Case ID: va_42/html/0218-01.html
Source: Caselaw Access Project
Author: {"author": "STANARD, J. CABELL, P.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

*Bank of the U. S. v. Beirne & als.
    
    August, 1844,
    Lewisburg.
    (A special court of appeals, consisting of Stanabd, J., of the court of appeals, and Scott, Leigh and Fry, J., of tie general court.)
    Endorsements—Power of Attorney to Make—Case at Bar.—Nine persons unite in a power, authorizing their attorney to endorse their names jointly on all bills, notes or drafts drawn by J. B. B. to be discounted at certain specified banks, for the accommodation of J. B. S. J. B. B. drew a bill, payable to the order of one of the principals in the power, upon which the attorney endorsed the names of all his principals ; and then the note was discounted at one of the specified banks, for the accommodation of .7. B. S. The bill having been protested for non-payment, the bank brought an action against the endorsers. Held, the bill being made payable to one of the principals in the power, the endorsement by the attorney was not such a joint endorsement as was authorized by the power.
    The facts of this case are reported in the separate action against Beirne, brought to charge him as several endorser of the bill upon which this suit is founded. Vide Bank of U. S. v. Beirne, ante, p. 234.
    The declaration contained thirteen counts, ten special, and three general money counts. All the special counts, except the 3d and 4th, set out the bill of exchange as drawn by John B. Steenbergen, addressed to Michael Arnold, and in favour of Andrew Beirne, or order, and aver the joint endorsement of it by the defendants, the principals in the letter of attorney. The 3d and 4th counts treated the endorsement as a new bill drawn by the defendants on Michael Arnold, in favour of the plaintiffs. The 7th and 8th counts describe the bill as drawn by John B. Steenbergen, with intent that it should be endorsed by the defendants, and that so endorsed, it should be discounted by the bank for his benefit; and that it was endorsed jointly by the defendants with like intent. The 9th and 10th counts ^describe the bill as made payable to Beirne, for the use and benefit of all the defendants. The 5th and 6th counts set out the transaction specially as the plaintiffs expected to prove it on the trial, and alleged:
    That on the 17th September in the year 1839, the said John B. Steenbergen, on account of dealings before that time had with the plaintiffs, was liable to them for large sums of money, exceeding the sum of 655,406 dollars 7 cents, and being desirous to procure to be discounted by the plaintiffs, at their bank in Philadelphia, and by the Bank of the United States in New York, or by either of them, from time to time, according to the customs and usages of the plaintiffs, at their said bank in Philadelphia, and of the said Bank of the United States in New York, certain notes, bills and drafts thereafter to be drawn by the said John B. Steenbergen, at such times as he might think fit, and that the said Andrew Beirne, Samuel Coffman, James M. H. Beale, Charles T. Beale, Benjamin Blackford, ©ramus Coffman, Thomas T. Blackford, JRhesa Allen and John Morgan, for the purpose of giving credit to such notes, bills and drafts as the said John B. Steenbergen should draw as aforesaid, and for the purpose of enabling him to procure them to be discounted by the plaintiffs at their bank in Philadelphia aforesaid, and at the Bank of the United States in New York, or either of them, for the benefit of him the said John B. Steenbergen, did, on the day and year last aforesaid, at Mount Jackson in the county aforesaid, duly constitute and appoint the said John B. Steenbergen and one Thomas S. Taylor, jointly and severally the lawful attorneys of them the said defendants, for them and in their names and behalf, to sign the names of the said defendants as endorsers upon all such bills, notes or drafts as the said John B. Steenbergen might offer for discount as aforesaid at the said banks, or either of them, at any time, and for any amount not exceeding his the said Steenbergen’s ^'liabilities of the said banks at the date last mentioned. That after-wards, on the 20th December 1839, the said John B. Steenbergen made his bill of exchange, by which he requested the said Michael Arnold to pay without grace, sixty days after the date thereof, to the said Andrew Beirne, or his order, 655,406 dollars 7 cents, value received; which bill of exchange, the plaintiffs aver, was made by the said Steenbergen with intent that it should be endorsed by the defendants and accepted by the said Michael Arnold, and so endorsed and accepted, should be discounted by the plaintiffs at their bank in Philadelphia. The plaintiffs also aver, that the defendants with like intent that the said bill should be discounted by the plaintiffs at their bank in Philadelphia, for the benefit of the said Steenbergen, did, by their said attorney Thomas S. Taylor, acting in pursuance of the authority conferred upon him as aforesaid, endorse and deliver the said bill to the plaintiffs, and thereby appointed the contents to be paid to them. That Arnold duly accepted the bill, and that the bill so made, endorsed and accepted, was discounted by the plaintiffs at their bank in Philadelphia for the benefit of the said Steenbergen, and the proceeds passed to his credit and applied to his use, pursuant to the true intent and meaning of the said Steenbergen when he made the bill, and of the defendants when they endorsed it by their attorney, and gave the authority aforesaid.
    The writ abated by the return of the sheriff, as to all of the defendants, except Beirne, and the two Coffmans; and they .pleaded the general issue, demurred generally to the whole declaration, and to each of the special counts. The court below overruled the demurrer to the whole declaration, but sustained it as to all of the special counts except the third and fourth.
    The plaintiffs, thereupon, struck out the third and fourth counts, and the money counts; and final judgment was rendered against them.
    *C. & G. N. Johnson, for appellants.
    Macfarland, Leigh and Jones, for appellees.
    The argument of counsel displayed great research and ability, on both sides; and it is regretted that the indisposition of the reporter, at the time, prevents a report of it.
    Judge Pry delivered an elaborate and able opinion, which unfortunately has been misplaced, and cannot be introduced into this report. It was especially valuable for the fullness and ability of the argument; and the reporter yet hopes to recover and present it to the profession.
    
