183 Wis. 621 | Wis. | 1924
Defendant’s counsel strenuously argue that there is ample evidence in this case from which it can be inferred that Stephens, the defaulting cashier, when he withdrew moneys from the bank between April, 1921, and June 8, 1922, did so as the agent of the plaintiff; that he was duly authorized so to do; and that therefore the first question submitted to the jury presented a proper jury issue; that the court in instructing the jury upon such issue committed prejudicial .error, and that therefore the judgment should be reversed and the defendant awarded a new trial.
In explaining to the jury the recent change wrought by statute with reference to jury trials in civil cases, the court instructed as follows: “The result of this law is that if any ten of your number agree, you may answer any question submitted to you and return a verdict accordingly.” This instruction, while not excepted to in the instant case, has been held error in the case of Dick v. Heisler, decided May 10, 1924 (184 Wis. -, 198 N. W. 734).
Referring to the first question of the special verdict the court instructed the jury as follows:
“The burden of proof as to this question is upon the defendant to convince you to a reasonable certainty by a*626 preponderance of the evidence that your answer thereto should be ‘Yes;’ and if ten or more of your number are so convinced you will answer this question ‘Yes;’ but if ten or more of your number are not so convinced you will answer this question ‘No.’ ”
It is this instruction pertaining to the first question which defendant’s counsel contend is prejudicial error. That such instruction is erroneous becomes manifest from a casual reading of the same. The jury is instructed that if ten or more are convinced that the plaintiff has met the burden of proof under such instruction they should answer the question “Yes,” but if ten or more are not so convinced they should answer the question “No.” This instruction, logically interpreted, can only convey to the jury the idea that if ten or more are not convinced to answer the question “Yes,” then they must answer the question “No.” This leaves no room whatever for the jury to disagree on a verdict. This was clearly error. But it is contended by counsel for the plaintiff that the record does not disclose an issue upon the subject of agency, or, assuming that an issue is raised by the evidence, the testimony is so overwhelming in plaintiff’s favor that no jury, properly instructed, would or could have answered such question in the negative, and that therefore the verdict of the jury upon this question should not be disturbed.
Among other things it is claimed by defendant’s counsel that the record shows that Stephens and the plaintiff were intimate friends; that her certificates of deposit were kept in his private safety-deposit box; that on numerous occasions during business hours he had visited the plaintiff at her home, ostensibly for the purpose of discussing business matters; that he was authorized to and did collect the interest maturing on loans; that he also negotiated a number of loans for the plaintiff; that debit slips, notes, and other securities payable to her were found in his private box in an envelope marked “B. S.;” that plaintiff had a private safety-
In the brief of defendant’s counsel this statement appears : “Obviously C. K. Stephens, from time to time, withdrew sums of money from the plaintiff’s checking account wrongfully.” If he had authority to withdraw such money by reason of an established agency, the mere withdrawal itself would not be wrongful. The moneys withdrawn and represented by the Cookson and Wayne notes were used for his own private benefit or for the benefit of his worthless and irresponsible confederates. Many of the unauthorized withdrawals were made within a short period preceding the time when he absconded as a defaulter and as a wrong
But it is claimed by defendant’s counsel that the court erroneously rejected evidence offered by the defendant which tended to establish agency. It is claimed that one Sabinson purchased through Stephens a note and mortgage payable to the plaintiff which was indorsed as follows: “I hereby transfer my interest in and to this note. Barbara Stevens, by C. K. Stephens, Agent.” Defendant offered to- prove in connection with this transaction that Stephens made the statement that he was the general agent of the plaintiff and had full power and authority to transact any and all business for her-. The note, with such indorsement, was offered in evidence, and the defendant offered to prove that C. K. Stephens went to the home of the plaintiff and obtained her mark upon the indorsement. This evidence was rejected, and defendant assigns such rejection as error. The plaintiff was a woman ninety years of age. For many years prior to the failure of the bank she had been incapacitated from personally transacting her. banking business. While the record shows that she did not expressly deny having affixed her mark to this indorsement, she testified that she had no definite recollection upon the subject. Even though this in-dorsement on its face bore evidence that Stephens was her
That the plaintiff had implicit confidence in Stephens cannot be doubted. She had transacted business with him for many years. He was a friend and a neighbor. She intrusted her funds to a bank of which he was the cashier and the managing officer. The affixing of her mark, under all the facts and circumstances of the case, assuming that it was so affixed, would not be convincing that she recognized Stephens as her general agent. There was no evidence in the case from which such agency could reasonably be inferred; on the contrary, such agency was expressly denied.
