Court Opinion

ID: 6662641
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:03:20.856704+00
Date Added: 2024-06-11T16:00:13.394472
License: Public Domain

Hamer, J.,
dissenting.
I am unable to agree with the views expressed in the majority opinion.. As I understand the facts in the .case the defendants, the Bossemeyers, were dealers in grain at Superior. They were accustomed to draw sight drafts on the person to whom they shipped grain. The draft was expected to cover the full amount of the shipment, and it was expected that it would be paid out of the proceeds of the grain when it reached its destination. A draft would be drawn upon the person who was expected to receive the grain and for the price of the grain. There would be attached to that particular draft a bill of lading for the.grain shipped. We will take one of the drafts and copy it with the indorsements upon it, and also the bill of lading attached to it, with its indorsements:
“Bossemeyer Bros., Grain Dealers. No. 1809.
“Superior, Neb., Jan. 8, 1914.
“At sight, pay to the order of First National Bank $729, seven hundred twenty-nine and 00/100 dollars.
“Bossemeyer Bros., By P. Bossemeyer.
“Young & Wheeler, Magdalena, N. Mex.
“Protest and return immediately with all papers attached if not paid upon presentation.”
Indorsed on back: “Pay any bank or banker. All previous indorsements guaranteed. 76-137. Jan. 3, 1914. 76-137. First National Bank, Superior, Nebraska.
“Pay to the order of any bank or banker for collection and remittance. Jan. 5, 1914. National Bank of Commerce. 43-3 Lincoln, Nebrasaka. 43-3. James A. Cline, Cashier.
“Mechanics American National Bank, St. Louis, Mo. Pay to order of any bank or banker. Prior indorsements guaranteed. Jan. 6, 1914. J. S. Calfee, Cashier. (In red ink) Indorsement erased.
“Pay to the order of any bank or banker. Prior indorsements guaranteed. Jan. 7,1914. Drovers National Bank. 18-22 Kansas City, Mo. 18-22.”
*106As the bill of lading is very long we will copy only such parts of it as seem material
“The Atchison, Topeka & Santa Fe Railway Company “Order Bill of Lading — Original. Shipper’s No. 1809.
“Received, subject to the classifications and tariffs in effect on the date of issue of this original bill of lading, at Superior, Neb., Jan. 3, 1914, from Bossemeyer Bros., the property described below, in apparent good order, except as noted. * * *
“The surrender of this original order bill of lading properly indorsed shall be required before the delivery of the property. Inspection of property covered by this bill of lading will not be permitted unless provided by law or unless permission is. indorsed on this original bill of lading or given in. writing by the shipper.” Indorsed across above paragraph in red ink is the following: “A. T. & S. F. Ry. Co. Received Jan. 3, 1914. Freight Office. Superior, Nebr. * * *
“Consigned to order of Bossemeyer Bros. Destination, Magdalena, State of N. Mex., County of-. Notify Young & Wheeler at Magdalena, State of N. Mex., County of----. Route---. Car Initial, A. T. & S. F. Car No. 27601.

“(This hill of lading is to he signed by the shipper and agent of the carrier issuing same.)”
The drafts appear to have been drawn and attached to bills of lading so as to enable the collection of certain amounts due for grain that had been shipped to customers *107of the Bossemeyers. It was the custom of the First National Bank of Superior to send the draft and bill of lading to their correspondent. At the time the draft and bill of lading were received there would be a credit given to the Bossemeyer Brothers by the First National Bank of Superior, and, if there was a failure to collect, the amount would be charged back and the credit of Bossemeyer Brothers reduced accordingly. This sort of business had been conducted by the Bossemeyers with the First National Bank of Superior'for perhaps 25 or 30 years. There were five of these drafts each with its bill of lading attached. The shipments were made to various places in other states than Nebraska. The places were of course mentioned in the bills of lading, as also the person expected to pay named in each.
The National Bank of Commerce of Lincoln, Nebraska, brought this action against the defendants, the Bossemeyers, as makers of five sight drafts aggregating about $3,200. The case was brought in the district court for Nuckolls county, and was tried before the judge of that court; a jury being waived. It was the contention of the defeated plaintiff that the sight drafts were negotiable, and that the defendants, the Bossemeyers, having made them, were liable thereon.
