Savings Bank v. Board of Education , 231 Mich. 504 ( 1925 )

Alvin R. Morrison was a building contractor. On April 22, 1922, he borrowed $500 of the plaintiff for which he gave his note and a writing reading as follows:

"Grand Haven, Mich., April 22, 1922.

"BOARD OF EDUCATION, "Grand Haven, Michigan.

"Dear Sirs: For valuable consideration I hereby authorize you to pay the People's Savings Bank, of Grand Haven, Michigan, $500.00 and apply it on account due me.

"Signed this 22d day of April, 1922.

"ALVIN R. MORRISON."

May 24, 1922, this paper was sent to the board of education with the request that it be accepted. The superintendent of schools notified the cashier of the bank by telephone that the paper had been received and placed on file. October 16, 1922, Mr. Morrison sued the board of education, and Mr. Osterhous, an attorney, was given charge of this litigation on the part of the board of education. Subsequent to the sending of the writing to the board of education the cashier of the bank took the matter of its acceptance up with the board, who referred him to their attorney. The attorney for the board wrote a letter reading:

"January 3, 1923.

"PEOPLE'S SAVINGS BANK, "City.

(Attention Mr. HOFFMAN.) "Dear Sir: For the purpose of protecting you, if possible, and so far as possible, in your claim against Alvin R. Morrison for the amount of which he gave you an order upon the board of education, you are advised that the board in its plea and notice of defense in the case commenced against it in the Ottawa county circuit court by Mr. Morrison, claims as a set-off to the defendants of the plaintiff, and by way of credit upon those demands, that:

" `The plaintiff did, on April 22, 1922, assign the sum of $500 to the People's Savings Bank of Grand Haven, Michigan, with a written authorization to the defendant to pay the same to said bank and apply the same on the amount due from defendant to the plaintiff, which assignment and authorization was delivered to the defendant and filed and accepted by it.'

"If this $500.00 is allowed by the court as a credit to the defendant upon the claims of the plaintiff, as I believe it will be, the board will immediately make payment of the account to you.

"Yours very truly, "LOUIS H. OSTERHOUS."

It is said this letter satisfied the bank.

Some time in the fall of 1923 the board of education authorized the payment of $12,000 as settlement of the Morrison suit, and it was settled upon that basis, but no money was paid to the bank, and this suit was brought. The trial judge was of the opinion as the defendant had not given a written acceptance of the paper, and had not authorized anybody else to do so, that plaintiff could not recover, and directed a verdict of no cause of action. The case is in this court by writ of error, and we are favored with three briefs on the part of the plaintiff, and two on the part of the defendant.

The plaintiff submits the following propositions:

"First: The instrument in question is not a bill of exchange and does not require a written acceptance. The negotiable instruments law does not apply to nonnegotiable papers.

"Second: If the instrument requires a written acceptance, then the letter of acceptance sent to the plaintiff by the duly authorized agent of the defendant is sufficient to satisfy the statute. Acceptance means notification.

"Third: There was an 'acceptance by conduct.' The retention of the assignment accompanied by other circumstances were sufficient to establish an implied acceptance. At least, this question was one for the jury to determine.

"Fourth: The defendant is estopped to deny its liability."

Each of these propositions is argued at length with a citation of many authorities. The case to us does not seem to be a very complicated one. Mr. Morrison borrowed money from the bank, and gave his note and the writing in controversy to secure its payment. He then became a debtor of the bank. The defendant at this time was a debtor of Mr. Morrison. The writing was a request from Mr. Morrison to the defendant that it pay to the bank $500 of its debt to Mr. Morrison and apply it on Mr. Morrison's account. If the defendant did this it would extinguish $500 of its debt to Mr. Morrison, and would also pay $500 of Mr. Morrison's debt to the bank. We think it clear from the record that defendant never agreed in writing to do this, and that the trial judge was quite right in his rulings. Finan v. Babcock, 58 Mich. 301;Pfaff v. Cummings, 67 Mich. 143; Upham v.Clute, 105 Mich. 350; Dean v. Ellis, 108 Mich. 240; Stone v.Dowling, 119 Mich. 476.

Judgment is affirmed, with costs to the appellee.

BIRD and SHARPE, JJ., concurred with MOORE, J.