McCornick & Co. v. National Copper Bank of Salt Lake City

• Decision Date: 08 March 1917
• Docket Number: 2969
• Parties: McCORNICK & CO., BANKERS, v. NATIONAL COPPER BANK OF SALT LAKE CITY et al
• Court: Utah Supreme Court

163 P. 1097

49 Utah 296

McCORNICK & CO., BANKERS, v. NATIONAL COPPER BANK OF SALT LAKE CITY et al

No. 2969

Supreme Court of Utah

March 8, 1917

Appeal from District Court, Third District; Hon. Geo. G. Armstrong Judge.

Action by McCornick & Co., Bankers, against the National Copper Bank of Salt Lake City, in which Hanna D. Bowring and another and Harold C. Best filed answers and cross-complaints and the United Home Builders Company filed answers and cross-complaints against the Bowrings and Best; E. B. Wicks being made a party defendant during trial.

Judgment for plaintiff and for United Home Builders Company and Best on their cross-complaints.

From judgment on cross-complaints, Bowrings and Best appeal, Wicks assigning cross-errors.

MODIFIED AND AFFIRMED and remanded, with directions.

Stewart Steward & Alexander for appellants.

W. I Snyder and Dan B. Shields for respondents.

FRICK, C. J. McCARTY and CORFMAN, J. J., concur.

OPINION

FRICK, C. J.

In view of the great length of the pleadings in this case, covering, as they do 58 pages of the printed abstract, we shall not attempt to set them forth, not even in condensed form. We shall, however, attempt to state the facts so as to make clear the points decided.

The case, as originally commenced, was an action at law and was commenced by the plaintiff, McCornick & Co., Bankers, against the National Copper Bank of Salt Lake City to recover judgment upon an indorsement of a certain check, which indorsement was guaranteed by the National Copper Bank of Salt Lake City, and which McCornick & Co., Bankers, claimed was a forged indorsement. The other defendants were brought into the case after it was pending.

The United Home Builders Company, a corporation, hereinafter called company, filed an answer and cross-complaint in which it sought equitable relief against its co-defendants, the Bowrings and Best. The Bowrings and Best also filed answers and cross-complaints in which they set forth purely equitable matters, that is, the Bowrings alleged that they were induced to sign certain papers, including the indorsement on the check in question, by misrepresentation and fraud practiced by one L. B. Call, who was a representative of said company; and Best alleged that said company, through said Call, had, through fraud and misrepresentation, obtained certain moneys from him and was withholding the same.

The Bowrings and Best alone appeal. The questions involved on this appeal arise entirely out of the matters set forth in the equitable cross-complaints aforesaid. The two banks between whom the action originated have no interest in this appeal and will not be further mentioned, except in connection with some of the transactions which are set forth in the cross-complaints and are involved on this appeal.

