Somers v. Germania Nat. Bank of Milwaukee

• Decision Date: 18 February 1913
• Parties: SOMERS v. GERMANIA NAT. BANK OF MILWAUKEE.
• Court: Wisconsin Supreme Court

152 Wis. 210

138 N.W. 713

SOMERS

v.GERMANIA NAT. BANK OF MILWAUKEE.

Supreme Court of Wisconsin.

Nov. 19, 1912.

On Motion for Rehearing or Change of Mandate. Feb. 18, 1913.

Syllabus by the Judge.

If a person have a certificate of deposit in a bank, payable to his order, and it be paid to another without endorsement thereon, proof thereof, unexplained, establishes, prima facie, a case in favor of such person to recover of such bank.

Neither agency or agency authority can properly be established by proof of declarations of the pretended agent.

The foregoing does not affect competency of a person claimed to be the agent of another to testify in respect thereto.

“The authority of an agent, when not in writing, or required to be, may be proved by the agent himself,” and that obtains “where the wife acts as agent of the husband, or the husband as agent of the wife.”

In case one would naturally be expected to make a claim of a pecuniary nature, if it existed, against another and enforcement thereof would give rise to a claim over against a third person, and that one knows, or has reasonable ground to know, that such other has acted inconsistent with the existence of such claim, relying upon supposed authority of such person, and delay in making the facts known to such other might probably work to his prejudice, unreasonable delay, in that regard, raises a rebuttable presumption of prejudice.

In the circumstances stated the burden of proof is on the one who keeps silent, to show that his conduct was not prejudicial to the person against whom the claim is alleged to exist.

A right may be lost by delay without any element of actual damage to him against whom it existed.

An existing right, known, or which ought to be known, by the possessor, may be lost by waiver as well as by estoppel.

A change of position by one relying upon the conduct of another--the relations between the two being such as to raise a duty of the latter to make known to the former the facts--so that a reversal of such conduct would work prejudice to such person, is essential to estoppel in pais.

The voluntary abandonment of a known, or presumably known right, constitutes a waiver thereof which cannot be displaced by a change of mind, regardless of any element of estoppel.

A right cannot be lost by abandonment without intention to waive; but the intent may appear, conclusively, as a legal result of conduct, regardless of existence of any actual or express intent, or even in case of an actual but undisclosed intention not to waive.

There cannot be a waiver without intent to waive, based on knowledge of the facts; but the intent and such knowledge may be constructive as well as actual, and be conclusive where, in contemplation of law, knowledge does or ought to exist.

Appeal from Circuit Court, Milwaukee County; Orren T. Williams, Judge.

Action by Fannie Sherwood Somers against the Germania National Bank of Milwaukee. Judgment for plaintiff, and defendant appeals. Reversed and remanded, with directions.

Siebecker, J., dissenting.

Action to recover $3,500 principal and accrued interest claimed to be due on certificates of deposit. The plaintiff's claim was this: The certificates were duly issued by defendant to plaintiff in 1906, payable to her order. She never transferred them nor authorized transfer thereof. They were taken without her authority and presented to defendant for payment, with a forged indorsement of her name thereon, and were paid to the wrongdoer. As soon as she learned thereof she called on defendant and notified it of the true state of the case.

Defendant answered to this effect: Plaintiff's husband, as her duly authorized agent, transacted all the business respecting the certificates up to the time they were paid. He deposited the money September 23, 1905. Prior to January 15th the money was drawn on part of the certificates by Mr. Somers and placed in his account by plaintiff's permission; she indorsing the certificates. On that date one of the remaining certificates, and February 15th thereafter, the other, was presented for payment by Mrs. Somers' duly authorized agent, and paid. Though she knew of the transactions she made no complaint until March 10, 1909, during which time plaintiff's position had materially changed. There was evidence establishing these facts: Plaintiff and Paul J. Somers intermarried in 1904. They lived together thereafter as man and wife until some time in the early part of 1909 when they separated. During 1905 and 1906 Somers was a practicing lawyer in Milwaukee. Mrs. Somers trusted him to do all business. He conducted all her financial transactions with defendant. In 1905, as her agent, he deposited with defendant the $5,850, taking four $500, one $1,000 and one $2,000 certificates of deposit, and credit in open account for $500 in his name and $350 in Mrs. Somers' name. All the certificates were left by Mrs. Somers in his care. He deposited them with his papers in a lock box at the Citizens' Trust Company in Milwaukee. He, alone, had access to the box. She knew that. She never had the key to the box except on one occasion for four days. Three of the certificates, aggregating $1,500 were, prior to January, 1905, indorsed by her and used by her husband by her permission to augment his open account. By February 15, 1906, the other certificates were likewise used, he indorsing them in her name and his own.

