Hill v. Bank of Seneca

87 Mo. App. 590 | Mo. Ct. App. | 1901

GOODE, J.

The theory on which the peremptory instruction is defended and the one doubtless on which the court gave it, is, that the contract made by the cashier with the appellants did not appear from the evidence adduced to be binding on the bank. The contract might be obligatory for several reasons: either because it was within the apparent scope of the cashier’s authority, because there was testimony from which it was fairly inferable that he was acting with the knowledge and approval of the directors in making the arrangement, because it was an act such as he was accustomed to do with their approval or because, after acquiring knowledge of what he had done, they ratified it by not objecting but retaining the advantages which accrued to the bank.

The principles of law concerning the powers of bank cashiers, as of other officers of private corporations to bind their companies are well known, but their application in cases against banking companies has been so contradictory and inharmonious that but little more than schedules of permissible and forbidden acts of such officials are furnished. The trite precept that a cashier’s conduct and agreements bind the corpo*ration “when they fall within the actual or apparent scope of his authority,” or “in the sphere of his duty,” is often a perplexing landmark to guide us to a satisfactory decision, so ob-soured is it by tbe widely different opinions announced by the courts as to what words or deeds it embraces — opinions often influenced by what happened to be deemed a safe public policy. Deriving such assistance as may be from those judgments which, seem the more authoritative or better reasoned, we will endeavor to ascertain whether or not the contract in question was the respondent’s or whether there was evidence tending to show it was which the jury should have weighed, bearing in mind the particular circumstances of the case and assuming that the president of the bank knew of and made no objection to what the cashier had done. The latter’s testimony justifies this conclusion.

Divergent as the precedents are concerning the functions of a cashier, they all agree that one of them is the custody of the notes and securities of the bank and the collection of its paper. As the executive officer and administrative head of the institution, it is peculiarly his province to take care that its bills receivable do not become stale nor its securities impaired by inattention. Seeing that notes are attended to when they mature, either by payment or renewal, or, in default thereof, taking the proper steps to realize on them, are sanctioned both by custom and law as a principal part of his duty. Young v. Hudson, 99 Mo. 102; Western Bank v. Gilstrap, 45 Mo. 418; Eastman v. Coos Bank, 1 N. H. 23; Bridenbecker v. Lowell, 32 Barb. 9; Corser v. Paul, 41 N. H. 24, 77 Am. Dec. 753; United States v. City Bank, 21 How. (U. S.) 356. The power to collect implies, of course, doing whatever is personally necessary to success and the exercise of some discretion in determining what is necessary under given circumstances. The performance of a duty by any officer, agent or person, involves, in the nature of things, the power to employ means to accomplish it, and the further power to decide what means to employ. The qualification is, that these implied secondary powers must be such as will probably subserve the end iu view, must lie within the bounds of right and reason. Extravagant, unlawful acts will not be upheld because wrong in themselves and also because they suggest their own impropriety to the party seeking to make them available against the principal. But for what is warranted by general usage, or by the special usage of the party to be charged, or is manifestly necessary to the attainment of the desired object, the principal will be responsible unless the agent’s freedom was restricted by known instructions. Mabray v. Kelly-Goodfellow Shoe Co., 73 Mo. App. 1; Watkins v. Edgar, 77 Mo. App. 148; Clark v. Southern Electric Supply Co., 72 Mo. App. 506; Keller v. Myer, 74 Mo. App. 318; Hill v. Wertheimer-Swarts Shoe Co., 150 Mo. 483; Breckenridge v. Ins. Co., 87 Mo. 62; Samuel v. Bartee, 53 Mo. App. 587; State ex rel. v. Gates, 67 Mo. 139; Sparks v. Despatch Transfer Co., 104 Mo. 531.

