Smith v. Crocker First National Bank

[833]

DOOLING, J.

Plaintiff appeals from a judgment awarding him $288.69 with interest, and interest on the sum of $12,716.33 from April 23, 1954, to August 20, 1954.

On December 22, 1952, Ralph Smith commenced an action against Tosemite Creek Company. On that day a writ of attachment and notice of garnishment were served on respondent bank. Ralph Smith subsequently died and his wife as his executrix was substituted as plaintiff.

On December 29, 1952, the garnishment was returned unsatisfied, the bank reporting: “No funds.”

Upon service of the notice of garnishment the bank exercised a right of setoff against the balance in the checking account of Tosemite Creek Company. At this time Tosemite Creek Company was indebted to the respondent bank on a promissory note in the sum of $21,912.50. The bank held a non-negotiable warehouse receipt for canned figs as security for the payment of this note. Seven drafts had been delivered by Tosemite Creek Company to the bank for collection and had been forwarded by the bank to the drawees. The bank had advanced to Tosemite Creek Company the full face amount of these drafts, $44,660.55. None of the drafts had been accepted by the drawees at the time of garnishment. At the time of garnishment Tosemite Creek Company had on deposit with the bank in a checking account $48,798.03. The bank exercised its right of setoff in the sum of $44,660.55 to repay the amounts advanced on the seven outstanding drafts and applied the balance of $4,137.48 in part payment of the promissory note, leaving a balance due on the note of $17,775.02.

Later the bank sold the figs covered by the warehouse receipt and after paying the balance of the note the bank held a balance of $12,716.33 from the sale of the figs.

In the action against Tosemite Creek Company plaintiff recovered judgment for $60,638.68. The plaintiff levied execution on respondent bank and in this action claims that its garnishment reached the $48,798.03 in the Tosemite Creek Company’s account plus the balance of $12,716.33 realized from the sale of the figs.

In the meantime one Eva Crow sued the bank claiming title to the surplus of $12,716.33 from the fig sale. The bank deposited this sum with the clerk of the court in that action and plaintiff was substituted therein for the bank as defendant.