First Nat. Bank of Eads v. Fleming State Bank

• Decision Date: 05 November 1923
• Docket Number: 10484.
• Citation: 74 Colo. 309,221 P. 891
• Parties: FIRST NAT. BANK OF EADS v. FLEMING STATE BANK.
• Court: Colorado Supreme Court

221 P. 891

74 Colo. 309

FIRST NAT. BANK OF EADS v. FLEMING STATE BANK.

No. 10484.

Supreme Court of Colorado

November 5, 1923

Rehearing Denied Jan. 7, 1924.

Department 3.

Error to District Court, Logan County; H. E. Munson, Judge.

Action by the Fleming State Bank against the First National Bank of Eads. From a judgment dismissing the action, plaintiff brings error.

Affirmed.

John H. Voorhees, of Pueblo, for plaintiff in error.

Coen &amp Sauter, of Sterling, for defendant in error.

CAMPBELL J.

A. C Cunningham drew his check on the defendant Fleming State Bank for $1,000, payable on demand to L. A. Poinsett. Poinsett left this check with the plaintiff, the First National Bank of Eads, to hold for further instructions, later given, which were that, if plaintiff was satisfied that the check was good, to supply the indorsement thereof and remit the amount of the check to the Hartman State Bank to the credit of Dean Doyle--apparently as a payment on a land deal. Pyles, the cashier of plaintiff, told Poinsett he had received from the defendant drawee a telegram that the check would be honored whereupon he indorsed the same for Poinsett, sent his cashier's check for the amount to the Hartman Bank as directed, forwarded the Cunningham check to its correspondent, the First National Bank of Pueblo, and the latter presented it to the drawee for payment, which was refused by direction of the drawer. The check was then returned to the plaintiff bank dishonored, and plaintiff at once charged the same back to Poinsett's account, he being a customer of the bank, and notified Poinsett thereof, to which charging back the latter objected. Thereupon, at Poinsett's suggestion, plaintiff again sent the check for collection to the defendant drawee, Poinsett's account being again credited therewith; it was then returned a second time under the same conditions, and the account of Poinsett was again charged therewith, and the instrument was canceled. Poinsett's bank account ever since has remained in that condition, though he has objected thereto. Paintiff's books show a deposit by Poinsett of $1,000 shortly after the last charge of that sum was made on the books of the bank against him, the purpose of which deposit the cashier is unable to explain, and Poinsett is silent about it, though he was a witness at the trial.

Plaintiff's theory of the case, upon this state of facts, is that the transaction was a sale, not a deposit for collection merely, and therefore plaintiff became the owner of the check and held the legal title which enabled it to maintain this action against the acceptor upon its failure to pay on presentation. Defendant's theory is that the transaction was not a sale, but a deposit for collection only, but, if a sale, and if the check which was dishonored by the acceptor caused a loss to the plaintiff, the latter was fully reimbursed and obtained full compensation for the loss by charging the amount thereof to the account of Poinsett, which, in legal effect, was a payment by Poinsett to the plaintiff of $1,000 in money.

Trial was to the court without a jury, upon whose findings in defendant's favor the action was dismissed. No specific findings of fact were made, but the opinion of the trial court brought up in the record shows that the court concluded that plaintiff was not the real party in interest, had no interest at all in the check when the complaint was filed, having been fully paid for the loss it sustained in sending its cashier's check by charging back the same to Poinsett's account when the Cunningham check was returned dishonored. Upon the record the court was justified in finding from the evidence: (1) That, if the transaction was a sale, plaintiff, having suffered no loss by its connection with the check, and not being its owner, could not maintain the action; (2) that, by the acts and conduct of plaintiff and Poinsett, Poinsett did not sell or intend to sell, and plaintiff did not buy or intend to buy, the check, and there was no intention of the parties to transfer the check from Poinsett to the plaintiff bank, which never passed from, and still remains the property of, the payee. We take up these findings or assumptions of the court in inverse order.

1. The authorities are not in harmony upon all of the legal questions argued by counsel. The undisputed facts do not bring the case within the rules invoked by the defendant. When, as here, a check is indorsed in blank by the payee, and placed in a bank other than the one on which it is drawn whether such a transaction constitutes a sale of the check to the first bank or is merely a deposit for collection depends upon the facts and...