“If there is one principle in the law which finds abundant and oft-repeated recognition, it is this: that where an agent is clothed with general powers, the means and measures necessary to effectuate the powers granted, attend the grant of authority as inevitable incidents.” State ex rel. v. Gates, supra; Edwards v. Thomas, 66 Mo. 468; Barnes v. City of Hannibal, 71 Mo. 449.

In the present case, when Berry took the wheat, the larger note for $3,000 was not due. It was, as stated, secured by a separate mortgage on different fields from those covered by the mortgage whose condition was then broken. The grain was in process of threshing pursuant to a contract which Richardson had made with the plaintiffs; six or seven thousand bushels had been separated, for which work Richardson owed them. Berry said he received notice the matter needed attention and went down, that he was eighty miles from home, could not leave the property in the owner’s hands and had to be represented by some one; so lie appointed tbe firm, at Catoosa. This all tends to show be was confronted with an emergency and took wbat measures seemed best for tbe bank’s interest. It may be that Richardson would not have surrendered the mortgaged property on other terms than Berry made. In good conscience he should have protected the plaintiffs if possible, for he had hired them to bring their machines and hands to his fields to clean the crop. The larger part of the property could not then have been recovered by action, for no breach of the conditions of the mortgage had occurred. Both instruments contained the usual provisions about possession remaining with the grantor until breach, and for a public sale after default. The bank eluded the hindrance and inconvenience of those clauses by the terms of the delivery obtáined by Berry, secured immediate possession and the privilege of a private sale without defraying the expense of threshing, shipping, freight, commission, labor or other charges; certainly an advantageous arrangement.’

We do not see how it can be denounced as outside the apparent or actual scope of his authority, in view of the usage and duty of bank cashiers to make collections or his own usage as testified to by himself to attend to such business for the respondent. It looks like the contract made with the plaintiffs was one step towards the carrying out of the understanding with Richardson, under which he surrendered possession. Perhaps it was necessary to get the wheat out of shock to preserve it. There was testimony that the weather threatened rain. We would not hold a gratuitous and uncalled-for contract by Berry, to thresh the entire crop, binding on the bank. No such power belongs to a cashier’s ordinary duties. To have that effect it must have been apparently necessary to the proper protection of the bank’s interest either by enabling it to make good its lien or preserve the property. Just why Berry was summoned to Catoosa is not shown, but for 'some cause he was alarmed. If Eichardson had turned over the crop without conditions' or terms and no injury was threatened, but the bank could as well have realized by selling it in the shock, a contract which imposed a useless and heavy charge for threshing would be very questionable. But the facts here are quite dissimilar and would legitimately warrant another conclusion as to the propriety of the cashier’s act and consequently as to his authority to act. We can not lose sight of the important, if not controlling, fact that Berry incurred no expense for the bank to bear by his contract with the plaintiffs. The memorandum of delivery afforded ample protection against any charge, by authorizing him or his representative to attend to the further threshing of the wheat, loading and billing the same, and to receive full proceeds of sale of wheat until all the indebtedness due the bank was paid in full and all the expenses of threshing, hauling, loading, freight, commission, labor and other charges paid. The bank was safeguarded by sweeping and comprehensive provisions in its behalf.

A cashier is empowered to enter into some contracts for his bank in the course- of collecting its notes which entail expense. He may institute suits and employ counsel. Western Bank v. Gilstrap, 45 Mo. supra; Young v. Hudson, 99 Mo., supra; Southgate v. Railway Co., 61 Mo. 89; Boot v. Olcutt, 42 Hun. 538; Eastman v. Coos, 1 N. H. 23; Bank v. Keavey, 128 Mass. 298; Frost v. Sewing Machine Co., 133 Mass. 563. It is difficult to see why he may not make an agreement which will entail no expense. It is true the plaintiffs are strangers to the memoranda for delivery of possession and are not suing on them, but they knew their contents, for one of them, O. W. Hill, was the attesting witness, and might well assume without further investigation that Berry, as cashier in charge of the bank’s security, which he was then enforcing, was authorized to comply with the provisions of the memoranda since it could be done cost free.

