Court Opinion

ID: 9471698
Source: CourtListenerOpinion
Date Created: 2023-08-05 03:39:13.588612+00
Date Added: 2024-06-11T17:42:32.610002
License: Public Domain

FAGG, Circuit Judge,
dissenting.
In my view the trial court did not commit reversible error. First, the trial court did not commit error in denying appellants’ motion to amend their complaints to conform to the proof on a breach of contract theory. This theory was not pled in their complaints nor was it tried by express or implied consent of the parties. Testimony which would support a breach of contract theory came in at a time when the midnight deadline claim was still in the case as a pled issue. Thus, because this evidence was relevant to the question whether the midnight deadline rule was violated, lack of objection by defense counsel to its introduction does not indicate that the issue of breach of contract was tried by consent.
The record shows that at the time the district court dismissed the midnight deadline claim appellants’ counsel was aware that his clients may have had an alternative claim based on breach of contract, and counsel suggested that he might seek to amend his pleadings to conform to the proof in order to assert a contract claim. However, a motion to amend was not made at that time. Hence, when Sumitomo proceeded to present its evidence the issue of a violation of the midnight deadline rule had been removed from the case, but a breach of contract issue had not been added. Under these circumstances, Sumitomo had no reason to present evidence concerning a contract theory. Because the contract theory had not been tried by consent, the district court committed no error in denying the motion to amend the complaints at the close of evidence and accordingly refusing to give jury instructions which pertained to a contract theory.'
Second, as a matter of law the facts of this case do not sustain the majority’s determination that the record could support a finding of consideration for Sumitomo’s alleged promise to pay the checks conditioned only on adequate funds being deposited. Ante, p. 377. When it agreed to hold the checks for another day Sumitomo was not seeking relief from the midnight deadline rule. Instead, the president of the Mitchell Bank instructed Sumitomo to disregard the midnight deadline rule and hold the checks until the next banking day based upon an outside chance that covering funds would then be available and the checks would be paid. Otherwise, it is unquestioned that Sumitomo was prepared to return the insufficient funds checks to the Mitchell Bank on April 17. Thus Sumitomo had no reason or desire to be “relieved of its obligation to act within the parameters of the ‘midnight deadline’ rule.” Ante, p. 377.
Furthermore, given Sumitomo’s role as a drawee bank, the agreement between the bank presidents that Sumitomo would pay the insufficient funds checks, conditioned on the availability of funds, carried with it by implication the condition that the checks bore authorized signatures. It is established by the record that Wentland’s signature did not appear as an authorized signa*380ture on the signature card held by Sumito-mo pertaining to the GSC account, and that Sumitomo’s depositors, Nelson and Etter, refused to authorize payment of the two outstanding checks signed by Wentland. The district court’s jury instruction 18, approved by the majority, states that a bank is justified in not paying an item that bears an unauthorized signature. Under these circumstances, therefore, Sumitomo was well within its rights when it complied with its depositors’ demand to close their account on April 18 without paying checks bearing unauthorized signatures, and it did not breach any agreement it had with the Mitchell Bank in so doing. Hence, even if it could be said that the trial court committed error in denying appellants’ motion to amend their complaints to assert a contract theory, logically it would have been futile to grant the motion, since the bank in any event was justified in refusing to pay checks bearing a signature not found on the signature card it held.
I would affirm.