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penses in bringing the violation of the injunction order to the attention of the court.

In Cary Mfg. Co. v. Acme Flexible Clasp Co. (1901) 48 C. C. A. 118, 108 Fed. 873, it is said that "the power of the circuit court to direct the payment of a part or all of the fine to the complainant in an application for contempt as a compensation for his time and outlay in prosecuting the application has been often recognized in the circuit courts . . . and in practice is a power which ought to be exercised when the expenses and trouble to which the complainant has been subjected justify its exercise." Citing Re Mullee (1869) 7 Blatchf. 23, Fed. Cas. No. 9,911; McCauley v. White Sewing Mach. Co. (1881) 9 Fed. 698; Re Tift (1881) 11 Fed. 463; Re North Bloomfield Gravel Min. Co. (1886) 11 Sawy. 590, 27 Fed. 795; Wells, F. & Co. V. ¿ Oregon R. & Nav. Co. 9 Sawy. 601, 19 Fed. 20.

So, where a proceeding for contempt was instituted by the creditors of a bankrupt for the violation of an injunction by which the estate was depleted, and by reason of which proceeding restitution was effected, it is within the power of the court to direct a fine imposed for the contempt to be

paid to such creditors as partial reimbursement for their costs and attorneys' fees expended. Morehouse v. Giant Powder Co. (1913) 124 C. C. A. 158, 206 Fed. 24.

Complainant may be reimbursed for his trouble and expense in watching the defendant to ascertain if he was violating the injunction, in securing evidence of the fact, and in presenting it to the court. Delaware, L. & W. R. Co. v. Frank (1916) 145 C. C. A. 182, 230 Fed. 988.

But the court will not require the complainant to be fully reimbursed for the expenses of bringing the violation of the injunction order to the attention of the court where the record is so unnecessarily voluminous and the expense is so large that a fine or penalty commensurate therewith would be inordinate. Board of Trade v. Tucker (1913) 221 Fed. 300.

And in Board of Trade v. Tucker (1915) 137 C. C. A. 255, 221 Fed. 305, it was held that although, in punishing the violation of an injunction as a civil contempt, the court may reimburse the complainant for the necessary expense of enforcing the injunction, extravagance in disbursements should not be allowed. E. S. O.

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1. A verbal direction by a depositor to a bank to pay the deposit on checks drawn by a third person is not invalidated by the provision of the Negotiable Instruments Act that the signature of any party may be made by an agent duly authorized in writing. [See note on this question beginning on page 175.]

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(181 Ky. 749, 205 8. W. 906.)

to pay out his funds on checks signed by another is estopped to assert claims to the fund against the bank.

Banks - joint deposit — check of one. 4. A bank which receives for deposit a check to two jointly, with the

understanding that the deposit, aithough standing in the name of one only, shall be paid upon the check of either, satisfies its obligation when it honors a check drawn by one of the depositors.

APPEAL by plaintiff from a judgment of the Circuit Court for Henderson County in her favor in part only, in an action brought to recover the balance of a fund alleged to have been deposited by her in the defendant bank. Affirmed.

The facts are stated in the opinion of the court.
Messrs. Woodward & Dixon and
Moorman & Woodward, for appellant:

A bank paying checks drawn by an agent who is without written authority cannot charge the same to the depositor's account.

Finley v. Smith, 165 Ky. 445, L.R.A. 1915F, 777, 177 S. W. 262; Boswell v. Citizen's Sav. Bank, 123 Ky. 485, 96 S. W. 797; First Nat. Bank v. Hargis Commercial Bank & T. Co. 170 Ky. 690, 186 S. W. 471; First State Bank v. Williams, 164 Ky. 144, 175 S. W. 10; Elsey v. People's Bank, 168 Ky. 701, 182 S. W. 873; Commercial Bank v. Arden, 177 Ky. 520, L.R.A.1918B, 320, 197 S. W. 951.

Banks are creatures of the statute, and their powers are strictly limited and confined by the terms of the statute.

