139 Iowa 338 | Iowa | 1908
This is an application by way of petition of intervention for the allowance against the receiver of the Corning State Savings Bank of claims of the Iowa National Bank and W. O. Curtis, based on indorsements or guaranties of certain notes and school warrants, and on certificates of deposit purporting to have been issued by the insolvent bank. Since filing the petition these claims have been assigned for the purpose of collection to Bruce Butler. The record discloses that for some years prior to February 13, 1904, when the Coming bank closed its doors, the Iowa National Bank was its Des Moines correspondent, and, as such, purchased a large number of promissory notes and some school warrants. Some of these were taken in the name of Curtis for the bank. These notes may be classified (1) as genuine notes payable to and indorsed in ordinary form by the Corning State Savings Bank'; (2) forged notes purporting to be so payable and indorsed as above; (3) forged notes purporting to be payable to La Hue, and by him indorsed, and also indorsed by the bank in blank; (4) notes and warrants running to other parties, and indorsed by them and also by the bank; (5) notes as above guaranteed by the bank, as well as being indorsed. The receiver in defense contends (1) that the bank is not liable on its indorsement or guaranty; and (2) even if it should be ordinarily, there was enough on the face of these notes to charge the Iowa National Bank
I. Section 1850 of the Code of 1897 provides that:
Each savings bank shall- invest its funds or capital, all moneys deposited therein and all its gains and profits, only as follows: (1) In bonds or interest bearing notes or certificates of United States; (2) in bonds or'evidences of debt of this State, bearing interest; (3) in bonds or warrants of any city, town, county or school district of this State, issued pursuant to the authority of law; but not exceeding twenty-five per cent, of the assets of the bank shall consist of such bonds or warrants; (4) in notes or bonds secured by mortgage or deed of trust upon unincumbered real estate in this State, worth at least twice the amount loaned thereon; (5) it may discount, purchase, sell and make loans upon commercial paper, notes, bills of exchange, drafts, or any other personal or public security, but shall not purchase, hold or make loans upon the shares of its capital stock.
We cannot think that after authorizing savings banks to deal in paper as commercial banks the Legislature intended so to limit and cripple such authority so as practically to defeat the object sought to be attained. Very little paper comparatively passes on indorsement “without recourse,” and even then this does not obviate the liability involved in the warranty of genuineness and of title. Code Supp. 1902, section 3060-a65. If appellee’s view should prevail, every one in taking paper from a savings bank must not only receive it indorsed “ without recourse,” but must know at his peril whether the paper is genuine and the bank has title, as well as that the object of the officers of the bank in disposing of it was “ for the jmrnose of obtaining money with which to pay deposits.-” As said, such was not the design of the lawmakers, but rather that section 1855 should be construed in connéction with those proceeding it — section 1850 authorizing saving banks to “ discount, purchase, sell ” in the customary way, section 1851 empowering them to purchase places of business and convey any realty that may be acquired thereby incurring liability — as prohibiting the creation of any indebtedness, or liability, save as thereinbe-fore authorized, and except for purposes therein named. Appellee relies on Laidlow v. Pacific Bank, 137 Cal. 392 (70 Pac. 277), but the California statute conferred no authority to “ discount, purchase, sell ” commercial paper and the like, and therefore the case is not in point.
Some of the provisions of the chapter relating to savings banks doubtless were enacted for the protection of depositors. State v. Corning State Savings Bank, 127 Iowa, 198. But
The claim as based on the indorsements and guaranties should have been allowed, though with the credits of $2,700 received by the bank on insurance, and $1,400 on a draft not noted in the statement of the claim. The cause will be • remanded for the entry of a decree. Affirmed in part, and reversed in part.