State Bank of Benkelman, Neb. v. Iowa-Des Moines Nat. Bank & Trust Co.

• Decision Date: 11 May 1937
• Docket Number: 43355.
• Citation: State Bank of Benkelman, Neb. v. Iowa-Des Moines Nat. Bank & Trust Co., 273 N.W. 160, 223 Iowa 596 (Iowa 1937)
• Parties: STATE BANK OF BENKELMAN, NEB., et al. v. IOWA-DES MOINES NAT. BANK & TRUST CO. et al.
• Court: Iowa Supreme Court

273 N.W. 160

223 Iowa 596

STATE BANK OF BENKELMAN, NEB., et al. v. IOWA-DES MOINES NAT. BANK & TRUST CO. et al.

No. 43355.

Supreme Court of Iowa.

May 11, 1937

Appeal from District Court, Polk County; Loy Ladd, Judge.

An action to recover the value of certain United States Liberty bonds claimed to have been owned and in the possession of the plaintiffs and, after being stolen from the Lincoln National Bank & Trust Company, purchased by the defendants, Iowa-Des Moines National Bank & Trust Company and the Iowa-Des Moines Company. At the close of the plaintiffs' testimony a verdict was directed for the defendants. Plaintiffs appeal.

Affirmed.

Introduction in evidence of certificates of bank's deposits of bonds in another bank for safekeeping held insufficient to take to jury question of ownership of such bonds by former bank's successor in latter's action to recover value thereof from bank and corporation purchasing them from codefendant after latter's theft thereof from depositary bank.

Harding, Ruffcorn & Jones and H. W. Hanson, all of Des Moines, for appellants.

Clark Byers, Hutchinson & Garber and J. B. Weaver, all of Des Moines, for appellees.

ANDERSON, Justice.

The State Bank of Benkelman is a corporation organized under the laws of the state of Nebraska and is the successor of the Max State Bank situated at Benkelman, Neb. The Lincoln National Bank & Trust Company is a banking corporation organized and existing under the laws of the United States with its principal place of business in the city of Lincoln, state of Nebraska. The defendant, Iowa-Des Moines National Bank & Trust Company, is a banking corporation organized and operating under the laws of the United States with its principal place of business in the city of Des Moines, Iowa and the defendant, Iowa-Des Moines Company, is a Delaware corporation having its offices with its codefendant, the Iowa-Des Moines National Bank & Trust Company, in the city of Des Moines.

The plaintiffs' petition alleges that on the 17th day of September, 1930, the Lincoln National Bank & Trust Company had in its custody, care, charge, and control certain Liberty bonds of the United States of America, said bonds being the property of the plaintiff, State Bank of Benkelman, and of the value of $17,700; that on that date the Lincoln Bank was robbed and among the moneys and securities stolen were the Liberty bonds owned by the Benkelman Bank; that later some $6,000 of these bonds were sold by Dewey Berlovich to the Iowa-Des Moines National Bank & Trust Company, or to the Iowa-Des Moines Company, and later the remainder of said bonds were sold to the same company by Victor J. Silliman Co., Inc., a bond and security broker of the city of Des Moines. The plaintiffs further allege that prior to the sale of the said bonds to the defendant, Iowa-Des Moines National Bank & Trust Company, the Lincoln National Bank & Trust Company had notified the Des Moines Bank that the bonds were stolen from the Lincoln National Bank & Trust Company and in such notice the numbers and series of the bonds were given.

The defendants, Iowa-Des Moines National Bank & Trust Company and the Iowa-Des Moines Company, which will hereafter be referred to as the Des Moines Banks, admitted the purchase of the bonds but denied all the other allegations of plaintiffs' petition and allege that they purchased the bonds without notice of any infirmity or defect of title; that such purchase was for a valuable consideration, in good faith, and that it acquired title to said bonds as a bona fide purchaser in due course of business.

There are three principal questions to which we will direct our attention: First, as to whether there is any competent evidence in the record as to whether the bonds in question were in the possession of the Lincoln Bank and were stolen from it as alleged by plaintiffs; second, whether there is any competent evidence in the record to sustain the allegation in the petition that the bonds in question were owned by the Benkelman Bank; and, third, whether the Des Moines Bank was a bona fide, good faith, purchaser of said bonds for full value in the regular course of business and without notice of any defect in the title of the sellers, and without any knowledge as to any defect in the title that would put it on inquiry.

As to the first of the above propositions, the plaintiffs' evidence consisted of the testimony of a Mr. Barkley, who was a director of the Lincoln Bank, to the effect that from an examination of the books of the Lincoln Bank, nine days subsequent to the robbery, he and two ladies made up a list of the bonds which they assumed were stolen, that is, the bonds were shown by the books of the Lincoln Bank to have been in its possession before the robbery and were not in its possession thereafter. The books or records of the Lincoln Bank, however, were not produced upon the trial, and we have only the conclusion of Mr. Barkley and the other witnesses as to what the books and records of the bank contained.

The testimony of this witness shows that there were two people in the Lincoln Bank, and others, who had access to the safe where the securities were kept. Barkley's testimony was corroborated by that of witnesses, Miss Dougan, and Mr. Selleck, an employee or officer of the Lincoln Bank.

As to the second proposition, above stated, ownership of the bonds in the Benkelman Bank was attempted to be proven by the introduction of five vouchers or depositor's certificates issued by the Lincoln Bank to the Max State Bank (the predecessor of the Benkelman State Bank). These certificates were all in the following form, with the exception of the numbers and amounts of the bonds described therein: " Safe keeping certificate. Not negotiable. Memorandum of property deposited for safe keeping with Lincoln State National Bank, Lincoln, Nebraska. This certifies that the Max State Bank, Max, Nebraska, has deposited for safe keeping the following described property to be delivered upon the order of the depositor or legal representative or attorneys on the return of this certificate. This bank will give to property left for safe keeping the same care that it does to its own property, but beyond that does not assume responsibility." Then follows a list of the bonds and the certificate is signed " Lincoln State National Bank, by D. A. Wachter, Ass't Cashier. Signature of Depositor, Max State Bank, F. G. Stilgebouer, Pr."

It will be noted that there is nothing in the foregoing " safe keeping certificate" which in any way indicates that the bonds so deposited were the property or owned by the depositor, Max State Bank. And this is the only evidence attempting to show ownership of the bonds by the plaintiff, Benkelman State Bank. It is not claimed that the Lincoln Bank owned any of the bonds involved in this action. No officer or other person connected with the Benkelman State Bank was called as a witness, and there is absolutely no testimony in the record other than the depositor's certificates, above mentioned, even suggesting that the Benkelman Bank was the owner of any bonds deposited in the Lincoln Bank, or that any bonds belonging to the Benkelman Bank were included in the property taken in the robbery.

As to the third proposition, stated above, the record shows, by the plaintiffs' own witnesses, that the bonds in question were purchased by the Des Moines Bank bond and securities department from two of its regular customers in its regular course of business, and that it paid in cash full market value for such bonds, and only profited by the transaction to the extent of the small regular commission charged in such transactions. It is claimed by appellants, and their testimony sustains the claim, that subsequent to the robbery a list of the bonds claimed to have been stolen was prepared by employees of the Lincoln Bank and a notice containing such list, showing numbers and amounts together with a statement that the...