Case Name: McVeigh v. The Bank of the Old Dominion
Court: Supreme Court of Appeals of Virginia
Jurisdiction: Virginia
Decision Date: 1875-03
Citations: 26 Gratt. 188
Docket Number: 
Parties: *McVeigh v. The Bank of the Old Dominion.
Judges: 
Reporter: Virginia Reports
Volume: 67
Pages: 71–76

Head Matter:
*McVeigh v. The Bank of the Old Dominion.
March Term, 1875,
Richmond.
i. Bank Treasurer —Confederate Currency—Liability for Collections.—M was president of the O. D. hank located in the city of Alexandria, and he was a member of the firm of B & Go. of that city. In May 1861M went to Richmond, where he remained during' the war; and B & Go. removed to the same city. In January 1863, M collected of the treasurer of the state the interest on state bonds held by the bank; of course in Confederate money. After the war the O. D. bank may maintain an action of assumpsit against M for the money so collected by him.
2, Same—Same—Same—Investments.—M invests the money so collected by him in a call certificate of the Confederate States, to have it ready to be applied to the uses of the bank, and he holds the certificates until such certificates are called in by the government. He then receives the money for it, and tries to lend it out, but fails; and he then deposits itin bank to the credit of B & Co., who are to pay interest upon it, and return it on call. In 1864 B & Co. invest this money, with their own, in tobacco, M intending it to be at his own risk; he holding himself bound to pay the bank as on an investment at sixj)» cent. The tobacco is burned during the war. This was an appropriation of the money by M to himself, and he is responsible to the bank for the 'value of the Confederate notes at the time they were appropriated by him.
3. War Interest. —M is to be charged with interest only from the end of the war.
This was an action of assumpsit in the Circuit court of the city of Richmond, brought in October 1870, by the Bank of the Old Dominion, located in the city of Alexandria, against Wm. N. McVeigh, late president of the bank, to recover the sum of $26,500, which it was alleged said McVeigh, as president of the bank, had collected in January 1863, from the State of Virginia *for interest upon the bonds of the state held by the bank. The declaration contained only the common counts in assumpsit.
The defendant demurred to the declaration, and pleaded non-assumpsit. And when the cause came on to be tried the court overruled the demurrer; and there was a verdict • and judgment in favor of the plaintiff for $1,104.17, with interest thereon from the 1st of April 1864, till paid.
In the progress of the trial the plaintiff and defendant asked for instructions, which were refused by the court, and others were given; and both parties excepted. The instructions asked and given are as follows:
Plaintiff’s Instructions.
1. If the jury believe from the evidence, that the Bank of the Old Dominion had its domicil in the city of Alexandria during the war, that the defendant, while acting as president, residing in the city of Richmond, without authority collected on the 13th day of February, 1863, the sum of $26,500, interest due the bank from the state treasury, and without authority of the plaintiff invested the same in Confederate securities, they must find for the plaintiff that sum with interest.
2. If the jury believe from the evidence, that the defendant, acting as the agent of the plaintiff, collected from the state treasury $26,500, interest due the plaintiff, and without authority of the plaintiff loaned out the said money, the jury must find for the plaintiff and assess the damages at $26, - 500 with interest."
3. If the jury believe from the evidence, that the defendant, on the 13th day of February, 1863, acting *as the agent of the plaintiff, collected from the state treasury $26,500, and invested the same at his own risk in business in which he was interested, the jury must find for the plaintiff and assess the damages at $26,500-with interest.
The defendant asked the court to give to-the jury the following instructions, number 1, 2, 3, and 4; and in the alternative the instructioñs numbered 5, 6, 7 and 8, which are in the words and fig-ures following, to-wit:
Defendant’s Instructions.
1. If the jury believe from the evidence, that the defendant, on or about the 30th of May, 1861, departed from the town of Alexandria with the intention of going within the Confederate lines, and did then accordingly go into the Confederate lines and there continually remain during the war, and for the most part in the city of Richmond, the seat of the Confederate government ; then that the office of the defendant, as president of said Bank of the Old Dominion, was, in legal effect, vacated and abrogated from the time of his said departure from Alexandria, and the defendant from that time ceased to be an officer or agent of the plaintiff; and no contract, express or implied, could or did arise between the plaintiff and the defendant, on account or by reason of any alleged dealings by the defendant with the funds of the plaintiff, given in evidence in this case; and the jury must find for the defendant.
