Gellert v. Bank of California, National Ass'n

• Decision Date: 17 April 1923
• Citation: 107 Or. 162,214 P. 377
• Parties: GELLERT v. BANK OF CALIFORNIA, NATIONAL ASS'N, ET AL.
• Court: Oregon Supreme Court

214 P. 377

107 Or. 162

GELLERT v. BANK OF CALIFORNIA, NATIONAL ASS'N, ET AL.

Supreme Court of Oregon

April 17, 1923

In Bank.

Appeal from Circuit Court, Multnomah County; Robert G. Morrow Judge.

Action by Sarah Gellert, as executrix of the estate of Jennie Posner, deceased, against the Bank of California, National Association, a corporation, and others. From a judgment for plaintiff against defendant bank, it appeals. Affirmed, with modification.

Rand J., dissenting.

This is an action prosecuted by Sarah Gellert, as executrix of the estate of Jennie Posner, deceased, against the Bank of California, National Association, a corporation, for the recovery of $3,920, with interest, received by the bank from Jennie Posner for two drafts delivered by the bank to Jennie Posner. The action was begun against the bank alone, but the trial court required the plaintiff to make as parties defendant Flora Levor, a resident of the city of New York and Mrs. E. W. Posner, a resident of the state of New Jersey who were named as the respective payees in the two drafts. The cause was with the consent of the plaintiff and defendant tried to the court without a jury. After hearing the evidence, the court dismissed without prejudice the proceeding as to Flora Levor and Mrs. E. W. Posner, on the ground that they were not properly impleaded and for the reason "that their answers and cross-complaints were unavailable in this action." Thereafter, "in determining what remained of the controversy," the court made findings and rendered a judgment against the bank for $3,920 with interest. The bank appealed.

The record originally presented to us contains only the pleadings, findings of fact, conclusions of law, and judgment. There is no bill of exceptions, and none of the evidence is made a part of the record on appeal. We cannot take notice of any facts except those which are admitted by the pleadings or recited by the court in the findings of fact. The question for decision is whether upon the facts admitted in the pleadings and the facts recited in the findings, the plaintiff is or is not entitled to a judgment against the bank; and therefore it is important to know what those facts are.

The defendant has a place of business in Portland, Or.; and its New York correspondent was J. P. Morgan & Co., a banking concern of the city of New York. At the time of the drawing of the two drafts involved in this action, the bank had on deposit with J. P. Morgan & Co., and at all times since has had, a sum of money largely in excess of $3,920 applicable to the payment of any drafts or demands that might have been made upon it by the defendant bank. On May 10, 1920, Jennie Posner had on deposit with the defendant bank to her credit more than $9,000; and on that date and at her request the defendant bank drew two drafts on J. P. Morgan & Co. Each draft was for $1,960, and was payable at sight; one was payable to Flora Levor and the other to Mrs. E. W. Posner. The bank delivered both drafts to Jennie Posner, deducted from her deposit the sum of $3,920, the amount of the two drafts, and the further sum of $3 as exchange for drawing the drafts. At the time of the drawing of the drafts and "in its usual and ordinary course," the bank notified J. P Morgan & Co. of the drawing of the drafts upon the latter, and the bank "credited J. P. Morgan & Co. upon its books for the amount of said two drafts."

Neither Flora Levor nor Mrs. E. W. Posner parted with any consideration to the bank for drawing the drafts or to Jennie Posner for procuring the drawing of the drafts; but Jennie Posner procured the drafts "for the purpose and with the intention of making a gift thereof to the payees named therein." Jennie Posner did not transmit the drafts to the payees, but retained the instruments in her possession until the time of her death, which occurred on May 18, 1920. Jennie Posner left a will which was admitted to probate in Multnomah county, Or., on June 1, 1920, and the plaintiff qualified as executrix. The plaintiff took possession of the property of the testatrix, "and among the personal property of the said deceased plaintiff obtained possession of the aforesaid instruments, and the plaintiff still has them in her possession." On June 2, 1920, the plaintiff tendered the two drafts to the bank for the purpose of cancellation, and demanded that the account of Jennie Posner be credited with $3,920, or that the bank pay that amount to the plaintiff as executrix, but the bank refused; and subsequently the plaintiff commenced this action. The drafts were never presented to J. P. Morgan & Co. for acceptance, certification, or payment.

