Court Opinion

ID: 9779121
Source: CourtListenerOpinion
Date Created: 2023-08-29 21:36:57.75176+00
Date Added: 2024-06-11T11:19:32.731833
License: Public Domain

*36BARDGETT, Judge
(dissenting).
I respectfully dissent.
The question is whether Bank of Gering transacted any business or made any contact in Missouri. According to a Gering Bank officer’s testimony, Bank of Gering received the first of the drafts referred to in the principal opinion at about the end of January 1973 together with a transit letter from American National Bank of St. Joseph, Missouri. Over the next three months, Bank of Gering received drafts and transit letters totaling 25 to 30 in number. When the Bank of Gering received a draft, it was entered in its collection department under an accountability number and then notified Tige Enterprises that the drafts were there and requested Tige’s acceptance or nonacceptance of the drafts. If Tige accepted them, they were paid immediately. If they were not accepted, they were sent back. About 22 drafts were paid and approximately 6 were not paid. The account of Tige Enterprises had been extremely liquid and on February 7, 1973, dropped to virtually nothing. The Gering Bank official testified that, to the best of his recollection, drafts which were dishonored were sent back to American National Bank on the next business day, but this is in dispute.
According to Clay & Co., Clay & Co. was required to reimburse American National Bank for advancements made to Clay on drafts which were not paid and for which Clay & Co. sued American National Bank and Bank of Gering in the underlying cause of action.
A group of six drafts, two dated 2-2-73 and four dated 2-5-73, totaling $55,257.09, which were deposited for collection by American National Bank under Clay’s deposit account card with American National Bank, were forwarded to Gering by transmittal letter and received by Bank of Ger-ing on 2-7-73. These drafts are referred to by the parties as “Group A”. According to the testimony of an official of American National Bank, notification of nonacceptance by Gering Bank as to Group A drafts was not received until March 5, 1973.
In State ex rel. Deere and Company v. Pinnell, 454 S.W.2d 889 (Mo. banc 1970), the court construed, inter alia, section 506.500 and noted that the Missouri long-arm acts were patterned after similar Illinois laws, and the court utilized Nelson v. Miller, 11 Ill.2d 378, 143 N.E.2d 673 (1957), as authority for the scope of the Missouri statutes. This court in Deere held at 892: “In concluding our effort to determine the legislative intent of the General Assembly of Missouri, we are convinced that the ultimate objective was to extend the jurisdiction of the courts of this state over nonresident defendants to that extent permissible under the Due Process Clause of the Fourteenth Amendment of the Constitution of the United States.”
In Gray v. American Radiator & Standard Sanitary Corp., 22 Ill.2d 432, 176 N.E.2d 761 (1961), the court held that it was not necessary for the defendant to be present in the forum state in order to be subject to long-arm service and in personam jurisdiction. In Gray the defendant manufactured a defective valve in Ohio which was used by another foreign corporation on a heater which, in turn, was sold to Gray and exploded in Illinois causing injury in that state. Gray presented a factual situation very similar to our case of Deere which cited Gray as authority for upholding long-arm service upon a defendant. Nor is the nonresident defendant’s presence in the forum state required when jurisdiction is premised on “the transaction of any business within [the] State.” Ziegler v. Houghton Mifflin Co., 80 Ill.App.2d 210, 224 N.E.2d 12 (1967).
In the instant case the drafts were sent directly to the Bank of Gering by the American National Bank of St. Joseph, Missouri, with written instructions as follows: “We enclose for collection and immediate returns, items as listed below. Protest all items over $500.00 unless marked x or items stamped ‘no pro. 36-3’ (or similar authority of a preceding endorser). Wire non-payment of items of $1000.00 and over, except those not paid because of missing, irregular or unsatisfactory endorsement.” In each *37instance Bank of Gering undertook collection of the item by attempting to obtain acceptance or nonacceptance from its depositor, Tige Enterprises. Each item was recorded by Bank of Gering in its records which records show the name and address of the party sending the item (The American National Bank, 6th & Francis Streets, St. Joseph, Mo. 64502); the type of item (customer drafts); the drawer (Tige Enterprises, Inc., signed by Mary Kay Hughes, payable to John Clay & Co.); “on whom drawn” (Tige Enterprises, Inc., P. O. Box 277, Gering, Nebraska, 69341); the amount of the draft; date received; and “date due” (within 24 hours). A vice-president and cashier of the Bank of Gering testified that the handling of the drafts between Tige Enterprises and John Clay & Co. was done under his supervision and he had personal knowledge of the transactions.
