Court Opinion

ID: 6989827
Source: CourtListenerOpinion
Date Created: 2022-07-24 03:22:57.341138+00
Date Added: 2024-06-11T16:09:34.577695
License: Public Domain

Welch, J. I do not concur in the reasoning or the conclusion reached by my brethren in this case. The 8th section of the act of Congress under which national banks are organized, makes them banking corporations with “ all such incidental' powers as shall be necessary to carry on the business of banking by discounting and negotiating promissory notes, drafts, bills of exchange, or other evidence of debt; by receiving deposits; by buying and selling exchange, coin and bullion; by loaning money on personal security; and by obtaining, issuing and circulating notes according to the provisions of the act.” The powers of national banks, being enumerated in the act of Congress by which they are created, the expressio unius est exelusio alteriusxi applied in the interpretation of this act would prohibit national banks from entering into such a contract as that claimed to have been entered into in this case. “ The deposits referred to in the act are deposits of money received by banks in the usual course of business and have none of the qualities of a bailment. The money deposited becomes the money of the banks and the relation of debtor and creditor is created between the depositor and the bank.” Whitney v. First National Bank of Brattleboro, 50 Vt. 398; same rule announced in Wiley v. First National Bank of Brattleboro, 47 Vt. 546; First National Bank v. Ocean National Bank, 60 N. Y. 278; Wickler v. First National Bank, 42 Ind. 581. Angel! & Ames on Corporations, 256, says: “ In deciding whether a corporation can make a particular contract, we are to consider in the first place whether its charter or some statute binding upon it forbids or permits it to make such a contract; and if they are silent upon the subject, in the second place, whether the power to make such a contract may not be implied on the part of the corporation as directly or incidentally necessary to enable it to fulfil the purposes of its existence, or whether the contract is entirely foreign to that purpose.” The contract, if any, between the plaintiff in error and the defendant in error, is based upon this paper : u Deposited with the First National Bank by Wm. H. Brooks. Monmouth, Ill., June 2, 1883. Currency — $800. To be indorsed on his note held by John Brown, or loaned for his use in case Brown won’t receive said money. B. T. O. Hubbard, Ce.” Judge Wayne, in United States v. City Bank of Columbus, 21 How. (U. S.) 356, says °. “ The court defines the cashier of the bank to be an executive officer, by whom its debts are received and paid, and its securities taken and transferred, and that his acts, to be binding upon a bank, must be done within the ordinary course of his duties. His ordinary duties are to keep all the funds of the bank, its notes, bills and other choses in action, to be used from time to time for the ordinary and extraordinary exigencies of the bank. He usually receives directly, or through the subordinate officers of the bank, all the money and notes of the bank; delivers up all discounted notes and other securities when they have been paid; draws checks to withdraw the funds of the bank when they have been deposited, as the executive officer of the bank, transacts most of its business.” After this summary of the duties and powers of the cashier, the same Judge says, “ that he may not make any eontraot involving the payment of money not loa/ned i/n the usual or eustO'inary way, or purchase or sell property, or create an agency of any bind for the bank unless expressly authorized by those to whom it has been confided to manage the business of the bank, both ordinary and extraordinary.” The same rule as to the limits of the authority of bank officers, to bind the corporation to acts and contracts within the ordinary sphere of their duties and the scope of the ordinary business, is announced in the following cases: Minor v. Mechanics Bank of Alexandria, 1 Pet. 46-70 ; Flickner v. Bank of United States, 8 Wheat. 338; Fulton Bank v. New York and Sharon Canal Co., 4 Paige, 127. Under the rule announced in the authorities, supra, had Hubbard, as the cashier of the bank, authority to receive for the bank money on the terms stated in said paper, and to bind the bank therefor ? as said in Whitney v. First National Bank of Brattleboro, 50 Vt., supra: “The deposits referred to in the act are deposits of money received by banks in the usual course of business, and have none of the qualities of a bailment. The money deposited becomes the money of the bank, and the relation of debtor and creditor is created between the depositor and the bank ; ” same rule announced in Commercial Bank of Albany v. Hughes, 17 Wend. 94; Maine Bank v. Fulton Bank, 2 Wall. 252. This is the character of deposit which by the National Bank Act, supra, the plaintiff in error was authorized to receive, and in receiving such a deposit the cashier would