Case ID: wash_12/html/0538-01.html
Source: Caselaw Access Project
Author: {"author": "Scott, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

[No. 1776.
    Decided September 10, 1895.]
    C. L. Taggart, Respondent, v. The First National Bank of Anacortes, Appellant.
    
    ORDER DRAWN ON BANK — ACCEPTANCE — LIABILITY FOR NON-PAYMENT.
    The payment by a bank of checks drawn on a special deposit, while neglecting to apply such deposit to the payment of a prior order drawn thereon and placed in the cashier’s hands by agreement of the parties, will render the bank liable to the owner of the order for the amount due thereon, if sufficient funds had been placed in such special deposit to cover the amount of the order.
    
      Appeal from Superior Court, Skagit County.
    
    
      Hastings & Stedman, for appellant.
    
      Million & Houser, for respondent.
   The opinion of the court was delivered by

Scott, J.

Plaintiff sued the defendant to recover the balance due him upon a certain order given to him by one John Doser, and at the conclusion of the testimony the court directed the jury to bring in a verdict in his favor for the amount claimed; whereupon this appeal was taken.

The evidence disclosed the following facts: One LeBallister was, on the 35th day of December, 1893, the owner of a boom of logs lying at Anacortes, on which the plaintiff held a chattel mortgage for $693.65 and the firm of Taggart & Gilkey, of which plaintiff was a member, held a second chattel mortgage for $303. On said day LeBallister, through his agent John Doser, sold the logs to Nelson & Son Mnfg. Co. to be cut into shingles and shipped. The proceeds of every other car of shingles were to be applied towards paying for the logs, and the bill of lading thereof was to be deposited with the defendant in furtherance of this purpose. The contract containing the terms of sale was deposited with one Perrin, defendant’s cashier, to be held by the bank, as were also the two chattel mortgages, and notes which they secured. The bank collected the amount of the purchase price of the logs, and placed the amount as a special deposit or account to the credit of John Doser, agent. As soon as the bank vbegan to receive money on the bills of lading, Perrin, wrote to Doser that, according to his understanding, the amount of the plaintiff’s claim, by virtue of the chattel mortgages upon the logs aforesaid, was to be paid before anything went to Doser. Doser answered, directing the money to be placed to his credit and asking for a check book, saying that he would pay the plaintiff’s claims by check. Shortly after this, Perrin wrote both Doser and the plaintiff on the same day suggesting that Doser and plaintiff agree on the exact amount due the plaintiff on said mortgage claims, and that Doser give the plaintiff an order for the amount and send it to the bank, sáying it would be paid out of the proceeds of the bills of lading. This was done and on the next day the plaintiff sent the order to the bank as requested. The bank received the order and retained it for several months, and during this time received as proceeds of the bills of lading more than enough to pay the claim, but, instead of paying it, applied the same in payment of checks drawn by Doser for other matters. It appears that there was not enough money in the bank to pay this order in full at any one time, and also that the bank at one time, upon the plaintiff’s asking for money, informed him that they would pay the amount then on hand if he would get a check from Doser for that amount. Whereupon Doser gave the plaintiff a check for $200, which the bank paid, and indorsed the amount upon the original order.

There was no conflict in the testimony as to any of these matters. The defendant admitted that the letters aforesaid were written by Perrin, its cashier, to • Doser and the plaintiff as aforesaid, and that during all the times mentioned it held all of the papers. After holding the same for several months and receiving the money as aforesaid and allowing Doser to check it out contrary to the terms of the agreement, the defendant returned the order to plaintiff and refused payment.

It is contended upon the part of appellant that these circumstances did not bind the hank to hold the moneys received as aforesaid for the plaintiff until his order was paid, and that, notwithstanding it, the bank was bound to pay the subsequent checks drawn upon it by Doser. But we do not so understand it. The bank was a party to this understanding, and it was by the suggestion of its cashier that the plaintiff took the order as aforesaid for the amount of his claim and deposited it with the bank, and upon its promise that it would apply the proceeds received from the logs in payment of it. This was binding upon the bank, and therefore it had no right to pay out such proceeds upon subsequent checks given by Doser for other matters, without retaining enough to pay the plaintiff’s claim.

It was further claimed by appellant that there was a conflict in the evidence. This was true as to one or two immaterial points; but the material facts were conclusively established by the written correspondence of the parties, and these were all in evidence and admitted to he genuine by the defendant.

Judgment affirmed.

Hoyt, C. J., and Dunbar, Anders and Gordon, JJ., concur.