Robb v. Ross County Bank

Sutherland, J. This is a plain case for reversal. The judge who tried the action at the circuit found as a fact, and it was admitted on the trial, that the plaintiffs received the bill of exchange or draft, on which the action was brought, before it became due. There is no evidence or finding tending to show that the plaintiffs were not bona fide holders, for value. The presumption is, then, that they were. It was admitted on the trial, and found as a fact by the judge, that the defendant, “The Eoss County IBank,” was a corporation; that B. P. Kingsbury was its cashier; and that the words “B. P. Kingsbury, cash’r,” on the back of the bill, or draft, were in his proper handwriting. There is no evidence or finding tending to show that the charter of the bank contained any restriction or limitation on its power of negotiating or indorsing notes or bills of exchange, or on the authority of its cashier to indorse such negotiable paper for the bank. The presumption is, then, that the bank had power, and it cashier authority, to negotiate or indorse the bill. (Marvine v. Hymers, 2 Kern. 223. Wild v. Passamaquoddy Bank, 3 Mason, 505. Heckners v. Bank of the United States, 8 Wheat. 360. Story on Agency, § 114.) The judge did not find as a fact, and there was no evidence tending to show, that the bill was indorsed by Kings-bury, the cashier, for the mere purpose of collection, or for any other special or limited purpose; but if this had been proved and found as a fact, it is perfectly clear on principle, and by authority, that such proof or finding would not have predjudiced or affected the plaintiffs’ right of recovery as bona fide holders for value, before maturity, unless the evidence had also shown that they took the bill with notice of such special purpose, or under circumstances which called upon them to make inquiry as to the purpose of the indorsement. Even if the Eoss County Bank had never owned the bill, or had any interest in it, that fact, if proved and found, would [592] not have affected the right of the plaintiffs, as innocent holders for a valuable consideration, before maturity, to recover. In The Bank of Genesee v. The Patchin Bank, (3 Kern. 315,) Judge Denio, after stating and citing cases to show that a mercantile firm, as between the firm and an innocent holder for value, is bound, when the firm name has been affixed by a copartner, to negotiable paper in which the firm had no interest, says: “The same principle applies to the acts of the officers of a corporation.” The maxim that when one of two innocent parties must suffer from the wrongful act of a third, he who put confidence in and enabled such third party to do the wrong, must be the sufferer, requires that the principle of liability stated by the learned judge should apply, (as he says it does,) to the acts of the officers of corporations. Indeed, as a corporation can only act by or through its officers, or agents, it is plain that it is most reasonable and proper to apply such principle of liability to the acts of the officers and agents of corporations. The simple and only question then presented by the appeal is, did the omission of Kingsbury, the cashier, to write on the back of the bill, before or after his name and the name of his office, the words “for the Koss County Bank,” preclude the plaintiffs from recovering against the bank as indorser ? In other words, although we know that this bill was indorsed as paper negotiated by banks is usually indorsed, that is by the cashier’s writing his name on the back of it, with the addition of the name or designation of his office merely; and although we know that banks deal with the public at large, and that their officers, president, cashier, &c. are generally spoken of, and designated, and dealt with by the name of their office merely; and although we must presume that the plaintiffs, when they took the bill, knew that there was such a bank as the Bank of Boss County, and that B. P. Kingsbury was its cashier; and although we know that corporations, from their very nature, can act only through or by their officers or agents; yet, is there any tech [593] nical, unbending rule of law, which compels us to hold in this case, that the indorsement of the bill, by Kingsbury, the cashier, writing his name with the addition of the name or designation of his office, on the back of it, was not the indorsement of the bank, and did not bind the bank as indorser ? I should be sorry to think that there was, and believe there is not. It appears to me that Judge Denio shows conclusively in his opinion in The Bank of Genesee v. The Patchin Bank, (3 Kern, supra,) that an indorsment like the one in question in this case, binds the bank. The point cannot be said to have been decided in that case, for it appears from the report of it, that the point was not passed upon by the court; but it appears to have been decided in Folger v. Chase, (18 Pick. 63,) that such an indorsement by the cashier sufficiently showed that it was made in behalf of the bank; and if that was not sufficiently certain, that the plaintiffs had a right to prefix the name of the corporation. (See also Bank of Watervliet v. White, 1 Denio, 608; and Marvine v. Hymers, 2 Kern, supra.) It would not be reasonable to apply the general rule that to make an individual liable on a bill or note, his name must appear on the bill or note, to banking corporations; because corporations cannot write, or do any other act, except by or through an officer or agent, and because any one taking a bill or note indorsed by a cashier of a bank, in his official capacity, would assume, and have a right to assume, in the absence of any thing suggesting doubt or inquiry, that the indorsement was made in behalf of the bank, and by the authority of the bank. We ought not to consider the decision of the general term of this district in the case of The Bank of the State of New York v. The Farmers’ Bank of the State of Ohio, in 1862, (36 Barb. 332,) as a controlling authority, for I understand that decision to have been reversed by the court of appeals; and besides, we must presume that when that decision was [594] made, the court were not. aware that the same point had been decided in more than one case, directly the other way, by the general term of the same district. [New York General Term, May 2, 1864. The judgment appealed from should be reversed, and a new trial granted, with costs to abide the event.