Evenson v. Waukesha National Bank

Crownhart, J. Plaintiff was an old man, sixty-nine years of age, who lived.at Stoughton. He had been in busi [173] ness there for a number of years, and had dealt with each of the issuing banks, having had in each bank a checking account, and having had certificates of deposit from such banks, but for the last four or five years he had not carried a checking account but had certificates of deposit from each of said banks. Plaintiff had his residence and office over a garage, and his brother, John Evenson, lived with him. He had a desk in his living room, and he had a small safe in an adjoining room, which he kept locked with a combination lock. Irving Stevens, a young man twenty-two, years of age, had been brought up in the family of Ole Evenson’s sister, Martha Stevens. He had been taken from an orphanage but had not been adopted. He seemed to have had the freedom of the residence of Ole Evenson. He discovered the combination to the safe, opened it, and abstracted therefrom the three certificates of deposit in question besides two or three others. He seems to have been living at Janesville at the time. He took the three certificates of deposit to the Wau-kesha National Bank and there negotiated them, placing the receipts to his credit in the bank. Two certificates issued by the Stoughton State Bank for $200 each were deposited with the defendant Waukesha National Bank on February 13, 1922. He was then unknown to the bank officials. Stevens went to the bank during the noon hour, represented himself as Ole Evenson, and claimed that he wished to go into business in Waukesha. He was questioned by the cashier of the bank as to his identity, and he answered that he was acquainted with a couple of Waukesha residents, naming them, but the cashier was unable to reach them by ’phone at the time because they were out to lunch. The cashier further questioned Stevens about his acquaintance in Stoughton, and finally the cashier became convinced of his identity as Ole Evenson from Stevens’ statements only, accepted the certificates, and placed them to Stevens’ credit under the name of Ole Evenson. The certificates were sent [174] to the issuing banks in due course, were promptly paid, and the Waukesha National Bank received the cash. The certificate of the Citizens’ National Bank for $1,250 was deposited by Stevens with the Waukesha National Bank on the 9th day of March, 1922, and credited to his account under the name of Ole Evenson. All but $15 of the deposits so made was shortly thereafter checked out by Stevens. About the 15th of March Ole Evenson discovered the theft of his certificates and found that they had been cashed at the issuing banks. Within three or four days thereafter he went to Waukesha and notified the Waukesha National Bank of the situation. The Waukesha National Bank got no title to the certificates of deposit. Sec. 116.27, Stats. It is the claim of the defendant Waukesha National Bank that the plaintiff is not entitled to recover, on the ground that he is estopped because of negligence in not notifying the bank sooner of the loss of the certificates. The trial court found that the plaintiff was guilty of no negligence, and in this we fully agree. Further, the Waukesha National Bank did not plead any estoppel against the plaintiff, and without such a plea the defense of estoppel is unavailing. Warder v. Baldwin, 51 Wis. 450, 8 N. W. 257; Pratt v. Hawes, 118 Wis. 603, 95 N. W. 965; Wis. Farm. Land Co. v. Bullard, 119 Wis. 320, 96 N. W. 833. The claim of the Waukesha National Bank as to the issuing banks is to the effect that because said banks paid the certificates of deposit they were guilty of negligence which makes them primarily liable to plaintiff. It is claimed that the issuing banks were bound to know the signatures of their depositors, and should have refused payment on the forged indorsement. If the plaintiff had brought his action against the issuing banks they could not have defended on the ground of payment, but plaintiff here seeks judgment against the Waukesha National Bank. ' As to the plaintiff the Waukesha National Bank had no defense. It converted [175] the plaintiff’s certificates of deposit to its own use. Such conversion was unlawful, and it must respond to plaintiff to the value of the property so converted. We are now concerned only with the right of the Wau-kesha National Bank to recover against the issuing banks. As to these banks, the Waukesha Bank, under the common law and by statute, became a guarantor of the signature of Ole Evenson to the certificates of deposit when it indorsed the certificates and forwarded the same for payment. Sec. 116.70, Stats.; 8 Corp. Jur. 393. Even if the negligence of the issuing banks be conceded in paying said certificates of. deposit upon the forged indorsement of Evenson, still it must be held that the negligence of the Waukesha Bank in accepting the forged indorsement of Stevens, without any proof of identity, was first in point of time and by far the more culpable. It is quite understandable that the issuing banks would cash said certificates of deposit without careful scrutiny where the signatures thereon were guaranteed by two or more banks. It is admitted that each of the issuing banks acted in good faith in cashing the certificates. Under the circumstances, we do not see how the Waukesha National Bank can recover from the issuing banks. By the Court. — The judgment of the circuit court is affirmed.