(290 S.W.) Main building and 60 feet additional on the | 11, and said trustees shall not waive any of south side from the brick wall of said building, their rights under said contract of February said 60 foot being of equal width across said 25, 1925, by acceptance of the payment except lot, from east to west. In case there are any that they shall not insist upon a repayment of law suits pending affecting the title to said the amount. property, I agree that you may have the privilege of prosecuting said suits and perfecting the title of said real estate in whatever way is necessary to make good title, provided that you will give me a personal guarantee of yourself and F. P. Hall that you will hold me harmless by reason of any such liens or defect of title, until same are released or title perfected. "This contract and agreement consists of two pages, executed in duplicate this February 25, 1925. J. N. Ward. "We hereby acknowledge receipt of $1,000 paid by J. N. Ward on the above contract, which we have accepted and signed on behalf of the Arkansas Cold Storage & Ice Company this 25th day of February, 1925. "J. H. McIlroy, Trustee. "Approved: F. P. Hall, Trustee." The testimony in this case shows that, after a survey was made and the controversy arose with reference to lot 11, the parties went ahead with the transaction, and entered into an agreement and bill of sale to close the trade and to litigate the question as to the title to lot 11. The agreement and bill of sale is as follows: "Whereas, the proposition of J. N. Ward to J. H. McIlroy, trustee, under date of February 25, 1925, relative to buying property of Arkansas Cold Storage & Ice Company at Fayetteville and Springdale, Ark., was accepted by J. H. McIlroy, trustee, and approved by F. P. Hall, trustee, and $1,000.00 was paid on said proposition, and "Whereas, by a warranty deed the trustees under the agreement and declaration of trust dated May 15, 1922, and recorded in volume 207 at page 478, of the Deed Records of Washington county, Ark., have conveyed to J. N. Ward, trustee, lots seven and ten in block 6 in Fayetteville, Ark., and a part of lot 1 in block seven in Fayetteville, Ark., more particularly described in said deed; also parts of lots 1 and 6 in block one of Holcomb's addition to the town of Springdale, particularly described in said deed; and "Whereas, it is the contention of the said J. N. Ward that he is entitled to have conveyed to him lot 11 in block 6 in the town of Fayetteville under the terms of said proposition made by him and accepted by the said McIlroy and Hall, trustee: "It is agreed between the said J. N. Ward and J. H. McIlroy, William J. Hamilton, F. P. Hall, W. H. McIlroy, Luke Powell and C. G. Dodson, trustees, that the said J. N. Ward may accept said warranty deed and pay the purchase price of the said property without waiving in any way his right to litigate his claim to said lot 11 under the terms of said proposition of February 25th, and the said trustees hereby ratify and approve the acceptance of the said McIlroy and Hall of said proposition of February 25, 1925, and hereby agree that by payment of the purchase price said J. N. Ward shall not waive any of his rights to insist upon a conveyance from the trustees aforesaid of said lot "And we, J. H. McIlroy, W. H. McIlroy, W. T. Hamilton, F. P. Hall, Luke Powell, and C. G. Dodson, trustees, doing business under the name of Arkansas Cold Storage & Ice Company by virtue of an agreement and declaration of trust dated May 15, 1922, hereby transfer, assign, and sell to the said J. N. Ward, for and in consideration of the sum of $1, and other good and valuable consideration, the personal property of every kind and character belonging to us as trustees or to the Arkansas Cold Storage & Ice Company, located on the real estate conveyed by the said warranty deed and also all personal property which was contracted for by us prior to February 23, 1925, and which has since been delivered and placed on said real estate so conveyed. "And it is agreed between parties hereto that in all things said proposition of J. N. Ward as accepted by J. H. Mcllroy and F. P. Hall is confirmed and made a part of this contract, a copy of which proposition and acceptance is hereto attached and marked Exhibit A. "It is further agreed that, in the event the said J. N. Ward shall bring a suit on said contract of February 25, 1925, for lot 11, we will enter our appearance to said suit, and that said suit may be tried on the merits as to whether or not under said contract he was entitled to said lot without any claim or waiver on his part by paying the purchase price of said property, or any waiver on part of trustees by accepting it. "In testimony whereof we have hereunto set our hands this 28th day of March, 1925. "[Signed] J. H. Mcllroy, "W. H. McIlroy, "F. P. Hall, "Wm. J. Hamilton, "C. G. Dodson, "Parties of the first part. "J. N. Ward, "Party of the second part." The only controversy in this case is as to whether appellees conveyed lot No. 11. The testimony on the part of the appellees tends the sale of the property was made by appelto show that, before any action looking to lees to appellant, appellees had sold lot 11 in block 6 to Sanford. They not only testified to this, but testified that this fact was. stated to