Court Opinion

ID: 8185866
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:08:19.149773+00
Date Added: 2024-06-11T16:40:24.790865
License: Public Domain

Winsnow, J.
The facts are simple. Trumpff and Koel-ting were the sole officers and stockholders of the bank, and the bank owned a foreclosure judgment. When -the land was about to be sold under the judgment, both agreed that Koetting should buy the land, and that the bank would become his creditor for the purchase price upon the security of Kopmeier’s open account with the bank, Kopmeier assenting thereto. There is no evidence that Koetting was not amply responsible for the loan at that time and for a long time afterwards. There is no doubt but that, if a stranger had bought the land, the bank might have extended credit to him, as it did to Koetting; and the transaction would have been perfectly valid, even though the purchase price might never have been paid. In the absence of statutory prohibition, a cashier may borrow money in good faith of his bank, with the consent of the managing body of the corporation. 1 Morse, Banks (3d ed.), § 173. This is what LLoetling did in this case. With the consent of all the stockholders and directors, he bought the land, and became the debtor of the ■corporation for the purchase price. We do not perceive how the corporation itself could afterwards disaffirm the transaction when all who were interested authorized it with knowledge of the facts, and when it does not appear that the transaction was even unwise. The cashier is not a legal trustee. He occupies a position of trust and confidence to*247wards bis bank, and is held to a high degree of diligence in performing his duties; but he may deal with his bank with consent of the board of directors or other managing body of the corporation. Morse, Banks, supra. He may not obtain a preference for himself if the corporation be insolvent, but there is no principle of law which prohibits him from borrowing money of the corporation in good faith while it is a going concern, with the consent of the board of directors. Hinz v. Van Dusen, 95 Wis. 503.
If the transaction was a lawful one when made, it follows necessarily that no trust arose in favor of the bank upon the land. This was not a case where the alienee took a conveyance in his own name “ without the knowledge or consent of the person paying the consideration,” nor was it a ease where the alienee, “in violation of some trust,” purchased lands with the money of another. R. S. 1878, secs. 2077-2079.
There being no ground of complaint on behalf of the bank, and no trust in the land having arisen in its favor, the only remaining question is whether there is anything in the transaction rendering it void as to the present creditors of the bank. The relation between a bank and its depositors is simply that of debtor and creditor, and not that of trustee and cestui que trust; nor did the fact that the bank wTas insolvent turn its assets into a trust fund, so long as it was a going concern. Ballin v. Merchants’ Exch. Bank, 89 Wis. 278. It is therefore simply a question whether the transaction was fraudulent as to subsequent creditors. In order to be such, it must have been entered into with the intent to contract debts in the future, and defraud the holders of such debts. Second Eat. Bank v. Merrill, 81 Wis. 142. There is no evidence here justifying the conclusion that there was any such intent. The bank did a large business for thirteen years after the transaction in question, and there seems to be no reason to believe that either Trumpff *248or Koetting contemplated failure at the time of nor for many years after this transaction.
The judgment of the circuit court was right.
By the Court.— Judgment affirmed.
Cassoday, O. J.. dissents.