The Bank of Gering accepted the drafts for collection and as such became a collecting bank, section 400.4-105(d), RSMo 1969, and Code Comment at Vol. 20B, V.A.M.S., p. 318, and the agent or subagent of the American National Bank, section 400.4-201(1). The acceptance of the drafts by Bank of Gering for collection constitutes a contract for collection. See Patton’s Digest of Legal Opinions, Vol. 11, p. 1250, sec. 1:6, and cases cited therein. There had been a prior course of dealings between Bank of Gering and American National Bank in that about 22 similar drafts had been forwarded by American National to Bank of Gering for collection and were collected by it with remittance to American National Bank in St. Joseph. Certainly a bank is held to the knowledge that, if it fails to perform the duties of a collecting bank with reference to presentment of the draft to the party upon whom the draft is drawn (Tige Enterprises) and to give timely notice of dishonor to its principal (American National Bank), injury and damage may or will occur to the party entitled to receive the proceeds and that such damage, if any, will occur in Missouri.
Indeed, the provisions of the U.C.C. of Missouri and Nebraska which, in effect, codified the customs and practices of banks with reference to collections prior to the adoption of the U.C.C. itself existed because it has always been known that damage will probably occur unless prompt notice of dishonor is given by the collecting bank. See Zollmann, Banks and Banking, Vol. 10, p. 555. And there is no denying that the handling of drafts for collection is part of the regular course of business of a bank.
It would be difficult to describe the course of dealings between the Bank of Gering and the American National Bank as anything other than the doing of business between the two. Nor can it be said that the business was done only in Missouri or only in Nebraska. Here the transactions required the doing of acts in Missouri and Nebraska. The very nature of the Bank of Gering’s obligations required that it transmit remittances or notices into Missouri pursuant to its agency relationship with the Missouri bank which relationship came into being by the voluntary acts of the Bank of Gering in accepting the drafts for collection.
The requirement of minimal contacts with the forum state is satisfied under Hanson v. Denckla, 357 U.S. 235, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958), if the defendant “purposefully avails itself of the privilege of conducting activities within the forum state.” Here, the Bank of Gering purposefully availed itself of the privilege of conducting business activities with the American National Bank in Missouri, which activities had to be performed, in part, in Missouri in order for the business transactions undertaken to be completed. Bank of Ger-ing had to deliver remittances or notices of dishonor into Missouri and it knew that the damage resulting from a failure to exercise ordinary care or failing to comply with the pertinent provisions of the U.C.C. would occur in Missouri.
I believe the acts of the Bank of Gering constituted the transaction of some business in Missouri and would hold those acts sufficient to satisfy the due process requirements of minimum contact required by the Fourteenth Amendment, United States Constitution, under Hanson v. Denckla, su*38pra, and the due process clause of Art. I, sec. 10, Mo.Const.
I think it is of some significance that the principal opinion states that “All of the testimony simply adds up to the conclusion that relator did not do any business in the State of Missouri and had no contacts with Missouri people or corporations except in the conduct of normal banking operations." (Emphasis mine.)
It seems to me when the normal business operations of a bank involve transactions and the making of contracts with Missouri residents that this certainly satisfies the requirements of section 506.500 so as' to subject the nonresident bank to the jurisdiction of the Missouri courts.
For the foregoing reasons I believe our provisional rule in prohibition heretofore issued should be quashed and therefore I dissent.