Young v. First Nat. Bank

• Decision Date: 01 November 1924
• Citation: Young v. First Nat. Bank, 150 Tenn. 451, 265 S.W. 681 (Tenn. 1924)
• Parties: YOUNG v. FIRST NAT. BANK OF ONEIDA.
• Court: Tennessee Supreme Court

265 S.W. 681

150 Tenn. 451

YOUNG v. FIRST NAT. BANK OF ONEIDA.

Supreme Court of Tennessee.

November 1, 1924

Certiorari to Court of Civil Appeals.

Bill by G. K. Young against the First National Bank of Oneida. Decree in Chancery Court for complainant was reversed by the Court of Civil Appeals, and complainant brings certiorari. Affirmed.

HALL J.

The bill in this cause was filed by G. K. Young against the First National Bank of Oneida to recover the value of eight United States bonds, of the denomination of $50 each and accrued interest.

The defendant answered the bill and denied liability.

Proof was taken, and the cause was heard by the chancellor, who was of the opinion that complainant was entitled to the relief sought, and entered a decree in his favor and against defendant for the sum of $506.45, the value of the bonds and accrued interest.

From this decree defendant appealed to the Court of Civil Appeals. That court reversed the decree of the chancellor and dismissed complainant's bill. The cause is now before this court upon a writ of certiorari for review.

The material facts, briefly stated, are as follows: Defendant First National Bank of Oneida, is a national bank and is engaged in the banking business at Oneida, Tenn. Its capital stock is $25,000, and its total resources is $500,000. The town of Oneida is in Scott county, and is located on the main line of the Cincinnati, New Orleans & Texas Pacific Railway Company. Its population is about 1,000 inhabitants. At the time of the happening of the things hereinafter to be stated defendant bank did business in a frame building consisting of two rooms, the main banking room and the directors' room. A partition wall separated the main banking room from the directors' room. There was a door in the partition wall through which egress and ingress was had from one room to the other. The directors' room was in the rear of the main banking room. There were windows in the rear wall of the directors' room.

The vault of the bank was in the main banking room. It was constructed of brick; the walls being about 18 inches thick. There was an air chamber in between the lap of the brick. The door to the vault was made of steel, and was manufactured by the Hall Safe Company, of Cincinnati, Ohio, and was of the thickness usual to doors of vaults like that of defendant. As a part of its business defendant installed and placed in its vault a cabinet, or, as some of the witnesses describe it, a nest of "safe deposit boxes." Defendant advertised on its stationery that it had safe deposit boxes for rent. The cabinet or nest contained 26 boxes. The walls of the cabinet were of steel, and the boxes were possibly made of tin, or a similar substance, and painted. The cabinet and the boxes were such as were, at the time, usually installed and kept for rent by banks like defendant located in towns of the size of Oneida. The boxes were of three sizes. The medium size boxes rented for $1.50 per year. When the boxes were installed, defendant made known the fact to its patrons and the public that it had them for rent, and complainant rented one of the medium size boxes, for which he paid defendant $1.50 per year. This was several years before the occurrence hereinafter to be narrated.

During the World War defendant bank, acting as the agent of one of the Federal Reserve Banks, without profit or compensation to it, and acting wholly from patriotic motives, sold Liberty bonds to its patrons and others. Among others, it sold complainant eight Liberty bonds, of the face value of $50 each.

Defendant did not advertise that its vault or its safe deposit boxes were burglar proof. It was its custom, however, to warn or advise lessees of said boxes not to put negotiable securities in them, but the proof fails to show that complainant was given such warning by any officer of the bank at the time he rented the box in question. Complainant placed said eight bonds in his safe deposit box so rented from defendant. It does not appear that defendant's attention was called to the fact of the putting of the bonds in the box by complainant, or that it, at the time, knew of complainant putting the bonds in said box; but it does appear that it thereafter became cognizant of the fact that the bonds were being kept by complainant in said box. Defendant did not advise complainant to continue keeping the bonds in the box, nor did it suggest that he remove them. Certain officials of defendant also kept valuable papers, including United States bonds, in certain of the safe deposit boxes of the bank. Some of the bonds kept in the boxes by officials of the bank, and others, were registered, and some were not. Complainant's bonds were not registered.

Neither the town of Oneida nor the defendant employed or kept a night watchman. The proof shows that a night watchman would have cost the bank, had it employed one, from $75 to $100 per month. There was only one peace officer in the town of Oneida, and he slept within less than 65 yards of the bank building. There was an electric light plant in Oneida. It was sometimes operated throughout the entire night, but was generally closed down about 11 p. m. Electric lights were installed in the bank building, and were kept burning at night as long as the plant was operated. Defendant's bank building was not equipped with a burglar alarm. At the time, it was not customary for banks of the size of defendant, in towns similar to Oneida, to have burglar alarms, or to employ night watchmen. Defendant maintained in its vault what is sometimes called a screw door steel safe, almost round, with a circular shaped compartment on the inside, which was about 18 inches in diameter. Defendant kept its cash, notes, negotiable bonds, and the like in said safe. Defendant's bank building, vault, and safe deposit boxes were as strong and as nearly safe against burglars as were the buildings, vaults, and safe deposit boxes of other banks the size of defendant bank and located in towns the size of Oneida.

The record does not show complainant's age, but does show that he is a man of intelligence. He is a traveling salesman, and has been for a number of years. He is, and was before the loss of his bonds, accustomed to doing business with banks. He was mayor of the town of Oneida, and had served in this capacity for three years.

On the night of May 16, 1920, burglars prized up a window in the rear of said bank building, entered the rear room, then prized open the door leading from the directors' room into the main banking room, which door was locked, entered the main banking room, and, with crowbars, spike pullers, hammers, and perhaps other tools, purloined from a nearby railroad section house, entered the vault, broke open complainant's safe deposit box, and a number of others, and, among other things, took complainant's said eight bonds. The burglars also took from some of the other safe deposit boxes bonds and other valuables belonging to other persons, including certain officials of the bank.

It should be stated that it was the custom of the bank to turn over to the person renting a safe deposit box a key to said box. The bank retained a key known as the master key. In order to unlock a safe deposit box, it was essential that the master key be inserted and turned, then one of the individual keys inserted and turned, and then the box unlocked. It therefore appears that a box could not be unlocked without the joint consent of the bank and the lessee of the box, for before the lessee could unlock the box he would have to procure an employee of the bank to use the master key as stated, or he would have to procure the master key from the bank and use it himself. The bank could not unlock the box without the use of the individual key in connection with the master key. If a patron desired, the bank would retain one of the individual keys for the convenience of the patron, and would turn it over to him when called for.

With the consent of complainant in this cause, the defendant bank retained one of his individual keys.

Upon the foregoing facts it is insisted by complainant that he is entitled to recover of the bank for the loss of his bonds, and that the Court of Civil Appeals committed error in reversing the decree of the chancellor and dismissing his bill, with costs.

We are of the opinion that the relationship which existed between complainant and defendant bank was that of bailor and bailee, and that their rights must be determined in accordance with the rules of law governing that relationship.

In National Safe Deposit Co. v. Stead, 250 Ill. 593, 95 N.E. 977, Ann. Cas. 1912B, 434, the court said:

"We think it clear that, where a safety deposit company

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