Declarations of an agent of his agency, to third persons, are not competent to establish agency. Somers v. Germania Nat. Bank, 152 Wis. 210, 216, 138 N. W. 713; Davis v. Henderson, 20 Wis. 520; McCune v. Badger, 126 Wis. 186, 191, 105 N. W. 667. In this case it is not attempted to prove the agency by the testimony of the agent himself, which would be competent under the decisions in O’Conner v. Hartford F. Ins. Co. 31 Wis. 160; Roberts v. Northwestern Nat. Ins. Co. 90 Wis. 210, 62 N. W. 1048; Smith v. State, 149 Wis. 63, 134 N. W. 1123, but such agency was attempted to be shown by the declarations of the agent to third persons. Had the agency of Stephens been first shown by evidence expressly establishing such agency, or had it been shown by facts and circumstances from which agency would be necessarily presumed, a different situation would be presented.
Under- the evidence as so detailed it can hardly be said that the question of whether Stephens was the agent of the plaintiff with respect to the withdrawal of her funds from the bank presented an ultimate issue to be determined by the
Defendant’s counsel further, assign as error the allowance of interest on daily balances. Miss Frankland testified that six or seven years prior to the failure of the bank plaintiff was induced to permit large balances to remain to her credit in her checking account by the representation of Stephens that the directors had agreed to pay interest upon such daily balances at the rate of six per cent, per annum. Prior to that time the plaintiff from time to time withdrew from her checking account large sums of money in order to invest the same in interest-bearing securities, and it also appears that from the income of such investments she defrayed her living expenses. She also testified that had it not been for such representations she would not have permitted these large balances to plaintiff’s credit in the bank on the checking account to ■ remain, but would have continued to make investments in interest-bearing securities.
Defendant’s counsel also claim that the agreement to pay interest on open balances subject to check is unusual with banks, and particularly with small banks in the country such as the bank in question; that the cashier, as such, had only the authority to represent the bank with reference to transactions which were within the usual and ordinary scope or authority of a cashier; that if interest could legally be paid under any circumstances by a bank on such daily balances, the bank could only be bound pursuant to action first taken by the board of directors. The minutes of the bank directors were offered, and it appears therefrom that the directors had taken no action upon this subject. The president of the bank was not. a trained banker, but was an ordinary merchant with no practical experience in banking. The testimony shows that he acted as such president merely
In the instant case Stephens was not only the cashier of the bank, and as such, under the law, its chief executive and administrative officer, but he was also, with the tacit consent of the board of directors, the managing officer, and to all intents and purposes the bank itself. The facts in this case, as far as the legal aspect involved is concerned, are not greatly dissimilar from those presented in Davenport v. Stone, 104 Mich. 521, 62 N. W. 722, where it is said:
“The directors intrusted the entire management of the bank to the cashier, Mr. Bradley. Therefore, neither the bank nor its receiver, can now be heard to deny the authority of the cashier to do any of those acts which it or its directors might lawfully authorize the cashier to do. The rule is*632 stated by Mr. Morse as follows: Tf the directors have for many years allowed the cashier to do, without interference, all the business of the bank, they are held thereby to have conferred upon him authority to do anything and everything on the corporate behalf which the charter or law does not absolutely prohibit and forbid a cashier to' do. . . .’ 1 Morse, Banks, § 165.” See, also, Arnold v. Nat. Bank of Waupaca, 126 Wis. 362, 367, 105 N. W. 828; 3 Fletcher, Ency. Corp. p. 3316, § 2138.
