Dempsey Oil & Gas Co. v. Citizens' Nat. Bank

• Decision Date: 17 March 1925
• Docket Number: Case Number: 13519
• Citation: 235 P. 1104,110 Okla. 39,1925 OK 205
• Court: Oklahoma Supreme Court
• Parties: DEMPSEY OIL & GAS CO. v. CITIZENS' NAT. BANK.

1925 OK 205

235 P. 1104

110 Okla. 39

DEMPSEY OIL & GAS CO. v. CITIZENS' NAT. BANK.

Case Number: 13519

Supreme Court of Oklahoma

Decided: March 17, 1925

Syllabus

¶0 1. Appeal and Error--Questions of Fact--Circumstances of Bank Deposit.

The question of who deposited certain funds in a bank, and the manner of depositing same, is one of fact, and when submitted to a jury under proper instruction by the court, the verdict of the jury will not be disturbed when the evidence is conflicting, or when there is evidence reasonably tending to support the same.

2. Banks and Banking--Status of General Deposit--Trust Funds.

A bank deposit, without any limitations or restrictions, or qualifications, such as is usually made in the due course of business, subject to be drawn out by the depositor on demand is a general deposit, and creates the legal relation of debtor and creditor, between the bank and depositor. In legal effect the deposit is a loan to the bank. This is equally so whether the deposit is of trust moneys, or funds which are impressed with no trust, provided the act of depositing is no misappropriation of the fund. The bank simply becomes indebted to the depositor in his fiduciary capacity.

3. Same--Withdrawal of Deposit--Duty and Liability of Bank.

A bank cannot question the right of its customer to withdraw funds, nor refuse (except in the instances already noted) to honor his demands by check; and therefore, even though the deposit be to the customer's credit in trust, the bank is under no obligation to look after the appropriation of the trust funds when withdrawn, or to protect the trust by setting up a jus tertii, the right of a third party, against a demand. But if the bank has notice or knowledge that a breach of trust is being committed by an improper withdrawal of funds, then it will undoubtedly be liable.

Commissioners' Opinion, Division No. 3.

Error from District Court, Grady County; Will Linn, Judge.

Action by the Dempsey Oil & Gas Company against the Citizens National Bank. Judgment for defendant, and plaintiff brings error. Affirmed.

Holding & Herr, for plaintiff in error.

R. D. Welborne and Bond, Melton & Melton, for defendant in error.

JONES, C.

