Opinion
No. 40238.
October 15, 1956.
1. Banks and banking — deposits — depositor suffered no loss from anything bank did in receiving deposits and permitting deductions therefrom.
In suit by depositor against bank to recover sums of money which bank permitted employee of depositor to deduct from deposits, and which were returned to depositor's local office and placed in depositor's cash fund, after depositor had given bank written instructions to effect that funds could only be withdrawn from account for the purpose of transferring funds to a Memphis bank, evidence was sufficient to sustain finding that depositor sustained no loss from anything that bank did in receiving the deposits and permitting deductions therefrom.
Headnote as approved by Arrington, J.
APPEAL from the Chancery Court of Hinds County; L. ARNOLD PYLE, Chancellor.
Dan E. Breland, Jackson, for appellant.
I. The appellant had a deposit contract with the Commercial Bank and Trust Company to pay all funds coming into its hands to Union Planters National Bank and Trust Company. Vol. I, Paton's Digest of Legal Opinions, Sec. 4 p. 1007.
II. The deductions and/or withdrawals were unauthorized and were a breach of contract. Bank of Hickory v. McPherson, 102 Miss. 852, 59 So. 934; Standard Steam Specialty Co. v. Corn Exchange Bank, 220 N.Y. 478; Weissman v. Bank, 224 N.Y.S. 555; 9 C.J.S., Banks and Banking, Sec. 354.
III. The principal is not bound by the acts of his agent when the agent is acting beyond the scope of his authority. Birdsong v. Craig Co., 111 Miss. 708, 72 So. 136; Colt v. O'Dom, 136 Miss. 651, 101 So. 853; Coulson v. Stephens, 122 Miss. 797, 85 So. 83; Havana Co. v. Central Trust Co., 204 Fed. 546; Johnston County Bank v. Scoggin Drug Co., 152 N.C. 142; Milling Co. v. Baking Co., 124 Miss. 205, 86 So. 588; N.Y. Life Ins. Co. v. O'Dom, 100 Miss. 219, 56 So. 379; Odd Fellows Benefit Assn. v. Smith, 101 Miss. 332, 58 So. 100; Foye Tie Timber Co. v. Nicholas, 128 Miss. 709, 91 So. 395; 2 Am. Jur., Agency, Secs. 92, 99; 13 Am. Jur., Corporations, Secs. 891, 922, 944; 40 Am. Jur., Payments, Sec. 279; 7 C.J., Banks and Banking, Sec. 375; Pomeroy's Equity Jurisprudence (4th ed.), Sec. 813.
IV. The bank cannot escape liability upon the theory that the depositor was negligent. Brunswick Corp. v. National Bank (Minn.), 8 N.W.2d 333, 146 A.L.R. 833; Calvin Cool Co. v. Bank, 286 S.W. 901; Cline-Clark Co. v. State Bank Savings Bank of Dallas, 81 S.W.2d 541; Coleman Drilling Co. v. Bank (Tex.), 252 S.W. 215; Deer Island Fish Oyster Co. v. First Natl. Bank, 166 Miss. 162, 146 So. 116; Fifth Natl. Bank v. Bank, 92 Tex. 436; First Natl. Bank v. Patty (Tex.), 62 S.W.2d pp. 141, 629; Franklin v. Bank of America, 31 Cal. 666, 88 P.2d 790; Glassell Development Co. v. Citizens Natl. Bank, 191 Cal. 375, 216 P. 1012, 28 A.L.R. 1427; Glasswell Development Co. v. Bank of Los Angeles, 191 Cal. 375, 216 P. 1012, 28 A.L.R. 1412; Iron City Natl. Bank v. Bank, 31 Tex. Civ. App. 308; Leather Mfg. Natl. Bank v. Morgan, 117 U.S. 96; National Dredging Co. v. Farmers Bank, 6 Penn. (Del.) 580, 69 A. 607, 16 A.L.R. (N.S.) 593, 130 Am.St. 158; Prudential Ins. Co. v. Bank, 227 N.Y. 510, 125 S.E. 824; Richfield Bank v. American Surety, 39 F.2d 387; Southwest Natl. Bank v. Underwood, 120 Tex. 83, 36 S.W.2d 141; Union Tool Co. v. Bank, 192 Cal. 40, 218 P. 424; Weinstein v. Bank, 69 Tex. 38; Wussow v. Badger State Bank, 204 Wis. pp. 467, 475, 234 N.W. 720, 263 N.W. 687; 7 Am. Jur., Banks, Sec. 516 pp. 391, 516; Annos. 15 A.L.R. 146, 28 A.L.R. pp. 1417, 1427; 1 C.J. 711; 7 C.J. 687; 1 R.C.L., Sec. 12 p. 213; 3 R.C.L., Secs. 167-68, 170 pp. 538-39, 541; 7 S.W. 171; 49 S.W. 368; 71 S.W. 612.
