Williams v. Peoples Bank

Clarkson, J. Tbe only question involved in this controversy is: “Was C. H. Godwin, tbe cashier of tbe defendant bank, tbe agent of plaintiff, P. W. Williams?” If be was, tbe plaintiff cannot recover. If be was tbe agent of tbe bank, tbe plaintiff can recover. • “Tbe cashier of a bank is tbe chief executive officer. Still be is but an agent of tbe bank, and bis acts are governed by tbe general rules applicable to agents, and if be exceeds bis authority bis acts will not bind tbe bank.” 3 R. C. L., sec. 71, p. 444. When tbe plaintiff delivered to defendant bank’s cashier, Godwin, tbe $1,400 note and deed in trust, and tbe cashier accepted it, Godwin was tbe agent of tbe bank. There is no. question about tbe bank making tbe loan. J. G. Staton testified: “This particular note went through on 10 November, 1919, and was approved by tbe finance committee 2 February, 1920. That is tbe signature of some of them approving tbe notes. Above my signature is written ‘approved.’ I do not know what date it was approved.” In Goshorn v. Peoples Nat. Bank, 32 Ind. App., 428 (102 Amer. State Reports, 251), it was said: Tbe bank “selected its own cashier, and held him out to tbe world as deserving of confidence. Those who deal with persons occupying such responsible positions have a right to rely upon their integrity, and do so constantly. Depositors do not deal at arm’s length with tbe cashier. In language used by Justice Faxon of tbe Supreme Court of Pennsylvania: ‘It would be'monstrous to allow them to take advantage of tbe ignorant and unwary, by reason *200 of their position, and the confidence it inspires.’ Zeigler v. First Nat. Bank, 93 Pa. St., 393, 397; Steckel v. First Nat. Bank, 93 Pa. St., 376; 39 Am. Rep., 758; City Nat. Bank v. Martin, 70 Tex., 643; 8 Am. St. Rep., 632; 8 S. W., 507.” In the instant case the plaintiff was borrowing the money from the bank to pay a note made by himself to Pleny Peele, on which C. H. Godwin was endorser. The note of Williams was made to defendant bank, secured by deed in trust. The record shows that the cashier had authority to make the loan, as the president of the bank and the finance committee approved it. The cashier, Godwin, representing the bank had discounted the note for the bank and, after taking out the interest, etc., had misappropriated and converted the balance to his own use. He was the agent of the bank to give the plaintiff credit for it or to pay plaintiff the money or to pay the Peele note and mortgage. He did neither, and the bank is liable for the conversion and misappropriation of its agent, the cashier. It is immaterial that Godwin was endorser on the Peele note. We do not think the case of Grady v. Bank, 184 N. C., 158, is an authority in this case. In that case (at p. 162) the. Court says: “It is a well settled principle of law that the cashier cannot bind the bank by his acts in respect to matters in which he is personally interested, and third persons are bound to know that the cashier has no authority to use the funds of the bank for his own benefit.” In the case at bar the cashier was not using the funds of the bank for his own benefit. He misappropriated and misapplied the plaintiff’s money contrary to the contract as cashier of the bank — in the scope of his employment — ratified by the president and finance committee — that he made with plaintiff, for which wrong the bank is liable. LeDuc v. Moore, 111 N. C., 516; Phillips v. Hensley, 175 N. C., 23. For the reasons given, there is No error.