Summary
In Thompson v. Bank, 8 A. 97, it was said: "It would hardly be safe to say that an agent could make himself a debtor, as distinguished from agent, by a confusion of the moneys or goods of his principal, and by then giving his principal credit for their value, or the amount collected."
Summary of this case from Thomson v. BankOpinion
02-17-1887
THOMPSON v. GLOUCESTER CITY SAV. INST.
James E. Hays, for petitioner. Mr. Paul and Biddle & Ward, for Independence Nat. Bank of Philadelphia.
On Petition by receiver.
James E. Hays, for petitioner.
Mr. Paul and Biddle & Ward, for Independence Nat. Bank of Philadelphia.
BIRD, V. C. On bill filed, the defendant corporation was declared insolvent, and a receiver was appointed. While progressing with the settlement of the affairs committed to him, the receiver encountered doubts. as to the payment of certain claims presented, among which were the claims of the Independence National Bank of Philadelphia. To protect himself, he filed a petition suggesting the claims and his doubts, and asked for directions. The defendant savings institution closed its doors July 2, 1884. May 31st the Independence National Bank sent a draft on C. D. Bailey for $16.67, of that date, and payable at one day's sight, indorsed, "Pay to the order of Pfeiffer, treasurer, for collection on account of the Independence National Bank, Philada. Willakd B. Moore, Cashier," to the defendant institution for collection. June 10th of the same year it sent a note of C. F. Ramson for $527.64, due July 2d, and June 3d, a note for $100, of Brewer & Co., due July 4th, to the same institution, for collection, both of which were indorsed as the first paper above named. The savings institution collected the Ransom note June 16th, although not due until July 2d. It also collected the draft for $16.67, but sent the Brewer & Co. note, for $100, to the National State Bank of Camden, which collected it. The Independence National Hank claims that it is entitled to those moneys in full. This is resisted by the counsel of the receiver, who claims the bank is only entitled to share pro rata in the funds collected by the receiver.' It is said that, when these notes were paid, it was impossible for the savings institution to keep the money separate from the other funds of the bank, and that when they were mingled with the other funds, and the Independence Bank had credit therefor, the simple relation of debtor and creditor arose, and that, if the relation of principal and agent ever did exist, it did so no longer, after such entry on the books of the bank.
I can see nothing in the argument respecting the impossibility of keeping the money separate when collected. The collecting bank could place such money in an envelope, or other paper, and preserve its identity, just as easily and as certainly as it could the note or draft collected. Nor can I see any force in the insistment that the entry by the collecting bank, upon its book, of the sum or sums of money collected, changed the rights or relation of the parties. It would hardly be safe to say that an agent could make himself a debtor, simply as distinguished from agent, by a confusion of the moneys or goods of his principal, and by then giving his principal credit for their value, or the amount collected. Any such doctrine would be dangerous in the extreme, and would inevitably compel the abandonment of commercial transactions by means of agents. But no difficulty whatever arises from the confusion of these moneys any more than in every other case where the rightful owner is in pursuit of trust funds. In such case the owner need not point out the very goods or bills or coin. He does all the law requires if he shows that the goods or bills or coin came to the hands of the defendant impressed with a trust to his knowledge. In every such case the holder must respond either in the article taken or its value. And these thoughts are sustained by the court of errors and appeals in Hoffman v. First Nat. Bank of J. C, 46 N. J. Law, 604; Sweeney v. Easter, 1 Wall. 166; Hook v. Pratt, 78 N. Y. 371; 2 Pars. Bills, 21-23; McLeod v. Evans, 28 N. W. Bep. 173; Morse,
That banks may collect notes or drafts for each other, and in so doing establish a system of mutual dealing, and thereby stand in the relation of debtorand creditor, as a banker does with his ordinary depositor, is not questioned, nor are the foregoing views at all inconsistent therewith. I will advise an order that the receiver pay to the Independence National Bank the full amount collected on said notes and drafts, with interest. If the money collected on the note sent to the National State Bank of Camden be still in its possession, the Independence Bank can look to it for that.