Pronger v. Old Nat. Bank

• Decision Date: 03 March 1899
• Parties: PRONGER v. OLD NAT. BANK et al.
• Court: Washington Supreme Court

56 P. 391

20 Wash. 618

PRONGER v. OLD NAT. BANK et al.

Supreme Court of Washington

March 3, 1899

Appeal from superior court, Spokane county; Leander H. Prather Judge.

Action by James T. Pronger against the Old National Bank and others. Judgment for plaintiff, and defendants appeal. Affirmed.

Stoll & Macdonald and Jay H. Adams, for appellants.

Blake & Post, for respondent.

FULLERTON J.

This is an action brought by the respondent against appellants for damages arising from fraud alleged to have been perpetrated upon respondent by the appellants. The acts constituting the fraud charged, as shown by the complaint, are briefly these The appellant bank is a national bank doing business at Spokane, in Spokane county, and the appellants Glidden and Vincent are respectively president and cashier thereof. That about October 13, 1896, the respondent had on deposit in the appellant bank some $2,200, which he was desirous of investing in some profitable business; and the appellants, conspiring together to cheat and defraud him of his money, induced him to open a bank at the town of Chency in that county, and invest therein $2,000, promising and agreeing to invest therein a like amount, and such further sums as the exigencies of the business would from time to time demand. That appellants had no intention of making any investment in the Cheney Bank, but made the agreement for the sole purpose of putting off onto the respondent certain worthless paper belonging to the appellant bank. That upon the organization of the Cheney Bank the appellant bank became its correspondent, and furnished the Cheney Bank with monthly statements showing the condition of the account between defendants and the Cheney Bank. That in one of these statements, furnished on the last of March, 1897, it charged the Cheney Bank with two items, one for $500, under date of March 15th, and the other of $1,000, under date of March 18th, both credited to the O. K. Gold-Mining Company. That upon receiving the statement the respondent made inquiry by telephone of the appellant bank concerning these items, and was told that the items represented charges taken from tickets furnished the bookkeeper by the cashier, and that no one present could give any further explanation as to them that Vincent, the cashier, was East, and would explain upon his return. That upon the return of Vincent he renewed his inquiry, and was informed that they represented two notes, for the several amounts mentioned, executed to the appellant bank by the O. K. Gold-Mining Company. That Vincent assured him that the payor was solvent, that the notes were as good as any paper the appellant bank had, and would be paid promptly on demand. That the respondent relied on the statements made to him by Vincent, accepted the notes, and gave the appellant bank credit for them. That the notes were the property of the appellant bank, were worthless, and the payor insolvent, all of which was known to the appellants. That the notes were forwarded to him, and representations were made to him, for the sole purpose of cheating and defrauding him out of his money, in pursuance of a conspiracy entered into by the appellants. That, upon learning of the spurious character of the notes, the respondent rescinded the transaction, tendered the notes to appellants, and demanded payment of them, which the appellants refused. That by reason of the frauds he was damaged, etc. The appellants severally demurred to the complaint on the ground that no cause of action was stated. On the demurrers being overruled, they answered jointly, denying the contract and fraud alleged, and, by way of separate answer, averred that the respondent and Vincent entered into a partnership for the conduct of the banking business at Cheney; that the sum paid the O. K. Gold-Mining Company was paid out, under the direction of Vincent, on a loan made by Vincent to that company of the money of the Bank of Cheney; and that neither the appellant bank nor Glidden had anything to do with the transaction, further than to transfer the account, under Vincent's direction, on the books of the appellant bank. The respondent replied, denying the new matter alleged. On the issues thus made a trial was had, which resulted in a verdict and judgment for respondent for the sum of $1,536.75.

1. The first assignment of error is that the court erred in overruling the demurrer to the complaint. That the complaint is sufficient as to the appellants Vincent and Glidden is not here seriously disputed. On the part of the bank it is argued that the agreement set forth in the complaint was one of partnership; that the respondent was bound to know that it was beyond the power of a national bank to enter into a partnership agreement, and hence there were no representations on the part of the bank on which he had a right to rely; that, if there is any liability at all on the part of the bank to respondent, it is only on contract to recover a balance of account due from the bank. We think the demurrer was properly overruled. It is true, a corporation, as a merely legal entity, can have no will, and cannot, of itself, act at all. But in its relation to the public it is represented by its officers and lawfully authorized agents, and their acts in the course of corporate dealings are, in law, the acts of the corporation. Whatever the rule may have been formerly, it is now settled beyond controversy that a corporation is liable to the same extent, and under the same circumstances, as a natural person, for the consequence of its wrongful acts, and will be held to respond, in a civil action, at the suit of an injured party, for every wrong which it commits, however foreign to its nature or beyond its granted powers the wrongful transactions may be. In such cases the doctrine of ultra vires has no application. Bank v. Graham, 100 U.S. 699; Merchants' Bank v. State Bank, 10 Wall. 604; State v. Morris & E. R. Co., 23 N. J. Law, 360; Railway Co. v. Harris, 122 U.S. 597, 7 S.Ct. 1286; Alexander v. Relfe, 74 Mo. 495; Buffalo Lubricating Oil Co. v. Standard Oil Co. (N. Y. App.) 12 N.E. 825; Jackson v. Insurance Co. (N. Y. App.) 1 N. E. 539; Nevada Bank of San Francisco v. Portland Nat. Bank, 59 F. 338; Thomp. Corp. §§ 6329, 6279.

2. In the court below, after respondent had rested his case in chief, the appellants challenged the sufficiency of the evidence to sustain a verdict against them, and moved the court to direct a verdict against the respondent. After the evidence was all in, they renewed their objection and motion, and after judgment moved for a new trial, setting up the same ground. These several objections and motions were overruled by the lower court. The appellants in this court earnestly insist that the court erred in so doing. It is insisted (1) that there was no evidence before the jury sufficient to make a prima facie case against the appellants; and, (2) if there was a prima facie case made, the evidence of the appellants so overcame the respondent's case as to make it apparent that the jury disregarded the evidence, ignored the instructions of the court, and arrived at their verdict through the influence of passion and prejudice. This calls for an examination of the evidence. We think no useful purpose would be subserved by setting out the evidence in detail, and that it is sufficient to say that the record discloses some evidence from which the jury could reasonably infer that the two notes of the O. K. Gold-Mining Company were the property of the appellant bank; that the payor was insolvent, the notes worthless, and that the appellants, knowing of this, without the consent of respondent, caused the notes to be forwarded to him, and his account with the appellant bank to be charged with the face value of the notes, falsely representing that the notes were taken for a loan of respondent's money made by one of the appellants to the mining company, that the mining company was solvent, and that the notes would be paid on demand; and that the respondent was injured thereby to the amount of the verdict. This would make a prima facie case.

On the second proposition nothing is pointed out to us in the record, and we have discovered nothing, other than that the weight of the evidence may appear to be against the respondent, which would indicate that the jury were influenced in arriving at the verdict by passion, prejudice or other arbitrary motive, or that the verdict was not the deliberate judgment of the jury upon the evidence before them. But the fact that the weight of the evidence may appear to be with the other side is not, alone, sufficient to warrant the court in reversing a judgment. To do so for this reason is to usurp the functions of the jury, to make this court the final arbiter on all questions of fact as well as of law, and to deny the constitutional right of a...