Louisiana State Bank v. Senecal

Rost, J., delivered the opinion of the court. This case has been twice before this court, and the facts of it are fully stated in the printed report of the last decision, 11 Louisiana Reports, 29. It was remanded to enable the defendant to prove that the note upon which he is sued had been discounted by the plaintiffs, with the knowledge of certain stipulations in a notarial act, under which said note was not to be negotiated until certain general mortgages, existing upon the property for which it had been given, were raised.- The Parish Court gave judgment against him, and he appealed. 1 It was proved on the trial, that the note was given in payment of land sold by Mrs. Peychaud, and was delivered to her husband, Anatole Pej'ohaud, who had signed with her the deed of sale. That-deed contains a clause that the note upon which this action is brought shall not be negotiated, nor the payment thereof exacted, until the property sold shall be fully released from all liabilities resulting, or to result, from certain general mortgages then existing upon it. Peychaud, being at that time a director of the Louisiana State Bank, offered the note for discount, before the mortgages were raised; was present at the board when it was acted upon ; took no part in the discount of it, and gave no information to the board in relation to the restrictions contained in the act of sale. The note was discounted for his benefit, and the defendant now contends that he was the agent of the bank, and that the knowledge of the agent being the knowledge of the principal, the plaintiffs are to be considered as having received notice, and ought not to recover. If the knowledge of those facts had been brought home to the president or cashier, we would unhesitatingly say that the plaintiffs were bound by it, they being the executive officers of the bank, upon whom all notices and process may be served. But directors are not officers of the bank, in the proper sense of the word, nor have they individually any power or control in the management of its concerns : they act collectively, and at stated times, and have otherwise no more to do with the general management of [528] the institution than the other stockholders. The director, in this instance, had a direct interest in suppressing the information he possessed ; and it would be extending constructive notices beyond all reasonable bounds to say that the plaintiffs must be held cognizant of facts which are proved to have been intentionally concealed from them, by a person who, individually, was neither their officer nor their agent. It is, therefore, ordered, adjudged and decreed, that the judgment of the Parish Court be affirmed, with costs.