      
      See ante, 1 Gratt. 234.
    
   STANARD, J.

It is known to the court, as well as the bar, that whatever equality of importance there may be in the questions presented by the demurrers to the respective counts, judging from the face of the record, the ultimate fate of the claim asserted by the plaintiffs in error, so far as it can be affected by the questions of law arising on the pleadings, depends mainly, if not entirely, on the decision of the questions presented by the demurrer to the 5th and 6th counts. If the demurrer to those counts should be sustained, though one or more of the demurrers to the other counts should be overruled, the principles on which they would be sustained, applied to the actual evidence that can probably be adduced, on the other counts, would forbid a recovery on them. And, if they be overruled, all the evidence that by any probability can be adduced in support of the other counts and sufficient to sustain them, would equally, if not a fortiori, sustain the 5th and 6th counts.

So regarding the questions presented by the demurrers to the Sth and 6th counts, my attention has been almost entirely directed to them, and as the solution of them will substantially settle the questions of law on which the fate of this case really hangs, I have bestowed *on them the anxious and earnest consideration demanded by the magnitude of the claim, the multiform and wide spread interests it affects, and the solemn and, I may add, painful responsibility, that attaches to the adjudication that may fix the fate of such a claim.

I should feel still more intensely that responsibility, if the opinion that I now give essentially affected the judgment that will be pronounced in this case. Whether I concur with or dissent from the opinion of my brethren, concurring with the judge of the superior court in thinking that the demurrers should be sustained, the judgment of the court below in that regard, would be affirmed.

As we are all of opinion that the 7th and 8th counts shew a good cause of action, and that the judgment of the court below sustaining the demurrers to these counts is erroneous, I shall assume that opinion to be correct, in considering the question on the 5th and 6th counts; and whether or no there should be a different judgment rendered as to these last, depends on the difference that may be shewn to exist between them, by a careful comparison.

