Bowen v. Needles Nat. Bank

• Decision Date: 02 May 1898
• Docket Number: 652.
• Court: U.S. District Court — Southern District of California
• Parties: BOWEN v. NEEDLES NAT. BANK (MURPHY, Intervener).

87 F. 430

BOWEN v. NEEDLES NAT. BANK (MURPHY, Intervener).

No. 652.

United States Circuit Court, S.D. California.

May 2, 1898

Works &amp Lee, for plaintiff.

Gardiner Harris & Rodman and Henry C. Dillon, for defendant.

WELLBORN District Judge.

In this case there was waiver of jury, and trial by the court. The action was originally brought against the Needles National Bank, May 8, 1895. Some months prior thereto said bank had become insolvent, and was, by the comptroller of the currency, placed in the hands of a receiver, Daniel Murphy who intervened in this action, August 22, 1896. Plaintiff unites in his complaint four causes of action, each of the first three stated under three separate counts, so drawn as to meet the various legal aspects of the case. The first cause of action is an instrument in writing, as follows: (CHART OMITTED)

Said instrument, termed in the complaint a 'bill of exchange,' is, accurately speaking, as shown later on, a check; and, since the distinction indicated is a material one, I shall hereafter, in alluding to said instrument, observe its appropriate designation.

The second and third causes of action are in all respects the same as the first, except that the checks therein mentioned were drawn, respectively, September 12, 1894, for $8,300, and September 17, 1894, for $5,364.

The fourth cause of action is thus stated in the complainant:

'That on the 25th day of April, 1894, the plaintiff having theretofore advanced moneys to one Isaac E. Blake upon checks drawn by said Blake upon the plaintiff as A. T. Bowen & Co., and not being willing to advance further sums without some guaranty from the defendant, the said defendant, on the said 25th day of April, 1894, in writing, promised and agreed with plaintiff that it would pay all checks signed by the said Blake and drawn upon the plaintiff as A. T. Bowen & Co. That, acting upon the said written promise of the defendant, the plaintiff thereafter, upon checks drawn by the said Blake for the following sums, and upon the following dates, respectively, to wit, September 4, 1894, September 5, 1894, September 10, 1894, and September 11, 1894, for the sums of $8,750, $8,300, $5,300, respectively, advanced to the said Blake the said sums of money upon the dates mentioned, and thereupon presented to the defendant the said checks for said sums, and upon receipt by said bank of the said three first-named checks the defendant issued its three several drafts for the sums above mentioned, payable to the order of this plaintiff, upon the Chase National Bank of New York, and delivered the same to this plaintiff; but that at the time said drafts were drawn and delivered to the plaintiff, and ever since, there has been no money on deposit or in the hands of the said Chase National Bank out of which said drafts could be paid, and the same have become dishonored, and remain wholly due and unpaid. That the said sums of money, respectively, not having been paid by and through said drafts drawn by the defendant, the plaintiff thereupon demanded payment of the defendant of said sums, including the said sum of $3,500, but the defendant has wholly failed and refused to pay said sums or either of them, or any part thereof, and the whole thereof is now wholly due and unpaid.' The defenses relied on, and stated in the order in which it will be convenient for me to consider them, are, substantially: First. A conspiracy between Blake and the plaintiff to defraud the defendant through certain false representations and practices, particularly set forth in the complainant in intervention. Second. That before the checks sued on were drawn it was agreed between plaintiff, defendant, and the said Blake that said checks were to be paid by counterdrafts on Blake in New York City, and not otherwise; and that the defendant was to be saved and kept free from harm by this arrangement. Third. That on September 12, 1894, said Blake gave the note of himself and wife to plaintiff for $37,100, and that plaintiff accepted said note in full payment and satisfaction of all the demands sued on. Fourth. That the checks mentioned in the first three causes of action, and the written promise mentioned in the fourth, were without consideration. Fifth. That said checks were never presented to the drawee for acceptance of payment. Sixth. That said written promise was, in effect, a guaranty of the payment of the debt of a third person, made solely his benefit, and therefore ultra vires; or, if said promise be considered an original undertaking, still Blake, as was known to plaintiff, had no funds on deposit with the defendant to pay his drafts, and therefore said promise, viewed as an original undertaking, was made without authority, and is void; and that, since the checks mentioned in the first three causes of action were drawn in attempted execution of said promise, without funds, and solely for the benefit of Blake, they likewise are void. The intervener filed a cross complaint, but abandoned it at the trial. Defendant also filed a cross complaint, claiming balance of $69.45, and asks judgment on the same.

