Kaesemeyer v. Smith

• Decision Date: 08 May 1912
• Court: Idaho Supreme Court
• Parties: T. G. KAESEMEYER, Respondent, v. W. P. SMITH, Defendant; EXCHANGE NATIONAL BANK OF COEUR D'ALENE, IDAHO, Garnishee Defendant; A. B. CARSCALLEN and E. J. CARSCALLEN, Copartners Doing Business Under the Name and Style of CARSCALLEN BROTHERS, and A. F. DUPLISEA, Intervenors, Appellants

123 P. 943

22 Idaho 1

T. G. KAESEMEYER, Respondent, v. W. P. SMITH, Defendant; EXCHANGE NATIONAL BANK OF COEUR D'ALENE, IDAHO, Garnishee Defendant; A. B. CARSCALLEN and E. J. CARSCALLEN, Copartners Doing Business Under the Name and Style of CARSCALLEN BROTHERS, and A. F. DUPLISEA, Intervenors, Appellants

Supreme Court of Idaho

May 8, 1912

BANK CHECKS-DEPOSITS-GENERAL-SPECIAL-SECRET AGREEMENT OF DEPOSITOR AND BANKER.

(Syllabus by the court.)

1. A check given by a depositor upon a bank is a mere direction to the bank to pay a certain sum of money to the person named therein, and by the giving of such check the amount of the same does not become the property of the payee of the check nor place such fund beyond the control of the depositor.

2. Under the provisions of sec. 3646, Rev. Codes, "A check of itself does not operate as an assignment of any part of the funds to the credit of the drawer with the bank, and the bank is not liable to the holder unless and until it accepts or certifies the check."

3. This section of the statute provides that the issuing of a check in no way transfers or assigns to the payee of such check the fund or any part of the fund of the depositor who draws the check, and that the bank is in no way liable to the holder of such check until the bank accepts or certifies the same.

4. Where S. deposits in the Exchange National Bank the sum of $1,500 and thereafter personally demands and receives payment of $700 of said sum, and at the time such payment is made furnishes the bank with a statement of checks issued by S against the balance of the deposit fund, and at such time makes no arrangement with the bank that such balance is to be a special deposit, and the bank does not accept such deposit as a special deposit, such deposit remains a general deposit and is subject to attachment.

5. Where S. issues a check against his general account on deposit at a bank, such check is not an equitable assignment of the fund standing to the credit of S. in the bank notwithstanding the fact that S. made the deposit for the purpose of paying such check, and a garnishment of the bank in a suit against S. before such check is presented creates a lien on the deposit superior to that of the payee of the check.

6. Where C. commences an action against S. upon a check issued by S. to C. against a deposit in a bank, and causes attachment to be issued against S., C. is not estopped from intervening and defending in an action wherein another creditor of S. is seeking to subject the deposit of S. in said bank, against which such check is drawn, to the payment of such creditor's claim.

APPEAL from the District Court of the Eighth Judicial District for Kootenai County. Hon. R. N. Dunn, Judge.

Action for debt. Judgment for plaintiff. Intervenors appeal. Affirmed.

Judgment affirmed. Costs awarded to respondent.

Reed & Boughton, and Elder & Elder, for Appellants.

"In order to constitute a binding election, the party must, at the time the election is alleged to have been made, have knowledge of the facts from which the coexisting inconsistent remedial rights arise." (15 Cyc. 261; Louisville & N.W. Co. v. Bernheim, 113 Ala. 489, 21 So. 405; Bierce v. Hutchins, 205 U.S. 340, 27 S.Ct. 524, 51 L.Ed. 828.)

When money is deposited with a bank with directions to pay out in a certain manner or to certain persons, the bank, if it accepts the deposit at all, must pay it out according to the special direction, and if it applies it, or pays it out in any other manner, the bank is liable. (1 Morse on Banks and Banking, sec. 208; Judy v. Farmers & Traders' Bank, 81 Mo. 404; Union Nat. Bank v. Dumond, 33 Ill.App. 102; Dumond v. Merchants Nat. Bank, 33 Ill.App. 95; Hummel v. First Nat. Bank, 2 Colo. App. 571, 32 P. 72.)

"In using deposits made for the purpose of having them applied for a particular purpose the bank acts as the agent of the depositor, and if it fails to apply it or misapply it, it can be recovered as a trust deposit." (5 Cyc. 515; Heath v. Safe Co., 184 Mass. 481, 69 N.E. 215; Fort v. National Bank, 82 S.C. 427, 64 S.E. 405; First Nat. Bank v. Barger (Ky.), 115 S.W. 726; 13 Current Law, 420; 15 Current Law, 467, note.)

C. H. Potts, for Respondent.

A check does not assign to the holder any part of the funds of the drawer in the bank, unless and until it is certified or accepted in writing. (B. & O. R. Co. v. First Nat. Bank, 102 Va. 753, 47 S.E. 837; Reviere v. Chambliss, 120 Ga. 714, 48 S.E. 122; Poland v. Love, 164 F. 186, 91 C. C. A. 466; Imboden v. Perrie, 13 Lea (Tenn.), 504; Jones v. Glover, 93 Ga. 484, 21 S.E. 50.)