J. N. Ward, appellant, when he was on the deal for the property. Witnesses for appellant deny this. The testimony is in hopeless conflict, and it would serve no useful purpose to set it out at length. [1] The appellant's first contention is that the contract between the parties was in writing, and that parol evidence is inadmissible to vary or contradict the terms of the written contract. But does the oral testimony in this case vary or contradict the terms of the written contract? The contract says: "Confirming my proposition relative to buying the property of the Arkansas Cold Storage "No weight is given to the findings of fact by the trial court unless the evidence is so conflicting as to leave the minds of this court in doubt as to where the preponderance lies. Where the evidence is evenly poised, or so nearly so that we are unable to determine in whose favor the preponderance lies, then the findings of fact by the chancellor are persuasive. ** * *The rule was early announced and has been consistently adhered to that the find this court unless they are clearly against the preponderance of the evidence." Leach v. Smith, 130 Ark. 465, 197 S. W. 1160. The testimony in this case was conflicting, and, after a careful consideration of the same, we are unable to say that the findings of the chancellor are clearly against the preponderance of the evidence. is therefore affirmed. The judgment "Parol evidence to vary the terms of a written contract is one thing; such evidence to enable the court to say what the parties to the contract intended to express by the language adopted in making it is quite another thing. The former is not permissible. * * *The lat-ings of the chancellor will not be set aside by ter is permissible, and is often absolutely essential to show the real nature of the agreement. * * * Both rules are elementary and do not conflict in the slightest degree with each other. One prevents a written contract from being varied by parol evidence either in regard to what was said at the time it was made or prior thereto; the other aids in determining what the contract is when its language, either in its literal sense or as applied to the fact, is obscure. The one is a rule to preserve the contract as expressed in writing; the other is a rule of construction to determine what the contract, as expressed, is, it being kept in mind that the mutual intention of the parties, so far as the same can be ascertained, governs within the reasonable meaning of the language they chose to express it; and that rules of construction to discover it are not to be resorted to unless there is some ambiguity to be cleared up. A failure to keep in mind the wide distinction between varying a contract by parol evidence and resorting to such evidence in aid of its construction often leads to error." Brown & Hackney v. Daubs, 139 Ark. 53, 213 S. W. 4. If the appellant went to Fayetteville and looked at the property, and it was pointed out to him, and he was told that lot 11 had already been either conveyed or contracted, and he knew that this was not included in the property which appellees were offering to sell, then certain parol evidence would be admissible to show the particular property pointed out to him, and, when he made his proposition in writing for the purchase of the property of appellees, it would necessarily mean the property pointed out to him and the property both parties had in mind. We therefore think the court did not err in permitting oral proof to enable the court to say what the parties to the contract intended to express by the language used. HUMPHREYS, J., did not participate in this case. CITY NAT. BANK OF FT. SMITH v. CITI- (Supreme Court of Arkansas. Jan. 24, 1927.) Generally, where check is offered and received by drawee bank, credited to holder's account, and charged to drawer's account, transscinded or recalled except for fraud or misaction is irrevocably closed and cannot be retake. 2. Contracts 93(1), 94(1)-Fraud or mistake vitiates every transaction in equity. In equity, fraud or mistake operates to vitiate every transaction. 3. Bills and notes 72-Drawee bank may correct mistake in crediting forwarding bank for draft, where forwarding bank suffered no loss thereby. Where bank forwarding draft for collection [2] Appellant's next contention is that the suffered no loss by reason of drawee bank misfinding of the chancellor is clearly against bank had right to correct mistake on same day takenly crediting account therewith, drawee the preponderance of the evidence. On ap-on discovering drawer had no funds with which peal in chancery cases this court tries the is- to meet draft, since postal card informing forsues de novo, and the findings of the chancel- warding bank of credit was not intended to be lor are always treated as persuasive, and absolute acceptance. his findings will be reversed only when this 4. Bills and notes 70-There is no acceptcourt can be convinced that they are clearly against the preponderance of the evidence. ance of draft by delivery until it passes through books of bank, making complete Leach v. Smith, 130 Ark. 465, 197 S. W. 1160; transaction. Langston v. Hughes, 170 Ark. 272, 280 S. W. 374. There can be no acceptance by delivery to bank on whom draft was drawn until draft For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes (290 S.W.) passes through books of bank, charging draw- received by the Citizens' Bank of Pettigrew er's account, crediting account of remitting on November 14, 1923. bank, and making complete transaction. According to the testimony of the cashier of the City National Bank, Conneway was Appeal from Washington Chancery Court; not a regular customer of the bank, but had Lee Seamster, Chancellor. Suit by the Citizens' Bank of Pettigrew against the City National Bank of Ft. Smith. Decree for plaintiff, and defendant appeals. Reversed, and action dismissed. So far as the issues raised by the appeal in this case are concerned, this is a suit in equity by the Citizens' Bank of Pettigrew against the City National Bank to recover the sum of $1,000, the amount of a draft drawn on the defendant in favor of the plaintiff and alleged to have been accepted by the defendant. The suit is defended on the ground that the drawer of the draft had no funds in the defendant's bank with which to pay it and that the acceptance of the defendant was made under a mistake of fact. The record shows that on November 10, 1923, the Citizens' Bank of Pettigrew, in Madison county, Ark., mailed at Pettigrew to the City National Bank of Ft. Smith, Ark., the following draft: "Nov. 6, 1923. "The Farmers' State Bank, Oklahoma City, Okl. "Pay to the order of Citizens' Bank ($1,000.00) one thousand dollars for value received and charge to account of R. J. Conneway. To City National Bank, Ft. Smith, Ark." borrowed money from it on one occasion previously and had deposited some collateral security with the bank. The amount so borrowed was due and unpaid at the time of the transaction in question, and the collateral was The draft and the notice of nonpayment still in the hands of the City National Bank. take of the stenographer and the actual date was dated November 15th, but this was a mis was November 13th. The direction of the cashier to return the draft with notice of but too late to be forwarded to the Bank of nonpayment was made during banking hours Pettigrew on that day. The Citizens' Bank of Pettigrew refused to accept the return of the draft on the ground that the postal card received by it, above recheck and was not merely an advice card ferred to, was an absolute acceptance of the showing the receipt of the draft as claimed by the Citizens' National Bank. R. J. Conneway had been connected with the Citizens' Bank of Pettigrew, and that bank knew that he had no funds on deposit in the City National Bank at the time the draft in question was drawn, but it expected that Conneway would be in Ft. Smith on November 12, 1923, and arrange for the payment of the draft. Conneway had returned from Oklahoma and was in the Citizens' Bank of Pettigrew on the day the card of acceptance or advice was received, which was November 14, 1923. The Citizens' Bank of Pettigrew, as soon as it received the postal card in question, treated it as an acceptance or payment of the draft, and made an entry in its books crediting the account of R. J. Conneway with $1,000. The "The City National Bank, Ft. Smith, Ark., draft was given by Conneway to the bank in November 13, 1923. Your letter of 11, re- payment of an antecedent indebtedness, and ceived. it is not shown that the Citizens' Bank of 1000 Pettigrew will in any wise be injured if the postal card in question is not treated as an absolute acceptance and payment of the November 11th was Sunday, and November 12th became Armistice Day and a holiday. When the City National Bank opened for business on Tuesday, November 13th, the draft had arrived. One of the clerks in the bank mailed on the same day a postal card to the Citizens' Bank of Pettigrew, which is as follows: We credit your account. We entered for collection... We debit your account.... "Yours truly, "The City National Bank." The account of R. J. Conneway was also charged with the sum of $1,000 by another clerk. The attention of the cashier of the City National Bank was called to the matter later in the day of the 13th inst., and he examined the account of Conneway to see if he had any funds in the bank. Finding that Conneway had no funds in the bank, he directed the draft to be at once returned to the Citizens' Bank of Pettigrew. This direction was given before the close of banking hours, but it seems that the letter returning the draft was not received by the Citizens' Bank of Pettigrew until November 15, 1923. The advice card or acceptance copied above was 290 S.W.-4 The chancellor found the issues in favor of the plaintiff, and rendered a decree in favor of the Citizens' Bank of Pettigrew against the City National Bank of Ft. Smith in the sum of $1,000. To reverse that decree, this appeal has been prosecuted by the City National Bank. Jas. B. McDonough, of Ft. Smith, for appellant. W. N. Ivie, of Fayetteville, for appellee. HART, J. (after stating the facts as above). [1] Michie in his treatise on Banks and Banking, vol. 2, § 141 (1c) lays down the general rule governing cases of this sort as follows: "Where a check is offered and received by the drawee bank as a deposit, credited to the hold er's account, and charged to the account of the and yields to the intention of the parties, exdrawer, the transaction is irrevocably closed press or implied, from the circumstances." and