First Nat. Bank of Burlingame v. Hanover Nat. Bank of New York

66 F. 34 | 8th Cir. | 1895

SANBORN, Circuit Judge.

The Hanover National Bank of New York, the defendant in error, brought an action in the court below, and, after a jury trial,1 recovered a judgment against the First National Bank of Burlingame, Kan., the plaintiff in error, for a balance alleged to be due it on account. The writ of error was sued out to reverse this judgment. At the trial there was but a single item of the account in controversy. That was $5,000, which the New York bank charged to the Kansas bank on December 24, 1890, on account of a promissory note for that amount made by one Sheldon, and discounted by the New York bank at his request. Sheldon was the president of the Kansas bank, and the New York bank maintained that the Kansas bank had agreed to pay this note at maturity if Sheldon did not, and that it had authorized the charge of this item to its account in that event. The Kansas bank denied that it had ever made any such agreement or given any such authority. Tliere was conflicting evidence upon this issue that it is unnecessary to recite. But the evidence was undisputed that the New York bank discounted this note on September 23, 1890; that by direction of Sheldon it placed the proceeds of it on its books (o the credit of the Kansas bank, and telegraphed to Sheldon to that effect on the same day, and that immediately upon the receipt of that telegram by Sheldon these proceeds were placed to his credit in the Kansas bank, and were used by him. The court charged (lie jury:

“If yon find from the evidence that there was originally a defect of authority upon the part of tiñese partios to this transaction, and if you further find that, the defendant banlc retained and enjoyed the proceeds of the transaction made by Sheldon, that would constitute acquiescence, as effectual as the most formal ratification afterwards, and the defendant, if you find that to be the case, would he estopped from resisting the demand of the plaintiff here. That is a mailer for you to determine from the testimony, for upon the question of authority the testimony is conflicting, and you must determine it for yourselves.”

An ex cop! ion was taken to this portion of the charge on the ground that there was no evidence tending to show that the defendant bank received and had (he benefit of the loan in controversy. We think this exception was well taken. We have stated the oniy evidence the record discloses on this subject, and from that it clearly appears that the Kansas bank was used by Hheldon as a mere conduit through which to pass the proceeds of the discount from the New York bank to himself. Just as soon as he learned that the New York bank had credited (he Kansas bank with this money on its books, he caused it to be charged to the Kansas bank, and credited to himself on the books of the latter, and lie used it. The Kansas hank neither retained nor enjoyed the proceeds 'of this discount, nor did it receive any interest, commission, or other benefit from the transaction. As there was no evidence that it retained or enjoyed the proceeds of this discount for the jury to consider, Ihe instruction that such retention and enjoyment might work an estopjiel of the right of the bank to question the authority of its officers to charge it with the liability in issue obviously tended to mislead the jury. An instruction which submits a material issue, that is settled hv the uncontradicted evidence in the case, to a jury, as a disputed question of fact for them to determine, is misleading and erroneous. Smith v. U. S., 151 U. S. 50, 54, 14 Sup. Ct. 234. The judgment below is reversed, and the cause remanded, with instructions to grant a new trial.