Columbia Bank of Lodi v. Markgraf

Vinje, C. J. It is true that the complaint is not replete with charges of fraud and misappropriation of funds, but it does set forth facts very clearly showing that the cashier of the bank and the defendant, his brother, conspired to defraud and cheat the bank. Good pleadings consist in stating clearly the facts which show the legal intent charged. It was not even necessary, perhaps, to state upon information and belief that the defendant and his brother conspired to defraud the bank. That conclusion could legitimately be drawn from the facts pleaded, namely, that the checks were drawn by the defendant and paid by the bank but intentionally withheld from the defendant’s account with the bank, thus .showing that over $2,400 should be to the credit of the defendant in the bank, where, as a matter of fact, he had no credit because the checks were not charged to him but held for the cash account. This court has labored strenuously to teach lawyers to plead the facts that constitute the cause of action rather than plead conclusions that may be drawn or may not be drawn from the alleged facts. Here, if the facts of the complaint are true, it follows as a matter of mathematics that the defendant is indebted to the bank in the sum alleged. It also clearly appears there was a secret understanding or conspiracy between the cashier of the bank and the defendant to defraud the bank by this method. Such a conspiracy would render both parties liable, and the de [477] fendant cannot escape the consequences of his fraudulent, unlawful act by pleading that he entered into- a conspiracy to perform such act with the cashier of the bank. Both would be equally liable to the bank for the sums so taken from its custody, and it conclusively appears from the allegations of the complaint that the defendant profited by this unlawful act on the part of both. Nowhere is there any allegation in the complaint that the bank, with knowledge of all the facts, stated the account as shown by defendant’s pass book. Where two parties conspire to defraud a third and are successful in such conspiracy and an account in form is stated, it is not binding upon the party who has been thus defrauded. Plaintiff in this case fully realizes that in order to impeach the account stated as shown by the bank book it must produce proof to the effect that fraud was practiced upon it. But this the complaint alleges the bank is able to do by proving the facts therein stated. The trial court erred in sustaining the demurrer. By the Court. — Order reversed, and cause remanded with directions to overrule the demurrer.