Court Opinion

ID: 8016870
Source: CourtListenerOpinion
Date Created: 2022-09-09 02:05:44.341175+00
Date Added: 2024-06-11T16:35:26.638612
License: Public Domain

*574DISSENTING OPINION.
GRAVES, J.
I do not concur in the opinion of our Brother Woodson in this case and for several reasons. ,
I. It is now practically conceded that if this be an action on the note the plaintiff failed in the trial, nisi. No contention is now seriously made by counsel that the plaintiff can recover upon the note, although the first brief filed herein was not to this effect. In the first brief learned counsel took the position that a bank cashier by virtue of his office had the power to not only borrow money but also to execute a note therefor. They had overlooked the damaging statute in the case and were drawing their pleadings on the note, having in view another statute, which they quote. They say in the first brief':
“It will be noticed that the statute does not undertake to deprive a cashier of the right, power and authority to borrow money on behalf of his bank, nor to deprive him of the right, power and authority to execute promissory notes in its name and behalf. It only goes so far as to restrict or limit his right and power to ‘indorse, sell, pledge or hypothecate any notes, bonds or other obligations received by said corporation for money loaned.’ ”
“That the cashier of a bank, by virtue of his office, has the right, power and authority to borrow money on behalf of his bank, also to execute promissory notes in its name and behalf, is well established, as we shall now show.”
Counsel had in view section 1294, Revised Statutes 1899, and overlooked section 1281 preceding, which section we discuss later. Just a few words more, however, on the pleadings before the discussion of this statute. "Whilst pleadings under our statute,- Revised Statutes 18991, section 629, should be liberally construed, but in our liberality we should not permit *575counsel to change their cause of action at the last moment in this court. To our mind this petition is one upon the note and not otherwise. The intent of the pleader and the character of the pleading should be drawn from the four corners of the instrument as said in the principal opinion, but we must not overlook the middle. We must take the instrument as a whole. The pleaders in this case realized that they could not recover upon the last note given, the one sued upon, without showing that it had been issued with the consent of the directors of the de-. funct bank. They realized that they had no such consent for that note, so as a matter of inducement they go back and pleaded the first note and all subsequent' renewals, and this for the purpose of tracing consent to the last note. They had the letter of Lewis, the cashier, evidently false, that consent had been given to the issuance of the first note and undertook to trace that consent through to the .note sued upon. So that We say all statements as to the notes previous to the one sued upon were matters of inducement. Then going to the last note, why allege its terms and why file a certified copy of it with the petition, if counsel for a moment thought they were suing for money loaned? The answer is evident. Counsel knew and believed that they were suing upon a note, and knew that when they sued upon such an instrument, they, under the law, had to file the note itself or a certified copy thereof. If suing for money loaned, why introduce the note in evidence, as was done? If suing for money loaned, why sue for $10,000, when at most Neal, the officer of plaintiff, only claims to have deposited the proceeds, after bank discount, of a $10,000 note, to the Middleton Bank? Their acts bespeaks the intent and belief of counsel much more than do their words by way of argument in this court. Again, why all this verbose pleading if counsel were suing for money loaned, or money had and received? *576"Why plead the time when due as expressed in the note? Why ask judgment for the eight per cent interest, as expressed in the note? That the distinguished and able counsel for the plaintiff thought they were declaring upon the note is earmarked throughout this case, until the last brief herein, wherein appears for the first time a change of front. Throughout the whole case nisi counsel for plaintiff tried this case upon the theory of having sued upon a note, and not until the last brief filed in this case did they make a change of front. How often has this court said that the theory below must be the theory here? We leave the majority opinion to answer.
We are of opinion that this petition is one upon the note and not one for money loaned, and so believing we think the case should be reversed outright.
II. Under section 1281, Revised Statutes 1899, among other things it is provided:- “The board of directors of each and every bank organized under this article shall meet at least once per month and pass ■upon the business of the bank back to the previous meeting of the board, and shall keep a written record of its approval or disapproval of each and every loan, and at each monthly meeting the records shall show the aggregate of the then existing indebtedness and liability of each of the directors and officers to the bank, and no bills payable shall be made and no bills shall be rediscounted by the bank except with the consent of the boa,rd of directors
By section 1294, it is, among other things, provided: “The directors may appoint and remove any cashier or other employee at pleasure. The cashier or any other employee shall have no power to indorse, sell, pledge or hypothecate any notes, bonds, or other obligations received by said corporation for money loaned, until such power and authority shall have been *577given such cashier or employee by the board of directors, in a regular meeting of the board, a written record of which proceeding shall first have been made, . . . and all acts of indorsing, selling, pleading and hypothecating done by said cashier or other officer or employee of said bank, without the authority from the board of directors, shall be null and void.”
