203 Wis. 576 | Wis. | 1931
On and prior to the 10th day of October, 1921, the Barronett State Bank owned and held the unsecured notes of one August E. Johnson, aggregating $758, exclusive of interest. Except one note for $50, all were renewals of prior notes. The plaintiff was a depositor and customer of said bank. She had a small amount of money which she loaned from time to time. Some time prior to October 10, 1921, the cashier of defendant bank requested or suggested that she loan to August C. Johnson the sum of $1,000, secured by a real-estate mortgage upon eighty
The bank defends on the ground that it did not authorize the guaranty and that it is ultra vires and void. While the act of the cashier in placing the guaranty on the back of the note was not authorized by any vote or act of the stockholders or directors of the bank, the cashier was the active managing officer of the bank, the indorsement was made for the benefit of the bank, and the bank was benefited by the guaranty, as will be shown. These facts were found by the trial court upon sufficient evidence and, under the circumstances, the bank cannot avoid payment on the ground that the cashier was not authorized to place the guaranty of the bank on the back of the note.
It is well settled that banks may not lend their credit or become liable as accommodation indorsers. American Exp. Co. v. Citizens State Bank, 181 Wis. 172, 194 N. W. 427; Best v. State Bank of Bruce, 197 Wis. 20, 221 N. W. 379. While in form the guaranty of the bank in this case
By the Court. — Judgment affirmed.