Culpeper Nat. Bank Inc v. Tidewater Improvement Co. Inc

• Decision Date: 08 June 1916
• Citation: 89 S.E. 118
• Parties: CULPEPER NAT. BANK, Inc. v. TIDEWATER IMPROVEMENT CO., Inc.
• Court: Virginia Supreme Court

89 S.E. 118

(119 Va. 73)

CULPEPER NAT. BANK, Inc.

v.TIDEWATER IMPROVEMENT CO., Inc.

Supreme Court of Appeals of Virginia.

June 8, 1916.

Error to Hustings Court of Richmond.

Action by the Tidewater Improvement Company, Incorporated, against the Culpeper National Bank, Incorporated, and another. Judgment for plaintiff, and defendant named brings error. Reversed and remanded.

Grimsley & Miller, of Culpeper, for plaintiff in error.

Daniel Grinnan, of Richmond, and Jeffries & Jeffries, of Norfolk, for defendant in error.

KEITH, P. This is an action of assumpsit brought by the Tidewater Improvement Company against the Culpeper National Bank and S. Russell Smith to recover the proceeds of a note, which it is alleged was drawn by the Tidewater Improvement Company, indorsed by H. B. Miller and J. Clifford Miller and delivered to S. Russell Smith, as president of the Culpeper National Bank, to be by it discounted and the proceeds placed to the credit of the plaintiff. The declaration avers that the Culpeper National Bank, through S. Russell Smith, who was its president, accepted the note for discount for the benefit of the plaintiff, as aforesaid, and then and there agreed to place the proceeds of the discount to the credit of the plaintiff; that S. Russell Smith was then president of the bank, and its managing officer, and controlled and did the discounting of paper which was discounted by the hank. The declaration further avers that on the 9th of August, 1907, the Culpeper National Bank, through itspresident and managing officer, S. Russell Smith, discounted the note so presented, the proceeds being $1,980, but failed to place that sum to the credit of the plaintiff, as it had agreed to do, but, on the contrary, without the knowledge or assent of the plaintiff, placed the said sum, to wit, $1,9S0, to the credit of S. Russell Smith, individually, at his instance and request.

The defendant Smith made no defense to the action. The Culpeper National Bank pleaded non assumpsit and the three and five years statutes of limitations. The case was tried before a jury, which rendered a verdict in favor of the plaintiff, upon which the court entered judgment, and thereupon a writ of error was awarded which brings in question certain rulings of the trial court.

The facts are substantially as follows: In 1907 the Culpeper National Bank was engaged in the banking business at Culpeper, Va. S. Russell Smith was its president, and managed its loan and discount business. He was also at the same time treasurer of Culpeper county and treasurer of the Tidewater Improvement Company, the plaintiff corporation, and had possession of its moneys and received and paid out the same, and as such treasurer had an account with the Culpeper National Bank. Prior to August 9, 1907, and also subsequent thereto, plaintiff in error discounted for the defendant in error certain notes, the proceeds of which were placed to the credit of Smith as treasurer of the plaintiff. The plaintiff also had another account with the bank in the name of John B. Miller, president of the Tidewater Improvement Company, which was opened on the 6th day of June, 1908, and closed on the 9th day of November, 1909. On the 9th day of August, 1907, the bank discounted a note of the plaintiff for $2,000, the proceeds of which were placed to the individual credit of S. Russell Smith, at his direction. This note was by the bank rediscounted with the Alexandria National Bank and subsequently paid by the check of S. Russell Smith, president of the Tidewater Improvement Company, drawn on the Culpeper National Bank and paid by it. Smith retired from the treasurership of the plaintiff in the fall of 1908, and the balance of $62.57 to his credit with the bank was, at the direction of John B. Miller, president, and who had also succeeded Smith as treasurer, and J. Clifford Miller, an active director and guiding spirit of the plaintiff, transferred to the account of John B. Miller, president of the Tidewater Improvement Company. In 1912 J. Clifford Miller succeeded John B. Miller as plaintiff's president and treasurer, and has so remained until the present time.

In 190S Smith became greatly involved financially, was compelled to resign as president of the bank, was threatened with prosecution for criminal conduct in the management of its affairs, was also found short in his accounts as treasurer of Culpeper county, and his sureties, including John B. Miller, plaintiff's president, furnished him a large sum of money to cover his shortage as treasurer.

The question upon which there was a conflict of evidence is, In what capacity did S. Russell Smith hold the note discounted August 9, 1907, when at his direction it was discounted at the bank and the proceeds placed to his credit—whether as treasurer or agent of the plaintiff, the Tidewater Improvement Company, or as agent of the Culpeper bank?

On behalf of the plaintiff, J. Clifford Miller testified that the note was sent to the bank for discount, and the proceeds to be placed to the general credit of the plaintiff. He does not, however, claim to have any independent recollection of the transaction, but says that his testimony in this respect was founded upon his rule in forwarding notes to be discounted for the plaintiff; that he always addressed the letters inclosing such notes to the Culpeper National Bank or to S. Russell Smith, president of the bank, yet he could not produce any copy of any letter so addressed, though copies thereof were kept, but could not then be found, and he thought they must have been lost in moving the plaintiff's office and place of business.

Turning to pages 89, 90, of the record, we find that the witness Miller testified as follows upon this point:

"By the Court: Mr. Miller, after this note was made as you have detailed, do you recall whether you sent it to the Culpeper National Bank by letter, or whether you gave it to Mr. S. Russell Smith to be carried to the bank?

"Witness: Judge, my best recollection is that I mailed it to them. I have looked over our files for 1907 and have been unable to find the letter. I do not recall ever having taken the note to the Culpeper National Bank and asked them to discount it.

"The Court: The point of my question is, Arc you certain whether you inclosed this note to the Culpeper National Bank for discount and credit to the Tidewater Improvement Company, or whether that note was carried by Mr. S. Russell Smith, who was then the treasurer of the Tidewater Improvement Company and also the president of the Culpeper National Bank— whether the note was taken and carried by him to the bank, or whether you mailed that note directly to the Culpeper National Bank?

"Witness: Well, I wouldn't like to state that positively, except that I would state that it was my custom, when indorsing notes—

"The Court (interrupting): You stated the custom before; that is why I asked you the question. I want to know whether you are prepared to state on oath which happened.

"Witness: I cannot state. But I know this, that I did not carry the note to the Culpeper National Bank.

"The Court: The point of my question is whether you mailed the note to the bank, or whether Mr. Smith was intrusted with the note for the purpose of discount at the Culpeper National Bank.

"Witness: I cannot tell you that."

The first error assigned is thus stated in the petition:

"Petitioner's first bill of exception is to the action of the trial court in sustaining a motion of the plaintiff to strike out certain pleas inabatement filed by it; but, as the same question presented on said pleas was subsequently presented on motion to exclude the plaintiff's evidence, as set out in bill of exception No. 2, and also in petitioners' instruction No. 5, refused by the court and set out in bill of exception No. 4, * * * therefore, it will be useless to discuss this question on each exception, but we will present it to the court under one head."

This suit was brought in the hustings court, part 2, of the city of Richmond, under section 3215 of the Code, which provides that a suit may be brought in any county or corporation wherein the cause of action, or any part thereof, arose, although none of the defendants reside therein, the contention of the plaintiff being that the cause of action arose within the city of Richmond, and, S. Russell Smith, one of the defendants, being found within the city, process was served...