National Bank of Oshkosh v. Munger

• Decision Date: 06 June 1899
• Docket Number: 497.
• Citation: 95 F. 87
• Parties: NATIONAL BANK OF OSHKOSH v. MUNGER.
• Court: U.S. Court of Appeals — Seventh Circuit

95 F. 87

NATIONAL BANK OF OSHKOSH v. MUNGER.

No. 497.

United States Court of Appeals, Seventh Circuit.

June 6, 1899

This suit is brought by Harriet E. Munger, the defendant in error to recover of the National Bank of Oshkosh, the plaintiff in error, a claimed balance of $14,435.06 of moneys deposited to her account in that bank. Prior to the 1st day of March 1891, she had a deposit account with the bank, and on that day had a balance to her credit of $822.35. She is the daughter and sole heir at law of Jefferson Bray, deceased and on April 8, 1891, his executors deposited in the bank to her credit the sum of $23,439.49, and delivered to Frank Heilig, who was, and for 20 years had been, the paying and receiving teller of the bank, a box containing the securities of the estate, and which then belonged to the defendant in error. This was done at her request, she having engaged Heilig as her agent to attend to her estate and to make loans for her. At about that date the cashier of the bank asked her who was going to do her business, and she said Mr. Heilig that her father had confidence in him, and that she intended to intrust him with her affairs. Heilig kept the box in the vault of the bank, no one but himself having access to it. The defendant in error resided at Oshkosh, in which city the bank was located, until the autumn of 1894, when she removed to the city of Chicago. The custom in the transaction of this business was that Heilig, when he made a loan for her, obtained her check upon the bank for the amount of the loan; and several hundred checks so procured, and signed by her, and aggregating in amount over $92,000, are produced in evidence. He had no authority from Mrs. Munger to draw upon her bank account, except upon checks signed by her. Soon after his agency commenced, and from time to time during the six succeeding years, he drew moneys from the bank, delivering to the bookkeeper of the bank memoranda called 'teller's memoranda,' which were directions to the bookkeeper to debit Mrs. Munger's account with the moneys stated thereon, and so taken by him. The claim in suit is properly divisible into three classes:

First. The amount taken by Heilig from the bank and appropriated to his own use, for which debit memoranda were made by him and delivered to the bookkeeper, and without check or voucher, or authority from Mrs. Munger. This amount is stated by the court below, and by counsel in this court, to be $13,080.35, while the notes of Heilig, representing the amount abstracted, and which were placed by him in the box containing Mrs. Munger's securities, foot up $13,183. No part of this amount was ever paid to Mrs. Munger, or in any way inured to her benefit. With respect to $5,000, part of the amount, the evidence disclosed that after its appropriation, and without knowledge of it by Mrs. Munger, Heilig, about October 2, 1893, asked her if she would loan him $5,000 upon timber lands, not mentioning where or what they were, and she expressed her willingness to make such loan. Thereupon, without further communication with Mrs. Munger, and without her knowledge, Heilig signed, and placed in the box of Mrs. Munger's securities at the bank, his note for $5,000, dated October 2, 1893, to the order of Mrs. Munger, payable at the National Bank of Oshkosh on or before five years after date, with interest at 6 per cent. per annum. This note contains this further statement:

'Having deposited with the National Bank of Oshkosh certain property (as stated below) as collateral security to this note, for value received I hereby authorize said bank, on the nonpayment of this note at maturity, to sell said property at either public or private sale, with or without further notice to me, and apply the proceeds thereon:

Lands in Michigan, hardwood.

Do ' Minnesota, pine.'

Indorsed upon the note was the following:

'Southwest quarter section 29, town 60, range 18, Minnesota. Contains 3,200,000 ft. of pine. I own 1/2 interest. Taxes paid for 1893.'

No money was taken upon this note. It was so made and deposited by Heilig to represent so much of prior defalcations.

