First Nat. Bank v. Stewart

• Decision Date: 22 April 1920
• Docket Number: 8 Div. 249
• Citation: 204 Ala. 199,85 So. 529
• Parties: FIRST NAT. BANK OF HUNTSVILLE v. STEWART.
• Court: Alabama Supreme Court

85 So. 529

204 Ala. 199

FIRST NAT. BANK OF HUNTSVILLE v. STEWART.

8 Div. 249

Supreme Court of Alabama

April 22, 1920

Appeal from Circuit Court, Madison County; Robert C. Brickell Judge.

Action by Lucy Stewart against the First National Bank of Huntsville for damages for failing or refusing to pay a check when she had funds on deposit. From a judgment for plaintiff defendant appeals. Transferred from Court of Appeals under Acts 1911, p. 450, § 6. Reversed and remanded.

Spragins & Speake, of Huntsville, for appellant.

R.E Smith and C.L. Watts, both of Huntsville, for appellee.

SAYRE J.

Appellee sued appellant for damages, alleging that appellant had refused to pay appellee's check for the sum of $10, notwithstanding appellee at the time had funds to that amount on deposit with appellant and subject to her check. In the complaint upon which the case was submitted to the jury there was no allegation of special damages. As originally framed, several counts contained an allegation that the effect of defendant's statement that plaintiff had no account at the bank, made when payment was refused, was to charge that plaintiff had obtained the goods, for which the check had been given, by a worthless check in violation of the criminal law, and that in consequence of such false statement plaintiff had been arrested and imprisoned; but this allegation was stricken on defendant's motion. The court instructed the jury to find for the plaintiff. The propriety of this instruction, under the evidence, is not questioned. Errors assigned relate to questions of evidence and certain instructions touching upon the measure of damages.

The charge which we have designated on the margin of the record as charge 1, given on plaintiff's request, was error. On the facts hypothesized, punitive damages were not a matter of right, as the charge asserted, but were discretionary with the jury. Cox v. B.R.L. & P. Co., 163 Ala. 170, 50 So. 975; Coleman v. Pepper, 159 Ala. 310, 49 So. 310; L. & N.R.R. Co. v. Bizzell, 131 Ala. 429, 30 So. 777. It is sought to obviate the effect of this error by reference to the court's oral charge in which the jury were told that, in the event of a finding that the bank acted in reckless disregard of plaintiff's rights, they might assess damages for the purpose of punishment, and by the affirmation that the amount of damages assessed, viz. $75, is proof conclusive that punitive damages were not assessed, but that the assessment was in pursuance of the court's instruction to the effect that, if the bank acted fairly, making such investigation as was reasonable and proper, and yet failed to honor plaintiff's check, she was entitled to recover "temperate" damages, not in the nature of punishment, but in the way of compensation. The error of the charge cannot be relieved on either ground. The oral charge could have corrected the error of the special charge in question only by some manner of statement or other treatment tantamount to an instruction that the jury were not to accept the charge as a correct statement of the law. The record shows no recognition nor correction of the error of the charge.

There is authority for the proposition that, even though the dishonor of plaintiff's check was the result of mere inadvertence on the part of the bank, and there was no proof of special damages, recovery should not be limited to nominal damages, but "temperate" damages should be awarded by way of compensation. 2 Morse on Banks (5th Ed.) § 458, cases cited in note 3a. But the rule of the cases to be found noted in the authority supra is an exception to the general rule of the common law that, save where a tort is committed maliciously, willfully, or wantonly, allegation and proof is necessary to sustain a recovery of special damages. And the authorities indicate that the rule, as applied to cases like that before us, is based upon public policy. As said in Patterson v. Marine Nat. Bank, 130 Pa. 419, 18 A. 632, 17 Am.St.Rep. 778:

"A bank is an institution of a quasi public character. *** The business of the community would be at the mercy of banks if they could at their pleasure refuse to honor their depositors' checks, and then claim that such action was the mere breach of an ordinary contract, for which only nominal damages could be recovered, unless special damages were proved."

Upon some such consideration was the rule founded in its beginning, and hence it was that stress was laid by the courts upon the fact that the depositor was a merchant or trader.

"Though it is admitted by the authorities that the right to recover substantial damages does not depend on the depositor's occupation, there is a distinction between an ordinary depositor and a depositor who is a merchant or trader. If the depositor is a merchant or trader, it will be presumed without further proof that substantial damages have been sustained; but, if the depositor is not a merchant or trader, there is no such presumption of substantial injury, and his recovery should be a nominal one, unless he alleges and proves some special damage." Note to Commercial Nat.

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