Int'l Bank of St. Louis v. German Bank

• Decision Date: 28 February 1877
• Citation: 3 Mo.App. 362
• Parties: INTERNATIONAL BANK OF ST. LOUIS, Appellant, v. GERMAN BANK et al., Interpleaders, Respondents.
• Court: Missouri Court of Appeals

3 Mo.App. 362

INTERNATIONAL BANK OF ST. LOUIS, Appellant,

v.GERMAN BANK et al., Interpleaders, Respondents.

St. Louis Court of Appeals, Missouri.

Feb. 28, 1877.

1. A certificate of deposit which does not contain the words ““for value received” is not a negotiable instrument under the statute, but title to it will pass by indorsement and delivery, or by delivery, in case of an indorsement in blank, yet the transferee takes it subject to all equities.

2. Where one indorses in blank, and delivers, as collateral, to a bank a non-negotiable chose in action, upon the face of which is indorsed a notice that it is subject to certain claims, the indorser is not estopped to assert his title as against the purchaser or pledgee thereof, who has taken it from the bank for a valuable consideration and without actual notice.

3. Where the cashier of a bank gives a fraudulent and worthless check, and takes up collateral securities therewith, such transaction effects no legal re-transfer of the securities.

APPEAL from St. Louis Circuit Court.

Reversed and judgment.F. & E. L. Gottschalk, for appellant, cited: Odell v. Gray, 15 Mo. 337; Paulette v. Brown, 40 Mo. 52; Commercial Bank v. Kortright, 22 Wend. 348; McNeil v. Tenth National Bank, 46 N. Y. 325; Moore v. Metropolitan National Bank, 55 N. Y. 41; Lowenstein v. Knapp, 2 Mo. App. 159; Woody v. Seventh National Bank, 3 C. L. J., No. 51, p. 824.

T. A. & H. M. Post, for respondents, cited: Shaw v. M. E. Church, 8 Metc. 226, and cases cited; Bailey v. Smock, 61 Mo. 219; Jaccard v. Anderson, 32 Mo. 188; Lindsay v. Parsons, 34 Mo. 422; Austin v. Blue, 6 Mo. 265; Thomson v. Roatcap, 27 Mo. 285; Hasbrouck v. Vandervoort, 4 Sandf. 74; Wilson v. Little, 2 Comst. 433; Homes v. Crane, 2 Pick. 610; Jarvis v. Rogers, 15 Mass. 376; Lowenstein v. Knapp, 2 Mo. App. 159; Hays v. Riddle, 1 Sandf. 248.

BAKEWELL, J., delivered the opinion of the court.

It appears from the pleadings and evidence in this case that the International Bank, the German Bank, and the People's Savings Institution, of which John H. Fisse is assignee, are all banking corporations whose place of business is St. Louis.

On August 11, 1874, Herman Boecke, one of the interpleaders, deposited with the German Bank $3,000, for which he received the following certificate:

“$3,000.

German Bank, St. Louis, Mo., Aug. 11, 1874.

Herman Boecke has deposited in this bank three thousand dollars, payable to the order of himself six months after date, with six per cent. interest for the time stated, on the return of this certificate properly indorsed.

No. 10,301.

FRANK N. DIETZ, Cashier.”

The following words were written across the face, in red ink:

“The certificate is subject to any claim for collection, or any other fees arising out of disbursement of the legacy of which this money is part proceeds.”

On August 24, 1874, before the maturity of this certificate, it was indorsed in blank by Boecke, and delivered to the People's Savings Institution for safe-keeping, and as collateral security for two loans made by said institution to Boecke, for which he had given his two notes for $300 and $150, respectively, of which no part is paid; and the notes are now held by Fisse, as assignee of the People's Savings Institution.

In January, 1875, before the maturity of the certificate, Edmund Wuerpel, then cashier of the People's Savings, on behalf of that institution and acting within the scope of his authority, obtained a loan of $5,000 from plaintiff, the International Bank, for which, as cashier, he executed a note maturing on Monday, February 1, 1875. As security for this note, Wuerpel delivered to plaintiff collaterals to the amount of $6,000, which he represented as the property of the People's Savings. Amongst these collaterals was the certificate of the German Bank to Boecke, which, with the other collaterals, was pinned to the note of Wuerpel.

