Baker v. Bank of Northeast Arkansas

• Decision Date: 18 February 1981
• Docket Number: No. CA,CA
• Citation: Baker v. Bank of Northeast Arkansas, 611 S.W.2d 783, 271 Ark. 948 (Ark. App. 1981)
• Parties: Barbara Ann BAKER, Appellant, v. BANK OF NORTHEAST ARKANSAS, Appellee. 80-380.
• Court: Arkansas Court of Appeals

Page 783

611 S.W.2d 783

271 Ark. 948

Barbara Ann BAKER, Appellant, v. BANK OF NORTHEAST ARKANSAS, Appellee.

No. CA 80-380.

Court of Appeals of Arkansas.

Feb. 18, 1981.

Bill W. Bristow, Jonesboro, for appellant.

Troy Henry, Jonesboro, for appellee.

CLONINGER, Judge.

This is an appeal from a trial court decision that appellant Barbara Ann Baker could not maintain a suit as a third party beneficiary against the appellee Bank of Northeast Arkansas. The trial court found that the appellee bank failed to follow the instructions of appellant's benefactor, the depositor, in the issuance of a certificate of deposit, but that appellant had no interest in the property and could not recover.

We find that appellant is a third party beneficiary; that, as such, she is entitled to maintain the action; and that she is entitled to damages against appellee on her cross-complaint.

This is the second time this proceeding has been before this Court, the first being styled Carlton v. Baker, 267 Ark. 949, 591 S.W.2d 696 (1980). The original dispute was between the administrator of the estate of Rebecca C. Self and Barbara Ann Baker, niece of Rebecca Self, about ownership of three $5,000 certificates of deposit at the Bank of Northeast Arkansas. The trial court and this Court found that the certificates were intended by Rebecca Self to pass to Barbara Ann Baker upon Rebecca Self's death, but this Court reversed the trial court in regard to the disposition of one of the $5,000 certificates, holding that there was not substantial compliance with the statutory designation in-writing requirement. The effect of this Court's opinion was to give Barbara Ann Baker $10,000 in the certificates and to give the administrator the additional $5,000. This Court remanded the case for further proceedings.

This aspect of the case involves the cross-complaint filed in the original action by Barbara Ann Baker against the Bank of Northeast Arkansas. The cross-complaint stated that it was the intention of Rebecca Self for the certificates to pass to Barbara Ann Baker, and it was the fault of the bank that they did not. Barbara Ann Baker asked for a money judgment against the bank in the event she was not found to be the owner of the certificates. Her theory was that she was the beneficiary of a third party contract and that the bank was negligent. No additional testimony or proof was presented upon remand from this Court. The chancellor found that the bank had made mistakes but held that Barbara Ann Baker could not maintain her claim because she had no contractual relationship with the bank. This appeal is from that decision.

The appellee is correct in pointing out that upon a second appeal the judgment of the former appeal becomes the law of the case, and is conclusive of every question of law or fact decided in the former suit, and also those which might have been, but were not, presented. Moore v. Robertson, 244 Ark. 837, 427 S.W.2d 796 (1968); Ferguson v. Green, 266 Ark. 556, 587 S.W.2d 18 (1979). In the instant case, however, the appellant did present her theory of third party beneficiary, but its applicability was not ruled upon by this Court. It might have been better if this Court had entered judgment on appellant's cross-complaint on the first appeal, but we exercised our discretion and remanded the questions of third party beneficiary and damages to the trial court, since the trial court had not considered those issues or ruled upon them. Neither party raised the issue of the law of the case upon remand and the chancellor made the issue of damages moot when he held that appellant was not entitled to maintain the suit.

The chancellor, in making his ruling, commented that, "... Mrs. Self here, deposited this money in the bank; and wanted it to go to this Mrs. Baker, survivor here. But still, Mrs. Baker didn't contribute anything to it ... There was no contract with Mrs. Baker, with the bank, that she could enforce at all ..." Later on the chancellor stated that "Mrs. Baker had no right in this account here, unless it was done exactly right. The bank fouled up, there's no question about it."

The Arkansas Supreme Court has held that a contract made for the benefit of a third party is actionable by such third party. Lovell v. Marianna Federal Savings and Loan Association, 264 Ark. 99, 568 S.W.2d 38 (1978). The appellant is a donee beneficiary as that term is defined in Coley v. English, 235 Ark. 215, 357 S.W.2d 529 (1961):

He is a 'donee beneficiary' if it...