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January 31, 1934


The opinion of the court was delivered by: KIRKPATRICK

This is an action at law by a depositor against a national bank and its receiver. The gist of the action is that the defendant has refused the plaintiff's demand for the payment to him of his deposit, having theretofore wrongfully and without his authoritization charged his account with various sums, which totaled the amount of the deposit and which it had paid out to a third party.

The trial was to the court and a jury, but both sides have presented the general point without more and thus all issues of law and fact have been submitted to the court.

 The plaintiff offered certain portions of the pleadings and rested his entire case upon the admissions contained therein. The defendant then immediately rested without adducing any evidence.

 The pleadings, though offered, do not constitute the evidence. The evidence consists of certain admissions, and the scope an extent of these are for the court. The practice upon an offer of pleadings for this purpose is settled by a decision of the Supreme Court of Pennsylvania in Buehler v. United States Fashion Plate Co., 269 Pa. 428, 112 A. 632, 634, which we follow under the Conformity Act (28 USCA § 724). In that case the court said "While the pleadings in a case determine the issues, primarily they are not evidence for any purpose, unless made so by act of assembly. A fact averred in the statement of claim, and not specifically denied in the affidavit of defense, is an admitted fact, but does not become such for purposes of trial, unless put before the jury in one of three ways: * * * (3) by offering in evidence specific parts of the statement of claim with what counsel conceive to be the replies thereto contained in the affidavit of defense, and having the facts thus sought to be established placed on the notes of trial as admitted, because averred in the statement and not denied in the affidavit of defense."

 In case of dispute, just what "the facts thus sought to be established * * * as admitted" are must be determined by the court, and, as so determined, they, and not the pleadings themselves, become the evidence for purposes of trial.

 If a fact is asserted in a paragraph of the statement of claim, the corresponding paragraph of the affidavit of defense is to be considered for one purpose only -- to see how far it limits or how much it subtracts from the asserted fact. The remainder (after the court has made the subtraction) is the evidence.

 We now turn to the record. The essential facts are to be found in paragraphs 6, 7, and 29 of the statement of claim and the corresponding paragraphs of the affidavit of defense. By these paragraphs the defendant admits (and this I do not think can be disputed):

 (1) That on July 9, 1927, the plaintiff caused his promissory note for $35,000 at 90 days to be delivered to the bank, that the bank discounted the note, and, after deducting the interest, placed the balance, or $34,216.38, in an account in the bank which was designated "Abraham Dektor, Building Account," and that a statement of the said account was rendered to the plaintiff under the name of "Abraham Dekstor" without the addition of the words "Building Account."

 (2) That the plaintiff had demanded payment to him of the sum of $34,216.38 with interest, which has been refused.

 Parenthetically it may be said that it is immaterial, as far as this case goes, whether it stood in the name of "Abraham Dektor, Building Account" or "Abraham Dekstor" or "Abraham "Dektor." It has been too well settled to question that the addition of some designation to the name of the depositor does not affect the rights and obligations created by the deposit, and, if we take the account to be as the defendant alleges, it would be no different from an account in an individual name without more.

 Nor is it necessary that the plaintiff allege that a check was drawn and presented by him. There is no suggestion that the refusal of the defendant to pay was based upon the fact that the demand was not made by check, and the position taken by the defendant makes it obvious that, whatever the fact, if a check had been presented, payment would have been refused.

 The cause of action thus disclosed is a suit upon a contract. It is not an action for the recovery of a specific fund belonging to the plaintiff. The money deposited becomes the property of the bank, and the plaintiff acquires a contract right. The relation created is that of debtor and creditor. There is no express contract, but the terms are all implied. They arise from and are defined by the established usages of banking practice. One term ordinarily implied in the case of a general deposit is that the bank will pay the depositor the amount on deposit upon demand, the demand being made by the presentation of a check.

 But the depositor's contract with the bank is like any other implied contract, in that it may be modified or changed by agreement of the parties, and in that an express agreement as to any particular term supersedes the obligation which would, in the absence of such agreement, be implied in that respect. "A bank deposit may be subject to any agreement which the depositor and the bank may make with respect to it, so long as the rights of third persons are not injuriously affected." 7 C.J. 642. Michie on Banking, c. 9, § 40. "It is competent for a bank of deposit to enter into a collateral agreement with the depositor with reference to the disposition of proceeds of the deposit." 7 C.J. 642, citing Newmark Grain Co. v. Merchants National Bank, 166 Cal. 203, 135 P. 958. This principle is too well known and too elementary to require much discussion. The special express contract may not go to the extent of creating a special deposit or of requiring the bank to keep the ...

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