Weaver v. Bank of America Nat. Trust & Sav. Ass'n

Citation59 Cal.2d 428,380 P.2d 644,30 Cal.Rptr. 4
Parties, 380 P.2d 644 Reba WEAVER, Plaintiff and Appellant, v. BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, Defendant and Respondent. L.A. 27112.
Decision Date18 April 1963
CourtUnited States State Supreme Court (California)

Louis J. Renga and Gerald B. Parent, Santa Barbara, for plaintiff and appellant.

Samuel B. Stewart, Robert H. Fabian, and George L. Beckwith, Los Angeles, for defendant and respondent.

TOBRINER, Justice.

This case concerns the liability of a bank whose wrongful dishonor of plaintiff's check resulted in plaintiff's arrest and temporary detention on a charge of petty theft. For the reasons which we shall subsequently set forth we have concluded: (1) that although the payee's complaint to the police constituted the immediate cause of the arrest, a sufficient causal connection remains between the arrest and the bank's dishonor of plaintiff's check to afford plaintiff a cause of action against the bank; (2) that damage to plaintiff's reputation and impairment of her health incident to plaintiff's arrest constitute 'actual damage' within the meaning of Civil Code section 3320. 1

Plaintiff's complaint alleges that she maintained a checking account with defendant bank, which 'agreed at all times to pay out the amount * * * deposited by plaintiff, in accordance with checks drawn by plaintiff on said Defendant Bank when duly presented.' Plaintiff drew a check for $32.68 to the order of J & E Tire Shop. Although plaintiff had on deposit a sum sufficient to cover the check, defendant 'wrongfully refused to pay' the check and 'marked upon the face of the check * * * the letters 'account closed', thereby indicating that plaintiff had no account in the bank.' J & E Tire Shop, 'upon receipt of said check marked 'account closed', and in reliance upon and as a proximate result of said marking,' swore out a warrant for plaintiff's arrest. Thereafter plaintiff was arrested, charged with petty theft, and temporarily confined.

Plaintiff further alleges that the bank and its employees 'knew or should have known that the issuance of a check upon a bank when the maker thereof has no account is a public offense which notoriously and frequently results in the arrest and imprisonment of the maker,' and 'that notwithstanding said knowledge * * * Defendant Bank wrongfully, negligently and wilfully refused to honor said check.' The complaint concludes 'that as a direct and proximate result of Defendant Bank's wrongful and negligent dishonor of said check, plaintiff's reputation was damaged, her health impaired, and plaintiff was arrested and imprisoned causing injury to plaintiff in the sum of $50,000.'

Defendant demurred on the ground that the complaint failed to state facts sufficient to constitute a cause of action. The court sustained the demurrer without leave to amend and accordingly entered judgment for defendant. Plaintiff appeals from the judgment.

Turning to the first issue, that of proximate causation, we summarize the positions of the parties on that subject. While defendant recognizes that a wrongful dishonor generally gives the depositor a cause of action against the bank, it contends that plaintiff seeks damages only for injuries incident to an arrest which the bank did not proximately cause. To support this contention it relies on Hartford v. All Night and Day Bank (1915) 170 Cal. 538, 150 P. 356, LRA1916A, 1220, and Bearden v. Bank of Italy (1922) 57 Cal.App. 377, 207 P. 270. 2 Plaintiff, on the other hand, would distinguish Hartford and Bearden of the ground that those cases sounded in contract while her complaint lies in tort. We do not believe that Hartford and Bearden can be satisfactorily distinguished on plaintiff's basis; those cases, however, were apparently decided upon a theory of proximate causation which has since been repudiated by this court. Thus, as we shall point out, Hartford and Bearden should be overruled on the issue of proximate causation; plaintiff's complaint should be held to state a cause of action.

