National Bank v. Farmers Bank

139 Va. 227 | Va. | 1924

Sims, P.,

after making the foregoing statement, delivered the following opinion of the court:

Independently of other views which, in our opinion, would lead to the same result, but which need not be set out here, there is a single question presented for decision by the assignments of error which is determinative of the case, namely:

1. Did the president of The Farmers Bank of Franklin (who was also one of the makers of the bond sued on), under the circumstances above set forth, have the implied authority from the other makers, of such bond, to assign the bond to the plaintiff, as he did, as collateral security, not only for the payment of the original negotiable note above mentioned, but also as security for the payment of “any note given in extension or renewal thereof?”

The question must be answered in the affirmative.

It is apparent from the evidence that the bond sued on was given to be used by the principal debtor, the defendant bank, acting through its said president, as a pledge as collateral security for the loan of $10,000.00 which the plaintiff afterwards made to such principal debtor, not as such security for the payment of any particular note; and when the bond was delivered by its makers to the president of the bank (who was also one of the makers of the bond), to be assigned by him, acting for the bank, to the plaintiff, without any restriction being placed upon the form of assignment to be made, the inference is irresistible that the president of the bank was impliedly authorized to execute the form of assignment he did execute, namely, that contained in the form of collateral note which was used by him, being the same form for such' an assignment used by the-bank, in its usual course of business, of which bank the makers of the bond were directors, and with which form of note they were familiar. ■

It is urged in argument in behalf of the defendant directors before the court on this appeal, that the assignment itself stipulates that the bond was deposited as collateral security for the payment of “this note” namely, the original negotiable note given by the principal debtor bank. But this was a stipulation made by the pledgee of the bond to whom the bond was assigned by its makers for the purpose aforesaid, and not by such makers themselves; and the stipulation goes further and says that the bond is deposited to also secure the payment of “any note given in extension or renewal” of the original note.

The assignee had no express authority to make the assignment in any particular form. He acted under his implied authority in making the assignment he did make, and that authority as fully empowered him to stipulate that the bond was deposited as security for the payment of renewal notes as for the payment of the original note. The makers of the bond, therefore, cannot select one of such stipulations to rely upon and repudiate the other. They are bound as much by the one as by the other stipulation. By claiming the benefit of it, they admit that they are bound by one of the stipulations; and they are equally bound by the other stipulation. And, aside from any admission, it is plain that the assignor, having been given the general authority to make the assignment of the bond as security for the-loan, had the implied authority from the makers of the bond to make the assignment as it was made.

The case will be reversed, and, acting under the statute (Code section 6365), final judgment will be rendered by this court in favor of the plaintiff against the directors who are defendants in error here, jointly and severally, for the sum of $4,996.47, the balance owing on said bond, with interest thereon from the 4th day of August, 1922, until paid, and costs.

Reversed and final judgment for plaintiff.