Adams v. Farmers State Bank of Olivia
| Decision Date | 21 December 1928 |
| Docket Number | 27,031 |
| Citation | 222 N.W. 576,176 Minn. 108 |
| Parties | STEVE ADAMS v. FARMERS STATE BANK OF OLIVIA AND OTHERS |
| Court | Minnesota Supreme Court |
Action in the district court for Renville county to recover $1,197.14 of the defendant bank and its officers and to have the defendant Veigel as commissioner of banks pay said sum as a preferred claim from the assets of the bank. There were findings for the plaintiff, and defendants bank and Veigel appealed from an order, Qvale, J. denying their motion for a new trial. Affirmed.
Cross-examination under the statute of officers of bank, so long as they remain officers, is permissible.
1. There was no error as to appellants in calling for cross-examination under the statute a defendant in default of an answer against whom plaintiff must prove his cause of action. Officers of a bank in the hands of the commissioner of banks for liquidation, so long as they remain such officers, may be called for cross-examination under the statute.
Plaintiff's money, wrongfully deposited in insolvent bank, was held by it as a trust fund.
2. The evidence sustains the findings that plaintiff's money was wrongfully and without his authority deposited in the bank by its officers whereby its assets now in the hands of the commissioner of banks were augmented, and that plaintiff never ratified such acts. As to such money the bank did not become a debtor to plaintiff but held it in trust for him.
Banks and Banking, 7 C.J. § 548 p. 751 n. 78.
Witnesses 40 Cyc. p. 2472 n. 17.
See note in 35 L.R.A.(N.S.) 461; 3 R.C.L. 556; 6 R.C.L. Supp 187.
D. F. Nordstrom, for appellants.
Daly & Barnard, for respondent.
The appeal is by Farmers State Bank of Olivia and A. J. Veigel, commissioner of banks, who has taken over the institution as insolvent, from an order denying them a new trial after findings in favor of plaintiff.
The action was brought on the theory that the officers of the bank, a few days before its doors were closed, wrongfully enriched the bank by money belonging to plaintiff which was part of the assets of the bank when the commissioner of banks took charge. The court found in substance that defendants C. A. Kuske and Nat C. Kuske were the officers and active managers of the bank and, together with defendant Louis J. Kuske, were the owners of the majority capital stock thereof. Defendant Lenz was assistant cashier. The defendants Kuske were partners doing business under the name of Farmers Shipping Association. On April 21, 1926, plaintiff was the owner of 41 hogs, and employed the association to ship and sell the hogs for him at the Union Stock Yards, South St. Paul, and the association did carry and sell said hogs for $1,197.14 net, after deducting expenses and commissions. The association did not deliver said sum to plaintiff, but without authority from plaintiff and in collusion with the bank caused the money to be deposited to its credit in the bank, well knowing that it was then insolvent, and fraudulently transferred said sum from the account of the association to the apparent checking account of plaintiff. On April 24, 1926, when plaintiff applied for and demanded the proceeds from the sale of the hogs the bank fraudulently concealed from him what had been done with said funds and represented that the same had been remitted to him by mail. The court also found:
"That defendant bank wrongfully and fraudulently deposited said funds in the bank to the credit of plaintiff and tortiously used the sum of $1,131.86 thereof to augment the general assets of said bank, and that plaintiff never ratified the acts of said Shipping Association or of said bank in so depositing the funds in said bank."
On April 29, 1926, the commissioner of banks took over the bank as insolvent, and thereafter plaintiff made due proof of his claim to said funds and seasonably demanded the payment thereof as a preferred claim. The conclusions of law were that as to said fund the relation of debtor and creditor between the bank and plaintiff was not created, that the bank received and held the fund without warrant of law, and therefore the fund did not become the property of the bank notwithstanding the fact that the same was used by the bank to increase its general assets.
Appellants objected to Louis J. Kuske's being called by plaintiff for cross-examination under the statute. He was a party to the action, though in default of an answer. But the action as to him being for fraud, judgment could not be entered against him without proving the cause of action alleged, and for that purpose he was properly called. Moreover, no exception to the ruling was preserved or assigned in the motion for a new trial. To the calling of Nat C. Kuske for cross-examination these appellants made no objection. Moreover, he was still an officer of the bank and subject to be called for cross-examination, and not within the rule of Snelling State Bank v....
To continue reading
Request your trial