Court Opinion

ID: 7107712
Source: CourtListenerOpinion
Date Created: 2022-07-24 12:22:50.040615+00
Date Added: 2024-06-11T16:13:37.834266
License: Public Domain

Kinne, C. J.
1 I. After the City National Bank had intervened in this action, it filed a motion for the removal of the cause to Clinton county, the place of residence of said intervener. This application for a change of the place of trial was made under section 2586 of the Code, which provides for the bringing of personal actions in a county wherein some of the defendants actually reside. Intervener’s thought is that it is the real party in interest, and that the defendant, the Citizens National Bank is a nominal party, only, and made a party solely for the purpose of giving the district court of Scott county jurisdiction of the action. The motion was overruled, and error is assigned thereon. We think the ruling was correct.
Counsel for appellants rely upon several cases, which may be briefly considered. Howell v. Furnace Co., 69 Cal. 153 (10 Pac. Rep. 390), was a case where the company, claiming a residence in San Francisco, held two thousand dollars, to which it made no claim. Howell, the plaintiff, lived in Santa Barbara-county, and brought his action there against the furnace company, claiming the money. In accordance with the provisions of the statute of California, the furnace company paid the money into court, and procured one Thompson, the claimant of it, to be substituted as sole defendant in the case. After Thompson had thus become the only defendant, he moved to transfer the case to San Francisco, the place of his residence. It was held that the lower court erred in not sustaining the motion. In the opinion, stress is laid upon the fact that Thompson did not voluntarily place himself under the provisions of the statute, and the fact that *537he was the only defendant in the case. Buell v. Dodge, 57 Cal. 645, was a case where two parties were made defendants, but the complaint stated a cause of action against only one of them, and it was held he was entitled to a change of venue to his own county. Mill Co. v. Bowen, 7 Iowa, 465, is also relied upon. In that case the holding' was that the defendants spoken of in the statute must be persons having an actual, real and positive interest in the, cause, and not those who consent to be made use of to defraud the real parties.
2 None of these cases are applicable to the facts iu the case at bar. If the action was rightfully brought, in the first instance, against the Citizens National Bank, and if it was liable to the plaintiff upon the cause of action stated in the petition, then the district court of Scott county had jurisdiction, and its right to hear and determine the cause could not be taken away because thereafter the intervener became a party to the suit, and might ultimately be required to reimburse the Citizens National Bank for money paid by it on the check. Was plaintiff’s action properly brought against the Citizens National Bank? Plaintiff’s claim was that said bank had converted its money, and refused to pay it over. Plaintiff was not required to follow the money, which said defendant had improperly paid out on forged indorsement of plaintiff’s check, and recover it from someone who had thus wrongfully received it. We think it clear that plaintiff’s remedy was properly sought against the bank which had, without warrant therefor, paid out the money. It cannot be doubted that, when plaintiff deposited its eight thousand dollars with the Citizens National Bank, it parted with the ownership of its money, and said Citizens Bank became plaintiff’s debtor to that amount. Independent District of Boyer v. King, 80 Iowa, 497 (45 N. W. *538Rep. 908). Therefore, in paying said eight thousand dollars to intervener, upon the faith of a forged indorsement, it paid its own money. Such being the fact, plaintiff would have no cause of action against the intervener. In Bank of British North America v. Merchants Natl. Bank of City of New York, 91 N. Y. 106, wherein the facts were similar to those in the case at bar, the court said: “The defendant was bound to see to it at its peril that tbe indorsement of Mrs. Hal-pin (the payee of the check) was genuine; that it paid the check to one entitled to the payment thereof; and that it got good title to the check as a voucher, and the loss, as between it and the plaintiff [the drawer of the check], for wrongful payment, must fall upon it.” The same question was presented in the case of Corn Exch. Bank v. Nassau Bank, 91 N. Y. 74. It appeared in that case that Kunhardt & Co. deposited money in the Corn Exchange Bank. They drew a check for nineteen thousand dollars to the order of William Ives and John Waters. The Nassau Bank cashed the check on a forged indorsement of the names of the payees, and the Corn Exchange Bank paid it to the Nassau Bank. Kunhardt & Co. sued the Corn Exchange Bank for their deposit. That bank notified the Nassau bank, as was done in this case by the Citizens National Bank, to intervener. The plaintiffs recovered against the Corn Exchange Bank. Thereafter, the latter brought suit against the Nassau Bank to recover the money it had paid on the forged check. It was held in that case that there was no privity between Kunhardt & Co. and the Nassau Bank; that the money received by it was not their money, and that it was not liable to them. It was said that “their money was still on deposit with the plaintiff, and the plaintiff owed them for it.” These cases show that the Citizens National Bank was properly sued by plaintiff. No action was brought against intervener, *539no recovery was sought from it, and it did not occupy such a position as to entitle it to be substituted for the original defendant. Suppose the plaintiff had made the intervener a party defendant with the Citizens National Bank, could intervener have demanded a change of place of trial to the place of its residence? We think not. Certain it is intervener can have no greater rights in that respect than it would have had in the supposed case. Having stated a good cause of action against the defendant; plaintiff was entitled to a trial in Scott county, as against such defendant, regardless of the intervention of the City National Bank of Clinton.
