Citizens N. Bank v. Alexander

• Decision Date: 21 May 1888
• Docket Number: 380
• Citation: 14 A. 402,120 Pa. 476
• Parties: THE CITIZENS N. BANK v. W. J. ALEXANDER
• Court: Pennsylvania Supreme Court

14 A. 402

120 Pa. 476

THE CITIZENS N. BANK v. W. J. ALEXANDER

No. 380

Supreme Court of Pennsylvania

May 21, 1888

Argued May 4, 1888

ERROR TO THE COURT OF COMMON PLEAS OF WARREN COUNTY.

No. 380 January Term 1888, Sup. Ct.; court below, No. 84 March Term 1887, C.P.

On February 25, 1887, W. J. Alexander brought assumpsit against The Citizens National Bank of Warren, to recover a balance of a deposit account to his credit.

At the trial on December 14, 1887, on motion of plaintiff's attorneys the record and pleadings were amended by adding after the plaintiff's name, wherever it occurs, the words "Deputy Treasurer," and by agreement of the parties, the cause was submitted to be heard by the court without a jury under the act of April 22, 1874, P.L. 109.

On January 28, 1888, the court, GUNNISON, P.J., 6th judicial district, holding special term, filed a finding of facts and law which was as follows:

I. On February 17, 1886, the plaintiff opened an account with the defendant under the name of W. J. Alexander, deputy treasurer, to which account he deposited money from time to time until February 4, 1887. The aggregate amount so deposited was $77,866.06. Checks were drawn upon the account prior to February 21, 1887, to the amount of $75,923.54, and on that day plaintiff drew a check for the balance $1,942.52, which was duly presented to the defendant, and payment of it refused, whereupon this suit was brought.

Having shown these facts, the plaintiff rested.

The defendant then offered to prove that Chas. H. McAuley was the treasurer of Warren county from January 1, 1884 until January 1, 1887; that he kept his account in the Citizens National Bank of Warren, as treasurer; that his credit balance on February 1, 1886, was $6,761.13; that he drew thereafter for the legitimate expenses of the county, checks on that account, which created an over-draft of $1,942.52 on the 8th day of February, 1886; to be followed by evidence that so much of the money deposited by his agent, W. J. Alexander, as deputy treasurer, was applied to the extinguishment of that over-draft.

This offer was objected to by the plaintiff, the objection overruled, and the evidence admitted, the question of its relevancy being reserved.

It then appeared that C. H. McAuley was elected county treasurer in the fall of 1883; was qualified and entered upon his office duties the first Monday of January, 1884; that as county treasurer he was ex-officio treasurer of the commissioners of the Rouse estate; that he gave bonds with Thomas Struthers and Myron Waters as sureties; that his sureties, becoming suspicious that he was misappropriating the public money in his hands, an investigation was made by them into his administration of the office; that as a result of this investigation, an agreement was made February 9, 1886, by which W. J. Alexander was appointed by him deputy treasurer and given exclusive authority to draw checks on his bank account as treasurer, to receive all moneys to be received by the treasurer of Warren county or of the commissioners of the Rouse estate, which moneys were agreed to be deposited in the Citizens National Bank of Warren; the intention of the agreement being that the plaintiff, W. J. Alexander, should perform all the duties and exercise all the powers of the treasurer of Warren county and of the commissioners of the Rouse estate, and have full and entire control of all moneys coming in or going out of the office of said treasurer.

It further appeared that C. H. McAuley had overdrawn his account with the defendant in the sum of $1,942.52, and that on July 19, 1886, the defendant, without authority from the plaintiff, charged that amount to his account, and credited it to account of C. H. McAuley, treasurer, thus balancing McAuley's account. It was not shown that the plaintiff was notified of this action of the bank other than by the balancing his pass book, which was done at least once before February 10, 1887.

It also appeared that Myron Waters, one of the sureties on McAuley's bond, was president of the Citizens National Bank of Warren, and had knowledge of the agreement by which the plaintiff was appointed deputy treasurer at the time it was entered into, and that the money deposited by plaintiff was the money of Warren county and of the commissioners of the Rouse estate.

