Verdi v. Helper State Bank

• Decision Date: 07 February 1921
• Docket Number: 3533
• Citation: 57 Utah 502,196 P. 225
• Court: Utah Supreme Court
• Parties: VERDI v. HELPER STATE BANK

196 P. 225

57 Utah 502

VERDI v. HELPER STATE BANK

No. 3533

Supreme Court of Utah

February 7, 1921

Appeal from District Court, Seventh District, Carbon County; Geo Christensen, Judge.

Action by Maria de Angele Verdi, administratrix of the estate of Tony Verdi, deceased, against the Helper State Bank. Judgment for plaintiff, and defendant appeals.

REVERSED and REMANDED, with directions.

Price &amp Fouts, of Price, for appellant.

O. K Clay, of Price, for respondent.

FRICK, J. CORFMAN, C. J., and WEBER and THURMAN, JJ., concur. GIDEON, J., dissenting.

OPINION

FRICK, J.

The plaintiff, as administratrix of the estate of one Tony Verdi, deceased, commenced this action against the defendant to recover a certain amount of interest alleged to be due upon a certain certificate of deposit. The complaint sets forth two causes of action. In the first cause of action, after stating the necessary matters of inducement, plaintiff alleged:

"That on July 11, 1917, plaintiff loaned defendant the sum of ten thousand ($ 10,000.00) dollars, for the use of which defendant agreed to pay interest at the rate of four (4) per cent. per annum for a period of one year; that defendant issued its certificate of deposit in favor of plaintiff, which said certificate provided for interest at the rate of four (4) per cent. per annum for a period of only six months from July 11, 1917; that subsequent to the issuance of said certificate, to wit, on the same date, plaintiff discovered that said certificate was issued for a period of only six months; that she thereupon called the matter to the attention of defendant, and defendant then and there agreed that interest would be paid to plaintiff at the rate of four (4) per cent. per annum for a period of one year from July 11, 1917; that plaintiff, relying upon the said promise, agreement, and representation of defendant, permitted defendant to have and use the said ten thousand ($ 10,000.00) dollars for the said period of one year, to wit, up to and including the 11th day of July, 1918."

The plaintiff further alleged that on July 11, 1918, she made demand for said $ 10,000, together with interest at the rate of 4 per cent. per annum from July 11, 1917, to July 11, 1918, and that the defendant refused to pay interest for the full period stated, but only paid interest at the rate aforesaid ending January 11, 1918, amounting to $ 200; that the interest for said six months commencing January 11, 1918, and ending July 11, 1918, is due and unpaid, wherefore she demanded judgment for said $ 200 and costs.

The second cause of action sets forth the same transaction in somewhat different phraseology. The second cause of action was, however, disregarded, and the verdict of the jury is based entirely upon the first cause of action.

The defendant answered the complaint, and, after admitting the matters of inducement, it also admitted that the plaintiff had made a deposit of $ 10,000 in defendant's bank, but averred that said deposit was to draw 4 per cent. interest for a period of six months only; that defendant had agreed to pay interest for no longer period. The defendant also denied the alleged representations set forth in the complaint, averred that it had paid to plaintiff the $ 10,000 at the date it was demanded as alleged in the complaint, and denied that it was indebted to the plaintiff in any sum or amount whatever.

The case was tried to a jury, which returned a verdict in favor of plaintiff "for four per cent. interest on ten thousand dollars from January 11, 1918, to July 11, 1918." The amount of interest, to wit, $ 200, was not stated in the verdict. Judgment was duly entered on the verdict for said $ 200, from which defendant appeals.

Among the errors assigned are that the evidence is insufficient to justify the verdict and that the court misled the jury as to the law.

On reading the evidence, the writer was of the opinion that it was insufficient to justify the verdict. In view, however, that a majority of the members of the court are of the opinion that the evidence is of such a character that we should not say as a matter of law what the findings upon the evidence should be, I cheerfully yield to the judgment of my Associates in that regard. We are, however, agreed that the district court erred in charging the jury as will hereinafter appear, and for that reason the judgment must be reversed and the cause remanded for further proceedings. In view, therefore, that the cause must be remanded, we shall refrain from setting forth or expressing any opinion upon the effect of the evidence, but shall confine ourselves to a consideration of the legal questions involved.