Various acts done by cashiers to facilitate collection of their bank’s securities more onerous than the one in this case, have been countenanced when the circumstances demanded them. Fleckner v. Bank of United States, 8 Wheat. 338; Bridenbecker v. Lowell, 32 Barb. 9; Bank v. Reed, 1 Watts & S. 101; Savings Bank v. Keavey, 128 Mass. 298; Badger v. Bank of Cumberland, 26 Maine, 428; Corser v. Paul, 41 N. H. 24. In Bank v. Reed, supra, it is said the authority of an agent “may be extended or varied on the ground of implied authority according to the pressure of circumstances connected with the business with which he is entrusted. If it had been shown that the arrangement in question was necessary for the security of the debt or that the circumstances justified the agent in acting as he did, the principal would have been bound.”

It is claimed by the respondent that it was only liable for the threshing of the wheat which was used to satisfy the notes it held against Richardson. Apart from any agreement made with the mortgagor, a mortgagee of personal property, on taking possession, may incur expense in preserving or selling the property and deduct it from the proceeds realized. Friendly v. McCullough, 9 Or. 109; Caldwell v. Hall, 49 Ark. 508; Hughes v. Johnson, 38 Ark. 296; Fry v. Ford, 38 Ark. 255; Schiffer v. Feagin, 51 Ala. 335. The bank might, therefore, independently of any authority, have threshed the wheat required to discharge its claims as a part of the expense of foreclosure if such action was necessary to enable it to save the grain 'or sell it. But it was specially empowered to pay for cleaning the entire crop, took possession on that condition and employed the plaintiffs to perform it, as the record now stands. Why the agreement as to possession was not fully carried out does not clearly appear, but probably because an understanding was had with the Coffeyville Bank that it should take the part of the crop left after the defendant was satisfied and see to the threshing. But if Berry had the right to make the agreement with plaintiffs in the first place, they could not be prejudiced by such subsequent arrangement to which they did not accede.

We rule, then, that it should have been left to the jury to say whether, considering all the circumstances, it was necessary in order to properly protect the bank’s interest for its cashier to contract for the threshing of the wheat; if so, the bank is liable to plaintiffs for the unpaid balance of the compensation for their work.

We also hold, there was evidence for the jury on the question of the ratification of the contract by the directors. We assent to the proposition of law contended for by the respondent that the bank did not necessarily ratify everything done by Berry in connection with the wheat, by merely retaining and selling it to pay its claims. The mortgages gave it the right to realize what -was owing, out of the property covered by them. This was a right separable and distinct from the contract made with the plaintiffs. But if the directors became apprised of their contract for the threshing, and afterwards allowed them to continue the work, the bank is bound to pay for it in full. If the directors intended to repudiate the contract, it was their plain duty to notify the plaintiffs to that effect and have them discontinue. The only notice to the plaintiffs was the refusal to honor their check on the eighteenth day of July. After that date, it seems, they were induced to go on by the representations of Eeynolds & Dougherty whom the bank had put in charge of the wheat and all matters connected with its threshing and shipping. McG-annon, the president, knew of this arrangement. Berry swore that he was advised reports were made to the bank of the sums paid .plaintiffs for their work. He said, also, that he took the mortgages back and, according to his impression, they were kept in the bank with the delivery agreements on them. Without going so far as to say, as was said by the court in Dry Goods Co. v. Bank, 81 Mo. 46, that it is “hardly comprehensible” how this transaction could have gone on without the knowledge of the directors, we think there was evidence from which the jury might reasonably have inferred that they were cognizant of the cashier’s doings. It was not necessary for them to take official action as a board in order to ratify his contract. If they had knowledge that he had made the agreement with the plaintiffs and made' no protest and gave no notice to the plaintiffs, the bank must be held to have adopted its cashier’s act.

The judgment is, therefore, reversed and the cause remanded.

All concur.