22 Gratt. 51 | Va. | 1872
This is á supersedeas to a judgment rendered by the ■ Circuit court of the city of Richmond on the 11th day of May 1871, in an action of debt, in which the First Hational Bank of Richmond was plaintiff, and John L. Hodge, executor of William L. Hodge, defendant. The action was brought on two promissory notes, each of them payable on demand, and signed by William L. Hodge; one of them dated April 5th, 1867, payable to the order of “ S. A. Glover, cash’r,” for 83,700, “for value, being for a check Mr. Fant, pres’t, gave me on Lockwood & Co., New York;” and the
Two exceptions were taken hy the defendant in the progress of the case in the court below, and bills of exception were accordingly signed by the judge: one of them was to the judgment given by the court in the case, and sets out the evidence on both sides; the other ■was to the action of the court in overruling the defendant’s motion to set aside the said judgment, and grant him a new trial upon the grounds of error in the said judgment, and of newly-discovered evidence, which is set out in the bill of exceptions. The defendant applied for and obtained from this court a supersedeas to the said judgment, and the errors assigned arise upon the two bills of exceptions aforesaid.
That arising upon the first bill presents the question, Was a right judgment given hy the Oh’cuit court upon the evidence certified in that bill?
On the trial of the cause, the plaintiffs, in support of the issue on their part joined, offered in evidence the two promissory notes aforesaid, called in the proceedings, or hy the parties, “demand notes,” or “call notes,” which are set out in the hill “in hcec verba;” and copies of the accounts of the defendant’s testator with the plaintiff, being the same with the bill of particulars filed with the common court, which copies are also set out. And the plaintiffs then rested.
The plaintiffs thus clearly made out a good prima facie case; and, if the evidence had stopped here, the
But notwithstanding the form and nature of the notes, ■ and the expressions which they contaiuf yet in a case between the original parties to the notes or their representatives, or between one of the original parties and the representative of the other, such as this case is, it is competent for the defendant to show in his defence a a want or failure of consideration of the notes, or any other matter which would render them illegal or void in whole or in part.
Accordingly, the defendant contended that these notes were given by his testator on the mistaken idea that he was indebted in the amount of them to the Virginia Brick Company, of which he was a large stockholder, and out of transactions with which company the claim of the plaintiff originally arose; whereas, in truth and in fact, he was not, when he gave the said notes, indebted to the said company, but had previously fully discharged bis debt to the same; and he introduced evidence tending to show, and sufficient to show, that such was the fact.
Now, if these notes had been given to, and this action bad been brought by, the brick company, instead of the plaintiff’ no doubt the evidence introduced by the defendant as aforesaid would have defeated the action. But these notes having beeu given to, and this action having been brought by, the plaintiff, instead of the brick company, whether said notes were given in con
The only proof of that kind which we find in the record is a paper marked “ Exhibit E,” referred to in, and returned with, the deposition of IT. G. Fant, a witness in behalf of the defendant, which paper was signed by said Fant and handed to said testator, and is in these words :
“Washington, 16th May, 1867.
“ The demand note of Wm. L. Hodge, favor of S. A. Glover, dated April 1866, for thirty-seven hundred dollars, has been given merely as a voucher, until it is ascertained that he has paid the full amount due by him on stock in the brick company.
“H. G. Fant, President.”
Reference is here made to one only of the two demandi notes aforesaid, to wit, the one for $3,700. In fact the-other, for $2,037.74, was not given until more than two-months thereafter, to wit, the 27th of July 1867. It is. not pretended that the latter was executed on any condition, or with any understanding, even with Fant, that the-validity of the note should depend upon the maker’s-being indebted at that time to the brick company in the-amount of the note, or in any amount.
But as to the note for $3,700, what is the effect of the* paper marked “Exhibit F,” just set out?
If that debt had been due, and that note had been-given to H. G. Fant individually, then “Exhibit F” would have been evidence against him, and, coupled with the other evidence in the cause tending to show that the maker of the note had paid the full amount due by him
But that debt was due, and that note was given to the First Rational Bank of Richmond. Though the note was payable to the order of S. A. Glover, cash’r, it was in effect payable to the said bank, of which he was cashier; that being the usual form of such transactions. The question is, how can the bank be effected by ‘ * Exhibit F ?”
The bank can only be so effected upon the ground that Exhibit F was signed by an agent of the bank duly authorized to sign it.
