First National Bank v. Railsback Bros. & Spelts

Nebraska Supreme Court

First National Bank v. Railsback Bros. & Spelts

78 N.W. 512, 58 Neb. 248, 1899 Neb. LEXIS 150

CourtNebraska Supreme Court

DecidedMarch 8, 1899

DocketNo. 8784

StatusPublished

This text of 78 N.W. 512 (First National Bank v. Railsback Bros. & Spelts) is published on Counsel Stack Legal Research, covering Nebraska Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

First National Bank v. Railsback Bros. & Spelts, 78 N.W. 512, 58 Neb. 248, 1899 Neb. LEXIS 150 (Neb. 1899).

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Opinion

Ryan, C.

This action was brought in the county court of Cass county by G. J. Railsback and others doing a grain busi[249]*249ness at Greenwood as a partnership firm under the name and style of Railsback Bros. & Spelts. By appeal the case came into the district court of that county, wherein, upon a trial had without a jury, there was a finding and judgment in favor of the above described plaintiffs. On February 6, 1894, the firm of Railsback Bros. & Spelts was a depositor in the First National Bank of Greenwood, and on that day drew its check, payable to Sam Atkinson or order, for the sum of $480. This check was transferred by indorsement to A. O. Loder, by whom it was presented to the bank for payment, Avhich was refused. Shortly afterward the bank Avas garnished as a supposed debtor of Atkinson, and upon its answer as such garnishee was required to pay the said sum of $480, Avhich it did in the garnishment suit of Welton against Atkinson. Loder, after the bank had refused to pay the check, brought suit for the amount thereof against the firm of Railsback Bros. & Spelts, and a judgment having been recovered as prayed, said firm paid it, and brought this action for the amount of its said payment and for damages occasioned by the refusal of the bank to honor the check above referred to. The uncontradicted testimony of Loder was that he purchased the check from the payee, Atkinson, in the evening of the day of its issue. On the following -morning he presented it for payment, which was refused by A. D. Welton, acting as teller for the bank, who testified that the reason for dishonoring this check was that, Avhen presented, its drawer had on deposit but $125. He admitted, however, that before the presentation of this check there had been deposited by Railsback Bros. & Spelts two checks drawn by that firm on the Columbia National Bank of Lincoln, each of which was for $500; that he gave the firm credit for that amount and after-wards sent to it a deposit slip showing that amount had been placed to the credit of the firm. He further testified that he had been with the bank for four and one-half or five years and that during this time Railsback Bros. & Spelts always received credits for checks on the Columbia [250]*250National Bank as ordinary deposits in its business; that he had been to Plattsmouth the night previous to the date of the check and had procured the institution of a suit by his grandfather against Atkinson; that when the check was presented he was expecting the appearance of an officer to garnish the bank, and refused to cash the check because he meant to hold the money until service of the garnishment could be made, and took advantage of the fact of the deposit being in checks to treat them as though deposited for collection. The answer of the bank as garnishee was made by this witness, who said that it was the opinion of the officers of the bank that the transfer of the check by the payee to Loder was fraudulent. It is very evident from this and other evidence concerning this transaction that the district court was justified in concluding that there were sufficient funds of Eailsback Bros. & Spelts to pay their check when it was presented, but that payment was refused under a false pretense merely that Mr. Welton might compel the application on his granfather’s claim of the amount by the check required to be paid to Atkinson or his order. This course of dealing the bank resorted to at its peril. By the evidence it was satisfactorily shown that Loder was the holder of the check in good faith, and that he had compelled the drawer to pay it to him. There was a claim in the answer that the action of Loder against Eailsback Bros. & Spelts Avas collusive, but we have found no evidence to support that claim. It was also pleaded in the ansAver that the bank had offered to defend against Loder’s action, but that this offer was refused except upon unreasonable conditions. We find in the record a written offer to defend, which, it was testified, had been seasonably made to Eailsback Bros. & Spelts, but we find no evidence of the refusal to permit a defense to be made, neither do we find an assent so unreasonably conditioned that it was tantamount to such a refusal. With reference to the notice above referred to the only evidence was that of the' bookkeeper of the [251]*251bank, Mr. Welton, who testified that he served on Rails-back Bros. & Spelts a written notice whereby the bank requested said firm’s permission to control the case of Loder against the firm aforesaid by the selection of counsel and the calling of Avitnesses, and an offer to assume responsibility for results if its demand was complied Avitli. Mr. Weston testified that he did not know of any acceptance of this proposition, but that the firm served a notice on him in the matter, in Avhich notice there was a proposition to alloAV the bank to defend. At this point in his testimony there Avas an objection sustained that the notice being in Avriting, no oral evidence Avas admissible. The Avitness had not the notice Avith him and it was never produced. This testimony is not very satisfactory, but it discloses the facts that the bank had notice of the pendency of the action of Loder against Railsbaclc Bros. & Spelts in time to defend; that the bank Avas notified to defend, and that it never did defend. As there was no proof of collusion or any unfairness, and as there is suggested in this case no defense which the bank would have interposed had it attempted to. defend against the claim of Loder, Ave are not at liberty to assume that the court improperly rendered judgment against Railsbaclc Bros. & Spelts. The facts disclosed by the evidence in this case warrant the conclusion that the bank, without justification, withheld payment of the check held by Loder, and that Loder Avas entitled to a judgment for the amount of such check against the drawer thereof.

It is, however, insisted that the court improperly assessed damages against the bank for the Avithliolding of payment of the check when no special damages had been proved. Facts showing that damages had been sustained Avere properly pleaded, and we think from Avkat we have already said that it was shown that the bank unwarrantedly refused to perform a duty which it owed to the drawer of the check. There was no way in which special damages could be proved, but the case falls Avithin the rule laid down in Bank of Commerce v. Goos, 39 Neb. 437, [252]*252with reference to general damages. The judgment Of the district court is

Affirmed.

