Ray's Administrators v. Bank of Kentucky

• Decision Date: 23 October 1874
• Parties: Ray's administrators v. Bank of Kentucky.
• Court: Kentucky Court of Appeals

Page 344

73 Ky. 344

Ray's administrators v. Bank of Kentucky.

Court of Appeals of Kentucky.

October 23, 1874.

APPEAL FROM JEFFERSON COURT OF COMMON PLEAS.

I. & J. CALDWELL, JAMES SPEED, For Appellants.

BARR, GOODLOE & HUMPHREY, For Appellee.

JUDGE LINDSAY DELIVERED THE OPINION OF THE COURT.

On the 16th of August, 1864, B. F. Ray deposited with the Bank of Kentucky, at its branch in Bowling Green, a package containing sixteen thousand and fifteen dollars in United States legal-tender notes. On the 24th of the same month he deposited with the same bank and at its said branch a bag containing five thousand one hundred and sixty-six dollars in gold coin. They were special deposits, for the keeping of which the bank was to receive no compensation. The cashier issued to Ray certificates describing the deposits, and reciting that they were to be held at his risk and to be delivered to him upon his receipt entered upon the special deposit-book of the bank.

In January, 1866, the Bank of Kentucky withdrew its branch from Bowling Green and sold its banking-house and vaults, with the greater portion of its assets, to a new banking corporation styled "The Bank of Bowling Green." The persons, or at least a majority of those who had acted as directors of the branch of the Bank of Kentucky at Bowling Green were made directors of the new bank. The old cashier, Thomas C. Calvert, was made its cashier, and, except the changes necessarily incident to the change of proprietors, the business was carried on by the new organization exactly as it had been carried on by the old. In the sale by the Bank of Kentucky to the Bank of Bowling Green, and in the arrangements under which the one became the successor of the other, the special deposits on hand seem to have been entirely overlooked. They were, however, left in the vault in which they had always been kept, and the special-deposit book in which they were entered was left in the custody of the new bank. The proof tends to show that Ray was aware of the fact that his package of legal-tender notes and bag of gold coin were left in charge of the Bank of Bowling Green, and it is claimed that he ratified the change and accepted the last-named bank as his bailee.

Ray died in October, 1870. Shortly thereafter appellants qualified as the administrators of his estate. They demanded the deposits evidenced by the two certificates dated respectively the 16th and 24th of August, 1864; and the bank failing to deliver them, this action was instituted to recover their value.

The bank defended, claiming exoneration from liability upon two general grounds:

First — It avers that the deposits when received were placed in its vaults where its own moneys and valuables were kept; that the same care and diligence were exercised in the preservation of these deposits as it exercised in preserving its own property of like character and value, and that this care and diligence was such as ordinarily prudent persons generally exercise under like circumstances; and further, that said deposits were preserved until January, 1866; that in this month it withdrew its branch from Bowling Green, and left them in the custody and control of its successor, the Bank of Bowling Green, and that Ray, with full knowledge of all the facts, ratified its action in the premises, and accepted the last-named bank as his bailee, and from that time forward looked to it alone for the execution of the contracts of bailment.

Second — That if the Bank of Bowling Green did not after January, 1866, hold these deposits in its own right, then it held them as appellee's agent, with the knowledge and approval of the depositor; and that it exercised the same care and diligence in their preservation as had theretofore been exercised by the appellee; and that they were lost by being fraudulently and feloniously abstracted from the vaults of said last-named bank by Thomas C. Calvert, its cashier, without the assent or knowledge of its president or directors, or any of them; and that up to and after this fraudulent and felonious act said cashier bore the reputation of a faithful and honest bank-officer, and that the bank had no reason up to such time to suspect him of dishonest practices.

We do not deem it necessary to review critically the evidence. It is sufficient to say that there was evidence before the jury tending to support both defenses. We will therefore proceed at once to consider the case in its legal aspects.

Instruction No. 1 given by the court of its own motion is substantially a restatement of the principles embodied in instructions Nos. 1 and 7 given at appellee's instance. Said instruction is in these words: "If the jury believe from the evidence that (by) the charter, by-laws, and usage of defendant Thos. C. Calvert, as defendant's cashier at its office or branch at Bowling Green, had the right to receive and did receive of plaintiffs' intestate, Dr. Ray, the United States legal-tender notes and gold, as set forth in the certificates of deposits or receipts exhibited by plaintiffs in their petition, and gave said receipts to said Ray for the same, and that afterward the defendant, without the knowledge or consent of said Ray, did transfer or cause to be transferred the care and custody of said legal-tender notes and gold to the Bank of Bowling Green or its cashier, Thomas C. Calvert, then from the time of such transfer the notes and gold so transferred were at the risk of defendant. If, however, the jury should believe from the evidence that after such transfer to the Bank of Bowling Green or to said Calvert, the cashier thereof, while said gold and notes were in its custody and care or in that of its cashier, the said Ray had notice or was informed of such transfer of the notes and gold, and after such notice or information assented thereto, or failed to object and within a reasonable time to notify defendant or its agent of such objection, if he did so object to said transfer, then after such assent or failure to object and give such notice if he did object, within such reasonable time, the risk of defendant by reason of the transfer to the Bank of Bowling Green or to said Calvert was at an end, and devolved upon said Ray. What was reasonable time within which it was the duty of Ray to notify the defendant of his objection to such transfer after notice thereof, if he received such notice or information and did so object, is a question for the jury to determine in view of the facts of the case."

We do not see that the theory of this instruction, upon the idea that the Bank of Kentucky when it discontinued its branch at Bowling Green transferred the deposits to the Bank of Bowling Green as its successor, and that the transfer was assented to by Ray with full knowledge of the facts, is objectionable. Ray lived in the adjoining county to Warren, in which Bowling Green is situated. The inference is reasonable and legitimate that he expected his deposits to be kept at Bowling Green. But the Bank of Kentucky was not bound to keep a branch at that place, and when it withdrew its branch the deposits had to be removed to Louisville or left with the Bank of Bowling Green, either as the successor or agent of the Bank of Kentucky, or returned to the depositors hence the act of the defendant in so leaving them did not necessarily imply a conversion.

It was the duty of the appellee to notify its depositors of its action; yet notwithstanding it may have failed to discharge that duty, if Ray otherwise acquired notice or information and then voluntarily ratified or acquiesced in...