The defendants interposed defenses: (1) That the plaintiff was not the owner of the drafts; (2) that the drafts were deposited for collection only; (3) that the plaintiff did not intend to purchase the drafts; (4) that each draft and the bill of lading attached thereto were inseparable, and that the drafts represented perishable goods and could not be purchased by the bank, even if it wished to purchase the same; (5) that the plaintiff bank did not pay for the drafts; (6) that any credit given to the First National Bank of Superior was not drawn out; (7) that sight drafts with bills of lading attached are not covered by the negotiable' instruments law, and that these drafts with the bills of lading attached showed that the defendants were not liable as drawers of commercial paper; (8) *108that the drafts were taken by the First National Bank of Superior for collection and were not purchased by it, but were taken by it to be transmitted to the plaintiff bank for collection; (9) that drafts and bills of lading were received by the First National Bank of Superior at a time when it was insolvent.
An examination of the testimony convinces the writer that the contention made by the defendants is correct. It appears to me that the five sight drafts with their respective bills of lading attached are not in any sense negotiable instruments, and were not intended to circulate as commercial paper subject to the provisions of the negotiable instruments law, but that the scheme was devised for the collection of the amounts due on said shipments of grain shown by the bills of lading. The drafts and bills of lading were received from the 3d to the 7th of January, 1914, and on the next day, January 8, 1914, the bank failed and quit doing business. The reply of plaintiff admits that, “accompanying" each of said several sight drafts, there was a bill of lading covering in each case one carload of grain shipped by the defendants to their own order, said several bills of lading being substantially the same as the said copies attached to said amended answer, excepting that each bore the indorsement of Bossemeyer Brothers upon the back thereof as follows: ‘Bossemeyer Bros.’ ”
There is no statement in the reply that the deposit of the First National Bank of Superior with the plaintiff bank was exhausted, or that this money contained in the drafts, and for which in the first place the First National Bank of Superior was given credit by the plaintiff bank, was drawn out by the First National Bank of Superior; neither is there any allegation in the reply of the plaintiff bank or in its petition that it paid anything for the drafts and bills of lading; and an examination of the evidence shows that the plaintiff bank never paid anything for the drafts. The statement contained in the syllabus of the majority opinion that “all previous indorsements guaranteed” is not a “restrictive indorsement” is not sustained in the face of the *109evidence which clearly shows that the indorsement was only to enable the collection of the price of the grain contained in the bill of lading.
Neither am I able to find any evidence which satisfactorily establishes to my mind that title to the drafts passed “to the receiving bank and made it a holder for value in due course.” The evidence shows beyond all controversy that the receiving bank did not pay even one dollar for the drafts. I have never seen a case that seemed to me to have less to sustain it than this one. If the rule sought to be established and maintained in this case is finally declared and fixed, then no country bank can send a collection to a city bank in this state without running the greatest risk of having it appropriated by the city bank without any consideration therefor, and in the face of the evidence and the uncontroverted facts. Such appropriation would be regardless of all the rights of the customers of the country bank. In this case there was no controversy between the First National Bank of Superior and the Bossemeyer Brothers. The only controversy is with the National Bank of Commerce, which up to this date seems to have successfully appropriated the grain shipped by the Bossemeyers. While not the grain itself, the judgment amounts to the price thereof.
According to Bossemeyer’s testimony Weil did not claim that his bank had suffered in any way. The jury in this case Avas waived and the case was tried to the district judge sitting as the district court. His finding is like the finding of a jury. I do not see what business we have to set it aside.
In Whisker v. Vera Crus Cofee Co., 95 Neb. 119, this court held: “The finding in an action at law, tried by the district court without the intervention of a jury, is entitled to the same consideration as the verdict of a jury, and will not be set aside unless it appears to be clearly wrong.”
“The findings of the district court in a law action tried to the court without the intervention of a jury are entitled *110to the same weight as the verdict of a jury, and will not be disturbed unless the evidence is clearly insufficient to sup: port them.” Stanisics v. Hartford Fire Ins. Co., 83 Neb. 768.
“A finding of fact made by a court in the trial of an action at law is entitled to as much respect as the verdict of a jury, and, if there is competent evidence to support the finding, it will not be disturbed oil appeal.” Dorsey v. Wellman, 85 Neb. 262.
Where an action at law is tried in district court without a jury, findings of fact have the same force as a verdict. National Engraving Co. v. Queen City Laundry, 92 Neb. 402; Darr & Spencer v. Kansas City Hay Co., 85 Neb. 665; Providence Jewelry Co. v. Gray Mercantile Co., 92 Neb. 633.
