Menard v. Davidson

3 La. Ann. 480

• Court: Supreme Court of Louisiana
• Decided: May 15, 1848
• Status: Published

Opinion

The judgment of the court was pronounced by

Eustis, C. .1.

Davidson was the cashier of the branch of the Carrollton Bank at Baton Rouge, and McNeill was his surety. The breach in the condition of the bank assigned is, the appropriation of a sum of money by Davidson to his own use, for which McNeill is sought to be made liable in this suit. There was an assignment made of the right of the bank in this claim to the plaintiff, the validity of which has not been contested. Judgment was-rendered in favor of McNeill, and the plaintiff has appealed.

Under a resolution of the directors of the branch, of the 23d of November, 1841, the cashier was authorized to draw his salary for four months in advance, on paying interest; and by a resolution of the 13th of April, 1842, he was authorized to draw his salary in advance for six months, by paying the usuaj interest; and, in case of approval by the mother-bank, should it be required; and it is added in the latter resolution, of which the cashier was the recording scz-ibe, that Mr. Davidson offered to give aznple security for said loan.

The deficit in this czise arises fronz Davidson’s having z-eceived his salary twice, once under the above resolutions in advance, and afterwards in the re. guiar monthly installments. The defence is that, the surety is not liable for the amount, it having been loaned; and that the advance of the salary to the cashier was a violation bf the conditions of the suretyship, and that he was thereby discharged.

The salary, its amount, and mode of payment, do not appear by the bond to have formed a constituent part of the contract-. - It is not mentioned. The condition is, for the faithful performance of his duties by Davidson, and that he should render a faithful account of all moneys and effects committed to his chaz-ge. and should save the bank harmless from, or on account of, any negligence or misconduct. To this point no authority has been adduced, and We cannot say that the increase or diminution of the salary of an officer, oran advance or delay in the payment of it, releases his sureties. Nozie of these cases can be distinguished in pz-inciple ; and if in one the surety is released by the act, he would be equally so in the others.

It is clear that a surety is not bound for loans, or ordinazy debts, contracted by the cashier with the bank, and for which he becomes its debtor in the coui-se of business. But We can find no gz-ounds whatever for treating the defalcation under considez-atiou, as a debt of that character. The term loan used, as it stands in the resolution, does not control the Whole impoz-t cz-eated by the other terms employed. The cashier was authorized to draw his salary for six months in advance, in consequence of his having sustained loss by a fire, he to pay the usual interest. The advance was evidently to be extinguished by his salary as it was earned, and it was in that sense that the pretentions afterwads set up by the cashier, to consider the advance as an ordinary loan, received the rebuke of the directors of fhe znother-bank. Your lettez-,” says file cashier of the institution, “ of the 14th instant, has been submitted to our direction, o.nd more than surprize has been created, with the construction you would place on the resolutions of the board of your branch relative to the advance of salary-allowed. Neither the letter nor spirit of those resolutions justify your position; the very fact of your not having credited the interest is further evidence, &c.” And what explanation is given of this omission to cz-edit the interest? And if the transaction was a loan merely, which made the cashier an ordinary debtor to the bank, with the privilege of renewing under the usual curtailment of ten per cent, as contended for by him in his letter, which produced the reply just given, how does it happen, that he who was bound faithfully to enter all transactions of the bank uuder their appropriate head and in their proper place, never entered this in the loan or discount line? It was charged to suspense account, indicating thereby that it was in suspense, and the very reverse of what he pretended it was. No entry is made of either curtailment or interest, according to the conditions of the pretended loan; but he regularly took the whole amount of his salary at the expiration of each month, and charged it to contingent expenses without any deduction. JRes ipsa loquitur. We think there is nothing in this defence, and that the judgment appealed from ought to be set aside, notwithstanding the verdict of the jury in the court below.

It is, therefore, ordered, that the judgment appealed from be reversed, and that the plaintiff recover from the defendant, S. D• McNeill, the sum of §1,559 52, with interst from judicial demand, aud costs in both courts.