II. The only question of law involved is, whether or not the defendant had the right to charge the plaintiff with the amount of the over-draft made by C. H. McAuley, treasurer.

It is not disputed that the money deposited to both was public money, belonging to Warren county and the commissioners of the Rouse estate. The defendant claims that it had the right to inquire into the ownership of the two funds, and that, the ownership of both being the same, it could set off the indebtedness existing on the one account against the claim of the plaintiff on the other. Plaintiff contends that the defendant is estopped by its own act in opening the account with Alexander and receiving the money deposited by him to the credit of his account, from setting up that he was not the owner of the fund so far as the bank is concerned.

I am unable to distinguish this case in principle from the case of First N. Bank v. Mason, 95 Pa. 113. In that case the facts as recited in the opinion were as follows: The plaintiff below brought his suit against the First National Bank of Lock Haven to recover the amount of moneys he had deposited with the said bank. The defendants offered to prove that the money deposited in the name of James D. Mason, the plaintiff, was in fact the money of Thomas & Mason, of which firm the plaintiff was clerk; that the plaintiff had admitted at the time the deposits were made that the money belonged to said firm, and were placed in his name as a matter of convenience in paying small bills; and that the said Thomas &amp Mason were indebted to the said bank in excess of the amount standing on its books to the credit of the plaintiff. The bank claimed to set off the indebtedness of Thomas & Mason against the claim of the plaintiff in this suit. The evidence was rejected by the court below, and forms the subject of the first assignment of error.

It will be observed that the defence attempted to be set up in that case was precisely similar to that relied upon in the case under consideration. Some of the cases cited by this defendant in support of its position were referred to in the opinion in that case, in which Mr. Justice PAXSON, after referring to them and showing that they referred to cases where the real owner of the money deposited, or his creditors, claimed it as against the person who deposited it and in whose name the account stood on the books of the bank, said: "We have here a very different question. The bank, the depositary, sets up an adverse title, to defeat the suit of its own depositor. It is clearly against public policy to permit a bank that has received money from a depositor, credited him therewith upon its books, and thereby entered into an implied contract to honor his check, to allege that the money deposited belonged to some one else. This may be done by an attaching creditor, or by the true owner of the fund, but the bank is estopped by its own act. A departure from this rule might lead to novel results, and embarrass commercial transactions." The judgment of the court below was affirmed.

[It must follow from this authority that the evidence offered by the defendant at the trial should have been rejected. Having been admitted under objection, it should now be disregarded. No other defence having been shown by the defendant, I am of the opinion that the plaintiff is entitled to recover, and I accordingly find for the plaintiff and against the defendant in the sum of two thousand and fifty dollars ($2,050), being the amount of the plaintiff's claim, with interest from February 2, 1887, to January 24, 1888.]

Defendant's points:

1. There being no statute authorizing the appointment of a deputy county treasurer, the effect of the paper or instrument dated February 9, 1886, signed by C. H. McAuley, was only to constitute W. J. Alexander the agent of C. H. McAuley, treasurer of Warren county.

Answer: This point is affirmed.

2. That the money deposited by W. J. Alexander in the Citizens National Bank, defendant, was the money of C. H. McAuley, treasurer of Warren county, and he so designated or "ear marked" it by depositing it in the name of W. J. Alexander, deputy treasurer.

Answer: This point is refused. The money was the money of Warren county and of the commissioners of the Rouse estate. The defendant, however, could not assert its ownership in the absence of any claim to it by the true owner. It is estopped from denying that it was the money of W. J. Alexander, by receiving and placing it to the credit of his account upon its books.

3. That said Alexander, by directing the said bank to keep the account in the name of W. J. Alexander, deputy treasurer, thus designated himself the agent of C. H. McAuley, treasurer of Warren county, and no principle of public policy will prevent the said bank from showing such fact, or in applying the funds so deposited by him to the extinguishment of said McAuley's overdrawn account.

Answer This point...