Crab v. Citizens' State Bank

126 P. 520, 22 Idaho 408, 1912 Ida. LEXIS 39

• Court: Idaho Supreme Court
• Decided: August 31, 1912
• Status: Published

Opinions

AILSHIE, J.

(After stating the facts.) — It is clear that Brothers had no authority to cheek against appellant’s private account, and it is equally clear that the bank knew appellant’s name had been signed to the cheeks by Brothers, and that these checks were in fact intended to be drawn against the account of the Atlanta Mercantile Co.

The principle of law contended for by respondent and supported by Leather Mfrs. Nat. Bank v. Morgan, 117 U. S. 96, 6 Sup. Ct. 657, 29 L. ed. 811, First National Bank of Birmingham, v. Allen, 100 Ala. 476, 46 Am. St. 80, 14 So. 335, 27 L. R. A. 426, National Bank of Commerce v. Tacoma Mill Co., 182 Fed. 1, 104 C. C. A. 441, Myers v. Southwestern National Bank, 193 Pa, 1, 74 Am. St. 672, 44 Atl. 280, and 5 Am. & Eng. Ency.’of Law, 1068, is not applicable to the facts of this case. No element of laches is shown here, and no grounds appear for invoking the doctrine of estoppel against appellant. (2 Morse on Banking, sec. 472.) The bank already had notice that these checks should not be paid from Crab’s account. On the other hand, Crab appears to have notified the bank as soon as the bank declined to pay his personal checks and notified him that his private account was overdrawn.

The relation existing between a bank and its depositor is that of debtor and creditor (State v. Thum, 6 Ida. 323, 55 Pac. 858; Morse on Banking, sec. 289), and before a bank can charge the account of its depositor with a cheek drawn by someone else, it must show authority or ratification from the depositor.

Instructions 6, 7, and 8 were erroneous, and not applicable to the facts of this case. They undoubtedly misled the jury to the prejudice of appellant.

The judgment is reversed and a new trial is granted. Costs awarded in favor of appellant.

Stewart, C. J., concurs.