The 5th and 6th counts set out the purpose of the defendants, to be carried into effect in futuro, of giving credit to such-bills, notes and drafts that Steenbergen should draw for the purpose of procuring them to be discounted by plaintiffs. To give effect to that purpose, the defendants did appoint Taylor their attorney, for them and in their names to sign their names upon such bills, notes and drafts, and that thereupon the bill in question being made by Steenbergen with intent that it should be endorsed by the defendants, and discounted by the plaintiffs, the defendants with like intent did, by their said attorney, acting in pursuance of the authority conferred as aforesaid, endorse the bill in question, and ordered and appointed the sum therein mentioned to be paid to the plaintiffs. And they then and there delivered *the said bill so endorsed to the plaintiffs, and it was afterwards discounted by plaintiffs for Steenbergen. The 7th and 8th counts state in substance that the bill being made by Steenbergen with intent that it should be endorsed by the defendants, and so endorsed should be discounted by the plaintiffs, the defendants with like intent that the bill should be discounted by the plaintiffs, by their attorney duly authorized in that behalf, jointly endorsed the bill, by which they ordered and appointed the contents thereof to be paid to the plaintiffs, and they then and there delivered it to the plaintiffs, who afterwards discounted it for Steenbergen, and he had the use of the proceeds. These counts represent the bill as actually existing at the time the defendants signified their consent and made their actual endorsement by an agent with plenary authority, and the endorsement so charged was to all intents and purposes, as binding on the defendants as if the endorsement had been made by the defendants in person. Such is our construction of the counts, and in coming to the conclusion that those counts are good, we have regarded the allegation as equivalent to the allegation that the defendants in person made the endorsement. The principle on which that opinion rests, would necessarily conduct us to the conclusion, that if the endorsements alleged in the Sth and 6th counts were made by the defendants in person, the judgment sustaining the demurrers would be erroneous. This reduces the question to this, does the endorsement as charged in the 5th and 6th counts, as made by the attorney, and deriving its obligatory force solely from the authority as specially set forth in those counts, bind the parties as it would if made by them in person?

My impression is, that an act done under a special authority does not necessarily involve the same responsibility as the like act done by the constituent in person. The authority looks and has relation only to future acts; *that done in person is in presenti. The subject to which the former is to be applied, is limited to the strict definition of the power. The latter is applied to an existing subject, and no question of the intention or authority to apply it can arise. The act of the attorney binds only when it strictly conforms to the power; that of the parties binds under whatever name made, or however described, if supported by adequate consideration. Endorsement and endorsers may have a popular or a technical sense. Sometimes they are merely descriptive of an act of writing. Sometimes they are used not only as descriptive of the act, but as concluding and significant of a particular and well defined responsibility under the law merchant. When parties put their names on a bill or note, it may be under circumstances which forbid us to predicate of the act, an endorsement in the enlarged mercantile sense, and yet this may bind them as guarantors of others, even though the act is described by them as an endorsement; and though they denominate the act an endorsement, and call themselves endorsers, yet when done by them in person on adequate consideration, they shall be bound as they may be, limiting the meaning of the words endorsement or endorser to their descriptive sense, and charging the party by force of the consideration and the contract that maj' be especially stated, and using the endorsement as evidence of his accession to it.

