On that day the appellee wrote the appellant that the lease was not on productive land and that it intended to cancel the same and pay no more rent. This letter, which appellant testified he received, notified him of the intention of the appellee to terminate the lease and under the plain terms of the contract the appellee was not liable to the appellant thereafter for rents.

Indeed, appellant did not sue and does not claim rent after November 24, 1917. His claim is based on rents alleged to be due for the second year. As already shown appellant received the payment for that year.

Hence, the judgment of the court is correct, and it is affirmed.

1.

2.

3.

MCFALL V. FIRST NATIONAL BANK OF FORREST CITY.

Opinion delivered April 14, 1919.

REFUSAL TO HONOR CHECK

DAMAGES.

BANKS AND BANKING
Where a bank wrongfully refuses to pay checks of a depositor
having funds subject to check, the depositor is entitled to recover
substantial damages.

DAMAGES.

BANKS AND BANKING - REFUSAL TO HONOR CHECK
In an action by merchant depositors against a bank for the lat-
ter's wrongful refusal to honor their check, the only burden im-
posed upon the plaintiffs, in order to recover substantial dam-
ages, was to show that they had sufficient funds in defendant
bank to cover checks drawn, and that the bank refused to pay
them.

BANKS AND BANKING REFUSAL TO HONOR CHECKS DAMAGES.In such action the jury in assessing the damages to plaintiffs should consider the importance of the checks to the merchants' business, the size of the account, the merchants' standing as business men in their community, and the probable effect the dishonoring of the checks had on their credit.

Appeal from St. Francis Circuit Court; J. M. Jackson, Judge; reversed.

C. W. Norton, for appellants.

The court erred in its instructions to the jury. They should have been instructed that plaintiffs were entitled

to "substantial" damages and that a mistake of the bank in dishonoring the checks would not excuse it from liability. 5 Cyc. 535; Ann. Cases, 1913, A. 999; 7 Am. Cases 818; 10 Id. 897; 121 Pac. 939; 67 N. E. 655; 5 R. C. L. 550. If the depositor is a merchant or trader, "substantial" damages will be presumed without proof. 5 R. C. L. 550 and cases cited; Ann. Cases, 1913, A. 1002. See also 121 Pac. 939; 5 R. C. L. 549, 546; 7 Ann. Cas. 818. Mann, Bussey & Mann and R. J. Williams, for appellee.

1. The court's instructions in this case were responsive to the pleadings and evidence. No special damages were alleged nor proven. The case was submitted on the theory that plaintiffs were entitled to substantial damages. The jury found that $50 was sufficient. There was no proof to warrant the submission of any other issue.

2. Substantial damages means that more than nominal damages should be assessed and is defined to be such damages as is fair and reasonable under the facts of the particular case. 15 L. R. A. 134.

3. Many cases hold that only nominal damages are recoverable where no measurable or tangible damages are shown, but here the trial judge adopted the general rule that the mere fact of refusal to pay the depositors' checks without a good and sufficient excuse is sufficient to warrant a recovery of substantial damages and so instructed the jury. 7 C. J. 696 and cases cited. The jury thought $50 sufficient and the judgment should be affirmed, as there is no error.

HUMPHREYS, J. Appellants instituted suit against appellee in the St. Francis Circuit Court to recover damages for wrongfully and wilfully dishonoring or refusing to pay certain checks drawn by them upon appellee in favor of the Southwestern Telephone & Telegraph Company engaged in business in Forrest City, Arkansas, and various wholesale merchants engaged in business in Memphis, Tennessee. In substance, the complaint alleged that appellants were partners engaged in a general grocery

and butcher business in Madison, Arkansas; that appellee was a national bank engaged in the banking business at Forrest City, Arkansas; that, in May, 1917, appellants were depositors in appellee's bank and issued checks on their deposit, payable to the Southwestern Telephone & Telegraph Company and certain wholesale merchants in Memphis, Tennessee, which checks, in the course of negotiation, were passed through banks in Memphis, St. Louis and Forrest City; that, in due course of business, said checks were presented to appellee for payment, and wrongfully and wilfully refused or "turned down" by it on the 18th, 19th and subsequent dates in May, 1917, to the damage of appellants in the sum of $6,000.

Appellee filed answer, denying that it wilfully or wrongfully refused to pay or "turned down" checks of appellants; or that appellants were damaged in any sum by reason of its refusal to pay the checks when presented, but admitting all other allegations in the complaint.

