Branch of the Bank v. Knox & Co.

GOLDTHWAITE, J. — 1. We will not stop, at this time, to examine how far it is consistent with the rules of law, to allow a corporation to discharge itself from the consequences of a breach of a contract lawful in itself, and in no wise prohibited, under the allegation of a want of capacity to enter into the engagement. This is a most important question; but it does not necessarily arise in this case, if the contract disclosed in the declaration is warranted by the charter of the Bank, and this we think will be apparent, on a very brief examination. The Bank is specially authorized to receive moneys on deposit, and pay the same out to order, free of expense. It is notorious, that the deposits in a Bank are, often times, the foundation of its issues in bills, and are, perhaps, as legitimately so, as any other that exists, except a specie capital. It is equally notorious, and was so when this charter was created, that all similar institutions in this, and in other countries, undertake the collection of all kinds of negotiable commercial securities, as a means to increase their deposits, and to afford facilities for exchange. It is not then unreasonable to conclude, that when the Bank was authorized to receive money on deposit, the legislature contemplated that it should be allowed to use the necessary means to effect the end. We cannot doubt that the Bank would be authorized to receive a deposit in Mobile, or elsewhere, if permitted by the local law; and it cannot be said that any substantial difference exists between the receiving of a deposit at that place and collecting a bill payable there, when, after collection, the money, for the time at least, is a deposit. We therefore incline to believe that an authority to collect all kinds of negotiable commercial securities may be deduced from the power to receive money on deposit, when no other act is necessary to be performed, than to forward the securities to their place of payment, and demand and receive payment. 2. The Bank is likewise authorized to deal in bills of ex [151] change, and discount notes,made negotiable and payable at the Bank, ■with two or more good and sufficient securities. It has been argued, that the restriction implied in this clause, extends, as well to bills of exchange as to promissory notes. It is evident that this idea cannot bo supported, because a bill of exchange in any other place than Montgomery could not be made payable at the Bank; and it would be absurd to suppose that the framers of the charier contemplated only the purchase of bills payable at that place. The restriction, if one is to be implied, certainly extends no further than to promissory notes. It will be seen, that the authority given is not restricted to the buying or selling of bills of exchange. The Bank is authorized to deal in bills, &c. This means “to act between two persons;” “to intervene;” “to have to do with.” This power necessarily extends to all transactions with bills of exchange, which aro in themselves lawful and considered by the Bank as expedient to enable it to transact its business or increase its profits. It might and frequently would be very important for a Bank to collect the same bills which it would be hazardous to purchase, either from the risks attending the course of trade, or because the solvency of the parties might be questionable. To receive them thus, would be important, whenever it became necessary to import specie, or to provide a fund at a distant place. These illustrations we consider sufficient to show that the dealing in bills, is not necessarily a purchase, but that it also includes the taking of them for collection. 3. Having shown that the Bank is authorized to deal in bills of exchange, for the purpose of collecting them, it follows as a matter of course, that the manner of this collection is the lawful subject of contract between the Bank and the owner of the bills, and that it is responsible for a breach of its engagements in matters of this kind, as in all other cases in which it is empowered to act; and if in the usual course of business it has undertaken to collect a bill, and has omitted to present it at the proper time and place, whereb3 a loss is sustained by the owner, the Bank is-liable to the extent of the loss. [152] 4. The Bank certainly did not acquire a property in the bill by its omission to make the necessary demand for payment. It belonged to Knox & Co. in precisely the same manner after the negligent omission, as it did before. It might be, that they could enforce their remedy against some party to the bill; and in that event, they might not wish to proceed against the Bank. If they had even pursued a remedy and without success, it would be most unreasonable to consider this, pursuit as a waiver of the right of action against the Bank for its negligence. Knox & Co. being the owners of the bill, were entitled to its possession, nor did the delivery of it to them, in any manner destroy their claim against the Bank. If the money was collected, or could have been collected, by the use of proper diligence, from any party to the bill, the injury would be little if any: if a part only could be collected, the Bank was chargeable only for the residue. If the parties were subsequently discharged by Knox & Co. or if the amount of the bill had been lost subsequently to the negligent omission of the Bank, by their improper conduct, this would be matter defence to show that the injury had not been caused by the Bank. And even after judgment against the Bank and a satisfaction, it could compel Knox & Co. either to transfer the bill, or coerce the parties yet liable on it (if they should hereafter become solvent) for the benefit of the Bank. We therefore cannot perceive how the receipt of the bill by its owners, could, under any circumstances, operate as a waiver of their right of action. Be this as it may, there is no ground for pretence that this action was waived, for it was commenced, and nearly at the trial term the bill was taken from the Bank to be used as evidence in this cause. There is no error in the record, and the judgment is affirmed.