Magness v. Equitable Trust Co.

Bond, C. J., delivered the opinion of the Court. The appellant, a depositor in the banking department of the trust company, made a practice of issuing checks on the company when he had no sufficient funds on deposit to pay them and then making subsequent deposits to cover them; and as some of the covering deposits were not made in time for crediting on the books of the company, according to its customary methods, before the checks drawn were presented, they were returned for lack of funds. The depositor sued for damages in an action of tort, but a verdict for the defendant was directed, and from the resulting judgment the depositor appeals. The direction of the verdict is the only ruling brought up for review.

The plaintiff depositor is a physician, and appears to have begun this anticipating of credit at the bank prior to 1937. For a time the bank, before dishonoring the checks as they were presented, had been searching among the deposits made on the same day, and making a service charge of twenty-five cents for the extra work; and if no covering deposits were found a charge of one dollar was made. But on February 6th, 1937, the bank wrote the plaintiff that thereafter his checks would be paid only if he had funds available at the close of the preceding business day. He then assured the officials he would have covering deposits made in every instance before one o’clock, the time of the last report to the clearing house, and at his request the abandonment of the investigation of deposits was postponed.

But on April 9th, 1937, another letter informed him that as his manner of conducting his account had not improved, the change, of which he had heen notified on February 6th, would be in effect on and after April 12th. At a meeting with officials of the company, he undertook to do better and correct his method by May 1st, and the special ⁵³⁰ service was furnished for a further time, until his account was closed. He complained in his suit of the return of six checks after April 12th because of lack of funds, when he had funds on deposit, and in thirteen more instances before May 7th he was charged for searches of deposits for his benefit. At the trial he was prepared to show covering deposits for only two dishonored checks.

For a third, drawn to the order of Loyola Building Association, for $35, there were, according to the evidence, no sufficient funds in the bank at any time during the day of presentation; and there was no testimony at all with respect to the remaining checks. The suit is therefore concerned with only two returned checks. The allegations are that, although having sufficient money of the plaintiff’s to pay the checks, the trust company negligently and carelessly did not pay them, to his loss and damage in suffering humiliation and embarrassment, as well as loss of credit. Both of the checks in dispute were drawn at night to the order of a neighboring druggist with whom the plaintiff had dealt since 1923, and by both, after paying any small bills for $5, $10, $15, or $25, he obtained from the druggist cash for his own use.

The first check he drew at about ten o’clock on the night of April 15th, for $175, and at that time he had on deposit $263.31, with another check for $185 drawn against it, and some open charges at the bank to be deducted. Two hours after giving the check, he deposited $170 in cash in a night deposit box, in the wall of the bank, in a bag marked with a number allotted him. The check was presented next day, returned, given the druggist again, and cleared and paid on April 20th. The second check, dated May 1st, 1937, for the same amount, $175, was drawn and delivered on April 30th, between ten and eleven o’clock, at night, when the amount to the plaintiff’s credit was $113.86.

And before one o’clock in the morning he deposited $25 in the night deposit box, and at about noon deposited $150, both deposits