Was it signed by such an agent? It is not pretended that any special or express authority was conferred upon Fant by the bank to sign that paper ; or that the bank confirmed the act after it was done. Fant being asked, on his examination in chief by the defendant: “At the time you signed the paper marked F, did you give it as president of the First Rational Bank, and as intending to bind that institution?” he answered: “It was presented to me by Mr. Hodge, and without much reflection, I signed it as it purports to be, by the president of the First Rational Bank of Richmond. The paper must speak for itself. If I had the power as president of the bank to make such a contract, I made it with Mr. Hodge in the hurried manner in which it was presented to me.” Being asked on cross-examination the following question: “ The demand note of Mr. Wm. L. Hodge for $3,700 bears date April 5, 1867, the receipt given by you, and alluded to in your examination in chief as Exhibit F, is dated May 15th, (16th?) 1867. Will you explain why it is, if that receipt refers to the note of April 5th, 1867, that it bears a different date ?” he answered: “It does refer to the note dated April 5th, 1867 ; it was given in a hurried way by me, over a month after the note for $3,700 was executed by Mr. Hodge. He stated to me at the time, that he thought there was some mistake about his owing the Virginia Brick Com
Then if Fant had any authority to bind the bank by the admission made in Exhibit F, he must have derived that authority from, and in virtue of his office of president of the bank. Bid he derive any such authority from that source ?
The First National Bank of Richmond was created
Thus it appears that the general management of the business of the bank, and the interest therein of the shareholders, are confided to the care of the board of directors, and there is in the act no specification of powers or duties to be exercised by the president or cashier. The election or appointment of such officers by the board is provided for by the act; which also provides that the board may define their duties. But there is nothing in
Then, had Fant any inherent power as president, to bind the bank by his admission made in “ Exhibit F ?” The president of a bank has, it seems, very little inherent power. He is generally, if not always, a member of the board of directors, and chosen by the board from their own number. It- is his duty to preside at meetings of the board. “ Ordinarily;” we are told, “ the position is one of dignity, and of indefinite general responsibility, rather than of any great and accurately known power. The president is usually expected to exercise a more constant, immediate, and personal supervision over the daily affairs of the bank - than is required from any other director. Usage, or directorial votes, may confer upon him special functions, and may extend his authority to correspond with the increase of active duties. But the authority inherent in the office itself is very small; indeed, it is very difficult to say precisely how or where it is much in excess of that which can be exercised by any other single director.” Morse on Banks and Banking, p. 128. “A careful collation of all the adjudicated cases, it must be confessed,” continues the same author, “wears a striking and peculiar aspect which is not very favorable to the assumption of any species of executive power by a bank president without direct authorization.” Id. 129. “ Indeed, it is a singular fact,” he further says, “that the entire collection of judicial authorities justifies the enunciation of .only one act as falling within the properly inherent power of the president. This solitary function is to take charge.of the litigation of the bank. There
But certainly, neither the president nor the cashier, nor both combined, could, virtute officii, giye-up a debt or-liability to the bank, or bind the bank, by such an admission as is contained in “Exhibit E” aforesaid. This, I think, plainly appears from the cases cited by the counsel for the bank. In Bank of the United States v. Dunn, 6 Peters U. S. R., 51, it was held, that “ an agreement by the president and cashier of the Bank of the United States, that the endorser of a promissory note shall not be liable on Ms indorsement, does not bind the bank. It is not the duty' of the cashier and president to make such contracts; nor have they the power to bind the-bank, except in the discharge of their ordinary duties; All discounts are made under the authority of the directors, and it is' for them to fix any conditions which maybe proper in loaning money.” This is the reporter’s heading of the decision, but it is fully sustained by what is said in, and is chiefly in the very words of, the opinion of the court asdelivered by Mr. Justice McLean. In United States v. City Bank of Columbus, 21 How. U. S. R., 356, it was held, according to the reporter’s marginal abstract of the case, which is no doubt correct, that “ where the cashier of a bank wrote to the Secretary of the Treasury, saying that the bearer of the letter was authorized to contract for the transfer of money from New York to New-
I think we may fairly conclude, from what has been said, that Fant had no authority, in virtue of his office-of president, to bind the bank by his admission made in “ exhibit F.”
But the claim of the plaintiff in error to a discharge from liability of his testator’s estate from the demand of' the bank, seems to rest mainly upon the following grounds: First, that the debt of said testator to the bank, was created in consideration of a debt supposed to be due by him to the brick company aforesaid. Secondly, that there was then, in point of fact, no debt due from, him to that company, as the parties supposed. Thirdly, that there was such a connection between the brick company and the bank, or such a contract or understanding between the said testator and the hank, as made the-validity of the debt from him to the bank dependent upon the existence of the debt from him to the said company, and aB no such debt as the latter existed, the former was, therefore, invalid. And fourthly, that the said contract or understanding was had with Fant, as-agent for the hank, and that he was so held out to the world by the bank as agent for such purposes, as that the hank is estopped from denying such agency in this-
As to the first: There seems to be no doubt but that the debt from said testator to the bank had its origin in a debt from him to the brick company. On the 7th of July 1866, he being indebted to said company as a stockholder, and for assessments, in an amount exceeding $5,700: that company, by the said Fant, their treasurer, on that day, drew two drafts on W. L. Hodge (the said testator), Washington, D. C., one of them for $3,825, specified in the draft to be “$3,750 and 4 months int., brick note,” and the other for $1,875, specified in the draft to be for “valued received,” with a direction therein “to charge to account of” the drawer, and amounting together to $5,700. Ho time for payment was named in either of them. Both were payable “to the order of S. A. Glover, cashier,” he being then cashier of the said bank. On the day of their date, it seems they were discounted by the said bank, and the proceeds were paid by it to the brick company. They were endorsed “credit my account—S. A. Glover, cashier”; and on the 13th of July 1866, they were enclosed in a letter from said Glover, cashier, to said W. L. Hodge, with a request that he would “please deposit to our credit with the First Hational Bank of Washington.” This was the origin of the debt claimed by the bank to be due from W. L. Hodge, which was, ■therefore, created in consideration of the debt supposed to be due by him to the brick company as aforesaid.”
As to the second ground—“that there was then, in point of fact, no debt due by him to said company.” ’There was certainly a debt due by him to said company at the time the said drafts were drawn, and at the time they were endorsed to and received by him, and in an amount about equal to .the amount of the said two drafts. But it is said that these drafts were never accepted by .him; that he never became indebted to the bank on that
As to the third ground—“that there was such a connection between the brick company and the bank, or such a contract or understanding between the said testator and the bank, as made the validity of the debt from Mm to the bank dependant upon the existence of the debt from him to the said company ; and as no such debt as the latter existed, the former was therefore invalid.” It has been shown that the drafts of the 7th of July 1866, were received by W. L. Hodge as aforesaid. He was indebted to the brick company in an amount equal to the amount of them ; and if said Hodge, by reason of his conduct in regard to. said drafts, rendered himself liable for the amount of the same to the bank ; or if the bank were entitled to enforce payment of said drafts against said Hodge, as equitable assignments of the debt due by-him to the brick company at the time they were drawn ; then, there is no foundation to sustain the point we are now considering. But let it be supposed, for the sake of argument, that Hodge did not so render himself liable for the amount of said drafts to the bank, and that the bank was not entitled to enforce them against him as equitable assignments of the said debt, then the question arises, was not the claim of the bank against him on those grounds, whether well or ill founded, a sufficient consideration for his assuming payment of the said claim, as he afterwards did by his acceptance of the said draft of March 30th, 1867, for $5,700, and by his execution of the said demand notes on the 5th of April and 27th July 1867 as aforesaid? Certainly it was; unless the brick company and the bank can be regarded as on e and the same institution, or as so connected with, or dependent on each other that a debt due by the Mne, is in effect a debt due by the other. It will not be pretended that there was any such connection between them as that.
As to the fourth and last ground: “ that the said contract or understanding was had with Fant as agent for the bank, and that he was so held out to the world by the bank as agent for such purposes, as that the bank is estopped from denying such agency in this case.” This view is no doubt founded on the evidence of the cashier, Glover, who was introduced as a witness by the defendant, and who testified, among other things, “that H. G. Fant was the president of the plaintiffs; that he, Fant, made a large majority of the loans himself; that Fant had the general charge and conduct of the financial negotiations of the plaintiffs; that the board of directors did not meet regularly ; that the state of the bank was not laid before the directors generally ; that he supposed it was known to the directors how Fant acted ;” “thatFant made negotiations; that he controlled the credit of the bank, but that witness did not know if he did it irregularly; that Fant sometimes drew his own drafts as
I am for affirming the judgment.
Judgment arrirmed.