V. Appellant is entitled to damages for the loss it sustained. Cutler v. Colonial Bank, 170 N.Y.S. 348; Hamburger v. Bank of Detroit, 218 Mich. 173, 187 N.W. 535; Vol. I, Paton's Digest of Legal Opinions, Secs. 4, 4:11, pp. 1000, 1004, 1006.
VI. This cause of action is not barred by the statute of limitations. Cock v. Abernathy, 77 Miss. 872, 28 So. 18; Deer Island Fish Oyster Co. v. First Natl. Bank, supra; Fowlkes v. Lea, 84 Miss. 509, 36 So. 1936, 68 L.R.A. 925; Jassoy v. Horn, 64 Ill. 379; Masonic Ben. Assn. of Stringer Grand Lodge v. First State Bank of Columbus, 99 Miss. 610, 55 So. 408; Schalucky v. Field, 124 Ill. 617, 16 N.E. 904, 7 Am. St. 399; 25 Cyc. 1041.
Henley, Jones Woodliff, Jackson, for appellee.
I. The Lower Court correctly held that appellant could not recover because it had sustained no loss. Industrial Savings Bank v. People's Funeral Service Corp., 296 Fed. 1006-1007; No Dust O Co. v. Home Trust Co., 46 S.W.2d 203; Armour Co. v. Bank of Lynch, 207 Ky. 203, 268 S.W. 1091; Cutler v. Colonial Natl. Bank, 170 N.Y.S. 348; 7 Am. Jur., Sec. 528 p. 381; 7 C.J., Note 28 (k) p. 677; 9 C.J.S., Sec. 354 p. 727, Note 43 p. 730; Vol. I, Paton's Digest of Legal Opinions, American Bankers Assn., p. 1003; Vol. V, Zollmann on Banks Banking, Sec. 3178 p. 199.
II. Appellate Court will not reverse Trial Court's finding of fact. Fidelity Cas. Co. v. Cross, 131 Miss. 632, 95 So. 631; Deer Island Fish Oyster Co. v. First Natl. Bank, 166 Miss. 162, 146 So. 116; Griffith's Miss. Chancery Practice (2d ed.), Sec. 674 p. 741.
III. Appellant is estopped by its own conduct. Deer Island Fish Oyster Co. v. First Natl. Bank, supra; Annos. 94 A.L.R. pp. 556, 559; 9 C.J.S., Sec. 354 p. 726; Vol. I, Paton's Digest of Legal Opinions, American Bankers Assn., p. 1004.
IV. Appellant is precluded from recovering by equitable defenses. Oxford Production Credit Assn. v. Bank of Oxford, 196 Miss. 50, 16 So.2d 384; Arkansas Power Light Co. v. Bauer-Pogue Co., 194 Ark. 1022, 110 S.W.2d 529; Silverman v. Harmon (Tex.), 250 S.W. 206; 19 Am. Jur., Secs. 55, 66-67 pp. 661, 694-95; Vol. III, Pomeroy's Equity Jurisprudence (5th ed.), Secs. 818, 820 pp. 250, 257.
V. Part of account barred by statute of limitations. Masonic Benefit Assn. v. First State Bank, 99 Miss. 610, 55 So. 408; Dear Island Fish Oyster Co. v. First Natl. Bank, supra; City of Hattiesburg v. Cobb Bros. Constr. Co., 174 Miss. 20, 163 So. 676; Foote v. Farmer, 71 Miss. 148, 14 So. 445; Blount v. Miller, 172 Miss. 492, 160 So. 599; First Natl. Bank of Laurel v. Johnson, 177 Miss. 634, 171 So. 11; Federal Land Bank of N.O. v. Collins, 156 Miss. 893, 127 So. 570, 69 A.L.R. 1068; Sec. 729, Code 1942.
VI. There was an account stated between the bank and the Nelson Company. Detroit Piston Ring Co. v. Wayne County Home Savings Bank, 252 Mich. 163, 233 N.W. 185, 191, 75 A.L.R. 1273; 67 A.L.R. 1126; Vol. V, Zollmann on Banks Banking, Sec. 3384 p. 356.