"To constitute an equitable assignment of fund, the assignor must not retain any control over it--any authority to collect, or any power of revocation." (Christmas v. Russell, 14 Wall. (U.S.) 69, 20 L.Ed. 762; Van Buskirk v. State Bank, 35 Colo. 142, 117 Am. St. 182, 83 P. 778.)

This deposit of $ 1,500 became the property of the Exchange National Bank as soon as it was made in the manner disclosed by the evidence, and it was no longer under the control of Smith as a separate fund. (Pullen v. Placer County Bank, 138 Cal. 169, 94 Am. St. 19, 66 P. 740, 71 P. 83.)

The defendant Smith could not make a secret arrangement with the bank that the check of intervenors should be paid to the exclusion of other check-holders or creditors. (Gage Hotel Co. v. Union Nat. Bank, 171 Ill. 531, 63 Am. St. 270, 49 N.E. 420, 39 L. R. A. 479.)

"A deposit is general unless the depositor makes it special or deposits it expressly in some particular capacity." (Ward v. Johnson, 95 Ill. 215; Wetherell v. O'Brien, 140 Ill. 146, 33 Am. St. 221, 29 N.E. 904; Mutual etc. Co. v. Jacobs, 141 Ill. 261, 33 Am. St. 302, 31 N.E. 414, 16 L. R. A. 516; McLain v. Wallace, 103 Ind. 562, 5 N.E. 911; Keene v. Collier, 58 Ky. (Met.) 415; Matthews, Finley & Co. v. Their Creditors, 10 La. Ann. 342; McGregor v. Battle, 128 Ga. 577, 58 S.E. 28, 13 L. R. A., N. S., 185; State v. Dickerson, 71 Kan. 769, 81 P. 497.)

"Knowledge that checks have been drawn does not make it obligatory upon the bank to retain the deposit to meet them." (Attorney General v. Cont. Ins. Co., 71 N.Y. 325, 27 Am. Rep. 55.)

"A creditor by attaching property belonging to his debtor is estopped to afterward assert title in himself upon an interplea." (4 Cyc. 799, citing Boettger v. Roohling, 74 Mo.App. 257; 15 Cyc. 257; Missouri P. Ry. Co. v. Henrie, 63 Kan. 330, 65 P. 665; Bank of Santa Fe v. Commissioners, 61 Kan. 785, 60 P. 1062; Thompson v. Howard, 31 Mich. 309; National Bank of Illinois v. First Nat. Bank, 57 Kan. 115, 45 P. 79; Moline Plow Co. v. Rodgers, 53 Kan. 743, 42 Am. St. 317, 37 P. 111; Terry v. Munger, 121 N.Y. 161, 24 N.E. 272, 8 L. R. A. 216; Crawford v. Nolan, 70 Iowa 97, 30 N.W. 32; Clausen v. Head, 110 Wis. 405, 84 Am. St. 933, 85 N.W. 1028; Bach v. Tuch, 126 N.Y. 53, 26 N.E. 1019.)

STEWART, C. J. Ailshie, J., concurs, SULLIVAN, J., concur in the conclusion.

OPINION

STEWART, C. J.

--Kaesemeyer, the respondent, commenced an action against the defendant, W. P. Smith, in the district court of Kootenai county on the 1st of February, 1910, to recover the sum of $ 700 with interest. A writ of attachment was issued in said cause and notice of garnishment was served upon the Exchange National Bank of Coeur d'Alene, Idaho. This notice of garnishment was served upon the bank at five minutes after 1 o'clock on the 1st of February, 1910. On February 3d the bank made and filed its answer to the interrogatories attached to the notice of garnishment.

On the afternoon of February 1, 1910, at about 5 o'clock, and after Kaesemeyer, the respondent, had filed his complaint in this action and written notice of attachment had issued in said cause and notice of garnishment had been served upon the Exchange National Bank, the appellants, Carscallen Brothers, filed a complaint against the defendant, W. P. Smith, to recover upon a check for the sum of $ 562.56 upon the Exchange National Bank, given and delivered by Smith to Carscallen Brothers, and caused a writ of attachment to be issued and to be levied upon the funds of Smith in the Exchange National Bank. Thereafter Carscallen Brothers filed a petition in intervention in this cause and were permitted to intervene, and alleged that W. P. Smith was indebted to said Carscallen Brothers upon a check for the sum of $ 562.52 given them by Smith upon the Exchange National Bank on the 1st of February, 1910, and such petition in intervention alleged that such check was given to appellants by Smith, and that at the time the same was given said Smith represented to Carscallen Brothers that he would make a special deposit to take up said check, and stated he would notify the bank of the issuing of said check and would leave money with the bank for the purpose of paying said check; and that thereafter he deposited with the Exchange National Bank the sum of $ 767 and notified the bank that said sum of money was deposited for the purpose of covering and paying the checks mentioned in a statement handed to the bank at the time, and directed the Exchange National Bank to pay said checks as they were presented, and that the sum so deposited was the exact sum of money necessary to pay the checks mentioned in said statement, and that said bank accepted said deposit as a special deposit and promised and agreed to pay said checks as they would be presented, and that said Smith deposited said sum of money for the purpose of paying said checks and for no other purpose, and that the bank accepted said deposit for said purpose and for no other.

The cause was tried to the court and findings of fact and conclusions of law were made by the trial court and judgment rendered in favor of Kaesemeyer for the amount sued for, and that...