The First National Bank of Hutchinson v. Williams

• Decision Date: 09 February 1901
• Docket Number: 11,795
• Citation: 62 Kan. 431,63 P. 744
• Parties: THE FIRST NATIONAL BANK OF HUTCHINSON v. L. T. WILLIAMS
• Court: Kansas Supreme Court

63 P. 744

62 Kan. 431

THE FIRST NATIONAL BANK OF HUTCHINSON v. L. T. WILLIAMS

No. 11,795

Supreme Court of Kansas

February 9, 1901

Decided January, 1901.

Error from Reno district court; M. P. SIMPSON, judge.

Judgment reversed.

J. W Rose, W. M. Whitelaw, and F. S. Whitelaw, for plaintiff in error.

George A. Vandeveer, and F. L. Martin, for defendant in error.

OPINION

SMITH, J.:

Plaintiff in error based its action in the court below against the defendant Williams on certain facts, which, stated briefly are: Defendant, for the purpose of wronging, cheating and defrauding the First National Bank, made and delivered to it a check drawn on the Citizens' Bank of Hutchinson in the amount of $ 2800, and bought of and received from plaintiff in error a draft on New York for said sum, payable to his own order. To carry out his fraudulent purpose, defendant represented that he had on deposit in the Citizens' Bank a sum equal to the amount of his check. The check was worthless. Discovering this fact, plaintiff below, by telegraph, stopped payment of the New York draft. The defendant Williams immediately left the state, and thereafter procured said draft to be cashed at Cayuga, Ind., by Malone & Sons, bankers at that place. The latter were innocent purchasers of the draft. The following extract from the petition shows the nature of the damages sustained by the plaintiff below:

"That Malone & Sons, bankers, were innocent purchasers of said draft, and that this plaintiff was liable thereon to said Malone & Sons for the amount of said draft; that in order to protect itself against loss it became necessary for plaintiff to counsel and advise with attorneys and employ a lawyer to go to Cayuga and procure a settlement of said draft by said Williams with said Malone & Sons, by returning to them (said Malone & Sons) said money paid to him, said Williams, by said Malone & Sons on said draft, which was finally done; that in procuring the settlement of said draft to the extent aforesaid, and repayment of the money to said Malone & Sons, plaintiff was put to large expenses, to wit, for telegraphing, attorneys' fees, and other expenses, the sum of $ 325.92; that all of said costs and expenses were caused by and through the wrongful, fraudulent and felonious acts of the defendant in giving said worthless check and representing the same to be valid and good, and said amount is the fair and reasonable value thereof; that said defendant has now in his possession said original draft drawn on the National Bank of North America, and refuses to deliver the same to plaintiff."

There is a prayer asking for judgment in the sum of $ 2500 damages, and that the draft be canceled and surrendered to the plaintiff in error. A general demurrer was sustained by the court below to the petition, upon the ground that it did not state facts sufficient to constitute a cause of action.

The demurrer seems to have been considered and held good on the theory that the claim for $ 325.92 for telegraphing attorneys' fees and other expenses is to be treated as a demand for punitive damages. We differ with the trial court in its view of the nature of the damages. The bank, through the fraud of the defendant, was induced to deliver to him a draft for $ 2800, payable to his order, which he wrongfully caused to be cashed. The natural and probable result of his false representations must have been foreseen by Williams, which was that the defrauded bank would use all reasonable means to prevent loss to itself and, if necessary, employ counsel and incur other expenses in its efforts to recover the draft or its proceeds. The demurring party admits that the expenses mentioned were necessary. Exemplary or vindictive damages are inflicted as a punishment to the wrong-doer, and not as compensatory to the plaintiff. Here, an actual pecuniary loss was sustained by one party through the fraudulent conduct of another, and the...