VII. Appellant's authorities are not applicable, and the theory relied upon by appellant does not justify recovery. Bank of Hickory v. McPherson, 102 Miss. 852, 59 So. 934; Love v. Little, 167 Miss. 105, 148 So. 646; Deposit Guaranty Bank Trust Co. v. Luke, 174 Miss. 98, 164 So. 30; Milling Co. v. Baking Co., 124 Miss. 205, 86 So. 588; Odd Fellows Benefit Assn. v. Smith, 101 Miss. 332, 58 So. 100; Colt v. O'Dom, 136 Miss. 651, 101 So. 853; Coulson v. Stephens, 122 Miss. 797, 85 So. 83; Havana Co. v. Central Trust Co., 204 Fed. 546; N.Y. Life Ins. Co. v. O'Dom, 100 Miss. 219, 56 So. 379; Richfield Bank v. American Surety Co., 39 F.2d 387; Brunswick Corp. v. National Bank (Minn.), 8 N.W.2d 333, 146 A.L.R. 833; Deer Island Fish Oyster Co. v. First Natl. Bank, supra; Cline-Clark Co. v. State Bank Savings Bank of Dallas, 81 S.W.2d 541; Cutler v. Colonial Bank, 170 N.Y.S. 348; Masonic Ben. Assn. of Stringer Grand Lodge v. First State Bank of Columbus, 99 Miss. 610, 55 So. 408; Washington v. Soria, 73 Miss. 665, 19 So. 485; Fowlkes v. Lea, 84 Miss. 509, 36 So. 1036; Jassoy v. Horn, 64 Ill. 379; Schalucky v. Field, 124 Ill. 617, 16 N.E. 904; Cock v. Abernathy, 77 Miss. 872, 28 So. 18; 2 Am. Jur., Agency, Secs. 95, 99; 13 Am. Jur., Corporations, Secs. 922, 944, 1891; 40 Am. Jur., Payments, Sec. 279; 9 C.J.S., Banks and Banking, Sec. 354; 3 R.C.L., Sec. 168 p. 539; Brown's Bank Laws, p. 502; Vol. I, Paton's Digest of Legal Opinions, Secs. 3, 4 pp. 1004, 1006; Vol. V, Zollmann on Banks Banking, Sec. 3487.
Appellant is a foreign corporation with headquarters in St. Louis, Missouri. It operated a place of business in Jackson, Mississippi. It had another place of business in Memphis, Tennessee, and reports were made daily to the Memphis office of business done in Jackson, Mississippi. The auditing covering Jackson operations was done in Memphis. In 1950, appellant opened a deposit account with Commercial Bank Trust Company of Jackson, Mississippi, which bank was later merged with appellee, at which time the appellee assumed the liabilities of the Commercial Bank Trust Company. Appellant gave written instructions to Commercial Bank Trust Company, hereinafter referred to as appellee, which also will designate appellee as its successor, to the effect that funds could only be withdrawn from the account on the signatures of certain persons and only for the purpose of transferring funds to a Memphis Bank.
Over a period of about three years, the Jackson branch of appellant made out deposit slips at its office in depositing proceeds of its daily sales. Most of the deposit slips consisted of a list of checks received in the course of sales and there was some currency. All the checks were endorsed with a stamp, "For deposit only, pay to order of Commercial Bank Trust Company, Jackson, Miss., N.O. Nelson Co., Memphis, Tenn." On many of these deposit slips was a notation "less" various sums ranging some few cents to substantial sums of money. When the teller received these deposits, the "less" sum was handed to the employee of appellant who carried the deposit to the bank and the employee returned the sum thus received by him to the appellant's place of business where it was placed with the company's funds. The total of these deductions from deposits over the period of nearly three years amounted to $2,762.59, which was the amount sued for. Copies of the deposit slips were mailed to the Memphis accounting office of appellant daily together with sales reports. No objection was ever made to the manner in which the bank was receiving the deposits and allowing the deductions. Appellant seems to have lost a large sum of money from a defaulting employee who was manager of the Jackson, Mississippi branch.
Appellant filed suit for the deductions from the deposits and the suit was tried in the county court in equity. From a judgment for appellee on appeal was taken to the Chancery Court where the county court was affirmed. Appellant then brought the case to this Court.
Appellant claims that the appellee bank, in allowing the deductions from the total funds shown on the deposit slip, breached the agreement with the bank as to withdrawals by checks signed by designated individuals; that such deductions were tantamount to allowing withdrawals by unauthorized persons.
(Hn 1) The trier of the facts was fully justified from the evidence to find that appellant sustained no loss from anything the bank did in receiving the deposits and permitting the deductions therefrom. The proof showed that the money thus deducted was returned to appellant's cash fund. We do not find it necessary to consider whether the bank breached the deposit agreement, or whether, if it did breach the agreement, the appellant acquiesced therein and is estopped to complain. The appellant failed to prove it sustained any loss, and that alone is sufficient to require an affirmance of the judgment.
Affirmed.
McGehee, C.J., and Kyle, Ethridge and Gillespie, JJ., concur.