On Saturday, January 30, 1875, Wuerpel came to the bank of plaintiff, in the afternoon, and represented to the teller of plaintiff that he wished to pay the note maturing on Monday; and then handed to the teller his (Wuerpel's) check on the People's Savings Institution for $4,500, the balance then due on the loan. This check was certified by Wuerpel, as cashier, and on receiving it the teller of plaintiff delivered to Wuerpel the note, with the collaterals attached.

On the next day (Sunday) Wuerpel absconded. On Monday plaintiff's teller went to the People's Savings Institution to present the check, during banking-hours, and found the doors closed.

The People's Savings Institution then made an assignment to Fisse, who took possession of its assets on February 1, 1875, and found that Wuerpel, before his flight, had given checks to various persons for a large amount, exceeding the money on hand.

Plaintiff commenced replevin against the People's Savings Institution for the certificate of deposit, and thus obtained possession of it again.

Plaintiff took the certificate from Wuerpel as collateral, in good faith, relying on his statement that it was the property of the bank. On the other collaterals plaintiff collected $2,040.26, and presented the certified check to the assignee for allowance; it was allowed, and a dividend declared of 2 1/2 per cent., which plaintiff has not collected.

The plaintiff commenced the present suit against the German Bank, on the certificate of deposit, on March 11, 1875.

The answer admits the issue of the certificate, but says that the amount due on it is claimed by Boecke, and by Fisse, assignee of the People's Savings; and asks that they may be required to interplead.

Boecke interpleads, and claims that he owns the certificate, and that it should be paid to him; and afterwards files an assignment of his claim to Christine Boecke.

Fisse interpleads, and claims that the People's Savings Institution should be first paid by the German Bank the amount due on the two notes executed by Boecke.

Plaintiff filed a reply to the interplea of Boecke, denying generally all statements inconsistent with the averments of the petition.

Afterwards the German Bank paid into court $3,050, and was discharged.

On the trial the plaintiff asked the following instructions, which were refused:

“1. The court declares the law of this case to be that, if the People's Savings Institution, by Edmund Wuerpel, its cashier, on 3d January, fraudulently, or by fraudulent representation, obtained possession of the certificate of deposit, and that plaintiff afterwards replevied said certificate out of the hands of the People's Savings, then the People's Savings Institution acquired no right to, or interest in, said certificate by reason of such possession, nor did plaintiff lose any right or interest therein, but he is entitled to the same rights that he would have had if the certificate had remained in his possession continuously up to the time of bringing this suit.

2. The court declares the law of this case to be as follows: It being admitted by all the parties that the certificate of deposit on which suit is brought was indorsed in blank by Boecke, the payee, and by him delivered before maturity to the People's Savings Institution, the effect of such indorsement and delivery was equivalent to an acknowledgment on the part of Boecke that he had parted with the ownership of said certificate, and he is estopped from setting up any claim to, or interest in, the same, as against the rights of the plaintiff, provided plaintiff took the certificate from the People's Savings Institution as a collateral for a loan, before the maturity, without any notice of Boecke's ownership or claim, but upon the representations of Wuerpel, the cashier, that the People's Savings Institution was the true and lawful owner of the certificate.

3. If the court, sitting as a jury, believes from the evidence that the certificate of deposit on which this suit is brought was indorsed by Herman Boecke, the payee, before its maturity, and that said certificate, after said indorsement and before maturity, was assigned to plaintiff as collateral security for a loan obtained upon the faith and credit of that and other securities; that plaintiff took said certificate in good faith, without any notice of any defect in the title thereof, or of any equities existing against the payment of the same; and if the court further believes from the evidence that the said loan has not been wholly paid, then the court will find for the plaintiff.

4. If the court should find for the plaintiff, the amount of its recovery should be the loan of $5,000, less the payment of $500, and the amounts already collected on the collaterals.”

The following declarations of law were given at the instance of the interpleader Boecke:

“1. The court declares the law to be that, if the plaintiff took a check...