First National Bank v. Dunbar , 118 Ill. 625 ( 1886 )

Mr. Justice Scholfield

delivered the opinion of the Court :

We have had some difficulty in ascertaining the precise questions intended to be presented upon this record, to this court, since there has been no oral argument of the case, and counsel have simply re-filed, here, their printed arguments used in the Appellate Court, in which questions of law and fact are, to some extent, intermingled. We have, however, carefully gone over the entire record, and considered all of the questions, except those of fact, discussed in the Appellate Court, and we are unable to perceive any reason justifying a reversal of the judgment of that court.

The declaration contains three counts—two in case, for negligence, and the third for trover and conversion.

The facts which the evidence tends to establish, and which the judgment of the Appellate Court requires us to assume are established, are, briefly, that on the 17th day of March, 1882, Solomon Byers employed B. T. 0. Hubbard, defendant’s cashier, to purchase for him four Boseville township railroad aid bonds, of $1000 each; Hubbard purchased the bonds, and paid for them from the proceeds of a check drawn by Byers on the defendant; that on the same day, Byers made a special deposit of these bonds with the defendant; that Hubbard, having embezzled funds from the defendant while acting as cashiér, subsequently, and while still acting as defendant’s cashier, without the knowledge or consent of Byers, in order to conceal, in part, the fact or extent of his embezzlement, took these bonds from their place of special deposit in the bank, and put them with the assets, including other like bonds, of the defendant, and thereafter reported them to the defendant as so much of its assets; that the defendant afterwards became insolvent, and its assets, and also these bonds, were taken charge of by a bank examiner, on the 8th of April, 1884, and that the defendant has, since, been demanded, by Byers, to deliver the bonds to. him, and has refused.

The Appellate Court, in its opinion filed on affirming the judgment of the circuit court, held—

First—That the circuit court did not err in holding that the evidence sustained the verdict.

Second—That the circuit court did not err in holding that in order to sustain the action, a demand should have been made for the delivery of the bonds before the bank examiner took possession of them; that if the special deposit was wrongfully transferred by the bank or its cashier, and put with the funds of the bank, and reported and treated by the bank as a part of its assets, then this was a conversion, and no demand and refusal were necessary to sustain trover, but that if the bonds should be regarded as still a special deposit, notwithstanding such transfer, yet the bank, although it had failed, and its property was in the hands of the Federal authorities, had the right, and it was its duty, under section 5228 of the Revised Statutes of the United States, “to deliver-special deposits.”

Third—The court did not err in overruling the objections to the questions put by plaintiff to the witness B. T. 0. Hubbard, on his direct examination; that the objections were general, and it does not appear that they were placed upon the ground that the questions were leading, and, in any view, that the trial court, in the examination of witnesses, has a large discretion as to the form of the questions to he put, which, in this instance, does not appear to have been abused.

Fourth—Objections to questions propounded to Guy Stapp were properly sustained, because the answers called for were with reference to matters that were res inter alios acta, and would have been but secondary evidence.

Fifth—The directors of the bank were all stockholders in the bank, and therefore parties in interest in the suit. The plaintiff, on the trial, was suing as administrator. Although Hubbard, in purchasing the bonds, was agent for Byers, yet when they were deposited in the bank, and when he took them from the special deposit and placed them with the assets of the bank, he was acting as the cashier, and, therefore, the agent of the bank. It was not proposed to prove, by the directors, any transaction or conversation with Hubbard while acting as the agent of Byers in making the purchase, or any transaction or conversation between Hubbard and Byers, even, and hence the proposed testimony of the directors was not admissible, under the second exception of section 2 of the statute in relation to “Evidence and Depositions, ” and it was properly excluded.

Sixth—The questions put to Stapp and Young on cross-examination, to which objection is urged, related entirely to the issues under the first and second counts of the declaration; and since the jury found for the plaintiff only on the third count, it is impossible that the defendant can have been prejudiced by those questions.

Seventh—The first instruction given at the instance of the plaintiff, was limited to the count in trover,—the third count; and, as applied to that count, it was substantially correct.

" Eighth—Conceding that the third and fourth instructions of the plaintiff were too broad in stating that the legal owner of personal property is never divested of title by the wrongful act of any other person, yet, inasmuch as these bonds are payable to bearer and negotiable by delivery, and since, here, Hubbard was the cashier of the bank from the date of the purchase of the bonds to the day the bank was closed, notice to him was notice to the bank, that the bonds were held on special deposit, and it could not by any purchase, having such notice, obtain a title to the bonds, and the instructions could not, therefore, have misled the jury to the defendant’s prejudice.

Ninth—The plaintiff’s fifth instruction was not objectionable. It merely left the jury to pass upon the credibility of the witnesses.

Tenth—The salient points to establish the case for the plaintiff were, that a special deposit was made as claimed, and that, without the knowledge or consent of the depositor, the deposit was transferred to the general funds of the bank, and converted to its use. Those points were fully and explicitly covered by the instructions given, and must have been affirmatively found by the jury, and hence it is immaterial that, as to some matters of detail, the instructions were not technically correct. Those that were given at the instance of the defendant, presented the law of the case fully and fairly in its behalf.

These rulings, as we understand the record, cover every point made,—or, at least, substantially so. We believe each of them, so far as depending on the facts, to be sustained by the record, and, so far as enunciating a rule of law, to -be sustained by authority. Indeed, as legal rulings, we do not conceive there can be any question in regard to their accuracy. The only difficulty in, the ease is of fact,—namely, did Hubbard ever purchase any bonds with Byers’ money, and if so, are those bonds among the bonds in the possession of the bank when the examiner took possession, and afterwards, when the demand was made for their possession, by Byers. These questions being found in the affirmative,—and there was evidence tending to sustain that finding,—the liability of the bank must inevitably follow. Although, in the mere act of purchasing the bonds, Hubbard was the agent of Byers, when the purchase was complete that agency ended. As cashier, in receiving the bonds on special deposit, he was the agent of the bank; and it was as cashier and agent of the bank, that, to hide, in part, his embezzlement from the bank, he took the bonds from the special deposit and placed them among and reported them as assets of the bank. His knowledge was its knowledge, and it could not, in this way, acquire a legal title to the bonds without the knowledge or consent of Byers.

The judgment is affirmed.

Judgment affirmed.