Court Opinion

ID: 7100965
Source: CourtListenerOpinion
Date Created: 2022-07-24 12:15:44.170315+00
Date Added: 2024-06-11T16:13:24.498083
License: Public Domain

Reed, J.
dissenting. — My examination of this case has led me to a conclusion the opposite of that announced in the foregoing opinion. The question to be determined in the case, as stated in the majority opinion, is, whether the delivery by Massey of the certificates of deposit to the bank, and its acceptance of them, was a payment of the debt due plaintiff, to the 'amount of the certificates. The general rule is, without doubt, that one acting as collecting agent for another has no right to receive anything except money in payment, unless specially instructed so to do. Graydon v. Patterson, 13 Iowa, 256; McCarver v. Nealey, 1 G. Greene, 360; Drain v. Doggett, 41 Iowa, 682. There is no claim that the bank had any special instruction or authority that would warrant it in receiving anything but money in payment of the debt. Indeed, the letter of plaintiff transmitting the claim to it, as I think, when fairly construed, amounts to an express direction to receive money alone in payment. The letter by which the interest coupon was transmitted called the attention of the bank to the fact that some of the coupons transmitted at that time were payable in gold coin, but authorized it to receive currency in payment of the same; and in the letter of Sept. 7, transmitting the note and other papers, -the bank was directed to deliver the papers in exchange for a New York draft, free of exchange, for the $1,248 represented by the note and coupon.
The certificates of deposit are simply the undertakings of the bank to pay the sums of money named to the persons named, or to their order, on the return of the certificates properly endorsed. They are the negotiable promissory notes of *474the bank, but are not money. Defendants make no question but that the general rule is as stated above. Nor is it claimed that the transaction amounted to a payment, if the case is governed by this rule. But their claim is that, as it was the usage of the bank in making collections to receive its own» certificates of deposit in payment, this usage is’ binding on plaintiff, and that it is presumed to have given its assent, when it placed the claim in the hands of the bank for collection, that the collection might be made in accordance with the usage. That there are many cases in which persons dealing with banks are bound by their usages as to the manner of doing business cannot be doubted. It is held in Mills v. Bank, 11 Wheat., 431, “that when a note is made payable or negotiable at a bank whose invariable usage is to demand payment and give notice on the fourth day of grace, the parties are bound by that usage, whether they have personal knowledge of it or not;” and in Gualech v. Bank, 56 Iowa, 434, it was held by this court that the usages of the business of banking raises an implied assent by the customer of a bank, who deposits with it paper for collection at a place other than the town or city where the receiving bank is located, that it should be sent to a correspondent, who would become his agent.
It will be observed,-however, that the usages referred to in these cases'relate to the manner merely of transacting business. The question involved in these cases was whether the banks had made themselves liable by the manner in which the business committed to them had been transacted. But the usage relied on in this case, if it has the effect claimed for it, goes much farther, and entirely changes the undertakings and obligations of the parties. The undertaking of the defendants in the contract is, that they will pay the sum of money named in the contract to plaintiff or to its use. This undertaking can be performed, according to its terms, only by the delivery of the sum named in money. The obligation to pay in money is as essentially a part of the contract as is the un*475dertaking to pay tbe amount named. But the usage of the bank to receive another commodity than money on collections has the effect, according to the claim of defendants, to make, the delivery by them of that other commodity the equivalent of the payment of the money.
It seems to me impossible that the usage should have this effect. ’ That parties may contract for the payment of debts in some other commodity than money is certainly true; but when the contract is for the payment of money, the right of the creditor to be paid in money cannot be defeated by any usage to which he does not give his assent. Marine Bank of Chicago v. Chandler, 27 Ills., 525.
It is said, however, that the money was in the bank, and that Massey could have obtained it by presenting the certificates at the counter and demanding payment, and that it would have been a useless formality for him to have done this, and to have delivered the money at once to the cashier in payment of the debt; and it is claimed that what was in fact done is the equivalent of this. • The position assumes one very important fact, viz., that if demand had been made the bank would have paid the certificates.- But let that fact be conceded, still the position is, as I think, not maintainable. As I have said, Massey’s undertaking was to pay in money, and it.could not be performed by delivering any other commodity. ■ An application of the sum’ of money named-to plaintiff’s use was absolutely essential to the discharge of that obligation. If he had obtained the money and had passed it to the bank, to be applied in payment of the debt, this would have been such an application of it, and would have discharged the obligation. The mere delivery of the certificates to the bank was not a payment of the debt, for the reason, as I have said, that it was payable only in money. Neither did that act alone appropriate the money to plaintiff’s use. Massey was not the owner of any portion of the money which the bank had in .possession at the time of the transaction, and, as a consequence, he could not apply it to plaintiff’s use. The *476bank was bis debtor, it is true, but that fact did not invest liiim with any title to or ownership of the money which it had in possession. That result could be effected only by a payment of the money to him, or some act which was equivalent to that, and no such act was done. He did not receive from the bank the money which it was owing him, and make an application of it himself to plaintiff’s use, but left it for the bank to make such application of it. Its act in securing the certificates did not have the effect to apply the money to plaintiff’s use. It amounted to no more than an undertaking by it that it would make such application. The actual appropriation of it to that use remained to be made. The agreement to make such application of the money, however, was an agreement between the bank and Massey. Plaintiff was no party to it. It related to the payment of the debt which the bank owed Massey, rather than the one which Massey owed the plaintiff. The agreement between him and the bank was that it would apply the amount which it was owing him in payment of the debt which he was owing plaintiff. It is manifest, as I think, that this agreement alone does not have the effect to discharge him from his liability to plaintiff, but that he would be discharged under it only on the happening of one of the following events: (1) An actual performance by the bank of its agreement with him; or (2) an agreement by plaintiff that the bank should be substituted in his stead as its debtor. But neither of these events has happened. In my opinion the judgment of the distinct court should be reversed.