Court Opinion

ID: 9764718
Source: CourtListenerOpinion
Date Created: 2023-08-29 03:37:46.886194+00
Date Added: 2024-06-11T07:30:00.996311
License: Public Domain

GANT, Judge,
dissenting.
As the majority points out, the problem here presented has been resolved for the future by the enactment of KRS 287.800, but this statute was not in effect at the time of the transaction here involved.
Of particular significance here are the conversations between the appellant and appellee. When appellant first notified ap-pellee of the mistake, First National requested a letter from French Bank, and a letter only. The impression was thus given by First National to French Bank that nothing else would be required. First National admits that it made no request of French Bank for a bond to protect it. Thus, with no statute requiring the posting of a bond and no request by First National, French Bank sent the requested letter, setting out in detail the error and requesting assistance. The letter further offered to guarantee, protect, and indemnify First National against any loss. This letter was not requested, and First National even erroneously informed French Bank that there were not sufficient funds in the depositor’s account when, in fact, the funds had not been withdrawn.
The majority frets itself needlessly over the possibility of damages from a “potential wrongful dishonor.” Here, there was no wrongful dishonor, in fact no dishonor at all. The law is well stated in 10 Am.Jur.2d, Banks, § 510, where it is pointed out as follows:
It is generally held that where a bank receives money by mistake, and in some manner turns the money over to its depositor or customer, and it cannot readily recover the payment by charging the customer’s account or otherwise, it has changed its position and is not liable for the money paid to it by mistake. However, where the bank is able to recover the money, as by charging the payment against the account of a depositor, it is no defense that it has turned the mistaken payment over to its customer. (Emphasis added).
See also German Security Bank v. Columbia Finance and Trust Co., 27 Ky. 581, 85 S.W. 761 (1905), in which the court held that an irrevocable change of position must occur before the bank can assert a defense against such an error.
Under the facts of this case, where French Bank notified First National of the mistake prior to the time that there had been any change in position, where there was no law requiring the posting of a bond and French Bank offered to guarantee First National against any loss, where every conversation between the parties indicated that the actions taken by French Bank were satisfactory to First National, the law should fall on First National.
I must therefore dissent.