First National Bank v. Mason

Mr. Justice Paxson

delivered the opinion of the court,

The plaintiff below brought his suit against the First National Bank of Lock Haven, to recover the amount of moneys he had deposited with said bank. The defendant offered to prove that the money deposited in the name of James D. Mason, the plaintiff, was, in fact, the money of the firm of Thomas & Mason, of which firm the plaintiff was a clerk; that the plaintiff had admitted at the time the deposits were made that the money belonged to said firm, and were placed in his name as a matter of convenience in paying small bills; and that the said Thomas & Mason were indebted to the said bank in excess of the amount standing on its books to the credit of the plaintiff. The bank claimed to set-off the indebtedness of Thomas & Mason against the claim of plaintiff in this suit. This evidence was rejected by the court below, and forms the subject of the first assignment of error.

Thomas & Mason made no claim to this money. The said firm having failed, the bank seeks to protect itself by setting up their title to the funds in question.

It is well settled that money deposited in a bank to the credit of A. may be shown to be the property of B. It may be reached by attachment on the part of the judgment-creditors of B., or its payment by the bank to A. may be stopped by a proper notice on the part of B. that the money belongs to him. The credit on the books of the bank is but prima facie evidence of ownership: Harrisburg Bank v. Tyler, 3 W. & S. 373; Frazier v. Erie Bank, 8 Id. 18 ; Jackson v. The Bank of the United States, 10 Barr 61; Bank of Northern Liberties v. Jones, 6 Wright 541; Stair v. York National Bank, 5 P. F. Smith 368; Arnold v. Macungie Savings Bank, 21 Id. 290. These were cases, however, in which the true owner set up a claim to the fund. We have here a very different question. The bank, the depositary, sets up an adverse title to defeat the suit of its own depositor. The bank held its claim against Thomas & Mason when the plaintiff made his deposits, and they knew, or at least they allege they knew when the deposits were made that the money so deposited in plaintiff’s name belonged to said firm. Yet under these circumstances and with this knowledge they permitted the plaintiff to make the deposit in his own name. Having received it as the money of the plaintiff and given him credit therefor, the bank is estopped, in the absence of any notice from, or claim by the real owner, from disputing the plaintiff’s title. Having received the money as the money of the plaintiff, they are bound to pay it to him or upon his order. Such a contract is implied from the fact of the deposit. In Jackson v. The Bank, supra, the funds in the bank to the credit of Warwick were attached. The bank paid the money to Warwick notwithstanding the attachment, and was held liable therefor. It was said by Mr. Justice Coulter, in delivering the opinion of the court: “ The first question that occurs is this: could the bank, if the attachment had not been served, have resisted the claim of Warwick to the money he had deposited with them ? They received it and the bills as his, entered them on their books as his, and were bound, in the absence of any attachment, to have paid the funds to him. How then were they placed in any better position by the service of the attachment ? The attaching-creditor stands in the place of Warwick. If they could not allege as against Warwick that the funds were not his, neither can they allege as against the attaching creditor that they are not his, and yet turn round and pay the money to Warwick to enable him to defeat his creditor.”

It is clearly against public policy to permit a bank that has received money from a depositor, credited him therewith upon its books,' and thereby entered into an implied contract to honor his check to allege that the money deposited belonged to some one else. This may be done by an attaching-creditor or by the true owner of the fund, but the bank is estopped by its own act. A departure from this rule might lead to novel results and embarrass commercial transactions.

We are of opinion that the evidence referred to in the first and second assignments was properly rejected.

Judgment afiirmed.