cannot be rescinded or recalled by the bank or the drawer without the consent of the [2] It is a well-recognized doctrine of equiperson to whom payment was made, except for ty jurisprudence that fraud or mistake viti fraud or mistake." The general rule proceeds upon the theory that when a bank accepts a check or draft on itself by depositing to the credit of the person presenting it, the amount of the check, it is presumed to know whether the check at that time is good or not and, if it unconditionally accepts it, it cannot thereafter repudiate it in this respect. The general rule has been recognized and followed by this court. Burns v. Yocum, 81 Ark. 127, 98 S. W. 956, and Sanders v. W. B. Worthen Co., 122 Ark. 104, 182 S. W. 549. In American National Bank v. Miller, 185 F. 338, the Circuit Court of Appeals, Sixth Circuit, lays down the rule to be that where a check was offered and received by the drawee bank as a deposit, credited to the depositor's account and charged to the account of the drawer, the transaction constituted complete payment of the check and could not be rescinded except for fraud or mutual mistake. This case was appealed to the Supreme Court of the United States and the judgment affirmed in 229 U. S. 517, 33 S. Ct. 883, 57 L. Ed. 1310, under the style of the American National Bank v. Miller. Mr. Justice Lamar, who delivered the opinion of the court, in discussing the subject said: "There are some disadvantages of sending a check for collection directly to the bank on which it is drawn, but when such bank performs the dual function of collecting and crediting the transaction is closed and, in the absence of fraud or mutual mistake, is equivalent to payment in usual course. National Bank v. Burkhardt, 100 U. S. 686, 689, 25 L. Ed. 766." We are of the opinion that the exceptions recognized in the cases just cited are in accord with the holding of this court on the subject. In Arkansas Trust & Banking Co. v. Bishop, 119 Ark. 373, 178 S. W. 422, the court said: ates every transaction. It is evident that if the bank acted through a mistake of fact in making the acceptance, it should not be bound thereby unless the other party suffered some loss on account of its act in making the acceptance. [3] In the case at bar, no loss was suffered by the Bank of Pettigrew. It knew that Conneway had drawn the draft in its favor in payment of an antecedent indebtedness and that he had no funds in the City National Bank at that time with which to meet it. It also knew that he intended to go to the City National Bank at Ft. Smith by the 12th of November and make arrangements for the payment of the draft. Conneway was in the bank when the post card copied in our statement of facts was received. The Citizens' Bank of Pettigrew did not ask him if he had made arrangements to pay the draft with the City National Bank, but credited his account with the amount of the draft. In doing so, the Bank of Pettigrew treated the post card as an absolute acceptance instead of a card advising it that the draft had been received by the City National Bank. It is true that the card, on its face, is an absolute acceptance, but, according to the testimony of the cashier of the City National Bank, it was not intended as such, but was only intended to be a notification that the bank had received the draft. It is also true that the bookkeeper credited the account of Conneway with the sum of $1,000, the face value of the draft, on the day that it was received, but, according to the testimony of the cashier of the bank, this was done through mistake. On account of the two previous days being holidays, an accumulation of business had come through the mails, and the routine work of the bank was being done hastily on Tuesday, which was the day the draft was received and on which the transactions with regard to it were had by the City National Bank. As soon as the cashier discovered that this had been done, he examined Conneway's account to see if he had any funds on deposit with which to pay the draft. Finding that he had none, he di "The only question in this case for the decision of the jury was whether the bank accepted the check and became liable to the payment of the amount for which it issued its deposit slip to the drawee thereof. The intention of the parties to the transaction could properly have been shown for the determination of this ques-rected the item to be charged off of the books tion, and the bank having issued its regular deposit slip or ticket for the amount of the check to the drawee thereof, the burden rested upon it to show that it was not in payment of the check." Again, in Sanders v. W. B. Worthen Co., 122 Ark. 104, 182 S. W. 549, the court said: "When a check is taken to a bank and the bank receives it and places the amount to the credit of the customer, the title to the check is vested in the bank. The rule as stated is not an absolute rule, but it is prima facie merely of the bank and that the Bank of Pettigrew be notified that the draft was returned to it because the drawer had no funds with which to pay it. This was done during banking hours on the day of the 13th of November, the day it was credited, although the letter notifying the Citizens' Bank of Pettigrew that the draft was returned for nonpayment for want of funds was dated November 