180 N.W. 714 | N.D. | 1920
Lead Opinion
The controversy before us involves the liability of the defendant bank upon a certain check which it received from the plaintiff for collection. The material facts are substantially as follows:
In June, 1918, the plaintiff was the state’s attorney of Eolette county in this state. • Prior to June 10, 1918, one I. M. Ingebretson was the treasurer of said county. Ingebretson had issued certain fraudulent tax receipts and by means thereof collected moneys from taxpayers of that county. The fraudulent practices were discovered, and on June 1, 1918, or thereabouts, Mr. Ingebretson executed and delivered to the plaintiff a check in the sum of $1,388.60, drawn upon the Eolette County Bank of St. John, North Dakota, the proceeds of which were to be used by the said Verret in reimbursing the persons so defrauded. The plaintiff testified that at the time Ingebretson gave him the check he asked him (Verret) “to take that check to the State Bank of Eolia, and not the other bank, and deposit it.” On June 10, 1918, the plaintiff Verret took the check to the defendant bank and, after indorsing it, delivered it to that bank for deposit and collection. He received from the cashier of the bank a duplicate deposit slip of the usual form. Verret testified that he informed the cashier of the defendant bank of the purpose for which the check had been given, and asked him not to put it in his (Verret’s) general account, but “to put it in a deposit by itself.” It was stipulated as a fact that the defendant bank on the same day forwarded the check to the Capital National Bank of St. Paul for collection and credit; “that the same was received by the Capital National Bank of St. Paul, Minnesota, on June 11, 1918, and on the same day forwarded by the said Capital National Bank to the Federal Eeserve Bank of Minneapolis, Minnesota; that said check was received by the Federal Eeserve Bank of Minneapolis, Minnesota, on June 11, 1918, and that on the same day, said Federal Eeserve Bank of Minneapolis, Minnesota, forwarded same by mail direct to the Eolette County Bank of St. John, North Dakota, the drawee bank therein; that thereafter and on the 20th day of July, a. d. 1918, not having collected said check from
The evidence shows that the defendant bank, in the usual course of business, received from the Capital National Bank of St. Paul a card acknowledging the receipt by said latter bank of the check for collection. Plaintiff Verret testified: “On two different occasions between the 10th day of June and the 22d day of July, 1918, I inquired
The cashier of the defendant bank testified that he had no recollection of the conversations referred to by the plaintiff. The deposit ledger of the Bolette County Bank at St. John showed that at the time Ingebretson drew his check he, in fact, had no money on deposit at the bank; but that at later dates he made deposits and from and after July 6, 1918, had sufficient money on deposit to care for the check.
The plaintiff Yerrct testified that he is a banker as well as an attorney, and that he did not expect the defendant bank to present the check to the drawee bank in any other manner than that in which it was done. The testimony, further, is to the effect that the check was forwarded for collection in the usual course, and that ordinarily no further inquiry or tracer would be sent by the forwarding bank.
Manifestly the liability of the defendant, if any, is predicated on negligence,—negligence either on the part of the defendant bank, or on the part of one of its subagents. As pointed out by this court in Farmers State Bank v. Union Nat. Bank, 42 N. D. 449, 173 N. W. 790, there are, in this country, two conflicting doctrines as to the liability of banks which undertake the collection of commercial paper at a distance. One has become known as the “New York rule” and the other as the “Massachusetts rule.” Under the so-called New York rule, the first bank is responsible for the conduct of its correspondents and subagents as fully as though it had performed the entire service itself. According to the Massachusetts rule the bank which receives for collection out-of-town commercial paper is responsible only for its own negligence, and not for the negligence of its correspondents or subagents. This court has not, as yet, been required to determine which rule ought to be adopted in this state. Nor do we believe it is necessary to determine that question in this ease. Negligence forms the basis of liability under both rules. There
The cashier testified that this check was received the same as any other check, and that plaintiff was immediately given credit therefor on the bank books. He further testified: “I may say in explanation, had this cheek been brought in by a stranger or someone we didn’t know he wouldn’t have received credit until we found out that the check was o. k., but in case of a responsible depositor we give credit light away, with the understanding, as our pass books read, if checks are not collected they will be charged against the account.” It should be borne in mind that at the time plaintiff deposited the check he talked with the cashier. Whatever specific information the bank was given regarding the check was given to the cashier. There is no showing that any other officer was present, or that plaintiff ever informed any other officer as to the purpose of the check. Plaintiff does not say that the two subsequent conversations were with the cashier, but merely with "officers” of the bank. The cashier testified that he had no recollection
Plaintiff testified that at the time he deposited the check he informed the cashier: “That I did not want to draw on this deposit until I knew that the checlc had been paid
On cross-examination, the following question was propounded to the plaintiff, and the following answer given by him:
Q. Did you at that time (when the check was deposited) tell Mr. Butterwick (the cashier) that you wouldn’t draw upon this deposit in the State Bank of Bolla until you found out that the check was collected, or words to that effect ?
