63 Neb. 163 | Neb. | 1901
On the 16th day of October, 1891, the comptroller of the currency, through the hank examiner, closed the doors of the Tecumseh National Bank and took possession of its assets. The embarrassment of the bank was caused by excessive loans to Russell & Holmes, and by discounting a large amount of commercial paper upon which they were indorsers. The firm of Russell & Holmes was composed of James D. Russell, who was a director in the bank, and Charles A. Holmes, who was also a director and was president of the hank. They also held a majority of the stock of the bank. After' the examiner had taken charge of the bank, an effort was made to reopen the bank for business, and the comptroller proposed to allow such action to be taken if Russell & Holmes would pay in cash their direct indebtedness to the bank so as to reduce it to $5,000, the limit allowed by law, and would also satisfactorily secure their indirect liability as indorsers. Russell tk Holmes appear to have still retained the confidence of the people to a considerable extent, and succeeded in obtaining accommodation notes from the farmers and others of their
1. It is contended by the plaintiffs in error that the -transfer of the stock is voidable because Edith R. Chamberlain was induced to assign the same by the misrepresentations of the officers and directors of the bank and the national bank examiner. The trial court made the following finding of fact:
“To obtain the assignment and transfer of said certificate by his daughter, James D. Russell said to her that everything had been straightened up at the bank; that she would not lose the stock; that they simply wanted it for a short time in order to enable Mr. Griffith to make a better showing to the comptroller at Washington; that the
And the following conclusions of law:
“Although James D. Russell was a director of plaintiff bank at the time he made the statements to his daughter, Edith Russell Chamberlain, on which she relied, and which induced her to assign and transfer her said stock, yet as he was then acting for himself alone and not for or on behalf of the plaintiff, his statements, however false and fraudulent they may have been, were not the statements of the plaintiff, nor made in its behalf, and were not binding on plaintiff.
“John M. Griffith, national bank examiner, had no authority to make representations of any kind which could in law bind the plaintiff bank. His powers are defined by the national statutes. Each person dealing with him is bound to know the extent of his authority. His statement to Charles M. Chamberlain, to Clarence K. Chamberlain and in the presence of Rood, which they reported to defendant, Edith Russell Chamberlain, were not binding upon plaintiff bank, were not such as he had power to make, and Avere not such as, though false, Avould give defendant a standing in equity to avoid the said transfer of her said stock to plaintiff.”
It is insisted that the finding of fact is not supported by . the evidence,, and it is argued that because Russell’s inter
•2. The suggestion that the contract of Russell & Holmes with the bank was illegal, and therefore the guaranty of Mrs. Chamberlain void, is without merit. The authority of Banking Co. v. Rautenberg, 103 Ill., 460, has been questioned, and if it is to be regarded as a correct exposition of the law it is not in point here. In that case, after an officer of the bank had already borrowed beyond the legal limit, the bank made him a further loan. The surety on this loan was held not liable. -The court held that the note given by him to the bank for the further loan was illegal and void, and any guaranty of its payment by a third person equally void; but the rule, so far as we are aware, has never been extended to a case like the one at bar. In the
3. It is argued that, as “Russell & Holmes Avere, both by law and by subsisting contract, bound to malee good their obligations expressed in their indorsements, or to secure them, hence a promise to extend the time in which to do it could be no consideration for doing it.” But the agreement was that Russell & Holmes should give further securities for their liability to the bank, and upon doing so their relations with the bank should be restored, and they receive the benefits that would obviously accrue through such restored relations. They manifestly would derive advantages, under these arrangements, from furnishing additional security. Their agreement to give such
4. It is also argued that if a principal avails himself of tiie fruits of the unauthorized acts of his agent, he thereby authorizes i hose acts and they become binding upon the principal. But this rule of law has no application here. The unauthorized acts relied upon were not the acts of the agent of the bank, nor of any one who assumed to act for the bank- in the transaction in question. As we have already seen, the bank Avas acting through the three directors not personally interested in the transaction, and not through Russell & Holmes or the bank examiner. If an agent is employed to transact the business of his principal and in doing so goes beyond his authority, the principal who employs him and AAdio accepts the results of his employment must accept also the obligations assumed by his unauthorized acts. But Avhere a principal is represented by a duly authorized agent, and some third person, who may alan be benefited by the transaction, assumes, without the kno wledge or consent of the principal, to make representations and statements, the principal will not be bound by such statements. Spurgin v. Traub, 65 Ill., 170. In this case the three disinterested directors Avere the proper parties to represent the bank, and assumed to do so and acted for the bank in making the arrangements Avith Russell & Holmes. They made no representation to Mrs. Chamberlain, and they Avere not aware that either Mr. Russell or the bank examiner had made the representations in question. The bank, through these directors, received these securities from Mr. Russell, and there is no evidence indicating that there was any collusion betAveen the officers Avho transacted this business on the part of the bank and Russell & Holmes or the bank examiner. The bank, therefore, is not chargeable with the representations made by them.
By the Court: For the reasons stated in the foregoing opinion the judgment of the district court is
Affirmed.