#### W. A. THOMAS v. AMERICAN TRUST COMPANY.

(Filed 1 November, 1935.)

1. Banks and Banking G e: Trial D a — Where evidence shows breach of contract entitling plaintiff to nominal damages, refusal to nonsuit is proper.

Where a bank wrongfully and unlawfully refuses to pay a check of a depositor drawn against his account, the bank breaches its contract with the depositor and the depositor is entitled to nominal damages at least, and where there is sufficient evidence that the bank wrongfully and unlawfully refused to pay the depositor’s check, the bank’s motion for judgment as of nonsuit in the depositor’s action to recover damages therefor is properly refused.

*6542. Banks and Banking C e — In absence of malice, bank is liable only for actual damage resulting from wrongful refusal to pay depositor’s check.

The liability of a bank to a depositor for wrongfully and unlawfully refusing to pay a check of the depositor drawn against his deposit and properly presented for payment, is limited to the actual damage sustained by the depositor when such refusal to pay the check is due to an error or mistake of the employee of the bank and not to malice, C. S., 220 (m), and in the absence of evidence of malice, plaintiff depositor’s recovery should be limited to the issue of actual damage sustained.

3. Same: Trial E d — Instruction on issue of damage in action against bank for wrongfully refusing to pay check held not supported by evidence.

In aii action by a depositor against a bank to recover for the wrongful and unlawful refusal by the bank to pay the depositor’s check, it is error for the court to charge the jury on the issue of damage that it should consider the evidence of damage sustained by plaintiff through injury to his credit and reputation in the community resulting from the bank’s wrongful act when there is no evidence that plaintiff’s credit or reputation had been injured thereby.

Appeal by defendant from *Iiill, Special Judge,*at October Special Term, 1934, of MboKLENBubg.

New trial.

This is an action to recover damages caused by the wrongful and malicious refusal of the defendant to pay a check drawn by the plaintiff on the defendant, and duly presented for payment by the payee of the check.

In its answer, the defendant admitted that it had refused to pay the check drawn on it by the plaintiff, as alleged in the complaint; it denied that its refusal to pay the check was wrongful or malicious; it also denied that plaintiff had suffered damages, actual or otherwise, from its refusal to pay said check.

At the trial, the evidence for the plaintiff tended to show that for more than a year prior to 21 March, 1933, the plaintiff, a resident of the city of Charlotte, had kept an account with the defendant in its bank in said city. The plaintiff from time to time made deposits with the defendant, and from time to time drew checks on the defendant, which were duly paid by the defendant, when presented for payment.

On the morning of 21 March; 1933, when the defendant opened its bank for the day’s business, the plaintiff’s account was overdrawn by a small amount. Soon after the defendant opened its bank, at about 9 o’clock, the plaintiff deposited with the'defendant the sum of $74.60, which was accepted by the defendant, and entered on plaintiff’s pass book as a deposit. At the time the plaintiff made this deposit, he drew his check on the defendant for five dollars. This check was payable to the plaintiff and was paid by the-defendant.

*655After tbe plaintiff bad made tbe deposit of $74.60 and bad received payment of bis check for five dollars, be returned to bis place of business in tbe city of Charlotte, and there drew bis check on tbe defendant for three dollars, payable to tbe order of A. P. Perry. Tbe plaintiff delivered this check to tbe payee, who presented it to tbe defendant for payment at about 10 o’clock that morning. Tbe teller to whom tbe check was presented refused to pay tbe check. He made a note on tbe check as follows: “No account in this name.”

Tbe payee did not notify tbe plaintiff of defendant’s refusal to pay bis cheek, but during tbe morning of 22 March, 1933, procured a criminal warrant from a justice of tbe peace of tbe city of Charlotte, for tbe arrest of tbe plaintiff for issuing a “bad check,” in violation of tbe statute. Tbe officer to whom tbe warrant was directed went to tbe plaintiff’s place of business, and after advising tbe plaintiff that be bad tbe warrant for bis arrest, directed him to appear at tbe office of tbe justice of tbe peace at 3 o’clock that afternoon. Tbe plaintiff was not arrested by tbe officer under tbe warrant.

As directed by tbe officer, tbe plaintiff, accompanied by bis attorney, went to tbe office of tbe justice of tbe peace, at 3 o’clock p.m., on 22 March, 1933. At tbe request of tbe plaintiff, an officer or employee of tbe defendant was present at tbe office of tbe justice of tbe peace, and testified that tbe refusal of tbe defendant to pay tbe check when tbe same was presented for payment by tbe payee was due to a mistake on tbe part of tbe teller to whom it was presented. This teller did not know when tbe check was presented to him at 10 o’clock that plaintiff bad made a deposit at 9 o’clock that morning sufficient to cover bis overdraft and to leave to plaintiff’s credit an amount sufficient for tbe payment of tbe check. After bearing tbe evidence, tbe justice of tbe peace found that tbe plaintiff was not guilty as charged in tbe affidavit on which tbe warrant was issued, and dismissed tbe action. Tbe defendant voluntarily paid tbe costs of tbe action.

