Orme & Okey v. Baker

Citations

• 74 Ohio St. (N.S.) 337

Syllabus

<p>Bank insolvent — Through fraudulent acts of cashier — Situation known to some directors — Receiver takes possession of hank —Customer makes deposit on last day hank open — Permitted to recover full amount — As preferred creditor — Imputed knowledge of hank officers — Law of agency — Respective rights of creditors.</p> <p>The board of directors of a hanking corporation, consisting of five persons, appointed P, one of the members, as its cashier, who, by its authority, was placed in control of its property and was made the active manager of its business. The president, also a director, resided in the country, was old and infirm, and gave no attention to the bank’s affairs. The treasurer, likewise a director, resided in another county engaged in business of his own. Within the last year of the existence of the bank, there was no meeting of the board of directors, and during that time, if not before, the bank became “hopelessly and irretrievably insolvent” through the fraudulent acts of the cashier and its vice president, likewise a director, who themselves being insolvent, used the funds of the bank for their own purposes, and the purposes of other corporations with which they were connected. These fraudulent acts were not communicated to the other directors. An examination of the condition of said bank at any time within thirty days before it was closed, would have disclosed its insolvency, but no such examination was made by the board of directors, or by anyone in its behalf. On the last day the bank was open for business, and but a few minutes before the close of banking hours, B, a customer, being entirely ignorant of said insolvent condition, made a general deposit consisting of some cash and certain checks drawn in his favor on other banks. The agent of the bank then in charge received the deposit, and entered the same on the pass book of the depositor to his credit, but did not enter the credit on the books of the bank. The cash part of the deposit was commin