Anderson v. First Nat'l Bank of Grand Forks
| Decision Date | 30 April 1896 |
| Citation | 67 N.W. 821,5 N.D. 451 |
| Court | North Dakota Supreme Court |
Appeal from District Court, Grand Forks County; Templeton, J.
Action by Alexander Anderson against the First National Bank of Grand Forks. From an order directing a verdict for defendant plaintiff appeals.
Reversed.
Judgment of the District Court reversed, and a fourth trial ordered.
Phelps & Phelps, for appellant.
Burke Corbett, for respondent.
Banquo's ghost was not more persistent than is this litigation. It will not down, either in the court below or in this tribunal. Thrice has it been tried in the District Court, and it is now for the third time before us on appeal. The facts have been so fully developed in the opinions written on the two former appeals (4 N.D. 182, 59 N.W. 1029, and 5 N.D. 80, 64 N.W 114) that it is unnecessary to do more at this time than to refer to those opinions, and point out the new elements which on the third trial were introduced into the case. On this last trial, as on the previous trials, the court directed a verdict for the defendant. It is this ruling of the District Court which is challenged on this appeal. Since the case was before us last, the pleadings on both sides have been amended. The plaintiff has elected to treat the act of the defendant in assuming to sell to itself, in violation of its duty to the plaintiff as his agent, as a conversion of the notes, and has also elected to waive the tort, and sue on the theory of an implied promise on the part of the defendant to pay the value of these notes at the time of their conversion. The defendant, by its amended answer, now for the first time asserts that it was not acting as agent, did not intend to act as agent, and was not regarded by the plaintiff as being his agent in the transaction leading up to the alleged sale of the property in question. No new facts were disclosed on the trial to support this utterly untenable theory. The facts are precisely the same as they were when this case was before us the last time. See 5 N.D. 80, 64 N.W. 114. We then held on these same facts that defendant was plaintiff's agent in the selling of the notes in question. That fact, is therefore, no longer open to controversy. At all times up to the period when the defendant's answer was amended, it had conceded that it was agent, and it defended the case solely on the ground that it had accounted for and paid over to plaintiff all the net proceeds of the sale effected by it as such agent. The agency was, in effect, admitted in the original answer. It formed the corner stone of defendant's argument in this court on the first appeal, and was not questioned by defendant's counsel in brief or oral argument on the second appeal. But we do not need to rest our ruling on this point on the ground that the question is settled, or on the further ground that defendant has estopped itself by its own solemn admission from raising the point. The evidence adduced on this last trial not only utterly failed to support the defendant's theory in this regard, but, on the contrary, conclusively established the agency as a fact. As before stated, that evidence was the same as on the previous trials, and was the same evidence that was before us on the two former appeals. We might, without further discussion of this question here, refer to the opinions on those appeals as showing beyond doubt that both plaintiff and defendant understood, and had reason to understand, that defendant was acting as plaintiff's agent in the sale of the plaintiff's notes. But in view of the fact that the learned trial judge, in directing a verdict for defendant, placed his ruling on the ground that no agency had been established, we will briefly refer to the evidence on this point. It is undisputed that whatever arrangement was made between defendant and plaintiff is embodied in certain letters and telegrams which passed between them. On September 14, 1891, defendant wrote plaintiff that, if he would allow defendant a small commission, it would try and place the paper for him. This letter not being answered by plaintiff, the defendant telegraphed plaintiff as follows on October 3, 1891: "Wire us your best offer, so we can advise a party who said that he would hold his money till we heard from you." Plaintiff having telegraphed defendant that he would allow a discount of $ 500, the defendant assumed to make the sale under these instructions, and on October 7th sent him a statement, in which it charged a commission of $ 35 for selling the notes. To assert, in view of these communications by defendant to plaintiff, that it did not assume to act as agent for him, and that he did not so understood these communications, is to trifle with and pervert the plain meaning of the language diliberately employed by the defendant. The utter grotesqueness of this new theory of defendant's counsel, in view of the facts, is brought out very prominently in the amended answer. In that answer it is alleged that defendant believed, and was justified in believing, that plaintiff intended said telegram (i. e. the one offering to allow a discount of $ 500, following defendant's communications to plaintiff which have been already referred to) as an offer to sell said notes to defendant. In the next paragraph defendant avers that, acting on this belief, it wrote the letter of October 7, 1891, accompanied by the statement, as part of it, in which defendant charged the plaintiff a commission of $ 35 for making the sale. The allegation, therefore, is that, believing that plaintiff understood that defendant was acting for itself, and not for him, it nevertheless charged him a commission, on the theory that it was acting for him; and immediately reported to him the fact that it had made such charge. That defendant assumed to act as such agent for plaintiff cannot be doubted. But it is contended that a national bank cannot legally engage in the business of acting as agent for another in the sale of securities such as those which were owned by the plaintiff. But that is not the precise question before the court. It ignores the conceded fact that at the time this correspondence was had the defendant held plaintiff's note for $ 2,000, which it had discounted in the regular course of business. The seven notes in question belonging to plaintiff were also held by the bank as collateral to plaintiff's indebtedness on that note. The bank, as pledgee, could not sell these notes. It could only collect them. Certainly, in furtherance of its undoubted power to collect a debt from one whose paper it had discounted, it could, with the assent of the debtor, act as his agent in the disposition by sale of collateral held by it to secure such debt. In doing so in this case the bank was not engaged in the general business of agency. The bank merely acted as agent in the particular case under special circumstances, when the exercise of power to act as agent was merely incidental, and entirely subordinate to the exercise of the conceded power of every national bank to take all the steps which may be necessary, appropriate, or useful in the collection of its claims against others. To deny to a national bank large incidental powers in the enforcement of such claims would be seriously to hamper and cripple them, and this, too, without necessity, and in the face of general principles. There is a wide difference between a bank engaging in the business of agency when the agency is not in furtherance of the powers conferred upon the bank, and on the other hand, its acting for a debtor of the bank under his authority in the disposition of collaterals held by the bank to secure the debt, when without such authority the bank would have had no power to make such disposition. We are of opinion that under the facts of this case the defendant, in assuming to act for plaintiff in the sale of these notes with his consent, kept entirely within the limits of its power. The whole drift of authority seems to us to support this view. Shinkle v. Bank, 22 Ohio St. 516 at 516-524; Holmes v. Boyd, 90 Ind. 332; John A. Roebling Sons' Co. v. First Nat. Bank of Richmond, Va., 30 F. 744; Reynolds v. Simpson, 74 Ga. 454; Wylie v. Bank, 119 U.S. 361, 7 S.Ct. 268, 30 L.Ed. 455; McCraith v. Bank, 104 N.Y. 414, 10 N.E. 862; First Nat. Bank v. National Exch. Bank, 92 U.S. 122, 23 L.Ed. 679; 1 Morse, Banks,...
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