People's Gin Co. v. Canal Bank & Trust Co. , 168 Miss. 630 ( 1932 )

ON SUGGESTION OF ERROR. In our former opinion the following stipulation required by the banks of their depositors was considered: "The right is reserved to send items direct or indirect to any bank, including the payor, and to accept drafts of such banks (but only subject to payment) as conditional payment in lieu of cash, the bank reserving the right to charge back any item at any time before final payment, whether returned or not." Interpreting this clause, we held as follows: "If we concede that the Canal Bank Trust Company had the same rights in reference to the collection that the Bank of Moorhead had, it still would not be absolved from liability, because under that agreement the authority to send the check direct and receive checks in payment was only authority to receive a check as a conditional payment, and it would have no right to surrender the check sent for collection for cancellation as a completed payment." 144 So. 858, 860. In other words, we held that the acceptance of the check of the payor bank would be conditional upon actual subsequent payment, and that unless the check of the payor bank was actually paid the collecting bank would be liable to the owner of the surrendered item attempted to be collected.

Upon further reflection and upon a mature consideration of the suggestions of error, we have become in doubt but that in requiring the depositor's agreement it was exactly the purpose of the banks to enable the collecting bank to surrender the depositor's item and to take the check of the payor bank, and that unless this check was paid the collecting bank would not be liable, but could charge back the item to the original depositor, although the collecting bank had thereby placed the item beyond its power to return to the depositor and although the action of the collecting bank had caused the depositor to lose his claim against the original maker of the item, and would place the depositor where his only recourse would be against the defaulting and defunct payor bank.

We were led to the conclusion stated in our original opinion because we regarded the agreement inequitable and unjust in its studied requirements against the depositor, for which reason, and for the further reason that these agreements are prepared by the banks and each of the public is required to accede to them or else be deprived of the ordinary course of banking facilities, we determined to construe them as strongly as the language would permit against those who prepared these agreements and required signatures to them. When the suggestions of error came in, and upon a further consideration as aforesaid, and we were in doubt upon the conclusion whether the studied and carefully prepared language of the agreement would bear the interpretation which we had placed thereon, we called for a response to the suggestions of error and advanced the point for inquiry and citation of authorities whether the agreements construed and carried to the extent insisted upon by the banks would not be in contravention of public policy. The stated point is not beyond inquiry, under the general principles and the numerous cases on the general subject which may be found in 50 C.J., pp. 857-859.

The response to the suggestions of error did not point us to any specific case or cases in respect to the issue of public policy and we lay that question aside without any decision upon it. And we eliminate from our former opinion that part which we have above quoted, reserving commitment until a case shall arise, which will require decision on that particular point in order to determine the ultimate result. We nevertheless overrule the suggestion of error and in doing so place our decision on the ground, which was mentioned in our former opinion, in the following words: "In addition to this, the item taken from the Bank of Indianola . . . was not merely a check in payment of the one thousand dollars involved in this suit, but was a check received in payment of other items aggregating five thousand eight hundred twenty-eight dollars and twenty-one cents, which the Bank of Indianola gave to said bank as a settlement of a number of items." There is not found in the agreement exacted of depositors any such terms, either expressly or by necessary implication, that the item or items of one depository may be bunched with those of others. What was done here after all the circuity of transfers from bank to bank and over long distances was that appellant's check for one thousand dollars was bunched with several other items and one check from the Indianola Bank was taken to cover the aggregate. Appellee Canal Bank thereby not only surrendered appellant's check and allowed it to become a paid obligation so far as the maker of that check is concerned, but has deprived appellant of the status of an independent claimant, fully vested with the power and privilege to handle its own separate claim against the defunct bank, and has hooked up appellant with other claimants whose interest may not be identical, and some of whom it may turn out are in fact to stand upon dissimilar grounds or even upon rights which may be antagonistic, for all that we know or the bank may know. Quite certain it is that there is no express provision in the agreements upon which the banks rely that this bunching of items may be permitted by the collecting bank, and hence the agreements relied on by the banks to relieve them of liability do not reach the case here made. We repeat what was said in the former opinion that these agreements will be strictly construed, the terms thereof will not be extended a single step by interpretation; and thus we now say that, when they are interposed as a defense, the case must be clearly within the very words of these agreements, so strongly drawn in favor of the banks, and, if the facts fall without the terms used, in any substantial particular, these agreements do not avail.

Suggestion of error overruled.