Redo Y Cia v. First National Bank

252 P. 587, 200 Cal. 161, 1926 Cal. LEXIS 225
CourtCalifornia Supreme Court
DecidedDecember 29, 1926
DocketDocket No. L.A. 8452.
StatusPublished
Cited by16 cases

This text of 252 P. 587 (Redo Y Cia v. First National Bank) is published on Counsel Stack Legal Research, covering California Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Redo Y Cia v. First National Bank, 252 P. 587, 200 Cal. 161, 1926 Cal. LEXIS 225 (Cal. 1926).

Opinion

SHENK, J.

—Plaintiff instituted this action to recover $14,200 paid by it to the defendant bank for two foreign bills of exchange drawn by the defendant on the Deutsche Bank of Hamburg, Germany, each being for 40,000 marks.

The plaintiff firm was engaged in the sugar business in Mexico and maintained an office in the city of Los Angeles. In the conduct of its business plaintiff maintained an account with Bartning Gebruder of Hamburg, Germany. On March 22, 1917, plaintiff’s Los Angeles manager inquired of the defendant bank the exchange rate on a draft for 40.000 German marks. The defendant bank thereupon wired its correspondent, the Crocker National Bank of San Francisco, and secured from it the rate of exchange, together with its consent to effect the sale. Thereafter and on March 23, 1917, the plaintiff, through its Los Angeles manager, purchased the first bill of exchange for 40,000 marks from the defendant bank. This bill of exchange was drawn on the above-named German bank and was payable to the plaintiff in marks. At the then prevailing rate of exchange the plaintiff paid $6,920 therefor—the exchange rate of each mark being 17.3 cents. On the same day the defendant notified the Crocker Bank of the issuance of the bill of exchange.

The Crocker Bank had an arrangement with the Deutsche Bank Filíale of Hamburg, Germany, dating from the year 1911, under which the latter honored and paid bills of exchange of the former bank and its correspondents to the extent of 500,000 marks at any time, without previous advice or the deposit of funds.

On April 2, 19Í7, the plaintiff, through its manager, purchased of the defendant bank a second bill of exchange for 40.000 marks similar to the first and paid therefor the sum of $7,280. Upon payment being made each of said bills was delivered by the defendant to the plaintiff’s manager. The amount paid for said two bills of exchange totaled $14,200, the sum sued for herein, of which amount the de *164 fendant asserts it retained $25 as commission and then remitted the remainder to the Crocker Bank.

A state of war was declared to exist between the United States and Germany on April 6, 1917, and mail service between the two countries was officially discontinued on the following day. Prior thereto the Crocker Bank had addressed and mailed to the Hamburg Bank a separate advice of each draft, both of which were received by the latter bank. Subsequent advices mailed by the defendant bank to the Hamburg Bank were returned marked “Mail service suspended to country addressed.” This information was apparently conveyed to the Crocker Bank by the defendant. The continued existence of a state of war between this country and Germany prevented the plaintiff for a considerable period from sending the two drafts to the latter country by mail. Hostilities were terminated on November 11, 1918, by the signing of the armistice, and on July 15, 1919, mail service and commercial transactions between the two countries were resumed. Approximately one month later, August 14, 1919, plaintiff’s Los Angeles manager mailed the two bills of exchange to the home office in Mexico for indorsement to Bartning Gebruder, Germany, together with instructions for their forwarding. The bills were inclosed in a letter bearing date August 20, 1919, and addressed to the indorsee in Germany.

Subsequent to the restoration of peace conditions and the resumption of business relations with Germany the Crocker Bank effected a new credit arrangement with the Hamburg Bank, being known as the neto account, the previous arrangement thereafter being referred to as the old account. No change had apparently been made in the arrangement, however. The bills of exchange were presented by the indorsee to the Hamburg Bank on September 24, 1919, whereupon the latter cabled the Crocker Bank and inquired if they might be paid from the new account, together with “all old drafts.” In reply thereto the Crocker Bank cabled to ascertain the status of the old account and to learn “why above drafts cannot be charged against same.” On October 1, 1919, the Hamburg Bank cabled the Crocker Bank to the effect that at the close of business the old account had a balance of 100,000 marks, but that “according peace condi *165 tions you cannot dispose against same.” The Crocker Bank addressed a letter bearing date November 6, 1919, to the Hamburg Bank “regarding the matter of paying drafts drawn against our old account to the debit of our new account, and would thank you to hold this matter in abeyance for the time being, advising us, however, when our old account is again at our disposal.” Other correspondence passed between the Crocker Bank and the Hamburg Bank relative to the status of the old and new accounts and the payment of the bills of exchange. The bills here involved were never protested, but, after being held for a time by the indorsee, were returned to the plaintiff at Los Angeles. This action to recover the amount paid for said bills of exchange grew out of the return thereof.

Among other things the trial court instructed the jury that laches was not chargeable to the plaintiff nor was the defendant bank relieved of any liability by reason of any delay in the presentation of the drafts to the Hamburg Bank occasioned by the existence of a state of war between the United States and Germany, and that it was the duty of the jury to determine whether the defendant bank had waived protest of the drafts. The jury was further instructed that should it determine that the plaintiff was entitled to recover, such recovery would and should be limited to the value of 80,000 marks in United States money on September 24, 1919, the date of presentment to the drawee, or $3,600; that in addition thereto the plaintiff would be entitled to damages of $15 on each $100 thereof, or $540, together with interest on $4,140—the total of the principal sum and damages—from the date of demand made by plaintiff on the defendant, which date was to be determined by the jury.

After deliberating the jury returned a verdict in favor of the plaintiff in the sum of $14,200—the full amount paid by it for the bills of exchange. The verdict was passed to the court and it declared that “The court cannot accept that verdict. I told you what the extreme amount was that you could find. That is all there is to it. You will retire again.” Considerable discussion thereupon ensued between the court and individual jurors and the court again instructed them that they could award no more than $4,140 and interest thereon to the plaintiff. The jury again retired and brought *166 in a verdict in accordance with the court’s instructions and judgment thereon was duly entered.

Plaintiff urges as a first ground of appeal that the court erred in declining to receive and record the first verdict brought in by the jury. Appellant contends that “the court was bound in law to receive the first verdict rendered by the jury. It could thereafter, on motion, set it aside and order a new trial, but it had no power to compel the jury to render a verdict different in substance.” We cannot uphold this contention. In its instructions the trial court informed the jury that in the event they found or concluded that appellant was entitled to recover from the respondent, such recovery was to be for $4,140, together with interest.

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Bluebook (online)
252 P. 587, 200 Cal. 161, 1926 Cal. LEXIS 225, Counsel Stack Legal Research, https://law.counselstack.com/opinion/redo-y-cia-v-first-national-bank-cal-1926.