Westervelt v. Mohrenstecher, 757.

CourtUnited States Courts of Appeals. United States Court of Appeals (8th Circuit)
Citation76 F. 118
Docket Number757.
PartiesWESTERVELT v. MOHRENSTECHER et al.
Decision Date31 August 1896

76 F. 118

WESTERVELT
v.
MOHRENSTECHER et al.

No. 757.

United States Court of Appeals, Eighth Circuit.

August 31, 1896


[76 F. 119]

O. A. Abbott and John W. Blee (Ralph W. Breckinridge was with them on the brief), for plaintiff in error.

C. C. Flansburg, S. L. Geisthardt, and W. H. Thompson, for defendants in error.

Before CALDWELL, SANBORN, and THAYER, Circuit Judges.

SANBORN, Circuit Judge.

This was an action upon the bond of the cashier of the Citizens' National Bank of Grand Island, Neb., brought by Edgar M. Westervelt, the receiver of that bank. The defendant in error George A. Mohrenstecher was the cashier, and the principal, and Mary Mohrenstecher, Otto A. Mohrenstecher, and William Stull were the sureties, on the bond. Judgment was rendered against the plaintiff below upon the pleadings, on the ground that the office of cashier of this bank was an annual office, and that the delinquencies charged in the petition occurred after the expiration of the year during which the bondsmen were liable. The facts material to the questions presented to this court, which were disclosed by the pleadings, are: The Citizens' National Bank of Grand Island, Neb., was a national banking association engaged in the business of banking from some time anterior to January, 1889, until on December 4, 1893, it suspended payment, and went into the hands of the plaintiff in error, who was appointed its receiver by the comptroller of the currency. The national bank act provides that such a banking association shall be a body corporate and shall have power:

'Fifth. To elect or appoint directors, and by its board of directors to appoint a president, vice-president, cashier, and other officers, define their duties, require bonds of them and fix the penalty thereof, dismiss such officers or any of them at pleasure, and appoint others to fill their places. Sixth. To prescribe, by its board of directors, by-laws not inconsistent with law, regulating the manner in which its stock shall be transferred, its directors elected or appointed, its officers appointed, its property transferred, its general business conducted, and the privileges granted to it by law exercised and enjoyed.' 13 Stat.c. 106, p. 101, Sec. 8; Rev. St. U.S. Sec. 5136, p. 993.

The articles of association of this bank provided:

'The board of directors shall have power * * * to elect or appoint a cashier and such other officers and clerks as may be required to transact the business of the association; to fix the salaries to be paid to them, and continue them in office or dismiss them, as in the opinion of a majority of the board the interests of the association may demand.'

The by-laws of the association provided that the cashier of the bank should be elected at the first meeting of the board of directors in January of each year; that he should give a bond in the sum of $10,000, and should hold his office one year, and until his successor should be elected and qualified. One D. H. Vieths was appointed [76 F. 120] cashier of this bank at the annual meeting of its board of directors in January, 1889, and resigned in May of that year. Thereupon the board of directors passed this resolution, 'Resolved, that George A. Mohrenstecher be appointed cashier of this bank;' and Mohrenstecher entered upon the discharge of his duties as cashier, and continued to discharge them until the bank suspended on December 4, 1893. On August 13, 1889, the defendants in error delivered their bond in the sum of $10,000 to the bank, and the latter accepted it, and never thereafter took any other bond to secure the faithful discharge of the duties of this cashier. This bond contained no recital of the time or term for which Mohrenstecher was appointed, and no reference of any kind to his appointment, or to the time during which the obligors bound themselves to be responsible for his acts, except that which is contained in the following condition of the bond, viz.:

'The condition of the above obligation is such that whereas the above-bound Geo. A. Mohrenstecher has been appointed cashier of the Citizens' Nat'l Bank of Grand Island, Nebr., by reason whereof he will receive into his hands and have under his care and charge money, goods and chattels, and other things the property of said bank. Now if the said Geo. A. Mohrenstecher for and during all the time he shall hold the said office of cashier of the said bank shall execute the duties thereof with integrity and fidelity and will faithfully perform and fulfill the trust thereby in him reposed, and well and truly, at all times when thereunto required, account for and render over to said bank all moneys, goods, chattels, and other things the property of said bank that may come into his hands, possession, or control, so that no default, fraud, or failure shall happen or be occasioned by any neglect or failure on his part to perform his duties as such cashier, then this obligation shall be void, otherwise it shall remain in full force and virtue.'