Some of the facts of the case are admitted; others are in dispute. As to the latter, the evidence is voluminous, and I shall not undertake to review it, but simply state my findings therefrom, together with the admissions of the pleadings. The material facts thus appearing are these: Defendant drew the checks sued on in settlement of drafts for corresponding amounts drawn by Blake on itself, and payable to the order of A. T. Bowen & Co., the name under which plaintiff conducted a banking business in the city of New York. Plaintiff, as he testifies, advanced to Blake the various amounts of money called for by said drafts on or about their respective dates, to wit, the 4th, 5th, and 10th of September. When Blake drew said drafts, he had no funds on deposit with the defendant for their payment. The checks sued on were not paid by the drawee, nor were they presented for payment. Defendant did not, at the time or subsequent to the dates of said checks, have funds with the Chase National Bank to meet them, but at the time of forwarding said checks to plaintiff also drew and forwarded to the Chase National Bank drafts for corresponding amounts on said Blake. From the promises of Blake and his previous compliances therewith defendant had reason to believe that said drafts on him would be paid, and that the Chase National Bank, thus provided with funds, would honor the checks issued to plaintiff. The defendant has suffered no loss or injury from the failure to present said checks for payment. The checks sued on were drawn pursuant to a written promise of defendant, referred to in the fourth cause of action, and evidenced by the following telegrams and letters:

'Received at the Western Union Building, 195 Broadway, N.Y., April 25, 1894. Dated Needles, Calif., 25.

'To A. T. Bowen & Co., 71 Broadway, New York: We will pay checks signed Isaac E. Blake by W. L. Beardsley.

'Needles National Bank.'

'The Needles National Bank, Needles, California, April 25th, 1894.

'A. T. Bowen & Co., New York City-- Gentlemen: We hereby beg leave to confirm out telegram to you of even date, 'We will pay checks signed Isaac E. Blake by W. L. Beardsley.' signed 'Needles National Bank.'

'Yours, truly,

W. S. Greenlee, Cashier.'

'The Needles National Bank, Needles Cal., August 22nd, 1894.

'A. T. Bowen & Co., New York City-- Gentlemen: I am in receipt of telegraph communications from Chase National Bank that our draft No. 2,200 for $7,500, payable to the order of Bowen & Co., has been refused payment until advices received from us guarantying the amount received. I immediately guarantied the amount to be $7,500, and I trust I have put you to no great inconvenience. It is simply a clerical error, which happens to us all some time or other, and in future we will endeavor to be more careful. I have telegraphed you to please pardon our error, which happens to us all some time or other, and in future we will endeavor to be more careful. I have telegraphed you to please pardon our error, and that we wish you to still continue your friendly relations with Mr. Blake and Mr. Beardsley, and that we guaranty absolutely the payment of Mr. Blake's, checks as heretofore. I am truly sorry the mistake has occurred, and can venture the assertion that it will not happen again. The Keystone Mine has just uncovered a large body of high-grade ore, and, if the vein continues as it is now for the next thirty days, it will make a big showing. Again asking your pardon, I remain, with best wishes,

'Very truly yours,

W. S. Greenlee, Cashier.'

Plaintiff's advances to Blake commenced in January, 1894, and continued down to September following. During this period, many checks, aggregating thousands of dollars, were drawn by Blake on the defendant, payable to the order of the plaintiff, and checks issued therefore by the defendant on the Chase National Bank. The means by which defendant supplied the Chase National Bank with funds to meet said bills of exchange were as hereinbefore stated, drafts drawn by defendant, through said National Bank, on Blake. All of said checks and drafts down to and expecting those specifically mentioned in said complaint were duly honored and paid. The first communication between plaintiff and Greenlee, cashier of the defendant, probably about the time the first check was drawn, was a letter dated January 22, 1894, stating the inclosure, and that there would be no charge for remitting. On February 10, 1894, another check of $1,900 was forwarded by plaintiff to the defendant, with the added inquiry:

'Please give us what information you can relative to Mr. Isaac E. Blake's financial standing. Is he

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