(dissenting):
I respectfully dissent. I find sufficient evidence in the record to make a jury issue on the contention that the bank defrauded the Hannahs, and also on the contention that the Hannahs failed to exercise ordinary care in the transaction.
Moore was to invest $12,500 in the capital stock of the corporation as his share of the venture. He purported to pay the sum to the corporation through the medium of a two year, loan from the bank. It is undisputed that the loan was a sham in that it was made on paper but the funds were never released to Moore or the corporation by the bank. This was arranged by the funds being pledged to secure the loan and by the bank holding the pledge. This stratagem was of much benefit to the bank: Moore was charged interest on the loan and, of course, the bank obtained the corporate account. The transaction was nothing more than the charging of interest for the service of making it appear to the Hannahs and Chrysler that Moore had paid his share of the capital into the corporation.
There are two facts in evidence which make a jury question on the fraud charged to Belger, the banker, i. e., on the element of the wilful misrepresentation of a material fact by Belger. First the loan was made to the corporation rather than to Moore without a corporate resolution; thus no record appeared in the papers of the corporation from which the Han-nahs or the corporate accountants could learn of the transaction. Second, Belger issued an Exchange Bank deposit slip to Han-Mor Chrysler-Plymouth, Inc. showing the deposit of $12,500 by Moore with no restriction whatever being shown on the deposit slip or otherwise. At this point, no one except Belger, Moore and perhaps certain bank employees could have known of the restriction on the use *100of the funds derived from the so-called loan.1
The deposit slip was a false representation of a material fact to the corporation. The falsity was not picked up by the accountants nor by Mr. Hannah who saw the deposit slip four or five months before the corporation collapsed for want of the $12,500 and when the sham transaction between the bank and Moore was discovered.
This misrepresentation is buttressed by the fact of nine financial statements which were required by and sent to Chrysler by Han-Mor between January 1965 and May 1966. These statements were prepared for Han-Mor by local accountants. They contain not even a clue to the fact that either the corporation or Moore had borrowed Moore’s share of the capital from the bank or that the sum borrowed had been pledged back to the bank.
Copies of the financial statements were sent to the Hannahs and they constitute a misrepresentation by Belger acting as a bank to the Hannahs since the false deposit slip and the failure to require a corporate resolution for the loan hid the true facts from the books of the corporation and thereby from the accountants, and thus Chrysler and the Hannahs.
These circumstances would support an inference by the jury of reliance by the Hannahs on the misrepresentation of the fact by the bank through the deposit slip and the failure to obtain a corporate resolution for the loan.
The receipt of the financial statements by the Hannahs are also a demonstration of the exercise of due care by the Hannahs in determining the facts as to the financial status of the corporation. They are sufficient to make a jury question on whether the Hannahs failed to exercise due care.
One last item is worth noting. Belger’s testimony was that the loan was to the corporation and that he planned to secure it with Moore’s stock in Han-Mor and a few used cars. The pledge would then have been released. He also stated that he was waiting for a corporate resolution from Han-Mor authorizing the loan. The security and the corporate resolution were never obtained. Moore’s story was that it was a personal loan and that he hoped to pay off the loan through funds obtained from the sale of property in which his wife had an interest. Moore testified that Chrysler required that Han-Mor have capital of $25,000 and that this was the reason for the capitalization of the corporation in this amount. He also testified that he unsuccessfully urged the Hannahs to put up the entire amount and then made the arrangement in question with Belger.
The majority decision in effect exalts an unconscionable transaction by a bank by finding an insufficiency of evidence of fraud — no misrepresentation to the Hannahs and thus no reliance on a misrepresentation to make a jury question —and also a lack of due care on the part of the Hannahs as a matter of law. I disagree. These were jury issues under the evidence as I view it.
This dissent is not to indicate agreement with all of the items making up the damages awarded by the jury but we do not reach the questions presented as to deficiencies in fact and law as to damages.
. As a safeguard against the bank ever paying out the proceeds of the loan, Belger finally transferred the $12,500 from the account of Han-Mor to a fictitious account set up solely for that purpose.