White, C. J.
This is an action by the plaintiff against the defendant bank for the recovery of $4,238.82, part of the bank deposit made in the defendant bank by the plaintiff. After trial, the court entered judgment for the defendant bank and the plaintiff appeals. The sole question involved in this case is whether the bank was legally authorized to debit the plaintiffs account with two checks. The two checks were drawn by another party, Francis L. Sherlock, against his own account and in which account there were insufficient funds to pay said checks in the amounts of $2,184.59 and $2,054.23. The question may be otherwise stated generally as to whether the deposit [675]*675of the plaintiff in the defendant bank was a general deposit or whether it was a deposit for the special purpose of paying these two checks and to be considered as a trust deposit.
From an examination of the evidence in this case, the following facts appear: On August 18, 1960, the plaintiff opened an account with the defendant Nebraska State Bank in the name of Glass Land Company by Oris Glass, a trade name under which the plaintiff did business. This account was opened by the deposit of a check in the sum of $4,500 executed by Eugene Russell, president of The Paddock, Inc. It was payable to Francis L. Sherlock and Glass Land Company and bore a notation in the lower left-hand corner, “Escrow account on Sherlock Farm & Bar.” This check was unrestrictedly endorsed by the payee, Francis L. Sherlock, and delivered to the plaintiff. There is dispute in the evidence, which will be discussed later, as to what happened on August 17, 1960, in an alleged conversation between Russell, the plaintiff, and the bank teller, James G. Melvin. On August 18, 1960, the plaintiff came to the bank to make a deposit of the check, and the transaction was handled on behalf of the bank by James G. Melvin, a teller. This transaction was in the customary form in making a general deposit. Melvin made out a deposit slip which was introduced in evidence'as exhibit 1. This deposit slip was in the usual form without any special notations. At the same time, the plaintiff was also given an account number in the usual form for a general account in the bank. A signature card was completed and executed. The signature card is on a printed form and captioned, “Signature Card,” and immediately beneath this appears the notation, “A - Checking Account - Individual.” Following the filling in of the name of the depositor, this signature card contains a number of detailed printed stipulations and agreements to which the depositor agrees by making a1' deposit. The details of these recitals on the signature card are not [676]*676pertinent here except to demonstrate the nature of the instrument and the intentions of the parties in making it. Beneath the printed stipulation or agreement appear the words, “Authorized Signature,” followed by the handwritten' words, “Glass Land Co. By Oris Glass.” The' rest of this signature card contains the address and the date of August-18, 1960.
On the following day, August 19, 1960, two checks drawn by Francis L. Sherlock against his own individual account, one in the sum of $2,184.59 and the other in the sum of $2,054.23, were debited by Melvin, a teller, against the' account of the plaintiff and transferred to the Sherlock account. There were insufficient funds in the Sherlock account to pay the checks. It is undisputed that there was no written check or written authorization for this debiting or for a transfer transaction. Both of the Sherlock checks referred to above were in the bank in the usual course of business on the morning of August 18, 1960, and were there before the plaintiffs account was opened on that same date. Sherlock is not a party to the case; and he was not called nor did he testify at all.
We go now to the defendant’s evidence. It is all oral in nature and consists of an attempt to show that the deposit made by Glass was for a special purpose, that the money deposited was for a trust deposit, and that the bank was authorized and directed to debit the money in the plaintiff’s account to the Sherlock account. Sherlock did not testify, but it is undisputed that there were insufficient funds in Sherlock’s account to cover the two checks written by him. The defendant’s testimony, in substance, is that on the afternoon before the deposit was made, August 17, 1960, an oral conversation was had between Eugene Russell, the maker of the deposited check, the plaintiff, and Melvin. Melvin, the teller, testified that Glass and Russell asked him if there was some way they could open up an escrow account to take care of the checks of Francis L. Sherlock. He [677]*677testified that after informing them that the opening of such an account was possible, the plaintiff and Russell told him that they would make a deposit for that purpose. Russell, Sherlock, and the plaintiff had been engaged in a transaction involving the sale of real estate, the details of which are not pertinent here except that the sale and the transaction contemplated by the parties was never consummated. Melvin testified that the plaintiff left his telephone number with him with instructions that as soon as checks from Sherlock came into the bank that he was to notify the plaintiff. Melvin then testified, in substance, that after August 18, 1960, he telephoned the plaintiff and received oral authorization from him to transfer money from the new account that had been opened on August 18, 1960, to cover the checks of Sherlock. Melvin transferred from Glass’ account to Sherlock’s account an amount sufficient to cover the two insufficient fund checks of Sherlock. Glass categorically denies all of this testimony, and testified that he was not even in the bank on August 17, 1960, the date of the claimed oral conversation establishing the special deposit. He further denies having had any telephone or oral conversation with Melvin subsequent to the deposit.