¶1 This action was instituted in the district court of Grady county on December 4, 1919, by the plaintiff in error, plaintiff below, against the defendant in error, defendant below, to recover the sum of $ 465, with interest. The plaintiff alleges that on or about August 5, 1918, it was the owner of certain United States Liberty Bonds of the value of $ 500, and that on or about said date, the plaintiff, through its secretary and treasurer, P. C. Stacy, delivered said bonds to defendant bank, and instructed said bank, through its cashier, Ed. F. Johns, to sell said bonds and place the proceeds thereof to the credit of plaintiff herein in said bank. That shortly thereafter the defendant did sell the bonds receiving therefor the sum of $ 465, and in violation of the instruction given to said bank by the plaintiff, through its secretary and treasurer, said bank deposited said sum to the individual credit of Homer Naudain, instead of depositing the same to the credit of plaintiff herein, as formerly instructed. That shortly thereafter, over the objection and protest of plaintiff, defendant bank permitted said Naudain to wrongfully and without authority draw said funds from said bank, and refused to pay said sum to this plaintiff. To which petition the defendant files its answer and denies that the plaintiff company, through its secretary and treasurer, P. C. Stacy, delivered said Liberty Bonds to its bank, or any of its agents or servants, or to Ed. F. Johns, its cashier, for the purpose of having said bonds sold, and proceeds thereof placed to the credit of plaintiff. And further answering avers that on or about--day of August, 1918, there was delivered to the cashier of said bank certain United States Liberty Bonds of the par value of $ 500 by Homer Naudain, with the request and direction that said bank sell and dispose of said bonds for the credit and account of said Homer Naudain, and that said bank, in compliance with such request, did sell said bonds for the sum of $ 465, and in compliance with the directions given, placed said sum to the credit of Homer Naudain; that said defendant bank never at any time knew or had knowledge that the plaintiff had or claimed any right or title to said bonds, or the proceeds thereof; that said bonds were delivered to said Homer Naudain; and further answering say that said funds were checked out of said bank by said Naudain in due course upon proper checks and demand. And deny that it is indebted to said plaintiff in any sum, and request that the said Homer Naudain be made a party to this action; and if for any cause plaintiff should be entitled to recover said funds or any part thereof, that this answering defendant would be entitled to judgment over and against the said Naudain for such sum and cost. And thereafter the said Homer Naudain voluntarily filed his answer, which adopts and is in accord with the answer of defendant bank, and further answering, avers that at the time of the transaction he was the president of the plaintiff, Dempsey Oil & Gas Company, and that said company was indebted to him in the sum of $ 525, for services and expenses, and that as the president of said company he applied said bonds, and the proceeds thereof as part payment of the amount due and owing him by said company at that time; and further answering, admits that in the event plaintiff should recover in this action against the defendant bank, said defendant bank would be entitled to have judgment against him for whatever amount said plaintiff should recover against said bank. Thereafter, on October 2, 1919, the plaintiff filed its motion to strike the answer of said Homer Naudain for the reason that same was filed without an order of the court, as making said Naudain a party defendant, and for the reason that said Naudain is neither a necessary nor proper party defendant to the action; and thereafter on the 14th day of October, 1920, the court sustained said motion, striking said answers from the files and discharged said Naudain as defendant in the action, for the reason that he was not a necessary or proper party defendant to which order of the court the defendant Naudain and the defendant bank duly objected and excepted. And thereafter on the 15th day of January, 1922, the case was called for trial and submitted to the jury, which, after hearing the evidence and instructions of the court, returned its verdict in favor of the defendant. Plaintiff files its motion for a new trial, which was duly overruled, and judgment was entered by the court in accord with the verdict of the jury, from which order and judgment the plaintiff appeals.

¶2 The appellant sets forth the following specifications of error, viz., the court erred in refusing requested instruction by the plaintiff, and in overruling the plaintiff's motion for a new trial, and in rendering judgment in favor of the defendant and against the plaintiff; and in its argument states that:

"The only question involved in this appeal is as to whether or not the court erred in refusing the requested instructions."

¶3 The instruction referred to is as follows:

"Gentlemen of the jury, you are instructed if you believe from the evidence in this case that the defendant, Citizens National Bank, at the time that they paid out the fund in question, knew that said fund was the fund of the said Dempsey Oil & Gas Company, and were advised by said company that said fund was the fund of said company, and after being so advised, and after having received knowledge that said fund was the fund of the Dempsey Oil & Gas Company, paid said fund to Homer Naudain, then in that event your verdict should be for the plaintiff."

¶4 This instruction in all probability would have been important and proper had the answer of Homer Naudain, which clearly raised the issue of ownership of the fund, been permitted to stand, which would have necessitated the adjudication of that question, but as we view it, when the answer of Naudain was stricken, the remaining issue raised by the pleadings, the petition of plaintiff and answer of the defendant bank, was that of who made the deposit, which one of the officers of the Dempsey Oil & Gas Company, whether its president, Naudain, or its secretary and treasurer, Stacy, and whether or not the bank acted in violation of any instruction requested or directions given, and that is the theory upon which the court submitted the case to the jury, as indicated by the following instruction found in the record, and of which no objections were made or exceptions taken by either the plaintiff or defendant. The instruction was as follows:

"The court instructs the jury that if you find and believe from a fair preponderance of the evidence that on or about the 5th of August, 1918, that the plaintiff, the Dempsey Oil & Gas Company, was the owner of the Liberty Bonds of the face value of $ 500, and

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