Anderson v. National Bank of Tacoma

• Decision Date: 07 February 1928
• Docket Number: 20948.
• Citation: 264 P. 8,146 Wash. 520
• Parties: ANDERSON et ux. v. NATIONAL BANK OF TACOMA et al.
• Court: Washington Supreme Court

264 P. 8

146 Wash. 520

ANDERSON et ux. v. NATIONAL BANK OF TACOMA et al.

No. 20948.

Supreme Court of Washington

February 7, 1928

Department 2.

Appeal from Superior Court, Pierce County; Remann, Judge.

Action by P. C. Anderson and wife against the National Bank of Tacoma and others. From an order dismissing the action plaintiffs appeal. Affirmed.

H. W Lueders, of Tacoma, for appellants.

Henry Arnold Peterson and Hayden Langhorne & Metzger, all of Tacoma, for respondents.

HOLCOMB J.

As stated by counsel for appellants, this is an action for the recovery of rents accruing on real estate, evidenced by a check for $675, dated July 5, 1920.

Although the second amended complaint, which is the pleading involved herein, was not filed until long afterward, it seems that the action was commenced by the filing and service of the original complaint on December 21, 1926.

Upon demurrers by the several defendants to the second amended complaint being sustained by the trial court, and appellants electing to plead no further, the action was dismissed, from which order this appeal is prosecuted.

The essence of the second amended complaint, somewhat condensed is as follows:

Appellants were the owners of certain real estate, and leased the same on June 20, 1915, to defendant George Lawler, at a monthly rental of $35, beginning July 20, 1915. It is not alleged whether the lease was oral or in writing, but it is alleged that, owing to the financial condition of Lawler at that time, it was agreed that all rentals should be deferred until the bulb and floriculture industry, which he was endeavoring to develop on the premises, should be so developed as to be upon a rental basis, and he was able to pay rent, which was estimated to be four or five years. In May, 1923, appellants requested payment on account of the rent, and were told by Lawler that the rent had been paid by checks drawn in favor of appellant P. C. Anderson. It is alleged that Lawler refused to state to whom the checks were delivered or to produce the checks. Accordingly, on September 8, 1923, Anderson demanded payment of the rental up to that date. That demand was refused or ignored, and on the same day Anderson, without the joinder, or, as it is alleged, without the knowledge of his wife, assigned to one Saraha A. Dodge his 'claim for the rent and occupancy of the certain real estate and appurtenances thereto owing to me by George Lawler and Mary F. Lawler, husband and wife, and now occupied by them and heretofore for some time as tenants, the amount due at this time not being exactly known to me, but, whatever amount it is, this assignment is to convey and invest in the assignee, with full right to sue for and collect by any and all means at her pleasure.'

The assignee thereupon instituted suit in the superior court for Pierce county for the recovery of the rents, which suit was promptly afterwards tried out, and resulted in a judgment that the rent had been paid. Thereupon Saraha A. Dodge reassigned to Anderson all her right, title, and claim in and to the rent for the occupancy of certain real estate by George Lawler and Mary F. Lawler, as tenants. It is also alleged that on June 5, 1920, defendant Lawler gave to defendant Peterson a check in favor of Anderson, expressed to be 'in full payment of account, as follows: Rental of house and grounds corner of Marshall & Valley avenues, up to August 2, 1920, $675'; that Peterson, without authority, indorsed the check, 'P. C. Anderson, by Henry Arnold Peterson, his attorney,' and procured payment thereof from the defendant bank on which the check was drawn, on June 7, 1920; that the facts as to this check were not learned by appellants until the trial of the Dodge action; and that thereupon they immediately demanded of defendants, the bank, and Peterson payment of the $675 evidenced by this check, which demands were refused. It is further alleged that the defendant bank knew P. C. Anderson's signature, knew, or ought to have known, that Peterson was not his attorney, and not authorized to indorse checks for him, and that the drawing of the check and delivery of the same to Peterson, and payment thereof by the bank, were all part and parcel of a conspiracy to defraud appellants of the $675 rental. The complaint concludes with the following paragraph:

'That, by reason of the facts aforesaid, the rents remained unpaid, although the said Henry Arnold Peterson, without authority from plaintiff or any one authorized by him, indorsed said check and thereby receipted for the rents in the sum of $675, and the said Lawler is still indebted to plaintiff for said rents, notwithstanding said false and unauthorized receipt, and is liable upon the check for the sum of $675 with interest thereon at 6 per cent. per annum from the 7th day of June, 1920, until paid.'

The prayer of the complaint was, first, for judgment against the defendant bank for $675 and interest; but, if that relief should be denied, then, second, for judgment against defendants Peterson and wife for a like amount; but, if that relief be denied, then, third, for judgment against defendants Lawler and wife for a like amount.

It will be observed that by the complaint appellants claim (1) that the rents remain unpaid; (2) that Lawler is still indebted for the rents; (3) that Lawler is liable on the check.

Appellants state in their brief that 'judgment is asked against Lawler by virtue of the admission of the rents due in the check and by virtue of his having issued the check--the check being in the nature of a written contract--and also against Peterson by virtue of his misappropriation of the funds.'

The demurrers of the various defendants were based upon five grounds, but it seems to be assumed by all the parties hereto that they were sustained upon the grounds that the complaint does not state facts sufficient to constitute a cause of action against the demurring defendants, and that the action had not been instituted within the time limited by law.

Appellants assert that, since the allegations of their second amended complaint are admitted by the demurrers to be true as to all matters well pleaded, it appears from the allegations of the complaint that there has been an injury to appellants' property rights, a damage for which the law affords a remedy; and, if it is true that Lawler issued a check for the payment of rents for $675, drawn in favor of Anderson, with a clause noted on the face of it that it was in full payment of rent, that this check was indorsed by Peterson without any authority, and that the bank accepted the check, and paid it to an unauthorized indorser, then appellants' remedy to recover from Peterson is absolute, and cannot be disputed.

But this is not an action for damages against any one. Appellants' first statement that it is an action for rentals, evidently made for the purpose of coming within the six-year statute of limitations as to such rentals (section 157, subd. 3, Rem. Comp. Stat.), precludes any such idea of damages. In the next place, if Peterson could be held liable for damages for unauthorized indorsement of the $675 check, it would in no wise involve either the bank or Lawler, unless they, or either of them, actually participated with knowledge of the fraud.

As to the bank, whatever might be its possible liability in an action of conversion, if brought within the statutory limitation, for converting the funds involved in the $675 check, it cannot be liable in an action of this kind.

Under our Negotiable Instruments Act (Section 3575, Rem. Comp. Stat.; section 4256, Pierce's Code):

'A check is a bill of exchange drawn on a bank, payable on demand. Except as herein otherwise provided, the provisions of this act applicable to a bill of exchange payable on demand apply to a check.'

Section 3579, Rem. Comp. Stat., provides:

'A check of itself does not operate as an assignment of any part of the funds to the credit of the drawer with the bank, and the bank is not liable to the holder

...