65 Kan. 774 70 P. 880

Henry Kleopfer v. The First National Bank of Herington.

No. 12,796.

(70 Pac. 880.)

SYLLABUS BY THE COURT.

Banks and Banking — A.etion on Deposit — Pleading. A bank is liable in. damages resulting from a non-fulfilment of-its contract to pay the money of its depositor upon demand to the same extent and for the same reason that other persons are liable for the non-fulfilment of contracts. The measure of its liability depends on the circumstances of each individual case. A petition, therefore, which states that a bank, in which the plaintiff had money on deposit, neglected or refused to honor his check or pay it upon demand, states a cause of action.

Error from Dickinson district court; O. L. Moore, judge.

Opinion filed December 6, 1902.

Reversed.

C. S. Crawford, for plaintiff in error.

Hurd & Hurd, for defendant in error.

*775The opinion of the court was delivered by

Greene, J.:

The plaintiff in error sued the defendant in error in the court below. In the petition he alleged that it was a banking corporation engaged in loaning money and receiving deposits; that on September 25, 1900, he secured from it a loan of $892, and executed his promissory note and chattel mortgage securing its payment, and thereupon the bank delivered to him a deposit slip showing that he had deposited therein $892. The petition also alleged that the plaintiff had purchased certain cattle at an agreed price of $900, and had informed the bank that the money which he had. caused to be placed to his credit was. to be used in payment therefor, and the bank agreed to remit said sum of $892 to the bank at Abilene, to be deposited to the credit of George Kleopfer in payment of said cattle; that thereafter the bank refused to make such remittance, and refused, upon demand' of plaintiff, to pay to him the amount of money so deposited; that by reason of such neglect he was unable to retain the possession of the cattle so purchased and was compelled to redeliver them to said George Kleopfer, and was thereby damaged in the difference between the agreed purchase-price and the actual value of the cattle. To this petition the defendant below demurred, which demurrer was sustained. Prom this ruling the plaintiff prosecutes error.

It is argued that the demurrer was properly sustained, because the money so deposited was for the benefit of George Kleopfer, and the refusal of the defendant to remit to George Kleopfer, or to pay the money to Henry Kleopfer, did not result in any damage to Henry Kleopfer. The second reason assigned for sustaining the demurrer was that there were no *776allegations in the petition showing that the plaintiff sustained any damage for which he could recover.

The petition fairly showed that Henry Kleopfer had on deposit in the bank $892, subject to check or order. It was the duty of the bank to pay it out upon the check or order of the depositor. This it refused to do. It violated its contract and is liable- at least for nominal damages. The law implies nominal damages for every tort and the breach of every contract.

A third reason assigned is that, if the plaintiff gave his note and mortgage to the defendant, and the defendant expressly or impliedly agreed to pay the plaintiff the amount of money evidenced by the note and mortgage, but refused to do .so upon demand, a cause of action would have at once accrued for the breach, and the plaintiff could have maintained an action for his damages, which would be the amount due, with interest. To avoid this admitted liability, however, it is contended that the petition shows a settlement between the plaintiff and the bank and that the promissory note and chattel mortgage were by the bank released, canceled, and surrendered, and, therefore, there was nothing upon which plaintiff could recover. This is not a fair interpretation of the petition. The allegation is: “That the promissory note and chattel mortgage referred to in paragraph 4 of this amended petition were by the defendant surrendered, released and canceled on this the 17th day of October, a. d. 1900.” There is no allegation that this was accepted a-s a settlement of plaintiff’s damage. Whether the payment of interest is the measure of the liability of a bank for the non-payment of money to its depositor depends entirely upon the circumstances of each particular case. In Johnson v. Mathews, 5 Kan. 118, 122, the court said:

“A party is always entitled to recover, on the breach *777of a contract, such damages as are the natural, direct and proximate result of such breach ; and he is also entitled to recover such other damages as may reasonably be supposed to have been in the contemplation of both parties, at the time they made the contract, as the probable result of the breach of it.”

It is said in Sutherland on Damages, section 77:

“Where the obligation to pay money is special and has reference to other objects than the mere discharge of a debt, as where it is agreed to be done to facilitate trade, and to maintain the credit of the promisee in a foreign country; to take up commercial paper; pay taxes ; discharge liens; relieve sureties; or for any other supposable ulterior object, damages beyond interest for delay of payment, according to the actual injury, may be recovered. A banker may be liable for damages not measured by. interest for refusing to pay the check of his customer who has provided funds subject thei’eto.” (American Nat. Bank v. Morey, 69. S. W. [Ky.] 759.)

Since the petition did not state facts from which it could be determined that the defendant knew that if it failed to keep its contract plaintiff would be unable to retain the possession of the cattle so purchased, and thereby deprived of the profits of his pux’chase, the loss of profit cannot be an item of damage, not having been in the contemplation of both parties at the time they made the contract as the probable result of a breach of it.

The judgment of the court below is therefore reversed, and the cause remanded with instructions to ovei'rule the demurrer to the petition.

All the Justices concurring.

Kleopfer v. First National Bank
65 Kan. 774 70 P. 880

Case Details

Name
Kleopfer v. First National Bank
Decision Date
Dec 6, 1902
Citations

65 Kan. 774

70 P. 880

Jurisdiction
Kansas

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