Court Opinion

ID: 5497577
Source: CourtListenerOpinion
Date Created: 2022-01-10 02:54:38.369409+00
Date Added: 2024-06-11T08:33:51.280506
License: Public Domain

Dykman, J.
This is an action upon the bond of William G. Rutherford, as cashier of the plaintiff, against the sureties in the bond for the recovery of the damages sustained by the bank through the misconduct of the cashier. The facts are quite complicated, but they are to a considerable extent undisputed, and the findings of the trial court have ample support in the testimony and the stipulation of the parties. The defense seems to rest upon the theory that the transaction of Rutherford in the conversion of the stock which resulted in the loss to the bank, and which constitutes the basis of the claim against the sureties in this action, was not in the line of the regular duties of a cashier, and that the sureties are not liable upon the facts found by the court. In relation to the first position, it is to be said that no misconduct is in the line of duty of a cashier of a bank, or any other officers, and yet persons who become surety in official bonds undertake to indemnify against malfeasance in office as well as misfeasance. The second position is founded upon the provision of the United States banking act, which prohibits banking associations from making loans or discounts on the security of the shares of its own capital stock, without providing any penalty for a violation of the law. It seems plain, therefore, that the government alone can attack the validity of such a transaction, and that the prohibition cannot be urged as a justification of the cashier for a wrongful conversion of the stock. A full and careful examination fails to disclose any error in the proceeding, or any defense to the action. The judgment should therefore be affirmed, with costs. .