First Nat. Bank at Cody v. Fay, 2877

• Decision Date: 23 June 1959
• Docket Number: No. 2877,2877
• Parties: FIRST NATIONAL BANK AT CODY, Cody, Wyoming, and Ruth Clare Yonkee, Trustees, Appellants (Plaintiffs below), v. F. Allyn FAY and Mary Ann Fay, Appellees (Defendants below).
• Court: Wyoming Supreme Court

Page 79

341 P.2d 79

80 Wyo. 245

FIRST NATIONAL BANK AT CODY, Cody, Wyoming, and Ruth Clare Yonkee, Trustees, Appellants (Plaintiffs below), v. F. Allyn FAY and Mary Ann Fay, Appellees (Defendants below).

No. 2877.

Supreme Court of Wyoming.

June 23, 1959.

Ernest J. Goppert of Goppert & Fitzstephens, Cody, for appellants.

Elmer J. Scott, Worland, for appellees.

Before BLUME, C. J., and PARKER and HARNSBERGER, JJ.

Mr. Justice HARNSBERGER delivered the opinion of the court.

On August 4, 1952, Otto Menger, now deceased, became the owner and holder of a $5,000 cashier's check of The Farmers State Bank, Worland, Wyoming. When introduced in evidence this check bore on its reverse side a typewritten notation 'Pay to the order of F. Allyn Fay and Maryann Fay, of Worland, Wyo. Loan on Contract Note of even date, Aug. 11th 1952', underneath which appears in ink 'O. A. Menger' with a typewritten underscoring and then in ink 'F. Allyn Fay & Mary ann Fay'. On August 12, 1952, this check was deposited to the account of 'The Men's Shop F. Allyn Fay'. 'The Men's Shop' was a trade name used by F. Allyn Fay.

In the probate of Mr. Menger's estate, the following entry appears upon the inventory and appraisement, 'F. Allyn Fay--Loan in the sum of $5,000.00'. On distribution of the estate of the deceased this inventoried item was decreed in trust to Ruth Clare Yonkee and the First National Bank at Cody, Cody, Wyoming, by virtue of a residuary clause. As the asserted loan was not repaid, the trustees brought this action against the defendants who claimed the $5,000 was a gift to them from the deceased.

Plaintiffs' position seemed to be that the typewriting appearing above the signature of the deceased on the reverse side of the check was sufficient evidence that a loan had been made to defendants and consequently they rested their case after introducing the check and a deposit slip showing the check's proceeds were credited to the account of defendant F. Allyn Fay.

At the conclusion of the trial, the court requested counsel to file briefs. This was done, and within a month thereafter, the trial judge addressed a letter jointly to respective counsel informing them that plaintiffs had failed to prove the allegations of their petition; that the record showed 'that on August 11, 1952, Otto Menger delivered a cashier's check to the defendants, bearing the endorsement in question'; that it was deposited in the defendant's account; that this was 'not sufficient upon which to base a finding for the plaintiffs'. The letter also noted that the court had said at the close of the case that it could not find that the transaction constituted a gift, and that the court was unable to say what the transaction was. The letter closed with instruction to defense counsel to prepare a judgment, 'saving exceptions to the plaintiffs'.

Defense evidence showed the endorsement signatures 'F. Allyn Fay & Mary ann Fay' were the first writings on the reverse side of the check and that both these names had been written by F. Allyn Fay; that the name 'O. A. Menger' was written thereafter and the typing including the underscoring line was imposed after 'O. A. Menger' was written.

The judgment recited that plaintiffs had asked for special findings at the beginning of their argument, but set forth that the only findings the court could make were: that plaintiffs had failed to prove their allegations by a preponderance of the evidence and that the court was unable to determine from the evidence what the transaction was between Otto Menger and the defendants. The court then found generally for the defendants and decreed plaintiffs recover nothing from defendants and defendants have their costs for witness fees. This general finding in favor of defendants and against plaintiffs imported a finding that there was insufficient evidence to prove that the $5,000 had been loaned to defendants.

