Deposit Guaranty Blank & Trust Co. v. Silver Saver Stores, Inc

• Decision Date: 29 May 1933
• Docket Number: 30518
• Citation: 148 So. 367,166 Miss. 882
• Parties: DEPOSIT GUARANTY BLANK & TRUST CO. v. SILVER SAVER STORES, INC
• Court: Mississippi Supreme Court

148 So. 367

166 Miss. 882

DEPOSIT GUARANTY BLANK & TRUST CO. v. SILVER SAVER STORES, INC

No. 30518

Supreme Court of Mississippi

May 29, 1933

Division A

1. BANKS AND BANKING. In action against bank for dishonoring check, 'bank held not entitled to peremptory instruction on theory that teller in transaction with plaintiff acted in his own interests and against interests of bank.

The facts showed that the teller cashed a check from plaintiff in which he was named as payee, credited it to himself and his mother, and did not charge check to drawer, but carried it as cash item for several days, and that the bank knew that this item was being so carried.

2. BANKS AND BANKING.

"Check" is simple, written order to make payment and is executory and revocable at any time before bank has paid or committed itself to pay it.

3. BANKS AND BANKING.

One dealing with bank may act on apparent authority of teller in matter of payment or nonpayment of check or where teller has refused to receive deposit.

4. BANKS AND BANKINO. Bank teller and others, such as bookkeepers, act under special authority, and their acts bind bank only when they are within line of authority.

However the acts of minor officials within the scope of their authority are binding on the bank, as are also their declarations, when within their proper fields of employment.

5. BANKS AND BANKING.

Notice of oral stop order on payment of check given to teller of bank was valid.

6. BANKS AND BANKING. In action against bank for dishonoring

check instruction authorizing punitive damages held not erroneous under evidence.

Instruction authorized punitive damages if jury regarded dishonoring of check as willful wrong, and the bank teller testified that he dishonored check for the sole purpose of building up a fund sufficient to pay another check on the following day. This evidence warranted the jury in finding, if they saw fit, that the action of the bank was willful or oppressive.

7 EVIDENCE.

Agent's declaration after happening of event is not competent and not binding on principal.

8. APPEAL AND ERROR. Evidence.

In action against bank for dishonoring check, teller's conversation with plaintiff, after suit had been brought, gist being that teller wanted money due him, and did not care what plaintiff did with bank or what he recovered from bank, held inadmissible, and admission thereof was prejudicial.

9. APPEAL AND ERROR.

Error in admitting evidence may be presented, though question was not included in motion for new trial (Supreme Court Rule 6, par. 3).

HON. W. H. POTTER, Judge.

APPEAL from circuit court of Hinds county HON. W. H. POTTER, Judge.

Action by Silver Saver Stores, Incorporated, against the Deposit Guaranty Bank & Trust Company. Judgment for plaintiff, and defendant appeals. Reversed and remanded.

Reversed and remanded.

Geo. E. Shaw and M. A. Pilgrim, both of Jackson, for appellant.

The general rule is that notice acquired by an agent, while transacting the business of his principal, of a fact which it is his duty to communicate to his principal, operates as notice to his principal; but this rule does not apply where the agent is acting in his own interest, and against the interest of the principal.

Frenkel v. Hudson, 2 So. 758, 82 Ala. 158.

Where an agent is interested adversely to his principal, his principal is not charged with knowledge of the agent acquired in such transaction.

Scott County Milling Co. et al. v. Powers, 73 So. 792, 112 Miss. 798; 31 Cyc. 1595.

If the adverse interest of the agent John Hart Ascher was such as to prejudice the interests of the principal, and the principal not chargeable with the knowledge of said agent, it then follows that the appellant being the holder, for value without notice, of the said one hundred dollar check it had the right to apply any funds it held to the credit of appellee's general account to the payment of said check.

Moreland et al. v. Peoples Bank of Waynesboro, 114 Miss. 203, 74 So. 282; National Mahaiwe Bank v. Peck, 127 Mass. 298, 34 Am. Rep. 368.

Punitive damages may be recovered only where there is malice, fraud, oppression, wilful wrong or gross negligence.

Yazoo & M. V. R. Co. v. Mullen, 131 So. 101, 158 Miss. 774; Bounds v. Watts, 131 So. 804, 159 Miss. 307.

As a general rule a bank may look to deposits in its hands for the repayment of any indebtedness to it on the part of the depositor and may apply the debtor's deposits on his debts to the bank as they become due.

7 C. J. 653, 654, par. 351.

The court below erred in permitting the testimony of plaintiff's witness N. R. Thomas with reference to his conversation with one John Hart Ascher.