The action was commenced to recover interest upon a certain certificate of deposit after the certificate had matured by its own terms. The certificate reads as follows:

"Helper, Utah July 11, 1917. No. 463.

"This certifies that Maria de Angele Verdi, Admr., has deposited with the Helper State Bank ten thousand dollars ($ 10,000.00), payable to the order of herself, countersigned by the AEtna Casualty Co. on the return of this certificate, properly endorsed, six months after date, with interest to maturity at the rate of four per cent. per annum.

"J. A. Pland, Assistant Cashier."

There was an indorsement on the back of the certificate which the testimony shows was placed thereon and signed on the date the same was issued and before it was delivered, which indorsement reads as follows:

"Four per cent. interest will be paid if left for six months. No interest will be paid after maturity, and all interest is forfeited if principal is drawn before maturity. J. A. Pland, Assistant Cashier."

There is much controversy between respective counsel in their briefs respecting the legal effect of certificates of deposit. Many cases are cited, especially by counsel for plaintiff. Practically all of these cases, however, have no bearing on this case for the reasons (1) that the facts and circumstances of this case are entirely different from those in the cited case; and (2) because the questions whether an ordinary certificate of deposit matures without a demand for payment, and when the statute of limitations begins to run, which are the principal subjects discussed in most of the cases cited, are not material, (a) because the certificate in question here matured by its own terms, and (b) for the reason that in this state, by virtue of Comp. Laws Utah 1917, § 6478, there is no limitation in favor of bank deposits. That section reads:

"To actions brought to recover money or other property deposited with any bank, banker, trust company, or savings or loan corporation, association, or society, there is no limitation."

It will be observed that the certificate in question here was negotiable in form, and thus, under the law, constituted a negotiable instrument. See 2 Daniels, Negotiable Instruments (6th Ed.) § 1703, where a large number of cases are cited in support of the text. At all events, the certificate of deposit in this case must be treated as an instrument in writing which evidenced a transaction between the parties, and hence must be considered in the light of the same rules of law and evidence as other written instruments. In 3 R. C. L. p. 574, § 202, it is said:

"As regards matters of evidence, a certificate of deposit is usually subject to the rules applicable to other written contracts."

While there is some diversity of opinion with respect to what extent parol evidence may be admitted in actions to recover on certificates of deposit, yet such difference does not relate to the principles governing the parol evidence rule, but arises entirely out of the different forms of certificates and the nature of the transactions. See Coleman v. First National Bank of Elmira, 53 N.Y. 388. See, also, the note to the case of Steckel v. First National Bank of Allentown, 39 Am. Rep. 760, where the subject is thoroughly discussed. Moreover, so-called certificates of deposit are sometimes no more than acknowledgments of the receipt of money, such as ordinary deposit slips, etc., and when such is the case they are treated merely as receipts. See First National Bank, etc., v. Clark, 134 N.Y. 368, 32 N.E. 38, 17 L. R. A. 580. We are, however, not dealing now with such an instrument, but are dealing with a certificate of deposit which, as already pointed out, constitutes a negotiable instrument and not a mere receipt. The certificate in question is for a certain sum, namely, $ 10,000, which is payable at a fixed time, "six months after date," and is made payable to the order of the depositor. The conditions which entitled the depositor to interest, and the rate thereof, are also clearly stated. The rate is four per cent. per annum if the money is "left for six months." Further, the certificate provides, "no interest will be paid after maturity, and all interest is forfeited if principal is drawn before maturity." It would seem that in the absence of a legal modification of the foregoing stipulations, which constitute the contract between the parties, there is little room for real controversy respecting the rights of the respective parties. It has repeatedly been held that such a certificate matures at the time stated; in this case, at the end of six months. First National Bank v. Security National Bank, 34 Neb. 71, 51 N.W. 305, 15 L. R. A. 386, 33 Am. St. Rep. 618, and cases there cited; Hunt v. Divine, 37 Ill. 137.

In Towle v. Starz, 67 Minn. 370, 69 N.W. 1098 36 L. R. A. 463, the certificate was substantially in the same terms as the one in question, and Mr. Justice Buck, in a dissenting opinion, which, however, relates to a point not controverted by the majority of the court, uses the following language, which the writer...