The Merch.S' Bank Of Macon v. The Cent. Bank Of Ga.

• Decision Date: 31 March 1846
• Docket Number: No. 64.,64.
• Citation: 1 Ga. 418
• Parties: The Merchants' Bank of Macon, plaintiff in error. vs. The Central Bank of Georgia, defendant in error.
• Court: Georgia Supreme Court

1 Ga. 418

The Merchants' Bank of Macon, plaintiff in error. vs. The Central Bank of Georgia, defendant in error.

No. 64.

Supreme Court of the State of Georgia

MARCH TERM, 1846.

This was an action, brought by the defendant in error against the plaintiff in error, in the Superior Court of the county of Ribb, upon a bill of exchange drawn by Jerry Cowles upon the Fulton Bank of New York, addressed to the cashier thereof, bearing date the 10th of January, 1842, whereby the said Cowles requested the Fulton Bank of New York to pay Scott Cray, agent, or order, ninety days after the date thereof, five thousand dollars for value received, and charge as advised.

Acceptance was waived, and the bill was endorsed by Scott Cray agent. The declaration also contained the Common money counts. The principal of Mr. Cray was not disclosed, either in the bill itself or in the endorsement. It was discounted by the Central Bank of Georgia, in renewal of a former bill for the same amount, and drawn and endorsed by the same parties. It. was afterwards presented to the Fulton Bant, of New York for payment, and was dishonored. It was alleged in the declaration, that the said Scott Cray received the said bill and endorsee the same to the Central Bank, as the agent of the Bank of Hawkinsville, the name and style of which was afterwards altered and changedby act of the Legislature of Georgia, to that of "The Merchants Bank of Macon, " and by that name and style the said corporation was declared to be subject to all the penalties and liabilities to which it was subject under the former name of "The Bank of Hawkinsville."

This cause was tried on the appeal in the court below, before Judge Floyd, at May term, 1846.

It was proven on the trial, by the books of the Bank of Hawkinsville. that said Scott Cray had been appointed agent of said bank, to transact at Macon, a legitimate business for said bank, with the power and privilege of discounting notes, and drawing and discounting bills of exchange; and that bills were sent him, from time to time, to bank upon, and for the purpose of discounting bills on Savannah, Charleston, and New York. It was proven by the testimony of the cashier of the Central Bank, A. M. Nisbet, Esq., that this bill was discounted by the Central Bank, in renewal of a former bill for the same amount, and drawn by the same parties, under the authority of the act of 1838, for the purpose of paying interest on sterling bonds of the State of Georgia, held by Messrs. Reid, Irving and Company, of London, and by the Bank of Augusta That said Scott Cray received the proceeds of the original bill in cash., and acted in the matter, as witness understood, as the agent of the Bank of Hawkinsville.

The counsel for the defendant in error then offered to read in evidence the said bill of exchange, to which the counsel for the plaintiff in error objected, on the following grounds:

1st. That said bill was not evidence to bind the plaintiff in error, who was sought to be charged, for and by the act of a supposed agent, while the name of the principal nowhere appeared on said instrument.

2d. That the bill was not evidence against the plaintiff in error, because the endorsement was not signed by the president, and countersigned or attested by the cashier, as required by the 8th section of the charter of the Bank of Hawkinsville, before its funds could be bound for any contract or engagement whatever.

3d. That said Scott Cray exceeded all the powers conferred, and all the powers of a general agent, by endorsing said paper; the said paper never having been the property of the plaintiff in error, as was disclosed by the proof.

4th. That the,, bill was an illegal paper; both the defendant in error in receiving, and said Scott Cray (if he was agent) in passing it, violated the act of 1837called the post-note law.

5th. That the said bill was not evidence, until or before demand and notice to the plaintiff in error had been proved. All of which objections were overruled by the court below, and the counsel permitted to read said bill in evidence to the jury.

The said Scott Cray was then introduced as a witness in behalf of the plaintiff in error, and it was proven by him that he was directed by Mr. John Rawls, president of the Bank of Hawkinsville, to procure to be disco-anted by the Central Bank, a draft for $8,500, for the use of the Bank of Hawkinsville, drawn by John Rawls upon Charles Hartridge, Savannah, and endorsed by II. II. Tarver. The Central Bank not wanting funds in Savannah, refused to discount it. Mr. Jerry Cowles was in Milleageville; and in a conversation with him, stated to witness, that he (Cowles,) had Hull and Smith\'s New York letter of credit, authorizing him to draw for a large amount, and proposed to witness that he (Cowles) would draw on them for $10,000 for the use of the bank, and the witness should endorse his (Cowles\') draft tor $3,000 for his own use, to pay his debt to the Hawkinsville Hank, and for him to draw the balanced Witness informed Dr. Fort, president of the Central Bank, that he did not feel authorized—that he had never endorsed such a draft before out of bank. The two drafts were discounted, and the proceeds were paid to witness by the cashier of the Central Bank. Witness returned with the money to the agency of the Hank of Hawkinsville in Macon, where Mr. Rawls was awaiting his return, and informed him what had been done, and that he had the money, and if he (Mr. Hawls) did not approve of it, the witness would return the money to the Central Bank, and take up the draft. Witness testified that he would have done so, as he was determined to run no risk; and it was remarked that Mr. Cowles owed the bank two-thirds of the amount of-said draft, which was a bad debt. Mr. Hawls. as president of the bank, approved the act of witness—the money was paid into bank, passed to Mr. Cowles\' credit, and used for the redemption of the notes of the bank. A few days or weeks afterwards Mr. Cowles had a settlement with the bank, and his note for about two-thirds of the net proceeds of the $5,000 draft was satisfied, and the balance was paid to him.

The counsel for the defendant in error then introduced, and was allowed to rend in evidence, the testimony of the notary public of New York, taken by commission, testifying that be protested the bill sued on, and gave due notice. No protest was produced. To Which testimony of the notary public the counsel for the plaintiff in error demurred, on the ground that the bill sued on being a foreign hill, a protest was necessary; and that the original protest must be produced or accounted for. These points wore also overruled by the court. To which the plaintiffs in error excepted.

John Rutherford, for the plaintiff in error, maintained,

1st. That the court erred in admitting the bill of exchange in evidence, because the name of the principal (the Merchants' Hank of Macon) nowhere appeared on the paper; and cited 10 Wend. Hep. 271; Hayley on Bills, 74. 69 Chitty on Hills. (8th ed.,).17. 254; also. 10 Mass. H. 44-6; 11 ib. 29; also. Story on Hills, 91: Story on Agency, 147, 155, 275-8; Bayley on Hills. 69-71; also. 2 Kent Com., sec. 41, page 630-1-4; Mass. Hep. 505; 13 Johns. H. 307; 2 Stra. 955; Com. Dig. att, (c. 14, 15,) and notes.

2d. The court erred in admitting the paper', because it was not signed by the president and cashier as required by the charter—Prin. Dig. 108: 2 Crunch R. 150, 100-7: 12 Wheat. 64-9; 13 Peters, 587; 5 Hill's N. Y. R. 1G, 20; Angell and Amos on Corp. 242. 166, 212, 107, 243: 12 Serg. and Rawle. 25ft: also. 17 Mass. Rep. 26; 4 Hill's N. Y. Rep. 447; 2 Kent. Com. 465; 2 Stra. 955-6; Angel! and Ames on Corp. 180.

3d. Scott. Cray exceeded all powers of a general agent, and Mr. Rawls could not sanction, so as to bind the bank: the evidence showing that the bank did not receive the benefit of the money, so as to be chargeableon the money count.—Chltty on Bills, (8th ed.,) 34; 1 Taunt. 347; Chitty on Bills, (8th ed„) 254; 1 East B. 422; Angell and Ames, 177-.S; 17 Mass. R. 505; 10 ib. 307; Angell and Ames, 240; 6 Pet. 51; 8 lb. 10; 1 Greenl. Rep. 81; 17 Mass. R. 1; 14 ib. 58; 17 ib. 479; 18 ib. 215. The bill is not evidence under the money count.-Story on Rills, 515; 1 Com. R. 409.

4th. The court erred in admitting the bill, because it was passed by S. Cray, and received by the Central Bank, in violation of the "postnote" law of 1837.—2 Hill's N. Y. R. 241: 7 Wend. 31: 3 ib. 583; 2 Coil. R. 678; Angell and Ames on Corp. 198; 19 Johns. R. 1; 8 Cowen, 20; 15 Wend. 412; 21 ib, 24.

The genera] rules of illegal contracts.—Chitty on Con., new ed., 637, 695, 419: 10 Bing. 107; 5 John. R. 320; 2 Kent. Com. 364; 13 Ves. 581; Dudley's Ceo. It. 250: 3 T. R. 260.

5th. And lastly, the court erred in not withdrawing from the jury the testimony of the New York notary, proving demand, protest and notice: because nothing but the original protest can prove a protest on a foreign bill. As to its being a foreign bill, see Bay ley on Bills, 21, and notes. Protest necessary.—Chitty on Bills. (8th ed.,) 489, 509; 4 Harr. and Johns. 54; 2 T. R. 713; 5 lb. 239: 9 Porter Ala. R. 181.

Charles J. McDonald, for the defendant in error.

It is necessary, in reviewing the decision of the court below, which is brought up by the bill of exceptions, to look into the state of the pleadings.

There are two counts in the declaration-one a special, the other a common count. In the special count, there is no averment of a notice to the endorser, though there is an averment of a demand upon the drawer, and his refusal to pay.

The first exception is founded on the decision of the court below, in overruling the objection, that the name of the principle nowhere appears on the instrument.

That the paper was payable to Scott Cray, as agent, appears on its face, and his endorsement is as agent. It appears, then, from the bill of exchange itself, that it was not his individual business, and that he had a a...