SECURITY BANK AND TRUST COMPANY, a Banking Corporation, Appellee, v. The FEDERAL NATIONAL BANK AND TRUST COMPANY OF SHAWNEE, a Banking Corporation, Appellant.
No. 48672
Court of Appeals of Oklahoma, Division No. 2.
April 13, 1976
554 P.2d 119
The argument overlooks evidence upon which the jury could base a finding that defendant‘s agents were not acting in good faith when they represented the VW Thing was in “excellent condition,” knowing it had been severely wrecked and then poorly repaired. The jury could find further that requiring Gary to wait from Friday until Monday to drive the yellow Thing home was an artifice to impede a potential professional examination of the VW until after defendant disposed of the Dodge, in order to coerce consummation of the deal with the plea it could not get the Charger back—a finding which is inferentially fortified by defendant‘s further аdmission that over the weekend it promptly “wholesaled” the Dodge to “Executive Motors” for $2,650.
In our view such conduct resulted in more than a so-called “technical” conversion, whatever that may be—it amounted to a willful and wanton conversion of a car it knew Gary did not own, accomplished under the false pretense of needing to keep the Dodge over the weekend to have it “appraised,” when in truth аnd fact defendant‘s agents knew the value of the car and knew for how much it could be quickly wholesaled. The whole transaction as related by plaintiff and her son fairly suggests oppressive overreaching on the part of defendant in a bad faith effort to gain an unfair advantage—the gist of fraud. Fontenot v. White, 115 Okl. 248, 242 P. 854 (1925). Thus, an ample foundation existed for the jury‘s award of punitive damages.
Affirmed.
BACON, P. J., and NEPTUNE, J., concur.
Eagleton, Nicholson, Pate & Gill, Oklahoma City, for appellant.
BACON, Presiding Judge.
This appeal involves the issue of whether appеllant bank gave sufficient notice of
The parties stipulated to the following facts:
“1. That with respect to check number 655, dated September 18, 1974, in the sum of $9,310.40:
(a) That check no. 655 was initially presented to the Federal Reserve Bank on Friday, September 20, 1974.
(b) That it was picked up by Mistletoe Express at approximately 9:00 p. m. on September 20, 1974.
(c) That it was delivered to defendant bank [appellant] on Saturday, September 21, 1974, before 6:30 a. m.
(d) That defendant gave the Federal Reserve Bank telephone notice of dishonor of said cheсk on Tuesday, September 24, 1974.
(e) That check no. 655 was mailed by defendant to the Federal Reserve Bank on September 24, 1974, and received by the Federal Reserve Bank on September 25, 1974.
(f) That check no. 655 was presented to the Federal Reserve Bank the second time on Monday, October [sic] 30, 1974.
(g) That it was picked up by Mistletoe Express at approximately 9:00 p. m. on September 30, 1974.
(h) That it was delivered to defendant bank on Monday, October 1, 1974.
(i) That defendant gave telephone notice of dishonor to the Federal Reserve on Tuesday, October 2, 1974.
(j) That check no. 655 was mailed by defendant to the Federal Reserve Bank on Tuesday, October 2, 1974, and received by the Federal Reserve Bank on Wednesday, October 3, 1974.”
Based upon the above-stipulated facts, depositions and evidence, the trial court made the follоwing finding in its journal entry:
“The Court further finds based on evidence presented herein as to Check No. 655, the following:
“(1) That Monday, September 23, 1974, was the banking day of receipt for purposes of determining whether or not defendant acted within its midnight deadline; that Saturday, September 21, 1974, was not a ‘banking day’ based on the facts established in this case; that defendant bank acted within its midnight deadline.
“(2) That defendant bank complied with all the terms and provisiоns of
12A O.S. (1971) Section 4-301 except that portion of said statute under (1)(b) to-wit: that defendant bank failed to send written notice of dishonor or nonpayment as required by said statute; specifically the Court finds that oral telephone notice of dishonor and nonpayment given by defendant Bank prior to its midnight deadline on both occasions that check number 655 was presented is insufficient and fails to comply with12A O.S. (1971) Section 4-301 and the Operating Letters of the Fedеral Reserve Bank of Kansas City.“(3) That defendant bank is liable and accountable to plaintiff bank for check number 655 in the sum of $9,310.40.
“The Court further finds that plaintiff claims attorney fees in its Petition, pursuant to
Title 12 O.S. Section 936 ; that the Court finds that this cause of action falls under said statute and that attorney fees in the amount of $1500.xx should be awarded plaintiff.”