Commercial Bkg. & T. Co. v. Citizens Trust & Guaranty Co. 153 Ky. 571, 45 L.R.A. (N.S.) 950, 156 S. W. 160, Ann. Cas. 1915C, 166.


Messrs. Dorsey & Dorsey for appel

Sampson, J., delivered the opinion of the court:

Mollie Pierson and her son, Roy Pierson, went to the appellee bank for the purpose of and did open a checking account with it in the name of Mollie Pierson, by depositing a check made to Mollie Pierson and Roy Pierson jointly for the sum of $703.

The Piersons instructed the bank to pay out the money on the check of Mollie Pierson or upon her check by her son, Roy Pierson. Some time thereafter Roy Pierson deposited another $100 to the credit of Mollie Pierson, but this money appears to have belonged wholly to Mrs. Pierson. In the meantime he was issuing checks against the account, signed "Mollie Pierson by

Roy Pierson," and these checks were paid. Mrs. Mollie Pierson also issued three small checks, amounting to $16.90 against the account, which were paid. The fund was exhausted, and shortly thereafter Roy Pierson died. Mrs. Mollie Pierson then brought this action against the bank, alleging that she had deposited in the bank the sum of $803 which was her individual funds, and that she had only checked out $16.90, and that the bank wrongfully refused to honor her check for the balance of the $803 which she averred was due her. The bank answered, setting up the fact that it had been instructed by Mrs. Mollie Pierson, in the presence of her son Roy, to honor checks issued by Roy Pierson, signed Mollie Pierson by Roy Pierson, and that it had done so, and that the entire fund had been paid out on such checks, except the $16.90 paid on the checks of Mrs. Pierson. By reply Mrs. Pierson denied that either of the deposits had been made by Roy Pierson, and also denied that when the account was opened by the deposit of the money in the bank she requested the bank to honor or pay any check that either she or her said son might draw against the funds in the bank, either in her name or in the name of her son. She further alleged that she had at no time given written or verbal authority to the bank, or to its agents, to honor checks drawn by her son, Roy Pierson, on the deposit; but she admitted she had drawn the three small checks amounting to $16.90.

A trial was had before a jury, to which the question of fact as to

whether Mrs. Pierson had authorized the agents of the bank to pay the money out upon checks signed, "Mollie Pierson, by Roy Pierson," was submitted, and the jury found that Mrs. Pierson had authorized the bank verbally to honor checks SO signed. Upon motion and grounds for a new trial filed by Mrs. Pierson, the verdict and judgment were set aside and Mrs. Pierson granted a new trial. Upon a second trial before a special judge to whom both the law and facts were submitted, without the intervention of a jury, a like conclusion upon the facts was reached and a judgment entered awarding Mrs. Pierson $83.10, being the balance of the $100, the second deposit made to her account at the bank at the time

when no instructions were given by

Mrs. Pierson to the officers of the bank to honor any check save her own. The bank was allowed credit for the $703, which it had paid out on the checks signed Mollie Pierson by Roy Pierson. In other words, the court on the last trial held that, as Mrs. Pierson did not give the officers of the bank any instructions as to the payment of the money at the time of the second deposit, $100, the bank had no authority to pay out this money except on her check; and, as she had issued only three small checks amounting to $16.90, there remained of the $100 the sum of $83.10.

As a jury upon the first trial, and the court upon the second trial, found that the deposit of $703 was made by Mrs. Pierson and her son Roy, both being present, to the credit of Mrs. Pierson, with instructions to the officers of the bank to pay the money out on checks signed Mollie Pierson by Roy Pierson, we have only the legal question to consider: May one, when making a deposit in bank, verbally direct the bank to pay out the funds on checks signed by another, and thus relieve the bank, when payment is so made, of responsibility? In other words, if such a direction is given by the depositor to the bank at the time the

