Invader Oil Corp. v. Commerce Trust Co.
| Decision Date | 07 July 1925 |
| Docket Number | Case Number: 15295 |
| Citation | 111 Okla. 85,1925 OK 578,238 P. 441 |
| Parties | INVADER OIL CORP. et al. v. COMMERCE TRUST CO. |
| Court | Oklahoma Supreme Court |
¶0 1. Election of Remedies--Conditions Precedent--Mistake as to Right.
Election of remedies is a species of estoppel in pais to the operation of which knowledge of all the material facts affecting the remedy is essential, but in addition to a knowledge of the material facts there must be in fact and in law two inconsistent remedies, the 'pursuit of either of which would accomplish the same legal result. Unless both of these essential prerequisites exist, there can be no irrevocable election.
2. Same -- Ratification of Unauthorized Agency -- When Election is Not.
An election to pursue a trust fund by filing preferred claim with the State Bank Commissioner is not a ratification of the unauthorized act of an insolvent bank in receiving a check on funds already in its hands in payment of a note which it does not hold for collection, such preferred claim being filed under a mistaken belief that the money was actually paid and that the assets of the insolvent bank were enhanced to the amount of such payment, and this is especially true where the claim was withdrawn on learning the true facts.
3. Banks and Banking--Collections--Authorized Agency--Insufficiency of Proof--Directing Verdict.
Where authorized agency of an insolvent bank is relied on to validate an alleged payment of a note to it, and the evidence relied on to establish such agency is proof of the general course of dealing between the insolvent bank and its alleged principal during a number of years which proof goes no further than to establish that when the alleged principal forwarded to the alleged agent commercial paper which was about to mature the agent had full authority to collect, renew, or substitute such paper so sent it, such proof is wholly insufficient to establish authority in the said agent to receive payment of a note which is not so placed in its hands and over which it has no control at the date of the alleged payment. Such defective proof does not raise an issue of fact as to agency to receive such payment and presents no question for determination by the jury.
Commissioners' Opinion, Division No. 1.
Error from District court, Muskogee County; Enloe V. Vernor, Judge.
Action by Commerce Trust Company against Invader Oil Corporation and N. Frank Wood. Judgment for plaintiff, and defendants bring error. Affirmed.
The petition in this case is in the usual form for actions upon promissory notes. By their answer defendants denied generally and specifically the allegations of plaintiff's petition, and then pleaded a number of special defenses, the only ones material here being the plea of payment, estoppel by election of remedies, ratification of unauthorized agency, and authorized agency of the Central State Bank, through which the payment was alleged to have been made.
The facts disclosed by the record are in substance these: That on February 13, 1922, Invader Oil Corporation by B. Frank Wood, and B. Frank Wood as an individual, executed to the Central State Bank of Muskogee their promissory note in the sum of $ 5,000 maturing August 1st of that year. This note was subsequently negotiated by the Central State Bank to the Commerce Trust Company, by indorsement and delivery before maturity. That the Central State Bank and Commerce Trust Company had been dealing with each other for a number of years, and the proof shows that in their dealings it was the custom for the Central State Bank to select the notes which it desired to negotiate, indorse and deliver them to the Commerce Trust Company. That on or about the first of each month the Commerce Trust Company would forward to the Central State Bank all notes which had been indorsed to, it by said bank, and which would mature during the ensuing 30 days. That the Central State Bank upon receiving these notes so forwarded was authorized and empowered to collect, renew or substitute the same as its business judgment dictated, and to return the collections, renewal notes or substituted notes promptly to the Commerce Trust Company. That the note in question was so forwarded by the Commerce Trust Company to the Central State Bank prior to its maturity, and was by the Central State Bank at maturity indorsed "extended to November 1, '22," and returned promptly to the Commerce Trust Company. That thereafter and on August 18, 1922, the Central State Bank was in a failing condition and when it closed its doors at the close of business on that day they were never reopened for business. That on this last business day of the Central State Bank, B. Frank Wood went to the bank and withdrew therefrom a deposit in that bank to the credit of his brother, Owen Wood, trustee. The manner of this withdrawal was that B. Frank Wood drew a check for $ 8,000 to take up one $ 5,000 note and one $ 3,000 note, and by drawing another check on the account for $ 2,000, which was paid to him in currency. No money was paid to the Central State Bank by B. Frank Wood in connection with this transaction. After the Central State Bank was taken over by the State Bank Commissioner, the Commerce Trust Company was informed by B. Frank Wood that the note here involved had been paid by him to the Central State Bank on August 18th. Thereupon the Commerce Trust Company filed a preferred claim with the State Bank Commissioner, seeking to recover the $ 5,000, which it alleged in its claim was paid by B. Frank Wood to the Central State Bank on August 18th, upon the theory that said $ 5,000 constituted a trust fund in its favor. Later the Commerce Trust Company learned the real facts concerning the alleged payment made by B. Frank Wood to the Central State Bank, and thereupon withdrew the preferred claim filed by it with the State Bank Commissioner, and commenced this action against the Invader Oil Corporation and B. Frank Wood to recover the face value of the note.