2. That in the state of facts supposed in the foregoing instruction, neither by force of the statute continuing certain officers of corporations in office .until their successors, are appointed, nor by virtue of the election of the defendant by the plaintiff on the 16th *day of January, 1862, as its. president, shown in evidence, was the defendant continued or constituted an officer or agent of the plaintiff to transact its business within the lines of the Confederate armies, or endowed with any capacity to contract for, or to be contracted with, by the plaintiff in the premises; and the jury must find for the defendant.
3. That no subsequent ratification by the plaintiff of the defendant’s acts as its agent during the war, nor acknowledgment by the defendant of such agency, can retroact to constitute the defendant an agent of the plaintiff during the war, under the circumstances appearing in evidence, or give rise to any obligation on the part of the defendant to account to the plaintiff in respect to-the alleged dealing of the defendant with the plaintiff’s funds, given in evidence in this case.
4. That in any event, if the jury believe from the evidence, that the defendant, as the agent of the plaintiff, received from the Richmond government interest on bonds of the State, belonging to the plaintiff, as in. the declaration and bill of particulars set forth, the institution of this suit is a ratification by the plaintiff of such action of the defendant, and no recovery can be had herein against the defendant, merely on account of his receiving said interest, whatever was the character or depreciation of the currency in which it was so received.
5. That if the jury believe from the evidence, that the said interest was received by the defendant in Confederate notes, and that the defendant acted in good faith and to the best of his judgment in investing the same in Confederate call certificates, in the name of and for account of the plaintiff, then that said certificates thereupon became the property of the plaintiff, and the defendant is not responsible in this suit for any *loss or damage, if any, which the plaintiff may have sustained by reason of such action of the defendant; and that in order to entitle itself to recover, the plaintiff must show, to the satisfaction of the jury, that it has suffered actual loss by the conduct of the defendant in collecting and dealing with their said certificates, and must prove the extent of that loss.
6. That if the jury shall believe from the whole evidence, that the defendant, after receiving the money of the plaintiff from the Richmond government, acted in good faith and according to his best judgment, in and about his management of and dealings with the same, then that he is not responsible in this action to the plaintiff for any loss sustained by the plaintiff in respect thereto, and the jury must find for the defendant. And this, notwithstanding the money of the plaintiff was invested by the defendant in Confederate States certificates, and said certificates were collected, and the proceeds placed by the defendant with C. A. Baldwin & Co., of which he was a member; if the jury shall further believe that the said money, so received and treated, was Confederate currency, and that by such change of investment from Confederate certificates to a loan to C. A. Baldwin & Co., no actual loss accrued to the plaintiff.
7. That if the jury shall believe from the evidence, that the defendant and his firm, the said C. A. Baldwin & Co., had, at all times during the war after the withdrawal of said fund from Confederate certificates and placing it with C. A. Baldwin & Co., ample funds of the same sort to meet any demands of the plaintiff, or for the plaintiff’s use, to the extent of the amount received by them aforesaid, and that no demand was made by the plaintiff or for the plaintiff’s use for said sum or any part of it, that the defendant is not responsible *to the plaintiff in this action, and the jury must find for the defendant.
8. That the jury are entitled to judge, from all the circumstances of the case, whether . or not the defendant, in placing the proceeds of the Confederate certificates with C. A. Baldwin & Co., intended at the time personally to assume responsibility to the plaintiff for anything but Confederate currency. And that if the jury shall believe that the defendant intended to undertake to be responsible to the plaintiff only for Confederate currency, and that he acted in good faith and in his best judgment for the interests alone of the plaintiff in the matter, after having endeavored in vain to invest said money otherwise for the plaintiff, then that the defendant is responsible to the plaintiff only for the value of such Confederate currency as of the time when demand was made by the plaintiff of the defendant, to wit: on the day of the institution of this suit.
And the court refused to give any of the said instructions; but in lieu thereof gave the following insturctions, to wit:
Instructions given by the court.
