Bradlee v. Warren Five Cents Savings Bank

Soule, J. The vote of the board of investment of the defendant corporation to sell the notes of the Eastern Railroad Company did not authorize the treasurer so to indorse them as to impose the liability of indorser on the defendant. Such indorsement was not necessary in order to enable the corporation to divest itself of property in the notes. They could have been indorsed without recourse, a well-known method of indorsing paper so as to avoid all liability on it. The treasurer went far beyond the authority given by the vote in assuming to make the defendant undertake that the notes should be paid at maturity, and, failing that, should be paid by the defendant if duly notified of their dishonor. The power conferred by the vote is unlike that given by the comprehensive power of attorney in Bronson v. Coffin, 118 Mass. 156. Authority to indorse is not to be inferred from the nature of the treasurer’s office. The chief business of a savings bank is to receive deposits, invest them in certain classes of securities, specified in the statutes of the Commonwealth, and to pay to depositors the amount due them, either in whole or in part, as they from time to time demand. It has no authority to do a general banking business, not even to engage in the business of discounting bank paper. It is no part of the business for which it is established, to give a market value to, or obtain a market for, the negotiable paper of persons or other corporations, by guaranteeing or indorsing it. Its duty is to keep safely invested the moneys deposited with it, not to hazard those moneys by assuming responsibility for the performance of the contracts of others. It has been held that the treasurer of a savings bank has not authority, by virtue of his office, and without vote of the officers of the bank, to execute a release in the name of the bank. Dedham Institution for Savings v. Slack, 6 Cush. 408. Such authority is much nearer the powers inherent in the office than the author if" y to put the bank into the position of indorser of the notes of third parties. The provision in the by-laws that his signature shall be binding on the bank means his signature to necessary papers, and in discharge of obligations to the bank. This view of the law on this branch of the case renders it unnecessary to decide whether it is ultra vires for a savings bank to become indorser of the negotiable paper of others, and we express no opinion on that point. 110 In the second .case, the declaration contains a count for the interest due on each of the notes held by the plaintiffs, and a count for money had and received, in which they seek to recover the purchase money paid by them for the notes, on the ground that when they bought them they were falsely represented to be indorsed by the defendant. It is agreed that the notes are to be regarded as in the hands of the clerk, to be surrendered to the defendant if judgment is given for the plaintiffs on the third count. It was correctly ruled at the trial that the plaintiffs had done everything necessary to entitle them to surrender the notes and recover the price paid for them, if they were otherwise entitled to recover on this count. It is the settled law, that, if one would recover what he has paid under a contract on the ground that he was led into the contract by misrepresentation, he must return the consideration received by him, if it is of any value at all. Coolidge v. Brigham, 1 Met. 547. Estabrook v. Swett, 116 Mass. 303. Ordinarily the consideration must be returned before suit is brought. Under some circumstances, when suit is brought on an original account for goods sold, for which notes have been taken in payment under a misapprehension as to who constituted the firm who made the notes, a surrender of the notes at the trial is seasonable. Tozier v. Crafts, 123 Mass. 480. But it cannot be permitted that, in an action where the plaintiff sues the defendant as indorser on notes which he has bought, and thereby affirms the contract of purchase, he should, while insisting on that right of action, provisionally surrender the notes for the purpose of maintaining his action on the inconsistent ground that the contract of purchase is not binding on him. By suing on the notes he elects to stand by the contract which he made. I te cannot stand at the same time, and in the same action, in the attitude of repudiating the contract.