Fine v. Harney Co. National Bank

• Decision Date: 15 April 1947
• Citation: Fine v. Harney Co. National Bank, 181 Or. 411, 170 P.2d 365, 182 P.2d 379 (Or. 1947)
• Parties: FINE ET AL. <I>v.</I> HARNEY COUNTY NATIONAL BANK ET AL.
• Court: Oregon Supreme Court

181 Or. 411

170 P.2d 365

182 P.2d 379

FINE ET AL.

v.HARNEY COUNTY NATIONAL BANK ET AL.

Supreme Court of Oregon.

Argued January 30, 1945.

Argued on rehearing April 15, 1947.

Affirmed as to Harney County National Bank and reversed as to Federal Deposit Insurance Corporation June 18, 1945.

Former opinion set aside and case reversed July 1, 1947.

Banks and banking — Checks — Deposit — Credit

1. When check is presented for deposit drawn on depositary bank, the bank may refuse to pay it or take it conditionally by express agreement or by usage; but, if bank pays the money or gives credit to depositor, transaction is closed between bank and depositor unless check proves not to be genuine or there is fraud on part of depositor, and giving of credit is same as paying money to depositor and receiving cash again on deposit.

Banks and banking — Checks for deposit

2. In absence of special circumstances or express agreement that check is taken conditionally, question whether check was received by bank for deposit is one of law for court.

Banks and banking — Officers — Personal checks

3. Where bank's assistant cashier and vice president in payment of his personal obligation issued his personal check to depositor who deposited check through such officer, and depositor accepted check in good faith without notice that check was not good and that officer was embezzling bank's funds, depositor could as matter of law recover the amount of check from the bank.

Principal and agent — Opinion of agent

4. The rule that opinion of agent, based upon past occurrences does not bind his principal, has no application where opinion, is communicated to principal who thereafter acts upon it.

Banks and banking — Officers — Misappropriation

5. In national bank depositor's action against Federal Deposit Insurance Corporation which purchased bank's assets to recover amount of check which had been misappropriated by bank's assistant cashier and vice president, evidence regarding authority of corporation's liquidator to bind corporation by recommendation that depositor's claim be allowed was properly admitted and established a prima facie case of assumption by corporation of deposit liability.

Banks and banking — Officers — Misappropriation

6. Whether federal deposit insurance corporation which purchased national bank's assets assumed through its liquidator bank's

liability to depositor of check which was misappropriated by bank's officer so as to entitle depositor to recover amount of check from the corporation was for jury.

Discovery — Inspection of documents

7. Under statute providing that, upon refusal to obey order for inspection of document, court may exclude document from evidence or may direct jury to presume document to be such as party applying for it alleges it to be if such document is "wanted as evidence" by party applying therefor, it is the party applying for document, not his attorney, who must allege character of document before instruction is authorized, and the allegations must be under oath.

Discovery — Banks — Inspection of documents

8. In action by national bank's depositor whose check was misappropriated by bank's officer to recover amount of check from Federal Deposit Insurance Corporation on theory that corporation assumed bank's liabilities, wherein corporation failed to comply with order for inspection of document asked for in unsworn motion by depositor's attorney and depositor objected to introduction of document when thereafter offered by the Corporation, instructing that because of failure to comply with order jury must presume that Corporation assumed all of bank's liabilities was error.

Pleading — Negative pregnant

9. The rule forbidding a negative pregnant is recognized in Oregon though it is greatly affected by prevailing liberal rules of construction and amendment of pleadings.

ON REHEARING

Principal and agent — Duty of agent to principal

10. An agent cannot bind his principal in matter wherein agent's own interest conflicts with his duty to principal

Principal and agent — Duty of agent to principal

11. An agent's endeavor to bind his principal in matter wherein agent's interest conflicts with his duty to principal operates as immediate revocation of agent's authority, and his undertaking to do so is enough to put other party to transaction on his guard.

Principal and agent — Authority of agent

12. General power, expressly given agent, to do an act in principal's behalf, does not extend to case wherein agent himself is person interested on other side, unless such intent is expressed in language so plain that no other interpretation can rationally be given it.

