52 Me. 545 | Me. | 1864
Lead Opinion
The opinion of a majority of the Court was drawn by
The note in suit is payable to B. D., Peck or order, and by him indorsed. The fact that, after his individual indorsement, is to be found on the note an indorsement by him, as Treasurer, in no way affects the right of the plaintiffs to recover. The bank may have failed to obtain the security of the State by such indorsement, but that affords no defence to the makers of the note, or prevents the title thereto vesting in the plaintiffs.
" The moneys of the State” are entrusted to its Treasurer for safe keeping, but, though he misapply them, they none
By R. S., 1857, c. 2, § 26, the Treasurer is required-to give bond to the State.
By § 27, "the condition of the bond shall be for the faith- ■ ful discharge of all the duties of his office, the fidelity of all persons by him intrusted with any of the concerns thereof, and that during his continuance in office he will not engage in trade or commerce, or as a broker, agent or factor for any merchant or trader,” &c.
By § 28, "the Treasurer shall not in any way receive for Ms own itse any interest, gratuity or benefit by reason of any money belonging to the State, or of any -loan -.obtained for the State, &c. He shall not loan, use in his own business or for his own benefit any such money, or permit any other person to. do it, unless authorized by law, upon pain of forfeiting a sum equal to the-amount so used or loaned,to be recovered by indictment.”
By § 30, "no greater amount of 'the money of the State’ than twenty thousand dollars shall be on deposit in a bank unless it is necessary for the payment of bonds of the State and interest, becoming payable at such bank.”
By § 31, the Treasurer is required to make monthly ex-, hibits, showing the places or-banks in which "the moneys of the State” have been kept and deposited during the past month, &c.
It is apparent from these provisions that "the moneys of the State” intrusted to its Treasurer, while under his care and supervision, ever remain its moneys. The bond required is not so much for " the moneys” as for the faithful discharge of his duties in- reference thereto. For the one it would be entirely inadequate, while for the other it might be amply sufficient.
The statute authorized Peck, as State Treasurer, to make a deposit with the plaintiff bank. His deposit with the bank, the case finds, was made of "cash and checks purporting to be official,” and of the discount of notes signed by
The moneys thus deposited and passed to the credit of the State Treasurer belong to the State, and are a part of its funds or they are not. If they are not the funds of the State, they would, on his death, descend to the heirs of the Treasurer, if solvent. If insolvent, they would be divided among his various creditors, of whom the State would be one, and would be thus entitled to a fractional share, greater or lesser, according to the insolvency of the estate. If not the moneys of the State, the. funds in the different banks might have been trusteed as the funds of Peck in suits against him, — a view of the law which might have been gratifying to his creditors. But such is not the law. The consequences would be too monstrous to allow one for a moment to assent to such a proposition. Moneys of the State thus deposited remain its property and cannot rightfully be appropriated save to its use.
But it is urged that the proceeds of notes discounted for Peck, and passed by his direction to the credit of the State, are not to be regarded as its funds. But such is not the law. Peck was a defaulter. The money belonging to him and arising from notes discounted at his request was by his order passed to the credit of the State. It remains to its credit. No mistake is pretended. He is estopped to deny that the funds thus credited' belong to the State. They should remain there until withdrawn in the due course of business, or until the final adjustment of his account. The bank has received these funds as the money of the State, and is bound by such reception so to recognize it. They have been understandingly appropriated to the credit of the State. They are mingled with its other moneys. Who is authorized without the consent of the State to separate and withdraw it? The State forbids it. Is this Court to sanction and approve the robbery of its treasury ?
Nor is the conclusion different if the discounts obtained
The payment to the plaintiff with the fuuds of the State-was illegal and against the express commands of the statute. As the bank received them with a full knowledge of all the facts, the State might have maintained an action to recover back the money thus wrongfully and fraudulently misapplied in payment of the individual indebtedness of its Treasurer. Such being the law, the bank lost no rights by voluntarily doing what, by law, it would have been compelled to do. Scranton, Ex., v. Bank of Rochester, 24 N. Y., 424.
As against Peck, whether the note was for his accommodation or not, the bank is entitled to recover the full amount. The payment became unavoidable to the bank, as the State recalled the money thus illegally paid. The bank has received no benelit therefrom. The indorsement on the note in suit, of the amount of the check given by Peck, was erased by him. It cannot be doubted that the claim of the bank against them z-emains unaffected by what has been done. No part of his indebtedness has been discharged.
