Court Opinion

ID: 6543703
Source: CourtListenerOpinion
Date Created: 2022-07-19 22:17:52.582436+00
Date Added: 2024-06-11T15:55:54.224674
License: Public Domain

Bunn, C. J., (after stating the facts.) The complaint, in brief, charges that the bank and its president, contemplating insolvency, and desiring to keep plaintiff’s money from being checked out of the bank by her, combined with its cashier, and entered into a conspiracy to deceive her, and to induce her to allow her money to remain in the bank, to be used by its president; and to accomplish this scheme the cashier, with the connivance of the president of the bank, wrote to appellant, at Washington, D. C., proposing to lend out her money on good security, and, she assenting to this arrangement, these bank officials induced Brown to execute the note to her for the $1,000, and assign the stock certificate to her as collateral security to the note, they pretending to her that the bank had loaned her money to Brown, that he was solvent, and that he owned the bank stock, and that the same was good security; with many specifications thereunder. Brown and the receiver each filed a separate answer, specifically denying each allegation and charge affecting him and the bank respectively. None of the material allegations of the complaint controverted by the separate answer are sustained by the evidence (the whole of which we have substantially set forth in our statement of facts); nor does it appear from the testimony that the bank officials conspired together to deceive appellant as charged, for in the correspondence between them she seems to have taken the initiative, and their letters appear as letters usually do in such cases. The loan, as it was finally made, viewed in the light of subsequent events, may and doubtless does give rise to inference as to motives actuating the parties from the beginning. But that is all, and that is scarcely sufficient to base a judgment upon. Moreover, appellant having given authority to these people to take her money from the bank, and pay it over to the borrower, whoever he might be, it does not appear just howr she, alone, can complain of the mere manner in which, her account was balanced upon the books, or because Brown, the borrower, chose to let Allis use the money, or havé the same credited to his account. The loan itself seems to be all that may be questioned, and this Powell, the confidential agent and relative, seems to have regarded as proper, although he himself might have been deceived. On the coming in of the testimony, Brown was let out of the case by the plaintiff, and the court sitting by consent as a jury, found for the receiver; whether on the law, or facts, or both, does not appear, as there were no special findings, but presumably on both, judging from the grounds of the motion for new trial. After all, the facts still remain that within about sis months next after the loan was made, the bank was wrecked by the misconduct of its president, and its stock (including the collateral stock held by the plaintiff) was rendered worthless. Brown was made insolvent, and it appears that appellant must lose her entire debt, unless, in this proceeding-, she can show the bank is liable for the tortious acts of its officials in dealing with her, if they were guilty of such at all; and, of course, this liability of the bank, if any exists, grows out of the relation it had with its president and cashier, and the connection it had constructively, through them, with the transaction with appellant; and this is the only proposition we have to consider. We do not regard the plaintiff as suing on the note from Brown, or as seeking to make the stock available, for it does not appear that the note is declared on in the complaint as evidencing a cause of action ex con-tractu, but the note and certificate of stock seem only to be a part of the history of the transaction of the bank officials and plaintiff. The case is therefore relieved of the imputation that it rests on inconsistent causes of action. We think it rests solely on the principle that one is civilly bound for the tortious acts of his agent, committed within the scope of his business and authority. The general rule is, “the principal is liable for the wrongful, fraudulent, or deceitful act of the agent committed within the scope of his authority,” but “we must distinguish between the authority to commit a fraudulent act, and the authority to transact the business in the course of which the fraudulent act was committed. Tested by reference to the intention of the principal, neither negligence nor fraud is within the scope of the agency; but, tested by the connection of the act with the property and business of the agency, fraud in taking the very property is as much within the scope of the agency as negligence in allowing the others to take it. The proper inquiry is whether the act was done in the course of the agéncy, and by virtue of the authority of the agent. If it was, then the principal is responsible, whether the act was merely negligent or fraudulent.” Mechem, Agency, sec. 739. The line between the tortious acts of the agent when committed within the scope of his authority as such agent, and those when committed without the scope of his agency, as those acts may or may not affect the principal, is rather sharply and forcibly drawn in the case of Foster v. Essex Bank, 17 Mass. 479. Again, it must not be lost sight of that, while the principal is responsible for the tortious acts of his agent committed while in the exercise of' his authority as such, yet the principal is subject to another principle, and that is, the acts of the agent must be such as the principal has a right to require of him, or he. will not be liable by operation of law, unless he has made himself actually liable otherwise. The services the cashier undertook to render for the appellant seem to have been a mere gratuity — done as an accommodation to her — if not deceptively. There is no showing that the bank, by its charter, had authority to transact such business as that of loaning the money of its depositors or other people in general. Such authority we have failed to find in the national banking law, and the decisions on the subject, or rather the decisions involving analogous facts, all seem to be to the effect that the business of a broker (and a broker’s business is to loan the money of others, or borrow for others, and such like) is not a business in which a national bank can lawfully engage, since it is not mentioned in the national bank act, and the act is strictly construed as'against the grantee corporation, as to powers conferred as in all cases of private corporate grants of power. In the case Weckler v. First National Bank of Hagerstown, 42 Md. 581, suit was brought against the bank for damages growing- out of the purchase of certain bonds, which the teller of the bank had sold him, and falsely represented to be what they really were not, to the . injury of plaintiff, the complaint averring1 that the bank was engaged in buying and selling these bonds, and was therefore liable for damages occasioned by the false representation, in relation thereto, of the teller, one of the agents in the transaction of its business. The plaintiff was defeated in his suit, the court holding that the bank had no authority to transact that kind of business, and the teller was therefore not acting within the scope of his authority and business when he committed the torts complained of. To the same effect is the ruling in the case of First National Bank v. Hoch, 89 Pa. St. 324, and that in the case of Dresser v. Traders' National Bank, 42 N. E. 567. We have been unable to find a case exactly on all fours with the case at bar as to the subject-matter of the transaction, a case where the bank officials were engaged in making loans for other people to third parties, and gratuitously; but, involving acts of the same class, the cases are quite numerous. The case really is between appellant on the one hand and the stockholders (if they really have any interest left in it) and other creditors. We are unable to find any ground upon which we would reverse the judgment, and the same is therefore affirmed. BATTCE, J., did not participate in the decision of this case.