Indianapolis Saenger Chor, Inc. v. American Fletcher Nat. Bank & Trust Co.

• Decision Date: 04 November 1971
• Docket Number: No. 1,No. 371A43,371A43,1
• Citation: 149 Ind.App. 665,274 N.E.2d 728,27 Ind.Dec. 475
• Parties: INDIANAPOLIS SAENGER CHOR, INC., Appellant, v. AMERICAN FLETCHER NATIONAL BANK AND TRUST COMPANY et al., Appellees
• Court: Indiana Appellate Court

Page 728

274 N.E.2d 728

149 Ind.App. 665

INDIANAPOLIS SAENGER CHOR, INC., Appellant, v. AMERICAN FLETCHER NATIONAL BANK AND TRUST COMPANY et al., Appellees.

No. 371A43.

Appellate Court of Indiana, Division No. 1.

Nov. 4, 1971.

Yeager & Tinder, George L. Diven, Indianapolis, for appellant.

John M. Ryan, Indianapolis, for American Fletcher National Bank and Trust Co.

Clark & Clark, Alex M. Clark, Indianapolis, for Fred Graber and Robert Kinder.

LOWDERMILK, Judge.

This is an action brought by plaintiff-appellant against defendants-appellees, charging defendant-appellee American Fletcher National Bank with wrongfully paying out a savings account to Fred Graber and Robert Kinder, who were members of the plaintiff-appellant corporation, without authority to do so, and for dishonoring a check, and charging appellees Graber and Kinder with conversion of $1,954.10 of plaintiff-appellant's money to their own use.

The complaint is in three Paragraphs, and alleges that Graber and Kinder were members of the plaintiff-corporation and that prior to March 27, 1968 Graber was chairman of the 'House Committee' of the plaintiff-appellant, said House Committee being a part of the management procedure of the plaintiff-appellant and appellee Kinder was a member of said House Committee.

On March 26, 1968, Graber resigned from the House Committee.

That during the year 1968 plaintiff was the owner of two accounts on deposit with the defendant American Fletcher National Bank, one account being listed as 'Indianapolis Saenger Chor, Inc.' and the other being listed as 'House Fund, Saenger Chor'.

That subsequent to March 26, 1968 and prior to May 8, 1968, plaintiff-appellant executed to American Fletcher National Bank an authorization for endorsing and signing checks, withdrawals and deposits of funds of House Fund, Saenger Chor, designating Otto Zehner or Frederick Renholzberger as the persons so authorized on behalf of plaintiff.

That on September 16, 1968, plaintiff executed a check in the amount of $1,700 payable to Ben J. Edwards, which was duly signed by Otto Zehner in his authorized capacity, which check was drawn on the House Fund, Saenger Chor account, No. 24--2853--0, and at the time said check was presented to defendant bank said House Fund had a balance of $1,954.10.

That the bank, without the knowledge or consent of plaintiff, refused to pay said sum from the House Fund, Saenger Chor, and altered and paid said check from Indianapolis Saenger Chor, Inc. account.

Plaintiff further charges that on October 4, 1968, without the knowledge or consent of the plaintiff, defendant bank fraudulently and with intent to defraud the plaintiff, violated its duty to protect the depositor, and permitted Graber and Kinder to withdraw the sum of $1,954.10 from the account designated House Fund, Saenger Chor, in said bank, which fact was not known until plaintiff received its cancelled checks and statement on October 9, 1968, after which the bank was immediately notified of the errors in their actions.

Plaintiff further charges Graber and Kinder with taking control and holding plaintiff's money in the amount of $1,954.10; that demand has been made and plaintiff has been refused and deprived of the money.

The second Paragraph of complaint charges that in October, 1968, plaintiff had on deposit $1,954.10 in an account which was titled House Fund, Saenger Chor; that on or about October 4, 1968, defendants Graber and Kinder converted said money to their own use as the result of which plaintiff sustained damages.

Paragraph III reiterates the allegation of the deposit and further states that on September 6, 1968, plaintiff drew its check on said account in the amount of $1,700 payable to Ben J. Edwards, who endorsed and presented it to the bank for payment. That the defendant bank dishonored said check and refused to pay the same from House Fund, Saenger Chor account. Said check was paid from the account of Indianapolis Saenger Chor, Inc. without authorization, all to plaintiff's damage.

Defendants Graber and Kinder filed their answer admitting that American Fletcher National Bank was an Indiana corporation, engaged in the banking business and denied each and every other rhetorical paragraph of the allegations of all three Paragraphs of plaintiff's complaint.