The proof shows that the officers of the bank had no knowledge that the note in suit was given for the accommodation of Peck. They might well regard the defendants as principals. Indeed, as to the bank, they must be deemed principals, and as having no defence in law or in equity. No payment has been made by them, or for, and on their account, which has enured to the advantage of the plaintiffs. Their indebtedness is not to be discharged because the indorser of the note, in which they are principals, attempted
If there had been no indorsement upon the note in suit of the money of the State, wrongfully paid by Peck and received by the bank, there would hardly have been the pretence oí a defence. But an' indorsement is at best but evidence of payment and is open to explanation. It is not conclusive. The evidence entirely negatives any presumption of a valid payment.
As Peck could not defend against the note, so neither could these defendants, if they were to be regarded as his sureties. The alleged payment was an illegal one on the part of Peck. If the transaction was fraudulent on his part and on that of the bank, it was so as against the State alone and not as against these defendants, whether they be principals or sureties. It was for their benefit that the State should not intervene. If the State should interfere, they would lose nothing which belonged to them. Assuredly, they had no claim to the money of the State. If the bank had surrendered security, or in any way injuriously affected their condition, the case would be different. The bank could not do otherwise than it did. It simply paid over to the true owner, what did not belong to it.
The wrong attempted, was the injury of the State. But these defendants cannot invoke, by way of defence, a fraud on third parties, which did not in the slightest degree injure them, but which, if consummated, would have been beneficial to them to the extent of its consummation. The bank has received nothing the law authorizes it to retain. Peck has made no valid payment. These defendants have paid .nothing. The attempt of Peck to pay with the money of
It is essential to a payment, that the title to the money or other property transferred for that purpose, pass to and vest in the creditor without the right of reclamation by the owner, if other than the person making such payment. "When the obligation is to give anything, the payment consists in an absolute transfer of the property. It follows, that it is essential to the validity of a payment, that it be made by a person who is able to make such transfer. Whence it also follows that the payment cannot be valid unless made by the proprietor of the thing, or with his consent; for otherwise, the person who makes the payment cannot transfer the property to his creditor; Nemo plus juris in alium transferre potest quam ipse habet.” 1 Evans’ Pothier, p. 3, c. 1, art. 1.
Though a payment, where no title to the thing passes to the creditor, would not be valid, iLseems the creditor, while retaining possession, cannot claim any other payment; he must suffer an eviction, or offer to restore what he has received to the debtor. 1 Evans’ Pothier, p. 3, c. 1, art. 1.
When the payment is with the money of a third person, and the creditor receives the same in good faith, and there is no right of reclamation, such payment would be valid. But, if the circumstances are such that the creditor cannot legally retain the money and, upon demand, he restores it to the owner, the debt cannot be regarded as paid. The person making the payment should in all cases be able to transfer a good title to that with which he makes his payment, whether it be money or specific articles.
Whether the defendants are principals, as the bank insists they are, or sureties, as they claim to be, the result is
Defendants defaulted for the whole amount of the note in suit.
Dissenting Opinion
dissenting. — On August 24, 1859, B. D. Pede, then Treasurer of the State, having in his individual and official capacity opened an account with the plaintiffs, in which his private and public funds were credited to him as Treasurer, procured the accommodation note now in suit and transferred the same to the bank by whom the proceeds were thus credited.
The note was made payable to Pede or his order, and indorsed by him, both in his individual and official capacity, the latter, although at the request of the plaintiffs, was without official authority.
When the note became payable it was duly protested for non-payment; at which time the Treasurer had a credit in the bank over and above his liabilities of $1168,70, and, at the special instance and request of the bank, drew his official check for $1100, which was received, charged to him and indorsed on the note. Prior to this time, however, the bank had become aware of Peck’s official defalcation, and, with full knowledge of that fact, obtained the cheek in part payment of the note and made the indorsement thereon.
Subsequently, the Legislature, who had granted, and still retained the power to nullify the charter of the bank,—
'' Ordered, — That the Treasurer of the State be directed*557 to demand of the Mechanics’ Bank, Portland, the sum of eleven hundred dollars, being the amount of the money of the State paid to said, bank, on the twenty-ninth of December, A. D. 1859, by JB. D. Peck, late State Treasurer, without authority of law; and the payment thereof to be made on or before Wednesday next.”