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Ryan, C.

This action was brought in the county court of Cass county by G. J. Railsback and others doing a grain busi[249]*249ness at Greenwood as a partnership firm under the name and style of Railsback Bros. & Spelts. By appeal the case came into the district court of that county, wherein, upon a trial had without a jury, there was a finding and judgment in favor of the above described plaintiffs. On February 6, 1894, the firm of Railsback Bros. & Spelts was a depositor in the First National Bank of Greenwood, and on that day drew its check, payable to Sam Atkinson or order, for the sum of $480. This check was transferred by indorsement to A. O. Loder, by whom it was presented to the bank for payment, Avhich was refused. Shortly afterward the bank Avas garnished as a supposed debtor of Atkinson, and upon its answer as such garnishee was required to pay the said sum of $480, Avhich it did in the garnishment suit of Welton against Atkinson. Loder, after the bank had refused to pay the check, brought suit for the amount thereof against the firm of Railsback Bros. & Spelts, and a judgment having been recovered as prayed, said firm paid it, and brought this action for the amount of its said payment and for damages occasioned by the refusal of the bank to honor the check above referred to. The uncontradicted testimony of Loder was that he purchased the check from the payee, Atkinson, in the evening of the day of its issue. On the following -morning he presented it for payment, which was refused by A. D. Welton, acting as teller for the bank, who testified that the reason for dishonoring this check was that, Avhen presented, its drawer had on deposit but $125. He admitted, however, that before the presentation of this check there had been deposited by Railsback Bros. & Spelts two checks drawn by that firm on the Columbia National Bank of Lincoln, each of which was for $500; that he gave the firm credit for that amount and after-wards sent to it a deposit slip showing that amount had been placed to the credit of the firm. He further testified that he had been with the bank for four and one-half or five years and that during this time Railsback Bros. & Spelts always received credits for checks on the Columbia [250]*250National Bank as ordinary deposits in its business; that he had been to Plattsmouth the night previous to the date of the check and had procured the institution of a suit by his grandfather against Atkinson; that when the check was presented he was expecting the appearance of an officer to garnish the bank, and refused to cash the check because he meant to hold the money until service of the garnishment could be made, and took advantage of the fact of the deposit being in checks to treat them as though deposited for collection. The answer of the bank as garnishee was made by this witness, who said that it was the opinion of the officers of the bank that the transfer of the check by the payee to Loder was fraudulent. It is very evident from this and other evidence concerning this transaction that the district court was justified in concluding that there were sufficient funds of Eailsback Bros. & Spelts to pay their check when it was presented, but that payment was refused under a false pretense merely that Mr. Welton might compel the application on his granfather’s claim of the amount by the check required to be paid to Atkinson or his order. This course of dealing the bank resorted to at its peril. By the evidence it was satisfactorily shown that Loder was the holder of the check in good faith, and that he had compelled the drawer to pay it to him. There was a claim in the answer that the action of Loder against Eailsback Bros. & Spelts Avas collusive, but we have found no evidence to support that claim. It was also pleaded in the ansAver that the bank had offered to defend against Loder’s action, but that this offer was refused except upon unreasonable conditions. We find in the record a written offer to defend, which, it was testified, had been seasonably made to Eailsback Bros. & Spelts, but we find no evidence of the refusal to permit a defense to be made, neither do we find an assent so unreasonably conditioned that it was tantamount to such a refusal. With reference to the notice above referred to the only evidence was that of the' bookkeeper of the [251]*251bank, Mr. Welton, who testified that he served on Rails-back Bros. & Spelts a written notice whereby the bank requested said firm’s permission to control the case of Loder against the firm aforesaid by the selection of counsel and the calling of Avitnesses, and an offer to assume responsibility for results if its demand was complied Avitli. Mr. Weston testified that he did not know of any acceptance of this proposition, but that the firm served a notice on him in the matter, in Avhich notice there was a proposition to alloAV the bank to defend. At this point in his testimony there Avas an objection sustained that the notice being in Avriting, no oral evidence Avas admissible. The Avitness had not the notice Avith him and it was never produced. This testimony is not very satisfactory, but it discloses the facts that the bank had notice of the pendency of the action of Loder against Railsbaclc Bros. & Spelts in time to defend; that the bank Avas notified to defend, and that it never did defend. As there was no proof of collusion or any unfairness, and as there is suggested in this case no defense which the bank would have interposed had it attempted to. defend against the claim of Loder, Ave are not at liberty to assume that the court improperly rendered judgment against Railsbaclc Bros. & Spelts. The facts disclosed by the evidence in this case warrant the conclusion that the bank, without justification, withheld payment of the check held by Loder, and that Loder Avas entitled to a judgment for the amount of such check against the drawer thereof.

It is, however, insisted that the court improperly assessed damages against the bank for the Avithliolding of payment of the check when no special damages had been proved. Facts showing that damages had been sustained Avere properly pleaded, and we think from Avkat we have already said that it was shown that the bank unwarrantedly refused to perform a duty which it owed to the drawer of the check. There was no way in which special damages could be proved, but the case falls Avithin the rule laid down in Bank of Commerce v. Goos, 39 Neb. 437, [252]*252with reference to general damages. The judgment Of the district court is

Affirmed.

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78 N.W. 512, 58 Neb. 248, 1899 Neb. LEXIS 150, Counsel Stack Legal Research, https://law.counselstack.com/opinion/first-national-bank-v-railsback-bros-spelts-neb-1899.

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