England Nat. Bank v. United States

• Decision Date: 23 June 1922
• Docket Number: 5652.
• Citation: 282 F. 121
• Parties: ENGLAND NAT. BANK v. UNITED STATES.
• Court: U.S. Court of Appeals — Eighth Circuit

282 F. 121

ENGLAND NAT. BANK v. UNITED STATES.

No. 5652.

United States Court of Appeals, Eighth Circuit.

June 23, 1922

H. M Trieber, of Little Rock, Ark. (John M. Moore, H. M Armistead, Ashley Cockrill, G. De Matt Henderson, and John W Newman, all of Little Rock, Ark., on the brief), for plaintiff in error.

June P Wooten, U.S. Atty., of Little Rock, Ark. (W. A. Utley, Asst. U.S. Atty, of Benton, Ark., on the brief), for the United States.

Before SANBORN and LEWIS, Circuit Judges, and VAN VALKENBURGH, district judge.

SANBORN Circuit Judge.

The record in this case portrays the proceedings in the trial of an action by the United States against the England National Bank to recover $6,205.49 and interest, on the ground that the bank paid and charged to the plaintiff's account the latter's checks, numbered 24 and 25, in each of which the name of the payee had been changed after the checks had been lawfully signed, on behalf of the plaintiff by Col. D. W. Ryther, 'Mess Fund, 348th Inf., D. W. Ryther, Col. 348th Inf. Com'd'g.' The most important questions in the case relate to the charge of the court at the close of the trial. To determine them it is necessary to consider the state of the evidence at that time. There was substantial and preponderant evidence in the case of these facts:

The two checks, 24 and 25, were dated, signed by Col. Ryther, and delivered to Robert H. Hall, the first lieutenant of the 348th Infantry on January 8, 1918, to deliver to the payees named therein in satisfaction of their claims for supplies which the plaintiff had purchased from them. Check 24 was for $3,557.15, and was payable to the order of 'Scott-Mayer Com. Co.' Check 25 was for $2,648.34, and was payable to the order of Swift & Co. The numbers, dates, amounts, and the names of the payees in these checks appeared in the stubs thereof, which have been in a check book in the possession of the plaintiff ever since the checks were drawn. Lieut. Hall had charge of the Mess Fund and of two other mess funds, purchased the supplies, kept the account, drew the checks, but he had no authority to sign the checks on the Mess Fund of the 348th Inf. on deposit in the bank. He had, however, signatory powers over two other funds deposited therein; that of the 'Mess Officer, 348th Inf.,' and that of the 'Headquarters Mess, 348th Inf.' With erasing fluid he removed the name of the payee in each of the two checks, wrote in the place of 'Scott-Meyer Com. Co.' in check 24 'Headquarters Mess, 348th Inf.,' then indorsed that name on the back of the check; wrote in the place of Swift & Co. in check 25 'Mess Officer, 348th Inf.,' then indorsed that name on the back of that check, obtained the money on the checks by depositing them in accounts in other banks than the plaintiff's, whence he could draw it out, secured the money on the checks, and absconded. He had written the two checks originally, and Col. Ryther had simply signed them, so that the handwriting of the substituted names of the payees was the same as that of the written amounts therein, and they passed through the banks and were paid by the plaintiff without exciting any suspicion that there had been any change in them after they were signed by Col. Ryther. Nor was there any evidence introduced in the case that there was anything about either of the checks to excite the suspicion of or give notice to an experienced cashier or teller that the name of the payee therein had been changed. Check 24 was paid by the defendant on January 27, 1918, and check 25 was paid by it on January 28, 1918. This action was commenced on September 27, 1918.

One of the defenses pleaded by the bank in its answer was that after it paid these checks it caused a statement of the account of the 'Mess Fund 348th Inf.' to be made, which showed all the items of debits and credits entering into that account, including the amounts of checks 24 and 25, and caused that statement and all the paid checks referred to in that account, including checks 24 and 25, to be delivered to Col. D. W. Ryther as the agent and representative of the plaintiff, requested that he examine them and report any error therein, and notified him that if no error was reported within 10 days after their delivery the account would be considered correct; that neither Col. Ryther nor the plaintiff notified the defendant of any alteration, fraud, or defect in connection with either of the two checks, and it was thereby prevented from protecting itself against loss, on account of its payment thereof, until it was too late for it to do so. At the close of the evidence the defendant requested the court to charge the jury that, if they found that a statement of the account of the 'Mess Fund 348th Inf.' was rendered by the defendant to the depositor or any one representing it, accompanied by the canceled checks referring thereto, including checks 24 and 25, about February 1, 1918, that no objection was made to the statement, to the balance shown or to the paid checks thereon by the depositor, and that no notice was given to the bank that any error had been made in the account, or that the two checks, or either of them, had been altered or changed, then they should return a verdict for the defendant, and that upon the question whether or not such a statement was rendered the testimony regarding the usage and custom of the bank in making and delivering such statements to its depositors was competent, and the jury might take into consideration the testimony of the officers of the bank in regard thereto. The court refused this request, and charged the jury that, if they found that at the time Col. Ryther signed the checks they were filled out, one payable to 'Scott-Mayer Com. Co.' and the other payable to Swift & Co., and that, after he had signed and delivered them to Lieut. Hall, the latter altered them by erasing or removing the names of the payees and substituting other names, the plaintiff was entitled to the verdict, thereby withdrawing from the jury all other questions of fact. To this charge, and to the court's refusal to give the charge it requested, the bank excepted, and it assigns these rulings as error.

The refusal of the instruction requested by the defendant presents two questions: First, was there any substantial, competent evidence that the bank sent or delivered the statement of account and canceled checks to the plaintiff? and, second, if it did so, would that fact, and the other facts of which there was substantial evidence, if they had been found by the jury, have constituted a defense to this action, and have entitled the defendant to a verdict in its favor?

The assistant cashier of the bank at the time of these transactions testified that it was the custom of the bank, if a depositor asked for a statement of his account, to make one showing the account at the time he requested it, and the balance, to accompany this account with the paid checks referring to the items therein, and, if the depositor requested it, to mail this statement and the checks to him that the bank had two clerks in charge of making these statements in 1918, that he was unable to say which one of these clerks made the statement in this case, and that no one remembered; that the bank never sent out canceled checks, except in connection with a statement of account; and that the records of the bank showed that a statement of the account of 'Mess Fund 348th Inf.' was made up at the close of business on January 28, 1918, and another up to the close of business on March 9, 1918. He also testified that about the 5th or 6th of February, 1918, he was informed that there was something wrong with the account, and that he stopped payment on it for a few days on the request of the plaintiff, and then resumed payment, but that he...