General Cigar Co., Inc. v. First Nat. Bank of Portland, Or.

• Decision Date: 04 June 1923
• Docket Number: 3958.
• Citation: 290 F. 143
• Parties: GENERAL CIGAR CO., Inc., v. FIRST NAT. BANK OF PORTLAND, OR.
• Court: U.S. Court of Appeals — Ninth Circuit

290 F. 143

GENERAL CIGAR CO., Inc., v. FIRST NAT. BANK OF PORTLAND, OR.

No. 3958.

United States Court of Appeals, Ninth Circuit.

June 4, 1923

The plaintiff is engaged in the wholesale and retail cigar business, with branches at Portland, Or., and Seattle and Spokane, in the state of Washington. During the period now in question, it carried accounts in the First National Bank of Portland, the Union National Bank of Seattle, and the Spokane & Eastern Trust Company of Spokane. The present action was instituted against the Portland Bank to recover the sum of upwards of

$10,000 misappropriated by the cashier of the Portland branch. The complaint originally contained 11 causes of action in all but a reference to the first is deemed sufficient for present purposes. It appears therefrom that on the 13th day of December, 1919, the plaintiff, through an agent of the Spokane branch, drew a check on the Spokane Bank in the sum of $1,293.58, payable to itself; that the check was transmitted to the Portland branch in the usual course of business; that upon receipt of the check by the Portland branch it was indorsed by rubber stamp, 'Pay to the order of First National Bank, 355 Portland, Or., 355. General Cigar Co., Inc., M. A. Gunst Branch, M. A. Gunst & Co.;' that the cashier of the Portland branch cashed the check and converted the proceeds to his own use, and that the cashier was without authority so to do, or to do otherwise than deposit the amount to the credit of the plaintiff in the Portland bank.

The answer alleged that during the period covered by the complaint each of the banks in which the plaintiff carried accounts rendered monthly statements to the plaintiff returning all canceled checks, together with an itemized statement of the plaintiff's accounts with the bank thereby advising the plaintiff as to the exact condition of its account with the bank and the amounts drawn from the bank by the cashier; that plaintiff made no objection to these statements and gave no information touching any irregularity concerning the same. It further appeared that the plaintiff discovered the defalcation in the latter part of May, 1921, and failed to notify the defendant thereof until the 20th day of July following. Upon the issues thus presented, the court charged the jury, in part, as follows:

'I instruct you further that the burden of proof lies with the plaintiff to show that the defendant bank paid out money without authority from the plaintiff, either real or apparent. * * * It is alleged, among other things, that at all times from July 23, 1919, to December 15th of the same year, the plaintiff, in addition to the three accounts carried in the defendant bank, carried accounts in the Spokane & Eastern Trust Company of Spokane and the Union National Bank of Seattle, and that each of these banks, including the defendant bank, rendered a monthly statement to plaintiff of its account therewith; that thereby the plaintiff was advised as to the exact condition of its account in each of these banks respectively, touching the amounts of money drawn from the bank by Turrell, but made no objection thereto, and gave the bank no information touching any irregularity affecting such accounts.'

'If you find from the evidence in the case that such were the facts, and that the plaintiff was so advised, and failed, within a reasonable time, to advise the defendant bank of such irregularities, then the plaintiff would be estopped now to assert that defendant was liable for its acts in paying the money over to Turrell in pursuance of his request or demand, and your verdict should be for the defendant. * * * I instruct you that, if you believe from the evidence

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