Curry v. Wisconsin Nat. Bank

• Decision Date: 23 April 1912
• Citation: 149 Wis. 413,136 N.W. 549
• Parties: CURRY v. WISCONSIN NAT. BANK.
• Court: Wisconsin Supreme Court

149 Wis. 413

136 N.W. 549

CURRY

v.WISCONSIN NAT. BANK.

Supreme Court of Wisconsin.

April 23, 1912.

Appeal from Circuit Court, Milwaukee County; J. C. Ludwig, Judge.

Suit by Annie E. Curry, by guardian, against the Wisconsin National Bank, to restrain sale of and to recover negotiable bonds. Judgment for plaintiff. Defendant appeals. Affirmed.Van Dyke, Rosecrantz, Shaw & Van Dyke, for appellant.

T. M. Priestley and J. L. O'Connor, for respondent.

TIMLIN, J.

On or about November 1, 1905, the plaintiff left with the First National Bank of Mineral Point, Wis., for safekeeping, 10 bonds of the United States each payable to bearer and aggregating $5,000. September 10, 1909, Phil Allen, Jr., vice president of the bank last mentioned and active in its management, without authority, express or implied from the plaintiff, and under circumstances amounting to larceny, took these bonds and pledged them with the defendant bank as collateral security to Allen's personal note for $5,000 and ordered the avails of such note to be credited to the bank of Mineral Point. The defendant bank was one of the correspondents or reserve agents of the Mineral Point bank and carried an account with the latter and credited the latter with $5,000 in this account. This credit was according to the mode of business between the banks which was known to Allen, and the court found that the transaction was for the sole benefit of the Mineral Point bank. This must mean that Allen, as officer of the latter bank, took such means to procure an additional credit of $5,000 for his bank in this account. On September 10, 1909, before the discount mentioned, the credits of the Mineral Point bank in this account exceeded its debits by $20,343.84, and after the discount by $25,343.84. Between the date last mentioned and October 18, 1909, there were numerous debits and credits in this account to the Mineral Point bank, but during all this time the latter bank had an excess of credits which never fell below $11,000, and on October 18, 1909, its excess of credits was $15,242; but disregarding credits made after September 10, 1909, and considering only items of debit to the Mineral Point bank for moneys paid out to or for it by the defendant, the aggregate of these debit items exceeded $25,343.84. On September 30, 1909, what is known in banking as a “reconcilement sheet” was sent from defendant to the Mineral Point bank and accepted without objection by the latter. This began with the credit balance of the Mineral Point bank on September 1, 1909, gave the items of debit and credit between that date and September 30, 1909, including the avails of the $5,000 note in question which was specially noted “Allen note discount” and balanced the account by an entry on the debit side, “Balance, $22,819.30.” This, of course, indicated an excess of credits of the Mineral Point bank to that amount. October 11, 1909, the Mineral Point bank was found to be insolvent and taken in charge by the United States officials under the national bank law. On October 18, 1909, this suit in equity was brought against the defendant to restrain it from selling the bonds and to recover possession thereof, and defendant was thereby fully informed of the plaintiff's ownership of the bonds and the wrongful and larcenous act of Allen by which they came in its possession. Defendant had, however, no knowledge or notice prior to this time of the title of the plaintiff or of any infirmity in Allen's title to the bonds and took them in pledge in due course without anything to put the defendant upon inquiry. After this action was commenced, the plaintiff became insane; hence her appearance by guardian.

Respondent argues in support of the judgment below that, under such circumstances, the defendant is not entitled to hold the bonds as against the plaintiff because it had actually, and prior to the commencement of this action and the consequent notice to it of plaintiff's title, paid out nothing on account of the pledge and entered into no irrevocable agreement, and it was amply protected by the credits of the Mineral Point bank at all times. The appellant contends that under the foregoing facts: (a) The defendant, by crediting the avails of Allen's note to the Mineral Point bank as requested by Allen with the consent of the Mineral Point bank, bound itself irrevocably to Allen and to the Mineral Point bank; (b) that the making and acceptance of the reconcilement sheet on September 30, 1909, was in effect an application of all charges against the Mineral Point bank therein contained upon the earlier credit items of that bank appearing therein, including the $5,000 item in question; (c) that in any event the law would apply the debit charges against the Mineral Point bank made after September 10, 1909, to the earlier items of its credit, and by this legal application of payments the defendant had paid out the avails of the note in question to or for the Mineral Point bank; (d) that if the defendant bank had a banker's lien upon the general balance of the bank of Mineral Point against which it might have asserted a...