I agree that bonds in the total sum of $249,000 are shown either to have passed through, or to have been handled by the American National Bank of Enid, which the Crews heirs ultimately lost. But the verdict and judgment fixing liability on the Enid bank for each and all of them is excessive. The Enid bank was of course the gratuitous bailee of these bonds from the Garber bank, bailor, as shown by the majority opinion, but as shown by the majority opinion, five bonds of $10,000 each (total $50,000) were returned by bailee to bailor, the Garber bank. Two of these bonds ($20,000) were returned to Garber bank in 1924 and three ($30,000) were returned to Garber bank in 1925, and their loss by the Crews heirs resulted directly from the subsequent defalcation of their trustees, the Garber bank, selected by them and trusted by them. The Enid *Page 69 bank had nothing to do with the final disposition of these bonds ($50,000) after returning them to the bailor, Garber bank, more than six years before this suit was filed, and five years or more before Mr. Taft died. I find no basis for fixing liability on the Enid bank for the loss of this $50,000. I agree with the majority of opinion that these five bonds were disposed of by the Garber bank or some one of its officers and the money embezzled, but the Enid bank did not do it nor aid in doing it. I cannot agree that the former holding of these bonds by the Enid bank made it liable. The Enid bank did formerly hold them. It held them as bailee, and returned them undamaged to its bailor several years before these plaintiffs made any demand or sought to enforce any liability against the Enid bank. See 6 C. J. 1150; 65 C. J. 35.
It should not be overlooked that the trustee, the Garber Bank, had the right to place these bonds in bailment and the Enid bank the right to so receive them. It was so held by the trial court without objection or exception by plaintiffs. It would seem to clearly follow that the Enid bank had the right to return them to the trustee and the trustee the right to receive them back. Then, as to these five bonds, the effect of the majority opinion is to hold that when the trustee, in violation of the trust, sold them and embezzled the proceeds, the owners may recover their value from the Enid bank because the Enid bank had theretofore held the bonds in bailment for a time and returned them when requested, to the trustee, who was the Enid bank's bailor. Of course no sustaining authority is cited.
The rule imposing liability on the Enid bank is stated in paragraph 5 of the syllabus. The majority opinion is not clear as to how it is concluded the Enid bank joined in or aided the embezzlement of the proceeds of these five bonds. It is my view that the act of the Enid bank in holding these bonds as bailee for a time did not damage plaintiffs at all and did not aid the trustee in its subsequent sale and embezzlement. It seems to me a strange rule of liability of a bailee that, as to property held by a trustee with authority to sell it or place it in bailment, if he first does the latter, the bailee who receives it and thereafter on request returns it intact to the trustee is himself liable to the owner if the owner's trustee subsequently sells the property and embezzles the proceeds.
I am mindful of the grievous wrong done plaintiffs, and of the great loss they sustained, but it resulted from their misplaced confidence in the trustee of their own selection. The courts should lend all possible aid to plaintiffs, but in measuring the liability of defendant, Enid bank, which handled these bonds as bailee of plaintiffs' trustee, we should be guided by the rules applicable to such bailment.
All these bond purchases and bond sales were handled in a number of separate transactions, each independent of the other. Neither item of bond purchase had any connection with any one before it or any one after it, nor did any bond sale have any connection with any sale after it or before it. The case was tried upon the theory that each such transaction was separate. This is disclosed by the record of evidence introduced by each party and by the court's instructions submitting the cause to the jury. In instruction No. 3 the court instructed the jury that each separate transmission of bonds to the Enid bank constituted a gratuitous bailment, and instruction No. 17 is quoted in full as follows:
"You are instructed that you must apply these instructions as a whole separately to each of the several transactions complained of in the plaintiffs' amended petition and shown in the evidence, and, so applying these instructions as a whole separately to each of such transactions, determine the liability or nonliability of the defendant to the plaintiffs in each of such transactions, and so, in such manner, make up and determine your final verdict."
The plaintiffs did not except to these instructions and make no point here on either of them being erroneous. *Page 70
In this case there was no theory or evidence that defendant Enid bank was a coconspirator and acted pursuant to a general plan or scheme and therefore would be liable for the acts and defalcations of the Garber bank.
Furthermore, the majority opinion shows a number of the bonds, totaling nearly $100,000, were either collected at maturity or sold, and a return of the proceeds made to the Garber bank, all as directed by the Garber bank, and all several years before the death of Mr. Taft. The original escrow contract specifically authorized the Garber bank to resell bonds bought for the Crews heirs, or to collect them at maturity. The contract was so construed by the trial court without objection or exception. The Garber bank having the right to make those sales and collections, it could do so through the Enid bank, or through any bank, without making that bank liable for the subsequent embezzlement of the proceeds by the Garber bank or any of its officers. If these particular collections and sales had been made by or through a New York bank, or a Federal Reserve bank or the United States Treasury, the making of proper return of proceeds to the Garber bank would have left no liability remaining against these agencies in favor of the Crews heirs. In the same position is the Enid bank as to those of the bonds which it aided the Garber bank to sell and collect, as the Garber bank had the full authority to sell and collect. The contrary holding of the majority opinion is not supported by cited authority and to my mind is not itself convincing.