The evidence here shows that this was a general deposit. The presumption is that a deposit is general and not special. When Glass deposited the money, as between Glass and the bank, it ceased to be the money of the depositor and became the money of the bank to which the depositor became a creditor of the bank to the extent thereof. Nichols v. State, 46 Neb. 715, 65 N. W. 774; Board of County Commissioners of Seward County v. Cattle, 14 Neb. 144, 15 N. W. 337; State ex rel. Davis v. Farmers & Merchants Bank, 114 Neb. 378, 207 N. W. 666. In this case, what was the nature of the contract of deposit between the plaintiff and the bank? A bank is authorized to pay only to the person designated according to the terms of the contract. A bank, [678]*678in paying out the funds from a general deposit, must comply with its agreement with the depositor. The signature upon which a depositor is to be bound and the bank is to be authorized to disburse the money in a general deposit and charge his account therefor may be whatever authorization that the bank and the depositor agree upon. Federal Land Bank of Omaha v. Omaha National Bank, 118 Neb. 489, 225, N. W. 471; 7 Am. Jur., Banks, § 506, p. 360. A deposit slip, signed by the plaintiff depositor, acceptance of the check, issuance of a signature card, and the signature by the plaintiff depositor to the signature card specifying only one authorized signature for withdrawal, issuance of the general account card, and crediting on the bank books of the deposit generally clearly constituted a written agreement and contract between the bank and the plaintiff depositor not susceptible to any misinterpretation, ambiguity, or indefiniteness.
Free access — add to your briefcase to read the full text and ask questions with AI
White, C. J.
This is an action by the plaintiff against the defendant bank for the recovery of $4,238.82, part of the bank deposit made in the defendant bank by the plaintiff. After trial, the court entered judgment for the defendant bank and the plaintiff appeals. The sole question involved in this case is whether the bank was legally authorized to debit the plaintiffs account with two checks. The two checks were drawn by another party, Francis L. Sherlock, against his own account and in which account there were insufficient funds to pay said checks in the amounts of $2,184.59 and $2,054.23. The question may be otherwise stated generally as to whether the deposit [675]*675of the plaintiff in the defendant bank was a general deposit or whether it was a deposit for the special purpose of paying these two checks and to be considered as a trust deposit.
From an examination of the evidence in this case, the following facts appear: On August 18, 1960, the plaintiff opened an account with the defendant Nebraska State Bank in the name of Glass Land Company by Oris Glass, a trade name under which the plaintiff did business. This account was opened by the deposit of a check in the sum of $4,500 executed by Eugene Russell, president of The Paddock, Inc. It was payable to Francis L. Sherlock and Glass Land Company and bore a notation in the lower left-hand corner, “Escrow account on Sherlock Farm & Bar.” This check was unrestrictedly endorsed by the payee, Francis L. Sherlock, and delivered to the plaintiff. There is dispute in the evidence, which will be discussed later, as to what happened on August 17, 1960, in an alleged conversation between Russell, the plaintiff, and the bank teller, James G. Melvin. On August 18, 1960, the plaintiff came to the bank to make a deposit of the check, and the transaction was handled on behalf of the bank by James G. Melvin, a teller. This transaction was in the customary form in making a general deposit. Melvin made out a deposit slip which was introduced in evidence'as exhibit 1. This deposit slip was in the usual form without any special notations. At the same time, the plaintiff was also given an account number in the usual form for a general account in the bank. A signature card was completed and executed. The signature card is on a printed form and captioned, “Signature Card,” and immediately beneath this appears the notation, “A - Checking Account - Individual.” Following the filling in of the name of the depositor, this signature card contains a number of detailed printed stipulations and agreements to which the depositor agrees by making a1' deposit. The details of these recitals on the signature card are not [676]*676pertinent here except to demonstrate the nature of the instrument and the intentions of the parties in making it. Beneath the printed stipulation or agreement appear the words, “Authorized Signature,” followed by the handwritten' words, “Glass Land Co. By Oris Glass.” The' rest of this signature card contains the address and the date of August-18, 1960.
On the following day, August 19, 1960, two checks drawn by Francis L. Sherlock against his own individual account, one in the sum of $2,184.59 and the other in the sum of $2,054.23, were debited by Melvin, a teller, against the' account of the plaintiff and transferred to the Sherlock account. There were insufficient funds in the Sherlock account to pay the checks. It is undisputed that there was no written check or written authorization for this debiting or for a transfer transaction. Both of the Sherlock checks referred to above were in the bank in the usual course of business on the morning of August 18, 1960, and were there before the plaintiffs account was opened on that same date. Sherlock is not a party to the case; and he was not called nor did he testify at all.
