Court Opinion

ID: 6737380
Source: CourtListenerOpinion
Date Created: 2022-07-20 23:19:33.418541+00
Date Added: 2024-06-11T16:01:50.346040
License: Public Domain

Goss, J.
(concurring). Cashier Iverson embezzled $1,000 from the plaintiff bank. He then appropriated sufficient of a $14,000 elevator *513sales account to replace the funds embezzled. This he did by checking against that account in favor of the bank and charging the same upon its books. Half of the elevator sales account'belonged to his wife. He Avas her general agent to invest her funds so deposited. Her funds were thus diverted in breach of his trust, and to make good a shortage xvith the bank, of which fact it was charged with notice. To make good his trust to the wife, who Avas ignorant of his diversion of her funds, he then overdrew his own account with the bank to buy with other funds this farm. He then in part recouped the bank by having it discount a promissory note he procured in the land deal. The bank received the amount and benefit of this note. The bank noxv seeks to subject the land to a resulting trust in its favor, claiming that its wrongfully diverted funds purchased the'farm, and that she as owner is by operation of law.a trustee of title for it.
Before it can recover it must establish that its money, and not that of its depositor, the grantee, was used. The test as to that is whether the depositor immediately upon the diversion of her deposit .could haAm recovered it of the bank receiving it. The bank, charged with notice of the shortage by embezzlement of it by its cashier, cannot retain the money unless it was the husband’s or unless he was authorized by her to use it as his to replace the funds embezzled. The bank is charged with knowledge of its receipt, and that it received it by virtue of a check on the account of one of its depositors. The whole transaction Avas within its presumed knowledge. The money did not belong to Iverson. Of that fact it had imputed knowledge. Being.charged with knowledge of the source from whence it came, it must establish that the diverter of the deposit had authority so to do and to make the application of it as was made. The burden of proof is upon it to establish this. Otherwise it would be obligated to respond in money to the depositor’s demand for her funds. As a defense it is shown that at the most but a general authority was in the husband to invest the wife’s funds on deposit. From this no authority to dissipate the deposit in repaying his criminal obligation to the bank can or should be inferred, as such would be as much without the scope of his authority to invest as it would be different from an investment. The foregoing is my conclusion from the evidence and an investigation of authorities. Concur in affirming the judgment.