Burtnett v. The First National Bank of Corunna

• Decision Date: 16 April 1878
• Citation: 38 Mich. 630
• Parties: Thomas F. Burtnett, adm'r of the estate of William Burtnett v. The First National Bank of Corunna
• Court: Michigan Supreme Court

38 Mich. 630

Thomas F. Burtnett, adm'r of the estate of William Burtnett v. The First National Bank of Corunna

Supreme Court of Michigan

April 16, 1878

Submitted April 5, 1878

Error to Shiawassee.

Assumpsit. Plaintiff brings error.

Judgment reversed with costs and a new trial ordered.

Gould & Lyon and Austin Blair for plaintiff in error. Property or the proceeds of it can be recovered by the owner wherever it can be traced in the hands of an agent or his assignees unless it has been transferred for value without notice Taintor v. Pendergast, 3 Hill 72; Denston v Perkins, 2 Pick. 86; United States v. Nat. Bank of Boston, 17 Alb. L. J., 188; 2 Kent's Com., 863.

Aug. C. Baldwin for defendant in error. Money deposited in a bank in an agent's name with his own funds cannot be identified and is held to be his in any litigation between the principal and a third person, Beatty v. McCleod, 11 La. Ann., 76; the deposit creates a debt and not a bailment, Wray v. Tuskegee Ins. Co., 34 Ala. 58; Robinson v. Gardiner, 18 Grat. 509; the title to money paid into a bank as a deposit, and passed generally to the depositor's credit, passes to the bank, which may apply the payment to any overdue demand they have against the depositor, Garnett v. M'Kewan, 4 Eng. 419; In re European Bank, id., 745; Demmon v. Boylston Bank, 5 Cush. 194; Com. Bank of Albany v. Hughes, 17 Wend. 94; Graves v. Dudley, 20 N. Y., 76; Marsh v. Oneida Cent. Bank, 34 Barb. 298; School Dist. v. Nat. Bank, 102 Mass. 174; State Bank v. Armstrong, 4 Dev. (Law), 519; Ford v. Thornton, 3 Leigh 695; Whittington v. Farmers' Bank, 5 Har. & J., 489; Oddie v. Nat. City Bank, 45 N.Y. 735; national banks are not authorized to take special deposits and are not liable for their loss, Wiley v. First Nat. Bank of Brattleboro, 47 Vt. 546; Weckler v. First Nat. Bank of Hagerstown, 42 Md. 581; First Nat. Bank of Lyons v. Ocean Nat. Bank, 60 N. Y., 278; Foster v. Essex Bank, 17 Mass. 478; nor is a bank liable for a loss of a special deposit occasioned by the act of the owner's agent who deposited it, De Feriet v. Bank of America, 23 La. Ann., 310.

OPINION

Graves, J.

This action was brought by William Burtnett in his life-time to recover a little over a thousand dollars claimed to have been received by the bank upon a bond issued by the city of Corunna and by him owned. In the progress of the cause he died and his administrator was allowed to assume the further direction of proceedings.

Upon the trial the jury found for the bank and the case has been removed to this court in order to obtain a review of particular rulings made in the circuit court.

The plaintiff in error has been fully heard but we have not been favored with either argument or brief on the part of the bank. ^[*]

As the hearing has consequently been wholly ex parte it is not considered prudent to go further than is actually necessary to dispose of the case.

The bond was issued by the city January 31st, 1870, to the decedent. It was made payable in three years with semi-annual interest at ten per cent. at defendant's banking house and was there lodged.

At the time of its issue or just before that, decedent commenced doing business at the bank, and Spencer B. Raynale was then cashier and continued so until the following January, and the evidence tended to show that he obtained the bond of the city for Mr. Burtnett and acted for him thereafter in other transactions and made several loans to parties for him and received payments upon certain of his demands.

About the first of January, 1871, Mr. Raynale ceased being an officer of the bank and employed himself in law business. He kept an account at the bank and appears to have had the confidence of its managers. He left papers in its vault for safe keeping, and the evidence tended to show that decedent's bond was with them.

March 24, 1874, and when the bond was past due and still owned by decedent, the city arranged with Mr. Raynale to pay it and take it up. Decedent had no knowledge of the transaction. Mr. Raynale sent an order to the bank for the bond and it was handed out accordingly. There was then due of principal and interest, the sum of $ 1015, and the city gave him in payment a check for $ 1000 and $ 15 in money and he surrendered the bond. Soon after and on the same day, he deposited the $ 15 and the check for $ 1000 with the defendant bank and requested that it might be credited to his account and it was done. The check was immediately collected. He soon afterwards checked out $ 229.29, and becoming too unwell to do business he went to his father's in Oakland county, where he died in September of the same year. The evidence tended to show that he was indebted to the bank in a sum greater than the amount left of the sum paid on the bond, and was insolvent. The bank assuming the right to apply what remained in its possession of the proceeds of the bond on Raynale's debt, proceeded to effect that result by entries in its books.

The evidence conduces to show that decedent Burtnett had no knowledge of the payment and surrender of his bond or of the conversion of the proceeds to the payment of Raynale's debt to the bank until long after the transactions and after the death of Raynale, and on the other hand there is no evidence fairly tending to prove that he authorized Raynale to transact this business or contemplated that he should collect the principal of the bond and lodge it in the bank. Neither is there any evidence fairly tending to prove that Burtnett ever in fact parted with any right or interest he was entitled to as owner. And the case is clear that all the bank did was to receive from Raynale the proceeds of Burtnett's bond and then to appropriate all, except the small amount checked out, to the payment of its debt against Raynale. This outline is sufficient to present the main point and the only one to be noticed now. It is gathered from the case that no recovery was claimed for the $ 229.29 paid out on Raynale's checks and hence that portion and the questions which a controversy about it might cause, are not involved. The subject of contention is the balance not taken out of the bank. And in regard to that the circuit judge was of opinion that conceding decedent's ownership of...