United States Building & Loan Association v. France
| Decision Date | 25 October 1935 |
| Docket Number | 6227 |
| Citation | 56 Idaho 108,50 P.2d 1015 |
| Court | Idaho Supreme Court |
| Parties | UNITED STATES BUILDING & LOAN ASSOCIATION, a Corporation, Appellant, v. DORA FRANCE, a Widow, and GUARANTY SAVINGS & LOAN COMPANY, a Corporation, Respondents |
BANKS AND BANKING-STATUTES-CONSTRUCTION-PARTIAL INVALIDITY-MATERIAL ISSUES-FINDINGS, SUFFICIENCY OF-REMANDED FOR FURTHER PROCEEDINGS.
1. Where check given in payment of mortgage was charged by drawee bank to drawer's account, but draft in payment of check was not paid because of drawee's insolvency defendants in foreclosure suit did not have burden to prove that drawee bank was solvent when check was charged to drawer's account, under statute declaring that item received by mail by solvent drawee bank should be deemed paid when amount was finally charged to drawer's account since statute, concomitant to subsequent section which under such circumstances would purportedly impress trust on drawee bank's assets in favor of owner of item, was inapplicable in view of invalidity of such subsequent section (I. C. A secs. 25-1307, 25-1313).
2. In action to foreclose mortgage, although court correctly found that check given in payment of mortgage had been paid notwithstanding drawee bank's failure before payment of draft given in payment of check, and that loss would fall on mortgagee, findings should have been made on allegations that drawer subsequently agreed to pay check and was estopped to deny nonliability thereon.
APPEAL from the District Court of the Sixth Judicial District, for Bingham County. Hon. Guy Stevens, Judge.
Action to foreclose a mortgage. Defense of payment by check on subsequently closed bank, alleged agreement of defendants' assumption of liability on check and estoppel to deny such liability. Judgment for defendants. Reversed and remanded for additional proceedings and findings.
Reversed and remanded. Costs awarded to appellant.
A. A. Merrill and J. F. Emigh, for Appellant.
The burden of proving payment was upon the defendants. (Pastene v. Pardini, 135 Cal. 431, 67 P. 681; Brennan v. Brennan, 122 Cal. 440, 55 P. 124, 68 Am. St. 46; Sheffield v. Cleland, 19 Idaho 612, 115 P. 20; 48 C. J. 680, sec. 176.)
The defendants were estopped to claim the Dora France mortgage had been paid. (Pomeroy's Equity Jurisprudence, 4th ed., sec. 804, p. 1642, sec. 813, p. 1672.)
Estoppel was properly proven. (Sec. 5-812, I. C. A.; Bancroft's Code Pleading, pp. 682-684; Powell-Sanders Co. v. Carssow, 28 Idaho 201, 152 P. 1067; A. Meister & Sons Co. v. Wood & Tatum Co., 26 Cal.App. 584, 147 P. 981.)
It is a well-known rule of law that where certain provisions of an act are invalid and others valid, the valid portions are not affected by the invalid ones, unless they are plainly dependent upon each other and so inseparably connected that they cannot be divided without defeating the object and purpose of the act. (Knight v. Trigg, 16 Idaho 256, 100 P. 1060; Gillesby v. Board of Commrs., 17 Idaho 586, 107 P. 71; State v. Bird, 29 Idaho 47, 156 P. 1140; In re Bruen, 102 Wash. 472, 172 P. 1152; In re Mills, 104 Wash. 278, 176 P. 556; In re Ward, 106 Wash. 147, 179 P. 76; McVicar v. State Board of Law Examiners, (D. C.) 6 F.2d 33; In re Edwards, 45 Idaho 676, 266 P. 665, 670.)
O. R. Baum and J. H. Anderson, for Respondents.
When the check in question was presented at the Citizens Bank & Trust Company and the account of the respondent Guaranty Savings & Loan Company charged the amount thereof and its account diminished by the amount of the check and the check marked "Paid," and after being so marked, placed among the other canceled checks and vouchers of the respondent, the maker of the check was released from all obligations thereof and the same constituted payment. (Wagner v. Spaeth, 36 Wyo. 279, 254 P. 123, 37 Wyo. 1, 257 P. 51; Davison v. Allen, 47 Idaho 405, 276 P. 43, 68 A. L. R. 856, 863, 864; Fisher v. Farmers Co-op. Irr. Co., 49 Idaho 343, 288 P. 164.)
The transaction by which the respondent Guaranty Savings & Loan Company paid the note and mortgage occurred prior to the time when chapter 60 of the 1931 Session Laws of Idaho was carried into the Idaho Code, Annotated, and the title to the last-mentioned act is not sufficiently comprehensive to have authorized the legislature in passing the sections applicable to the instant transaction. (Federal Reserve Bank v. Citizens Bank & Trust Co., 53 Idaho 316, 23 P.2d 735.)
Budge, J., not participating.
