1084 EXCHANGE BK. & TR: CO. v.. ARK: GRAIN CO. 11169 EXCHANGE . BANK & TRUST COM. PANY V. ARKANSAS GRAIN . COMPANY. OPinioh deliveied December 14, 1925. 1. BILLS AND NOTES=ACCEPTANCE OF BILL.—The . acceptance of a bill of exchange is , the signification by the drawee of his assent to the order of the drawer. . •• 2. A SSIG NM EMT—RECEIPT AND FILING OF oRDER.—Where a . rice growers' association receiVed and filed an order of a customer to p4 the amount due him for rfce to 'another, this constituted an acceptance of the order, Which then became in legal effect an assignment, of funds in .the association's . hands . belonging to the customer. . , • 3. BILLs AND NOTERIGHTS OF PAYEE OF DRAFT.—The payee of an unaccepted check, order, draft or bill of exchange cannot maintain an action upon it against -the drawee, as there is 'no privity a contrad between them; but' the payee may sue the drawee after acceptance. 4. ASSIGN MEN TS—ACChr.l. AN CE.—Where a rice' grciWers' association accepted a cuetomer's order to Pay funds due to him to a bank, it was not necessary for the' bank to show thatAt accepted same since the presumption , is that the order, being for the bank's benefit, was accepted by . • i t. • , Appeal, from Arkansas Circuit 1 Court, Northern Dis, trict ; George W. Clark, Judge; reversed. John L. Ingram,. for appellant. Joseph Morrison; for appellee: , WOOD, J. On February 22, 1924, the. Arkansas Grain Company procured a judgment against Fred E. Bueker in the circuit court of Arkansas County for $368.27, 'and afterwards on April 9, 1921, filed allegations and interrogatories against the Arkansas Rice Growers' Co-operative Association, as garnishee, alleging that that association, on and after the service of the writ of garnishment, was indebted to the defendant in the sum of $400, and had in its hands personal assets belonging to the defendant Bueker of that value. The Arkansas Rice Growers ' Cooperative Association, the garnishee, answered the allegations and interrogatories to the effect that it had in its hands a certain quantity of rice which it believed to be the property of the defendant Bueker, which was de-
ARK.] EXCHANGE BK. & TR. CO. v. ARK. GRAIN CO. 1085 livered to it by-Bueker ; -that Bueker, on January 9, 1924, delivered to ,the garnishee -the -following order : . . `fDear Sirs: The Dxchange Bank & Trust Corn-pany of Stuttgart, Arkansas, • holds a note signed by me in favor of J. F. Whaley for $435.55, and interest at ten per cent. per annum, from- January 7, 1922,,,until.paid. I hereby pledgW any amount; that may be due me from-this;date as additional.returns,on my 1923 crop of, rice to satisfy' said. note i. and you, are, hereby:instructed •o deliver to..said bank(any additional advances that may come to me. :And you are requested to acknowledge re-. ceipt -to the Exchange Bank & Trust Company, Of this pledge, and to advise said -bank that- no other lien on - my crop except this.order on you. • "Yours truly, . . (Signed)- Fred , E. ,Bueker.'' That the -garnishee had paid out a large suM-on account of.the delivery of said rice to' the defendant-and the holder of the:first mortgage on the crop. of : rice mentioned; that., the. garnishee -did not•know whether there would be any: money. in its hand's in excess of' the amount necessary to. satisfy the order above referred to at -the, time. of the - settlement: for the rice crop; that' the garnishee did- not have in . its hands any 'goods, :chattels, moneys; credits or. . effects, except in the manner and to :the extent above set • forth. •. The 'garnishee ,prayed that the action 'be dismissed as to it. : The Arkansas Grain Company, in its -reply -to the• answer of the garnishee, admitted that the garnishee was the holder ,of the order above set. forth; -but denied that said order assigned any part of the funds now:in ' the hands 'of the garnishee,' but alleged that such .order merely 'directed the garnishee to pay moneYs to' the, Ex-. change Bank & Trust Company, and that, such being the case, it did not create a lien-upon the funds-in' the-handS of the garnishee, and that the writ of garnishment, sued out by the appellee created a lien upon the funds prior and. paramount tO-that created by tbe order in . the hands:: of the garnishee. The grain company prayed that the
1086 EXCHANGE BK. & TR. Co.v. ARK. GRAIN CO. • [169 wilt 'Of garnishment be declared a prior and paramount lien to the order in the hands' Of the garnishee; and that.. the' funds 'noW in the hands of •the garnishee be aPplied upon the payment of its judgmentagainst the defendant.: in . the' original aCtion. • On August 5, 1924; the Exchange Bank•& Trust . Corn-pany filed anintervention alleging Hu& Bueker, the de- • fendant in the' original action, was' indehted to •it in the • sum of '$508.13, and that; for the purpose of paying 'that . • amount, Bucker, on JanuarY' 9, 1924, , had executed' and! delivered to it his order on the'Arkansas . c P e i Growers.'' Co-operative' Asseciation, directing such assOciation to pay the'aniount of his debt to the txchange•Bank & TrUst 'Company; thatthe Arkansas Rice Growers.' Co-operative'• Association, the garnishee, accepted' the order and filed the saine in its office; that, under and by virtue of such order; the Eixchange Bank & Trust 'Company is' the owner of ihe ! fundS .:garnished; •and that its' •claiin 'is priOr And pardinOunt to the claim of the Arkansas Grain Company: • The ExChange Bank & Trust ComPany prayed thatthe Arkansas Rice Growers' Co-operative ASSOciation rected to pay to. it the sum. of • f • The Arkansas Grain Company 'answered the inter: vention and denied .that the . garnishee association accepted the Order, and denied that the • order -was as‘ sigiiment of. the mOneys 'due. Bueker by the.garnishee.'• The cause was tried on the following . agreed state-' ment of-facts: • • "It is agreed that on 'January 9, 1924, .before *the writ of garnishment herein was •issued and serVed, that the defendant, Bucker, executed and delivered to the in-terveners, Exchange Bank & Trust •Company, the order, a copy of which is attached hereto, as exhibit 'A, and that said order was, on the same date; delivered to the garnishee, Arkansas Rice Growers' Coloperalive Associa-: tion by the said Exchange Bank & T'rust CoMpany. That said association received Said order and 'placed same on file, a.nd that same is now on file 'in its office . in Stuttgart,' Arkansas."
