Farmers & Merchants Bank of Hanna v. Peoples Trust & Sav. Bank of La Porte, No. 15123.

• Docket Nº: No. 15123.
• Citation: 101 Ind.App. 474, 199 N.E. 892
• Case Date: February 17, 1936
• Court: Court of Appeals of Indiana

101 Ind.App. 474
199 N.E. 892

FARMERS & MERCHANTS BANK OF HANNA et al.
v.
PEOPLES TRUST & SAVINGS BANK OF LA PORTE.

No. 15123.

Appellate Court of Indiana, in Banc.

Feb. 17, 1936.

Appeal from La Porte Circuit Court; Alfred J. Link, Judge.

Action by the Farmers & Merchants Bank of Hanna, La Porte county, Ind., against the Peoples Trust & Savings Bank of La Porte, Ind., wherein George H. Denison, trustee for the Farmers & Merchants Bank of Hanna, was added as party plaintiff. From a judgment for defendant, plaintiffs appeal.

Reversed, with instructions.

Ben C. Rees and Russell W. Smith, both of La Porte, for appellants.

Sallwasser & Sallwasser and Darrow, Rowley & Shields, all of La Porte, for appellee.

WIECKING, Judge.

This was an action by the appellants against the appellee to recover the value of certain bonds of the value of $9,450 and interest thereon, and to collect from the appellee bank the amount of money which the appellant bank had paid to its customers, and the interest thereon under a certain agreement alleged to have been entered into between the officers of the appellant bank and the officers of the appellee bank. The complaint upon which the action was tried consisted of five paragraphs, each alleging a different ground for recovery. The first paragraph of complaint is based upon simple conversion, and charges the appellee bank with converting the bonds belonging to the customers of the appellant bank to its own use; the second paragraph of complaint proceeds upon the theory that the appellee bank was a gratuitous bailee of the bonds; and the third paragraph of complaint alleges the establishment of a bailment for mutual benefit. The second and third paragraphs of complaint were based upon substantially the same allegations, as follows: That in November, 1923, the appellant bank had in its possession Liberty Loan bonds to the amount of $16,000 which were the property of the customers of the appellant bank. That on or about November 13, 1923, the appellant bank at the

[199 N.E. 893]

request of the appellee deposited these bonds in appellee bank for safekeeping. That thereafter certain bonds were withdrawn by the appellant bank until in November, 1926, the appellee had of the original bonds deposited for safekeeping, Liberty bonds of the value of $10,950. In November, 1926, appellee informed the appellant bank that the appellee bank had been robbed in the daytime, and that all of the bonds belonging to appellant's customers then in its possession had been stolen and taken from the custody of appellee. That appellee would not be able and could not deliver said bonds to appellant in accordance with their agreement. That since the date of said robbery the appellee has paid to the appellant bank the sum of $1,500, representing the par value of that number of bonds alleged to have been stolen. That appellants have demanded the return of said bonds or the value thereof, but appellee has notified appellant bank that they do not have said bonds and will not deliver them to appellants, and that said appellee still refuse to pay the value thereof. Each of said paragraphs asks damages of $12,000. In addition to the above facts, the third paragraph alleges negligence on the part of the appellee, in that the bonds in question were not cared for in the same manner as those of appellee, and were not kept under a “time lock,” but in a safe locked with an ordinary “combination lock,” that the said safe was not open to view, but was concealed from the street by curtains, and that appellee bank did not carry insurance against robbery and burglary, nor was it equipped with a burglar alarm system. The fourth and fifth paragraphs of the complaint alleged all of the facts above set out, and also that after the robbery in November, 1926, in consideration of the appellant bank refraining from pressing any claim against appellee or filing any action against appellee on account of said bonds, the officers of the appellee bank made an agreement with the officers of the appellant bank that appellee would reimburse appellant bank over a period of years for the loss occasioned by the robbery; that if any large amounts of bonds were called for appellee would furnish them; that if bonds in small denominations, of $100 or less, were called for, and if the appellant bank had the money to pay for the same, the appellant bank would purchase such bonds for its customers as called for, and the appellee bank would reimburse the appellant bank for the amounts which the appellant bank paid for said bonds. The fourth paragraph of complaint further alleges compliance with this agreement by both the appellee and the appellant bank, and that pursuant thereto the appellee had paid the interest on the stolen bonds up to April 15, 1930, and had also paid $1,500 on the principal of the bonds. That the appellant bank had paid to its customers the sum of $2,450 pursuant to the said agreement in payment for such bonds stolen from appellee, and that appellee had failed and refused to reimburse appellant bank therefor; that a demand for such sum and return of the balance of the bonds has been refused, and prays judgment for $12,000. The fifth paragraph of complaint alleges all of the facts set out in the fourth paragraph of complaint, and alleges that, pursuant to the agreement above, the appellant bank had taken up bonds...