State ex rel. Sorensen v. Citizens State Bank of Wahoo
Decision Date | 12 May 1933 |
Docket Number | 28438 |
Citation | 248 N.W. 388,124 Neb. 846 |
Parties | STATE, EX REL. C. A. SORENSEN, ATTORNEY GENERAL, v. CITIZENS STATE BANK OF WAHOO: MARTIN ERICKSON, INTERVENER, ET AL., APPELLEES: SAUNDERS COUNTY NATIONAL FARM LOAN ASSOCIATION, APPELLANT |
Court | Nebraska Supreme Court |
APPEAL from the district court for Saunders county: HARRY D. LANDIS JUDGE. Reversed and dismissed.
Judgment reversed and cause dismissed.
Syllabus by the Court.
1. The maxim, " Equity regards as done that which ought to be done," implies that, where there has been a failure to perform duties imposed, all parties whose interests are in any manner affected by such default will be deemed entitled to the same rights as if the duties had been actually performed at the proper time.
2. " Where the managing officer of a banking corporation deposits in his bank, in the name of another corporation of which he is also manager, money and securities belonging to others, for whom he is agent and trustee, and receives and accepts the deposit for the bank as its sole directing authority, his knowledge of the rights of the beneficiaries of the trust may be imputed to the bank." State v American State Bank, 108 Neb. 111, 187 N.W. 762.
3. " False entries on the books of a bank, whereby one depositor is credited with the funds of another, do not change the relation of banker and depositor in regard to that particular item or relieve the bank from liability for a proper disbursement of the fund, if the bank is chargeable with knowledge of the facts." State v. American State Bank, 108 Neb. 98, 187 N.W. 759.
4. In commercial banking transactions, where money is deposited as a general deposit, it ceases to be the money of the depositor and becomes the money of the bank, and the depositor becomes a creditor of the bank to the extent of such deposit.
5. Evidence examined, and held insufficient to sustain the judgment of the district court.
Appeal from District Court, Saunders County; Landis, Judge.
Proceeding by the State, on the relation of C. A. Sorensen, Attorney General, against the Citizens State Bank of Wahoo, in which E. H. Luikart was appointed receiver for the defendant, and in which Martin Erickson filed an intervening petition against the receiver and the Saunders County National Farm Loan Association. Judgment for the intervener. From an order overruling its motion for a new trial, the Saunders County National Farm Loan Association appeals.
Reversed, and cause dismissed as against the appellant.
Sanden, Anderson & Gradwohl, for appellant.
F. C. Radke, J. F. Berggren, Barlow Nye, Good, Good & Kirkpatrick and E. S. Schiefelbein, contra.
Heard before GOSS, C. J., ROSE, DEAN, GOOD, EBERLY, DAY and PAINE, JJ.
Prior to May 10, 1930, the Citizens State Bank of Wahoo, Nebraska, was conducting a general commercial banking business in that city. On the day mentioned, in a proper proceeding instituted for that purpose, an adjudication of the insolvency of that institution was made and a receiver therefor appointed, with direction to liquidate this bank as provided by law.
On June 4, 1931, in this proceeding, a petition of intervention was filed by Martin Erickson against the appointed receiver and the Saunders County National Farm Loan Association. So far as the issues here presented for consideration are concerned, that petition embraced the following allegations:
The defendant, Saunders County National Farm Loan Association (hereinafter called the Loan Association), as its defense, "denies each and every allegation in said petition in intervention contained."
Prior to the introduction of any evidence, the Loan Association presented a general demurrer ore tenus, which was overruled, and upon consideration of the evidence subsequently introduced, the district court awarded judgment to intervener as prayed against the Loan Association, and also against the Citizens State Bank of Wahoo. From the order overruling its motion for a new trial, the Loan Association separately appeals.
The intervener contends that, "Where a defendant holds the proceeds of the collection of a negotiable instrument based upon a forged or unauthorized signature, the true owner of the money may recover the amount from the person receiving such proceeds." He cites, as supporting his position, the following cases: Allen v. Mendelsohn & Son, 207 Ala. 527, 93 So. 416; Schaap v. First Nat. Bank, 137 Ark. 251, 208 S.W. 309; George v. Security Trust & Savings Bank, 91 Cal.App. 708, 267 P. 560; United States Portland Cement Co. v. United States Nat. Bank, 61 Colo. 334, 157 P. 202; Merchants' Bank v. National Capital Press, 53 App. D.C. 59, 288 F. 265; Hamlin's Wizard Oil Co. v. United States Express Co., 265 Ill. 156, 106 N.E. 623; Indiana Nat. Bank v. Holtsclaw, 98 Ind. 85; Hope Vacuum Cleaner Co. v. Commercial Nat. Bank, 101 Kan. 726, 168 P. 870; Meyer v. Rosenheim & Co., 115 Ky. 409, 73 S.W. 1129; A. Blum Jr.'s Sons v. Whipple, 194 Mass. 253; National Union Bank v. Miller Rubber Co., 148 Md. 449, 129 A. 688; Thomas v. First Nat. Bank, 101 Miss. 500, 58 So. 478; Good Roads Machinery Co. v. Broadway Bank, 267 S.W. 40; Robinson v. Chemical Nat. Bank, 86 N.Y. 404; Crisp v. State Bank of Rolla, 32 N.D. 263, 155 N.W. 78; Shaffer v. McKee, 19 Ohio St. 526; Bell-Wayland Co. v. Bank of Sugden, 95 Okla. 67, 218 P. 705; Charleston Paint Co. v. Exchange Banking & Trust Co., 129 S.C. 290, 123 S.E. 830; Farmer v. Bank, 100 Tenn. 187, 47 S.W. 234; Labor Bank & Trust Co. v. Adams, 23 S.W.2d 814; California Stucco Co. v. Marine Nat. Bank, 148 Wash. 341, 268 P. 891.
But these cases involve valid negotiable instruments on which indorsements only were forged. As applied in banking transactions, the rule they sustain is: "If a negotiable instrument having a forged indorsement comes to the hands of a bank and is collected by it, the proceeds are held for the rightful owners of the paper, and may be recovered by them, although the bank gave value for the paper, or has paid over the proceeds to the party depositing the instrument for collection." 1 Morse, Banks & Banking (5th ed.) sec. 248, p. 491.
Schaap v. First Nat. Bank, 137 Ark. 251, 259, 208 S.W. 309.
But it would appear that these principles unquestionably sound as abstract propositions, are inapplicable to the facts here involved. The instrument made use of in the instant case is a forged check, not a forged indorsement on a valid check. By its terms it was drawn on the Citizens State Bank of Wahoo, and payable to "Note or order." It is not indorsed. The payee named as "Note or order" is a fiction, a nonexisting person, a fact which all persons concerned in its execution or use must have known. From the evidence...
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