be acting within the scope of his authority and the bank by his act .would become a debtor to the depositor. Does the paper-signed by Hubbard, supra, show the reception by him of such a deposit for the bank? In my opinion the alleged contract is entirely foreign to the purpose of the plaintiff in error corporation, and is ultra vires and imposed no duty or obligation upon the bank. Bullard v. Banks, 18 Wall. 385; Hood v. Armory, 2 Cr. 107. The defendant in error in depositing his money with Hubbard was under the law required to know whether he had authority as cashier of plaintiff in error to receive it on the terms fixed by him, and, as I think I have shown, that no such authority existed. The money must have been left with Hubbard as his agent, and not deposited with the plaintiff in error. This view is sustained by Hubbard, who says: “ Brooks came to me and gave me the money and requested me to pay it to Deacon Brown, and in case Deacon Brown would not receive it to loan it out for him. It was a personal request to me.” Brooks and Hubbard both seemed to realize that Hubbard had no authority to receive it for the bank on such terms. It was a “ personal request ” to Hubbard to make the application of the money. If Hubbard, as the cashier of plaintiff in error, was not acting in the limit of his duty as such cashier when he received the money from Brooks, then he received the money as the agent of Brooks. Man. Co. v. Lydig, 4 I. R. 377; Satislee v. Grant, 1 Wend. 272; Thatcher v. Bank of N. Y., 5 Sandford, 121 ; Lloyd v. Bank, 3 Harris (Pa.) 175 ; Lithbridge v. Phillips, 2 Stark. 544. Even if it should be conceded, which I do not, that the plaintiff in error could receive money on the terms stated in the paper signed by Hubbard, sufra, that would make it a gratuitous undertaking, and as such it would only be responsible for gross negligence. Wharton on Negligence, Sec. 47.); Edson v. Weston, 7 Con. 278 ; Beardsly v. Richardson, 11 Wend. 25: Sandusky v. McFarland, 3 Dana, 204. I hold that no liability on the part of plaintiff in error was incurred on the paper given by Hubbard to the defendant in error. Has anything transpired since to create a liability on the part of plaintiff in error to the defendant, in error? Hubbard states: “ I did not pay it to Deacon Brown, I did not loan it for Brooks, 1 put it in the general funds of the bank. It was kept with some other items on a little memorandum paper I kept in the drawer, called a £ deduct tag,’ in the cash drawer for accommodation. It was so I could pay it to Deacon Brown when he called for it.” There was no entry made upon the bank books of this money, if there had been it should have been placed to the credit of Hubbard, it having been left with him to pay to Brown or loan for Brooks. If it had been placed to the credit of Brooks it would have required the check of Brooks to have used it. What was written on the “ deduct tag ” in reference to this money we do not know. It is certain there was nothing written upon it which would have prevented Hubbard from at any time withdrawing the money. It was not placed to his credit on the boobs so that his check would have been necessary to withdraw it. It was not placed to the credit of Brooks so that his check would have been necessary to withdraw it. The evidence of the directors of the plaintiff in error shows that they did from time to time and repeatedly count the funds and compare them with the books; that no one of them ever heard of the Brooks money or found any such overplus in the cash; that on some occasions balances were corrected through “ deduct tags,” but nothing is known of the Brooks money. Hubbard states the “deduct tag” was left there; no one else connected with the bank remembers to have seen it or knows what became of it. The only-basis on which Brooks was entitled to recover was that the money was received from Hubbard and mixed with the funds of the bank and was never withdrawn from the bank by him or by his authority. Various errors are assigned as to the giving, refusing and modifying of instructions. The instructions given for the defendant in error authorized the jury to find for the defendant in error, although the jury might believe that Hubbard took from the funds of the bank a much larger amount of money than claimed in this case. In my view the evidence conclusively shows that Hub: bard had not only withdrawn the money left by Brooks with him, if it was ever mixed with the funds of the bank, but also had withdrawn all of the money of the bank. Yet under the instructions for defendant in error the jury were authorized to find for defendant in error. This notwithstanding Hubbard says “ I so placed it that I could withdraw it.” He must have exercised that right to withdraw it, for he left no money in the bank when he left it. In the view I take of this case, the instructions given for the defendant in error should not have been given, and the instructions given for plaintiff in error should have been given without modification.