Attleborough National Bank v. Rogers

Lord, J. The question, which has been so ably and exhaustively argued by the counsel on each side, to wit, whether it is within the authority of a national bank to purchase a promissory note, in contradistinction to a discounting of it, is one which cannot properly arise in this case. The action is for money had and received by the defendants to the plaintiff’s use. The answer is a denial that the defendants received the money to the plaintiff’s use. It appears from the facts that the defendants received money of the plaintiff, and the real question in the case is, to whose use did they receive it. They say they received it to their own use; that they received it in payment of certain promissory notes sold and delivered by them to the plaintiff. If this be so, it is immaterial whether the plaintiff had the right to buy or not. The defendants had a right to dispose of the notes to whomsoever they chose, and if the plaintiff bought them and paid for them, it could not rescind the contract thus fully performed and executed upon the ground that it was a purchase which it had no authority to make, and recover back the money paid upon it. A corporation, acting without authority, is not in the position with the privileges of an infant to avoid an improvident contract, but in the position and subject to the liabilities and disabilities of a wrongdoer, if it exceeds its authority. It sannot complete a bargain with a third party, which such third party has a right to make, and then rescind the contract, wholly executed, if such contract proves to be an improvident one, and recover back the consideration: [344] An embarrassment arises from the fact that by the terms of the report it is agreed that if the court should be of opinion that the bank had no authority to buy the notes in question, and the evidence offered by the defendants was rightly rejected, a verdict should be entered for the plaintiff. We think it entirely clear that there is omitted, by accident, from the report, the most important element, to wit, whether, upon the facts as reported, the plaintiff can avail itself of the want of authority to make the contract alleged by the defendants. The real controversy between these parties is upon a question of fact. Was there an executed contract between them, of which the transferring of the notes upon the one side, and the payment of the money upon the other, were the respective considerations ? If so, the transaction was complete, and the plaintiff cannot rescind and recover back the money paid. If, however, there was no contract between the parties ; if the title to the notes had not passed to the plaintiff according to the agreement and understanding between the parties ; that is, if the parties to the transaction did not understand the contract to have been made, both parties understanding that it remained wholly at the option of the plaintiff whether to purchase or not, then, whether the contract was one which the plaintiff had authority to make or not, it had not in fact made it; and if it is able to prove that the money went into the defendants’ hands upon no consideration and was to be held to the plaintiff’s use, unless the plaintiff should determine to consummate the contract, it will be entitled to recover. In this view, it is necessary that the case Stand for trial.