Lusk State Bank v. Town Council of Lusk, 1914
| Decision Date | 10 December 1935 |
| Docket Number | 1914 |
| Parties | LUSK STATE BANK v. TOWN COUNCIL OF LUSK |
| Court | Wyoming Supreme Court |
APPEAL from the District Court of Niobrara County; C. O. BROWN Judge.
Action by the Lusk State Bank against the Town Council of the Town of Lusk, Wyoming, to recover on certain bond interest coupons. From a judgment for plaintiff, defendant appeals.
Modified and Affirmed.
For the defendant and appellant there was a brief by Thomas O Miller, of Lusk.
The court erred in admitting evidence, over objection, of a conversation between John F. Harkin, Mayor of Lusk, and C. W Erwin and also a conversation between the Mayor and C. F. Bautch. The court erred in making and entering judgment against appellant and in favor of respondent. The plaintiff elected to collect its interest through Kountze Brothers in New York and was bound thereby. Sec. 22-1616, W. R. S. It was stipulated by the parties that plaintiff had followed that custom as to interest coupons of the same series. The plaintiff is therefore estopped from collecting the coupons from the Town Treasurer. Tracey v. Accident Insurance Co., (Me.) 109 A. 490; 10 R. C. L. 23-25; Vogel v. Shaw, 42 Wyo. 340 and cases cited. The court erred in determining interest from October 1, 1931, to date of judgment. 15 R. C. L. 33. Conversations had by C. W. Erwin and C. F. Bautch with the Mayor of Lusk were not binding upon the town. City commissions must act in organized capacity and not individually. Wichita Company v. Wichita, (Kan.) 158 P. 49. The plaintiff was a depositary for town funds until November 12, 1931, and should have been required to account for interest on deposits to that date. Sec. 92-120, R. S. 1931. Shambaugh v. Bank, (Nebr.) 226 N.W. 460.
For the plaintiff and respondent there was a brief by Joseph Garst, of Douglas.
The coupons were for semi-annual interest on bonds of the Town of Lusk, dated October 1, 1928, which were payable at the office of the Town Treasurer, or at the Banking House of Kountze Brothers in the City of New York, at the option of the holder. The town had sent money to the New York bank to pay these coupons when due on October 1, 1931. The plaintiff did not present the coupons at Kountze Brothers Bank until December 30, 1931. In the meantime, Kountze Brothers Bank failed and closed its doors, and the coupons were not paid by that bank when presented for payment. The Town seems to rely upon the doctrine of estoppel to avoid payment, on the theory that it had been the custom of plaintiff to collect interest coupons of this bond series through the Kountze Brothers Bank. We do not believe that the doctrine of estoppel applies. 10 R. C. L. 688. The Town of Lusk is liable and the judgment should be affirmed. Binghamton Pharmacy v. Bank, 2 A. L. R. 1377, 1381. Coupons bear interest from maturity. City v. Adams, (Colo.) 85 P. 184; Town of Pana v. Bowler, 27 L.Ed. 424. On June 3, 1930, the bank qualified as the town depositary, and had paid interest on daily balances. In January, 1931, officials of the bank notified the Mayor of the Town that they did not want the account any longer and would not pay interest thereon, and the trial court so found. Its findings will not be disturbed on appeal. Kamp v. Kamp, 36 Wyo. 310; Christensen v. McCann, 41 Wyo. 101. The bank gave notice of discontinuance of the account and interest thereon. 7 C. J. 628. In the absence of statute or agreement, the relation of the depositary continues during the mutual will of the parties to the contract. 18 C. J. 597. Knowledge of an officer of a municipality will be imputed to the municipality. VI McQuillan on Municipal Corporations, p. 5721, Sec. 2810.
