Anderson v. Pacific Bank

Henshaw, J. Appeal from the judgment given in favor of plaintiff under the following facts: Plaintiff and defendant entered into a contract whereby defendant agreed to furnish bail for Harry Christian and Martin Olsen, who had been held for trial before the superior court. To protect defendant and the sureties it might furnish from liability or loss, plaintiff agreed to deposit with defendant the sum of two thousand dollars in gold coin as a pledge. Plaintiff delivered the money to McDonald, the acting president of the bank, leaving it with him in the president's room. He received from the bank the following acknowledgment: “Edw. Anderson has deposited in this bank two thousand dollars—$2,000—(in gold coin), payable to self or order, on return of the certificate properly indorsed. (Payable only on release of bonds.) (Not subject to check.) R. H. McDonald, Jr., “ W. S. Morse, Vice-President. “Teller.” The money afterward, but without the knowledge or [601] consent of the plaintiff, went into the bank vaults through the regular channels. The bonds were furnished, and neither defendant nor the sureties were subjected to any liability or loss thereunder. Subsequently the defendants under the criminal charge were surrendered into custody by their bondsmen, and plaintiff thereafter, upon February 26, 1894, mg,de demand upon defendant, which had meanwhile become insolvent, for a return of the money pledged. The bank refused a return, and this action was instituted. Under this statement, which is taken from the findings, appellant contends that the facts disclose a general, and not a special, deposit with the bank, and that upon the bank’s insolvency plaintiff stands in the same position as that occupied by the general creditors of the institution. It is unquestionably true that one making a general deposit with a bank in the usual course of business parts with title to the moneys deposited. In the case of a special deposit, however, which is a mere bailment, the rule is the same with banking institutions as with individuals. Whether the special deposit be under a contract of bailment for the better protection of the bail- or’s property, or under a contract of pledge as security for some specific obligation of the pledgor, title does not pass to the bailee or pledgee, but remains in the pledgor. The pledgee acquires no right to make general use of the property. (Civ. Code, secs. 1835, 2888.) It would seem, therefore, that in this case the question is completely disposed of by the finding of the court that the money was given and received as a pledge, and by the additional finding that it was afterward carried into the bank’s vaults through the regular channels without the knowledge or consent of the pledgor. But, indeed, all of the attendant circumstances substantiate the ultimate finding that the deposit was a special one, while none is inconsistent with it. Defendant demanded a delivery to it of two thousand dollars, not for banking purposes, but to protect the bonds [602] men it might procure. There was reason why the plaintiff should make a special deposit of two thousand dollars with the bank as bailee, and none at all why he should make a commercial deposit of that sum. The money was delivered in a manner strictly in accord with a contract of pledge, but quite inconsistent with the notion of an ordinary banking deposit. The so-called certificate of deposit issued by the bank is not a certificate of deposit, but a mere receipt, expressing, though briefly, the contract of pledge. Every contract by which possession of personal property is transferred as security only is to be deemed a pledge. (Civ. Code, sec. 2987.) Under such a contract the fact that the bank afterward wrongfully commingled and used the funds, if it did do so, cannot be urged by it in defense as effecting any change in the contractual relations and rights of the parties. It would be but allowing it to plead its own wrongdoing to its own advantage. (Henderson v. O’Conor, 106 Cal. 385; Massey v. Fisher, 62 Fed. Rep. 958; National Bank v. Insurance Co., 104 U. S. 54.) There is nothing in the case of Mutual etc. Assn. v. Jacobs, 141 Ill. 261, 33 Am. St. Rep. 302, upon which appellant relies, which can aid his contention here. The plaintiff in that case sued to recover the sum of six thousand dollars, deposited by it with the banking house of Kean & Co., as indemnity on an appeal bond. But, as the court declares, the plaintiff gave its check to Kean & Co., which was cashed by that house, and the funds thus received with the knowledge of plaintiff were mingled and used with the general funds of the bank, and there was nothing in the certificate of deposit issued and received by plaintiff which indicated a special deposit. The court merely finds, from a review of the evidence that it was not established that the deposit was special. In the case at bar the trial court finds a special deposit, and does not find a commingling and use of the money with plaintiff’s knowledge. Indeed, it does not find any such commingling and use at all. It merely [603] finds that after its reception, and without plaintiff’s knowledge or consent, the moneys “went into the bank vaults through the regular channel.” The bank vaults are the usual and proper places for the reception and keeping of special deposits. The finding strictly means no more than that the money went into the bank vaults as a special deposit in the regular manner. The court allowed plaintiff as damages legal interest upon the money from the date upon which Christian and Olsen were surrendered by the sureties. But, w'liile plaintiff was entitled to a return of his money immediately after this event, defendant was not in default until its refusal after demand to make restoration of it. Not being in default, it should not be charged with interest as damages. This demand was actually made by plaintiff upon February 26, 1894, from which date plaintiff is entitled to interest as compensation. The judgment is ordered modified accordingly, each party to bear his respective costs upon this appeal. McFarland, J., and Temple, J., concurred.