First Nat. Bank v. Weinberg

• Decision Date: 14 November 1935
• Citation: 165 Va. 433
• Parties: FIRST NATIONAL BANK OF LEXINGTON v. ISAAC WEINBERG, ET AL.
• Court: Virginia Supreme Court

Page 433

165 Va. 433

FIRST NATIONAL BANK OF LEXINGTON v. ISAAC WEINBERG, ET AL.

Supreme Court of Virginia, Richmond.

November 14, 1935.

Present, All the Justices.

1. MASTER IN CHANCERY — Weight Due Commissioner's Report Approved by Trial Court. — The Supreme Court of Appeals should not reverse a conclusion of a commissioner, approved by the trial court, unless it clearly appears that the commissioner has erred.

2. APPEAL AND ERROR — Burden of Proving Error — Raising Doubt Is Insufficient. — While the Supreme Court of Appeals cannot avoid the duty of weighing the evidence when its sufficiency is fairly challenged, that doctrine does not relieve the complaining party of the burden of showing error, and to raise a doubt is not sufficient.

3. BANKS AND BANKING — Liability for Embezzlement of Depositor's Funds — Appeal and Error — Affirmance of Commissioner's Report Approved by Trial Court — Case at Bar. — In the instant case plaintiff instituted suit against defendant bank to recover a sum of money embezzled by a bank teller, a business associate of plaintiff and trusted by him implicitly, and charged to plaintiff's account. The cause was referred to a master commissioner and his finding in favor of plaintiff, confirmed by the trial court, was challenged by defendant as being without evidence to support it. Plaintiff's case rested, in a large measure, upon the testimony of an expert accountant, approved by both the court and commissioner, explaining the method used by the teller in his peculations, but there was also filed before the commissioner certain checks and charges, plaintiff's bank deposit books, adding machine slips returned to him by the bank, and the bank's records of his account.

Held: That no palpable error in the commissioner's report was shown, and defendant's contention was without merit.

4. JURY — Waiver — Omission to State That All Questions Are to Be Determined by Court. — When a case is submitted to the court for determination, it is the usual practice to state in the order of submission that all questions are to be determined by the court, but the omission to do so does not conclude the question of a determination by the court when it appears that neither plaintiff nor defendant damanded a trial by jury.

5. BANKS AND BANKING — Liability for Embezzlement of Depositor's Funds — Reference to Commissioner — Right of Plaintiff to Jury Trial on Question of Negligence — Case at Bar. — In the instant case plaintiff instituted action against defendant bank to recover a sum embezzled by a teller and charged to plaintiff's account, and the bank brought an action against plaintiff and his wife on two notes to which plaintiff pleaded as an offset the sum claimed by him. The cases were refereed to a master commissioner by an order stating that they involved voluminous matters of account which rendered it impracticable to try the case at that time before a jury. The commissioner found for plaintiff, and on the latter's motion the court awarded a jury trial on the issue whether plaintiff was estopped to deny the correctness of the accounts rendered him by defendant bank, and because of negligence barred of recovering from the bank the sum found by the commissioner to be due him. Defendant contended that by consenting to the order referring the causes to a commissioner, plaintiff agreed to submit the determination of all matters to the court.

Held: Tht the order of reference was a reservation of rights and not a waiver of same, and the question of negligence was properly submitted to the jury.

Error to a judgment of the Circuit Court of Rockbridge county. Judgment for plaintiff. Defendant assigns error.

The opinion states the case.

J. M. Perry and G. D. Letcher, for the plaintiff in error.

Hugh A. White and Leo Weinberg, for the defendant in error.

CAMPBELL, C.J., delivered the opinion of the court.

At the May, 1926, term of the Circuit Court of Rockbridge county, Isaac Weinberg brought an action against the First National Bank of Lexington to recover the sum of $14,595.21. The notice of motion alleges:

"The above mentioned net balance of $14,595.21 due to the undersigned has been caused and brought about by the errors, discrepancies and falsifying the accounts of the undersigned with the said First National Bank of Lexington, Virginia, by its agents, servants, cashiers, assistant cashiers, bookkeepers or tellers, or all of such agents and servants combined."

