Court Opinion

ID: 6834463
Source: CourtListenerOpinion
Date Created: 2022-07-23 20:01:37.288935+00
Date Added: 2024-06-11T16:04:39.501881
License: Public Domain

GILBERT, Circuit Judge
(after stating the facts as above).  It is assigned as error that the trial court admitted evidence to show that, about the time of executing the written guaranty, Malpas asked the appellee to execute the same, and that the appellee was given a bill of sale of the logging trucks, and that the understanding was that Malpas, on the sale of those trucks, would reduce the limits of the guaranty by applying the proceeds of the sale thereof. Under this assignment it is urged that the court below erroneously permitted the introduction of parol evidence to vary a written guaranty.
We are unable to follow the reasoning which leads to that conclusion. To us it seems clear that the written guaranty rer mained unaffected by the bill of sale and that the parol testimony had no tendency to alter its terms. It remained, as it was before, the appellee’s undertaking to pay the bank the amount named therein in case of the failure of the logging company to pay it. The only effect of the parol evidence was to show that, before executing the guaranty, the appellee had received from the logging company security to protect him against loss by reason thereof. There is no evidence that he knew that the officers of the appellant were ignorant of the transaction, or that he connived with Malpas in practicing deception upon the appellant; and while it is in evidence that Malpas violated a rule of the appellant in acting as he did as the secretary of the logging company, it is not shown that the appellee was aware of that rule, or that he knew or was charged with notice that the. interests of Malpas in the transaction were adverse to those of the appellant.
The second assignment of error, that the court held that the title to the logging trucks passed to the appellee by the bill of sale and became his property, requires no comment in addition to what has been said.
Nor do we find error in the third assignment, which is that the court held that Malpas, in selling the trucks, was acting on behalf of the appellant, and not on behalf of the logging company. The appellee had authorized Malpas to sell the trucks and to apply the proceeds on the guaranty. His acts in pursuance of those instructions were manifestly valid, so far as the appellee is concerned, whether they be regarded as the acts of the appellant or as the acts of Malpas as secretary of the logging company.
Cases are cited, such as Live Stock State Bank v. First Nat. Bank (D. C.) 300 F. 945, to the proposition that the relation of a bank officer to his bank; is highly fiduciary, and that with one who has knowledge of the officer’s private interest the latter can make no binding obligation for his bank to his own benefit and to its injury. But here the act of Malpas, which inured to his private interest and to the injury of the appellant, was his extension of credit to the logging company far beyond the guaranteed limit. For that extension there is nothing to show that the appellant was responsible. The most that can be said against the security which the appellee took is that by the Bill of sale substantial assets of the logging company were diverted; but in that faet there was nothing out of the ordinary course of business, and the appellant through its manager, knew and assented to all that was done.
The decree is affirmed.