On the first page of the Bossemeyers’ pass book there was the following: “First National Bank, Superior, Nebraska. In account with Bossemeyer Bros., Superior, Nebraska. This bank in receiving out of town checks and other collections, acts only as your agent and does not assume any responsibility beyond due diligence on its part, the same as on its own paper.” No one makes the contention that the First National Bank of Superior became the owner of these drafts and bills of lading. If it did not, then how did the plaintiff bank become the owner of the same? As the First National Bank of Superior never oAvned these drafts and the bills of lading it could not transfer to any one a good title. It had them for the purpose of making collection. It had no more authority to treat them as its own than a lawyer would have to appropriate the collections placed in his hands. Thu National Bank of Commerce acknoAvledged receipt of said sight drafts as follows: “With credit, subject to payment.” This shows that there was no absolute and unconditional credit, but the credit was to be subject to payment only.
It is in the testimony that there was an understanding between the First National Bank of Superior and the defendants that the amount of the sight drafts should be *111charged hack to defendants and against their deposit account if collection should not be made from drawees of the sight drafts. At the same time, if the First National' Bank of Superior was insolvent on the 9th of January, 1914, when it closed its doors, it must have been insolvent on the day before and for several days preceding that. It might have been insolvent, and if permitted to do so it might have honestly collected these drafts for the Bossemeyers. If it did not have any authority to collect the money and keep it, it is difficult to understand what right the plaintiff bank would have had to keep it if it had succeeded in collecting it. But it did’ not succeed, for the Bossemeyers collected the drafts themselves. We are not told in what way the Bossemeyers perpetrated a fraud upon the plaintiff bank. Unless they wronged the plaintiff bank in some way, it has no right to recover anything against the Bossemeyers.
The bank failed on the morning of the 9th of January, 1914. On the morning of the 10th of January, 1914, the First National Bank of Superior had on deposit in the plaintiff bank $8,588.08 according to the testimony of Carl Weil, the vice president. Therefore, there could have been no difficulty in charging back the amount of the uncollected drafts, and bills of lading, as they only amounted to about $8,200. He also testified that the First National Bank of Superior had only one account with the plaintiff bank, “the checking account,” and that all items forwarded to it were handled through that account, whether indorsed for collection and remittance, or for credit and advice. But he followed that up with a statement: “By agreement with the bank that we give them credit for all items in their checking account and permit them to check against it and have the use of the money, yes, sir.” Also, that it was his understanding that items not collected' should be charged back. “We were to be recompensed for anything that we could not collect.” “Q. I see the dates are stamped on here with a rubber stamp in the collection column. What does that signify, if it signifies anything? A. It is merely, possibly, a careless manner of the clerk in dating.”
*112When he was first asked about the matter he answered that the balance of the First National Bank of Superior on the morning of the 10th of January, 1914, was, “speaking from memory, I think about $1,000.” An examination of the record showed $8,588.08.' Subsequently he testified that the amount on the morning of the 13th was $4,091.82, “where it remained until the morning of the 28th, $4,096. 08; on the morning of March 28th, $4,102.52, at which amount it now stands.” The testimony of this witness suggests that he had designs on the grain of the Bossemeyers, or he desired to get a fund ahead to be used as collateral for certain other indebtedness of the First National Bank to his bank.
Ernest Bossemeyer testified that the First National Bank of Superior would charge them interest on the amount of the drafts made from the date they received them until they were collected. His testimony shows a slip of this sort where the Bossemeyer Brothers were charged in four days on this sort of a credit for interest, $14.29. This arrangement appears to have been extended also to the National Bank of Commerce, which charged the defendants in the same way, through their correspondent, the First National Bank of Superior, and also for protest fees.