On January 14, 1890, and at the first meeting of the board of directors in each January thereafter, that board passed a resolution in substantially this form:

'Resolved, that George A. Mohrenstecher be appointed cashier of this bank.'

Subsequent to January 14, 1890, Mohrenstecher appropriated to his own use large amounts of money of the bank, under the pretense of loaning it to himself and others, whose promissory notes he took, payable to the bank, and placed among its assets. He also loaned money of the bank, in excess of the amounts permitted by the national bank act, to several persons, upon their promissory notes. By these unlawful acts of its cashier the bank lost $17,321.82. The bank or its receiver obtained judgments upon the various notes so taken in its name, but has been unable to collect the judgments. The defendant in error Mary Mohrenstecher was a married woman when she signed the bond.

Were the obligors on this bond liable for the defaults of the principal in it after January 14, 1890, under this state of facts? The contention of their counsel is that the office of cashier of this bank was an annual office, and that their liability was limited to the unexpired term of Vieths, for which Mohrenstecher was appointed in May, 1889. It is familiar law that, in cases where the term of office to which the principal is elected...

To continue reading

Request your trial
38 practice notes
  • Goonan v. Fed. Reserve Bank of N.Y., No. 12 Civ. 3859(JPO).
    • United States
    • United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
    • January 7, 2013
    ...an early case addressing the clause described its purpose in broad and sweeping terms. Id. at 983 (quoting Westervelt v. Mohrenstecher, 76 F. 118, 122 (8th Cir.1896)). The court added that “[t]he original congressional intent behind the at-pleasure provision of the Bank Acts was to ensure t......
  • Peatros v. BANK OF AMERICA NT & SA, No. S076454.
    • United States
    • United States State Supreme Court (California)
    • January 10, 2000
    ...as institutions and to further their integrity and stability in appearance and reality. In Westervelt v. Mohrenstecher (8th Cir. 1896) 76 F. 118, 122, the United States Court of Appeals for the Eighth Circuit uttered what has become the classic statement: "Observation and experience alike t......
  • Peatros v. Bank of America, No. B116465
    • United States
    • California Court of Appeals
    • December 31, 1998
    ...to "immediate removal whenever the suspicion of faithlessness or negligence attaches to them." (Westervelt v. Mohrenstecher (8th Cir.1896) 76 F. 118, In sum, Marques and Lavelle found that since Congress has forbidden dismissal on the basis of age, sex, or national origin, "the congressiona......
  • Aalgaard v. Merchants Nat. Bank, Inc., No. C005605
    • United States
    • California Court of Appeals
    • October 10, 1990
    ...was a crucial component of a bank's solvency. This mindset is demonstrated in the early case of Westervelt v. Mohrenstecher (8th Cir.1896) 76 F. 118. There, holders of a bond posted on the performance of a bank's cashier had refused to honor it on the theory it had expired with a previous o......
  • Request a trial to view additional results
38 cases
  • Goonan v. Fed. Reserve Bank of N.Y., No. 12 Civ. 3859(JPO).
    • United States
    • United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
    • January 7, 2013
    ...an early case addressing the clause described its purpose in broad and sweeping terms. Id. at 983 (quoting Westervelt v. Mohrenstecher, 76 F. 118, 122 (8th Cir.1896)). The court added that “[t]he original congressional intent behind the at-pleasure provision of the Bank Acts was to ensure t......
  • Peatros v. BANK OF AMERICA NT & SA, No. S076454.
    • United States
    • United States State Supreme Court (California)
    • January 10, 2000
    ...as institutions and to further their integrity and stability in appearance and reality. In Westervelt v. Mohrenstecher (8th Cir. 1896) 76 F. 118, 122, the United States Court of Appeals for the Eighth Circuit uttered what has become the classic statement: "Observation and experience alike t......
  • Peatros v. Bank of America, No. B116465
    • United States
    • California Court of Appeals
    • December 31, 1998
    ...to "immediate removal whenever the suspicion of faithlessness or negligence attaches to them." (Westervelt v. Mohrenstecher (8th Cir.1896) 76 F. 118, In sum, Marques and Lavelle found that since Congress has forbidden dismissal on the basis of age, sex, or national origin, "the congressiona......
  • Aalgaard v. Merchants Nat. Bank, Inc., No. C005605
    • United States
    • California Court of Appeals
    • October 10, 1990
    ...was a crucial component of a bank's solvency. This mindset is demonstrated in the early case of Westervelt v. Mohrenstecher (8th Cir.1896) 76 F. 118. There, holders of a bond posted on the performance of a bank's cashier had refused to honor it on the theory it had expired with a previous o......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT