Cory v. Golden State Bank

• Decision Date: 25 July 1979
• Citation: 95 Cal.App.3d 360,157 Cal.Rptr. 538
• Court: California Court of Appeals Court of Appeals
• Parties: Kenneth CORY, Controller of the State of California, Plaintiff and Respondent, v. GOLDEN STATE BANK, a California Banking Corporation, Defendant and Appellant. Civ. 54267.

Page 538

157 Cal.Rptr. 538

95 Cal.App.3d 360

Kenneth CORY, Controller of the State of California, Plaintiff and Respondent, v. GOLDEN STATE BANK, a California Banking Corporation, Defendant and Appellant.

Civ. 54267.

Court of Appeal, Second District, Division 3, California.

July 25, 1979.

Hearing Denied Sept. 20, 1979.

Hartman, Hosp, Richard & Schlegel, Monte D. Richard and Stanford E. Reichert, Los Angeles, for defendant and appellant

George Deukmejian, Atty. Gen. of California, Warren J. Abbott, Asst. Atty. Gen., and Yeoryios C. Apallas, Deputy Atty. Gen., for plaintiff and respondent.

KLEIN, Presiding Justice.

On April 17, 1975, the Controller of the State of California (hereinafter Cory) instituted this action against Golden State Bank (hereinafter the Bank), seeking to recover certain funds held by the Bank as the result of money orders remaining uncashed for more than seven years. The first of Cory's seven causes of action was based on the Unclaimed Property Law (Code Civ.Proc., § 1500 et seq.) and in particular Code of Civil Procedure section 1513, which at that time provided as follows:

"Subject to Sections 1510 and 1511, the following property held or owing by a business association escheats to this state:

". . .

"(d) Any sum payable on any other written instrument on which a banking or financial organization is directly liable, including, by way of illustration but not of limitation, any . . . money order, that has been outstanding for more than seven years from the date it was payable, or from the date of its issuance if payable on demand, Excluding any charges that may lawfully be withheld, when the owner, for more than seven years, has not corresponded in writing with the banking or financial organization concerning it, or otherwise indicated an interest as evidenced by a memorandum or other record on file with the banking or financial organization.

". . ."

(Italics added.) ¹

Relying on the italicized portion of the above quoted language, the Bank asserted as an affirmative defense that it was entitled to retain, from a total uncashed money order fund of $154,765.47, service charges in the amount of $143,133.22.

On June 22, 1977, the trial court, Judge Robert Weil presiding, granted a motion by Cory for summary judgment as to the first cause of action, finding that the service charges sought to be retained by the Bank were not, under Code of Civil Procedure section 1513, subdivision (d), the kind of "charges that may lawfully be withheld." Cory thereupon dismissed his remaining six causes of action and, on October 21, 1977, judgment in Cory's favor on the first cause of action was entered, Judge Jack T. Ryburn presiding.

The Bank now appeals, contending that triable issues of material fact remain regarding the Bank's right to deduct service charges with respect to uncashed money

orders. For the reasons discussed below, we find the Bank's arguments unconvincing and, therefore, affirm the judgment of the trial court.

FACTS

Through the use of requests for admissions and other discovery techniques, Cory established the following to be the Bank's practice with respect to the sale of money orders:

The money orders used by the Bank come in three parts initially, all attached at one end. The first part is the actual money order or face copy; the second part, lying beneath the first, is the customer's copy; the third part, lying beneath the first two, is the Bank's copy. ² When a customer purchases a money order, the face amount plus an issuance fee is collected by the Bank's agent. The agent then imprints the money order, detaches and retains the Bank's copy, and hands the customer the money order itself with the customer's copy or receipt still lying beneath it.

NOTE: OPINION CONTAINS TABLE OR OTHER DATA THAT IS NOT VIEWABLE

The provision which the Bank maintains is legally sufficient to justify its withholding of service charges is found on the customer's copy in small print. The provision reads: "The check described hereon will be subject to a service charge from the date of issuance if not presented for payment to this bank within one year from such date." During the sale of the money order, the Bank's agent does not inform the customer of this provision. Accordingly, the first opportunity the customer has to become Pursuant to the service charge provision, the Bank has instituted a practice of deducting charges from the sums payable on uncashed money orders. At least with respect to the recent past, the practice was to charge off and credit to income on the Bank's books the entire amount of any money order which was for $63 or less and which had remained outstanding for four years. If the face amount exceeded $63, the item remained on the Bank's list of outstanding money orders until it became seven years old, at which time a $63 charge was taken against the issued amount. The remainder was reported to the state as unclaimed property.

aware of the service charge provision is when he or she is handed the customer's copy or receipt after the sale has already taken place.