Joseph Simon, of Portland (Dolph, Mallory, Simon & Gearin, of Portland, on the brief), for appellant.

S. J. Bischoff, of Portland, for respondent.

HARRIS, J. (after stating the facts as above).

Since the record does not contain a bill of exceptions, the only facts before this court are those admitted by the pleadings filed by the plaintiff and by the defendant bank and those recited in the findings of the trial court ( Kay v. Portland, 79 Or. 147, 151, 154 P. 750); phry v. Portland, 79 Or. 430, 434, 154 P. 897; Frazier v. Cottrell, 82 Or. 614, 616, 162 P. 834; Kapischka v. Tillamook Hotel Co., 86 Or. 498, 168 P. 938; Meridianal Co. v. Bourne, 87 Or. 324, 160 P. 1151, 170 P. 521). In this condition of the record we connot inquire into the correctness of the findings, but must accept them as verities to the extent that they are within the pleadings. The briefs of counsel assume to supplement the findings with fragments of information concerning occurrences at the trial, but we shall steadfastly confine our attention to the pleadings and the findings.

Accepting as verities the findings of the circuit court, the fact situation is one where Jennie Posner, intending to make gifts to Flora Levor and Mrs. E. W. Posner, with her own money bought from the defendant bank two drafts, drawn by the defendant bank on a New York bank with Flora Levor named as the payee in one draft and Mrs. E. W. Posner as payee in the other draft; but, instead of consummating her intention by delivering the drafts to the respective payees, Jennie Posner retained them in her possession and still had them when she died eight days after the purchase.

The defendant insists that upon the delivery of the two drafts to Jennie Posner the only obligation assumed by the defendant was to pay the drafts if upon presentation the drawee failed or refused to pay; that no state of facts subsequently arising could operate to rescind "the contract that was completely executed as this one has been," or to create an implied obligation on the part of the defendant to refund the money received on the drafts sold; and that if the plaintiff is entitled to a return of the money paid for the drafts, she must look to the drawee and cannot look to the drawer. On the other hand, the plaintiff contends that the death of Jennie Posner made it impossible legally to consummate the intention of Jennie Posner; that the payees never acquired any interest in the drafts, because there was no delivery; and that therefore the drawer is liable to the plaintiff as for money had and received.

Assuming as we must that the facts are as recited in the findings, then the conclusion must inevitably be that as between the estate of the decedent and the defendant bank the estate owns the two drafts and is entitled to the money represented by them. It is true that the decedent intended to give the drafts to Mrs. E. W. Posner and Flora Levor, but it is also true that she did not execute that intention, and the result is that because of her death it is now impossible legally to give the drafts or the moneys represented by them to the intended donees. Since the estate owns the drafts, and the payees do not own and cannot be made the owners of them it necessarily follows that the plaintiff as the legal representative of the estate is entitled to receive the moneys which the drafts represent. The inquiry then is: To whom can and must the plaintiff look for the moneys? Can and must she look to J. P. Morgan & Co.? The defendant so insists. Can and must she look to the defendant bank? The plaintiff so contends.

The plaintiff has argued at length concerning the difference between special and general deposits; and she has in a large measure rested her claim on the theory that the facts involved in the issuance of the drafts created the relationship of principal and agent with the decedent as the principal and the defendant bank as her agent selected for the transmission of the money to the payees named in the drafts. Of course, if the transaction created nothing more than an agency for the transmission of funds, the death of the principal, occurring as it did before the execution of such agency, operated as a revocation of the agency. The defendant insists that the issuance of the drafts amounted to sales of credit, and that the resultant rights are to be ascertained and determined by the rules which are recognized in Legniti v. Mechanics' & Metals National Bank, 230 N.Y. 415, 130 N.E. 597, 16 A. L. R. 185, and kindred cases holding that the payment of money to a bank in this country for transmission to a foreign country by cable or wireless draft on a foreign credit is a mere purchase and sale. While it is not necessary to analyze and exactly define the transaction, it is sufficient to say that obviously the payment by the decedent to the defendant bank for the drafts did not constitute a special deposit. The moneys paid to the defendant bank became its moneys freed from any trust relationship which could give any special or superior rights to the owner or owners of the drafts. If the drawer had become insolvent the next...