Henderson v. Greeley Nat. Bank of Greeley, 15056.

• Decision Date: 13 September 1943
• Docket Number: 15056.
• Citation: 111 Colo. 365,142 P.2d 480
• Parties: HENDERSON v. GREELEY NAT. BANK OF GREELEY.
• Court: Colorado Supreme Court

142 P.2d 480

111 Colo. 365

HENDERSON v. GREELEY NAT. BANK OF GREELEY.

No. 15056.

Supreme Court of Colorado, En Banc.

September 13, 1943

Rehearing Denied Nov. 1, 1943.

Error to District Court, Weld County; Frederic W. Clark, Judge.

Action by William W. Henderson against the Greeley National Bank of Greeley, Colo., to recover damages in a sum equal to that portion of plaintiff's deposits disbursed by defendant bank allegedly without authority and in violation of an oral trust agreement. A demurrer to the complaint was sustained and judgment entered dismissing the cause, and plaintiff brings error.

Reversed and remanded.

John S. Stidger, of Denver, for plaintiff in error.

Hubert D. Waldo, of Greeley, and Donald C. McCreery, of Denver, for defendant in error.

HILLIARD Justice.

An action by a depositor to recover from a bank damages in a sum equal to that portion of his deposits disbursed by the bank allegedly without authority and in violation of an oral trust agreement in relation thereto. Proceeding on the bank's demurrer set forth in its answer to the amended complaint, considered as a motion to dismiss under the Colorado Rules of Civil Procedure, the court entered judgment of dismissal of the cause, with costs. Other questions will have attention as we proceed, but since the sufficiency of plaintiff's allegations is a major inquiry on error, examination of the amended complaint will be our initial consideration.

We think the amended complaint states a cause of action. The gravamen is that June 16, 1936, plaintiff, wishing to prevent his then wife from drawing checks on his account, withdrew from defendant bank his deposit in the considerable sum appearing, upon which his wife had theretofore been by him authorized to draw checks, and by agreement with the cashier of the bank he opened a new account to which his wife could not resort. In the new account he deposited the sum of $2,749.82, and for the balance of fifteen thousand dollars of the withdrawal, he took defendant's cashier checks, two for $5,000 each and two for $2,500 each. At the time of the changing of his account, plaintiff explained to the cashier that he was about to leave for California, and, to enable one Messick--who, in plaintiff's absence was authorized to purchase livestock for him--to make such purchases, he would leave with said Messick 'signed checks' with which to accomplish the purpose indicated; that in addition to plaintiff's signature on said checks, they were to be marked with an 'x' and bear notation on the lower left hand corner of 'the number of head of livestock and the kind' of the purchases, and only checks so marked and identified were to be paid by the bank and charged to plaintiff's account.

In furtherance of plaintiff's plans to prosecute his business during his absence, and that his account should not be overdrawn, he endorsed the several cashier checks and left them with defendant's cashier, with instructions to deposit them in his newly opened account from time to time, if and when necessity arose through the payment of checks issued conformably to the instructions stated. It was especially agreed between plaintiff and the cashier of the bank, however, 'that the sole purpose of handling plaintiff's account with the bank in the above manner was to prevent the then wife of this plaintiff from securing plaintiff's money so held and deposited with the defendant,' and particularly that no check 'made payable to the then wife of this plaintiff or any check which, by endorsement thereon, plainly showed that the said wife of this plaintiff was securing the proceeds,' was to be paid. Plaintiff further alleged that notwithstanding said agreement between himself and defendant bank, the latter not only paid checks, made out to various persons, marked with a 'X' and bearing the specified notation in the lower left hand corner thereof, but also paid four checks marked with an 'X', but without the required notation indicating that they were issued in payment of livestock, in a sum aggregating $9,525, the items thereof being as follows June 22, 1936, $2,025, June 25, 1936, $1,500, June 30, 1936 $2,645, and July 2, 1936, $3,355. That in accomplishing payment of the foregoing unauthorized checks, together with checks that did bear the agreed identification marks defendant's cashier deposited the above mentioned cashier's checks to plaintiff's credit as follows: June 30, 1936, $2,500, July 2, 1936, $2,500, July 3, 1936, $5,000, and July 6, 1936, $5,000. That by reason of the foregoing, plaintiff's wife became possessed of the sum stated, to plaintiff's damage in the amount thereof.

While the agreement between plaintiff and defendant bank may be unusual, nevertheless, as we think, it was lawful, understandable and capable of observance. The bank was in control of the situation. It not only paid checks bearing necessary notation identification, but it paid others, endorsements upon which indicated that the proceeds thereof were to go to the one person who in no event was to receive any of such funds, and in consummation of this forbidden act, it deposited to the credit of plaintiff's account his cashier checks entrusted to its care. This is not a situation where from a deposit balance made directly by the depositor, a careless or nonobservant bank teller paid checks lacking in some of the requirements of signature or other safeguards, however that might be regarded in relation to the bank's liability, but is one where a responsible official of the bank involved, proceeding in circumstances admitting of pause and reflection, made the foray possible by the deposit of plaintiff's cashier checks entrusted to the bank, to the credit of his checking account, contrary to, and in violation of, the plain terms of an agreement which he made for the bank with plaintiff. That Messick was faithless and issued checks in the large sums appearing in the interest of plaintiff's wife, is not an answer to the bank's failure to observe its compact with plaintiff. The checks through which plaintiff's funds were diverted to the proscribed individual did not bear notation indicative of their purpose, an essential requirement of which the bank had knowledge. That Messick came under the spell of a woman is not the first known instance of the kind; but even Messick did not falsify as to the purpose of the checks--he did not recite that they were for the 'purchase of livestock.' Evidently, he was not equal to saying nay to the woman, but he did omit to attach to the checks through which the woman illegally became possessed of the funds in question, the notation necessary to their adequacy. That omission operated to bring the bank's agreement with plaintiff into play and controlling importance.

The circumstances considered, we cannot think the bank exercised the care required. Plaintiff made the arrangement upon which is his reliance with the cashier of the bank, who, having 'greater' inherent powers than any other officer of the corporation * * * is generally the active financial agent and manager of the bank. He is endowed with full power to transact all usual and general business of the bank.'...