Burdick v. Schmitt

• Decision Date: 05 September 1935
• Docket Number: 3089.
• Citation: 48 P.2d 762,56 Nev. 229
• Parties: BURDICK v. SCHMITT.
• Court: Nevada Supreme Court

48 P.2d 762

56 Nev. 229

BURDICK v. SCHMITT.

No. 3089.

Supreme Court of Nevada

September 5, 1935

Appeal from District Court, Washoe County, Second District; Thomas F. Moran, Judge.

Action by Marie W. Burdick against Leo F. Schmitt, as receiver of Tonopah Banking Corporation, substituted for E. J. Seaborn Superintendent of Banks. From a judgment and order denying motion for new trial, the plaintiff appeals.

Judgment and order affirmed.

H. R Cooke, of Reno, for appellant.

Platt & Sinai, of Reno, for respondent.

TABER Justice.

This is an appeal from a judgment of the Second judicial district court, Washoe county, and from an order of said court denying a motion for new trial. Appellant was plaintiff in the action in the court below, and the original defendant was E. J Seaborn, superintendent of banks. Leo F. Schmitt, as receiver of Tonopah Banking Corporation, was later substituted as defendant. In this opinion appellant will be designated plaintiff, and said banking corporation as the bank.

In October, 1932, appellant handed the bank, for collection, an investment certificate issued by the Investors' Syndicate of Minneapolis, Minn., for the principal sum of $2,500, which matured October 10, 1932. The certificate was in the name of plaintiff, who testified that it was her separate property. The bank sent the certificate to the Reno National Bank, its Reno correspondent, with instructions to make collection. Collection was duly made by the correspondent bank, whereupon it notified the collecting bank that the collection had been made and the collecting bank credited with the amount of the collection. Within approximately a half hour after receipt of said notification, on October 22, 1932, the bank had credited the amount collected, less collector's commission expenses, etc., to the joint account of plaintiff and her husband, and placed in the bank's mailing box a duplicate credit advice addressed to plaintiff, in care of Wittenberg Warehouse Company, Tonopah, Nev., the city of her residence, and the place where the banking house of the collecting bank was located. The Wittenberg Warehouse Company had a post office box in the Tonopah post office, and plaintiff and her husband received their mail in that box. Plaintiff testified that her husband received the mail most of the time and that she received it sometimes. Said duplicate credit advice was in the words and figures following:

"The Tonopah Banking Corporation Tonopah, Nev., 10/22 1932 Mrs. M. W. Burdick We credit your account as follows: Your letter, date or number Amount Coll#3516 Investors Syndicate ................ 2500____ Exchange chgd by Minneapolis Bank ...... 2 50 -------- 2497 50 Ins Reg & Postage ...................... 1 17 -------- The Tonopah Banking Corporation

Tonopah, Nevada

By C H, Cashier

Items not on this Bank credited subject to payment

Respectfully,

The Tonopah Banking Corporation."

On October 24 or 25, 1932, while plaintiff's husband, Dr. Ralph H. Burdick, was in the bank, there was a conversation between him and Mr. Carroll Henderson, at that time cashier of the bank. Mr. Henderson's testimony is to the effect that in that conversation he told Dr. Burdick that said collection had been made and the advice mailed. Dr. Burdick testified that all he could remember of the conversation was that Mr. Henderson asked him whether he had received notice of the collection, and he replied that he had. Dr. Burdick further testified that at the time of this conversation he had just come from the post office and had the notice in his pocket, but that he had not as yet opened the envelope, and so had not seen the notice. He further testifies that he did not speak to plaintiff either about the notice itself or the conversation with Mr. Henderson until the afternoon of Saturday, October 29, 1932, at which time he told her that he had the notice of the collection in his pocket, "or what he supposed to be the notice." Plaintiff testified that it was at this last-mentioned time that the notice was handed her by her husband. Plaintiff testified that Dr. Burdick was injured on the day that he received the credit advice, and was confined to his room most of the time thereafter. This, she testified, accounted for his "not having a very good memory or thinking of business matters." It appears that plaintiff herself was not in the bank at any time between October 22d and November 1st.

