Court Opinion

ID: 6904586
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:58:33.71274+00
Date Added: 2024-06-11T16:06:17.947759
License: Public Domain

Mr. Justice McBride
delivered the opinion of the court.
The fact that plaintiff deposited $3,254.25 more in the defendant bank than she herself checked out is clear. The only question arising on this branch of the case is whether she authorized T. R. Sheridan individually to check out the money and lend or use it for himself, or whether she contracted to lend it to the bank. The evidence discloses the fact that Sheridan was president of the bank and active in its management; that when plaintiff transacted business with it she usually transacted it with Sheridan if he was present, but with the other employees in his absence. The plaintiff, a woman past 60 years of age, had by *299inheritance from her husband recently become the owner of a deposit made by him in the defendant bank, which amounted in all to about $3,000. Shortly after her husband’s death she went to the bank to make a further deposit, when she had a conversation with Sheridan, which it is claimed constitutes the contract sued upon. The whole conversation was as follows:
“Just when I was leaving there [referring to the bank], T. R. Sheridan said, ‘Mrs. Byron, you have got too much money in the bank to be laying idle, ’ and I says: ‘What will I do with it? If I loan it, I will lose it.’ And he says, ‘I will keep it working and give you 7 per cent and keep 1 per cent for the bank.’ Those are just the words that he said. * * That was all that was said. That was all the bargain that was made. * * I said, ‘All right, for if I loan it I will lose it. ’ He was president of the bank and doing business for the bank, I suppose.”
Later the following question was asked, and the answer was permitted over defendant’s objection and exception:
“Q. Who was you dealing with, the bank or with him?
“A. The bank; he was president of the bank. * * Mr. Sheridan was president of the bank, and when I wanted money I went to the bank and got it. ’ ’
1-3. Putting aside for the present the question of the authority of the president to borrow money on behalf of the bank, we will determine whether this testimony was sufficient to justify the jury in finding that the contract was made on its behalf, or whether it merely discloses a contract between plaintiff and Sheridan individually to act as a broker for plaintiff in lending her money to third persons. It may be conceded, and it is the law, that a national bank cannot act as a broker; so, if the contract is to be construed in *300that aspect, plaintiff's case must fail. It is either a loan to the bank or a private transaction with Sheridan. It is a rule of law that, where a contract is reasonably susceptible of several constructions, that must be taken which is most favorable to the promisee: Hoffman v. Aetna Ins. Co., 32 N. Y. 413 (88 Am. Dec. 337); Moore v. Aetna Ins. Co.,75 Or. 47 (146 Pac. 151). From the authorities cited in the foregoing cases, we also derive the rule that in such instances the court will consider the relations of the contracting parties with a view of determining how the promisee must reasonably have understood the contract. In this case we find, on the one hand, a woman evidently unaccustomed to business and evidently so distrustful of her own capacities as to be afraid to lend her money. She is in a bank, displaying, no doubt, the usual evidences of wealth and solidity calculated to impress her with confidence that in its hands her little hoard would be entirely safe. That she had such confidence is shown by the fact that she had allowed her money derived from her husband to remain there, and for the second time since her husband’s death had that day made an additional deposit of a considerable amount. She feared to trust individuals, but to her the First National Bank of Boseburg was the emblem of solidity, and, when the president of that institution advised that her money ought not to lie idle, but that he would keep it working and give her 7 per cent, and take 1 per cent out for the bank, she no doubt thought that he was speaking for the bank, and that it was the responsible party. There is no testimony to indicate that she had ever at any time had any business relations with Sheridan personally, or even any acquaintance with him, except that derived from her transacting business at the bank, and under the circumstances, it is reasonable to infer that she supposed *301the bank would take' her money and use it for its own purposes. She was in the bank talking to the president, who was bargaining to make 1 per cent out of the money for the benefit of the bank, and she no doubt thought she was lending the money to the bank, and that its intention was to relend it at a higher rate of interest. Her intent in the matter was to lend her money to a safe debtor. Perhaps, her idea as to how the bank would make any profit on such a transaction may have been a little hazy, and a man accustomed to business would have hesitated to enter into the transaction without further inquiry; but there is enough here to authorize a jury to infer that she thought she was lending the money to the bank and that Sheridan intended she should think so. That he intended she should still have this impression is shown by the statement furnished her in May, 1906, when she asked for a statement of the interest that had accrued, and received the following:
“First National Bank. No. 4624. Boseburg, Oregon, May 5, 1906. We credit Mrs. John Byron on $3,000, as interest, $210. T. B. Sheridan.”
The late Boscoe Conkling once remarked that only three classes of persons were privileged to use the pronoun “we” in reference to themselves individually, namely, “editors, emperors, and men, with tapeworms ’ ’; and it is common experience that nobody uses the plural pronoun when writing in regard to business pertaining to himself as an individual. The- “we” was calculated to, and no doubt did, convey the impression to Mrs. Byron that the statement furnished was that of the corporation, and not of Sheridan personally. Having arrived at the conclusion that there was evidence sufficient to go to the jury that Sheridan actually *302made the contract on behalf of the bank, and that the loan was to the bank and not to him personally, the' next question confronting us relates to his authority to bind the bank by such a contract.
4. The power of a national bank to borrow money except in emergencies was seriously questioned in some of the early cases, as may be seen from the authorities cited. Magee on Banks and Banking, page 351, contains an exhaustive discussion of the subject; but the later authorities seem to indicate the general adoption of a broader rule: 1 Michie on Banks and Banking, § 97, and authorities there cited. We conclude that the contract in question was one which it was in the power of the bank to make.
5-7. A more serious question is that of the authority of Sheridan to make it. It seems to be a general, though not universal, rule that the president of a bank as such does not possess power to borrow money without express or implied authority from the board of directors, and there are cases in which the lender has been denied a recovery where large sums have been loaned upon the solicitation of the president of the debtor bank without this authority having been conferred upon him: Western National Bank v. Armstrong, 152 U. S. 346 (38 L. Ed. 470, 14 Sup. Ct. Rep. 572). But while the president may not have such technical authorization as empowers him in the first instance to secure the loan, it does not follow in all such cases that the creditor must lose his money. The bank may actively or passively conduct itself with reference to such a transaction as to be estopped from asserting that the transaction was beyond the power of the particular officer to enter into, and by its negligence and lack of supervision place itself in, a position where to allow it to avoid the transaction would be to *303permit it to perpetrate a fraud upon the creditor: Aldrich v. Chemical National Bank, 175 U. S. 618 (44 L. Ed. 611, 20 Sup. Ct. Rep. 498); Wyman v. Wallace, 201 U. S. 230 (26 Sup. Ct. Rep. 495, 50 L. Ed. 738); Poppleton v. Wallace, 201 U. S. 245 (50 L. Ed. 743, 26 Sup. Ct. Rep. 498); U. S. National Bank v. First National Bank, 79 Fed. 296 (24 C. C. A. 597); Merchants’ Bank v. State Bank, 10 Wall. 604 (19 L. Ed. 1008). While none of the authorities ahoye stated are parallel in all their features with the case at bar, we may fairly deduce from them the general rule above stated. In the instant' case, the testimony tends to show that Sheridan was practically the manager of the bank and prominent in its affairs; that he was permitted to check out from the moneys sued for here, signing Mrs. Byron’s name to memorandum checks without any question as to his authority to do so, and without any written authority. It is fair to assume that no person outside of the circle of bank officials would have been allowed to check out a single dollar without some demand being made .upon him for authority from his principal for so doing. This he was permitted to do evidently because of his position, and this custom extended over a period of more than two years and could not have escaped the notice of other officials of the institution if they had been at all attentive to their duties. The presumption is that they did know, and, if they knew, they must have acquiesced. It is a significant fact that Sheridan was in the vicinity at or near the time of this trial and was not called by the defendant to explain this transaction by which, under color of his office as its president, a large proportion of plaintiff’s savings had been drawn out; for what purpose or for whose benefit does not clearly appear. The plea of an. account stated cannot prevail. It does *304not purport to be a full statement of all transactions between her and the bank, bnt is merely a writing or summary of her deposit account showing what sums had been drawn out. Under her contract with the bank, she, no doubt,- expected Sheridan or some other official to draw out the money, and the casual credit of certain notes in the account is too equivocal to charg’e her with notice that the money was being loaned on her account. From the whole case it appears that the defendant through its president decoyed an ignorant old woman, who relied upon the credit of the bank, into making an equivocal contract, whereby she must probably lose her money unless the defendant pays it, as in good morals it ought to do. Under such circumstances, courts will not be astute to search for technical reasons to enable the defendant to escape from the consequences of a contract made for it by its chief officer.
The judgment is affirmed.
Affirmed. Rehearing Denied.
Mr. Chief Justice Moore, Mr. Justice Burnett and Mr. Justice Benson concur.