At the conclusion of all the testimony in the case, plaintiff and defendants each filed their motions requesting a directed verdict. The trial court overruled the motion of defendants for a directed verdict and sustained that of the plaintiff. After unsuccessful mo tion for new trial, the defendants have brought the case here by petition in error with case-made attached for review. The parties will be hereafter referred to as plaintiff and defendants, respectively, as they appeared in the trial court.
Geo. S. Ramsey, Edgar A. de Meules, Villard Martin, and T. G. Logan, for plaintiffs in error.
Ezra Brainerd, Jr., Chas. P. Gotwals, and John T. Gibson, for defendant in error.
¶1 Defendants present their argument for reversal of this case under four propositions, stated in the brief as follows:
¶2 The first proposition is argued under four subdivisions: (a) That plaintiff having two remedies, each resting upon a different basic right, they were inconsistent; (b) therefore, the filing of a claim with the Bank Commissioner was an election; (c) this election was irrevocable; and (d) being a choice as one of two substantive rights as well as an election of remedies, it was irrevocable.
¶3 It is not considered that the contention is tenable as to the existence of two substantive rights. The only substantive right which plaintiff had was to enforce collection of its note. Whether this be done by recovery of a trust fund created for its payment or by Judgment against the makers does not change the character of the substantive right. Either remedy effectuates only one result--collection of the debit--which is the primary and only substantive right of plaintiff. A choice of the remedy by which this right shall be enforced may operate as an estoppel to pursue any other, but it cannot change the character of the substantive right, which remains the same under either theory.
¶4 Was there such an election by plaintiff of its remedy as to become irrevocable and to now operate as an estoppel against its successful maintenance of the instant action?
¶5 Defendants rely on the general rule announced by this court in Herbert v. Wagg, 27 Okla. 674, 117 P. 209, and on textwriters, and on decisions from other jurisdictions announcing consonant principles. The applicable language in Herbert v. Wagg, supra, is this:
"The general rule is that when the law gives several means of redress or kinds of relief, predicated on conflicting theories, the election of one of them operates as a bar to the subsequent adoption of others."
¶6 Plaintiff in its brief concedes the correctness of this general rule, but questions its application to the facts in the instant case. Many of the authorities relied on by defendants to sustain their application of this general rule to the facts of the instant case have been carefully examined. From this examination, it is deduced that where a specific fund can be identified as a deposit or transfer cf cash, or where merchandise has been delivered, thus, in either case, enhancing the value of assets, an election to pursue the specific funds or merchandise, or to file a claim for a pro rata share of the assets thus enhanced in value, where they have come under legal control, is an election and operates as an estoppel to pursue any other remedy. Herbert v. Wagg, supra; Vose v. Penny, 78 Okla. 238, 190 P. 97; Fowler v. Bowery Savings Bank (N.Y.) 21 N.E. 172; Beach v....
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...same legal result. Unless both of these essential prerequisites exist, there can be no irrevocable election. Invader Oil Corp. v. Commerce Trust Co., 111 Okla. 85, 238 P. 441. 3. Appeal and Error--Sufficiency of Evidence--Conclusiveness of Verdict. In a civil action triable to the jury, whe......
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...to the case of an ordinary discount business between banks. In this class, among other cases, is that of Invader Oil Co. v. Commerce Trust Co., 111 Okla. 85, 238 P. 441. The third section of the syllabus is as follows: "3. Where authorized agency of an insolvent bank is relied on to validat......