Respondent Dora France, in arrears in payments on her loan from appellant, arranged with respondent Guaranty Savings & Loan Company for a new loan to take up appellant's loan, pursuant to which arrangement respondent Guaranty Savings & Loan Company, September 16, 1931, sent to appellant its check, drawn on the Citizens Bank & Trust Company of Pocatello, Idaho, in payment of appellant's loan. Appellant deposited the check in the First National Bank of Butte, Montana, September 17, 1932, which sent it to the Walker Brothers Bank at Salt Lake City, Utah which turned it to the Salt Lake Branch of the San Francisco Federal Reserve Bank, by which it was sent direct to the Citizens Bank & Trust Company, received there on the 22d day of September, marked paid and charged to the account of respondent Guaranty Savings & Loan Company. The Citizens Bank & Trust Company in payment of this and a number of similar items, sent a draft for $ 26,000 to the Salt Lake Branch of the San Francisco Federal Reserve Bank. The Citizens Bank & Trust Company failed to open September 23, 1931, and the draft was not paid, hence this controversy involving the question of whether the consequent loss should fall on appellant or on respondents.
Various correspondence was had between appellant and respondent Guaranty Savings & Loan Company; a claim was filed by appellant with the receiver of the Citizens Bank & Trust Company seeking a preferred classification on a trust theory, but rejected on that basis, and the respondent Guaranty Savings & Loan Company refusing to assume the burden of the loss, appellant sued to foreclose its mortgage. Respondents by their answers claimed payment by reason of the above circumstances. Appellant in turn traversing such defense, contends that section 7 of chapter 60 of the 1931 Session Laws, I. C. A., sec. 25-1307, was in effect, even though section 13 of said chapter, I. C. A., sec. 25-1313, had been declared inoperative as of the time of the transaction herein involved (Federal Reserve Bank v. Citizens' Bank & Trust Co., 53 Idaho 316, 23 P.2d 735), because of a defective title to said chapter, and that the burden rested upon respondents as one of the conditions precedent to the establishment of payment under section 7, I. C. A. sec. 25-1307, supra, to prove the solvency of the drawee bank, also that the respondent Guaranty Savings & Loan Company had in effect after September 23d agreed to pay the check, appellant's compliance with and performance of its duties under such agreement, respondents' refusal to perform, and that respondent Guaranty Savings & Loan Company is estopped to deny its nonliability for the check. Such affirmative answers to respondents' affirmative defenses being deemed denied, indicate respondents' position with their added contention that section 7, supra, was inoperative the same as section 13, chapter 60, of the 1931 Session Laws.
Appellant virtually concedes that in the absence of section 7, chapter 60, 1931 Session Laws, I. C. A. sec. 25-1307, supra, the law would hold that the check was paid. If section 7, I. C. A. sec. 25-1307, and section 13 of chapter 60, I. C. A. sec. 25-1313, supra, are so inseparably connected that it cannot be considered that the legislature would have passed the one without the other, section 7, I. C. A. sec. 25-1307, supra, must fall with section 13, I. C. A. sec. 25-1313, supra. (Ballentine v. Willey, 3 Idaho 496, 31 P. 994, 95 Am. St. 17; Gillesby v. Board of County Commissioners, 17 Idaho 586, 107 P. 71; Cunningham v. Thompson et al., 18 Idaho 149, 108 P. 898; Epperson v. Howell, 28 Idaho 338, 154 P. 621; State v. Bird, 29 Idaho 47, 156 P. 1140; Carlson v. Mullen, 29 Idaho 795, 162 P. 332; Dumas v. Bryan, 35 Idaho 557, 207 P. 720.)
Assuming the law prior to the passage of chapter 60, 1931 Session Laws, I. C. A. sec. 25-1301 et seq., supra, to be as asserted by respondents and virtually conceded by appellant section 7, I. C. A. sec. 25-1307, thereof announced a new and different rule, the operation of which on the transaction involved herein would effect payment of the check, nevertheless concomitantly section 13 of said chapter, I. C. A. sec. 25-1313, under the circumstances of this case would purportedly impress a trust in favor of the owner of the item and impose the loss neither on the payee nor the payor except as a proportionate diminution of the payor's share, if any, in the distributable assets, if any, of the failed bank, since the general assets of the failed bank would necessarily be reduced by the prior payment of the preferred or trust claims contemplated and sanctioned by said section 13, I. C. A. sec. 25-1313. Likewise conceding that in the absence of this statute decisions may be found placing the loss upon the payee, the payor, or upon neither as declared by section 13, I. C. A. sec. 25-1313, supra, it would seem to follow that the legislature intended by section 7, I. C. A. sec. 25-1307, and 13, I. C. A. sec. 25-1313, supra, to very definitely and certainly declare, in the case of solvency of the paying or intermediate banks, that the check when finally charged is paid so far as the banking transactions are concerned. If on the other hand insolvency along the line interrupted the...
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