3 II. After the court had overruled the application for a change of the place of trial heretofore mentioned, the intervener answered, setting out substantially the same defenses as had been pleaded by the defendant, the Citizens National Bank; whereupon the intervener made an application for a change of the place of trial, upon the ground of local prejudice, under section. 2590 of the Code. It may be, if this application and the showing made in its support had been made in time, that it should have been granted. But the statute requires such an application to be made before a continuance of the case has been had, and it is not allowed after such continuance except for a cause or causes not known to the affiant before such continuance. Code, section 2591. This application was made after the case had been •three times continued, and it does not appear that the causes for the application were not fully known to affiants long prior to such continuances. For this reason the application was properly overruled.
*5404 *539III. It is said that the court erred in not submitting all the issues to the jury; that other issues, as to which it is claimed there was evidence, were material; and that the jury should have been instructed as to *540them. The answers of the defendant and of the intervener presented substantially the following defenses: (1) That plaintiff bank reported to defendant bank that it had made a loan to Quinlan, and was therefore estopped from denying that the check had been wrongfully paid; (2) that McLaughlin, in the loan transaction, acted as plaintiff's agent; (8) that plaintiff was negligent in not informing intervener that it had dealt only with McLaughlin; (4) that plaintiff was negligent in not informing intervener fully touching the check. In each division of the answer it is alleged that inter1 vener paid the check upon the direction of the plaintiff. The evidence on part of the defendant and intervener tended to show that plaintiff said it had made a loan to Quinlan. They then supposed that they had made such a loan. Because it appears thereafter that McLaughlin forged the application, the mortgage, the acknowledgement, and the recorder’s certificate, does not estop plaintiff from now seeking to recover its deposit with the defendant. The case is not different from what it would be had Quinlan actually negotiated the loan for himself, and McLaughlin had improperly obtained the check, and forged Quinlan’s name, and drawn the money thereon, as he in fact did.
5 It is said that McLaughlin was acting as the agent of plaintiff, and it is responsible for his act in forging Quinlan’s name on the check. If it should be conceded that McLaughlin was so acting as plaintiff’s agent, he could not bind his principal by making a forged indorsement on the check of the payees named. See Welsh v. Bank, 73 N. Y. 424. In the case of Citizens National Bank of Davenport v. Importers and Traders Bank of New York, 119 N. Y. 195 (23 N. E. Rep. 540), the forgery was committed by the bookkeeper of the payees named in the drafts. The payees, Wadsworth & Co., bought drafts *541from the plaintiff bank to remit to their creditors in payment of amounts due the latter. They indorsed the drafts, and delivered them to their bookkeeper, to be mailed to the proper parties. He erased the indorsements, forged others, and used the paper for his own purposes. The court said: “In the first place, we must regard the paper as never having been paid by defendant to the order of the plaintiff, for the rule is, well and long established that a forged indorsement j does not pass a title to commercial paper, negotiable only, by indorsement; and payment by the drawee, although1 in good faith, of a draft so- affected, is no payment at t all as to the true owners. Graves v. Bank, 17 N. Y. 205. It was the defendant’s business to see to it that its depositor’s moneys were expended according to its directions, and every expenditure was at the defendant’s risk of the direction being valid, and of the indorsement conveying title to the holder being gen- j uine.” The case of Weisser v. Denison, 10 N. Y. 68, was, like the one at the bar, brought to recover a deposit claimed to have been paid out on forged checks» The forgery was. committed by the confidential clerk of the depositor. The case was decided in favor of the plaintiff. This last case was followed1 and approved in Welsh v. Bank, 73 N. Y. 424.