At the same term of court the bank brought an action against Isaac and Rebecca Weinberg to recover the principal sum of $14,006.24, claimed by virtue of two notes executed by the Weinbergs. To the action of Weinberg the bank pleaded the general issue, and to the action of the bank Weinberg pleaded as an offset the sum claimed by him.

At the September, 1926, term of court the following order was entered in the Weinberg case:

"This day came the parties by their attorneys, and it appearing that this case involves voluminous matters of account between the plaintiff and the defendant, which renders it impracticable to try the case at this time before a jury, by consent of both the plaintiff and the defendant by their attorneys, it is ordered that this cause stand committed to Master Commissioner M. W. Paxton, Jr., who will take, state and report as follows:

"1st. He will report a statement of the accounts between the parties stating in detail as far as possible, all of the accounts and claims existing between the parties, whether by open account, note or otherwise.

"2nd. And he will report what, it anything, the plaintiff is entitled to recover.

"And each party shall furnish to the commissioner any books, papers or records which may be required of him or it by the commissioner or the other party, and subject to the prior examination by the other party or his attorney.

"It appearing to the court that there are two chancery causes pending in this court and before said commissioner under the style of Isaac Weinberg First National Bank of Lexington, and Isaac Weinberg Rockbridge Steam Laundry, &c., and also one law suit pending in this court under the style of First National Bank of Lexington Virginia Isaac Weinberg and Mrs. Isaac Weinberg, it is ordered that so far as relevant and subject to objection, the evidence or any part thereof, or copy thereof, taken in any of the said causes may be read in this cause at the written request of either party, or by the commissioner * * *."

The companion order entered in the bank case directed the commissioner to report as follows:

"1st. He will report a statement of the accounts between the parties stating in detail, as far as possible, all of the accounts and claims existing between the parties, whether by open account, note or otherwise.

"2nd. The said commissioner will report what, if anything, is due the plaintiff, and what may be due the defendant, of either of them, if anything, under the pleadings and issues in this cause."

No question was made before the commissioner as to the debt due by the Weinbergs. The amount of the claim of Weinberg against the bank constituted the question presented for the determination of the commissioner. To support his claim of offset, Weinberg relied upon his own testimony and the testimony of E. B. Knatz, and expert accountant, and filed before the commissioner certain checks and charges, his bank deposit books and adding machine slips returned to him by the bank, and the bank's records of Weinberg's account.

After an extended and painstaking hearing, as evidenced by the voluminous record and the excellently prepared report, the commissioner found in favor of Weinberg in the sum of $7,398.98. To this report the bank filed eleven exceptions. While the report is challenged from different angles, the crux of the complaint is that the finding of the commissioner is without legal evidence to support it.

The trial court confirmed the report and definitely fixed the amount of Weinberg's recovery at the sum above named, conditioned, however, upon the proviso that he had not waived his right to a recovery by reason of his alleged negligence in failing to examine his bank statements and report the errors to the bank within a reasonable time. That action of the court is assigned as error.

The evidence before the commissioner tends to prove that for a number of years Isaac Weinberg had been a depositor with the bank; that his deposits for several years just prior to the defalcations complained of amounted to over a hundred thousand dollars annually; that he was a business associate of the teller in the bank, who, during the period from September 4, 1920, to November 18, 1923, embezzled a large sum of money and fraudulently entered a part of the amounts so embezzled against the account of Weinberg; that Weinberg, though a successful merchant, was uneducated and relied implicitly upon the teller in both his private dealings and in his dealings with the bank; that when he received his usual statements from the bank he would take the checks and charges, as shown on the adding machine slip, and check these against whatever charges were made up and shown on his check book stub, but that he never re-added the adding machine slips. By way of parenthesis, it will be stated that some of the adding machine slips were a yard in length and contained a multitude of items.

That the teller was guilty of embezzlement is not controverted. It is the conclusion of Knatz, the accountant (which...