A. To the best of my recollection I did say that or words to that effect, and that is the reason I put it in a special deposit and didn’t put it with my other deposit. ... As a matter of fact I didn’t know whether that check was any good or not.
The plaintiff, Yerret (who acted as his own attorney on the trial of the case); propounded the following question to Butterwick, the cashier of the defendant bank:
“Q. Do you remember that I told you in that conversation when I left the check with you, that I was anxious to find out as soon as the check was paid so that I could make out checks and pay off the taxpayers the money they had coming, and that I wouldn’t draw on that deposit until I found it was paidf”
According to plaintiff’s testimony he was never advised that the check was paid. He did not so construe the statements made to him by the officers of the bank. He was twice given the same information. The information received the first time was of sueh nature that he did not feel warranted in drawing checks. The second time he received precisely the same answer that he received the first time. There is no contention that the answers were untrue. There is no foundation in the evidence for any claim that the defendant bank itself owed any duty to make any inquiry regarding, or effort to collect, the check other than was done. We find no evidence of actionable negligence on the part of the bank itself.
It follows, from what has been said, that the judgment appealed from must be reversed. It is so ordered.
Dissenting Opinion
(dissenting). I am of the opinion that the judgment appealed from should be affirmed. The Federal Reserve Bank of Minneapolis, Minnesota, was a subagent of the defendant, and was, without question, guilty of negligence.
On June 11, 1918, it forwarded the check in question to the Rolette County Barde, the drawee, of St. John, North Dakota, and not receiving payment,- on the 20th day of July, 1918, charged the check to the Capital National Bank of St. Paul, from which it had received it. Otherwise, the Federal Reserve Bank paid no attention to the check until the 21st day of July, 1918, when its representative appeared personally at the Rolette County Bank of St. John and received the check; and on the 22d of July, 1918, presented it for payment to the Rolette County Bank, and payment was refused.
On the 26th day of July, 1918, it returned the check to the Capital National Bank, from which it had received it. It is clear that after the check was sent by the Federal Reserve Bank to the Rolette County Bank, the drawee, and while the check was with the drawee, it had sufficient money on deposit to the credit of Ingebretson, from July 6th to July 21, 1918, to have paid it.
When a bank undertakes to act as principal, it should be held to the same rule of conduct that applies to the liability of principals, generally; that is, it should be responsible, in damages, for the negligent acts of its agents or subagents, performed within the scope of their employment. If such rule were applied in this case, as the record now stands, the defendant could not escape liability.
Plaintiff has petitioned for a .rehearing. The petition is in effect a reargument of the case. It assails both the conclusions of fact and of law reached by us in this case. We have given the petition careful consideration. We have again reviewed the evidence, and reconsidered the legal principles involved. We find no reason to doubt the correctness of the former decision in any particular. That decision was handed down after careful consideration of every aspect of the ease, and represented the deliberate views of the four members of the court who signed it. Further reflection has not altered, but rather confirmed, the views we then expressed.
Eehearing denied.