On that day the demand was made, to wit, on March 10, 1860, and the amount claimed was paid to the then State Treasurer by the bank, who, without the knowledge or consent of the defendants, erased their previous indorsement, and in this suit claim to recover the note with the indorsement thus erased.
Whether, or not, the Legislature acted wisely in their peremptory demand, or the bank in its ready compliance, we are not now called upon judicially to determine. It has, however, been suggested that the resolve was in terrorem. But, Tantaene animis coelestibus irae!
It may be very questionable whether that part of the resolve, which embraces an ex parte adjudication, that the payment was made "without authority of law” is correct. It has been otherwise decided in New York, in the case of Swartwout v. Mechanics’ Bank, 5 Denio, 555, where the Court held that "a mere deposit by a collector in his own name, with his official addition, is no accounting for the money received by him in his official capacity. A county treasurer, sheriff, surrogate, or other officer, opens an account with a bank with his addition, and keeps a separate account in such capacity; most clearly he can collect such deposit in his own name, and the bank would not be permitted to show that the money belonged to the county.”
But in the same State, in a subsequent decision, in the case of Scranton, Ex’r, v. The Farmers’ and Mechanics’ Bank of Rochester, 10 Smith, 424, a contrary opinion was pronounced by a majority of the Court, (two members thereof dissenting.) In that case it was held that an insolvent executor by depositing funds derived exclusively from the proceeds of his testator’s estate, in his official capacity, thereby
Our statute, c. 2, § 80, provides that, — "No greater amount of money of the State than twenty thousand dollars shall be on deposit in any bank, unless it is necessary for the purpose of paying bonds of the Slate and interest, becoming payable at such bank.” . It is, therefore, urged that money so deposited is ipso facto a transfer to the State. But, under that section, the Treasurer is not obliged to deposit in any particular place. He may-keep the money in his actual possession. What safety to the State would it be against a fraudulent Treasurer to have the money so deposited ? His official checks would soon restore it to himself or disseminate it in various ways. But money so deposited may be an excuse for the Treasurer m case of the subsequent insolvency of the bank. Practically, that section can produce no other result. The security of the State, then, is principally the official bond, the moral worth and integrity of the incumbent, stimulated to duty by the executive officers, and the threatenings contained in § 28.
But, whether the foregoing views be correct or otherwise, it may not be very material in this case. I base my opinion principally upon other and distinct grounds. There may be instances when the depositor, acting in bad faith, may suffer the funds to be misappropriated, for which he may become accountable to the true owner. There is another class of cases where it is said, "that ignorance of the law, with the full knowledge of the facts, furnishes no ground to rescind agreements, or to set aside solemn acts of the parties.” Jones v. Mathews, 31 Maine, 318, and authorities there, cited. Had the plaintiffs, under the former, become ac
At the time of the disclosure of Peck’s insolvency three parties were interested in the legal appropriation of his bank assets; viz., his sureties on his official bond, the bank and the signers of accommodation paper. It was known to the bank that the note in suit was payable to Peck in his individual capacity, but was discounted solely on the strength of his official indorsement, and so credited to him in his account current, at a time when the balance was largely in his favor. The attorney for the bank now admits that the official indorsement was without authority, or, in other words, that it was perfected by parties ignorant of the law, which ignorance caused the negotiation that otherwise would not have been accomplished. Thus far there was no ignorance of any material facts. . How was it in relation to subsequent proceedings? This is disclosed in an extract from the agreed statement. " When said note fell due, namely, Dec. 28, 1859, not being paid, it was protested. About this time it was ascertained that Peck was a defaulter to the State. Dec. 29, Dow, one of Peck’s bondsmen to the State, called on the president of the bank and requested him, as Peck was in trouble, not to honor any more of Peck’s checks against said account. In the evening of the same day with this interview with Dow, said president, with the cashier, called on Peck with the note and urged payment. There was then a balance to said account of $1,168,70. Peck gave them a check against said account, signed B. D. Peck, State Treasurer, for eleven hundred dollars, which was duly cancelled at the bank, as is usual with checks when paid, and the amount indorsed as a partial payment on said note in suit.”
That indorsement, by well settled rules of law, cannot be cancelled except on proof of an ignorance of facts. None such is pretended, but, bn the contrary, it was made with full knowledge of the antecedent and subsequent history of the note and of Peck’s individual and official relations.