238 N.W. 161 | Minn. | 1931
On June 24, 1925, Albert Barsness, the father of the plaintiff, received a certificate of deposit from the Farmers State Bank of Brandon for $10,000. Afterwards the plaintiff became the owner of it. On February 24, 1926, the plaintiff received a certificate of deposit for $500; on December 3, 1925, another for $5,300; and on October 26, 1925, another for $3,700. He was then the owner of certificates aggregating $19,500. Each certificate was a renewal of an earlier one. When each renewal was issued the bank was unsafe or insolvent, and the directors knew or had good reason to know it to be so. This was not the situation when the original certificates were issued. The plaintiff's right of recovery is based upon G. S. 1923 (2 Mason, 1927) § 10407, which makes it an offense in the officers or directors to receive in a bank a deposit, knowing or having good reason to know that it is unsafe or insolvent. It reads:
"Every officer, director, stockholder, cashier, teller, manager, member, messenger, clerk, person, party, or agent of any bank, banking corporation, association or firm, banking house, savings bank, banking exchange, brokerage deposit company and private bank, and every person, company, and corporation engaged in whole or in part in banking, brokerage, exchange, or deposit business in any way, who shall accept or receive on deposit in such bank or banking institution as aforesaid, with or without interest, from any person, any money, bank bills, or notes, or certificates or currency, or other notes, checks, bills, drafts, or paper circulating *190 as money, when he knows, or has good reason to know, that such person, bank, banking corporation, association or firm, banking house, savings bank, banking exchange, brokerage deposit company or private bank as aforesaid is unsafe or insolvent, and every person knowing such insolvency or unsafe condition who shall be accessory to, or permit, or connive at the accepting or receiving on deposit therein or thereby any such deposits as aforesaid, shall be guilty of felony, and punished by imprisonment in the state prison for not less than one nor more than ten years, or by fine of not less than five hundred dollars nor more than ten thousand dollars."
The statute does not by specific declaration make the officers or directors pecuniarily liable when they offend the statute. Their liability comes from the application of the principle, general in scope, that the violator of a statute intended for the protection of a class is liable to a member of the class for damages proximately resulting from his violation of the law. We have applied the principle to § 10407 in Baxter v. Coughlin,
In Johnson v. Floan,
In State v. Shove,
The certificate holder surrendered a certificate for $200 on which there was due in principal and interest $210, added $90 in cash, and took a certificate for $300. The bank received $90 in new money. Its assets were increased to the extent of the new money. It did what the statute had in mind preventing. It received on deposit money when insolvent. It committed a wrong upon the depositor. Here nothing was added. Payment of existing debts was extended — nothing more. The court said [
"The mere fact that a portion of the $300 consisted of a certificate of deposit held against the same bank, and the accrued interest thereon, which was surrendered at the time, did not make the transaction essentially different from what it would have been had the whole amount of $300 been deposited in cash, as recited in the certificate. The cash was present, or supposed to be present, in the bank, and was considered and treated the same as though the cashier had actually passed it over to Glye and she had immediately redeposited the same in the bank."
This case is approved in Ellis v. State,
There is a distinction between the Wisconsin case quoted and this. There the depositor put new money into the bank. Here lie did not. He left the money which he had on deposit. The renewal certificate did not represent even in part new money. No actual or positive fraud is alleged.
The rule is general that the renewal of a note, unless it is so expressed or the circumstances show the intention to be so, does not pay the debt, and it continues in its changed form. Geib v. Reynolds,
Whether a renewal certificate is to be held as a continuance of the old certificate or as evidence of a fresh deposit depends upon the particular facts of the case and the particular statute construed. One purpose of § 10407 was to prevent a loss to the intending deposit by penalizing the bank officer and so preventing the receipt of a deposit. As we view it, a construction of the statute holding that it was not intended that the renewal of a certificate should be a crime is the better one. At the time of taking the renewal the status of the depositor is fixed. He is then a depositor in an insolvent bank. He was substantially the payee in a note. The renewal of a note is not an offense. In most cases a refusal to take his renewal cannot rightfully help him, for the bank should not pay when it is insolvent; it should refuse to pay and should not receive a deposit. An argument reaching either the result claimed by the plaintiff or that claimed by the defendant may be made with show of reason. The result we reach seems most in accord with the terms of the statute and the practical object to be attained.
Judgment reversed. *194