Carter Stirling, Roy Arnold and Leonard Calhoun, all of Jackson, for appellee.

The second assignment of error is the admission of testimony of a conversation between Mr. Ascher and Mr. Thomas, in which Mr. Ascher stated in substance that it didn't matter to him how much the bank paid in damages, that he wanted his August rent. This was not called to the attention of the court in the motion for a new trial, and it is submitted that under Carpenter v. Savage, 46 So. 537, 93 Miss. 233, it should not be complained of now.

The general rule is that notice acquired by an agent while transacting the business of his principal, of a fact which it is his duty to communicate to his principal, operates as notice to his principal; but this rule does not apply where the agent is acting in his own interest, and against the interest of his principal. However, in the case at bar the agreement does not appear to be either in Mr. Ascher's interest, or peculiarly against the interest of the bank. The stop notice certainly was not accepted by Mr. Ascher for any benefit to himself, nor, under the circumstances, against any interest of the bank, while both these facts seem necessary to exempt the principal from notice.

Frankel v. Hudson, 82 Ala. 158, 2 So. 756.

Appellant sets up a straw man and carefully knocks it down in his argument as to wilfulness, in bringing in the conversation between Ascher and Thomas with respect to the collection of August rent, demonstrating that this is not evidence of wilfulness. This demonstration might be effective if the only wilfulness complained of was dependent on this evidence, but it is not this conversation, but prior ratified acts with respect to stoppage of the check that is the evidence supporting this instruction.

It is submitted that from the record there arises sufficient evidence of wilfulness to allow the jury to determine whether as a matter of fact there was wilful action, and, if so, to award punitive damages.

The plaintiff could prove the verbal notice given to the "receiving teller."

Peoples Savings Bank & Trust Co. v. Lacey (Ala.), 40 So. 346.

The appellant cannot call to the attention of the court a single instance where a check of appellee's was not covered by sufficient deposits and paid, though it may show instances of some delay in payment, in a very few cases.

Even without proof of any particular special damage, substantial damages may be recovered for dishonoring check.

7 C. J., sec. 425; 5 R. C. L., sec. 74; 4 A.L.R. 948; Wiley v. Bunker Hill Nat. Bank (1903), 97 N.E. 655; Ward v. State Bank, 52 Mont. 328, 157 P. 573; Reeves v. First Nat. Bank (1912), 20 Cal.App. 508, 129 P. 800; Metropolitan Supply Co. v. Garden City Bkg. & T. Co. (1904), 114 Ill.App. 318; McFall v. First Nat. Bank (Ark. 1919), 211 S.W. 919.

The law presumes malice in law from a refusal to pay check.

4 A.L.R. 949; 16 L.R.A. (N.S.) 440.

OPINION

McGowen, J.

The appellee, Silver Saver Stores, Inc., a trading corporation or trader, brought suit for damages against the Deposit Guaranty Bank & Trust Company, the appellant, for dishonoring six checks aggregating about one hundred eighteen dollars and forty-five cents, on July 25, 1932. On issue made up, the case was submitted to a jury, which returned a verdict for the Silver Saver Stores, Inc., against the bank, for the sum of seven hundred fifty dollars, and judgment was rendered accordingly.

These facts are undisputed: That on July 25 and 26, 1932, there was a sufficient amount of money on deposit in the Deposit Guaranty Bank & Trust Company to the credit of the Silver Saver Stores, Inc., to pay the checks which were dishonored, leaving out of view the fact that on the 26th day of July, 1932, John Hart Ascher, a teller of the bank, cashed a check in which he was named as payee, credited same to himself and his mother, and did not charge the check to the drawer. That, on several occasions, before that time, the bank had dishonored checks drawn by the Silver Saver Stores, Inc., at a time when it did not have sufficient funds on deposit with which to pay such checks.

It is admitted that two checks of the depositor were dishonored on July 25, 1932, by the teller, Ascher, in order to insure the bank that there would be sufficient funds on hand to pay the one hundred dollar check.

It is also undisputed that the Silver Saver Stores, Inc., gave its check on the bank for one hundred dollars on July 14, 1932, to pay the rent due to Ascher and his mother, for the lease of a building from them in which it carried on a mercantile business. This check was postdated July 18, 1932, and around this check clusters the controversy in this case.

On July 18, 1932, Thomas, the president of the Silver Saver Stores Inc., sent an employee, McGuffee, to the bank with a deposit in excess of one hundred forty dollars, directing him to notify the bank not to pay the check drawn in favor of Ascher, and if the bank would not stop payment of this check until the latter part of next week, that McGuffee was not to make the deposit. According to...