Rock Springs National Bank v. Luman

• Decision Date: 28 December 1894
• Citation: 5 Wyo. 159,38 P. 678
• Parties: ROCK SPRINGS NATIONAL BANK v. LUMAN
• Court: Wyoming Supreme Court

38 P. 678

5 Wyo. 159

ROCK SPRINGS NATIONAL BANK v. LUMAN

Supreme Court of Wyoming

December 28, 1894

A rehearing was granted in this case. See 42 P. 874; 43 P. 514.

ERROR to District Court for Sweetwater County. HON. JESSE KNIGHT Judge.

Action by Abner Luman against the Rock Springs National Bank. Judgment for plaintiff. Defendant prosecuted error. The material facts appear in the opinion.

Decision reversed and case remanded.

E. E Enterline, A. C. Campbell and R. W. Breckons, for plaintiff in error.

C. C Hamlin, for defendant in error.

CORN, JUSTICE. GROESBECK, C. J., and CONAWAY, J., concur.

OPINION

CORN, JUSTICE.

One Frank Pfeiffer was indebted to defendant in error, Abner Luman, in the sum of $ 24,100, which had been reduced by payments to $ 19,100. Pfeiffer was also cashier of the plaintiff in error. The above indebtedness of Pfeiffer to Luman was secured by a chattel mortgage upon a herd of 6,800 head of sheep. The mortgage was duly recorded, and, during the time of the transactions out of which this suit arose, was a valid and subsisting lien upon the sheep. Pfeiffer was also indebted to the plaintiff bank, of which he was cashier, and also to Tim Kinney & Co., Kinney being president of the bank. The mortgage contained a provision permitting Pfeiffer to market, sell and dispose of portions of the property, and providing that the proceeds should be applied toward the payment of the indebtedness secured. About the 5th of November, 1893, Pfeiffer left the bank to go to his sheep ranch, and was not at the bank, or in the active performance of his duties as cashier again until the 29th of the same month. During this time, under the provisions of the mortgage, and with the consent of Luman, he shipped to Chicago 1,356 head of the mortgaged sheep, going with the shipment himself. He sold the sheep, and realized $ 2,880 net from the sale. He brought this amount with him in Chicago exchange on his way home, as far as Laramie, Wyoming, where he stopped over. At Laramie, on the 27th, having endorsed the draft (which was made payable to himself) to the defendant, he mailed it to George H. Goble, vice president of the bank, with the following letter of transmittal:

"Laramie, Wyo. Nov. 27, 1893.

Geo. H. Goble, Vice President,

Rock Springs, Wyo.,

Dear Sir: --

Herewith please find Chicago exchange for $ 2,880, which please place to my credit, and oblige, Yours truly,

Frank Pfeiffer."

Goble, who was vice president of the bank, and, in the absence of Pfeiffer, acting cashier, received the draft on the 28th, and on the same day, applied $ 1,079.34 on Pfeiffer's account with the bank, in payment of an overdraft, and $ 987.25 in payment of a note of Pfeiffer's due to the bank. He applied the remainder of the amount of the draft, amounting to $ 813.41, upon the debt of Pfeiffer to Tim Kinney & Co. Goble testifies that this last application was made after Pfeiffer's return on the 29th, and by his direction. Pfeiffer states that the application of the whole amount of the draft was made without his knowledge or consent, but that he made no objection, when informed of it on the morning of the 29th, not wishing to antagonize the bank. Afterwards, upon learning of the application of the money by the bank, Luman, the defendant in error, made demand for the amount of $ 2,880, upon the ground that it was the proceeds of sheep mortgaged to him, and payment being refused, brought suit. The plaintiff (defendant in error) sets out in his petition the lien of the mortgage, and that there was due upon it more than the sum of $ 2,880, the sale of the mortgaged property under the terms of the mortgage, the receipt of the money by the defendant bank, and its refusal to pay, and alleges that the bank had notice and knew when it received it that the sum was the proceeds of property mortgaged to plaintiff, and was the money of the plaintiff.

The defendant answered, admitting the receipt of the draft, but denying any knowledge of the source from which the money was derived with which it was purchased; alleging Pfeiffer's indebtedness to the bank, and its application of that amount, and that afterwards, on the 29th of November, it applied the balance to the payment of the debt of Tim Kinney & Co. by Pfeiffer's instructions. The court below tried the case without a jury, and found for the plaintiff generally in the sum of $ 3,024. The defendant presented its motion for a new trial, which was overruled and judgment entered for the plaintiff.

The plaintiff in error assigns numerous errors, eighteen in all but it will not be necessary to consider them each separately, or in their numerical order. The question presented is that of notice to the bank. Upon the trial, the court, over the objection of the defendant, permitted the plaintiff, Luman, and his attorney, Mr. Hamlin, to testify to certain conversations with Pfeiffer in reference to the transaction. These conversations were had after the return of Pfeiffer from Chicago, and after the various steps of receiving the draft by the bank, and its application of the proceeds to the payment of its own claims and that of Kinney & Co., had been taken, and the transaction out of which the suit arose was completed. If the statements of Pfeiffer, made at this time, and under the circumstances of this case, would bind the bank, then the testimony was properly admitted. Otherwise, it was hearsay, and its admission was error. We think it is quite clear that in this entire transaction, Pfeiffer was acting in his individual capacity, and not as an officer or agent of the bank. It was his individual indebtedness to Luman, and the bank was in no way connected with it. The mortgaged property was his, and the bank had no interest...