Plaintiffs moved to amend this judgment, claiming the court had orally stated at the close of the argument and before submission of briefs that defendants had received the sum of $5,000 in the form of a cashier's check issued by The Farmers State Bank of Worland, to the deceased, Otto Menger; that defendants had failed to prove that the $5,000 had been paid them as a gift and that the court's letter to counsel was a memorandum opinion making special findings slightly different than those announced at the close of the oral argument. The motion also stated that before judgment was entered, plaintiffs again had verbally requested the court for special findings of fact and conclusions of law to be made in accordance with the court's letter of March 25, 1958, and alleged that thereupon the court advised plaintiffs the judgment would contain the findings as orally announced by the court and as set forth in the letter above referred to, but that notwithstanding this promise the judgment entered omitted such findings.

It was also claimed in this motion that inasmuch as plaintiffs had admitted during the trial that defendants had never made nor executed a contract note dated August 11, 1952, with Otto Menger, as plaintiffs had originally pleaded, they should be permitted to amend their pleadings accordingly. The court denied the motion in its entirety.

In this appeal, plaintiffs say the court committed reversible error (1) in failing to find defendants had received from Menger the sum of $5,000; (2) in failing to find the transaction did not constitute a gift; (3) in failing to find the transaction was an unjust enrichment of defendants; (4) in refusing the amendment of plaintiffs' pleading; (5) in denying plaintiffs' motion to have the judgment amended; (6) in finding generally for defendants; and (7) in entering the judgment rendered.

There was no error in the court's failure to find defendants had received $5,000 from Menger. Such a finding standing alone would have availed plaintiffs nothing. In order to have benefited plaintiffs, the necessary finding would have been that defendants had received $5,000 from Menger as a loan. The effect of the court's finding that there was a failure to prove the allegations of the petition was a holding that the alleged loan had not been made. That was sufficient to adversely dispose of plaintiffs's claim, providing only that the evidence justified such a finding.

Nor was there error in failing to find the transaction did not constitute a gift.

Plaintiffs' action was commenced on the theory there was an express contract evidenced by a promissory note which obligated defendants to repay the $5,000. Upon this theory plaintiffs were required to prove not only that there was such a note but that the same remained unsatisfied. After entry of the judgment containing the finding that plaintiffs had failed to sustain their cause of action, plaintiffs in effect belatedly admitted this was true by filing their motion to amend. This implied they wanted to abandon their note theory and switch to a claim upon an implied contract to repay the money. But their proof was not amplified and remained only that the $5,000 had been paid by Menger to defendants. This was as insufficient to establish an implied contract to repay the money as it was to prove the money had been paid as a loan. In either view, the appellants' position is tantamount to saying that an unexplained payment by one person to another presupposes that such payment is a loan unless the payee is able to prove to the contrary.

This would indeed be a strange rule of law if we must be put to proof that all moneys coming into our possession were not paid to us as a loan.

In this case we have an admitted failure of plaintiffs to prove defendants made and executed the purported note. There was also a failure of plaintiffs to prove that the money was given as a loan or was paid under circumstances where in equity or good conscience it ought to have been repaid.

This is not a case where the evidence shows defendants had moneys belonging to another which in good conscience, equity and justice they should be called upon to account. The cases cited by appellants, to support their theory that the burden of proof shifted from plaintiffs to defendants because defendants had answered that the money paid them was a gift, fall far short of meeting the facts proven in this case. We do not disagree that if proof shows one holds property of another, and sufficient reason is shown why in good conscience, equity and justice it should be returned, the onus of defending against an action to enforce its return or repayment falls upon him who asserts such a defense. But here, plaintiffs completely failed to show anything except that Menger had paid defendants $5,000. When they proved that, they merely proved the $5,000 belonged to the defendants. To recover the money back it was necessary they prove a reason, valid in law or in equity and justice, why it should be repaid. This they did not do and the court so correctly found.

The burden was upon plaintiffs to establish that the transaction was such that in law or equity they were entitled to repayment of the amount involved. Until sufficient evidence was produced to prove this vital element of plaintiffs' claim, nothing was required of the defendants. They were entitled to sit idly by, taking the position there was nothing which required any defense. However, when the typewritten notation and underscoring presented a circumstance bearing upon the existence of a note which evidenced a loan, it then became incumbent upon defendants to act. This they did by challenging the verity of the typewriting being upon the instrument at the time it was negotiated. To do this the testimony of an expert whose qualifications were admitted by plaintiffs was offered. This evidence showed the chronology of the various writings which appear on the reverse side of the check. In addition, the court itself was privileged to make its own visual examination of the exhibit. Fu...