Pulaski State Bank v. Kadziszak

180 Wis. 218 | Wis. | 1923

Lead Opinion

Crownhart, J.

The answers in the special verdict are amply supported by the evidence, unless it be the conclusion of law as to whether the cashier was acting for the bank and within the scope of his authority at the time the sale of the property was made to the defendant Mary Kadziszak and her husband. The cashier claimed in his testimony that he went out to the farm of the Kadziszaks simply to act as notary public for Dominiczak, but it appears without controversy that Dominiczak paid him $15, and that M-. J. Kadziszak, for his father and mother, also paid the cashier $15, which payment was made over the counter of the bank the next day. Thus it will be seen that the cashier received $30 for going out to the farm, two and a half or three miles from Pulaski, with Dominiczak to act as notary public, as he claims. There does not appear from his statement to have been any necessity for his going out there for that purpose, as he could have taken the acknowledgment of the deed at the bank as well as at the farm. There clearly appears to have been another purpose on the part of Szczechowski in going out to the farm, and that purpose fairly appears from the evidence. The bank had been asked for a loan, and through its committee had approved a loan to be made to the Kadziszaks to purchase this farm. The cashier knew this, and may well have been presumed to have assisted in carrying out the deal and making the loan in behalf of the bank. . Certainly the Kadziszaks had a right to believe that he represented the bank and that they could depend upon his word that the title to the property was in Dominiczak. More than this, it appears fairly clear from Szczechowski’s own evidence that he was not to turn over the money to Domin-iczak until an abstract had been delivered to him showing that the title was good. He testified:

“Dominiczak came to my house about 8:30 and came to my residence and asked me if I could not take my notary seal and go out and close that Kadziszak deal up. I told him that I did not care to go out that time or go out that night as it was storming and told them to come to the bank. I went out there anyway and- got $30 for my services, but never represented Kadziszaks personally in this deal and never told Mrs. Kadziszak that the Pulaski State Bank would stand back of the deal. I told her that the abstract would correspond to the deed, and they told me not to turn over the money to Joseph Dominiczak until the abstract was continued to date, and after the abstract was returned I ■looked it over to see whether the same obligations were on there as they agreed at the house, that is, the support of the minor children and the mortgage to support the minor children and the $900 and to the State Bank of Seymour, and after I looked over the abstract and found these obligations as set forth as they agreed upon I told Mike Kadzis-zak, who was acting for them, that everything seemed to appear the same way, as they agreed upon, and'he said all right, turn over the money, and I turned over the money, but until then I did not turn over no money.”

From this testimony alone the jury had a right to infer that Szczechowski, representing the bank, did pass, upon the title and did represent that the title in Dominiczak was good, and that the Kadziszaks relied upon such representations and authorized him to turn over the money. As a matter of fact the abstract showed that Dominiczak had no title, and that he and Szczechowski misrepresented the facts with reference thereto. There was an utter failure of consideration for the notes.. It was' the duty of the cashier not to turn over the money until the abstract showed good title. The abstract showed no title in Dominiczak, the cashier knew that Dominiczak had no title, and thus the ■bank took the notes with full knowledge of their infirmity. The bank was not a holder in due course, for the reason that at the time the note was negotiated to it, it had notice of the infirmity in the instrument. Sec. 1676 — 22, Stats.

The question of the bank’s notice of the failure of consideration for the note was not submitted to the jury, but the evidence is substantially without dispute on that point, to the effect that the cashier did have such knowledge, and in turning over the money to Dominiczak and accepting the note he was acting for the bank. In such a case the necessary finding is presumed to have been supplied by the trial court in granting judgment. Sec. 2858m, Stats.

The judgment of the circuit court should be affirmed, both on the findings of the jury and trial court and pursuant to sec. 3072m, Stats.

By the Court. — The judgment of the circuit court is affirmed.

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Dissenting Opinion

Owen, J.

(dissenting). Although the bank loaned'and actually parted with $800, the face of the note, it is held that there was no consideration for the note. It is perhaps a confession of obtuseness, but candor compels me to say that the logic by which this conclusion is reached is too obscure-for my comprehension.

Whatever may have been the delinquency of the cashier, there can be no doubt that the bank exchanged $800 for the Kadziszak note. This certainly constituted full consideration for the note, and I am utterly unable to understand how it can be said that the note was procured by fraud under such circumstances. That the defendants were defrauded by Dominiczak is plain enough, but that was a separate and independent transaction. Granting that the cashier of- the bank not only knew of that fraud but contributed to its consummation, apd granting further that his participation in the fraud was imputable to and' constituted the action of the bank, there is still a hiatus in The logic by which it is held that such fraud taints the transaction whereby the bank loaned $800 to the defendants. If there is any liability here on the part of the bank, it must be due to a breach of duty owing by it to the defendants in failing to discover the absence of Dominiczak’s title to the land which he was selling to the defendants. That constituted an independent liability which should have been pleaded as a counterclaim. It did not constitute a defense to the action on the note. Whether -the defendants were entitled to recover. on such a cause of action presents numerous robust questions which were neither litigated nor argued. One question is whether it is within the power of a bank to assume to pass upon abstracts of title, thereby subjecting it to liabilities quite foreign to the banking business. It may be remarked that if banks may assume such liabilities the question of their solvency.becomes a rather elusive subject. Certainly it does not tend to increase the security of the depositors, a matter which has been a subject of consistent legislative concern for many years. Furthermore, there is no evidence in this case to the effect that the bank assumed to examine this abstract for the purpose of ascertaining whether Dominiczak had title. The evidence of the cashier, set forth in the opinion, affords no foundation for such a conclusion. According to his testimony he was to ascertain merely whether two incumbrances specifically mentioned in the negotiations at the house when he was present were as represented. In my judgment there is an entire lack of evidence to- show that in the participation of the cashier in the transaction between Dominiczak and the Kadziszaks he was representing the bank. It is said that he was paid $15 over the bank’s counter. That is no evidence that he was acting for the bank or that the bank ever became the beneficiary of said payment. He was paid over the counter because that was where he. happened to be at the time the payment was made. It is said in the opinion that “certainly the Kadziszaks had a right to believe that he represented the bank and that they could depend upon his word that the title to the property was in Dominiczak.” The question' is not what the Kadsissaks had a right to believe, unless such belief was predicated on the conduct of the bank apart from the mere representations of the cashier. The question is whether he in fact represented the bank, or whether the bank, by its own conduct, is estopped to deny it. In my judgment it is rather dangerous to hold a bank responsible for the individual transactions of its cashier which from their very nature are entirely without the scope of his duties, not conducted upon the premises of the bank and having no relations with the bank’s business.

For the reasons thus briefly stated I must dissent.

I am authorized to state that Mr. Chief Justice ViNjE concurs in this opinion.