Brinton v. Lewiston National Bank

• Decision Date: 19 May 1905
• Parties: BRINTON v. LEWISTON NATIONAL BANK
• Court: Idaho Supreme Court

81 P. 112

11 Idaho 92

BRINTON v. LEWISTON NATIONAL BANK

Supreme Court of Idaho

May 19, 1905

BANKS AND BANKING-CREDIT BY WIFE MAY BE REVOKED WHEN-RIGHTS AND LIABILITIES OF PARTIES-PAPERS DEPOSITED IN ESCROW-ESCROW AGREEMENT.

1. Where the bank of C. wired the L. N. Bank that the Alamance Mining Company had deposited with it for credit of L. N. Bank for use of Brinton $1,000, which telegram was received after banking hours and the order countermanded by wire the following day before credit had been given thereof, and before any rights or liabilities of B. or other parties had been incurred in regard thereto, held, that the L. N. Bank was not liable to B. for such deposit.

2. On the facts of this case the Bank of C. had the right to countermand said order for credit before any rights or liabilities had been incurred or losses sustained in consequence of it by either Brinton as attorney in fact or any third person.

(Syllabus by the court.)

APPEAL from the District Court of Nez Perce County. Honorable Edgar C. Steele, Judge.

An action to recover for an alleged deposit. Judgment for plaintiff. Reversed.

Reversed and remanded with instructions. Costs awarded to the appellant.

I. N Smith, for Appellant.

It is well settled that a party cannot make matter admissible in evidence by setting forth immaterial allegations in the complaint. Besides, the attention of the court is directed to the following authorities: Teutonia Loan etc. Co. v Turrell, 19 Ind.App. 469, 65 Am. St. Rep. 419, 49 N.E. 852; Brunswick etc. Co. v. Bingham, 107 Ga. 270, 33 S.E. 56; Ferris v. National Commercial Bank, 158 Ill. 237, 41 N.E. 1118; Keefer v. Mason, 36 Ill. 406. Orders of payment of money issued by the bank may be revoked by the bank issuing such orders prior to the acceptance thereof and prior to a change of relations of third parties based thereon; likewise orders of credit may be revoked. The telegram of November 15th was canceled by the telegram of November 16th, before any third party's rights were prejudiced thereby. The court erred, therefore, in not giving peremptory instruction asked for by defendant; also instruction No. 2, at folio 443. (Second Nat. Bank of Baltimore v. Western Nat. Bank, 51 Md. 128, 34 Am. Rep. 300; Holt v. Spokane etc. Ry. Co., 3 Idaho 703, 35 P. 39.) It is well settled that instructions, though correct in a point of law which are not founded upon the evidence in the case at issue, are reversible error; likewise, an instruction which assumes facts to exist, of which there is no evidence, is reversible error. (11 Ency. of Pl. & Pr., p. 128 et seq.) The misconstruction of the escrow agreement which runs through the entire charge is reversible error. (11 Ency. of Pl. & Pr., pp. 78, 79.) It is also well settled that the powers of an escrow agent are limited by the powers under which he acts. (McDonald v. American Nat. Bank, 65 P. 896.) The court left the construction of the escrow agreement to the jury. This is error. (11 Ency. of Pl. & Pr., p. 78; Green v. Christie, 4 Idaho 438, 40 P. 54.)

George W. Tannahill, for Respondent.

Counsel contends on page 31 that the telegrams show that it was impossible for money to have been received, and the testimony of Kester is that no credit was made, and incidentally says that Mr. Kester's testimony is not disputed. We respectfully submit that Mr. Kester has impeached his own testimony, and it is disputed by Mr. Brinton, and as to whether or not there was a credit made on the books of the bank it makes absolutely no difference. If they failed to make the credit, Mr. Kester was negligent in his duty, and the money had gone so far that it required affirmative action from Mr. Kester in violation of the rights of Mr. Brinton to have it withdrawn from the Bank of California, and if he has done this, it makes absolutely no difference whether the money was placed to Brinton's credit on the books of the bank or not, and Mr. Kester's testimony on every point is disputed, and he has not only been contradicted by Mr. Brinton and documentary evidence on material points, but has contradicted himself and been forced to admit that his evidence was either false or he was badly mistaken. We respectfully submit that under these circumstances Mr. Kester, upon these material matters, cannot be taken as undisputed. In support of our contention in this case we respectfully call attention to the following authorities: Wiggins Ferry Co. v. Ohio etc. R. Co., 142 U.S. 396, 12 S.Ct. 188, 35 L.Ed. 1055; Thompson v. Commercial Union Assur. Co. of London (Colo. App.), 78 P. 1073. Where there is evidence in the record to justify the verdict, the reviewing court will not disturb it, though it be of opinion that the amount found reaches the extreme limit. (Lownsdale v. Gray's Harbor Boom Co., 36 Wash. 198, 78 P. 905.) In addition to the authorities we have already cited bearing upon the liabilities of banks arising out of the collection of commercial paper and a reception of deposits, we cite the following: A bank with which a note is deposited for collection is agent of the holder: See 3 Am. & Eng. Ency. of Law, 803; Waid v. Smith, 7 Wall. (U. S.) 447, 19 L.Ed. 207. After the collection was made the bank became debtor. This principle applies also between two banks, one of which forwards paper for collection to another. (3 Am. & Eng. Ency. of Law, 819.) The Bank of California would have had no right to recall the money after remittance made to the Lewiston National Bank, even if the credit to Brinton had been entered upon its books at the request of the Alamance Mining Company upon a consideration that afterward failed because of the insolvency of the company or for any other reason. (Canterbury v. Bank of Sparta, 91 Wis. 53, 51 Am. St. Rep. 807, 64 N.W. 311, 30 L. R. A. 845.) The relation between a bank and a depositor is merely that of debtor and creditor. (See 3 Am. & Eng. Ency. of Law, 826, note 11, and cases cited.)

SULLIVAN, J. Stockslager, C. J., concurs. Ailshie, J., did not sit on the hearing of this case and took no part in the decision.

OPINION

SULLIVAN, J.

This is an action to recover $ 1,000, with interest thereon, alleged to have been deposited in the appellant bank to the credit of the respondent. The following, among other facts, appear in the record:

On the twelfth day of June, 1900, the respondent, Thomas W. Jones entered into a contract with John N. Ward for the sale of said Ward of the Republic and the Republic No. 2 mining claims, situated about three miles from Elk city, Idaho county, for the sum of $ 15,000, payments to be made as follows: $ 3,000 on or before April 1, 1901; $ 3,000 on or before November 1, 1901; $ 3,000 on or before February 1, 1902; $ 6,000 on or before the seventh day of June, 1902; and promissory notes were executed in the usual form of negotiable notes, with interest at the rate of seven per cent per annum, payable semi-annually. Ward, the second party to said contract, agreed to do certain work on said mining...