The district court of Niobrara County rendered a money judgment against The Town Council of the Town of Lusk, an incorporated town under the laws of Wyoming, in an action wherein the party named was defendant and The Lusk State Bank, a banking corporation of this state, was the plaintiff. The record is before us through direct appeal proceedings instituted by defendant to secure a review of that judgment. The facts involved are very little in dispute and appear to be these:
October 1, 1928, the defendant issued its refunding bonds in the sum of $ 14,000.00, each of the denomination of $ 1,000.00 and bearing interest at the rate of five per centum per annum, payable semi-annually on the first days of April and October respectively. The bonds were made payable to bearer and in order to evidence the several installments of interest due thereon, had attached to them certain interest coupons, which could, as is usual in such matters, be cut off and presented for payment. The coupons due October 1, 1931, each stated that:
The bonds aforesaid are now held and owned by the plaintiff, which apparently purchased them about the date of their issuance. Prior to October 1, 1931, plaintiff had always collected the semi-annual interest due it by detaching and sending in the proper coupons to the Banking House of Kountze Brothers, located in the City of New York, N. Y., where the defendant, through its Town Treasurer, customarily deposited funds in an amount necessary to pay them.
On October 1, 1931, also, the defendant had deposited the sum of $ 350.00 with the New York Banking House aforesaid, to meet the coupons then due. On October 13, 1931, Kountze Brothers failed and closed their doors to further business. The coupons representing the October installment of interest due on the bonds held by it as above recited, were not presented by the plaintiff to Kountze Brothers for payment until about December 30, 1931. Payment thereof was at that time refused and the coupons were returned to plaintiff, which during the month of January, 1932, presented them to the Town Treasurer of the Town of Lusk. Payment was against declined.
Additional facts involved in this litigation are that pursuant to its prior, due and legal application therefor, the plaintiff was on June 3, 1930, designated as the depositary of the public moneys of the Town of Lusk, and plaintiff properly qualified as such, having theretofore, on or about February 10, 1929, filed its surety company bond with the Town Treasurer for the safe-keeping of these funds; that thereafter, until and including February, 1932, the moneys of the Town were deposited and received by plaintiff; that some time in January, 1931, plaintiff's cashier, and also its president, notified the Mayor of the Town of Lusk that plaintiff would not pay interest on the Town's account after January 1, 1931, and told him also to withdraw the account. This fact is disputed, but there is substantial testimony in the record to support it when viewed in the light of the trial court's general finding in favor of plaintiff. It appears also that the further liability of the surety company bond aforesaid was by the surety company duly terminated through a letter from it to the Lusk Town Treasurer and received by him October 12, 1931; that although demand was made about January 9, 1932, by the defendant that payment of interest be made, no interest was paid by plaintiff to the Town on account of the deposit of the Town's moneys during the period January 1, 1931, to and including February, 1932; that two per cent on the average daily balance of the account of the Town of Lusk with the plaintiff from January 1, 1931, to and including February, 1932, was the sum of $ 96.63; that prior to January 1, 1931, plaintiff had paid to defendant two per cent on the average daily balance in the Town's account with plaintiff; and that the Town's account was withdrawn from plaintiff about February, 1932.
February 21, 1934, plaintiff commenced its action to recover from the defendant the amount alleged to be due on the fourteen interest coupons mentioned above, as due October 1, 1931. The defendant filed its amended answer, which, together with sundry admissions and denials of the matters alleged in plaintiff's petition, asserted that Kountze Brothers was plaintiff's agent for the receipt, collection and transmission of the interest money which the defendant had deposited with said Banking House prior to the maturity of the interest coupons involved, and that plaintiff, by sending said coupons to Kountze Brothers, had exercised its option to collect them at that place and could not thereafter elect to collect said interest at the office of the Town Treasurer of the defendant. Defendant's pleading also contained an alleged counterclaim for damage in the sum of $ 350.00, alleged to have been suffered by it through plaintiff "having by its actions over a long period of years induced this defendant to believe, and this defendant believing, that said Banking House was the proper agency and the only place that said holder of said coupons would receive the said interest; and this defendant relying on said belief so induced by plaintiff and having deposited, in due and timely manner, said sum for the sole and only purpose of paying said interest coupons as aforesaid."
The amended answer of the defendant additionally set out a cross-petition in its favor against plaintiff, based generally on the facts above detailed relative to the refusal on...
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