At tbe trial of this action tbe plaintiff testified that his credit as a business man in tbe city of Charlotte bad not been affected by tbe issuance of tbe warrant by tbe justice of tbe peace, or by the trial of tbe criminal action. He said: “I do not know of any place where my credit has been affected by tbe issuance of tbe warrant or by tbe trial. Tbe only injury which I suffered was restlessness during tbe night following tbe trial. When I thought of tbe criminal charge unjustly made against me, I felt humiliated.”

At tbe close of tbe evidence, tbe defendant moved for judgment as of nonsuit. Tbe motion was denied, and defendant excepted.

Tbe issues submitted to tbe jury were answered as follows:

“1. Did tbe defendant wrongfully and unlawfully refuse to pay or honor plaintiff’s check, as alleged in tbe complaint? Answer: ‘Yes.’

*656“1 Did the defendant wrongfully and unlawfully represent to the payee of the check drawn by plaintiff on defendant bank that plaintiff had no account in said check, as alleged? Answer: ‘Yes.’

“2. "What general damages, if any, is the plaintiff entitled to recover ? Answer: ‘$500.00.’

“3. What special damages, if any, is the plaintiff entitled to recover ? Answer: ‘$100.00.’”

From judgment that plaintiff recover of the defendant the sum of $600.00, and the costs of the action, the defendant appealed to the Supreme Court, assigning as error the refusal of the court to allow its motion for judgment as of nonsuit, and certain instructions of the court to the jury to which defendant duly excepted.

*Merl M. Long and Jalee F. Newell for plaintiff.*

*Whitlock, .Dockery & Shaw for defendant.*

CoNNOR, J.

There was evidence at the trial of this action from which the jury could find, as it did, that the refusal of the defendant to pay the check which was drawn by the plaintiff and duly presented for payment by the payee, was wrongful and unlawful. Such refusal was a breach of the contract between the plaintiff and the defendant with respect to plaintiff’s deposit with the defendant. For such breach, the plaintiff was entitled to nominal damages, at least. *Woody v. Bank,*194 N. C., 549, 140 S. E., 150. For this reason, there was no error in the refusal of the court to allow defendant’s motion for judgment as of nonsuit.

There was no evidence, however, tending to show that defendant’s refusal to pay the check was malicious. All the evidence shows that the nonpayment of the check was due to a mistake or error on the part of the defendant’s teller to whom the check was presented for payment. For this reason, plaintiff’s recovery in this action is limited to the actual damages which he suffered by the refusal of the defendant to pay his check.

It is provided by statute that “no bank shall be liable to a depositor because of the nonpayment, through mistake or error, and without malice, of a check which should have been paid had the mistake or error of nonpayment not occurred, except for the actual damages by reason of such nonpayment that the depositor shall prove, and in such event the liability shall not exceed the amount of damages so proven.” C. S., 220 (m).

With respect to the second issue, the court instructed the jury as follows:

*657“The court instructs you that if you find by the evidence and by its greater weight, the burden being on the plaintiff, that the defendant wrongfully refused to honor the plaintiff’s check, as alleged, or wrongfully represented that the plaintiff had no account in the defendant’s bank, and that in consequence of the latter, the plaintiff’s check was turned down, and you further find from the evidence and by its greater weight that as a proximate result of this the plaintiff’s credit was impaired or impeached, or his standing injured, or his reputation impaired, then the jury should award such damages as they shall find from the evidence and by its greater weight to be a reasonable compensation for the injury, if any, to the plaintiff’s credit, standing, or reputation, brought about and proximately sustained in consequence and as the proximate result of'the defendant’s alleged wrongful conduct, if the defendant was guilty of any alleged wrongful conduct.”

The defendant’s exception to this instruction must be sustained. There was no evidence from which the jury could find that plaintiff’s credit had been injured, his standing impaired, or his reputation impeached by the refusal of the defendant to pay his check. The plaintiff himself testified to the contrary.

For the error in the instruction, the defendant is entitled to a new trial.

At the new trial, we think that the only issue as to damages should be as follows: “What actual damages, if any, has the plaintiff sustained by the wrongful refusal of the defendant to pay his check?”

Whether there was evidence at the former trial tending to show more than nominal damages, we do not now decide.

New trial.