Exeter Bank v. Rogers

7 N.H. 21

Opinion

Richardson, C. J.

drew up the opinion of the court.

Footnotes

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The original act incorporating this bank declares, that the directors shall have power to appoint a cashier ; but no time is prescribed for his holding the office. He is appointed by the directors, holds his office at their pleasure, and may be removed whenever they see fit to remove him.

The record of the appointment of Rogers fixes no period for his holding the office. It simply states the fact that lie is appointed cashier.

The recital in the condition of the bond is simply that Rogers has been appointed by the directors cashier, and the condition is only that he shall faithfully discharge the duties of the office, and account for all money and other property in his keeping.

He continued in office under the appointment mentioned in the condition of the bond, from 1809 until 1830 ; and the plain letter of the condition is that he shall faithfully discharge the duties of the office so long as he shall hold it under that appointment.

Any delinquency on the part of Rogers while he continued in office under that appointment, is within the broad terms of the condition ; and in order to entitle the defendants to judgment in their favor, it is incumbent on them to show us some reasonable ground on which we can hold that the delinquencies which are admitted to exist in this case are not within the true intent and meaning of that condition.

It is contended on the part of the defendants, in the first place, that as the corporation was by its charter limited to combine only twenty years from the 1st January. 1S04. when the appointment of Rogers was made, the condition ought not to be construed to embrace any delinquency which happened after the expiration of that time ; and as no delinquency is found to have happened in this case within the twenty years, the defendants are not liable on this bond.

But on what ground are we to hold that the condition was intended to be limited by the time mentioned in the charter ? The condition itself is silent on that subject. It is in the most general terms.

Rogers was appointed to hold the office during the pleasure of the directors. It was known to Rogers and his sureties that he was to continue as long as the directors chose to retain him, and he chose to stay. The condition must be presumed to have been intended to render them answerable so long as he should remain. The duration of the office depended on the will of the directors and of Rogers. They might remove him at pleasure, and he might resign when he chose. The charter might be surrendered, or forfeited, and the office of cashier cease. The duration of the charter might be prolonged by an act of the legislature. All this must be presumed to have been well understood by the obligors in this bond. What is the probability that the parties to this bond thought of the time when the charter was to expire when the bond was executed ? Or if the surety had thought of it, what is the probability that he would have considered it of any importance ?

Rogers might continue cashier during a long life, or he might cease to be cashier in a week. How long he might continue was wholly uncertain. But the condition of the bond is in general terms, — broad enough to cover all the time he might remain in office. There is no limitation in the terms of the condition. How then can we say that it was understood that the obligation was to embrace only delinquencies happening during the period fixed in the original act of incorporation ? The appointment has no reference to that period. The condition contains no allusion to it. Rogers remained cashier after that period, just as he had been before. Mr. Gilman, the surety, was a director at the time the twenty years expired, and he must be presumed not to have supposed that the bond ceased to cover the acts of the cashier, — otherwise he would have called upon Rogers for a new bond.

Indeed we see no solid reason for supposing that the bond was given with any reference to the time mentioned in the charter, any more than that it was given with a reference to the year during which the directors who appointed Rogers were to hold their office. The surety may just as well say, I had confidence in the directors who appointed Rogers, and was willing to be bound as long as their year continued, and no longer, and the bond was given with respect to that year only. The only reason why he is not to be permitted to say this,'is that the condition of the bond is not so limited. But it is just as much so limited as it is to the time mentioned in the charter.

The true rules of law to be deduced from all the cases on this subject, are these :

When the term of office is limited to a particular period, as a year, or five years, and the person appointed cannot continue in office for a longer period without a new appointment, then the official bond, if nothing appear to the contrary, is presumed to be intended to be confined to the particular term: and if the officer be re-appointed there must be a new bond.

But when an office is held at the will of those who make the appointment, and is not limited to any certain term, then the bond is presumed to be intended, if nothing appear to the contrary, to cover all the time the person appointed shall continue in office under the appointment.

Thus a sheriff is appointed in this State to hold his office during the term of five years, and cannot hold it beyond that term without a new appointment. The bond he gives does not therefore extend beyond the term for which he is appointed,

But the deputies of the sheriff hold their offices at the will of the sheriff, and their bonds may extend to any period during which they are continued in office, notwithstanding the sheriff may in the mean time be re-appointed, and be compelled to give new bonds himself.

These rules are founded in sound reason and good sense. The presumption which the law makes as to the intention of the parties to the bond is the natural presumption in both cases.

Now we are of opinion that the terms of the condition in this case are broad enough to embrace the whole term during which Rogers was cashier, and that there is nothing in the form of the appointment, the nature of the office, the words of the condition or the conduct of the parties, that gives the slightest indication of any intention in any party that the bond should be limited to the period mentioned in the original charter as the termination of the corporation.

But it is contended, that the additional act of the legislature made such changes in the corporation that the sureties ought not to be held answerable for the conduct of Rogers after that act took effect.

The most material provision in the additional act was that it prolonged the existence of the corporation for twenty years. But this furnishes no ground for discharging the surety in this case. He having in effect contracted to be answerable for Rogers generally so long as he should remain in office, the prolonged time is as fairly within the scope of his contract as any time that elapsed previously. If he intended to be answerable only for the first twenty years he should have made his contract accordingly. To hold him answerable so long as Rogers continued cashier, is to hold him answerable according to the terms of his contract.

The additional act contains further provisions, that there shall be no division of the capital stock without the consent, of the legislature, nor shall the bank have in circulation bills exceeding in amount the capital stock actually paid in, under a penalty not exceeding ,f 10,000, nor less than fj> 1000. But we see nothing in these provisions that materially varies the condition of the surety, or that affords the slightest pre-tence for holding him discharged. If the cashier had incurred all the penalties which the additional act prescribes, it would have had no more effect upon this bond than if he had incurred forfeitures to the same amount under any other law.

The surety could not have been affected by it. We are therefore of opinion that there must be in this case

Judgment for the Plaintiffs.

Parker, J. did not sit.