The law as stated in the Davenport Case above referred to appeals to us as sound doctrine.
It is not contemplated by the statutes authorizing and regulating state banks that a bank shall be conducted and operated solely by one person. In order to avoid such a situation a governing body must exist in the form of a board of directors. When the legislature saw fit to require a board of directors it had in mind' a governing, functioning body. When it prescribed the duties of directors it did not intend that such duties be nominal merely. The provision for the office of a director and the functions prescribed were deemed necessary for the successful operation of a bank, which is a quasi-public institution, in which are interested not only the stockholders and the depositors but also the public residing in the community. Private banks, owned and operated by individuals, had in the past for a long time been authorized in this and other states. But the legislature of this state and the legislatures of other states have wisely seen fit to confine the conduct of banks to banking corporations, so that we have now clearly a legislative intent and policy, fully expressed, condemning these so-called one-man banks.
From what has been heretofore said, we hold as a matter of law that the bank and its present representative as receiver, the banking commissioner, are estopped from claiming immunity from liability to pay interest on the daily balances under the agreement entered into.
Defendant’s counsel further contend that “an agreement by a bank of the size and character of the Montfort State
Defendant’s counsel also contend that the court erred in holding that the balanced pass-book constituted an account stated. In 1 Morse, Banks (5th ed.) § 291, it is said that:
“The entries in the bank book, made by the proper officer, bind the bank as admissions. Especially the balancing of the book is conclusive upon the bank, in the same manner as an account stated. In Greenhalgh Co. v. Farmers' Nat. Bank, 226 Pa. St. 184, 75 Atl. 260, it was held that a balance struck in a pass-book is in effect an account stated which may be impeached only for fraud or mistake.” See, also, Ripley v. Sage L. & I. Co. 138 Wis. 304, 119 N. W. 108; Off v. Cream City S. Co. 166 Wis. 228, 233, 164 N. W. 1005.
In Klauber v. Wright, 52 Wis. 303, 8 N. W. 893, the following appears in the first head-note:
“A settlement of their accounts deliberately made by two persons, without any intention to defraud a creditor of one of them, will not be set aside in favor of such creditor without at least the clearest and most positive proof of fraud or mistake as between the parties to such settlement.” See, also, Case v. Fish, 58 Wis. 56, 108, 15 N. W. 808.
While it is the rule that a settlement made between individuals, or where an account is stated between them, will not be set aside excepting upon the clearest proof of fraud or mistake, this is particularly so as between a depositor and a bank. The business of the bank is confined to financial transactions. The conduct of its business is regulated by and is under the supervision of the state, through its banking department. The form of bookkeeping and accounting is also largely prescribed by the banking department. The condition of the bank is periodically investigated by an officer of the banking department, and the law requires periodical reports to be published as to the condition of the bank.
It is further contended by defendant’s counsel that the court erred in refusing to permit the defendant to amend his answer alleging fraud and mistake. Such request for an amendment was not made until some time after the defendant had proceeded to establish his defense. The amendment offered did not set forth any specific facts showing either fraud or mistake, but was couched in general language. It appears from the evidence that most of the canceled vouchers returned by the bank to the plaintiff had been destroyed or lost. No plausible excuse was offered for failure to plead fraud or mistake timely, and no diligence was shown for failure to timely include proper allegations in the answer. Under such circumstances the allowance of an amendment would have worked a great hardship upon the plaintiff. To permit an amendment at this stage of the trial was largely discretionary with the court, and we are satisfied that the court not only did not abuse its discretion in the premises but that it exercised its discretion wisely.
This disposes of the principal assignments of error of defendant’s counsel.
We are convinced that the evidence in this case requires an affirmance of the judgment, and that by affirming such
By the Court. — Judgment affirmed.