Thibodaux minerva. [volume] (Thibodaux, La.) 18??-1858, 1854-02-25
The Bank Case.

The Bank Case.
We copy from the New Orleans True Delta,
following in relation to this case, just decided
nv the Supreme Court at New Orleans The
decision, in our opinion, is a just one:
Union Bank Of Louisiana us. j. c. Beatty, ct ais
HEIDI That the securities of an assistant
cashier of Bank for the purchase of the assets
Of one of the branches of such Bank, of which he
was CASHIER are discharged from their surety
ship, if it appears that at the time of such sale
although unknown to both parties, a large por
ton of the assets sold and enumerated in the
authentic act of sale, did not exist or appertain
to the vendor, because they had been embezzled
and disposed of by the purchaser prior to the
SALE 2. That sureties can only be held respon-
sible for acts arising under the contracts, and
not for acts originating long before the contract,
by which they and their principal bound them
selves, had any existence.
Facts-P. Marchais had been the cashier of
the Union Bank at the branch in Thibodaux,
and enjoyed the entire confidence of the mother
Bank, although, as it afterwards appeared, he
had embezzled large portion of the assets of
the branch Bank, prior to the 23d November,
l849.
The Union Bank being about to wind up its
affairs, the defalcation of Marchais would ne
cessarily have been detected, and to avoid this
discovery, he wrote to the mother Bank, offer
ing to buy the banking house and the assets of
the Thibodaux branch. The proposition was
accepted, the banking house was sold for Sc, 900,
payable in four equal instalments on the LIST
March, 1851, 80, '53 and 54; and the assets
amounting nominally to 1888, 1888 83, for the sum
of $S0,028 IA, of which $16,028 IA are ac
knowledged to have been received in cash, and
for the balance, he gave four notes for SIG, 900
each, payable as above in 1851, 80, &c. In the
act of sale to Marchais by the Union Bank, a
list of the assets was given, and the defendants,
five in number, bound themselves in soHdo with
the purchaser, for the payment of his notes.
absconded. and the defendants having been
sued as his sureties, averred, that they were
discharged, because the sale was null, inasmuch
as large portion of the assets sold had no
existence at the time Of the sale, having been
previously embezzled and disposed of by Mar
chais. They also averred that the Bank at the
time of the sale, knew this fact, and committed
fraud upon them by accepting their suretyship
under the circumstances.
The evidence proved, that Marchais had pre-
vious to the sale embezzled large portion of
the notes, sold by the Bank, did not belong to
it. but failed to establish that the Bank knew,
at the time of the sale, that Marchais was de-
faulter.
There was judgment in the inferior court in
favor of the defendants, which was affirmed on
appeal.
Observation: The decision of this cause,
which is one of considerable Importance, has
excited a good deal of attention and provoked
the expression of opinions, some of which are
adverse and some favorable to the correctness
Of the Judgment. Men of practical common
sense generally seem to think the conclusions at
which the Court arrived conformable to the
principles of justice and equity, but we have
heard some very respectable lawyers deny that
it is conformable to law.
These latter contend, that inasmuch as Mar
chais received some assets, the contract of sale
was not null in toto, nut in part, and there was
only partial failure of the consideration, and
that for the portion of the assets received at the
time of the sale the securities are, at all events
responsible. ,=
This reasoning is plausible and appears to
harmonic with that portion of the decision of
the Court declaring that sureties are only bound
for obligations arising from the contract ITSELF
for which they became obligated, and not for
those arising from an extrtnsac cause. Evans
Pothier, l VOL, p. 250.) For it may be said
that by this rule the sureties are exempt from
paying for that portion of the assets not received
but they are bound to pay for those received,
which cannot be regarded as an extrinsic cause
live scrutinize the opinions delivered in the
cause we shall find that this is merely said ar
guendo, and with view to prove that the sure
ties could not legally be held responsible for
the property embezzled long before the sale, and
which was not and could not be delivered to the
purchaser
The real motive of the decision is to be sought
for in that portion of it which declares that both
parties, to-wit., the plaintiff and defendants in
the present suit, were in error as the principal
cause for making the contract, C. c., Art. 1917,
and the contract of sale is, therefore, null, the
snreties discharged. a..s. -a
ID Il appears to US that there is fund of equity
This decision that recommends it to the APP
val of every rejecting mind, and for which
can readily be found, if necessary.
Marchais had been for a long time the con-
fdentialagen of plaintiff, in situation in which
it was the duty of the Bank to verify the cor
RICHNESS of his transactions and ascertain that
he had not misapplied any portion of the pro-
perty entrusted to his management. The Bank
approves of his conduct until the connection be-
tween them is about to be dissolved, and then,
in order to give him a striking proof of their
all the assets under his control on credit of
four years, and the act of sale contains an enume
ration of the assets.
This was surely an endorsement of the honesty
Of Marchais by the bank, and the list of the
assets embodied in the act of sale, was guaran-
tee by the bank Of their existence, when the sale
vas made. The sureties had right to pre-
sumo that the bank had verified the truth of
their statement; and if it had failed to do SO, it
was 3 deception; involuntary, no doubt, but
still deception. @ :.
The loss caused by Marchais' misconduct is
to fall either on the bank or on the sureties
one or the other must support it, and the ques-
ton is on whom ought the loss to fall Surely
on that party who first trusted the unfaithful
cashier, and afterwards, by neglecting to fulfil
the duty Of examining his accounts, enabled
him to gain the confidence of the sureties. ss
one Of two innocent parties is to suffer, law
md Justice require the loss to be borne by him
VIC committed the first fault, and in this in
stance that was the bank. gssss8
II the bank had done its duty the sureties
foQld never have entered into the engagement
tAeY assumed, and it would be strange indeed
1.-The bank should be permitted to avail itself
q this neglect, and enrich itself at the expense |
the sureties.
..AaNEw PIANo.-It is we'll known that
List c0nci.lorod Nv, we ~, %baa r,.co1n,1