91 Kan. 91 | Kan. | 1913
Jasper Stewart was engaged in buying and selling live stock. His custom was to purchase horses and mules, giving in payment his checks on The Home National Bank, of Arkansas City. Later he would borrow money from the bank upon his personal note to meet the checks. This plan became unsatisfactory to the bank, by reason of unsuccessful transactions made by Stewart, and it notified him that it would no longer loan him money, and that he must make some other arrangement if he desired to continue business relations with it. Subsequently a conversation was had between the president of the bank and Stewart, which it is contended resulted in an agreement that Stewart might continue to buy stock, giving checks therefor, which would be paid by the bank, provided money for the purpose was furnished by Stewart from the sale of the stock he had purchased. Stewart bought stock from several persons, giving his checks. He made sales sufficient for the purpose and deposited the proceeds in time to meet the outstanding checks. The bank, however, refused to pay them, and applied the deposit to the preexisting debt of Stewart. Two separate actions were brought against the bank by holders of the checks. In each the plaintiff recovered, and the defendant appeals.
Stewart and the bank president, A. Ht Denton, gave substantially the same account of their conversation. One who overheard it testified to some additional particulars. Denton’s version was this:
“I told him that as I had informed him before, we would buy no more mules for Mr. Stewart, at least not until after the feed business and the unfinished business was settled. He said: ‘Perhaps I can beat them around.’ That was practically the end of the conversation. To which I made answer, ‘That might do.’ ”
“Mr. Denton, he says, ‘No, we will buy no more mules at present, until we get this feed deal off.’ ... I. says, ‘Suppose I buy and check for some mules and beat the checks in?’ He says, ‘That might do.’ ”
The third person testified:
“Mr. Stewart told Mr. Denton that he had a bunch of mules down there that he was going to buy, and Mr. Denton spoke up and'told him that.he wouldn’t pay any of his checks. He says, ‘Well, I have these mules sold,’ and he mentioned the man’s name, I' don’t remember it; and Mr. Denton says, ‘Well, that is all right, his checks are good.’ He asked Mr. Stewart when he was coming in and Mr. Stewart told him the day, but I don’t remember the date; it was along the last of the week some time. He says, ‘If you- are coming in then you will beat those checks in, because you know how they do, some of them run around several days before they get in the bank.’ That is about all the conversation I heard talked.”
We think this evidence sufficient to sustain a finding that the bank, by its president, agreed with Stewart that he might draw checks upon it in payment of stock, and that, notwithstanding his past due debt to the bank, it would pay the checks, provided he “beat them in”— that is, provided he resold the stock and turned the proceeds over to the bank in time to furnish a fund for their payment. It was a fair question of fact whether under all the circumstances this was what each party intended. The jury by its general verdict, under proper instructions, must be regarded as having rendered an affirmative answer, thus settling this issue.
The jury were instructed, in substance, that in order to render a verdict for the plaintiff they must find that in pursuance of the agreement Stewart bought the stock, giving his checks therefor, and deposited the proceeds with the bank. These facts also must therefore be regarded as established. We think these findings, considered in connection with the undisputed
“Of the general rule that a bank to whom a depositor is owing a matured indebtedness may appropriate the general deposit of its debtor to the discharge of the obligation, there can be no doubt. . . . But it is no less certain that a deposit made for a special purpose, or under a special agreement, can not rightfully be so appropriated. . . . Indeed, the proposition that a bank enjoys no exemption from the general rule by which every party to a business transaction or agreement is legally bound to respect the obligation of his contract is one which ought to require neither argument nor citation of authority.” (Smith v. Sanborn State Bank, 147 Iowa, 640, 644, 645, 126 N. W. 779, 30 L. R. A., n. s., 517.)
The defendant maintains that the evidence did not warrant the application of this principle, or if so, that proper instructions were not given concerning it. It is urged that the bank had no notice that the deposits made by Stewart were for the protection of the checks in question. They were turned into the bank without specific directions given at the time. They were, however, in the form of checks bearing upon their faces
The defendant further maintains that whatever may be the relations between the bank and Stewart, the plaintiffs have no cause of action against the bank, because there is no privity between them. Of course, by the usual rule, which obtains in this state, the
(See, also, Anthony v. Herman, 14 Kan. 494; Harrison v. Simpson, 17 Kan. 508; K. P. Rly. Co. v. Hopkins, 18 Kan. 494; Bank v. Crowell, 6 Kan. App. 533, 51 Pac. 575; Bank of Garnett v. Cramer, 7 Kan. App. 461, 53 Pac. 534; Gruenther v. Bank of Monroe, 90 Neb. 280, 133 N. W. 402—decided since the adoption of the uniform negotiable instruments act.)
The bank had on hand funds which it not only was at liberty to apply to the checks presented by the plaintiffs, but which it had undertaken to use for that purpose — which by virtue of its agreement with Stewart had been so appropriated. The money obtained by the sale of the property of the plaintiffs was received by the bank under a virtual promise to hold ft for their benefit, and pay them out of it.
The negotiable instruments act provides specifically that a bank is not liable to the holder of an unaccepted check (Gen. Stat. 1909, § 5442), and that the acceptanee must be in writing (Gen. Stat. 1909, § 5385;
It is suggested that the making of such an agreement was beyond the power of the president of a national bank, or of the bank itself. The contract was not immoral or forbidden, and even if when made it was invalid for want of capacity on the part of the officer or of the bank, it was so far carried out that a defense on that ground can not successfully be interposed. (See cases cited in Harris v. Gas Co., 76 Kan. 750, 92 Pac. 1123.)
The judgments are affirmed.