We go now to the defendant’s evidence. It is all oral in nature and consists of an attempt to show that the deposit made by Glass was for a special purpose, that the money deposited was for a trust deposit, and that the bank was authorized and directed to debit the money in the plaintiff’s account to the Sherlock account. Sherlock did not testify, but it is undisputed that there were insufficient funds in Sherlock’s account to cover the two checks written by him. The defendant’s testimony, in substance, is that on the afternoon before the deposit was made, August 17, 1960, an oral conversation was had between Eugene Russell, the maker of the deposited check, the plaintiff, and Melvin. Melvin, the teller, testified that Glass and Russell asked him if there was some way they could open up an escrow account to take care of the checks of Francis L. Sherlock. He [677]*677testified that after informing them that the opening of such an account was possible, the plaintiff and Russell told him that they would make a deposit for that purpose. Russell, Sherlock, and the plaintiff had been engaged in a transaction involving the sale of real estate, the details of which are not pertinent here except that the sale and the transaction contemplated by the parties was never consummated. Melvin testified that the plaintiff left his telephone number with him with instructions that as soon as checks from Sherlock came into the bank that he was to notify the plaintiff. Melvin then testified, in substance, that after August 18, 1960, he telephoned the plaintiff and received oral authorization from him to transfer money from the new account that had been opened on August 18, 1960, to cover the checks of Sherlock. Melvin transferred from Glass’ account to Sherlock’s account an amount sufficient to cover the two insufficient fund checks of Sherlock. Glass categorically denies all of this testimony, and testified that he was not even in the bank on August 17, 1960, the date of the claimed oral conversation establishing the special deposit. He further denies having had any telephone or oral conversation with Melvin subsequent to the deposit.
The evidence here shows that this was a general deposit. The presumption is that a deposit is general and not special. When Glass deposited the money, as between Glass and the bank, it ceased to be the money of the depositor and became the money of the bank to which the depositor became a creditor of the bank to the extent thereof. Nichols v. State, 46 Neb. 715, 65 N. W. 774; Board of County Commissioners of Seward County v. Cattle, 14 Neb. 144, 15 N. W. 337; State ex rel. Davis v. Farmers & Merchants Bank, 114 Neb. 378, 207 N. W. 666. In this case, what was the nature of the contract of deposit between the plaintiff and the bank? A bank is authorized to pay only to the person designated according to the terms of the contract. A bank, [678]*678in paying out the funds from a general deposit, must comply with its agreement with the depositor. The signature upon which a depositor is to be bound and the bank is to be authorized to disburse the money in a general deposit and charge his account therefor may be whatever authorization that the bank and the depositor agree upon. Federal Land Bank of Omaha v. Omaha National Bank, 118 Neb. 489, 225, N. W. 471; 7 Am. Jur., Banks, § 506, p. 360. A deposit slip, signed by the plaintiff depositor, acceptance of the check, issuance of a signature card, and the signature by the plaintiff depositor to the signature card specifying only one authorized signature for withdrawal, issuance of the general account card, and crediting on the bank books of the deposit generally clearly constituted a written agreement and contract between the bank and the plaintiff depositor not susceptible to any misinterpretation, ambiguity, or indefiniteness. That it expressed the intention of the parties with relation to the nature of the deposit, outside of the presumption applicable, there could be little question under the evidence here presented.
Despite the complete and unambigous terms of this transaction and the reduction of the agreements with reference to the deposit in a clearly understandable form used in the usual course of business, the defendant contends that this deposit was for a special purpose. It introduced evidence, to- which there was objection, to show that the real nature of the deposit was for a special purpose and that prior to and contemporaneous' with the actual transaction made, there was an agreement that this money was to be deposited and used only for the purpose of paying the Sherlock checks. We think applicable here are the following pronouncements that we have made with reference to the introduction of parol evidence to vary, to alter, or to contradict by prior or contemporaneous oral testimony the terms of a written contract or transaction. In Theno v. National [679]*679Assurance Corp., 133 Neb. 618, 276 N. W. 375, we said: “The parol evidence rule is not merely one of evidence, but is a rule of substantive law, which declares that certain kinds of facts are legally ineffective, and forbids such facts to be proved at all.”
