Bank v. National Bank of Commerce

57 Kan. 183 | Kan. | 1896

Martin, C. J.

The original action was brought by the National Bank of Commerce against the Bank of Lakin to recover the balance due upon two promissory notes of $4,000 and $8,000 respectively, which were signed by the Bank of Lakin, by S. H. Carr, cashier. It was averred in the petition that the notes were issued with the authority of the defendant; that the 4th by-law of the Bank of Lakin was as follows, —“This bank shall be responsible for the official acts of the officers elected by the Board of Directors ’' ; and, further, that the proceeds of the discount of the two notes were used in behalf and for the benefit of the Bank of Lakin in the regular and ordinary way of conducting the banking business. It was admitted in the answer that Carr executed the notes, but his authority to do so was denied, although not under oath ; and this was followed by a general denial of all other matters. The answer also contained a counterclaim charging that the National Bank of Commerce had obtained assets of the Bank to the amount of $18,000, and judgment was prayed for that sum. The reply admitted that certain evidences of indebtedness had been deposited with the National Bank of Commerce as collateral security for said two promissory notes, but alleged that nothing had been collected thereon.

A trial by the Court at the November term, 1891, resulted in a judgment in favor of the National Bank of Commerce against the Bank of Lakin for $15,024.30 ; and of this the latter complains. The Court found that Carr, claiming to act as cashier, borrowed the money for which the notes were given without the knowledge of the Board of Directors or of any one of them ; that without any authority from the Board he delivered certain assets of the Bank, of the face value of $18,000, as collateral security for said two promissory notes ; that the National Bank of Commerce had collected thereon the sum of $2,508.45, and applied the same as credits on the notes, and that no other payments had been made. But the Court further found that the Bank actually received the money borrowed on said notes, and had never repaid the same, except in so far as the collaterals were collected and applied. The Bank of Lakin excepted to this last finding, and now claims that the same is not supported by the evidence. The Cashier of the National Bank of Commerce testified that the two promissory notes came from Lakin by mail; that the proceeds were credited to the Bank on current account in the regular course of business, and that the credit was not extended to Carr, but to the Bank of which he was cashier ; and L. F. Wilson, Vice President of the National Bank of Commerce, testified that the notes were discounted in the regular course of business, atid that the money was either expressed upon the order of the Bank of Lakin, paid out upon 'its drafts, or forwarded to its eastern correspondents to its credit. There is a suggestion that Carr had used part of the money by investing in property in his own name; but we think the evidence supports the finding of the Court that the Bank of Lakin actually received the money borrowed on said notes, and, if so, it -would make no difference that the Cashier appropriated a part of the same to his own use.

A principal cannot receive and retain the benefits of a transaction, and at the same time deny the authority of the agent by whom it was consummated. Elwell et al. v. Chamberlin, 31 N. Y. 611, 619; Busch v. Wilcox, 82 Mich. 315; Morse v. Ryan, 26 Wis. 356, 362; Mundorff v. Wickersham, 63 Pa. St. 87.

The judgment of the District Court must be affirmed.

All the Justices concurring.