Banks and banking — Officers — Personal checks

13. A bank officer, to whom depositor presents a check on such officer's bank for deposit therein, owes duty to determine whether check is good and, if not, to refuse to accept it.

Banks and banking — Officers — Authority — Notice

14. A bank depositor, from whom bank's assistant cashier accepted for deposit in depositor's account such officer's worthless check to depositor on officer's account in bank for amount of his personal indebtedness to depositor, was charged with knowledge that officer acted in dual capacity as both principal and bank's agent, so as to bar such depositor's recovery from bank of amount of check; officer's personal interest in transaction being sufficient to put depositor on notice of extent of officer's authority.

Banks and banking — Officers — Authority

15. A party knowing or charged with knowledge, while dealing with bank officer, that his authority does not extend to business in hand, unless especially conferred, owes duty of inquiry and acts at his peril, in absence of inquiry.

Estoppel — Banks and banking — Checks

16. The rule that, where one of two innocent persons must suffer from third person's wrongful act, innocent person who gave third person power to do wrong must bear consequences, is inapplicable as against a bank, for deposit in which an officer thereof accepted his own worthless check, given in payment of personal indebtedness to depositor, as such depositor, on whom duty rested to ascertain whether officer was misappropriating bank's funds, was not innocent person in legal sense.

Banks and banking — Officers — Personal checks

17. A bank's assistant cashier's authority, not shown by evidence, to receive deposits of his own checks on bank, cannot be inferred.

Banks and banking — Officers — Personal checks

18. In action against bank for amount of its assistant cashier's check, drawn on his account in bank for payment of his personal debt to plaintiff and accepted by such officer for deposit in payee's account, burden was on plaintiff to prove that such officer had special authority to receive deposits of his own checks.

Banks and banking — Officers — Individual debts

19. Under provision of Federal Reserve Act that no executive officer of any member bank shall become indebted thereto and that no such bank shall make loans or otherwise extend credit to its executive officers, directors of member bank had no power to authorize its assistant cashier to use bank's funds for payment of

his individual debts, as by accepting for deposit in bank his check on his own account therein for payment of personal debt to depositor.

Principal and agent — Agent's apparent powers

20. An agent's "apparent powers" are those incidental to his main authority or those sought to be deduced from special circumstances of recognition, acquiescence, or holding out, as to which principle of estoppel or something akin thereto must be invoked.

Banks and banking — Officers — Personal checks

21. Bank depositors, suing bank for amount of its assistant cashier's worthless check, given in payment of his personal indebtedness to one of plaintiffs and accepted by such officer for deposit in plaintiffs' account, cannot claim that they relied on officer's apparent authority to use bank's funds for his private purposes, since plaintiffs were charged with knowledge that exercise of such authority would be unlawful under Federal Reserve Act and that bank directors had no power to confer such authority.

Banks and banking — Officers — Personal checks

22. Evidence that bank's assistant cashier embezzled large amount of bank's money, and concealed his embezzlements from bank's directors and bank examiners for several years, showed no authority, conferred on such officer by bank's acquiescence, to accept for deposit his own worthless check for amount of his personal indebtedness to depositor and credit such depositor with amount thereof, as required to entitle depositor to recover such amount from bank, in absence of evidence that such officer ever before assumed to exercise such authority.

Banks and banking — Officers — N.S.F. checks

23. Bank was not estopped to deny its assistant cashier's authority to accept for deposit his worthless check on bank for amount of his personal indebtedness to depositor suing bank for amount thereof, in absence of evidence that depositor relied and acted on such supposed course of conduct of such officer.

Banks and banking — Officers — Personal indebtedness

24. In depositor's action against bank for amount of its assistant cashier's worthless check, given in payment of his personal indebtedness to plaintiff and accepted by such officer for deposit to plaintiff's account in bank, evidence showed that two deposit entries on plaintiff's account in aggregate amount of such check after transaction in dispute were fictitious entries, made by assistant cashier to prevent overdrafts from appearing in plaintiff's account, which would have led to discovery of such officer's embezzlements from bank, and hence did not constitute restitution of amount of check, which was not entered as credit on bank's books.

Banks and banking — Deposit — Credit

25. Depositors, suing bank for amount of deposit which they alleged that bank failed to credit to their...