Second. The sum of $2,665 taken from the bank by Heilig upon like debit memoranda, and disposed of as follows: (a) Wall and Spaulding loan, January 9, 1893, at six months, $1,000. Heilig states that this loan was repaid, but he was unable to say whether Mrs. Munger's account was credited with the amount. The bank book shows that it was not. (b) Loan to Arthur C. Payne June 30, 1894, $100; November 1, 1894, $300,-- charged in the bank book to Mrs. Munger's account. It is not possible from the record to reconcile or account for the singular entries respecting this loan. On january 13, 1896, Mrs. Munger's bank account is credited $160, A. C. Payne,' and on March 12, 1896, the account is charged with $217.67, note A. C. Payne,' while the notes of Payne found in the box are dated August 25, 1894, for $300, and June 26, 1896, for $100, and on June 16, 1895, Heilig reported a loan to A. C. Payne of $200. (c) Loans to pearson Refrigeration & Cold-Storage Company. These loans were all made in the year 1896, as follows: May 11, $350; June 4, $300; August 4, $300; September 5, $115; September 26, $200; total, $1,265. Notes of the company were taken, and placed in the box of Mrs. Munger's securities, bearing the dates stated, each payable one year after date to the order of Mrs. Munger. In this transaction Heilig assumed to act both for Mrs. Munger and for the corporation, in which he was one of the chief parties interested. These loans were made by Heilig after he had severed his connection with the bank, and were done in this way: In each case he made a memorandum, not signed, directing the amount to be credited to the Pearson Refrigerator & Cold-Storage Company, and to be charged to Mrs. Munger, delivering them to the bookkeeper, who made entries accordingly in the books of the bank. Heilig states that no one but an officer of the bank ever makes such memoranda and that no money is ever paid to an outsider upon a memorandum debit, and that he had free access to the bank after he had left its service. Neither of these loans have been paid, nor had Mrs. Munger any knowledge of them.

Third. The sum of $75 withdrawn on July 24, 1896, from the bank by Heilig upon a like debit memorandum, for his own use, without check or voucher from Mrs. Munger, after he had left the service of the bank, and charged to Mrs. Munger, in the bank book, as loaned under the name of 'ad. Domingo.'

It should be noted that the total of all these amounts is $15,820.35,-- an excess of $1,385.29 over the amount claimed, $14,435.06, to which sum, with interest, the recovery of the plaintiff below was limited by the court.

The record states that in the autumn of 1894, just previous to Mrs. Munger's removal to Chicago, Heilig had an interview with her at her home, and he says: 'Took the box containing bank books, with whatever belonged in it,-- the plaintiff's papers. We then and there looked over the plaintiff's matters. Cannot remember whether rendered her a statement. That he knows that they looked over the contents of the box. Exhibit R2 is a statement he furnished the plaintiff. Cannot state when he furnished it. The pencil mark on exhibit R2 my handwriting. S2 is in his handwriting, including the pencil mark on the same. That he made and furnished it to the plaintiff before the plaintiff went to Chicago. ' On cross-examination, Heilig stated that Mrs. Munger must have seen his note (referring to the $5,000 note). 'I compared at her house before she went to Chicago, and each individual note was taken out; * * * checked them up.'

There were three statements produced in evidence,-- Exhibits R2, S2, and T2. The latter, on its face, refers to receipts and expenditures in the year 1895, and could not have been the statement referred to by Heilig. There is some uncertainty in the evidence respecting which statement was given to Mrs. Munger by Heilig before the former removed to Chicago. The court, in its charge, said that it was not claimed that there was proof of the actual delivery of Exhibit R2 to Mrs. Munger at that particular time, except as it might be determined from the appearance of the paper itself, and left the matter to be determined by the jury. Exhibit R2 contains a statement of Heilig's note for $5,000. Exhibit S2 does not, although it refers to notes of subsequent date. The latter exhibit is manifestly prior in time to the former. Exhibit R2 at the foot, contains a statement in pencil by Heilig of receipts and expenditures, as follows:

Receipts.

Int. Rec. from Jany 1st, 94

to Oct 1st 2477.97

" 2. Otis 420.

Timmerman 120.

Milwaukee 73.50

_______

Expenditures. Jany 1st 94 3091.47

Taxes 289.29

Mrs. Munger to Sept. 18 1450.

_______ 1739.29

_______

1352.18

In pencil on the statement, and in the handwriting of Heilig, is the following:

2000 Beideman)

2800 D. L. Miller)

12000 Harry & John Munger) Notes del'd to

______) Mrs. Munger.

$16800)

The record discloses that Exhibits R2 and S2 were introduced in evidence by the bank, but from whom they were obtained does not appear by the record. Certain other exhibits, being letters from Heilig to Mrs. Munger, were produced by her. The court, in its charge to the jury, assumed that a statement was produced at the trial by Mrs. Munger, but did not, nor does the record identify the one produced. She testified that, before she left Oshkosh for Chicago, Heilig brought the box to her; that she did not personally examine the papers; that he gave her what was supposed to be a memorandum of the contents at that time. She thought it to be one of the papers produced, but did not identify the statement. Mrs Munger stated...