The bank, because of insolvency, closed its doors on Tuesday, November 1, 1932.

When plaintiff placed the investment certificate in the hands of the bank for collection, she asked the cashier to let her know when the collection was made. Mr. Henderson testified that at the time the collection was being placed with the bank, plaintiff mentioned that on payment of the collection she expected to apply some part of the proceeds on a note of her brother's held by the bank. This is positively denied by plaintiff. Plaintiff admits that she did not give any instructions as to what disposition was to be made by the bank of the proceeds of the collection. She testified that it was her intention to put such proceeds in postal savings. She does not claim, however, that anything was said to the bank about such intention, and the bank does not claim that plaintiff gave it any instructions to use any of the proceeds of the collection to apply on the note of plaintiff's brother.

It appears that it had been some twelve years since plaintiff had closed an old account in the bank in her name only, but for a period of approximately twelve years next preceding the first of November, 1932, plaintiff and her husband had maintained a joint deposit and checking account so arranged that, as between them and the bank, either or both of them could at any time check on any part or all of the funds in said joint account, and that upon the death of either, any sum remaining in the account would be the sole property of the survivor. The wording of the written agreement between plaintiff, her husband, and the bank was as follows: "Any and all moneys in this account and any and all which may hereafter be deposited therein, is subject to withdrawal in part or in whole by either of us; and in case of the death of either of us, such account shall pass to and be withdrawn by the survivor. R. H. Burdick Marie W. Burdick" This joint account, on the bank's books, was as follows: "Burdick, R. H. or Marie W." The account usually did not show a large balance. On cross-examination of Mr. Henderson, it appeared that on September 2, 1932, the credit balance was $.93, on October 3, 1932, $32.49, and on October 22, 1932, after the proceeds of said collection had been credited, $2,528.82. Plaintiff's Exhibit 4, being bank statement of said account covering the period from June 17, 1932, to December 31, 1932, shows that the credit balance on the first of said dates was $61.80; that after June 17, 1932, and up to and including September 27, 1932, nine deposits were made, ranging in amounts from $4.05 to $300, and being, with the exception of the proceeds of said collection, the only deposits made between June 17, 1932, and December 31, 1932. During the same period, twenty checks were drawn on said account, ranging in amounts from $.06 to $270.30. The credit balance on December 31, 1932, as shown by said bank statement, and including the net proceeds of said collection, was $2,497.39. Plaintiff and Dr. Burdick, from time to time, each made deposits in and checked on said joint account. Plaintiff testified that most of the everyday business transactions of herself and husband were conducted on a cash basis, including most of their purchases of food, clothing, and other household necessities. She testified that the joint account in the bank was a small one carried by herself and husband as a matter of convenience.

At and for some years previous to the time said collection was placed with the bank, plaintiff and her husband had another joint bank account in a San Francisco bank. The testimony shows that there was less than $1,000 in this account.

The passbooks of the Tonopah bank contained a printed notice including the following sentences: "In receiving items for deposit or collection, this bank acts only as depositors' collecting agent and assumes no responsibility beyond the exercise of due care. All items are credited subject to final payment in cash or solvent credits." Neither plaintiff nor her husband had a passbook, their deposits being "made out on deposit slips."

On October 20, 1932, the bank, by letter, requested the Reno National Bank to charge the former's account and forward it $7,000 in currency. A request for a further $7,000 was telegraphed October 28, 1932. Both of these requests were promptly complied with by the Reno National Bank. Mr. Henderson testified that neither of said requests was made for the purpose of securing money with which to pay plaintiff the proceeds of said collection. Said requests, according to Mr. Henderson, had no connection with the collection, and were made only for the reason that the bank needed funds in the transacting of its general business.

After the bank had closed its doors on November 1st, plaintiff told Mr. Henderson that she thought she was entitled to a preference...