Swennes v. Citizens State Bank of Rice Lake

Vinje, J. Plaintiff makes some attack on the findings of fact which we deem not well taken because there is practically no dispute in the evidence and it sustains the findings made. He further claims that notice to Peterson that he did not own the mortgage was notice to the bank of that fact and hence the money deposited by Peterson from the proceeds of the release was known by the bank not to belong to Peterson and it should not have allowed him to check it out for his individual use. That in doing so it became liable to plaintiff for the amount. This claim seems to be based upon the idea that in releasing plaintiff’s mortgage Peterson was acting in behalf of the bank and was transacting the [199] bank’s business. There is no evidence to sustain such claim and it is contrary to the court’s findings. In making the release Peterson was transacting his individual loan business, and in making the deposit he stood in the same relation to the bank as any other depositor. The bank had a right to assume that the money realized from the release belonged to Peterson. Its second mortgage was not due and it was not asking for payment thereof, but when Peterson tendered payment it received it and surrendered its mortgage. And as to this transaction the circuit court held that Peterson was acting for the bank and entered judgment against the bank for the amount received by it. The case of Mitchell St. State Bank v. Schaefer, 169 Wis. 543, 173 N. W. 330, is relied upon as an authority showing.the bank’s liability. But in that case the bonds converted by the cashier belonged to the bank as collateral security. They were taken for. its benefit, and of course the bank could not escape liability by showing that one of its officers had wrongfully converted them to his own use. Here-the money deposited by Peterson, so far as the bank knew, belonged to Peterson; and the bank, as it had a right to do, treated it as such and permitted Peterson to check it out like any deposit made by any other depositor. The releasing of the two mortgages, though made at the same time and with Peterson alone, were-in fact two separate transactions. As to the first mortgage Peterson acted as the agent of plaintiff alone, as he had a right to do according to their established custom. The bank had no interest in this transaction and could not be charged with notice of the fact that it was not Peterson’s mortgage. As to the second mortgage Peterson acted as the agent of the bank, and the court held the bank liable for the money it received through this transaction. This certainly was as far as justice required it to go. The case comes well within the rule announced in In re Plankinton Bank, 87 Wis. 378, 58 N. W. 784, to the effect that a bank is not chargeable with knowledge of the ownership of moneys collected by one [200] of its officers in his private loan business and deposited by him in the bank to his private account, though it had notice that he conducted a loan business, collected money for others, deposited only in that bank, and kept no separate account. The money here in dispute was drawn out by Peterson long before the bank had any knowledge that plaintiff claimed it. The court therefore properly refused to enter judgment for plaintiff for any part of such deposit. By the Court. — Judgment affirmed.'