The complaint, we believe, states a cause of action in both tort and contract. As Allen v. Bank of America (1943) 58 Cal.App.2d 124, 136 P.2d 345, sets forth: '(W)henever the bank fails to discharge its agreement by dishonoring a duly presented check, a right of action then accrues. * * * (W)hile in a sense the injury arises from contract it is nevertheless viewed in another sense, independent of contract, and sounds in tort.' (P. 127, 136 P.2d p. 347.) The weight of authority supports that proposition. 3 Although a few courts have restricted the plaintiff to a single form of action, they are almost equally divided between tort 4 and contract, 5 and in none does it appear that the plaintiff urged the alternative form of action.

In the present case, plaintiff has clearly alleged a contract, its breach, and the negligent or wilfully tortious nature of the breach; plaintiff thus has stated a cause of action in both contract and tort. 6 (See Siminoff v. Jas. H. Goodman & Co. Bank, supra.) Having undertaken no action which could prejudice defendant, plaintiff need not elect her remedy but may go to the trier of fact upon both theories. (Acadia, California, Ltd. v. Herbert (1960) 54 Cal.2d 328, 336, 5 Cal.Rptr. 686, 353 P.2d 294; see Dresser, Procedural Control of Damages by Election of Remedies, 12 Hastings L.J. 171, 179-182 (1960).)

Although we have thus concluded that the complaint encompasses a cause of action in tort, we cannot hold that Hartford and Bearden may be distinguished on the suggested theory that those cases sounded only in contract. The complaint in Hartford charged negligence; the complaint in Bearden, that defendant 'negligently, willfully and maliciously refused to honor said check.' (57 Cal.App. at p. 378, 207 P. at p. 270.) Insofar as the opinions in those cases indicate, the depositors stated causes of action in tort as well as contract. Although Hartford's dependence upon section 3302 may imply that the action there sounded in contract (see Abramowitz v. Bank of America, supra (1953) 131 Cal.App.Supp.2d 892, 897, 281 P.2d 380), it could be argued as convincingly that Hartford's discussion of negligence, proximate cause, and intervening cause implies that the court considered the action in tort.

While Hartford and Bearden cannot be distinguished upon the above-proffered grounds, those cases attempt to uphold a proposition which, we believe, no longer enlists support. They hold that the act of the payee of the check in procuring the depositor's arrest constitutes a superseding cause which severse the chain of causation. Whether we treat the action as one of tort or contract, however, we have concluded that the bank's dishonor of the check serves as a proximate cause of the arrest.

Considering the complaint first as setting out an action in tort, we recognize that the Hartford and Bearden rule of proximate cause commands considerable support in older cases. 7 The rule, however, was rejected by the Supreme Courts of North Carolina (Woody v. National Bank of Rocky Mount 1927) 194 N.C. 549, 140 S.E. 150, 58 A.L.R. 725, and Ohio (Mouse v. Central Savings & Trust Co. (1929) 120 Ohio 599, 167 N.E. 868). In the most recent decision upon the issue the highest court of Connecticut specifically declined to follow Hartford on proximate cause. (Collins v. City Nat. Bank & Trust Co. of Danbury (1944) 131 Conn. 167, 38 A.2d 582, 584.) 8

Not only do these cases sustain the conclusion that the negligence of the bank operated as the proximate cause of the damage but that conclusion finds support in the doctrine of recent cases that the intervening act of a third party will not terminate the defendant's liability for negligence if that act were reasonably foreseeable. (See e. g., Richardson v. Ham (1955) 44 Cal.2d 772, 285 P.2d 269; Warner v. Santa Catalina Island Co. (1955) 44 Cal.2d 310, 319, 282 P.2d 12; Mosley v. Arden Farms (1945) 26 Cal.2d 213, 218, 157 P.2d 372, 158 A.L.R. 872; id. at p. 222, 157 P.2d at p. 376 (concurring opinion of Traynor, J.); Restatement, Torts, § 447-449.)

