Addison v. Citizens Tr. & Sav. Bk.

6 Ohio Law. Abs. 322, 1927 Ohio Misc. LEXIS 1269

• Court: Ohio Court of Appeals
• Decided: February 9, 1927
• Docket: No. 1596
• Status: Published

Opinion

FERNEDING, J.

“An examination of the evidence discloses that Kelly, in his official capacity, was only called upon to make reports of the bond sales to the Accounting Department and that he had no official connection with, nor was expected to make any report to the Loan Department, of such sales, and in fact made none. In a financial institution of the size and handling the volume of business as does The Citizens Trust and Savings Bank, it necessarily follows that, in order to expedite the work and insure accuracy of detail everywhere, a multiplicity of departments must be established, each independent of the other and yet all connected under one management.

In the case of Myers v. Insurance Co. 108 OS. 175, discussing the question of notice to an agent being binding on the principal it was held:

‘Syl. 1. Knowledge of or notice of an agent is not binding upon his principal unless it appear that such agent had authority to deal in reference to those matters which the knowledge or notice affected, or had a duty to communicate the same to his principal.’

Tn the ease at bar Kelly was the agent of the Bond Department and nothing more. He was Vice President but in such official capacity he had no duties to perform other than the duties of such bond agent.

We are therefore of the opinion it was riot incumbent upon John A. Kelly, as Vice President in charge of the Bond Department, to communicate his knowledge of the sale of the bonds to William R. Powell as trustee, to the other officers of the Bank. Counsel for plaintiff in error contend that J. H. Lange, who was the secretary of the Bond Department of the Bank and also connected with the Auditing Department, should have had knowledge of the certification of the bonds, or rather of the sale of these bonds to William R. Powell as trustee. The evidence shows that Lange was not connected with the Loan Department nor was he an officer charged with the duty of making loans. Consequently there was no obligation upon him to communicate his knowledge of bond sales to the Loan Department. The officers who were acting in the Loan Department were John Dury, Robt. H. Schryver, and Walter S. Beebe. All had certain and definite authority over loans and would be empowered, as such, to make loans. None of these three was chargeable with notice of the sale or transfer of the bonds to Wm. R. Powell, as trustee. Consequently when Powell presented the bonds to.them as the loan agents, they were not concluded by the records in another department of the Bank evidencing that the Bank had knowledge that such bonds were held by Powell as trustee and not by him individually.

Tn the court below the defendant bank moved for an instructed verdict. The court was bound to render such verdict upon the knowledge which the defendants had or could have had by considering the transaction in connection with the loan records of the Bank.

The record discloses that Mr. Addison was subsequently appointed by the court as trustee to succeed Wm. R. Powell, and that on Feb. 27, 1926, he, in a written communication, formally notified the defendant bank that the $6,000 of bonds referred to and held by the Bank as collateral on the $5,000 personal loan of W. R. Powell were trust bonds and not individually owned. We think this circumstance does not affect the right of the Bank to sell these collateral bonds upon the maturity and non-payment of the note and under the conditions recited above.”

(Kunkle and Allread, JJ., concur.)