Steenbergen v. First Federal Sav. and Loan of Chickasha

• Decision Date: 08 December 1987
• Docket Number: No. 63166,63166
• Parties: , 5 UCC Rep.Serv.2d 1054, 1987 OK 122 Bobbie Lou STEENBERGEN, Appellant, v. FIRST FEDERAL SAVINGS AND LOAN OF CHICKASHA, et al., Appellees.
• Court: Oklahoma Supreme Court

Page 1330

753 P.2d 1330

56 USLW 2378, 5 UCC Rep.Serv.2d 1054,

1987 OK 122

Bobbie Lou STEENBERGEN, Appellant, v. FIRST FEDERAL SAVINGS AND LOAN OF CHICKASHA, et al., Appellees.

No. 63166.

Supreme Court of Oklahoma.

Dec. 8, 1987.

Rehearing Denied March 8, 1988.

Appeal from the District Court of Grady County; James Winchester, District Judge.

In suit by depositor against Savings and Loan for wrongful delivery of check to depositor's daughter trial court granted summary judgment for defendant. Reversed and remanded with directions to enter judgment for plaintiff.

Michael A. Taylor, Bloodworth & Associates, Oklahoma City, for appellant.

F. Thomas Cordell, Jr., Chickasha, for appellees.

SUMMERS, Justice.

Plaintiff/appellant Bobbie Steenbergen had two accounts with the defendant/appellee First Federal Savings and Loan of Chickasha. The first was a passbook savings account opened with $500.00 in the names of Renee Steenbergen (her daughter) or Bobbie Steenbergen. The second was a certificate of deposit for $7500.00 in the names of Bobbie Steenbergen or Velma Hooker. All funds were the inheritance of Bobbie Steenbergen and hers was the only authorized signature on both accounts.

On October 27, 1980 Bobbie went to First Federal and announced that she wished to close out both accounts. She was given a check for $8844.27 representing the balance in both accounts, which she presumed to be a cashier's check. That check was made payable to the order of Renee Steenbergen or Bobbie Steenbergen. Bobbie put the check in her lockbox. In reality the instrument was not a cashier's check, but rather a check drawn on an account First Federal had at a Topeka, Kansas lending institution.

In November 1981 First Federal issued a stop payment order on the 13 month old check. The following month it issued a second check in the same amount, again payable to Renee or Bobbie, and called Renee to come in and pick it up. The daughter obliged and cashed it for her own benefit. None of the events described in this paragraph were known to Bobbie until January 1982, when she deposited the check to purchase a new CD. Only then did she learn that payment on her check had been stopped, that a second check had been issued, and that it had been delivered to Renee, who at the time was taking her father's side in a bitter divorce battle.

In Bobbie's lawsuit against Renee and First Federal all parties filed motions for summary judgment once discovery was completed. The trial court sustained First Federal's motion and Bobbie now appeals.

We reverse.

The trial court held, as do we, that First Federal was justified in issuing the stop payment order on its stale check. 12A O.S.1981 § 4-403. A "customer" so entitled to stop payment includes a bank carrying an account with another bank. 12A O.S.1981 § 4-104(1)(e).

The trial court held that in paying the proceeds of the two accounts to one of the payees named on the first check First Federal could incur no additional liability. It is here that we disagree.

Although not raised defensively by First Federal we note a threshold question that needs to be first addressed. Bobbie's suit sounds in conversion. Deposits such as hers in savings and loan or banking institutions establish debtor-creditor relationships. State Guaranty Bank of Okeene v. Doerfler, 99 Okl. 258, 226 P. 1054 (1924). The general rule is that an action for conversion of funds will not lie for a general debt. Wright v. School District No. 97, 36 Okl. 294, 128 P. 241 (1912). It has been held, however, that once an account matures, a bank's withholding of a check representing specifically identified and designated sums belonging to the depositor, and its use of the check in an unauthorized manner, does constitute conversion. Owens v. Andrews Bank and Trust Co., 265 S.C. 490, 220 S.E.2d 116 (1975). The parties having contracted to play the hand in conversion, we are thus free to leave them in that suit.

Conversion is any act of dominion wrongfully exerted over another's personal property in denial of or inconsistent with his rights therein. White v. Webber/Walkman Co., 591 P.2d 348 (Okl.1979) It is not necessary to constitute a conversion that the property come into the defendant's possession wrongfully. Federal National Bank of Shawnee v. Lindsey, 172 Okl. 30, 43 P.2d 1036 (1935). Nor is it necessary that the alleged converter apply the property to his own use, U.S. Zinc Co. v. Colburn, 124 Okl. 249, 255 P. 688 (1927), or be in bad faith. Stack v. Gudgel, 60 Okl. 32, 158 P. 1144 (1916).

To maintain her action for conversion Bobbie must establish that First Federal wrongfully interfered with her funds as represented by the check, depriving her of the use of such funds. See Davidson v. First State Bank, 559 P.2d 1228 (Okl.1976). All parties agree there are no material facts in controversy.

The following uncontested facts compel us to reach a result opposite that reached by the trial court:

1. Bobbie was the sole signatory on each account.

2. As signatory she was the one who appeared in person to close out the accounts.

3. The first check for all the proceeds was delivered to her.

4. When the Savings and Loan reissued the check it called in the other payee, Renee.

5. Renee's name had never been on the CD, which represented over 93% of the funds on deposit and delivered to Renee.

6. Renee, a minor at this time, knew nothing about the check nor the accounts it represented.

7. Renee appeared before the loan officer with her father, who was known by the loan officer to have been in a contested divorce with Bobbie.

8. The loan officer had been told that the first check had been delivered to an older woman.

9. The defendant delivered the second check to Renee without notifying Bobbie.

If there be no substantial controversy as to any material fact the court shall render judgment for the party so entitled as a matter of law. Rule 13(e), Rules for the District Courts of Oklahoma.

Our conclusion is that in this fact-specific situation the above acts of the defendant amounted to such a mishandling of the check to which Bobbie was entitled as to constitute a wrongful interference with her property. She is thus entitled to judgment as a matter of law....