136 P. 994 | Idaho | 1913
This is an action brought by appellant against the respondents to recover the sum of $625, alleged to have been placed under the control of J. W. Hockersmith as-trustee of appellant, and it is claimed that Hockersmith
The allegations of the complaint were denied by the defendants, except the issuing of the cheek of the plaintiff to Hockersmith. The case was tried and judgment was rendered for the respondents and the action was dismissed. A motion for a new trial was made and denied, and this appeal is from the judgment and also from the order denying the motion for a new trial.
A motion has been made in this court to dismiss the appeal from the order overruling the motion for a new trial, for the reason that no notice of motion for a new trial and no motion for a new trial were ever filed, and there was no certificate of the presiding judge in said cause showing what papers or records were used upon the hearing or notice of intention to move for a new trial or upon the motion for a new trial. This motion is sustained as to the appeal from the order overruling the motion for a new trial, and the ease will be considered on the record as an appeal from the judgment.
It is necessary in this opinion to set forth the substance of the pleadings, for the reason that the appellant relies upon this appeal that the court erred in overruling the demurrer to the answers, to which exception was taken.
The complaint alleges that the plaintiff is a widow, and that at the death of her husband on the 3d day of August, 1909, the plaintiff’s husband was the owner of a dwelling-house and lot in G-rangeville, upon which a real estate mortgage existed unpaid for the sum of $600 and interest; that J. W. Hockersmith is the administrator of the said estate of Robert J. Dearing, deceased, and has been so since his appointment; that the appellant reposed faith, trust and confidence in him and his honesty and integrity, and placed in his hands on or about the 3d of November, 1909, the sum of $625, her own individual and separate property, to be applied by Hockersmith in payment of said above-mentioned mortgage, and that Hockersmith accepted and promised and agreed with the
The defendants, the trust company and Leonard, filed an answer, and deny that Hockersmith and the trust company by and through Leonard, or otherwise, acting in concert and
Hockersmith filed an answer, and denies that there was any conspiracy or conniving with or without the .plaintiff’s knowledge, or that he did on the 3d of November, 1909, or at any other time, connive or conspire for the purpose of cheating or defrauding the plaintiff out of the sum of $625 or any other sum; denies that he made any false or fraudu
To these answers of defendants counsel for appellant filed a demurrer upon two grounds: (1) That said answers, and each of them, do not state facts sufficient to constitute a defense in this action; (2) that the answers, and each of them, are ambiguous, uncertain and unintelligible. The ruling of the trial court is assigned as error.
There is no merit in this contention. These answers consist of denials and of affirmative matter which were proper defenses to the complaint.
The trial court found in this case (1) that the Grangeville Savings & Trust Company is a corporation duly organized and existing under the laws of this state, with its principal place of business at Grangeville, and (2) that F. L. Leonard is and has been, during all the times herein mentioned, the cashier of the defendant corporation. The court also found (6) that the plaintiff did not deposit any money in the defendant bank in the name of J. "W. Hockersmith, and that (7) defendant Leonard did not state to plaintiff that he would see that any sum or amount of money would be paid on said mortgage as soon as 'the same was due. The court also found (8) that no sum of money was deposited in the defendant bank by the plaintiff to the credit of defendant Hockersmith for any purpose whatever. As to the cheek, the court found (9) that the plaintiff drew a check against her own personal checking account in said defendant bank in the
There is no evidence in the record that .contradicts or conflicts with the evidence offered by the defendants in support of findings 1, 2, 6, 7, 8, 9, 10 and 11, and there is evidence in the record which conclusively proves that the findings of the court above named are supported by the preponderance of the evidence.
Counsel for appellant contends very earnestly that the bank should be held responsible on the ground that Leonard, cashier, had notice that the check given by appellant to Hockersmith and by him deposited in the respondent bank was a trust fund, and relies upon the case of Duckett et al. v. National Mechanics’ Bank of Baltimore, 86 Md. 400, 63 Am. St. 513, 38 Atl. 983, 39 L. R. A. 84. That case differs very materially from the case at bar. In that, case there were two cheeks drawn on the City National Bank of Laurel, Maryland, and the first reads: “Pay to the order of James Scott, Cashier, Two Thousand Dollars ($2,000.00) for deposit to credit of Henry W. Claggett, being balance of purchase money due him as trustee from John R. Coale. C. H. Stanley.” The second check is drawn on the bank and reads: “Pay to the order of James Scott, Cashier, Two Thousand
These two checks were deposited to the personal account of Claggett, and were dissipated by hiín. We have examined that case, and in our judgment, while the facts are not the same as the present case, yet the law applicable in that ease is applicable to the case now being -considered. The case is quite lengthy, and we quote from the syllabus:
“1. A check stating that it is ‘for deposit to credit of’ a person named without adding the word ‘trustee’ to his name, although it contains a further clause stating that it is ‘the balance of purchase money due him as trustee, ’ does not impress the funds with a trust so as to prevent a bank in which he deposits it from crediting the check to his individual account.
