Bank of Monticello v. Dooly

WiNsnow, J. The court was plainly right in directing a verdict for the plaintiff. The note was a negotiable note. When the plaintiff introduced it in evidence, it had made prima facie proof that it was given for value, and that every person whose signature appeared thereon had signed for value. Negotiable Instruments Law (Laws of 1899, ch. 356, sec. 1615 — 50). The defendant attempted to meet the case so made by showing that Dooly did not sign the note until after it had been purchased by the bank, and then that he received no consideration for his signature. But in attempting to make this proof, he showed affirmatively that the note had never been purchased or discounted by the bank until after he put his signature thereon. The note was signed by Sears, the cashier.' It is not shown that Sears had authority from the board of directors of the bank to discount notes. Even had he possessed such authority as to the notes of third persons, he could not bind his bank by discounting his own note. General authority to a bank officer to make discounts does not author 594 ize Mm to bind tbe bank by discounting notes to wbicb be is a party. Tbis limitation is absolutely necessary for tbe protection of tbe bank and tbe important interests wbicb are intrusted to it by tbe business community. Rhodes v. Webb, 24 Minn. 292; Bolles, Bank Officers, §§ 161, 476, 494; 1 Morse, Banks, § 173. Wben tbe directors of tbe bank examined its loans and discounts on tbe 18tb of April, 1901, they found among tbe notes wbicb tbe casbier turned over as casb or collateral tbe note in question. Tbis is certainly prima facie proof that tbe casbier bad advanced tbe bank’s money upon tbe note. There is no proof to tbe contrary in tbe case, either received or offered; hence it must be considered as a fact. Tbis being tbe fact, and it being the law that tbe casbier could not bind tbe bank by discounting bis own note, it necessarily results that the bank bad not bought tbe note prior to the directors’ meeting, and that wben tbe directors met on tbe 18 th of April they could refuse to receive tbe note altogether, or they could require additional signatures before receiving it; and any one who signed for tbe purpose of'meeting such a requirement would be bound, upon tbe plainest principles, and it would be entirely unnecessary for any new consideration to proceed from tbe bank to such signer. His signature would be a part of tbe original transaction, and one of tbe conditions upon wbicb, only, tbe bank consented to purchase tbe note at all. It appears without dispute that this was just what occurred in tbe case before us. Tbe bank directors, finding tbe note among tbe bank’s discounted notes for wbicb money bad been advanced, refused to accept it unless indorsed by Dooly, and Dooly indorsed it. Tbe original consideration advanced by tbe bank attached to tbe transaction, and it is immaterial that no money passed directly to Dooly. Hence, irrespective of all questions of evidence, the judgment must be affirmed. Under tbe admitted facts, tbe judgment was right, and none of tbe evidence offered could affect tbe case, bad it been received. By the Gowrt. — Judgment affirmed.