During the period covered by Cory's complaint, namely from the beginning of 1958 through June 1967, the Bank reported only $11,632.25 as unclaimed property. The amount withheld as service charges by the Bank represents 92.48 percent of the unclaimed total.

DISCUSSION

We begin our discussion by acknowledging that summary judgment is a drastic procedure which should be used with caution so that it does not become a substitute for the normal trial method of determining facts. (Corwin v. Los Angeles Newspaper Service Bureau, Inc. (1971) 4 Cal.3d 842, 852, 94 Cal.Rptr. 785, 484 P.2d 953; People ex rel. Dept. of Pub. Wks. v. McNamara Corp. Ltd. (1972) 28 Cal.App.3d 641, 651-652, 104 Cal.Rptr. 822.) On the other hand, "(w) hen discovery, properly used, makes it 'perfectly plain that there is no substantial issue to be tried' (citation), section 437c, Code of Civil Procedure, is available for prompt disposition of the case." (Buffalo Arms, Inc. v. Remler Co. (1960) 179 Cal.App.2d 700, 703, 4 Cal.Rptr. 103, 105.) Furthermore, it is clear that the non-moving party's admissions may be used to establish that no material factual issues remain to be resolved by trial. (See Newport v. City of Los Angeles (1960) 184 Cal.App.2d 229, 236, 7 Cal.Rptr. 497.)

Here the admissions and other competent evidence set forth in Cory's moving papers adequately demonstrated that the Bank as not, as a matter of law, legally entitled to withhold service charges under any of its theories, contractual or statutory.

First, notwithstanding the Bank's arguments to the contrary, no factual issues remain as to whether a valid contract for service charges can be said to exist between the Bank and each of its money order customers. The rule is well established in this state that "an offeree, regardless of apparent manifestation of this consent, is not bound by inconspicuous contractual provisions of which he was unaware, contained in a document whose contractual nature is not obvious." (Windsor Mills, Inc. v. Collins & Aikman Corp. (1972) 25 Cal.App.3d 987, 993, 101 Cal.Rptr. 347, 351; cf. Steven v. Fidelity & Casualty Co. (1962) 58 Cal.2d 862, 881, 27 Cal.Rptr. 172, 377 P.2d 284.) In view of the undisputed evidence concerning the Bank's practice with respect to the sale of money orders, there can be no argument here that purchasers have been given an adequate opportunity to become aware of and consent to the service charge provision in the subject money orders. Rather, the uncontradicted evidence presented with Cory's summary judgment motion established that the provision in question is effectively hidden from the view of money order purchasers until after the transactions are completed. In addition, given the size of the print with which the service charge provision is set forth in the money order and the fact that the Bank's agents do not as a rule call the provision to the customer's attention, it would be reasonable to presume that most customers never, in fact, become aware of the provision's existence. Under these circumstances, it must be concluded that the Bank's money order purchasers are not chargeable with either actual or constructive notice of the service charge provision, and therefore cannot be deemed to have consented to the provision as part of their transaction with the Bank.

We next turn to the Bank's contention that it is entitled to impose a service charge on uncashed money orders by virtue of the warehouseman's lien provision of Financial Code section 1670. That section reads: "Whenever a bank receives personal property for safekeeping or storage as bailee and issues a receipt therefor, the bank may enforce its lien as warehouseman in accordance with the provisions of the Uniform Commercial Code or at its option in the manner provided in Sections 1671 to 1673, inclusive, of this article."

It is a cardinal rule of construction that statutes should be given a reasonable interpretation which accords with the apparent intent of the Legislature. (County of Alameda v. Kuchel (1948) 32 Cal.2d 193, 199, 195 P.2d 17; see also Rushing v. Powell (1976) 61 Cal.App.3d 597, 603-604, 130 Cal.Rptr. 110.) The construction given to a statute should not be one which would...