If the jury believe from the evidence, that the defendant believing himself to be president of the bank of the Old Dominion, and authorized to act for said bank, did in good faith collect in February 1863 from the State of Virginia, the interest due said bank, and invest the same for the said bank in such, securities as were then regarded by the business community of Virginia as judicious investments, in this action he is not liable for anything except the interest which he may have collected on such investments, with interest *thereon from the date of its receipt, unless he thereafter converted that investment and appropriated the proceeds thereof to his own use; in which event he is further liable for the value of such proceeds with interest thereon from the date of such appropriation. And the jury are instructed that a loan of the proceeds of such investment to, or a deposit thereof with the firm of C. A. Baldwin & Co., of which the defendant was a co-partner, is to be regarded as an appropriation to the use of the defendant.
Upon the application of McVeigh a writ of error and supersedeas was allowed him.
The facts material to the questions decided by the court are the following:
Before the late war William N. McVeigh was a resident citizen of the city of Alexandria, a member of the mercantile firm of C. A. Baldwin & Co., and president of the Bank of the Old Dominion located in that city. He was re-elected in January 1861, and again in his absence in January 1862. As president he from time to time collected the interest upon the bonds of the state held by the bank. In May 1861 he left the city of Alexandria, and took up his residence in the city of Richmond, where he remained until after the close of the war, and the firm of C. A. Baldwin & Co. also removed to the same city.
In July 1865 McVeigh addressed a written communication to the stockholders of the Bank of the Old Dominion, in which he says: We have been permitted again to. meet together to transact business connected with this bank, and I beg here to submit a statement of my doings during the four years absent. Being separated from the board of directors by military armies, I had to act upon my best judgment and upon the judgment of others with whom I advised. As *president of this bank, and as I considered it my duty to do, I collected, &c., mentioning two sums of money which he collected from the state for interest due on bonds of the state held by the Bank of the Old Dominion, and deposited on the same day in the Bank of Vix'ginia to the credit of the first named bank; and stating that he paid, by his checks upon the Bank of Virginia, such banks as he could learn had balances against the Bank of the Old Dominion. In relation to these sums thex-e was no controversy.
He then proceeds to state that on the 18th ■of February 1863 he collected from the treasurer the interest due on the state bonds held by the bank, up to the 1st of January 1863, being $26,697, and that he invested, by the advice of W. G. Cazenove, one of the ■directors of the bank, $26,500 in a Confederate convertible or call certificate, bearing six per cent, interest; and the balance he ■deposited in the Bank of Vix'ginia to the credit of the Bank of the Old Dominion. This loan to the Confederate government continued until that government advertised for the return of all call loan certificates bearing six per cent, interest, by a certain •day for payment, or they would become permanent six per cent, stocks; and then the certificate was presented, and the amount with interest paid in Confederate xnoney; at which time a law of the state imposing a tax of one per cent, was immediately to take effect, and a law passed by the Confederate government, soon to take effect, of thirty-three and one-third per cent, tax on all Confederate currency held by banks or individuals. In order to avoid this heavy tax he made vax'ious efforts to lend out the money, but without success. As a last resort he placed it in bank to the credit of C. A. Baldwin & Co., of which he was a member, with the understanding that said firm was to *pay the bank the same kind of currency on. call or demand with six per cent., so that the same should stand with C. A. Baldwin & Co. on the same terms as it did with the Confederate government. In his testimony given in this case he says :
At that time Baldwin & Co. and McVeigh had more of Confederate currency than they knew what to do with, and frequently lent ■out large sums to such persons as they could get to take it; and they would at any time have paid any call made upon them by the bank or for its use, for the said sum of $26,500 and interest: and that said sum, with its accumulated interest, was invested by said C. A. Baldwin & Co., together with their own funds, in tobacco and other things which were destroyed by fire that occurred at Columbia, South Carolina, at Charlotte, North Carolina, and in the city of Richmond on the 3d of April 1865, at all which places the said firm had stored the said tobacco and other goods.
This investment was not made for the bank, but at the individual risk of McVeigh, he determining to continue the amount as a six per cent, investment to the bank payable any day.
John Howard, for the appellant.
Claúghton, for the appellee.
War Interest.—On the question of the allowance of war interest, see Roberts v. Cocke, 28 Gratt. 207, and note; Vaiden v. Stubblefield, 28 Gratt. 153; Dromgoole v. Smith, 78 Va. 670.