“2. A check stating that it is for ‘deposit to the credit of’ a person named, with the word ‘trustee’ added to his name, is an explicit notification to the bank in which he deposits it that he is not the actual owner of the money, and if the bank credits it to his individual account, and loss ensues to the trust estate by reason of his drawing out the fund by check on his personal account, the bank is liable for participation in the breach of trust.
“3. A bank is not responsible for the use of trust funds made by trustee, unless it knowingly participates in the breach of trust, or profits by the fraud.”
If the law announced in the above case is applicable to the facts in this case, we are satisfied that the plaintiff cannot recover in this action against the • defendant, Grangeville Savings & Trust Company.
Before citing other authorities, we call attention to the check in question in this case:
“No.- Grangeville, Idaho, 11/3, 1909.
“GRANGEVILLE SAVINGS & TRUST CO.
“Pay to the order of J. W. Hockersmith............$625.00 Six Hundred Twenty-five & no/100 Dollars.
“ETTA M. DEARING.”
The supreme court of Kansas in the case of First National Bank of Sharon, Pa., v. Valley State Bank of Hutchison, 60 Kan. 621, 57 Pac. 510, holds: “1. When an agent, rightfully in possession of his principal’s money, deposits it in a bank of which he is president to his own credit and as a part of his general deposit account, and tells the cashier the name of the person to whom it belongs, and instructs him to remit it to the owner, but the remittance is not made, and the agent in a short time cheeks against the general balance of the account, inclusive of the deposit in question, reducing it far below the amount of such deposit, the bank has the right to presume that the agent knows the remittance has not been made and has revoked the order to make it, and that the checking out of the deposit by the agent is within the authorized terms of his agency; and in such case the bank will not be charged with notice of a trust in favor of the owner of the money to the extent of the deposit made by the agent.
“2. Nor does the trust in favor of the owner of the money arise if subsequently, and at a time when the agent’s general deposit is below the amount of his principal’s money deposited by him, he discovers that the remittance has not been made, and therefore directs that the balance to his credit be applied upon his debt due to his principal, if he is also at the same time indebted to the bank, and it chooses to assert its lien upon his funds for its protection; but the bank may refuse to do as directed, and instead thereof may apply the balance of his account to the payment of a debt which the agent in his individual liability owes to it.”
This ease substantially involves the principle which applies to the facts in this case, although differing somewhat from it in point of fact.
A similar question was considered by the supreme court of Georgia in the ease of Munnerlyn v. Augusta Bank, 88 Ga. 333, 30 Am. St. 159, 14 S. E. 554, and in that case the court holds: “A check in favor of a third person signed by the
Under the principle announced in the foregoing authorities there can be no question but that the rule of law applied to the facts in this ease is as follows: Where one party draws a check in favor of another, and it is agreed between such parties that the payee is to act as trustee and agent to draw said money and apply it for the purpose of paying a mortgage upon real property, and the payee presents the check to the bank for payment and the bank pays such cheek, such payment is a cash discharge of the deposit of the party drawing the check to the extent of the check drawn.
The foregoing authorities were cases where the facts are practically the same as in this case, and the law applicable to the facts in those cases was applied, and we are of the opinion that it is a law that governs the facts of this case. While the evidence in this case shows that the plaintiff testifies that she took the cheek to the bank herself and left it there, this statement of the plaintiff is disapproved conclusively by the testimony of Hockersmith and Leonard, and the record of the bank. Hockersmith testifies that on the 18th day of November, 1909, he deposited in the bank the following checks:
“November 18, 1909. Check on trust company, $10.00; check on trust company, $30.00; check on trust company, $46.10; cheek on trust company, $15.65; check on trust company, $19.25; check on trust company, $208.00; check on trust company, $625; cheek on Bank of Camas Prairie, $8.15; check on Bank of Camas Prairie, $48.85; check on Bank of Camas Prairie, $5.15; total, $1,016.15.”