ARK.] . EXCHANGE BK. & TR. CO. V. ARK. GRAIN CO. 1087 . The cause,.by 'consent,! was . •submitted to 'the •court sitting as•a jury; and the court found generally in Savor of . the Arkansas. Grain Company; and t. entered a. judgment in its favor directing the garnishee to'pay ,over•to it, the funds in its,thands as soon as the . amount thereof • was definitely ascertained, and dismissed the inter: yen-.tion. of the Exchange Bank &. Trust Company,.from which .•jfidgment it prosecutes this appeal. ' Thd'appellee contends- that the . order of' Jarivary • '9th, 'set forth above, ' NkTfis not aCcepted • by the Arkansas Ride' G l io'werS ' Cd-.Operative'' AssociatiOn, the garnishee, •and thi's ' contentiois the' eruX' of this laWSuit, beeanse, if' diem was an:aceePtance of the order by' the garnishee, in the le o ul sense of that .termr,Alien the garnikhee'be-*came thourid to Pay tthe • Money , in its hands beh•MgMg . . to Bu-eler 'to the aPP'ellant. 'thei-e aecePtariCe• Of the . order by'the garriishee,,its Character, thy' that adt, was changed ' froth: siihple order to an assigathent: ;It.'was % • statedin the' agreed . §tatemerit of facts that ; Said"Al tkan-.*sas'RiCe Growers . 'CoL operative Association received said order, and 'placed smile on file, and that 'same is now .on t • file iri its office.. 'It occurS . to'us that' this act of)the , assö-Ciation in receiving and filing the order *was tantamount •to . saying to Bueker, • the drawer of the order: '"We ac-- knowledge receipt of your order, accept' the' same; l‘alid will'pay the money to the Exchange Bank & TruSt Coin-"Duly as you. direct." The 'language of . the order cannot be'construed in ; any Other way . than as an' absolute 'renunciation of the'ianiount . belonging 'to Bueker in 'the • hands of 'the asSociation in favor of the appellant and a 'perem'ptOry J directiOn tomotify the appellant of_ that.fact, and' to-pay : to 'the appellant this money. 'When :the association received'and filed the order, instead of Tetiirn-ing the 'mine Bueker or notifying him that it Would riot comply 'with this instructions, 'such 'act, as . we ihaVe-: already stated,''on the part of the association waS equivalent to • saying :will pay the Money to the.appellant as yoa direct.'" -. •
1088 EXCHANGE BK. & TR. CO. v. ARK. GRAIN ' CO. [169 " The acceptance of a bill is, the signification by the drawee of his assent to the order of the drawer." Bran-non on Negotiable Instruments, 3rd ed., §, 132, p.. .358 ; .Bouvier 's Law Dictionary, .` Acceptance. • It oceurs to us•that the receiving and filing of the order by the association_ was an acceptance .. thereof on • its part, and the order then became in legal effect an assignment of the funds in the hands of . the' association to the appellant. Such was -0 19 interpretation of the order by the association itself, and of its adt hi receiving and filing the same, as shown in the . allegations , of its answer, wherein it states that "this garnishee is nOw holde , r of an order signedbY- said Fred E.liueker, defendant herein, by virtue of Which order 'said , defendant assigns tO, the Exchange Bank of Stuttgart the 'prdceeds to be derived from the Sale of his rice, the .„ s uni of $435.55:" • ) ' • • , It is . the, settled , doctrine :that; the ,payee of . an , unaccepted check; order, , draft, or , bill, , of exchange, , cannot maintain an action upon it against ti l .e drp,wee, for there ; no •privity. „ of . contract , hetween. . them. }Sims y. First . National Bank ,of Fort Snvith, 98.,Ark.I t; Rogers ,C07 , 10Th: Co.: ' v. Fanners', Bank of.,Leslio, 190 Afk.; 537 ; Spullbern Trust.Co. , v..44,9nerican Bank of. Comwroo,:ptp., 148 ,Ark.. 283; First , . National Bank of :Washington . v. : Whitman, 94 . 1J. , S. 343. ..But,, if the drawee,..has;accepted, then the payee may maintain thp action.. ,As we construe the action of the association,, it accepted . the,order ii con-•roversy, and therefore the. aboye authorities s , hoW that the :association wasIable.to the appellant . for the amount of, the i .fands in the. association's hands ,belonging , to Bueker._ Since 'the order Iby the action of; the association became in legal effect an assignment,. it .was : not • neces-. sary ,for . the appellant. to show affirmatiyelY that. it ac-: eepted the same, , The order being f or :appellant's .:fit, the:presumption is, in the absence of proof to rthe,contrary, that . it :was. accepted,,by , it. 4 Cyc.:_.p,, 29., note.: : It follows that the Court erfed in. holding that the ap-pellee had prior and superior rights to the appellant by
virtue of. the garnishment. The judgment is therefore reversed, and the cause remanded with directions to enter judgment in favor of the appellant for the amount:due Bueker in, the hands of the Associatio4. I t
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.