Court Opinion

ID: 9725316
Source: CourtListenerOpinion
Date Created: 2023-08-26 11:40:49.575533+00
Date Added: 2024-06-11T18:25:14.013737
License: Public Domain

Boslaugh and Brower, JJ.,
concurring in this dissent.
I am unable to agree with the majority opinion. I find no fault with the conclusion that the deposit involved was a general deposit and that its terms could not be modified by a contemporaneous oral agreement not embraced in the written contract. That, however, is only one phase of the case.
The majority opinion entirely disregards the fact that a written contract may be subsequently modified by parol. 12 Am. Jur., Contracts, § 428, p. 1006.
As early as Erskine v. Johnson, 23 Neb. 261, 36 N. W. 510, this court, in an opinion by Judge Maxwell, held: “A provision in a building contract, that ‘no new work of any description done on the premises, nor any work of any kind whatsoever, shall be considered as extra *683unless expressly contracted for in writing before its commencement,’ will not preclude the parties from afterwards waiving the same, and making changes in the original contract by parol.”
The phase of the case ignored by the majority opinion is whether the bank was subsequently orally authorized to transfer the funds from the account of the plaintiff to pay the two checks involved.
Plaintiff in his petition alleged that the defendant, without any authorization whatever, charged the checks to his account. The answer of defendant contained a general denial, which put the question of authorization in issue.
The plaintiff opened the account in the defendant bank on August 18, 1960, by depositing The Paddock, Inc., check in the amount of $4,500. The two checks written by Sherlock, in the amounts of $2,184.59 and $2,054.23 were received by the bank in the morning mail on August 18, 1960, and were in the bank at the time the account was opened. The custom and practice of the bank was to post all items on the day following their receipt. Consequently, it was not until August 19, 1960, that the bank determined that the Sherlock account was insufficient to pay the two checks which had been received in the mail on August 18, 1960.
On August 19, 1960, the bank teller in charge of returned checks brought the two Sherlock checks to James G. Melvin, another teller of the bank, and the officer who had talked with the plaintiff and had acted for the bank at the time the plaintiff had opened the account.
Melvin then attempted to call the plaintiff by telephone but was unable to reach him. Later that day, at about closing time, the plaintiff called Melvin and, according to Melvin, authorized the transfer of funds from the plaintiff’s account to pay the two Sherlock checks.
The fact that the two Sherlock checks were in the bank at the time the plaintiff opened the account is not im*684portant. Any agreement between the plaintiff and the bank was subject to subsequent oral modification.
The evidence on the specific authorization embraced in the second phase of the case is Melvin’s testimony about the telephone call from the plaintiff to the bank. He testified that the plaintiff had left his telephone number with him with instructions that as soon as the checks from Sherlock came into the bank, that he was to notify the plaintiff. Melvin then testified in substance that on August 19, 1960, he telephoned the plaintiff and could not contact him. He left his telephone number, however, and the plaintiff called back and gave him oral authorization to transfer money from the account that had been opened on August 18, 1960, to cover the checks of Sherlock. Melvin’s testimony in this respect is as follows: “Q The number you had left for him to call, was that the regular bank business number? A Yes. Q Did you then talk to Mr. Glass at 3:00 pan-as stated? A Yes. Q What did he say and what did you say? * * * A He said, ‘Hello Jim, this is Oris Glass’. I said, ‘Yes’. He said, ‘This is Oris Glass. You called me?’ And I said, ‘Yes’. And I proceeded to tell him about the two checks and asked him to come in at the time he could come in to transfer some money. He said he couldn’t get away right at that time and it being 3:00 o’clock, our hour for closing of business I had to either have him do that or send the checks back or transfer the money, which I told him I had to do one of the three, and he asked me could I do the transferring of the money and I said yes I could. Q . Did you then transfer the money? A Yes, I did. * * * Q Was that transfer accomplished by debit memo to the account of Glass Land Company in which the $4500 was placed? A Yes.”
Melvin transferred from Glass’ account to Sherlock’s account an amount sufficient to cover the two insufficient fund checks of Sherlock. Glass denies absolutely all of the testimony with reference to both the original *685claimed oral conversation setting up the trust or special deposit account and the subsequent oral authorization to Melvin to transfer the funds to cover the checks.
It is my position that the trial court’s judgment may be sustained on the basis of the testimony of Melvin that he held a telephone conversation with Glass on the afternoon of August 19, 1960, the day after the final deposit, by which conversation he received direct oral authorization to transfer these funds. Under the terms of a contract of general deposit with the bank, is the bank bound to pay only upon the authorized written signature, or may it rely upon subsequent oral authorization? So far as I have been able to determine, there is no law applying a different rule to bank contracts than to any other type of contract. The rule is that a bank may require, under the terms of a general deposit, the authority of a written signature on a check, but may honor or may disburse or transfer funds upon an oral authorization of the depositor.
