Keith v. First National Bank of New England

• Decision Date: 16 April 1917
• Citation: 162 N.W. 691,36 N.D. 315
• Court: North Dakota Supreme Court

162 N.W. 691

36 N.D. 315

FRANK KEITH v. FIRST NATIONAL BANK OF NEW ENGLAND, NORTH DAKOTA, a Corporation

Supreme Court of North Dakota

April 16, 1917

Appeal from the District Court of Hettinger County, W. C. Crawford J.

Affirmed.

Judgment and order affirmed, with costs.

Chas Simon and Thos. H. Pugh, for appellant.

An officer of a bank has a right to transact his own business at the bank of which he is an officer, and in such a transaction his interest is adverse to the bank, and he represents himself, and not the bank. 3 R. C. L. 478, and cases cited; Burrill v. Whitcomb, 100 Me. 286, 1 L.R.A.(N. S.) 451, 109 Am. St. Rep. 499, 61 A. 678, and cases cited.

The cashier of a bank is its chief officer, the executive of the bank, the business officer or head of the bank. He does not regulate it nor control it. Morse Bkg. 4th ed. § 152; 3 R. C. L. 444; 3 Enc. U. S. S.Ct. 89, and cases cited; United States v. City Bank, 21 How. 356, 16 L.Ed 130; First Nat. Bank v. Michigan City Bank, 8 N.D. 608, 80 N.W. 766.

The mere fact of any person, even the depositary himself, surreptitiously or fraudulently recording the deed or getting it recorded, does not give it any efficiency, and the cloud on the grantor's title thereby created will be canceled by a court of equity. 10 R. C. L. 636; 16 Cyc. 578; 11 Am. & Eng. Enc. Law, 348; Wilkins v. Somerville, 80 Vt. 48, 11 L.R.A.(N.S.) 1183, 130 Am. St. Rep. 943, 66 A. 893; Calhoun County v. American Emigrant Co. 93 U.S. 124, 127, 23 L.Ed. 826, 827; Young v. Clarendon Twp. 132 U.S. 340, 33 L.Ed. 356, 10 S.Ct. 107; Felix v. Patrick, 145 U.S. 317, 329, 36 L.Ed. 719, 725, 12 S.Ct. 862; Schmidt v. Musson, 20 S.D. 389, 107 N.W. 367; Thornhill v. Olson, 31 N.D. 81, L.R.A.1916A, 493, 153 N.W. 442.

The rule is that upon the delivery of an escrow without performance of the conditions upon which it was to be performed, even a subsequent purchaser without notice and for a valuable consideration acquires no title and will not be protected. 11 Am. & Eng. Enc. Law, 2d ed. 350; 10 R. C. L. 636; 16 Cyc. 581; 1 Devlin, Real Estate 3d ed. § 322; Tiffany, Real Prop. § 406, pp. 932, 933; Wood v. French, 39 Okla. 685, 136 P. 734; Guthrie v. Field, 85 Kan. 58, 37 L.R.A.(N.S.) 326, 116 P. 218; Osby v. Reynolds, 260 Ill. 576, 103 N.E. 556, Ann. Cas. 1914D, 390; Dixon v. Bristol Sav. Bank, 102 Ga. 461, 66 Am. St. Rep. 193, 31 S.E. 96; Wilkins v. Somerville, 130 Am. St. Rep. 943, note.

Plaintiff could not elect to ratify the wrongful delivery of the papers after learning of the misdelivery and hold the bank for the amount which should have been paid, but which was not paid, leaving the bank, plaintiff's agent, without a remedy. 10 R. C. L. 638; Wilkins v. Somerville, 130 Am. St. Rep. 972, note; Eichlor v. Holroyd, 15 Ill.App. 657.

C. S. Shippy, for respondent.

"A person dealing with officers of a bank without notice of limitation of their powers may presume, and assume without inquiry, that they have the right to do such acts as those officers usually and customarily do and perform." 7 C. J. p. 783, § 647; Banks & Banking.

The want of authority of an agent of a corporation, to constitute a defense, must be pleaded. Wachsmith v. Merchants' Nat. Bank, 96 Mich. 426, 21 L.R.A. 278, 56 N.W. 9.

The defense of ultra vires is special, and is not available under a general denial. It must be specifically pleaded and proved. 10 Cyc. 1156; Citizens State Bank v. Pence, 59 Neb. 579, 81 N.W. 623; Thomas Gordon Malting Co. v. Bartels Brewing Co. 206 N.Y. 528, 100 N.E. 457, 461; Royal Fraternal Union v. Crosier, 70 Kan. 85, 78 P. 162.

The law presumes that a thing delivered by one person to another was due to the latter. This presumption was not overcome. Comp. Laws 1913, § 7936, subd. 8.

"As a depositary is bound by the terms of the deposit, and charged with the duties voluntarily assumed by him, the rule is that liability attaches to him if he improperly parts with the deposit." 10 R. C. L. 634; Wilkins v. Somerville, 130 Am. St. Rep. 949, note; Citizens Nat. Bank v. Davisson, 229 U.S. 212, 57 L.Ed. 1153, 33 S.Ct. 625, Ann. Cas. 1915A, 272.

"A depositary who violates the terms of the escrow contract is liable in damages for the loss suffered thereby." 16 Cyc. 576; Triggs v. Jones, 46 Minn. 277, 48 N.W. 1113.