Opinion:
Staples, J.,
delivered the opinion of the court.
This is an action of assumpsit bx'ought in the Circuit court of the city of Richmond by the "Bank of the Old Dominion" against William N. McVeigh, to recover certain money belonging to the plaintiff, which as is alleged, was collected by the defendant in the year 1863. During the trial instructions were asked for by plaintiff and defendant respectively, which were refused *by the court; and in lieu thereof certain other instructions givexx; to which both parties excepted. There was a verdict and judgment for the plaintiff; 'to which the defendant applied for and obtained a writ of ex'ror and supersedeas. It is not necessary to consider the various questions presented by these instructions. It will be sufficient to examine the two main grounds upon which defendant relies for a reversal of the judgment.
The first of these is, that the defendant in the year 1861 having left the city of Alexandria, where the bank was situated, having permanently located within the Confederate lines, his official connection with the bank as president was thereby dissolved, and his relations to that institution thereafter were those of a public enemy; and consequently no contract, express or implied, could arise between the pai'ties during the existence of such hostile relations, and no action can be maintained against the defendant for any act done by him as president or agent of said bank during that period. In order fully to comprehend the doctrine here asserted, it is necessary to give some attention to the evidence. It appears from the defendant's own admissions, that although residing within the Confederate lines after the 11th of June 1861,' he undertook to act as president of said bank; and in that character he collected from the state money belonging to the plaintiff. We must suppose that he honestly entertained the opinion that he had the right so to do. Any other supposition would be a direct imputation upon his good faith and fair dealing.
After the close of the war, in July 1865, the defendant addressed a communication to the stockholders of the bank, in which he gives a history of his official conduct during the period of his separation from the ^'institution, and his reasons for collecting the funds belonging to it. He states that being separated from the board of directors by military forces he had to act upon his best judgment, and upon the judgment of others with whom he advised. As president of the bank he collected in November 1861 of the state treasurer fifteen hundred and seventy-five dollars, being balance of interest due the bank 1st July 1861. On the 4th Januax'y 1862 he collected eight thousand one hundred and ninety dollars, the interest to January 1862; which several sums, after the payment of certain •claims against the bank, were deposited to its credit in the bank of Virginia. And on the 8th of February 1863 he collected twenty-six thousand six hundred and ninety-seven dollars, the interest due on the state bonds up to the 1st of January 1863, and invested the same, or nearly the same, amount in a Confederate convertible or call certificate, bearing six per cent, interest. The present controversy is in reference to this latter sum.
How the position assumed in the instructions and in the argument of the defendant's •counsel is, that the defendant's office or agency was abrogated by the war—that the act of the defendant as president, in collecting plaintiff's money, was null and void— that this act could not be ratified after the war by the plaintiff or defendant, so as to create a cause of action ex contractu against the defendant. Conceding all this, how •does it relieve the defendant of the obligation to account to the plaintiff for money collected without authority, and appropriated to the defendant's individual use and benefit. It is a matter of no sort of consequence that he was not authorized to act as president: having undertaken to do so, he cannot set up the illeg'ality of his own conduct to avoid the just responsibility arising out of the agency he assumed. It has *been held in several cases, where money is received by an agent by force of a contract which is illegal, he cannot protect himself from accounting for what was so received by relying upon the illegality of the transaction in which it was paid to him. Sharp v. Taylor, 2 Phil. Ch. R. 801.
In Terrant v. Elliott, 1 Bos. & Pul. 3, the defendant, an insurance broker, having effected an illegal insurance for the plaintiff, and received the amount of a loss, endeavored to defend himself against the claim of his principal by showing the illegality of the insurance; but it was held the plaintiff was entitled to recover. McBlair v. Gibbes, 17 How. U. S. R. 236; Kinsman v. Parkhurst, 18 How. U. S. R. 289; 7 Rob. Prac. 455-6.
A fortiori does this principle apply, where the plaintiff is entirely free from censure, and the illegality of the transaction, if it be such, is attributable to the defendant alone.
