Bank of Hatfield v. Clayton, 263

• Court: Supreme Court of Arkansas
• Writing for the Court: MCCULLOCH, C. J.
• Citation: 250 S.W. 347,158 Ark. 119
• Parties: BANK OF HATFIELD v. CLAYTON
• Docket Number: 263
• Decision Date: 02 April 1923

250 S.W. 347

158 Ark. 119

BANK OF HATFIELD
v.
CLAYTON

No. 263

Supreme Court of Arkansas

April 2, 1923

Appeal from Polk Circuit Court, James S. Steel, Judge; reversed.

Judgment reversed. Rehearing denied.

Norwood & Alley, for appellant.

Judgment was wrongfully rendered against the bank. If the bank was at fault in paying out appellee's money on her check signed by her by Johnson, she should have complained about it immediately upon receiving knowledge of the fact. If she authorized it, she was bound, and she had notice of the transaction, receiving the check he signed for her, and, not having complained about it, she is bound any way, and appellant was entitled to a directed verdict. The court erred in giving the four requested instructions for appellee. Should not invade province of jury as to weight to be given the evidence or single out any part thereof. Sharp v. State, 51 Ark. 147; Railway Co. v. Byars, 58 Ark. 108; 93 Ark. 316; 141 Ark. 25; 45 Ark. 165. No. 2 erroneously placed the burden of proof on appellant. Harris v. Lemley, 131 Ark. 471. There was nothing in signature of check to indicate bank was borrowing the money. Board of directors act for and direct affairs of bank. 3 R. C. L. 440, sec. 66; 128 Ark. 266. Court erred in amending appellant's requested instructions 1, 2, 3 and 4, and giving them as modified. Facts show an account stated between the depositor and the bank. Citizens' Bank & Trust Co. v. Hinkle, 128 Ark. 275, quoting 1 R. C. L. 211.

Van Hoy & Frederick, for appellee.

The instructions were correct, and properly submitted the issues to the jury. Appellee's money being on deposit, it devolved on the bank to show it had been paid to the depositor, or some one authorized to receive it, or that she had ratified an unauthorized payment made. 7 C. J. 699; Michie on Banks and Banking, 1341, sec. 154; 111 Ill. 323; 13 Cyc. 1647. Johnson, vice president of the bank, appropriated appellee's funds, for which the bank was liable. Citizens' Bank & Trust Co. v. Hinkle, 126 Ark. 266. The court's instructions on ratification are correct. 21 R. C. L. § 107; 31 Cyc. 1647; 147 Ark. 425; 124 Ark. 360; 74 Ark. 557; 55 Ark. 240; 29 Ark. 131; 11 Ark. 189; 96 Ark. 505; 141 Ark. 414; 96 Ark. 505. Appellee, immediately upon discovering that the bank had not borrowed her money, complained and demanded payment of the money. No evidence of ratification except she received the letter and the bank statement, with voucher or paid check. As to duty of depositor to examine passbook, 3 R. C. L. 538-9, sec. 168. No error in rejecting stub of receipt which was offered by appellant. The verdict is supported by the evidence, and judgment should be affirmed.

MCCULLOCH, C. J. WOOD, J., dissenting.

OPINION

[158 Ark. 120] MCCULLOCH, C. J.

The plaintiff, Mrs. Nancy Clayton, instituted this action against the defendant, Bank of Hatfield, to recover the sum of $ 1,000 held on deposit in the bank to the credit of plaintiff, for which a check had been issued and payment refused. The bank defended on the ground that the deposit had been previously withdrawn by check, and that plaintiff had no funds on deposit at the time the last check was drawn. Upon the issues the jury returned a verdict in favor of the plaintiff, and the defendant has appealed.

[158 Ark. 121] The defendant is a banking institution doing business at the town of Hatfield, in Polk County, and the plaintiff, Mrs. Clayton, is the wife of a farmer residing about a mile and a half distant from that town.

In May, 1921, Mrs. Clayton had on deposit in the bank the sum of $ 1,475.83, and Lewis Johnson, who was vice-president of the bank, and, according to the evidence, was more or less active in assisting in the management of the affairs of the bank, made a visit to the home of the plaintiff and proposed to plaintiff that if she would permit him to withdraw $ 1,000 of the funds from the bank and lend it out he could secure a loan for her at the interest rate of ten per cent. per annum. Johnson testified that the plaintiff consented to that arrangement, but the plaintiff testified that she declined to go into the plan, for the reason that she needed the money for another purpose. The verdict of the jury must be treated as having settled this issue of fact in favor of plaintiff. However, Johnson disregarded the expressed will of the plaintiff, and on June 5, 1921, he drew a check on the bank for $ 1,000 and signed plaintiff's name to it. The money was withdrawn from the bank on this check by Johnson and used in a loan to himself. He executed a note to the plaintiff with G. H. Johnson as surety, and this note was laid away in the vaults of the bank, presumably to be kept for the plaintiff. The check was in form as follows:

"Hatfield, Ark., June 5, 1921.

"THE BANK OF HATFIELD

"Pay to the order of loan 90 days ($ 1,000) one thousand and no/-- dollars.

"(Signed) NANCY CLAYTON,

"L"

The money was withdrawn on this check June 8, 1921, and a charge was made against [250 S.W. 348] the plaintiff's account on the books of the bank, together with another item of $ 6.08, covered by a check which the plaintiff had drawn herself.

[158 Ark. 122] On June 11, 1921, Johnson wrote the following letter to plaintiff, which was received by her:

"Hatfield, June 11, 1921.

"Mrs. W. S. Clayton:

"I have placed a thousand dollars for you at ten per cent., and, if you should happen to need it, let me know a couple of weeks before you need it, and will place it back, but just as long as you don't need it, will draw you 10 per cent. interest, and this will help you out. You have been good to us, and we want to do all we can to help you.

"Your friend,

"L. H. JOHNSON,

"V. President."

Plaintiff testified that she received this letter, but made no response thereto.

On July 30, 1921, the bank delivered to the plaintiff an itemized statement of her account with the canceled checks. The statement had a proper caption showing what its nature was, and it had printed thereon notice to the depositor in the following form:

"This statement is furnished you instead of balancing your pass book. It saves you the trouble of bringing your pass book to the bank and waiting for it to be balanced. These statements will be found very convenient to check up and file. All items are credited subject to final payment. Use your pass book only as a receipt book when making deposits."

This statement covered the plaintiff's account for the months of June and July, and she admitted...