In Master Laboratories, Inc. v. Chesnut, 157 Neb. 317, 59 N. W. 2d 571, we stated as follows: “The correct rule is set out in Telluride Power Transmission Company v. Crane Company, 208 Ill. 218, 70 N. E. 319, as follows: ‘The rule is, that when the writings show, upon inspection, a complete legal obligation, without any uncertainty or ambiguity as to the object and extent of the engagement, it is conclusively presumed that the whole agreement of the parties was included in the writings. The fact that a point has been omitted which might have been embodied therein will not open the door to the admission of parol evidence in that regard. * * * The rule is too well recognized to require citation of authorities that all preliminary negotiations, whether oral or written, are merged in the written contract.’ ”
We conclude, and it seems obvious, that there was neither ambiguity nor omission within the meaning of the foregoing rules as applied to the writings and the written evidences thereof in this general deposit transaction. The undisputed writings in evidence in this case not only declare the nature of the deposit and the terms and the agreements with respect to withdrawal, but it is clear that they comport and comply with the very conditions imposed and required by the bank itself to open a general deposit account. The bank, by the terms of the declaration and the agreement entered into itself, agreed to be bound by and agreed to honor withdrawals only upon the signature of that person who signed the signature card. Contemporaneous or prior oral agreements to the contrary would be inconsistent with and would deny the very thing that the parties here themselves did. At the time Melvin opened the account for Glass, the Sherlock checks which he sub[680]*680sequently paid out of this account, had already been received and were in the bank. Despite this, and it is significant, Melvin made no notation on the various instruments involved, nor any requirement for authorization from Glass to pay the Sherlock checks at the time that he opened this general deposit for Glass. That the bank itself recognized that no withdrawals could be made except according to the terms of the express written agreement is expressed by the following testimony of Melvin on cross-examination. Referring to the conversations at the time of the opening of the account, the following questions and answers were given: “Q Wasn’t his (Glass’) statement to you that if any checks were to be charged there he was to come in personally and make the transfer himself, isn’t that right? A To the best of my knowledge, yes.” Redirect examination by Mr. Learner: “Q Did you fully hear that question and that is your answer? * * * A Yes.”
The defendant’s theory is that the sum deposited here was a deposit for a special purpose and that when a person makes a deposit for a specific purpose it constitutes a trust deposit and must be treated by the bank as such. The defendant concedes that the burden of proving that a trust deposit existed rests upon the defendant and in order to meet such a test, it must be made by clear and satisfactory evidence. The general rule is well stated in 7 Am. Jur., Banks, § 419, p. 294, as follows: “* * * the burden devolves on the party who claims that the deposit is a special one to show that it was received by the bank with the express or clearly implied agreement that it should be kept separate from the general funds of the bank and that it should remain intact.” (See note 13 citing approximately 22 cases.) See, also, Annotations, 86 A. L. R. 375, 16 L. R. A. 516; Ann. Cas. 1913E 45. Two Nebraska cases are cited by the defendant in support of its position. They are State ex rel. Sorensen v. Bank of Otoe, 125 Neb. 530, 251 N. W. 111; State ex rel. Sorensen v. Farmers & Merchants [681]*681Bank of Deshler, 125 Neb. 800, 252 N. W. 316. Neither of these cases supports the defendant’s proposition as applied to the facts in this case. These cases arose between the depositor and the receiver of an insolvent bank and the question under the particular circumstances was whether the deposit was a trust deposit, which the bank was required to separate out and keep separate from the general funds of the bank. In neither case was the question raised as to whether the bank could transfer funds from one depositor’s account to another without a written signature or authorization by the depositor. We have examined the cases from other jurisdictions cited by the defendant to sustain its position in this case that this was a trust deposit. None of them are applicable to the situation present in this case. There is much testimony in the record as to the nature, the liabilities of, and the agreements between Sherlock, the witness Russell who wrote the check that was deposited, and Glass concerning arrangements that either were made or were disputed as to a real estate transaction and a contract for sale of a farm and a bar. It is significant that Sherlock did not testify in connection with this transaction at all. Russell testified that he gave the check to Glass when in fact it constituted a loan to Sherlock. There is no testimony, even from Sherlock, to confirm this. This testimony is inconsistent with the express memoranda that Russell placed on his check denominating it as relating to an escrow account. By maximum reach, it appears that the defendant bank through Melvin came to the conclusion that Glass was holding the funds deposited as trust funds as between the parties. The evidence in this respect falls far short of a clear and convincing nature in order to establish such a trust relationship. But, in any event, even assuming that Glass was a trustee as between the parties, it would not affect the transaction and issue in this case. The general rule is that a bank which receives a general deposit of money becomes the debtor of the depositor and [682]*682impliedly contracts to honor his checks up to the sum deposited. It seems beyond doubt that if a bank essays or attempts to pass upon the rights of an adverse claimant to the fund deposited, and pays it over to him, or any part thereof, it becomes responsible for the amount so paid to the depositor. 7 Am. Jur., Banks, § 413, p. 289, notes 18 and 19.
This follows the general rule that a fiduciary or trustee may, as a general rule, deposit trust funds in a bank as a general deposit, and with full knowledge of the bank, and the fact that the funds so deposited are trust funds does not destroy the character of the deposit as being a general one, subject to the withdrawal of the trustee depositor, and does not make the deposit a special one. 7 Am. Jur., Banks, § 421, p. 295; Annotation, 53 A. L. R. 564.
Under the evidence in this case and the law applicable thereto, the judgment is hereby reversed and the cause remanded to' the district court with directions to render judgment for the plaintiff’ in the sum of $4,238.82 together with interest.
Reversed and remanded with directions.