Section 1281, Eevised Statutes 1899, was a substitute for section 2748, Eevised Statutes 1889, and section 1294, Eevised Statutes 1899, was a substitute for section 2759', Eevised Statutes 1889. The change was made in 1897, Laws 1897, p. 87, at which time sections 2748 and 2759 of the statutes were repealed and new sections enacted in lieu thereof. Slight changes were further made two years later in the revision of 1899.
Prior to 1897 no prohibitions or restrictions were placed upon the cashier. He possessed all the powers ordinarily understood to belong to such officer. There were no restrictions in either of the old sections. No records were required to be kept of loans and other things as now required. Directors were not required to meet and pass upon loans and to give their consent to the making of loans or borrowing of money as now required. These statutes clearly imply that the consent of the board of directors must be spread upon the records of the bank. They are required to meet monthly and to keep records. But whether the consent should be made to appear in one way or the other is not material in this case, because consent to the execution of this note or the borrowing of this money was not shown in any manner. By these statutes the cashier of a bank is the bank’s agent with limited powers. The limits are placed upon the powers of the agent by public statute, and all persons dealing with such agent must deal with him at his peril and unless the express power be shown for the *578act, it is of no binding effect. One dealing with an agent of limited powers must affirmatively show that the act relied upon fell within his powers. This plaintiff failed to do. Need we cite cases to a proposition so well founded?
These statutes were passed to prevent a cashier from looting banks by borrowing money. Under his general powers such cashier by statute is given the right to buy and sell exchange. If these statutes are meaningless, as my brothers seem to indicate, then all a cashier of a bank has to do to loot the bank is to borrow money otherwise than by note, put it with a correspondent bank and sell exchange to himself, and thus loot the bank. These laws were to prevent such conduct. The usual and customary method of procuring money by way of loan is by giving a bill- - payable. The giving of such a bill by the cashier without the consent of the directors is prohibited. To say that the cashier can borrow money without a note, but can’t borrow it with a note is trifling with the statute law and its purpose. It would be the height of legislative foolishness to pass a law intended to prohibit a cashier from borrowing money on the bank’s note and yet permit him without reserve to borrow without giving the note. The legislative meaning and intent of this law was to prohibit the borrowing of money by the cashier in the name of the bank except upon the consent of the board of' directors. The law was not only intended to protect the bank itself but likewise its depositors.
Nor is there injustice in saying that an individual or bank loaning money on a note thus executed without authority should lose it. They know the law. They know the limits on the powers of the agent, the cashier. Dealing with such agent of limited powers, they must know his right to make and receive a loan at their peril. Many harsher statutes than this are unhesitatingly enforced by the courts. *579If for increased interest rates- by way of discounts, banks or individuals will chance the authority of the limited agent to make the loan, they must do so with the penalties affixed by law.
The opinion of my Brother Woodson mops both of these statutes off of the books with one fell swoops Cases wherein there are no such statutes, and cases in this State, and such there are, discussing the powers of a bank cashier, prior to the Act of 1897, can have, no binding effect. The purpose of these statutes was to prevent the cashier “by virtue of his office” from borrowing money. . It is a wise legislative act, remedial in character, and should be upheld. We are of opinion that even on the theory that the plaintiff is suing for money loaned, it has failed to show that the agent of limited powers had the authority to make the loan, and therefore has failed to make its case.
III. But going further, and even conceding, which we do not do, that the plaintiff could recover for money loaned, and that this is such an action, yet it devolves upon plaintiff to prove by competent evidence that the defunct bank actually received that money, and this in our judgment it has failed to do. There is no pretense that this money was sent direct to the defunct Middleton Bank. There is no pretense that it was delivered to an authorized agent of such bank. It was, as the witness says, who does not speak from personal knowledge, but from an alleged examination of books and the customs of the bank, deposited in plaintiff bank to the credit of the Middleton Bank, and afterwards paid out on drafts. Objections were urged to this evidence but ignored. No pretense is made to put in evidence either the books of plaintiff bank or the books of the Middleton Bank. No effort is shown to get the alleged drafts of the Middleton Bank upon which the plaintiff claims that it paid the money. Some of these drafts *580it claims to have in its own possession, and yet the witness is permitted to orally allege payment, when the written evidence is in existence, if there ever was snch written evidence. This proof that the Middleton Bank was the beneficiary of this fund is not sufficient to take this lump sum of $10,000 from the bona-fide creditors of the defunct bank, to whom it rightfully belongs. By bona-fide creditors, we mean those creditors who have become such in the usual channels of business, and not such creditors as is the plaintiff, which became a creditor, if it is either in fact or law a creditor, by knowingly violating a public statute. So that upon any theory of this case, there has not been that degree of cogent and competent proof to authorize this verdict.
We therefore insist that this cause should be reversed.