Willard Given & Associates, P.C. v. First Wyoming Bank-East Cheyenne, BANK-EAST

• Decision Date: 05 September 1985
• Docket Number: No. 84-306,BANK-EAST,84-306
• Citation: 706 P.2d 247
• Parties: WILLARD GIVEN & ASSOCIATES, P.C., Willard W. Given and James B. Given, Appellants (Plaintiffs), v. FIRST WYOMINGCHEYENNE, Appellee (Defendant and Third-Party Plaintiff), Harold Walters and Janice Wright, (Defendants and Third-Party Plaintiffs). Robert Larson, an individual, and Charles Hunter, an individual, (Third-Party Defendants).
• Court: Wyoming Supreme Court

Page 247

706 P.2d 247

WILLARD GIVEN & ASSOCIATES, P.C., Willard W. Given and James B. Given, Appellants (Plaintiffs), v. FIRST WYOMING BANK-EAST CHEYENNE, Appellee (Defendant and Third-Party Plaintiff) Harold Walters and Janice Wright, (Defendants and Third-Party Plaintiffs) Robert Larson, an individual, and Charles Hunter, an individual, (Third-Party Defendants).

No. 84-306.

Supreme Court of Wyoming.

Sept. 5, 1985.

Rehearing Denied Sept. 30, 1985.

John J. Maier, Torrington, and James A. Stemmler, member in good standing, State Bar of Missouri, St. Louis, Missouri, signed the brief on behalf of appellants; oral argument by Mr. Stemmler.

John C. Patton and Royann Fransen of Carmichael, McNiff & Patton, Cheyenne, signed the brief on behalf of appellee First Wyoming Bank-East Cheyenne; oral argument by Mr. Patton.

A brief was filed, signed by Kenneth G. Vines of Vines, Rideout, Gusea & White P.C., Cheyenne, on behalf of third-party defendants.

Before THOMAS, C.J., and ROSE, ROONEY, BROWN and CARDINE, JJ.

ROONEY, Justice.

This appeal is from a judgment in favor of appellee-defendant after a trial to the court. Appellants-plaintiffs instituted the action against appellee ¹ for failure to honor a check drawn on the account of appellant Willard Given & Associates, P.C. (hereinafter referred to as "WGA") upon which the payee was altered and for failure to honor it when presented a second time personally by appellant James B. Given for the purpose of obtaining a cashier's check. ² Appellants inartfully word the issues on appeal:

1. "DID THE TRIAL COURT ERR IN HOLDING THAT FAILURE OF CONSIDERATION WAS A GOOD DEFENSE OF DEFENDANT BANK [APPELLEE ] REGARDING ITS REFUSAL TO HONOR ITS CASHIER'S CHECK, SINCE FAILURE OF CONSIDERATION IS AN AFFIRMATIVE DEFENSE WHICH WAS NOT PLEADED BY DEFENDANT BANK [APPELLEE ]?"

2. "DID THE TRIAL COURT ERR IN HOLDING THAT FAILURE OF CONSIDERATION WAS A GOOD DEFENSE OF DEFENDANT BANK [APPELLEE ] REGARDING ITS REFUSAL TO HONOR ITS CASHIER'S CHECK, SINCE FAILURE OF CONSIDERATION IS AN AFFIRMATIVE DEFENSE WHICH WAS NOT PROVED BY DEFENDANT BANK [APPELLEE ]?"

We affirm.

PLEADING FAILURE OF CONSIDERATION

As already noted, the complaint was premised on failure to honor a check drawn on the account of WGA when presented to appellee on two occasions, not the failure to honor a cashier's check, i.e., a check drawn on the account of appellee bank itself. Although the evidence reflected that appellee had indicated that a cashier's check would be issued to Given or to the Equality State Bank upon the second presentation, the cashier's check never was issued ³ and therefore the refusal complained of was the refusal to issue it as promised rather than any refusal to honor the cashier's check. The complaint did not allege a breach of contract to which an affirmative defense could properly be made.

Evidence concerning the promise to issue the cashier's check and the question of consideration was presented and received at trial without objection, and the court considered the case with reference thereto. Rule 15(b), W.R.C.P., provides in pertinent part:

"(b) Amendments to conform to the evidence.--When issues not raised by the pleadings are tried by express or implied consent of the parties, they shall be treated in all respects as if they had been raised in the pleadings. Such amendment of the pleadings as may be necessary to cause them to conform to the evidence and to raise these issues may be made upon motion of any party at any time, even after judgment; but failure so to amend does not affect the result of the trial of these issues. * * *"

The record reflects full exploration of the promise and consideration by the parties, and none of them were prejudiced by the failure to join issue thereon in the pleadings, as these issues were tried by implied or express consent of the parties and treated as if raised in the pleadings. Title Guaranty Company of Wyoming v. Midland Mortgage Company, Wyo., 451 P.2d 798, 801 (1969).

PROVING FAILURE OF CONSIDERATION

Again, this issue as worded by appellants is not accurate in that the cashier's check was never issued and therefore could not be dishonored. WGA had an account with appellee upon which checks could be drawn by appellant Willard W. Given, appellant James B. Given, Robert Larson and Charles Hunter. When an operating agreement between WGA on the one side and Larson and Hunter on the other side was terminated, appellant James B. Given wrote a check, presigned by Willard W. Given, on the account in the amount of $10,324.57 with appellee as payee. He deposited it in a WGA account at the Equality State Bank on August 16, 1982, after scratching out the payee "First Wyoming Bank East" and writing above it "Equality State Bank." When the check was presented to appellee, it refused to honor the check, stamping it "refer to maker." On August 20, 1982, appellant James B. Given learned that the check had not been honored and asked appellee for an explanation. He was told that if he again presented the check, appellee would exchange it for a cashier's check. He then secured the check and again presented it to appellee.

In the meantime, Hunter and Larson learned of the attempt by Willard W. Given and James B. Given to withdraw the $10,324.57 from the account and requested appellee to stop payment from the account. Appellee refused to do so unless a lawsuit was filed, whereupon Hunter and Larson did file an action against WGA to prevent payment from the account. Appellee filed an interpleader for a court order concerning disposition of the funds in the account; the funds were ultimately distributed pursuant to a settlement of the interpleader petition. Since then an accounting between Willard W. Given and James B. Given on one side and Hunter and Larson on the other side over termination of the operating agreement between them has been accomplished and settled in another lawsuit.

Appellants do not contest, on appeal, the district court's holding that appellee's refusal to pay the altered check did not constitute a wrongful dishonor. ⁴ Rather, in the appeal they contend the court erred in not finding the bank liable for refusal to issue the cashier's check. More specifically, appellants complain that appellee did not sufficiently prove failure of consideration to justify the refusal to issue the cashier's check.

When appellee agreed with James B. Given to issue a cashier's check, it was with the obvious expectation that the WGA account would be debited for the amount of the check. When the joint signatories of the account disagreed as to the disposition of the funds in the account, which disagreement resulted in a lawsuit, appellee was placed in the position of potential liability regardless of which of the two alternatives it followed. If it issued the cashier's check and charged the account (making sure that the altered check was returned without payment), Hunter and Larson could contend that appellee acted improperly in the face of their lawsuit, and in the face of their stop-payment order against the check with an altered payee. ⁵ If it failed to issue the cashier's check, appellants could contend, as they do in this action, that appellee's failure caused damage to them. Appellee did that normally done under such circumstances when it interpleaded the matter in the pending lawsuit.

The disposition of the funds in the WGA account under the settlement eliminated the...