We cannot hold as a matter of law that the intervening arrest here was so remote a possibility that the bank could not reasonably have foreseen it. The foreseeability of the risk generally frames a question for the trier of fact (see Hilyer v. Union Ice Co. (1955) 45 Cal.2d 30, 37-38, 286 P.2d 21, and cases there cited; Prosser, Torts pp. 373-375; compare Mosley v. Arden Farms Co., supra, at pp. 218-219 with id. at p. 223, 157 P.2d at p. 377 (concurring opinion of Traynor, J.)). Indeed, as to this factual issue we note the opinion of the Ohio Supreme Court that '(b)y the exercise of reasonable diligence, the bank could have foreseen that this exact consequence would occur, for the issuance of a check upon a bank without funds or credit to meet it is a public offense, which, notoriously, frequently results in the arrest and imprisonment of the drawer of the check.' (Mouse v. Central Savings & Trust Co., 1929, 120 Ohio 599, 167 N.E. 868, 870.)

If we consider the case from the viewpoint of a contract action, we reach the same conclusion. While the causal extent of damages may be more limited than in tort (see Hunt Bros. Co. v. San Lorenzo Water Co. (1906) 150 Cal. 51, 56-57, 87 P. 1093, 7 L.R.A.,N.S., 913; Abramowitz v. Bank of America, supra, at p. 896, 281 P.2d at p. 383; compare Civ.Code § 3300 with Civ.Code § 3333), nevertheless, damages actually contemplated, or within the reasonable contemplation of the parties, are recoverable. Such contemplation of the parties does not ordinarily compose an issue which can be resolved on demurrer. (See e. g., Arvin-Kern Co. v. B. J. Service, Inc. (1960) 178 Cal.App.2d 783, 790, 3 Cal.Rptr. 238; Csordas v. United Slate Tile etc. Roofers (1960) 177 Cal.App.2d 184, 2 Cal.Rptr. 133; Ely v. Bottini (1960) 179 Cal.App.2d 287, 294, 3 Cal.Rptr. 756.) The risk of the arrest of the depositor does not depend upon any special...

To continue reading

Request your trial
45 cases
  • California Shoppers, Inc. v. Royal Globe Ins. Co.
    • United States
    • California Court of Appeals Court of Appeals
    • November 26, 1985
    ...The foregoing distinction between the two measures of damages, as defined by these statutes was noted also in Weaver v. Bank of America, 59 Cal.2d 428, 30 Cal.Rptr. 4, 380 P.2d 644, where the court said, "While the causal extent of damages may be more limited [in contract] than in tort (see......
  • People v. La Peluso
    • United States
    • California Court of Appeals Court of Appeals
    • January 28, 1966
  • Reichert v. General Ins. Co. of America
    • United States
    • California Supreme Court
    • July 3, 1968
    ...see Hunt Bros. Co. v. San Lorenzo Water Co. (1906) 150 Cal. 51, 56, 87 P. 1093, 7 L.R.A.,N.S., 913; Weaver v. Bank of America (1963) 59 Cal.2d 428, 434, 30 Cal.Rptr. 4, 380 P.2d 644; Ely v. Bottini (1960) 179 Cal.App.2d 287, 294, 3 Cal.Rptr. Plaintiff argues, however, that the claims assert......
  • Lee v. Bank of America
    • United States
    • California Court of Appeals Court of Appeals
    • March 13, 1990
    ...are permitted for a dishonor which occurs, as in the instant case, by mistake. (Com.Code, § 4402; 10 Weaver v. Bank of America (1963) 59 Cal.2d 428, 437-438, 30 Cal.Rptr. 4, 380 P.2d 644.) Moreover, for any cause of action punitive damages are allowed only upon a showing of "oppression, fra......
  • Request a trial to view additional results
1 books & journal articles
  • CHAPTER 6
    • United States
    • Full Court Press Zalma on Property and Casualty Insurance
    • Invalid date
    ...regard to a statute of limitations, the rule is also applicable in determining liability. (Weaver v. Bank of Am. Nat. Trust & Sav. Ass’n, 59 Cal. 2d 428, 432 [30 Cal. Rptr. 4, 380 P.2d 644] (1963); Lucas v. Hamm, 56 Cal. 2d 583, 589, fn. 2 [15 Cal. Rptr. 821, 364 P.2d 685] (1961);Acadia, Ca......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT