Pease v. Francis
| Citation | 55 A. 686,25 R.I. 226 |
| Parties | PEASE v. FRANCIS. |
| Decision Date | 29 May 1903 |
| Court | United States State Supreme Court of Rhode Island |
Action by Leroy B. Pease against E. Charles Francis. Judgment for plaintiff, and defendant petitions for a new trial. Granted.
Argued before STINESS, C. J., and TILLINGHAST and DOUGLAS, JJ.
Barney & Lee, for plaintiff.
Edwards & Angell, for defendant.
The evidence shows that in August, 1803, the plaintiff owned real estate in Woonsocket, which he sold for $5,000 over incumbrances. At that time he owed to the Woonsocket National Bank $5,000 on a note of April 4, .1892, secured by pledge of 150 shares of stock of Woonsocket Reporter Company. He also owed a note for $1,000, dated April 4, 1893, with pledge of 150 shares of said stock; a note for $700, dated June 27, 1893, with the same pledge; a note for $375, one for $450, and a note for $725, these last three notes not being secured by an express pledge. On the sale of the real estate the plaintiff claims that he made an agreement with the defendant, the acting cashier of the bank, that the proceeds of the sale should go to pay the $5,000 note, thereby releasing the shares held as collateral for it. This action is based upon a breach of that agreement by the defendant, in applying the payment to the smaller notes, leaving only a balance of $1,350 to be applied to the $5,000 note, whereby the stock was still held in pledge, and loss occurred from inability to sell the stock so pledged. The evidence was contradictory; the plaintiff testifying to the contract as stated, and the defendant denying it.
Assuming, as we must from the verdict, that the jury found that such a contract was made, the question arises whether the defendant is liable for the breach of it. We think it is clear that he is not liable. The defendant could not make an agreement affecting the collateral or the notes except as an officer of the bank. If he made the contract in question in his official capacity as cashier, it was the contract of the bank; and the remedy is against the bank, and not against him personally. The plaintiff must have understood that he was dealing with the bank, for he knew that the bank held the note and collateral, and the bank alone could release them. He was dealing with the bank through its authorized agent, the cashier.
The plaintiff claims that the defendant had been his adviser. Still the plaintiff must have known that the defendant could make no contract touching the interest and affairs of the bank except in his official capacity. If the trifling matters of collecting rebate of Interest and insurance were outside of his duties as cashier, there is no claim of breach of duty in this respect, but the charge is for failure to apply the $5,000 to the payment of the note for that sum. In this matter he would only act as the agent of the bank. If, on the other hand, as the plaintiff says, the defendant "volunteered" to make the arrangement, he was to that extent the plaintiff's agent, and not responsible if the bank would not do what the plaintiff wanted. There is no evidence of any consideration running to the defendant to support the contract with him. The only consideration shown is the payment to the bank.,
In either view the plaintiff shows no cause of action against the defendant. While it may be admitted, as plaintiff claims, that an agent may make himself personally liable, we do not think that this is a controlling question in the case, because the plaintiff ratified and adopted what was done by the defendant by giving the note of April 3, 1894, for $3,000. At that time he knew how the money had been applied, and knew that the stock was still held by the bank as a pledge, and testified that he supposed the defendant was acting for the bank. He accepted the benefit of the situation by an extension of time by renewal notes, and he cannot ratify a contract and then sue for its breach. Before signing the note of April 3, 1894, the plaintiff had received a full statement of the application of the $5,000, showing a payment on that note of $1,400—$1,350...
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