Corinth Bank & Trust Co. v. Cochran

• Decision Date: 21 March 1929
• Docket Number: 6 Div. 301.
• Parties: CORINTH BANK & TRUST CO. v. COCHRAN.
• Court: Alabama Supreme Court

121 So. 66

219 Ala. 81

CORINTH BANK & TRUST CO. v. COCHRAN.

6 Div. 301.

Supreme Court of Alabama

March 21, 1929

Appeal from Circuit Court, Marion County; Ernest Lacy, Judge.

Action by the Corinth Bank & Trust Company against J. M. Cochran. Judgment for defendant, and plaintiff appeals. Transferred from Court of Appeals under Code 1923, § 7326. Affirmed.

Williams & Chenault, of Russellville, for appellant.

Ernest B. Fite and K. V. Fite, both of Hamilton, for appellee.

BOULDIN J.

The holder of collaterals to secure a loan, whether a banker or other lender, has the unquestioned power to select agents to collect and invest them with such authority as he shall determine. He may authorize the collection of collaterals still in possession of the principal. However unbusinesslike it may be, he may confer on his debtor and the indorser of such collaterals full power to make collections without possession thereof. No writing is essential to the creation of such agency. It may be proven in the same way as other issues of fact; the evidence being weighed in the light of all the circumstances and under recognized rules for passing upon the weight of evidence. While agency cannot be shown by the declarations of an alleged agent, he is a competent witness on that issue as other persons. Corinth Bank &amp Trust Co. v. Wallace (Ala. App.) 117 So. 618; Caton v. Andalusia National Bank, 216 Ala. 415, 114 So. 75; Thompson v. Ware, 200 Ala. 624, 76 So. 982; Lawler v. Corinth Bank & Trust Co. (Ala. Sup.) 118 So. 666; Roberts & Sons v. Williams, 198 Ala. 290 73 So. 502.

The cashier of a bank is its chief executive officer in the conduct of the ordinary business of the bank; this includes the collection of loans, naming and prescribing powers of collecting agents, and the handling of collaterals for loans. In such matters he is the alter ego of the bank; his powers being similar to those of the general manager of a corporation in dealing with the public. First National Bank of Birmingham v. First National Bank of Newport, 116 Ala. 520, 22 So. 976; Montgomery Bank & Trust Co. v Walker, 181 Ala. 368, 61 So. 951; Navco Hardwood Co. v. Bass, 214 Ala. 553, 557, 108 So. 452; 7 C.J. p. 549, § 160, and notes.

These are common-law rules, not peculiar to the statutes of Alabama; they are presumed to obtain, in the absence of proof to the contrary, in other states, like Mississippi, of common-law origin. We need not inquire...