The bank record shows that this deposit on the 18th of November was received by the bank as stated by Hockersmith, and he was credited with the same in his own personal name on his personal account with the bank as a depositor, and not as a trustee, and the evidence also shows that there was nothing said at that time, or at any other time, that the sums so deposited should not be withdrawn by Hockersmith upon his
Referring to the complaint in this case, wherein the cause of action is alleged, the allegation of the complaint was that Hockersmith and F. L. Leonard, cashier of the respondent bank and trust company, combined, connived and conspired to appropriate and apply said sum to their own use. This allegation was the basis and the facts upon which plaintiff sought to recover in this action, and the trial court found against the plaintiff.
We have above set out the allegations of the pleadings and the findings of the court and some of the evidence that was introduced. We will now call attention to the evidence that was given upon the question of the transactions which took place between Leonard and Hockersmith and the plaintiff, and the evidence relating to whether there was a conspiracy proved in this case to apply the sum involved to the use of such parties.
Counsel for appellant called as a witness the defendant Hockersmith and cross-examined him on plaintiff’s behalf, and his testimony relating to the check, material to its history, and what was done with it, is here related, partly in detail without question and partly with the question and answer.
The witness states that he has been acquainted with the plaintiff, and that she came to their house as a little girl. The check was presented to him, and he states that the plaintiff drew the check and delivered it to him on the day of its date. He was asked this question. “Do you know how she came to deliver this check to you?” His answer was, “Well, she gave me the check. She had a mortgage on the place here. . . . . She had a little mortgage on her place here, and she gave me that cheek, and I was going to pay the mortgage and the mortgage was not due at that time, and there was not enough quite to pay the mortgage, and I taken the check into the hank cmd gassed it into the window.” He was asked
Counsel then asked witness: “Now, have you got any explanation to make there when you took the check in as to the conversation you and Mr. Leonard had? A. I can tell you the conversation as soon as I remember it. I taken the cheek in and shoved it into the window and I says, ‘Fred, here is that check.’ Q. By ‘Fred’ you mean the cashier, you mean Mr. Leonard? A. Yes, sir, Mr. Leonard, and I says, ‘What am I going to do with it?’ I says, ‘The mortgage isn’t due and there isn’t enough there to pay, any way,’ and I says, ‘I don’t know what to do with it.’ He says, ‘Who is it to be paid to?’ I says, ‘Mr. Reed holds the mortgage, or at least he is attending to it, any way.’ ‘Well,’ he says, ‘you can just deposit it the same as your other
We call special attention here to this language used by this witness, to show his intention at the time he took the check to use the money for his own use and not deposit it for any special use.
The witness was asked: “Q. That he-would take care of it? A. That it would be taken care of.” Counsel then read from the evidence taken in the bankruptcy proceedings the following questions: “You never drew that money out yourself? A. No. Q. You never drew it out of the bank? A. No.” Counsel for defendants at this time made the statement that he did not think Mr. Hockersmith testified to that, and counsel for appellant said he did, and proceeded to read the same questions again, and counsel for appellant then asked the witness. “What do you mean by that? A. Well, I supposed it was checked out. Q. You checked it out? A. I don’t just understand your question. Q. At whose request did you check that money out? A. Well, I was sending in cheeks there all the time. Q. Well, I am talking about this $625, for the purpose of paying off this mortgage. A. It was put in there for the purpose of paying off that mortgage. Q. Then at whose instance was it checked out? A. Mine, I suppose. I drew the cheeks.....Well, I supposed when he said it went in there the same as my money, it was just the same. Q. I understand. A. And if it was cheeked out, it was just the same. Q. Well, you owed the bank at that time? A. Well, I could not swear to that, whether I did or not. My impression is thpt I did. Q. Did you owe that bank then? A. At the time I deposited it? Q. At the time that money was put in the bank by Mrs. Dearing. A. I think I did. Q. And as you stated you owed the bank? A. I did owe the bank; I think I did at that time. Q. That is, that $625 was checked out for different things and not for the purpose of paying the mortgage. A. That is correct.”
We call attention to this answer, that Hockersmith denies that Leonard said anything to him about the use of the money when it was deposited, which corroborates the evidence of Leonard which we will call attention to later in this opinion.
Counsel again repeats the questions previously-asked this witness about the conversation he had with Leonard when he took the check to the bank and repeats the question of a statement that the mortgage is not due: “And I says, ‘I will better take it to Reed.’ Q. That is the money, the check? A. Yes, sir.” Counsel then reads a former question: “And he says — that is, Leonard — ‘You better deposit it to your credit here. ’ A. He, as I remember,- did not say, ‘you had better’; he just says, ‘You deposit it in your own name.’ Q. Here? A. Here, yes, sir. Q. Instead of at Reed’s? A. Yes, sir; he says, ‘Your credit is good.’ ” Further questions were asked the witness, which have been answered before, and such questions and answers were practically as formerly given.
The plaintiff was a witness and counsel for appellant asked her what arrangement, if any, she had made with Hockersmith and Leonard with reference to a portion of that money that was placed there and to her credit by the Artisans: “What arrangement, if any, did you make with reference to a disposition of a portion of that money ? A. I talked with Mr. Hockersmith a day or so before I left, two days before I
We call attention to the statement above made by the plaintiff, that she left the check in the bank with Mr. Leonard and he said he would see it would be paid for nothing else but the mortgage. This statement of the plaintiff contradicts the testimony of Hoekersmith, in that Hoekersmith testifies that he deposited the check delivered to him by Mrs. Dearing, and that he took the check to the bank with other checks and deposited them upon his own account. This statement of the plaintiff is also contradicted by Leonard’s testimony, which will be referred to later on in this opinion. The witness then says she went away to Boise, for nearly two years; she could not hear from Hoekersmith and she wrote Mr. McDonald, an attorney, about the matter. She was then asked if she got a statement from the bank and she answered she had: “I got it from the bank addressed on the envelope.” This bank account reads as follows:
*156 “Etta M. Dearing in Account with Grangeville Savgs. & T. Co.
Nov. 2, 1909, balance per pass-book...............$699.53
Nov. 2, 1909, deposit............................. 2.50
Check returned.........................$ 74.53
“ “ ........................ 625.00
Balance due you........................ 2.50
$702.03 $702.03
Balance due you 1-30-11....................... 2.50”
The plaintiff was then asked when she first found out that the money had not been paid according to her understanding with Leonard and Hockersmith on the cheek that she left in favor of Hockersmith for that purpose. Her answer was: “I never really found out for sure. The first I found out I wrote to my father in law, Mr. Dearing, J. F. Q. What time was that? A. Right after I got that return from the bank. Q. In 1911? A. Yes. After I got the return from the bank, and then it was the first time I learned that the money had not been paid. I then wrote to Hockersmith. Got two letters from him.....After I found out the mortgage had not been paid in 1911, I came up then in the spring of 1912, came up from Boise to Grangeville. Before I left Boise I was not satisfied writing to Mr. Dearing and I wrote to Mr. Ilattabaugh.....When I got to Lewiston I met Mr. Leonard.....I asked 'him in regard to the matter. He did not know. I asked him if the money was left in the bank. He answered that he did not know and I asked him if Mr. Hockersmith had any account to meet with the bank, and. he did not know, and I told him that I would be down at 9 o’clock in the morning when the hank opened, and he said the bank opened at 9 o’clock. I asked-him if there was a note in the bank from Hockersmith to me. He said, nothing in the bank. He said it might be in Hockersmith’s own bank-box which he had no right to show me. I then asked him if Hockersmith had any money in the bank. He says, ‘Mrs. Dearing, there was a check drawn on the bank last week by
As to the conversation had in the bank at 9 o’clock, she was asked: “Q. State any further conversation with Mr. Leonard at that time. A. Well, I didn’t have any further conversation with Mr. Leonard at that time. Q. He denied that he knew there was any money there to be paid on that mortgage? A. Yes, sir, he denied that absolutely, and as far as seeing the note, I never saw the note. I don’t know there is a note there or not. Q. Did you ever authorize any note to be executed to you by Mr. Hockersmith? A. No, I never did.”
Leonard was called as a witness for the defendant and in his evidence gave testimony with reference to the transactions had by him and the plaintiff and Hockersmith. He testified that he was cashier of the bank. He was handed the cheek in controversy and was asked to examine the paper and state what it was and he answered, a check by Etta M. Dearing, dated November 3, 1909, drawn against the Grange-ville Savings & Trust Company, payable to the order of J. W. Hockersmith, amount $625, indorsed by J. W. Hockersmith. He was asked if he had seen the cheek before. “A. I presume I saw the cheek when the statement was made, I don’t recall. Q. I will ask you whether or not this check was delivered to you for Hockersmith. A. It was not. Q. You heard Mrs. Dearing testify in regard to coming up here and making this cheek and giving it to you ? A. I did. Q. State what the conversation was. A. Nothing, unless she asked me in regard to the standing of Hockersmith. Q. What was Mr. Hockersmith’s standing at that time? A. That it was good at our bank at that time for a thousand dollars without security.”
A paper was handed Leonard by counsel for defendant and he was asked what it was. “A. It is a deposit slip showing a deposit made November, 1909, showing the deposit made by Hockersmith.” It happened to be a copy and some objections were made to it and counsel asked Leonard when he made the copy. “A. A clerk made that out. Q. When?
It was agreed by counsel that the statement of the bank heretofore referred to contains a history of the transaction with Hockersmith, the amount of the deposit made $1,016.15, and a copy of that statement has heretofore been incorporated in this opinion. The above statement was agreed to by counsel, that it showed what the books show in reference to the transaction between Hockersmith and the bank.
Some controversy arose whether the witness did not, on inquiry from counsel in November or October last that there was a note in the vault, bring out the note and show it to the attorney at the window in the presence of Hockersmith. “Q. How long was it Mrs. Dearing was in your bank a day or two before she left for Boise? A. I don’t remember talking to Mrs. Dearing after she got off the train. Q. I mean in Orangeville. A. I could not tell. Q. Was she down in your bank at that time ? A. Might have been for all I know. Q. She might have had a conversation with you at that time ? A. Might have. Q. Might have asked you with reference to this mortgage? A. Might have. Q. Might have talked with you about this money that was deposited by the Artisans to her credit? A. I don’t know whether she did or not. She had the privilege of checking it to anybody she desired. Q. Did she write any checks to you? A. Not to my knowledge. Q. You say that this statement that you see shows her account in your bank which you sent her in 1911 showing the statement of her account? A. It is a copy of the ledger, a copy of her account. Q. It does not pretend to show that this money was disbursed. A. Nothing of my business to show how she got rid of her money. Q. How came you to render this statement to her? A. We sent out statements regularly every month. It bears date January 30, 1911.”
Upon cross-examination counsel further interrogated the witness: “Q. After this money was deposited in the bank to Mrs. Dearing from the Artisans’ lodge, did you ever at any time have any conversation with Mr. Hockersmith in
We have taken particular pains here to state the evidence which relates to the conversations of these three witnesses with reference to the transactions involved in this action. I am satisfied from this evidence that there can be no question but that there is no evidence given by either one of ■ the parties which even hints that any conspiracy was entered into between Leonard and Hockersmith to in any way defraud
Black’s Law Dictionary defines conspiracy in criminal law: “A combination or confederacy between two or more persons formed for the purpose of committing, by their joint efforts, some unlawful or criminal act, or some act which is innocent in itself, but becomes unlawful when done by the concerted action of the conspirators, or for the purpose of using criminal or unlawful means to the commission of an act not in itself unlawful.”
Sec. 6540, Rev. Codes, defines conspiracy as follows: “If two or more persons conspire: 1. To commit any crime..... 4. To cheat and defraud any person.of any property by
The evidence in this case shows that the deposit of the check of $625 was made by Hockersmith as his own personal account, and that no other obligation or agreement was made between the bank or any of its officers and Hockersmith that such deposit should become a trust fund. The obligation of the bank when such deposit was made was to keep the fund safe and return it to the proper person who deposited the same, or to pay it to his order. If Hockersmith had deposited the check as a trustee, then as such trustee he would have a right to withdraw it, and the bank in the absence of knowledge or notice to the contrary would be bound to assume that the trustee would appropriate the money when drawn to a proper use. If this rule is not adopted it would place upon a bank a duty of inquiring and investigating as to the appropriation made of every fund deposited by a trustee or other like fiduciary, and if this duty is imposed it would, practically put an end to the banking business, because no bank could possibly conduct .business if without fault on its part it was held accountable for the misconduct or malversation of its depositors who occupy some fiduciary relation to the fund placed by them with the bank. (Duckett v. National Mechanics’ Bank, 86 Md. 400, 63 Am. St. 513, 38 Atl. 983, 39 L. R. A. 84.)
As to the fact of depositing money in a bank in trust for a third person, a note to the above case cites the following: “See Cunningham v. Davenport [147 N. Y. 43, 49 Am. St. 641, 41 N. E. 412], 32 L. R. A. 373, and Bath Savings-Inst. v. Hathorn [88 Me. 122, 51 Am. St. 382, 33 Atl. 836], 32 L. R. A. 377.”
There is another ground which in our judgment is sufficient and conclusive as to whether this ease should be reversed. The trial judge saw the witnesses who testified in this case and had a full opportunity to determine the credibility of the witnesses, and he made his findings and entered his judgment upon what he deemed to be the preponderance of the evidence received in the case. In my judgment there
In Hayne, New Trial and Appeal, vol. 2, sec. 288, the author, in speaking of the rule above stated, says: ‘ ‘ This rule has been announced more frequently than any other rule of practice.”
The judgment appealed from in this case is affirmed. Costs awarded to respondents.
Petition for rehearing denied.