15th. The cashier of the City National Bank, however, testified that was due to a mistake of the stenographer and that the letter was (290 S.W.) directed to be sent on the 13th, although the, 2. Contracts 353(1)-Instruction on liabilmistake was discovered too late for it to be mailed on the train going to Pettigrew on that day. [4] The City National Bank acted in the dual capacity of collecting agent of the Citizens' Bank of Pettigrew, the holder of the draft, and as drawee. In such case, there can be no acceptance by delivery until the draft passes through the books of the bank, charging the account of the drawer and crediting the account of the remitting bank First and making a complete transaction. National Bank of Murfreesboro v. First National Bank of Nashville, 127 Tenn. 205, 154 S. W. 965, 45 L. R. A. (N. S.) 240. ity of car dealer on promise to pay for used car, if plaintiff's employee bought automobile, held proper, in view of evidence. Instruction, in action to recover amount due for used automobile, that if car dealer agreed to allow plaintiff certain sum for used car, if plaintiff or his employee bought new car, and employee bought new car, that plaintiff could recover, held proper under evidence. 3. Contracts 62(1)-Delivery of used car to defendants was sufficient consideration for defendants' agreement to pay $200 therefor, if plaintiff's employee bought automobile from defendants. Delivery and acceptance of used automobile by defendants was sufficient consideration for defendants' agreement to pay plaintiff $200, if one of plaintiff's employees purchased automobile from defendants. Under the circumstances of this case, it is evident that the City National Bank charged the amount of the draft to the account of Conneway in the hurry of the day which was caused by the accumulation of business on account of the two previous days being holi-County; John E. Tatum, Judge. days, and that there was no intention to treat the transaction as completed until the close of the day's business. The postal card was not intended to be an absolute acceptance, but was only intended by the bank to be a card advising the Citizens' Bank of Pettigrew that the draft had been received. No loss was suffered by the Citizens' Bank of Pettigrew on account of the transaction. Appeal from Circuit Court, Sebastian Action by J. H. Hollingshead against Martin Green and wife, doing business as the Green Motor Company. From a judgment for plaintiff, defendants appeal. Affirmed. This is an action by J. H. Hollingshead Green and Mrs. Martin against Martin Green, doing business as Green Motor Company, to recover the sum of $200 alleged to The be due for a second-hand automobile. as stated in the plaintiff's complaint. They allege that they were dealers in automobiles, and agreed to allow the plaintiff $200 for his second-hand car if he would purchase a new automobile from them, that they were ready at all times to furnish the new car to the plaintiff under their contract, and that the plaintiff had refused to accept the same. The result of our views is that the City Na-defendants denied liability on the contract tional Bank never intended to treat the transaction as a completed one and that it had a right to correct the mistake when it discovered on the same day that Conneway had no funds in the bank with which to meet the draft. The Citizens' Bank of Pettigrew, having been promptly notified and having suffered no loss on account of the mistake, is in no position to claim that the facts of this case did not bring it within the exception that the acceptance was made under a mistake of fact. It follows that the decree must be reversed, and, inasmuch as the case of the plaintiff seems to have been fully developed, its cause of action will be dismissed here. J. H. Hollingshead was a witness for himself. According to his testimony, he purchased a Chevrolet sedan from the defendants and gave them a Ford touring car in Subsequently he part payment of the same. paid the balance of the purchase price of the Chevrolet sedan. At a later date, defendants agreed with the plaintiff that they would allow him $200 for a second-hand Dodge touring car, if he would purchase a new Chevrolet roadster, or if any one of his employees would buy a car from them. Subsequently W. H. Chriswell, an employee of the plaintiff, bought a car from the defendants. He made a payment of $200 on the car, and gave his (Supreme Court of Arkansas. Jan. 17, 1927. note for the balance of the purchase money. GREEN et ux. v. HOLLINGSHEAD. Rehearing Denied Feb. 7, 1927.) 1. Appeal and error 301-Where refusal of instruction is not made ground for new trial, appellate court will treat objection as abandoned. Where refusal of instruction was not made one of grounds in motion for new trial, appellate court could not review such ruling, but objection had to be treated as abandoned. Subsequently Chriswell paid the note. According to the evidence for the defendants, the plaintiff negotiated with them for the purchase of a Chevrolet sedan, and wanted to turn in a Ford truck and a Dodge touring car in part payment of the purchase price. The defendants told the plaintiff that It they could not take more than one car. was then agreed that the plaintiff should turn For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes |