Pennington v. Farmers' & Merchants' Bank

• Decision Date: 28 May 1921
• Citation: 231 S.W. 545,144 Tenn. 188
• Parties: PENNINGTON v. FARMERS' & MERCHANTS' BANK.
• Court: Tennessee Supreme Court

231 S.W. 545

144 Tenn. 188

PENNINGTON v. FARMERS' & MERCHANTS' BANK.

Supreme Court of Tennessee.

May 28, 1921

Appeal from Circuit Court, Maury County; W. B. Turner, Judge.

Action by Minnie Pennington against the Farmers' & Merchants' Bank. Judgment for defendant, and plaintiff appealed to the Court of Civil Appeals, which transferred the case. Reversed and remanded.

Sam Holding, of Columbia, and L. H. Hammond, of Mt. Pleasant, for appellant.

Percy S. Chandler, of Mt. Pleasant, and Hughes, Hatcher & Hughes of Columbia, for appellee.

GREEN J.

Plaintiff brought this suit to recover from defendant the value of a $1,000 Victory Bond which belonged to her and had been lodged in the bank's vault for safe-keeping. The bank was robbed, its vault being blown open by burglars, and plaintiff's bond, along with other valuable papers taken.

The circuit judge directed a verdict in favor of the defendant and the plaintiff appealed in error to the Court of Civil Appeals. That court transferred the case to this court, conceiving that the constitutionality of an act of the Legislature was involved.

The form of charter provided by our statutes for banks and trust companies, under which statutes defendant is incorporated, contains, among other things, the following:

"It shall have the right to construct a vault on its real estate, or to rent any vault already constructed or to be constructed, which, in the judgment of the directors, will provide reasonable means of safety against loss by theft, fire, or other cause, in which vault may be fixed or placed safes, boxes, or receptacles for the keeping of jewelry, diamonds, gold, bank notes, bonds, notes, and other valuables, which boxes, safes, or receptacles may be rented by the corporation to other persons or corporations, on such terms as may be agreed by the parties."

"In no event shall the corporation be liable for any loss of said jewelry, diamonds, gold, bank notes, bonds, notes, or other valuables thus lost by theft, robbery, fire, or other cause, the said corporation not being the insurer of the safety of said property, nor in any manner liable therefor. The corporation is not required to take any note or property thus deposited, as the person who rents a safe, box, or receptacle, is, for the term of his lease, the owner thereof."

Sections 2101, 2102, Thompson's Shannon's Code.

The circuit judge was of opinion that these sections were applicable to this case, and that under the provisions of section 2102 defendant could not be held liable for the loss of said bond, kept as hereafter described.

We cannot agree with the learned trial judge in this conclusion.

We think such sections cover a case where a particular box or space in its vaults is rented or leased by the bank. This is made clear by the provision that the person renting the box or receptacle is, for the term of his lease, the owner thereof. A rental contract is clearly contemplated. The customer selects his space, fills it as he pleases, and takes his chances under the statute.

We have no such a case before us. Plaintiff's father had a tin box which the bank had presented to him. He kept his valuable papers in this box. The bank undertook to care for the box without charge. Mr. Pennington had rented no space or receptacle in the bank's vault, and the bank was free to keep his box where it thought proper. The plaintiff's bond was placed in this box belonging to her father so intrusted to the bank.

We think this bailment was undertaken by the bank under the authority of another provision of its charter, namely, the following:

"It shall have power to take and receive on deposit, specially as bailee, any jewelry, plate, money, specie, securities, valuable papers, or other valuables of any kind, and, upon a consideration to be agreed upon by the parties, to guarantee the safe preservation and redelivery of the same; also the power to guarantee the payment of bonds and mortgages owned by other persons, or to guarantee titles to real estate for a consideration to be agreed on by the parties." Section 2099, Thompson's Shannon's Code.

Sections 2100, 2101, of Thompson's Shannon's Code, relied on by defendant, are attacked as unconstitutional; it being asserted that such legislation is arbitrary and unreasonable and discriminatory in favor of banks. We do not think this legislation is applicable to the case before us, and therefore have no occasion to pass on the constitutionality of the enactment.

Nevertheless, as the constitutional question was fairly raised on the record, we retain jurisdiction of the case and will dispose of the other questions.

Plaintiff's proof tends to show that she was the daughter of a substantial farmer. who kept an account with defendant bank. She herself had a savings account at this bank. Some months before the robbery her father determined to give her $1,000. He so informed the president of the bank, and the latter drew a check to plaintiff's order, which the father signed and took to her.

The father testifies that the president of the bank asked him to have his daughter to do business with that institution. The father said that he could not interfere, and told the bank president that he must speak to plaintiff about the matter himself. It appears from the father's testimony that he and the bank president had previously had some conversation about the rate of interest the bank was paying on savings deposits, which was only 3 per cent., and the father insisted that he should have 4 per cent. for his savings. The bank president would not yield, and the matter was arranged by the father buying Liberty Bonds from the bank with his savings.

Plaintiff testifies that before she received the $1,000 check from her father the bank president called her up and told her he understood she was to receive this present and asked her if she would not buy a bond from him. She says that after some negotiation over the telephone she agreed to buy the bond and the bank president said he would take care of it for her. She states that when her father gave her the check she indorsed it and sent it back to the bank by her father, and that he paid $995 to the bank for a Victory Bond and brought her back $5....