The question then is, in what way does the special authority authorize the attorney to bind the constituents by writing their names on the bill as endorsers? Is it, by so writing them as to satisfy the mere descriptive sense of that word, leaving the fact so done to operate as it may, to charge the defendants, though not on' the strict mercantile contract of endorsement? I think not. The authority is to be applied to papers, the names of which indicate commercial securities, and they are to be used by being discounted by a corporation that we may ^justly infer discount only such securities. An endorser of such a security, in its strict mercantile sense, is one who bj' the act of endorsement generally is placed in that relation to the bill, that certain responsibilities attach to him in favour of any subsequent holder, and when these are incurred and discharged, certain rights result to him against the previous parties to the bill. Such an endorser would, on taking up the bill on its dishonour in the hands of an endorsee, have his remedies'on the bill against the prior parties thereto ; and no one who is not so an endorser as that such remedy would result and could be used by him on the bill in the condition it was when endorsed by him, is in the exact and complete mercantile sense, an endorser. I think the view taken by my brother- Scott, ascertains that if the defendants as joint endorsers take up the bill described in the 5th and 6th counts on its dishonour, they could not, as the bill stands, and as the result of the condition of endorsers as described, have a remedy on the bill against the acceptor. The only way in which such action could be supported in their names against the acceptor, would be by claiming as endorsees of Beirne, representing him as the endorser to himself and the eight others, and this would be an endorsement, certainly not warranted by a power limited to the making a joint endorsement for all. The question is, must the endorsement tobe within the warrant of the power be such as to place the endorsers in the condition, that, while they are subjected to the responsibilities. they will have all the rights that endorsers in the exact and complete mercantile sense would have. In respect to the bill in question, an argument of great force, and which has caused me much hesitation in coming to a conclusion, is derived from the words of the power, which authorizes the joint endorsement for the constituents of any bill, note or draft (without exception or qualification) that Steenbergen might offer for discount; and as this general description embraced such a bill as that described, and as the difficulty of the defendants’ endorsing such a bill jointly, fulfilling the definition of strict technical endorsers, and having all the rights of such endorsers, springs not from the defect of the execution, but is intrinsic, and is the inevitable result, from the nature of the bill endorsed; the failure of the endorsement of it to invest the endorser with those rights, does not invalidate the endorsement. The only answ.er that occurs to me to this argument is, that the joint endorsement of such a bill was not in contemplation of the constituents of the power, as, I think, in all probability the bank, when it discounted it, did not regard the endorsement as made, a joint one, but discounted it under the impression that it was in fact a several and successive one, and that general words of the power in stating without exception that it was to be exercised by writing the names of the constituents as endorsers on any bill, note or draft, may be restrained to such bills, on the endorsement of which the endorsers would, with the responsibilities as such, have all the rights of endorsers, according to the exact and complete mercantile sense. I give this answer, though not fully satisfied of its sufficiency.

Finally', is the power to receive the strict construction, which exacts as a condition of its due execution, that the names of parties (whose names shall by virtue of it be signed as endorsers on the bill, note or draft,) shall be so endorsed that while it subjects them to the liabilities of endorsers, they shall have all the rights which endorsers in the full and exact mercantile meaning of the word endorser, when that word is used not only as descriptive of an act, but as importing the responsibilities and rights that arise out of it in respect to the parties, who can be strictly so named as connected with or parties to the paper of which the endorsement is predicated? This question I answer, though not without hesitation, in the affirmative. The rule is, that the *p°wef shall be confined to the limits that a strict construction will assign to it, and that rule applied to the power in question, indicates the answer I give.

The result is, that the special authority set out in the 5th and 6th counts, did not authorize the endorsement by the attorney of the names of his constituents as endorsers on the bill described in those counts, so as to bind them to the responsibility of endorsers of that bill, and that the judgment sustaining the demurrers to those counts, ought to be affirmed.

The whole court concurred in sustaining the demurrers to all the counts but the 7th and 8th, and in overruling the demurrers to these counts. Judgment reversed, and cause remanded.

Edmunds v. Diggs.

It should have been stated in the report of Edmunds v. Diggs, ante, p. 359, that Cabell, P., dissented from the judgment of the court in that case. The ground of his dissent, is stated in his opinion given below.

CABELL, P.

I concur in the opinion that in the absence of all stipulation between the parties, the law does not, of itself, imply a warranty of the value of bank notes payable to bearer, and passing by delivery.

But it is, nevertheless, competent to the parties, to contract for a warranty' of the value of such notes; and such express warranty may be as well inferred from circumstances, as proved by the most positive and direct testimony.

I am, farther, of opinion that, upon the proofs set forth in the second bill of exceptions, the assurances made by the appellant that the notes of the Mechanics Bank of Baltimore could be exchanged in Fredericksburg for notes of the Bank of Virginia, and that they' would answer the appellee’s purpose of making his pay'ment into the treasury, as well as notes of the Bank of Virginia, did, in point of law, constitute an express warranty that they were of equal value with the notes of the Bank of Virginia.

I am, therefore, of opinion, that the court below rightly refused the instruction moved for by the appellant, and stated in the second bill of exceptions; and that it also rightly refused to grant a new trial. I think, therefore, that the judgment ought to be affirmed. But the other judges being of a different opinion, the judgment is to be reversed, and the cause remanded for a new trial.