Defendant bank filed answer in four Paragraphs. In the first Legal Paragraph, in the first rhetorical paragraph thereof, the bank admitted it was a banking institution and the rest amounted to a denial of each and every rhetorical paragraph of the first Legal Paragraph of complaint, and also of each rhetorical paragraph of the second and third Legal Paragraphs of complaint.

Paragraph IV of defendant bank's answer was in the affirmative and alleged that defendant (sic) opened an unincorporated account entitled House Fund, Indianapolis Saenger Chor, showing Robert Kinder, Secretary, Fred Graber, President. The resolution provided that either of the above named could withdraw any and all money in said account, which was opened in December, 1966. It further alleged that on or about May 8, 1968, another purported resolution was submitted to the East Street Branch of defendant, but charged that the new resolution failed to adhere to the resolution of December, 1966. The resolution of December, 1966, provided that American Fletcher National Bank and Trust Company was authorized to permit withdrawals to Fred Graber and Robert Kinder, only; that until written notice of modification or repeal of said resolution be delivered to said bank that the permission to withdraw any and all deposits in said account will be only to the above named Graber and Kinder; that the purported new resolution of May, 1968, did not include any modification or repeal of the resolution of December, 1966.

The record discloses that there was no reply filed to the bank's fourth Paragraph of Answer.

Trial was to the court without a jury and at the close of plaintiff's evidence defendant-appellee bank moved for a finding in its favor, after which appellees Graber and Kinder likewise moved for a finding in their favor at the close of plaintiff's evidence. The trial judge, immediately, without hearing argument thereon, sustained each of said motions and granted defendants-appellees judgment herein with costs against plaintiff. (There was no request by any of the parties to arise either of these motions.)

Plaintiff-appellant timely filed its motion to correct errors, which reads as follows, to-wit:

'COMES NOW the above named plaintiff and moves that the Court correct errors occurring at the trial of this cause as follows:

'1. Error of the Court in sustaining defendants' motion for finding in favor of defendants at close of plaintiff's evidence.

'Said ruling of the Court is in error for the following reasons:

'A. Contrary to the evidence of record in the case, which evidence proved a prima facie case on behalf of plaintiff;

'B. Contrary to law in that it ignored the law of procedure and evidence before the Court;

'C. Contrary to law in that it is in conflict with established decisions of Courts of Appellate jurisdiction.

'2. Plaintiff was denied a fair trial by an abuse of Court's discretion in that as shown by comment of the Court, consideration was given to matters not in evidence; and a complete failure to consider evidence before the Court.

'3. The decision of the Court is contrary to law for each of the reasons above set forth.

'4. The decision of the Court is contrary to the evidence of record in that plaintiff proved a prima facie case.'

This was followed by a memorandum of four pages on the evidence and on the law, which will not be copied herein becaue of its length.

The motion to correct errors was overruled.

The facts of this cause as shown by the evidence are:

The Indianapolis Saenger Chor, Inc. had two checking accounts with American Fletcher National Bank and Trust Company; one in the corporate name, the other in the name of House Fund, Indianapolis Saenger Chor.

The House Fund received receipts from the bar, pool tables, and other club functions. The House Fund was the account of the House Committee, which was responsible for running the bar and other activities of the club. Such Committee was required to make reports of its activities to membership and officer meetings, and did so.

During 1967 and until March 26, 1968, defendant Fred Graber was a Director of Saenger Chor, Inc. and Chairman of the House Committee, and Robert Kinder was a Member of the organization and was Secretary of the House Committee.

The corporation adopted a resolution which was filed with the bank, certifying that they had authorized Fred Graber, President and Robert Kinder, Secretary, at a meeting of the membership (Board of Directors, Trustees) of the organization known as House Fund, Indianapolis Saenger Chor, on the 22nd day of November, 1966, to maintain a deposit account in the name of the organization with said American Fletcher National Bank and to endorse for deposit to said account checks and payments to the organization and deposit sums therein and authorized said bank to permit withdrawals from said account on checks signed in the name of the organization by the officers listed below, including checks drawn to the individual order of any of said officers signing. This authorization was effective until written notice of modification or repeal of the resolution to the American Fletcher National Bank. This authorization was accepted by the bank and placed on file on December 2, 1966.

On March 26, 1968, Graber resigned his position as Chairman of the House Committee by letter personally handed the corporation in an official meeting.

On April 30, 1968, Indianapolis Saenger Chor, Inc. caused American Fletcher National Bank to be given an authorization form which made Otto Zehner or Frederick Renholzberger the only authorized agents of Indianapolis Saenger Chor to draw on House Fund, Saenger Chor acco...