deposit is made and accepted, and the bank, in pursuance of such instruction, pays out the money upon the check of the person designated, or upon the particular signature agreed upon, will the bank be protected? That is the question presented here. The bank, in receiving the deposit, agreed, on the request of the depositors, to pay out the money on checks signed, "Mollie Pierson, by Roy Pierson." All this entered into the contract by which the deposit was received by the bank, and the bank was bound to comply therewith, and it was fully within its rights when it paid checks so signed. There is no difference in principle between the state of case where A hands money to B, and directs B to pass it to C. The giving of the money to C fully discharges the obligation of the second positor's consent person, who holds to check by the money as trustee or agent for the first person. If Mrs. Pierson, immediately, upon depositing the money at the bank and before the account was entered upon the books, had said to the cashier, "Give the money to my son Roy," and the cashier had thereupon paid it out to him, and Roy had appropriated it to his own use and benefit, would it be contended that Mrs. Pierson could thereafter sue the bank and recover the money which she had thus directed to be given to her son?




There is yet another reason why the bank is not liable to Mrs. PierThe transaction was between Mrs. Pierson, the bank, and her son, and she directed the bank to honor checks upon the funds signed, "Mollie Pierson, by Roy Pierson," and the bank complied with this request and paid out the money. Upon her representation the bank parted with the money. It is not therefore liable to her again for the amount, because she, by in- Estoppel-to ducing the bank to claim bank pay out the money to her son or on his check, is es


(181 Ky. 749, 205 8. W. 906.)

topped to now assert claim to the fund.

Mrs. Pierson insists that under § 19 of the Negotiable Instruments Act, which is § 3720b, Kentucky Statutes, which reads, "The signature of a party may be made by an agent duly authorized in writing," the bank had no legal authority to pay the money out upon checks by Roy Pierson, because Roy Pierson had no written authority from Mrs. Pierson to act as her agent in signing her name to checks; that the only authority which the bank had, or that Roy Pierson had, for signing and issuing of the checks or making payment of the money, was verbal. It has been held in the case of Finley v. Smith, 165 Ky. 445, L.R.A.1915F, 777, 177 S. W. 262, and in the case of Inter-Southern L. Ins. Co. v. First Nat. Bank, 178 Ky. 95, 198 S. W. 563, that a signature placed upon a negotiable instrument by an agent is without binding force upon the principal unless the agent be duly authorized in writing. The statute is so plain upon this point that it would be difficult to otherwise construe it. But in the case at bar we do not think the facts come within the rule. Mrs. Pierson instituted this action against the bank, not to enforce or defeat a liability which grew out of the attachment of her signature to a negotiable instrument by her agent, but to recover money from her debtor, the bank, which she had directed the bank to pay in a certain way. We may rely upon the facts as found by the jury and by the court to preclude her. All the authorities agree in holding

Banks-verbal direction to pay checkeffect of Negotiable Instruments Act.

that a bank is not the agent of a depositor, but that the depositor and bank stand in the relation of creditor and debtor. This being so, the rules of the common law apply in this case, and subsection 19 of § 37206, Kentucky Statutes, relied on by Mrs. Pierson, has no application.

Aside from all this, the deposit of $703 with which the account was opened was the joint property of Mrs. Pierson and her son Roy, and this was manifested by the fact that the check was made to them jointly. The bank, in possession of these facts, and at the request of the two, placed the money to the credit of Mrs. Pierson alone, with the agreement and understanding that the fund was subject to check by Roy Pierson. Pierson. In receiving and accepting the deposit, it was agreed between all the parties, including the bank, that the same should be paid out upon checks signed, "Mollie Pierson, by Roy Pierson," or upon checks signed, "Mollie Pierson." This was a special agreement or contract between the depositors on the one side and the bank upon the other, which is inseparable from the deposit contract. The deposit was accepted and received by the bank and was offered by Mrs. Pierson and her son with the specific understanding and agreement that it should be paid out in the manner aforesaid, and the Same-joint bank, having com- deposit-check plied with its part by one.

of the agreement and parted with its money, cannot now be compelled to again pay the amount at the suit of Mrs. Pierson.

No error appearing to the prejudice of the appellant, the judgment is affirmed.


Effect of verbal order with respect to payment of check or transfer of bank deposit.

