76 So. 747 | Miss. | 1917
delivered the opinion of the court.
(After stating the facts as above). This appeal presents the following questions for decision in this case: First. Did the surrender of the notes held by G-. W. Cole to the First State Bank as a payment on the bonds constitute a payment in law, or is he liable for the amount of said notes? Second. Is the United States Fidelity & Guaranty Company entitled to subrogation' to such liability as may exist against Mr. Cole by virtue of its payment of the funds due to the county? Third. Is the National City Bank liable to the United States Fidelity & Guaranty Company under its contract for the amount paid by the United States Fidelity & Guaranty Company, or any part thereof, and, if for any part what part?
It appears from the evidence that the board of supervisors and county treasurer turned the bonds of the county over to the First State Bank for the purpose of delivering the bonds to Cole and collecting the money from Cole for the benefit of district No. 1 of Calhoun county; said First State Bank being then a duly qualified depository. It appears that the money and payment made by Cole was paid without having obtained a “received” warrant from the chancery clerk under section 352 .of the Code but that the receipt given by the depository was made out in duplicate as required by statute. It further appears in the evidence that the county treasurer gave his receipt for the money on the statement that Cole had paid the money into the depository.
We think it is the duty and obligation of bond buyers to pay for bonds in actual money, in the absence of an express statute authorizing the taking of something other than money in payment of bonds. Under the laws of this state, road funds and road bond funds are special funds, and can only be used in the payment of specified warrants,
' We think therefore, that the depository was not authorized to take the notes held by Mr. Cole as payment for the bonds., We think, however that, the payment of three thousand dollars in August was understood by all parties to be a payment on the bond purchase, and that, though a note was taken at said time, it was not intended as a loan of money to the bank, and was not so understood by any of the parties to the transaction, and that
In reference to the third proposition, as to liability of the National City Bank to the United States Fidelity & Guaranty Company under its contract, we find that section 5136 of the Revised Statutes of the United States, defining the powers of national banks, provides, first, that it has power to adopt and use a corporate seal; second, to have succession for the period of twenty years, unless it dissolve as therein provided; third, to make contracts; fourth, to sue and be sued in any court of law" or equity as fully as natural persons; fifth, to elect or appoint directors, and by its board of disectors to appoint a president, vice president, cashier, and other officers, and define their duties, and to dismiss such officers and appoint others to fill their places; sixth, to prescribe, by its board of directors, by-laws not inconsistent with law, etc.; seventh, “to exercise by its board of directors, or
It is settled by a long list of authorities that a national bank cannot be held liable for acts in excess of its charter powers, and that such bank is not estopped to plead ultra vires in defense of any unlawful contract; that it had no power to lend its credit by guaranteeing the letter of credit or making and indorsing notes or drafts for the accommodation of other persons. See 5 Fed. Statutes Annotated, p. 82, authorities there cited. It is equally well settled that a bank that executes a contract even beyond its powers, but receives funds or property by virtue of such contract, is liable to the extent that it has received funds or property or has received benefits from such ultra vires contract. See Citizens’ National Bank v. Appleton, 216 U. S. 196, 30 Sup. Ct. 364, 54 L. Ed. 443; First National Bank v. Anderson, 172 U. S. 573, 19 Sup. Ct. 284, 43 L. Ed. 558; Emmerling v. First National Bank, 97 Fed. 739, 30 C. C. A. 399; Logan County National Bank v. Townsend, 139 U. S. 67, 11 Sup. Ct. 496, 35 L. Ed. 107; American National Bank v. National Wall Paper Co., 77 Fed. 85, 23 C. C. A. 33; Hutchins v. Planters’ National Bank, 128 N. C. 72, 38 S. E. 252; First National Bank v. Henry, 159 Ala. 367, 49 So. 97.
In Citizens’ National Bank v. Appleton, 216, U. S. 196, 30 Sup. Ct. 364, 54 L. Ed. 443, the court held that a national bank which, in pursuance of a previous agreement with its debtor that he will apply to the discharge of the
There seems to be no restriction in the act itself, nor can we see any reason to imply any restrictions, that the bank may make any contract with reference to the re-receipt of deposits agreeing to handle the deposits in a certain way and to pay them out only in a certain prescribed way necessary for the'protection of the parties dealing with it, and we are of the opinion that its contract in this case, by which it agreed to' receive the deposits of money paid to the First State Bank as a public depository, and to cause the certificates of deposit to be assigned to the Guaranty Company, was valid, and was 'not beyond its powers. It appears in the testimony that the cashier of the National City Bank, in discussing this proposition with the agent of the First State Bank, stated that he would rather borrow money at four and one-fourth per cent than to loan money at eight per cent. This statement indicates that the bank’s applications for loans wére' in excess of funds available for loan purposes. Of course, it is necessary for a bank to have funds to loan its customers, when needed, to retain them. It is also one of the methods by which banks make money, borrowing money at a smaller rate and loaning it at á higher rate.. In this way it also serves the interests of the public in receiving money, which depositors do not need, or do not care personally to handle, by way of deposits, and loading it out at interest to people who desire to borrow, and we think that that part of the contract between the National City Bank and the Guaranty Company that provided for
It having undertaken by contract to cause that money sent to it by the First State Bank received under the depository bond should be handled in a particular way, calculated to safeguard the interest of the surety company, without serious inconvenience to the National City Bank or to the First State Bank, we think it cannot escape obligations which it imposed upon itself in' this regard on the mere theory that it had not received notice that the second bond issue had been made, nor notice that the funds received by it from the First State Bank were in reality funds belonging to the road district. In assuming this obligation, it assumed an obligation to keep in touch with the affairs of the depository, and it was an easy matter for it to learn from the public records that this bond issue had been sold and the money paid into the depository. It was the duty of the National City Bank under the facts in this case, when it received remittances from the First State Bank, to determine the character of the funds so received, whether they were public funds or private funds of said bank. We think there is no ultra vires act with reference to this part of the agreement.-
We do not think the National City Bank’s liability is limited to profits it may have made out of this transaction. Indeed, the transaction might have been a losing one to the bank, and still it would be liable for the moneys actually received. It having imposed a duty upon itself to deal with this fund in a specific way, it cannot escape liability by pleading ignorance of facts it should have known under its contract, and could easily have ascertained by reasonable diligence. We think the National City Bank is liable to the Guaranty Company to the extent of the funds that actually passed through its channels, to wit, the amount of seven thousand four hundred ninety-three dollars and twenty cents, and for attorney’s fees which the Guaranty Company had to pay by reason
In order that the court below may not be hampered in administering the rights’ between all the parties to this litigation in accordance with the views expressed in this opinion, the ease is reversed on both direct and cross appeals; the costs of appeal to be taxed against the appellees.
Reversed and remanded.