6 Nor is the claim well founded that the plaintiff was negligent. In the light of the authorities, there was no negligence on part of plaintiff. True, plaintiff did not discover the forgery for nearly a year, after it had been accomplished. The check was returned with an apparent genuine indorsement of Quinlan. The fact that intervener had paid the money thereon, and presumably had satisfied itself that the indorsement of Quinlan was genuine, as it was in duty bound to do, was a further reason why plaintiff should not, in the absence of knowledge to the contrary, have concerned itself as to the genuineness *542of the indorsement of Quinlan’s name thereon. Furthermore, the-plaintiff owed no duty to'the defendant, or to the intervener, as to the genuineness of the indorsement of Quinlan. This same contention was made in Welsh v. Bank, supra, wherein the court held that a depositor owes no duty to a bank which requires him to examine his pass book or vouchers vith a view to a detection of forgeries of his name. “Whatever loss the bank has sustained it has suffered from its own negligence or want of skill in a matter in which, in the first instance, it, and it only, was bound to exercise care and diligence. To this loss no act of Weisser has contributed. He was guilty of no bad- faith. He has violated no duty which he owed to the bank, and is in no way responsible. He had a right to assume that the bank had discharged its own duty to itself, and was not bound to conceive it possible that the bank had charged him with money which had not been paid upon his order. He was under no contract to examine with diligence his returned checks and bank book.” See, also. Bank v. Rossing, 95 Iowa, 1 (63 N. W. Rep. 351).
Counsel for appellants cite many cases which are claimed to support the theory that plaintiff was guilty of such negligence as should preclude it from recovery. Coggill v. Bank, 1 N. Y. 113, was a case where the drawer of a bill forged the indorsement of the payee, and procured the money on it from a bank, and the drawee accepted and paid the bill to the bank; and it Avas held that he could not, because of the forgery, recover the money back from the bank; that the bank acquired good title to the paper from the drawer, he having negotiated it. Meacher v. Fort, 30 Am. Dec. 364, is a like case. Such a bill is treated as drawn in favor of a fictitious person. Cases are cited where it is held that if the payee or drawer’s conduct has been such as is calculated to mislead the bank *543which cashed the check, or has prevented it from making the usual scrutiny against fraud, it .would be such negligence as should prevent a recovery. Rouvant v. Bank, 63 Tex. 610; Bank v. Bangs, 106 Mass. 444; De Feriet v. Bank, 23 La. Ann. 310; Daniel, Neg. Inst., section 1657. An examination of these cases shows that they are not authority in support of appellants’ contention in this case, under the facts disclosed in this record. The evidence fails to show that there was any negligence on the part of the plaintiff. The court was not bound to submit to the jury matters which, if established, would constitute no legal defense to a recovery, or as to which there was no evidence. We think there was no error in the respect complained of.
7 IY. Before the City Bank paid the check, its cashier had a telephonic communication with a representative of plaintiff’s bank in relation to said check. Intervener claims that in that conversation, and after being advised that McLaughlin was at its bank with a check for eight thousand dollars, in favor of William Quinlan, whom McLaughlin said plaintiff had made a loan to, plaintiff said it had issued such a check, and had made such a loan, that it said: “The check is all right;” that intervener said: “Shall we cash it? Will it be all right if we do?” that the reply was: “It will be all right to cash it.” Mr. Lischer, who represented plaintiff at the Davenport end of the telephone line, states the conversation somewhat differently from intervener’s cashier. He says he said his bank had issued such a check of eight thousand dollars, in favor of William Quinlan, and that “the check is all right.”