By virtue of the implied contract arising from the usage of the banking business a bank is entitled to demand some written evidence of an or

der of a depositor to pay out or transfer his deposit, and is not bound to act on an oral order. McEwen v. Davis (1872) 39 Ind. 109; First Nat. Bank v.

Stapp (1905) 165 Ind. 162, 112 Am. St. Rep. 214, 74 N. E. 987, 6 Ann. Cas. 632.

However, in Altman v. Phillips County Bank (1912) 86 Kan. 930, 122 Pac. 874, wherein it was held that a demand by the depositor was not prerequisite to an action by the depositor where it appeared that a demand

would have been futile, the court said obiter: "It is true that the usual method of demanding money so deposited is by the presentation of a check of the depositor, but it may be demanded without a check or written order."

But a bank may, if it so desires, waive its right to a written order, and is authorized to pay out a fund on deposit or transfer the deposit to the name of another on the oral order of the depositor. Rice v. Bank of Camas Prairie (1896) 5 Idaho, 39, 47 Pac. 856; Neff v. Greene County Nat. Bank (1886) 89 Mo. 581, 1 S. W. 747; Whitsett v. People's Nat. Bank (1909) 138 Mo. App. 81, 119 S. W. 999; Ellis v. First Nat. Bank (1901) 22 R. I. 565, 48 Atl. 936. See also First Nat. Bank v. Hall (1898) 119 Ala. 64, 24 So. 526.

See also dictum in McEwen v. Davis (1872) 39 Ind. 109; First Nat. Bank v. Stapp (1905) 165 Ind. 162, 112 Am. St. Rep. 214, 74 N. E. 987, 6 Ann. Cas.

631. And see the reported case

PIERSON V. UNION BANK & T. Co. ante, 172.

In Whitsett v. People's Nat. Bank (1909) 138 Mo. App. 81, 119 S. W. 999, the action was to recover the amount of a check which the plaintiff had sent by an agent to the defendant bank and which the latter had placed to his credit. It appeared that subsequent to this deposit the plaintiff drew another check on another bank for the exact amount called for by the previous check, payable to one Ferguson. Ferguson presented the second check for payment at the defendant bank, which at first refused payment thereon because it was drawn on another bank; but on Ferguson's representation that he was authorized, verbally, to inform the defendant that the plaintiff wished to transfer or have the amount to his credit in the defend

ant's possession paid to him (Ferguson), and that the naming of another bank as drawee was a mistake, the cashier of the defendant's bank changed the name of the drawee and paid the money to the payee. It further appeared that the plaintiff had ratified the transaction. It was therefore held that the plaintiff could not recover the sum paid by the defendant to Ferguson, as a written order from the plaintiff was not necessary before the defendant could act as it did. The court said: "Though usually banks do not pay out the money of depositors except on the depositor's checks, a check is nothing more than a written order, and there is no reason in law for saying that a bank may not lawfully pay out or transfer money on a depositor's account by oral order."

In Rice v. Bank of Camas Prairie (1896) 5 Idaho, 39, 47 Pac. 856, the action was to recover a sum of money previously deposited by the plaintiff and another, as partners, with the defendant bank. It appeared that after the deposit was made one of the partners, on his oral request, obtained payment from the bank of the sum deposited. It was held that an instruction which stated to the jury that the defendant had no right to pay out the deposit unless it had received a written order from the partnership firm was erroneous. The court said: "However careless and uncommon may be the payment of money by a bank to a depositor without any written order or receipt, if such payment of the money of the firm was actually so made by the bank to a person authorized to draw such money, it would be a good payment, and the bank would not be further liable."

In Ellis v. First Nat. Bank (1901) 22 R. I. 565, 48 Atl. 936, it appeared that the plaintiffs had accepted a certain assignment, which included a bank account of the assignor. The plaintiffs went to the bank and informed its cashier that they had accepted the assignment, and that one Ellis was authorized to draw checks on the bank deposit. The cashier agreed, orally, to honor the checks drawn by Ellis. It was said that the

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