Court Opinion

ID: 7200211
Source: CourtListenerOpinion
Date Created: 2022-07-24 17:07:10.261208+00
Date Added: 2024-06-11T16:16:29.970446
License: Public Domain

MOUTON, J.
Dissenting.
Defendant, the Shawnee Milling Co., drew a sight draft on Holmes & Barnes, Ltd., for one thousand seventy-five dollars, (payable to the order of the Bank of Topeka. After stating, pay to the order Of the Bank of Topeka, the draft reads “for collection”.
Holmes & Barnes paid the draft to the National Bank of Baton Rouge to which it had been sent for collection by the Bank of Topeka. The amount of one thousand and seventy-five dollars collected on the draft by the Bank of Baton Rouge, was garnisheed by Holmes & Barnes, payee, under a judgment it had obtained against the Shawnee Milling Co., for flour, the latter had failed to deliver to Holmes & Barnes.
The Bank of Topeka intervened in the garnishment proceedings, claiming to be the owner of the one thousand and seventy-five dollars which had been attached in the hands of the National Bank of Baton Rouge by Holmes & Barnes under the judgment it had obtained against the Shawnee Milling Co. The Bank of Topeka, intervenor, is claiming this sum of one thousand and seventy-five dollars, proceeds realized on the draft, as purchaser of the draft from the Shawnee Milling Co. The burden of proof is therefore on the Bank of Topeka to show that it acquired title to the draft, as owner, by sale, exchange, or other contract transmissive of title. In order that we may properly determine what was the nature of the contract between the milling company and the Bank of T'opeka it is necessary for us to ascertain from the facts and circumstances of the case what was the intention of the parties in entering into the agreement in reference to the draft in question, or as to whether or not after *400the contract had been entered into, it was negative, altered or modified by a subsequent understanding passing title to the Bank of Topeka..
The proof shows that the Shawnee Milling Co. was a regular customer of the Bank of Topeka and had been dealing with it for quite a while. The fact is that the Shawnee Milling Co. had a large” overdrawn account with the bank. The bookkeeper of the Shawnee Milling Co., Mr. Tally, was the party who deposited the draft in question with the Bank of Topeka. He says, it was credited by the bank to the account of the milling company. He says, on cross-examination, that all such drafts were deposited to the account of his company, and that in such cases, he drew checks in favor of the bank in which he included the amount due the bank for collection and interest. He testified also that the draft in question was handled by the bank as similar drafts had been previously handled by it. He explains that the proceeds of the drafts he deposited, on all occasions, were credited to the account of the Shawnee Milling Co.; that this account was used as a checking account against which the milling company drew its checks. The foregoing testimony shows that the bank had established a running account with the milling company and which the record shows had been largely overdrawn. There is no proof whatsoever to indicate in the instant case that the bank was acquiring the draft as a purchaser. The testimony does not support this contention. The draft was simply turned over to the bank by the milling company in the usual course of dealing which had been established between them. The cashier of the bank says that the words “for collection” which appear on the face of the draft were inadvertently left there in the printed blank. He says, these words are sometimes striken out, but that in this instance they were not. If a special agreement had been made in this case by which the bank had acquired the note as purchaser or otherwise, it occurs to us that the words referred to would have been, erased or striken out of the draft.