There is really not much controversy concerning the facts which arise upon the cross-complaints and which must control this appeal. Briefly stated, the facts are: That in the latter part of April, 1915, the appellant Best was the owner of a certain dwelling situated in the southeastern part of Salt Lake City which he was desirous of selling or exchanging for less valuable property. To accomplish his purpose he listed the dwelling with the defendant company which was engaged in the real estate business in Salt Lake City. There was a mortgage on Best's dwelling of $ 3,500 which would have to be assumed by the purchaser, or, if exchanged, by the person with whom the exchange was made. Best valued his dwelling at $ 6,500, and he thus had an equity in it of $ 3,000. At the time of the transactions involved here one L. B. Call was an employee of the company, and he undertook to dispose of Best's dwelling, as before stated. It seems that Call was acquainted with the Bowrings, and he called on Mr. Bowring at his place of business and informed him of the Best dwelling and of Best's desire to dispose of it. The Bowrings had a dwelling in the westerly part of Salt Lake City which they valued at $ 3,000, and Call suggested to them that they exchange their dwelling for Best's and assume the $ 3,500 mortgage. This would make an even exchange of the properties, that is, the $ 3,000 at which the Bowrings valued their dwelling would offset the $ 3,000 equity Best had in his. The evidence is undisputed that the Bowrings and Best never met to discuss the terms of the exchange. Call conducted all of the negotiations, and in doing so he would communicate with the Bowrings and then with Best, and in that way would inform each of the parties what the other had said and desired. In handling the matter in that way the misunderstandings which culminated in this lawsuit arose as follows: Best had informed Call, so Call says, that the former did not have the money to pay Call but a small commission if the exchange were made, but that Best would "make it up" to Call in some other way or "on some other deal." If the exchange of the properties were made as before suggested--that is, if the Bowrings would exchange their $ 3,000 dwelling for the $ 3,000 equity Best had in his--there would be no money in the transaction out of which Call could take his commission. Call therefore conceived the idea to raise some money on the Bowring property, which he did as follows: Call informed Best that there was a $ 1,000 mortgage on the Bowring dwelling, and that Best would have to take a deed subject to that mortgage, the same as the Bowrings took a deed to Best's dwelling subject to the $ 3,500 mortgage. In view of the fact that Best supposed there was a $ 1,000 mortgage on the Bowring dwelling, he assumed that the exchange could not be made by merely exchanging deeds, but could only be made by Bowrings paying him the amount he demanded. After considering the matter Best informed Call that if the deal were made the Bowrings would have to pay him $ 750 so as to reduce the $ 1,000 mortgage to that extent. Call informed Best that the deal could not be consummated in that way, and that the best the Bowrings would do would be to pay Best $ 500 and exchange deeds. Best, being very desirous of closing the deal, and also being in need of some ready cash, finally agreed to make the deal if the Bowrings would pay him the $ 500 in cash. Immediately after Best had agreed to that Call went to a Mr. Wicks, a money broker, and obtained a $ 1,000 loan on the Bowring dwelling. He then induced Best to execute a deed to his dwelling to the Bowrings subject to the $ 3,500 mortgage, and at the same time induced the Bowrings to execute a deed to their property to Best in which Call inserted the clause that it was subject to a $ 1,000 mortgage. When the Bowrings saw the deed, however, they insisted that their property was free from incumbrances and Call then explained to them that the $ 1,000 was obtained for Best, and that in view that Best had to leave the city he wanted the Bowrings to execute a note and mortgage for the $ 1,000 to Wicks and make their deed subject to that mortgage. The Bowrings, believing Call's statements, executed the $ 1,000 note and mortgage to Wicks and delivered both to Call. Call then delivered the same to Wicks and obtained a check from him for the loan amounting to $ 970.30, that being the amount of the loan less "commission and expenses," as Call puts it. The check was drawn on McCornick & Co., Bankers, and was made payable to Mrs. Bowring in view that the title to the Bowring property was in her name and that she and her husband had executed the mortgage aforesaid. Call took the check to Mrs. Bowring to have her indorse the same. She demurred, and Call explained to her that she had no interest in the check, that the money belonged to Best, and that the note and mortgage were made in the way they were merely as a matter of convenience to Best for the reason that he was obliged to leave the city. Mrs. Bowring still refused to indorse the check, however, so Call went to see her husband, to whom he told the same story he had told Mrs. Bowring. Bowring conceded that neither he nor his wife had any interest in the check, and that the money represented by it belonged to Best, so he wrote his wife's name on the back of the check. Call then presented the check to the company, which presented the same to the defendant, the National Copper Bank of Salt Lake City, and said bank paid it, and, as hereinbefore stated, guaranteed the indorsement thereof. When the check was presented to McCornick & Co., Bankers, on whom it was drawn, it was paid. A few days thereafter, however, Mrs. Bowring convinced McCornick & Co., Bankers, that her indorsement was unauthorized and that the check had been paid without proper authority. Mr. Wicks then demanded that McCornick & Co., Bankers, credit him with the amount of the check, which was done. Upon the question of whether the indorsement of the check was authorized by Mrs. Bowring the court found the facts against her contention, and found that she had in fact authorized the indorsement thereon. In view that the two banks have settled their differences respecting the check, that phase of the case is immaterial, except so far as it affects Mr. Wicks; and his claims will be referred to hereinafter. After the company had obtained the money on Wicks' check it deposited $ 462 of the $ 970.30 to Mr. Best's credit in a certain bank, and the company retained the rest. Some time afterward Mr. Best learned that he had only been paid $ 462 of the $ 500 Call had promised that Bowring would pay him. Best then called up Bowring and asked him why he did not pay Best the full $ 500 as he had agreed to do. Bowring informed Best that he had never agreed to pay Best $ 500 or any other sum. Best and Bowring, upon making inquiries, then for the first time learned how Call had induced them to agree to what h...