Plaintiff and Mr. Somers lived together thereafter in quite an extravagant manner, considering their income, particularly his. In October, 1906, upon the occasion of plaintiff wanting $95, for a special purpose, she asked defendant, by telephone, about her interest money, whereupon she was informed she had no interest-bearing fund at the bank. She told her husband of the occurrence and he supplied her with the needed money. She paid no further attention to such occurrence till the expiration of one year and three months. In the meantime, she and Mr. Somers had become somewhat estranged but were still living together as husband and wife.

After the expiration of such period, she became informed of all the facts in respect to the use of the certificates. She requested defendant to produce the papers, which he did. Then, and again a few days thereafter, there was conversation between the representatives of the bank and plaintiff respecting the certificates. Her claim was that Somers had used them without authority. She gave such representatives the impression that she was much in need of money and purposed realizing on the canceled certificates. She was given to understand that if Somers had really forged her name to the papers, and thus improperly obtained the money, it was a very serious matter for him. She manifested a disposition not to press the question so far as to thus involve Somers. She said she would think it over, giving the officers of the bank the impression that she would reflect upon the situation and then conclude whether to hold the bank liable to her on the certificates, or submit to what had been done. She lived with Somers for about a year thereafter, going to Chicago for that purpose. There they parted; she returning to Milwaukee, where after some two months she applied for a divorce and obtained it without contest. Mr. Somers in the meantime had gone to reside in a distant state. Some time after the divorce was obtained--about one year and three months after the last occurrence mentioned at the bank, and some two years and six months after payment of the certificates--the claim in suit was made. Between the call at the bank and the later occasion plaintiff did not communicate therewith or make known thereto that she intended to make a claim upon the certificates. In the meantime the matter had been practically forgotten at the bank. It was thought, because of her not returning to make a claim after going away to reflect over the matter, as before stated, that she had dropped it. She explained why she did not follow up the matter when informed over the telephone in 1906, she had no interest-bearing fund at the bank; saying that Somers stated to her, she must have been misunderstood by the bank official when she talked over the telephone, that he would look into it the next day and that he supplied her with the $95, the need of which moved her to make the inquiry. She made no explanation of why she did not later see that Somers obtained an explanation of the communication over the telephone as he promised. She made no explanation of her silence from January, 1906, till about the time the action was commenced in 1909.

There was evidence to the effect that the bank had the customary identification card as to plaintiff's signature, but did not refer to it when the certificates were paid, taking it for granted, on account of the way her business had been done, that Somers had authority to sign her name. There was evidence tending to prove that he had authority in fact to do what he did, and, further, direct evidence that she ratified his conduct, such direct evidence, however, being put in issue by her.

Evidence by Mr. Somers was offered to prove that he acted as agent for his wife, fully authorized thereto, but it was rejected upon the theory of incompetence under the rule that the authority of an agent cannot be established by proof of his declarations.

The cause was submitted to the jury for a general verdict, instructions being given with reference to evidence of Mr. Somers, showing that he was authorized to handle the certificates as he did, which was received and then stricken out on motion, that it was condemned by the rule precluding agency, or agency authority, to be established by declarations of the agent, hence the exclusion of it. This was made very emphatic so as to guard, as far as practicable, against plaintiff being prejudiced by the supposed improper evidence having been gotten before the jury. The jury were further instructed to the effect that...