Now, the court instructed the jury that the burden of proof was on the defendant, and, in order to defeat plaintiff’s claim, it must establish, by a'preponderance of the evidence, that the payment of said *544check by the City National Bank to McLaughlin was rightful, and justified by law; that the only question they should determine was whether the plaintiff, in the conversation over the telephone, authorized the City Bank to pay said check, in the condition it then was, to McLaughlin. He also told them that ordinarily it is the duty of a bank to whom a check payable to order is presented for payment to ascertain at its peril the title of the person 'presenting it, and his right to receive the money thereon, and that, if such title, purported to come through an indorsement, the bank to whom the check is presented for payment must at its peril know that such indorsement is genuine before it will be protected in advancing money on such paper; that such rule must prevail in this case, unless they found that the City Bank was induced to advance its money on the check by some act or declaration of the plaintiff, which act or declaration was reasonably calculated to, and did, cause the City Bank to advance the money, without informing itself of the title or right of the person presenting the check. Touching this telephonic conversation, he further instructed'the jury that ordinarily any inquiry in relation to the check by the intervener, propounded to the plaintiff, could properly be construed by the latter as relating only to the validity of its signature, and whether it had funds to meet said check, and that nothing more than this information would be understood as being sought, unless specially and plainly asked, and that, after determining what the conversation through the telephone was, they should ascertain and find, in the light of all the surrounding circumstances, whether the City National Bank sought to learn from plaintiff if it (the City National Bank) might safely pay said check without investigation or inquiry as to McLaughlin’s title thereto or the genuineness of Quinlan’s name upon the back, and also *545whether the plaintiff bank, knowing what the City Bank sought, so responded as to reasonably'induce' said City Bank to believe that it was authorized’ so'to1 do; that, if the City Bank paid the check without^ being misled by the plaintiff, they must find for the plaintiff. If, however the City Bank was induced to make the payment to McLaughlin without investigation on its part, by reason of plaintiff’s response, then it would not be liable.
The above is a summary of the instructions given touching this matter. That they were correct we have no doubt, and that they embodied the only real defense pleaded which was legally, under the evidence, available to the defendant and intervener, we think is clear. These instructions were evidently based upon the holding in Espy v. Bank, 18 Wall. 604. Without quoting from that, case, which is a leading one, we may say that it fully .sustains the law as laid down in the instructions of the trial court.in this case. As supporting the same doctrine, see Marine National Bank v. National City Bank, 59 N. Y. 67; White v. Bank, 64 N. T. 316; Clews v. Bank, 89 N. Y. 418.
8 Y. Complaint is made of an instruction of the court to the effect that, if the jury found for the plaintiff, they should include in their verdict, interest on the amount of the check from the time the check was paid. There was no error in this division of the charge. While it appears that the plaintiff did not receive .interest on its deposit account with the Citizens National Bank, still, when said account was reduced by the payment of this check, plaintiff was compelled to supply its place with a like sum of money, in order to keep its deposit intact. Therefore it was deprived of the use of the money so wrongfully paid out. That interest is recoverable in such a case, see Corn Exchange Bank v. *546Nassau Bank, 91 N. Y. 74; 3 Parsons, Cont., page 102. And see also, as bearing upon the question of the right to recover interest on money held by one and belonging to another, Hubenthal v. Kennedy, 76 Iowa, 707 (39 N. W. Rep. 694); Risser v. Rathburn, 71 Iowa, 113 (32 N. W. Rep. 198); Goodnow v. Litchfield, 63 Iowa, 275 (19 N. W. Rep. 226); Mansfield v. Wilkerson, 26 Iowa, 482.
YI. Error is assigned upon the court’s refusal to give certain instructions asked by appellants. They were intended to present the .defendant and intervener’s theory of the case. In so far as they were proper, the thought contained in them was embodied in the instructions given by the court. As framed, they were objectionable, for reasons already stated.