A defendant is not at liberty to raise or open an issue he has closed by admissions in his answer. Myrick v. Bill, 3 Dak. 284, 17 N.W. 268; McLaughlin v. Alexander, 2 S.D. 226, 49 N.W. 99; Kirby v. Scanlan, 8 S.D. 623, 67 N.W. 828.

Issues not before the lower court, either by pleading or proof, and not relied upon, cannot for the first time be urged in the supreme court.

The theory upon which the case was tried must be followed in the appellate court. McLain v. Nurnberg, 16 N.D. 144, 112 N.W. 243; Buchanan v. Minneapolis Threshing Mach. Co. 17 N.D. 343, 116 N.W. 335.

It is the rule that an estoppel, to be available to a party, must be pleaded when the party has an opportunity to do so. McQueen v. Bank of Edgemont, 20 S.D. 378, 107 N.W. 208, and numerous authorities; Cloud v. Malvin, 108 Iowa 52, 45 L.R.A. 209, 212, 75 N.W. 645, 78 N.W. 791; Brown v. Iowa L. of H. 107 Iowa 439, 78 N.W. 73; Union State Bank v. Hutton, 1 Neb. (Unof.) 795, 95 N.W. 1061; Newhall v. Hatch, 134 Cal. 269, 55 L.R.A. 673, 66 P. 266; Wisconsin Farm Land Co. v. Bullard, 119 Wis. 320, 96 N.W. 833; Smith v. Cleaver, 25 S.D. 351, 126 N.W. 589.

The acts of the officials of the bank are the acts of the bank itself, when such officials are acting in and about the bank and the usual and customary work of the bank. People's Bank v. Manufacturers' Nat. Bank, 101 U.S. 181, 25 L.Ed. 907; Thomas v. City Nat. Bank, 40 Neb. 501, 24 L.R.A. 263, 58 N.W. 943; Minnesota Mut. L. Ins. Co. v. Tagus State Bank, 34 N.D. 566, L.R.A.1917A, 519, 158 N.W. 1063; U. S. Rev. Stat. § 5163, Comp. Stat. 1916, § 9702.

OPINION

GRACE, J.

This case is an appeal from a judgment of the district court of Hettinger county, and an appeal from an order of the said court denying the motion of the defendant notwithstanding the verdict, or, in the alternative, a new trial.

The plaintiff, in his complaint, in substance, states that defendant is a banking corporation under the laws of the United States of America. That the plaintiff deposited with defendant an assignment of contract for the purchase of the southwest quarter of section 23, in Township 135, north of Range 97, at the same time deposited a warranty deed for said land, both to be delivered by said defendant to W. T. Loomis upon the payment to said defendant by W. T. Loomis of one thousand nine hundred twenty-four and 59/100 dollars ($ 1,924.59), for the account and credit of the plaintiff, on or before sixty (60) days from March 27th, 1911. That said deposit was accompanied with a letter of instructions in words and figures as follows:

New England, N. Dak., Mar. 27th, 1911.

The First National Bank, New England, N. Dak.

I herewith deposit with you assignment contract for the purchase of S.W. 1/4 23-135-97, also warranty deed for the same land, all to be delivered to W. T. Loomis on payment of nineteen hundred twenty-four and fifty-nine one-hundredths dollars in your hands for my account and credit on or before sixty days from date. Cash received to-day $ 40, leaving balance of $ 1,884.59.

Frank Keith.

That defendant, within said period of sixty days, turned over and delivered to said W. T. Loomis the assignment of contract and warranty deed of said premises; that defendant failed, neglected, and refused, and still fails, neglects, and refuses, to pay this plaintiff the sum of $ 1,884.59, or to place the same to plaintiff's account and credit, or any part thereof, though demanded, and claims damages in the sum of one thousand eight hundred eighty-four and 59/100 ($ 1,884.59).

The defendant answering interposes a general denial, and on information and belief alleges that on the 1st day of January 1910, W. T. Loomis was the owner of said land and sold the same to plaintiff under contract for deed, payable in installments and subject to prior indebtedness owed by Loomis and a then lien against the said land; and further alleges that it was agreed between W. T. Loomis and the plaintiff that W. T. Loomis should offer said land for sale to Mary Carlon, with whom Loomis was then in communication. It is further alleged by the defendant that it was agreed between Loomis, plaintiff, and one H. B. Baillet, in order to complete the sale of said land to said Carlon, or to such person as Loomis might be able to make sale to, and in order that such sale might be more readily consummated during the absence of plaintiff, assignment of the contract held by plaintiff together with the warranty deed from plaintiff to Loomis should be left with Baillet, who was acting in conjunction with Loomis in the sale of said land, and defendant further alleges that it was there agreed that in event Loomis should deem it necessary to place said documents of record in the office of the register of deeds in the county of Hettinger, in order to show merchantable title to said land any time, that the said Baillet should deliver the said documents to Loomis for such purpose, or himself have the same recorded. That Loomis and Baillet deemed it necessary, in order to show a merchantable title to said land in said Loomis for the purpose of sale, that said document should be placed of record, and they thereupon did have the same recorded in the office of the register of deeds for Hettinger county. Defendant further alleges that he had no custody or control of said documents nor any knowledge relative thereto, that said documents were always in the possession and under the control of H. D. Baillet and W. T. Loomis; that the transaction...