The plaintiff bank at Lincoln received the drafts to collect them if it could out of the proceeds of the. grain when the money should be paid on the drafts according to the bills of lading. The bank at Lincoln gave the bank at Superior a book credit subject to be charged back if the money was not collected from the drawees to whom the grain was sept. When the bank at Superior failed the Bossemeyers immediately countermanded payment of the drafts .by wiring the persons to whom the grain was sent, who refused payment of the drafts. Of course the grain had all along been the property of the Bossemeyers because the bank at Superior had paid nothing for it; neither had the bank at Lincoln. The Bossemeyers had a credit with the bank at Superior which they might have checked against, but they did not. The bank at Lincoln was a cor*113respondent of the hank at Superior, and gave that hank a credit which it might have checked against, but it did not. The full amount of the credit in both banks was dependent upon the contingent fact whether the proceeds of the grain should be collected. If not collected, then the banks would lose nothing because they had paid nothing. Whatever is collected by the bank at Lincoln in its action against the Bossemeyers is taken out of their pockets without the Lincoln bank paying anything. Suppose the bank at Superior had kept the drafts until after Bossemeyers wired the purchasers of grain not to pay and then had refused payment, would the bank at Superior have had any sort of valid claim against the Bossemeyers? If so, why not? Of course it must be because it had paid nothing and it had lost nothing. The same is true of the bank at Lincoln. It paid nothing. Neither did it lose anything. It made an entry on its books, but that was not payment. That was a way of keeping an account of the transaction. If the bank at Superior had stayed in business the drafts would probably have been paid by the persons to whom the grain was sent, but because it went out of business the drafts were not paid. Should Bossemeyers lose' their money because the bank at Superior failed? That appears to be the effect of the majority decision. The man who buys my horse from the man who has unlawfully appropriated the horse gets no title, and the horse is still mine. The rights of parties where a note has been discounted by a bank and the proceeds credited on the books of the bank to the person from whom it was purchased have been repeatedly stated by text-writers. I quote from 1 Daniel, Negotiable Instruments (6th ed.) sec. 7796, as follows: “The apparent purchase must have been a purchase in fact and not a mere bookkeeping entry. Mere discount and credit do not of themselves constitute a bo?w fide purchaser for value. To occupy that position the holder must actually have parted with something of value for the note. Thus, where a bank discounted a note for a company, and credited it with the amount, the credit, on account of other deposits, subse*114quently increasing, so that at the time of suit on the note the bank had actually paid nothing for it, it was held not a purchaser for value.”
In Eaton and Gilbert, Commercial Paper, sec. 54, it is said: “A bank by merely discounting a bill or note and placing the proceeds to the credit of the payee does not become a holder for value; but where the bank, on the strength of such credit, has relinquished securities in its possession or made advances to or paid the checks of the payee, it becomes a holder for value.”
In 7 Cyc. 929, it is said: “While the authorities are not entirely uniform upon the subject it is fairly well settled that a bank, by discounting negotiable paper, placing the same to the credit of the depositor, and honoring his checks or drafts, surrendering to him securities, or in some other manner making advances and extending its credit on the faith of such deposit, thereby becomes a holder for value. But the mere discounting and crediting of the amount on the depositor’s account, without making payment or incurring any increased obligations or liabilities, is not sufficient.”
In 4 Am. & Eng. Ency. of Law (2d ed.) 298, it is said: “Where a bank discounts paper for a depositor who is not in its debt, and gives him credit upon its books for the proceeds of such paper, it is not a bona ficle holder for value, so as to be protected against infirmities in the paper, unless, in addition to the mere fact of crediting the depositor with the proceeds of the paper, some other and valuable consideration passes. Such a transaction simply creates the relation of debtor and creditor between the bank and the depositor; and so long as that relation continues and the deposit is not drawn out, the bank is held subject to the equities of prior parties, even though the paper has been taken before maturity and without notice.”
In Thompson v. Sioux Falls Nat. Bank, 150 U. S. 231, it is said: “The mere credit of a check upon the books of a bank, which may be canceled at any time, does not make the bank a bona fide purchaser for value. If after such *115credit and before payment for value upon the faith thereof, the holder receives notice of the invalidity of the check, he cannot become a bona fide holder by subsequent payment.”
In Central Nat. Bank v. Valentine, 18 Hun (N. Y.) 417, the court said: “The mere giving of credit by entering the amount on the books, and not actually parting with a dollar upon the strength of the indorsement, cannot be regarded parting with value in the sense which the law contemplates. The parties in whose favor the credit was given might never draw or appropriate any portion of the fund.”
Other authorities along the same line are: Dykman v. Northbridge, 80 Hun (N. Y.) 258; Clarke Nat. Bank v. Bank of Albion, 52 Barb. (N. Y.) 592; Thompson v. Sioux Falls Nat. Bank, 150 U. S. 231; Manufacturers Nat. Bank v. Newell, 71 Wis. 309; Citizens State Bank v. Cowles, 180 N. Y. 346; Davis v. Elmira Savings Bank, 161 U. S. 275; Ætna Nat. Bank v. Fourth Nat. Bank, 46 N. Y. 82.
The legislation mentioned in the majority opinion is not aimed to take the property of any person without just compensation or without due process of law, and if that was its purpose such legislation would be void. Const. Neb. art. I, secs. 3, 21; also, Const. U. S., Amend. XIV, sec. 1.