9 YII. Error is assigned upon the action of the court in refusing to submit twelve special interrogatories to the jury. We cannot set them out, as they cover two pages in print. As to these interrogatories, it may be said that if submitted to the jury, and answered favorably to defendant and intervener, they could not, in view of the evidence, have controlled the general verdict; hence it was (not error to refuse to submit them. Dreher v. Railway Co., 59 Iowa, 601 (13 N. W. Rep. 754); Scagel v. Railway Co., 83 Iowa, 380 (49 N. W. Rep. 990). They were also properly refused, because not calling for a finding of fact necessarily determinative of the case. Hawley v. Railway Co., 71 Iowa, 717 (29 N. W. Rep. 787).
10 YIII. Defendant and intervener sought to'show by the witness Smith, who conversed over the telephone with plaintiff’s representative, Lischer, what he (Smith) repeated to one Stone as the answers he received from Lischer; The evidence was rejected. We are cited to no authority in support of the appellant’s claim that such evidence *547is admissible, and we know of no rule which would warrant its admission.
11 IX. After' the jury had been out about twenty-two hours, they were called into the court room during a session of the court, and asked if they were unable to agree on account of any misunderstanding of the law of the case; and the foreman said that they understood the law and the facts, and were unable to agree, whereupon the court said to them, orally: “This case is submitted to you for decision, and not for disagreement. I think I will let you give it a further trial.” It is contended that this statement was error. Counsel’s thought seems to be that the language used was calculated to coerce the jury into agreeing upon a verdict. In Niles v. Sprague, 13 Iowa, 203, the jury was told “that it was important they should agree, if they could satisfy their minds as to the right of the case between the parties.” It was held not error. In Frandsen v. Railway Co., 36 Iowa, 372, it was held not error to instruct a jury which has failed to agree that it is the duty of each juror to lay aside all pride of opinion, and carefully review the ground of his opinion, and to direct them to return to their room, and examine their differences in a spirit of fairness. In Giese v. Schultz, 69 Wis. 521 (34 N. W. Rep. 913), the court said to the jury: “I cannot discharge you now. It is your duty to use every reasonable effort to come to an agreement.” It was held not error. In Jackson v. State (Wis.) 64 N. W. Rep. 838, the court said: “It is your duty to agree upon a verdict if that is possible.” Held not error. In Odette v. State (Wis.) 62 N. W. Rep. 1054, it is held that the court must have a broad discretion in such matters. The cases where directions to a jury touching an agreement have been held error have been where the language used has been such as indicated *548an intention of coercing the jury into an agreement, or where the remarks of the trial judge were such as to impress the jury with the belief that the judge wanted the case decided in favor of a particular party to the suit. Railway Co. v. McCue (Tex. Civ. App.) 35 S. W. Rep. 1080; Mahoney v. Railway Co. (Cal.) 42 Pac. Rep. 968. The language used by the trial judge in the case at bar was proper. The statement that the case was submitted to .them for a decision was a statement of a fact, which, as jurors, they should have known in the absence of admonition to that effect by the court. The last part of the court’s statement indicated simply that he thought the jury should make further efforts to agree. There was no suggestion that he would keep them together until they did agree. The end to be attained by a jury trial is a verdict, and it is desirable, from every point of view, that jurors agree, so that litigants may not be put to the annoyance and expense of more than one trial. Much discretion must be vested in the trial judge in such matters, and, unless such discretion is abused, we should not interfere. In this case there was no impropriety in what the court said.
12 X. It is said that the court erred in refusing to let the jury take to their room certain letters which had been introduced in evidence. The record fails to show that appellants, when the jury retired,' requested that they take the letters, and that the court refused such a request, and that an exception was taken to such a ruling. The question appears to have been raised for the first time in.the motion to set aside the verdict, and for a new trial. It was too late. Shields v. Guffey, 9 Iowa, 322; Turner v. Kelley, 10 Iowa, 573. We have considered all of the questions argued. We discover no error in the rulings and holdings complained of, and the judgment of the district court is affirmed.