Bank of Commerce v. Bright

• Citation: 77 F. 949
• Decision Date: 23 December 1896
• Docket Number: 22.
• Parties: BANK OF COMMERCE v. BRIGHT.
• Court: United States Courts of Appeals. United States Court of Appeals (3rd Circuit)

77 F. 949

BANK OF COMMERCE v. BRIGHT.

No. 22.

United States Court of Appeals, Third Circuit.

December 23, 1896

George Clinton and Richard C. Dale, for plaintiff in error.

John G Johnson, for defendant in error.

Before ACHESON, Circuit Judge, and BUTLER and WALES, District Judges.

ACHESON Circuit Judge.

The agreement set up by the defendant in the pleadings was, in substance, this: That in consideration of the defendant's surrender of his chattel mortgage upon property of the Genesee Oil Works, Limited, given for his indemnification against loss by reason of his liability upon the paper of said Genesee Company as accommodation indorser or otherwise the plaintiff bank, from time to time during the period of one year, would renew the paper of said company held by it and that the state of affairs between the bank and said company should remain unchanged during that year, and the business of said company go on as theretofore; and that any money the company could pay during the year should be applied to the reduction of the paper upon which the defendant was accommodation indorser. A careful reading of this record has satisfied us that there was abundant evidence to show the existence of such a contract. It is hard to believe that the negotiations looking to such a contract, which undoubtedly took place between these parties, came to naught in view of their subsequent acts. Certain it is that the defendant delivered up his chattel mortgage, and that Mr. Warren, the cashier of the plaintiff bank, upon the mortgage being brought to the bank, destroyed it by tearing off the signature. Aside from the alleged contract, we do not find in all the evidence any satisfactory explanation of the surrender and cancellation of the defendant's mortgage security. Clearly, the question of the existence of the alleged contract was for the determination of the jury under all the evidence, direct and circumstantial.

The question of the authority of the cashier of the bank, Mr Warren, to bind the bank by the alleged contract was not distinctly presented to the court below by any of the plaintiff's points, nor is it specifically raised by any of the assignments of error. We think that there was sufficient evidence of Mr. Warren's authority to act for the bank in this transaction. He had not only all the powers incident to the office of cashier, but at that time he exercised additional discretionary power by reason of the absence abroad of Mr. Smith, the bank's president. Mr. Smith testifies that in his absence Mr. Warren was running the bank under the advice of the executive committee, and that in a general way he had authority to act for the bank as he deemed best for its interests. The bank was the holder of a very large amount of the paper of the Genesee Company, and was deeply interested in keeping the concern going. Two other banks acting in concert with Mr. Warren came into the same general arrangement. At the preliminary meetings of the parties concerned which led up to the contract the counsel for the bank was present with Mr. Warren. Moreover, the plaintiff bank received and has enjoyed the benefit of the surrender of the defendant's mortgage security. It never offered restoration to the defendant, nor gave him an opportunity to put himself in his previous condition. Having thus retained the fruits of the contract made by its cashier in its behalf, the bank may well be presumed to have sanctioned it. Bronson v. Chappell, 12 Wall. 681; Kelsey v. Bank, 69 Pa.St. 426.

Error is assigned to the following portion of the charge of the court:

'If, on the other hand, you should be satisfied that the defendant's contention on this point is sustained by the evidence, then you would encounter no difficulty, I think, in arriving at the conclusion that the contract was broken by the plaintiff, for, if there was in fact such a contract (and I intimate no opinion of my own) as is asserted by the defendant, I do not doubt that the action of the bank in taking its second mortgage, and in recording both its mortgages, constituted a breach of that contract.'

This language is not, in terms, a binding instruction upon the question of the breach of contract; and much less can it be so regarded when read, as it must be, in connection with the rest of the charge. The learned judge, in discussing another point, had already said to the jury, 'But my impression as to this or any other matter of fact is in no sense binding upon you;' and afterwards, towards the close of the charge, he told the jury, 'You, of course, perceive that I mean to leave all matters of fact wholly to you. ' The judge also said, 'If you should determine the question as to the existence and breach of contract adversely to Mr Bright, you need proceed no further. ' Then again the judge charged, 'Accordingly I have said that if you find the contract and...