Douglas v. First Nat. Bank of Hastings

• Decision Date: 01 January 1872
• Citation: 17 Minn. 18
• Parties: ALBERT DOUGLAS v. FIRST NATIONAL BANK OF HASTINGS.
• Court: Minnesota Supreme Court

17 Minn. 18

ALBERT DOUGLASv.

FIRST NATIONAL BANK OF HASTINGS.

Supreme Court of Minnesota.

Appeal by defendant from an order of the district court, Dakota county, denying a new trial.

The action was brought to recover the balance of a deposit account against defendant, kept by W. K. Rogers in the name of Samuel Rogers, and assigned by W. K. to plaintiff. On a trial before a referee he reported in favor of plaintiff.

Smith & Van Slyke, L. Emmett, and H. R. Bigelow, for appellant.

Smith & Gilman, for respondent.

BERRY, J.

The referee's conclusion that there was due from the bank to William K. Rogers a balance upon deposit account of $5,061.60, is based upon findings that the item of $5,061.60, entered July 12, 1866, was improperly debited, and the item of $5,061.60, entered August 1, 1866, was properly credited, to said Rogers.

In our judgment, there is no evidence in the case which has a reasonable tendency to sustain the referee in arriving at this result. The testimony is flatly contradictory; but, upon any rational construction of it, we are entirely clear that both items should be allowed to stand in the account as entered, or that both should be rejected. In either case the result would be that the account would be balanced and the bank owe nothing.

Much of the apparent difficulty in this case will disappear if it be borne in mind that the real question to be solved is, not how the bank kept the deposit account, nor whether it was kept correctly and properly, but whether the bank was in fact indebted to Rogers. If the bank in fact owed Rogers nothing, the plaintiff has no cause of action, no matter how the bank kept its accounts.

From the testimony returned, it appears that there were two theories as to the origin and nature of the two items referred to, — one disclosed in the testimony of William K. Rogers, the other in that of L. S. Follett, the bank's cashier.

Rogers' theory is that the account belonged to himself; that the debit of $5,061.60 was an attempt upon the part of the bank to pay, out of his said account and without his consent, a note dated August 14, 1865, held by the bank against his brother, Samuel Rogers, Jr.; that the credit of $5,061.60 represented a note dated August 1, 1866, and executed by himself for Samuel Rogers, Jr., as principal, and for himself as surety, which was given "to take the place of, and to evidence the same debt as," the former note; that there were, in fact, no proceeds from the latter note, and no authority given to pass the same to his (William K. Rogers') credit. It is hardly necessary to say that, upon this theory, neither of the items was properly in the account.

Follett's theory is that the account belonged to Samuel Rogers, Jr., or, if it did not, that the conduct of William K. Rogers had been such as to authorize the bank to treat the account as belonging to Samuel Rogers, Jr.; that, therefore, it was proper to debit in the account the amount of the note of August 14th, which was overdue and unpaid, and thereby to pay the same; that the note of August 1st was a discount note, taken by the bank upon an application for a loan by William K. Rogers, who requested the amount of the same to be placed to the credit of Samuel Rogers, Jr.; that it was entirely independent of the note of August 14th; that the credit of $5,061.60 represents the "proceeds" of the note of August 1st, and that it was therefore a proper subject of credit in the account. Upon this theory both items were properly in the account.

As...