The learned counsel argued this branch •of the case upon the theory, that war ipso facto operates as a confiscation of the title to all property belonging to alien enemies, : and that any person appropriating or holding such piroperty cannot be required to account for the same to the former owner after peace is restored. But clearly war has no such effect. While it gives to the government authority to confiscate the property of an enemy, it does not itself confiscate, nor confer upon individuals such authority. If the government does not exercise the power, the title remains unchanged. During the existence of hostilities, the owners' remedies for its protection or recovery are suspended; but so soon as peace is restored, these remedies revive as fully and effectually as though they had never been disturbed. This is the doctrine everywhere sustained by *the comity of states. Ware v. Hylton, 3 Dallas' R. 199, 226; Brown v. United States, 8 Cranch's R. 170.
The learned counsel insists, however, that the defendant being a mere tort feasor, the action against him ought also to have been in tort. But it is well settled, that in cases of this sort the plaintiff has his election of remedies. He may, if he pleases, waive the tort and sue in assumpsit. Indeed assumpsit is the appropriate remedy whenever the defendant has received plaintiff's money, which in equity and good conscience he ought not to retain. 1 Rob. Prac. 484.
The defendant's second ground of defence is contained in the fifth, sixth, seventh and eighth instructions, offered by him, and rejected by the court. The main proposition asserted in these instructions is, that the defendant having acted in good faith in collecting the money from the state and investing it in Confederate call certificates, the said certificates became thereby the property of the bank, and the defendant is not responsible in this suit for any loss or damage which the bank may have sustained by reason of the action of the defendant.
It will be observed that the proposition here asserted leaves out of view the important fact established by the evidence, that after the defendant had converted the certificates into treasury notes, as required by the Confederate government, he deposited the money in bank to the credit of C. A. Baldwin & Co., of which firm he was a member; and subsequently the entire amount, together with the other funds of the said firm, was invested in tobacco and other articles. This investment, as the defendant states, was made at his individual risk, he being confident it would pay him the interest, and save to the bank the heavy Confederate tax. He further states that the articles so purchased *were destroyed by fires that occurred at Columbia, Charlotte and the city of Richmond, at which places the said firm had stored the property.
It thus appears that the fund did not perish upon the hands of the defendant, but was loaned by him to a firm of which he was a member, and was invested by that firm in private trade and speculation. It may be that the goods were destroyed, but we have no means of ascertaining the circumstances under which the destruction occurred. We do not know whether it might not have been prevented by the exercise of due care and diligence: whether considerable profits may not have been realized from this fund by previous investments. Upon these points the record furnishes no information; no inquiry was asked upon the subject; no issue made up. The defendant nowhere asserts that the money was wholly lost by him. He does not say that no profits were realized from its use; nor does he rest his defence upon the destruction of the property. No such ground is taken in the instructions or in the argument. The learned counsel was too well satisfied it could not be maintained. The defendant having appropriated the plaintiff's money, having invested it in trade and speculation, must of course account for it, however unfortunately the speculation may have proved. The defendant is to be regarded simply as a borrower of the fund. His use of it, whether judicious or otherwise, whether profitable or not, cannot affect the right of the creditor.
The case is wholly unlike that of Davis v. Harman, 20 Gratt. 197. There the fund was in the hands of a commissioner acting under the order of a court of chancery. He did not appropriate a dollar of it to his own use; but deposited it in bank, where it perished with the fall of the Confederate government.
*Nor does the case bear any resemblance to that of Pidgeon v. Williams, 21 Gratt. 251. In that case the money was also deposited in bank; was so marked as to be easily identified as the property of the plaintiff; and so remained in the bank until the termination of the war, and the consequent destruction of the currency.
The defendant is charged only with the value of the Confederate notes at the time they were appropriated by him; and with this we think he has no just cause of complaint. The veridct and judgment, however, bear interest from the 1st day of April 1864. The interest ought to be computed only from the close of the war; for the plain reason, that plaintiff and defendant were, until that date, residents of hostile sections. To this extent the judgment must be amended and affirmed, with costs to the defendant in error. In thus affirming it, we see no reason to impute any blame to the defendant. He seems to have acted through out with a conscientious regard for what he considered the best interest of the bank. But his motives, however conscientious, cannot exonerate him from liability for his collection and appropriation of money belonging to the plaintiff.
Judgment amended and affirmed.