Appellee states the question to be decided is “whether telephonic notice was authorized under the applicable Oklahoma
Before we can determine if appellant‘s telephonic notice of dishonor was sufficient, we must first determine if appellant “acted” within its midnight deadline. We say this because if appellant acted after the midnight deadline, oral or written notice would not be sufficient in this case. This issue was not raised until appellee did so in the last proposition of its answer brief.
The cheсk in question was received by appellant on Saturday, September 21, 1974, and appellant telephoned notice of dishonor on Tuesday, September 24, 1974. The Uniform Commercial Code
“‘Midnight deadline’ with respect to a bank is midnight on its next banking day following the banking day on which it receives the relevant item or notice or from which the time for taking action commencеs to run, whichever is later.”
“‘Banking day’ means that part of any day on which a bank is open to the public for carrying on substantially all of its banking functions.”
The Uniform Commercial Code Comment following these sections states:
“Purposes:
1. Subsection (1) (c): ‘Banking Day.’ Under this definition that part of a business day when a bank is open only for limited functions, e.g., on Saturday evenings to receive deposits and cash checks, but with loan, bookkeeping and other dеpartments closed, is not part of a banking day.”
It is undisputed that on the Saturday in question only appellant‘s “paying and receiving” departments were open. All other departments, including bookkeeping, accounting, installment loan, and proofing were closed. We therefore conclude under these circumstances that the Saturday in question was not a banking day as defined under the above-quoted Oklahoma law. Since the following Monday (September 23, 1974) would be the day of receipt of the item, appellant‘s “midnight deadline” (as above defined) would be midnight of the next day, that is, midnight Tuesday, September 24, 1974. Appellant gave telephonic notice of dishonor on this Tuesday before midnight. We therefore conclude that appellant acted or telephoned notice of dishonor before its “midnight deadline,” when it telephoned thе Federal Reserve on Tuesday, September 24, 1974. There is no question as to whether appellant “telephoned” before its midnight deadline after
We will now turn to the main issue of this case, which, as stated by appellee, is “whether telephonic notice was authorized under the applicable Oklahoma law and the Operating Letters of the Federal Reserve Bank.” No case deciding this issue has been brought to our attention, nor has our research disclosed one.
We think the positions of the parties can be fairly summarized and stated as follows. Appellee‘s position is that notice of dishonor by a payor bank must be in writing as required under
We find the operating letter in question authorizes appellant to give notice of dishonor by telephone.2 At first glance it
Appellee argues that the operating letters are not to change substantive law. The thrust of appellee‘s argument to support the judgment of the trial court is that if oral notice under the Federal Reserve operating letter is deemed sufficient, such would be in complete disregard for the law, i.e.,
“(1) The effect of the provisions of this Article may be varied by agreement except that no agreement can disclaim a bank‘s responsibility for its own lack of good faith or failure to exercise ordinary care or can limit the measure of damages for such lack or failure; but the parties may by agreement determine the standards by which such rеsponsibility is to be measured if such standards are not manifestly unreasonable.
“(2) Federal Reserve regulations and operating letters, clearing house rules, and the like, have the effect of agreements under subsection (1), whether or not specifically assented to by all parties interested in items handled.
“(3) Action or non-action approved by this Article or pursuant to Federal Reserve regulations or operаting letters constitutes the exercise of ordinary care
and, in the absence of special instructions, action or non-action consistent with clearing house rules and the like or with a general banking usage not disapproved by this Article, prima facie constitutes the exercise of ordinary care. . . .”
We find that
The trial court found appellee‘s cause of action fell under
Apрellant‘s third proposition of error urges appellee‘s cause of action is based on liability created by statute for failure to give legal notice of dishonor of a demand item and is not a suit “to recover on a negotiable instrument” falling under
The cases cited in the briefs involve suits to recover on negotiable instruments and open accounts. As we view this lawsuit, it is a suit to recover for failure to validly dishonor a check, and as such, is not a suit to recover on the instrument itself. We note appellee did not attach copies of the checks to its petition as required by
The case as to check number 655 is reversed and remanded to the trial court with directions to vacate the judgment entered and to enter judgment for aрpellant in accordance with the views expressed herein, and is affirmed as to checks numbers 650 and 652.
BRIGHTMIRE, J., concurs.
NEPTUNE, Judge (concurring in part and dissenting in part).
I would affirm the judgment awarding attorney‘s fees as being within the purview of