The rule is stated in 5A, Michie, Banks and Banking, § 43a, p. 105: “The relation between a bank and a depositor being that of debtor and creditor, the bank can justify a payment out of the depositor’s account only upon the actual direction of the depositor, which may be oral as well as written. It is sufficient if the bank practically carries out the instructions of a depositor as to paying his deposit to the third person; but it is liable for payment of a deposit upon the direction of a person who was unauthorized to give it.” The rule seems to be that a check is. only a written order, and a verbal direction from a customer to a bank to pay a sum, or transfer a credit, is sufficient authority for the bank in so doing. Whitsett v. Peoples Nat. Bank, 138 Mo. App. 81, 119 S. W. 999; Lind v. Porter, 46 Idaho 50, 266 P. 419, citing 2 Michie on Banks and Banking, p. 927; Ellis v. First Nat. Bank, 22 R. I. 565, 48 A. 986; Petty v Gacking, 97 Ark. 217, 133 S. W. 832, 33 L. R. A. N. S. 175.
In the case of Blose Estate, 374 Pa. 100, 97 A. 2d 358, *686a.bank officer received authorization from a general depositor shortly before his death for the transfer of funds belonging to the depositor. In that case, the court rested its decision entirely upon the fact finding that the bank officer had received oral authorization from the depositor saying,’ “* * * a bank may waive its fights to require written orders and may act upon a merely oral order: Ogdon v. Washington Nat. Bank, 82 Ind. App. 187, 145 N. E. 514; See also Watts v. Christie, 11 Beav. 546, 552, 50 E. R. 928; Gaunt v. Alabama Bound Oil & Gas Co. (C.C.A. 8), 281 Fed. 653, 655; 7 Am. Jur. § 504; and 9 C. J. S. § 288, p. 599. If the creditor later seeks to recover from the bank for obeying his oral order, he is estopped: Pierson v. Union Bank & Trust Co., 181 Ky. 749, 205 S. W. 906; see also 2 A. L. R. p. 175.”
In Annotation, 2 A. L. R. 176, the rule is stated as follows: “But a bank may, if it so desires, waive its right to a written order, and is authorized to pay out a fund on deposit or transfer the deposit to the name of another on the oral order of the depositor. Rice v. Bank of Camas Prairie (1896) 5 Idaho, 39, 47 Pac. 856; Neff v. Greene County Nat. Bank (1886) 89 Mo. 581, 1 S. W. 747; Whitsett v. People’s Nat. Bank (1909) 138 Mo. App. 81, 119 S. W. 999; Ellis v. First Nat. Bank (1901) 22 R. I. 565, 48 Atl. 936. See also First Nat. Bank v. Hall (1898) 119 Ala. 64, 24 So. 526.”
A further statement of the rule is in 7 Am. Jur., Banks, § 504, p. 359: “A bank may, however, if it so desires, waive its right to a written order and pay out a fund on deposit or transfer the deposit to the name of another on the oral order of the depositor.”
It is clear, therefore, that under the principles applicable to the authority of a bank arising out of a contract of general deposit with a depositor it may justify a transfer of funds or a payment on the basis of an oral authorization from the depositor. This presented a factual question for determination by the trial court. The testimony in this case revolved around a dispute as to *687whether Melvin, the bank officer involved, actually received such oral authorization. There was competent testimony to sustain the finding that such authorization was received by the bank. The credibility and reasonableness of this testimony is strenuously attacked in the plaintiff’s brief. This being a law action, we may not review a factual determination based upon competent and material evidence, except to determine whether there was sufficient evidence by which a reasonable conclusion could be drawn that such oral authorization was received. Our position should be that the trial court’s finding in this respect has the same posture as a jury verdict upon conflicting evidence. Where the sufficiency of conflicting evidence to support a judgment depends upon the credibility of witnesses who appeared and testified before the trial court, its judgment in that respect will not ordinarily be disturbed. Northwestern State Bank v. Hanks, 118 Neb. 442, 225 N. W. 119; Furse v. Lambert, 85 Neb. 739, 124 N. W. 146.
It therefore appears, applying the principles of law applicable thereto, that the plaintiff entered into a general deposit contract with the bank. Under the law applicable thereto, the bank was entitled to withdraw or transfer the funds to cover these two checks on the oral authorization of the plaintiff Glass. The trial court’s judgment in this respect should have been affirmed.