Opinion ID: 2612400
Heading Depth: 1
Heading Rank: 4

Heading: /s/ Dan Palmer

Text: Valley Bank then issued and delivered to Palmer a cashier's check for $6,500.00, payable to Monarch Investment. This cashier's check also had Neibaur's name typed in the lower left-hand corner. At the time Valley Bank issued the cashier's check, the bank charged the Neibaurs' account $6,500.00. Later that same day, an unidentified individual entered a business operated by Monarch Coin Corporation (Monarch Coin) in Salt Lake City, Utah. Monarch Coin is also known as Monarch Investment. This individual asked to purchase $6,500.00 worth of gold coins and presented the cashier's check as payment. Pursuant to the usual practice of Monarch Coin, one of its employees telephoned Valley Bank in Pocatello and spoke to the operations officer. The operations officer informed Monarch Coin's employee that Valley Bank had issued the cashier's check that morning, that the signature on the cashier's check was authorized and that the bank had no notice that the check had been stolen. At the trial of this case, the operations officer testified that she made it clear to the employee of Monarch Coin in this conversation that the cashier's check had been issued for the payment of a backhoe that was purchased by the Neibaurs. The employee of Monarch Coin who had called Valley Bank about the cashier's check testified at trial that in this conversation the operations officer of the bank asked, is this for payment of the backhoe? The Monarch Coin employee testified that she replied, no, ... I'm a coin company and I am calling on that. The Monarch Coin employee testified this was all that was said about a backhoe. Monarch Coin then delivered the gold coins to Palmer in exchange for the cashier's check. The vice president of Monarch Coin endorsed the cashier's check with the words Monarch Investment and stamped the check for deposit to the bank where Monarch Coin had its account. On May 23, 1987, Neibaur obtained possession of the backhoe. Neibaur was to receive a bill of sale by the next day. May 24, 1987, was a Sunday, and the following day was Memorial Day. When Neibaur did not receive a bill of sale by May 26, 1987, Neibaur unsuccessfully attempted to locate and contact Monarch Investment of Colorado and then directed Valley Bank to stop payment on the Neibaurs' check. On May 28, 1987, Valley Bank received the cashier's check for payment. Valley Bank returned the check because the endorsement was irregular. On June 3, 1987, the vice president of Monarch Coin signed the cashier's check with his name as the one endorsing the cashier's check for Monarch Investment and redeposited the check. On or about June 15, 1987, the cashier's check was dishonored by Valley Bank based on the Neibaurs' stop payment order. Palmer was not an agent of either Monarch Investment of Colorado or Monarch Coin. The Neibaurs subsequently learned that the backhoe had been stolen and returned it to its owner. Valley Bank filed an interpleader action alleging that the bank had received a demand from Monarch Coin to pay the cashier's check and a demand from the Neibaurs to stop payment on the cashier's check. Valley Bank deposited $6,500.00 with the clerk of the trial court, which the bank said represented the sums held by it from the cashier's check and from the Neibaurs' check. Valley Bank portrayed itself as an innocent stakeholder and requested the trial court to enter an order releasing and discharging the bank from all liability to Monarch Coin and the Neibaurs on account of the cashier's check and the Neibaurs' check. Monarch Coin counterclaimed, requesting payment of the $6,500.00 represented by the cashier's check, together with interest and attorney fees. The Neibaurs counterclaimed, requesting the $6,500.00 represented by their check, together with interest and attorney fees. Following a court trial in the magistrate's division of the district court, the magistrate ruled that Monarch Coin was a holder in due course of the cashier's check and was entitled to receive $6,500.00, plus interest, from Valley Bank. The magistrate also ruled that Palmer's endorsement of the Neibaurs' check was unauthorized, that Valley Bank was negligent in failing to determine Palmer's authority to cash the check, and that the Neibaurs were entitled to receive $6,500.00 from Valley Bank. magistrate denied interest to the Neibaurs and denied attorney fees to both Monarch Coin and the Neibaurs. Each party appealed the portion of the magistrate's decision that was adverse. On appeal, the district judge affirmed the magistrate's award of $6,500.00, plus interest, to Monarch Coin, but ruled that the magistrate should have awarded attorney fees to Monarch Coin. However, the district judge concluded that Monarch Coin should have taken action to mitigate the accrual of interest by requesting that the $6,500.00 deposited with the clerk of the trial court be placed in an interest-bearing account. The district judge directed the magistrate to reduce the interest payable to Monarch Coin appropriately. The district judge also ruled that Valley Bank was not negligent in accepting Palmer's endorsement of the Neibaurs' check, reversed the magistrate's award to the Neibaurs and directed the magistrate to award attorney fees to Valley Bank against the Neibaurs. The district judge denied attorney fees on appeal to both Monarch Coin and Valley Bank. Each party appealed the portion of the district judge's decision that was adverse.