The fifth paragraph of the syllabus of the majority opinion would imply the Garber bank only "had apparent authority and control over the bonds." The fact is that the original contract of the plaintiffs, as is construed by the trial court without objection, gave the Garber bank actual and complete and unrestrained control over the bonds, as to when and whether they would be sold, and where they would be kept or held.
On page 7 the majority opinion refers to the first sale of bonds being the sale of bonds in the sum of $27,000 to Mr. M.C. Garber and Mrs. Lucy Garber. The statement in that paragraph implies that the Enid bank, holding these bonds for safekeeping, sold them and then advised the Garber bank thereof; all without any former authorization from the Garber bank to sell those bonds. The fact is the Enid bank was first authorized by the Garber bank to make that sale and after making it, the Enid bank did write Taft of the Garber bank that the sale was made and the amount was credited to the account of the Garber bank. If it is in the minds of the majority that the Enid bank, holding these bonds as bailee, breached their trust and disposed of the bonds without authority from the bailor, Garber bank, then the majority opinion should say so emphatically, but since that is not the fact and cannot therefore be used as a basis of liability, the majority opinion should not so imply. All of the bonds which were ever sold by the Enid bank were sold upon the express authority and direction of the Garber bank through its officials, and it is nowhere contended to the contrary.
These particular bonds were sold to Mr. M.C. Garber and Mrs. Lucy Garber before any one of the bonds had been mishandled in any manner. These bonds were sold and return made of the proceeds in December, 1922, and it is not contended that there was any technical mishandling of any bond until during the following calendar year. I do not see how the majority opinion does or can justify the approving of liability against the Enid bank for these bonds. It is true that subsequently the Garber bank or its officers embezzled these proceeds so that the Crews heirs suffered total loss, but such loss was not caused or contributed to by the Enid bank, nor could the Enid bank up to the time of this sale have possibly had knowledge of any wrongdoing or bond mishandling, because up to that time none had existed.
The trial court correctly instructed the jury as follows in instruction No. 10:
"You are instructed that the Farmers *Page 71 State Bank of Garber, as trustee of the funds belonging to the plaintiffs and in the Crews Estate Oil Gas Producers escrow account, had the right to deposit for safekeeping such United States Government Bonds and Treasury Certificates, purchased out of the proceeds of such fund, in the American National Bank, and that the defendant, American National Bank, had the right to receive and accept such bonds for safekeeping; and you are informed that if you find from the evidence submitted that the Farmers State Bank of Garber invested either in whole or in part the funds of the Crews Estate Oil Gas Producers escrow account in United States Government Bonds and Treasury Certificates, and transferred such bonds and Treasury Certificates to the American National Bank for safekeeping and that the American National Bank received such United States Government Bonds and Treasury certificates for safekeeping upon behalf of said Farmers State Bank of Garber and thereafter returned to the Farmers State Bank of Garber the identical United States Government Bonds and Treasury Certificates or other United States Bonds and Treasury Certificates of like quality and value or the proceeds of the sale of such bonds and certificates equal to the then fair cash market value thereof, then and under such circumstances the American National Bank, the defendant herein, would not be liable to these plaintiffs by reason of such transactions."
The plaintiffs did not except to this instruction and did not here assert the same was in any manner erroneous or contend any incorrect statement of the law.
Each bond sale made by or through the defendant, Enid bank, was made at the then market value or price as shown by the record, and it is nowhere contended to the contrary.
The majority opinion repeatedly refers to the Enid bank's mishandling of bonds in the pledging of such bonds to secure deposit of public funds in the Enid bank. That use of the bonds, although by express permission of the Garber bank, was nevertheless a wrongful use. However, that wrongful use was only temporary and did not injure or damage the bonds, and that use did not damage these plaintiffs. When those bonds were released from such pledge they were all returned to the custody of the Enid bank and were thereafter handled by the Enid bank exactly as directed by the Garber bank. As to that item of temporary misuse, this case was tried on the theory that the same would not create liability of the Enid bank if said bonds in kind were returned to the Enid bank before the Crews heirs, plaintiffs, made claim thereof. The trial court specifically so instructed the jury in instruction No. 15. The plaintiffs did not except to that instruction, nor did they question the correctness of that legal rule in their briefs. The majority opinion is in error in relying upon this circumstance as fixing liability against the defendant (6 C. J. 1113-14), since the rule is so reasonable and so well settled that the temporary wrongful use of property by the bailee thereof imposes full liability for all damages caused by or flowing from such use, but in itself imposes no other or future liability or responsibility on the bailee.
Thus it is demonstrated from the majority opinion that the verdict and judgment is excessive by approximately $150,000; and when considered as fixing liability for each and every one of the bonds as it must be, is not sustained by evidence and is contrary to law. These are matters specifically assigned as error, and since they alone would justify reversal to the end that proper liability should be determined, I do not discuss other propositions presented.
I respectfully dissent to affirmance in full.