The cause was submitted to a jury on the pleadings, evidence and instructions of the court, upon which a verdict was returned and judgment rendered against appellee in the sum of $50. Under proper proceedings, an appeal has been duly prosecuted to this court from the verdict and judgment.

The evidence disclosed that on May 14, 1917, appellants, who were engaged in the mercantile and butcher business at Madison, Arkansas, deposited $293 with appellee, who was engaged in the banking business at Forrest City; that they drew checks against the deposit on and after May 14, 1917, in payment of a telephone bill and goods purchased in Memphis; that the deposit was sufficient to pay all checks drawn; that the check to the telephone company was presented to appellee and refused; that the checks issued to wholesale merchants in Memphis passed through Memphis, St. Louis and Forrest City banks in the regular course of business; that four of them were presented to appellee prior to May 24, 1917, and refused; that one of the checks was refused on the 18th and 21st days of May; that on the 19th day of May the atten

tion of the bank had been called by Mr. McFall to the fact that appellants had money in the bank to pay the checks, and, on the 21st day of May, their attention was again. called to that fact by Mr. Scales, who showed the cashier the deposit slip issued to them for $293 on the 14th day of May, for which they had not received credit; that thereafter checks were refused until appellants made a deposit on May 22nd of a sufficient amount to pay them; that, on May 25th, the error was discovered and appellee gave appellants credit as of that date for the sum of $293 deposited by them on May 14th.

This appeal involves a determination of the rule by which to measure damages against a bank for refusal to pay a merchant depositor's check, who has sufficient funds on deposit to pay it. There is no statute in our State fixing the measure of damages in this character of case; so, under section 623 of Kirby's Digest, the common law rule will control. The common law rule, as stated in Siminoff v. Jas. H. Goodman & Company Bank (Cal.), 121 Pac. 939, is as follows: "Substantial damages are recoverable against a banker for dishonoring the check of a depositor where there is sufficient money in his hands at the time to meet it." See also Rolin v. Steward, 14 C. B. 595, and other English cases referred to in the note to the annotated case of Lorick v. Palmetto Bank & Trust Company (S. C.), Am. & Eng. Ann. Cas., vol. 7, p. 818. The note appears on page 819. The great weight of American authority is clearly in accord with the common law rule. The general rule announced under the heading, "Liability of Bank to Drawer" in 5 Cyc., p. 535, is as follows: "If the bank neglect or refuse to pay on order of a depositor, where the latter has sufficient funds on deposit and no other good excuse exists, the depositor can maintain an action against the bank for the money, and is entitled to recover substantial damages for such refusal." The text is supported by a number of cases from many States in the Union. Touching upon the measure of damages in this character of case, it is said in Ruling Case Law at page 548 that "even where the de

positor is unable to show any special loss or injury, the authorities seem to be almost universal to the effect that he is not limited to mere nominal damages" and that the depositor "is entitled to recover general compensatory damages." The doctrine thus announced in the text is sustained by leading American cases under citations 15 and 17. It is indicated in the note to Blanche 0. Lorick v. Palmetto Bank & Trust Co., vol. 7, Am. & Eng. Ann. Cas., 818, that the American cases adhering to the common law rule have followed the English case of Rolin v. Steward, 14 C. B. 595; 78 E. C. L. 595, and that the American cases announcing a contrary rule have followed the English case of Marsetti v. Williams, 1 B. & Ad. 415, 20 E. C. L. 412. In that note, the case of Rolin v. Steward, supra, is characterized as a leading case on that subject, and the fact is emphasized that Judge Campbell "instructed the jury that they ought not to limit their verdict to nominal damages, but should give the plaintiff such temperate damages as they should judge to be reasonable compensation for the injury which they must have sustained from the dishonor of their checks;" and that the case of Marzetti v. Williams "can hardly be considered as an authority in point," because the point at issue was not involved in that case. Concerning the latter case, it is said in the note that "the only question before the court was whether or not the defendant was entitled to a nonsuit because the action should have been brought in contract and not in tort. Beyond that point the statements are merely obiter." The chief reasons assigned in support of the doctrine sustained by the great weight of authority, to the effect that a merchant or trader has a right to recover substantial damages for the wrongful refusal of a bank to honor his check when he has sufficient funds in the bank to pay it, is that "the wrongful act of the banker in refusing to honor the check imputes insolvency, dishonesty or bad faith to the drawer of the check, and has the effect of slandering the trader in his business." 5 R. C. L. 549. These reasons are sound and all sufficient.