Bank of Italy Nat. Trust & Savings Ass'n v. Farmers' & Merchants' Nat. Bank of Merced

There is little controversy over the facts in this case. One Hart was city treasurer of the city of Merced and president and manager of the Farmers’ & Merchants’ National Bank of Merced. The Merced Security Savings Bank applied to Hart, as treasurer, for a deposit of city funds to the amount of $25,000, and to secure the deposit, as required by a statute of the state, delivered to Hart negotiable bonds of the value of approximately $28,000. Hart defaulted as city treasurer. The Farmers’ & Merchants’ National Bank converted to its own use the securities deposited with Hart by the Merced Security Savings Bank; a receiver has been appointed for the Farmers’ & Merchants’ National Bank; and the Bank of Italy National Trust & Savings Association has succeeded to all the rights of the Merced Security Savings Bank. The different institutions, for convenience, will hereafter be referred to as the national bank, the savings bank, and the Bank of Italy. The present action was instituted by the Bank of Italy against the national bank and its receiver to recover the value of the securities converted by the latter bank. Upon Anal hearing the court below found that the securities, of the value…