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R. M. BOURNE & COMPANY v. PEOPLES UNION BANK AND TRUST COMPANY (07/17/61)

July 17, 1961

R. M. BOURNE & COMPANY
v.
PEOPLES UNION BANK AND TRUST COMPANY, APPELLANT.



Appeal, No. 114, March T., 1961, from judgment of Court of Common Pleas of Allegheny County, Oct. T., 1958, No. 2229, in case of R. M. Bourne & Company, nominee of The Cleveland Trust Company et al., v. Peoples Union Bank and Trust Company. Judgment affirmed.

COUNSEL

Edmund K. Trent, with him Ralph II. Demmler, and Reed, Smith, Shaw & McClay, for appellant.

Earl F. Reed, with him James B. IIecht, and Thorp, Reed & Armstrong, for appellees.

Before Jones, C.j., Bell, Jones, Cohen, Bok and Eagen, JJ.

Author: Cohen

[ 404 Pa. Page 520]

OPINION BY MR. JUSTICE COHEN.

This action in assumpsit was brought by R. M. Bourne & Company (Bourne), nominee of The Cleveland Trust Company, and The Cleveland Trust Company (Cleveland Trust) against Peoples Union Bank & Trust Company (Peoples Union) of McKeesport, Pennsylvania. The plaintiffs sought to recover the sum of $201,075.14, with interest. The lower court, sitting without a jury, awarded plaintiffs the damages prayed for. Peoples Union has appealed from the judgment entered after dismissal of its exceptions.

The facts as set forth in the opinion of the trial court are as follows:

For some years prior to December, 1957, Eastern Investment and Development Corporation (Eastern), now bankrupt, was a depositor in Peoples Union. Although the balance of Eastern had been substantial during much of this time, it had dwindled to approximately $2,000 by December of 1957. During the month of December, 1957, Earl Belle, an executive Vice-President of Eastern, approached C. E. Palmer, President of Peoples Union and informed him he had a "friend" who would be willing to make a deposit of $400,000 in the bank in return for a six months' certificate of deposit in that amount at 2 1/2% interest if such arrangement was acceptable to the defendant bank. Palmer agreed to accept the deposit, and Belle then promised to furnish

[ 404 Pa. Page 521]

    him with the name of the person to whom the certificate should be made payable.

Thereafter, Belle, acting on behalf of Eastern, which he apparently controlled, consulted with a note and money brokerage firm in New York, by the name of Garvin, Bantel & Company (Garvin), and made known to this firm his desire to have money placed on deposit in the defendant bank in the sum of $400,000. Belle informed the representative of Garvin, whom he had consulted about this deposit, that he wanted the transaction arranged at the lowest possible rate of interest.

Garvin then contacted Cleveland Trust, one of the plaintiffs, in connection with Belle's proposition and furnished Cleveland Trust with the name of Peoples Union as the bank which would issue the certificate of deposit. After checking the financial condition of Peoples Union in the bankers' "blue book", Cleveland Trust agreed to make the deposit for 5% interest, payable in advance. Garvin then notified Belle that the deposit could be arranged for 5 1/4% interest, payable in ...


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