The cashier of the bank testifies that the amount of the draft was credited to the account of the Shawnee Milling Co. The tellers of the bank testify practically to the same effect. The bank contends that by thus crediting the amount of the draft to the account of the Shawnee Milling Co., it became the purchaser of the draft and was entitled to the ownership of its proceeds. The cashier explains that the credit was given the milling company in the usual course of the banking business by deposit slip, in which appears the deposit of one thousand seventy-five dollars, the amount of the draft, and which was credited to the account of the milling company. We find, however, at the foot of the deposit slip, in print, the significant words following: “Checks lost in transit, or on which payment is refused, will be charged back to the depositor’s account, this bank acting only as agent and assuming no responsibility beyond due diligence on its part.” It may be that the words “for collection”, which appear in the draft were inadverently left there as explained by the cashier, but the language used in the foot note of the deposit slip is clear and leaves no doubt but that the bank in accepting the draft was acting as agent, only. It is impossible, unless we do violence to this language, to say that the bank was acting as a purchaser of the draft when it applied the deposit to the credit of the Shawnee Milling Co. At the time this deposit was so applied it is unquestionably true that the Shawnee Mill*401ing Co. was then the owner unless we eviscerate from the deposit' slip the emphatic declaration that the bank was acting as agent only, and did not assume any other responsibility in handling the draft. Not only this, but we would also have to accept the explanation of the cashier of the bank that the words “for colleteion” found in the draft had been left there inadvertently. The proof is that the Shawnee Milling Co., subsequent to the deposit and the application thereof to the credit of the milling company on the books of the bank, drew for an amount in excess of the deposit. If the bank had not placed the restrictions as to its handling of the draft above pointed out, the fact that it had honored the check of the milling company to the amount of the deposit or in excess thereof, it might upon that fact be contended by intervenor that the bank had acquired the check for value, thus establishing its title thereto as owner. Even, if the bank had merely reserved the right of charging to the account of the depositor the amount of the draft in case of its loss or refusal of payment, counsel for mover might with show of authority under some of the decisions cited by him, claim that the bank had parted with its money to the amount of the draft in favor of the milling company and was therefore a holder for value. There would be in such a situation, legal ground for that contention.
In the instant case, however, the restrictions go.further as we find in the draft in question the words “for collection”; also in the deposit slip the reservation of the right of the bank to charge back to the account of the milling company the amount of the deposit in the event of the loss of the draft or its payment refused, and we must also bear in mind that we have in this case in addition thereto this significant condition, namely, “this bank is acting only as agent and is assuming no responsibility beyond due diligence on its part”. It is stated there, clearly, beyond cavil or question, that the bank was acting as agent, only. At that time the deposit had been received and had been applied to the credit of the Shawnee Milling Co., still the bank proceeds to say we are acting in this transaction only in the capacity of agent. Not satisfied with this clear declaration, the bank says further in its reservation, we assume no responsibility beyond due diligence. Obviously, there is not the slightest claim to ownership in such language as this. What is the meaning of the words “no responsibility beyond due diligence on the part of the bank”. Evidently, diligence in the bollection of a draft as agent, for it is impossible to believe that such an expression as this would have been employed by the bank, if it' had considered itself as owner, or vested with title to the draft.
The evidence shows that the Shawnee Milling Co., after making the deposit, continued to draw on the bank, .and that in these drawings the amount of the draft was included. As a matter of fact, the record shows, that the overdrawn account of the milling company with the bank continued to increase as time wore on. As explained by the .cashier, the various deposits made by the milling company were used as a cheek account by that company. The bank simply honored its checks when they were drawn against this account' without requiring that the checks should be applied to any specific deposit. In this case it is certain that there was no special understanding that the milling company would draw against the deposit made to its credit for the draft in question as an amount the bank had paid to acquire title as a purchaser or otherwise. *402The record, therefore, lacks proof that it was the intention of the milling company to sell or to part with its ownership in the draft or that the bank intended to acquire title thereo. It is universally recognized as an elementary principle that in all contracts, in those of sales, exchange, or pledge as well, the intention of the parties is the dominant, determining and controlling factor. There was no intention to sell here on the part of the milling company and no- intention to buy by the bank, and there is no proof to show that by any agreement or understanding subsequent to the original contract as hereinabove explained, that the relations between the parties were changed or modified so as to operate a transfer of title to the bank.
Counsel for mover contends that the bank is entitled to the proceeds of the draft as pledgee. In its petition the bank claims these proceeds as owner, only. There is no proof whatsoever to indicate in the slightest that the draft had been pledged to the bank by the milling company. In the absence of either averment or proof in the record that the parties ever intended to enter into a contract of pledge, we find no grounds to support the contention of the bank in that respect.
Holmes & Barnes, plaintiff, complains that in our original opinion we modified the judgment appealed from by disallowing attorney’s fees which had been decreed below against the defendant. In this respect complainant is correct as defendant did not appeal nor file an answer to the appeal asking the disallowance of attorney’s fees. That part of our decree disallowing this item should therefore be set aside.
For the foregoing reasons, I hereby dissent and am of the opinion that the original judgment should be reinstated with the exception of the item set aside as above decreed.