22 Mo. 85 | Mo. | 1855
delivered the opinion of the court.
Thi-s was an action by the city bank of Columbus on a negotiable note, dated May 1st, 1851 ; it was a premium note, given for the insurance on a steamboat. The bank took the note on discount in the usual course of business. The defence set up in the answer was that the Columbus insurance company was insolvent, and fraudulently entered into the contract of insurance ; that by reason of the fraud the contract was void, and the insurance company acquired no right to recover upon the note, and that the city bank of Columbus, when she took the note, knew this. The note was executed to James M. Clendennin, the agent of the Columbus insurance company, dated 1st May, 1851, and payable six months after date. The note was endorsed by Clendennin, the agent, to the Columbus insurance company, and was by the company discounted at the bank, the plaintiff in this action.
On the trial, the defendant offered evidence tending to show that the Columbus insurance company was wholly insolvent at the date of the issuing of the policy and of the note; that the same persons who controlled the bank also controlled said in-' surance company; that the directors, or a portion of them, were stockholders and directors in both institutions, and knew
1. This instruction, given for the plaintiff, is erroneous. The court here tells the jury that the defendant, in order to avail himself of the insolvency of the Columbus insurance company, (if the jury believe that the plaintiff acquired title to the note sued upon, before it became due, and for a valuable consideration,) as a defence to this action, must prove, to the satisfaction of the jury, the following facts, to-wit: “That said company, when said note was given, was and knew itself to be insolvent and unable to fulfill the contract of insurance, on account of which said note was given ; that said company, knowing itself to be so insolvent and unable, induced the defendant to give said note, by false representations of its solvency, actually made to him for the purpose and with the intent fraudulently to deceive him, and induce him to give said note ; and that the plaintiff, when it acquired title to said note, knew for what it had been given, and that it had been obtained from the defendant by means of such false representations, actually made by said company with such fraudulent intent. ” Surely the law does not require that the false representations
2. The same persons or a portion of them control both institutions, the bank and the insurance, company. The insurance company becomes insolvent — hopelessly unable to pay for any losses. That, company make false publications as to its condition and ability to pay. It also files, under the statute law of this state, a statement of its condition with regard to its means and liabilities. This our law requires, because the company has its agent here doing business for it. This statement is to be filed with the clerk of the county court of St. Louis county. This statement should b.e honestly and truly made. This statement, filed by the company in this case, was provéd to be false. Now it is but a reasonable presumption that what one of these companies or institutions does, is known to the other; that the condition of each is known to the other. The same directors, or a portion of the-directory and stockholders in each is the same. Notice, therefore, may be well presumed against the bank. “ It is a well established principle, both in law and equity, that notice to an agent in the transaction for which he is employed, is notice to the principal; for otherwise, where notice is necessary, it might be avoided in any case by employment of an agent. The rule applies equally to a corporation as to a natural person. In case of a joint agency as of directors of a bank, knowledge of a material fact, imparted by a director to the board at a regular meeting, is notice to the bank. Notice to either of .the directors, whilst engaged in the basi
The instruction prayed for by the defendant, in the opinion of a majority of the judges, was improperly refused. It should have been given. For the errors aforesaid, in giving and refusing instructions above pointed out, the judgment below is reversed, and the cause remanded ;