President of the State Bank v. Locke

15 N.C. 529
CourtSupreme Court of North Carolina
DecidedJune 5, 1834
StatusPublished
Cited by1 cases

This text of 15 N.C. 529 (President of the State Bank v. Locke) is published on Counsel Stack Legal Research, covering Supreme Court of North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
President of the State Bank v. Locke, 15 N.C. 529 (N.C. 1834).

Opinion

Rueein, Chief-Justice,

after stating the case as above, proceeded: — Upon the trial, several points were made by the defendants, on which his Honor gave opinions, in which it is insisted there was error,to correct which, is the object of the present appeal.

There is no' dispute about the receipt of the money by Boche from Stephens, the Cashier of the Bank of Newborn, nor that it was his duty to enter it as a deposit to the credit of Stephens as Cashier. . But the court having rejected evidence, offered by the plaintiffs, of the recent of payment of the money by the State Bank to the Newbern Bank, it was., insisted, that, without proof of such payment, the plaintiffs could not recover in this action.

The defendants also prayed the court to pronounce . the bond void, either wholly or in part, as not being au-thorised by the charter, but contrary thereto. On both points, the decision was against the defendants. .

On the first, nothing scarcely need be added to what observed as to the nature of Bank deposites in the case of the' State Bank v. Armstrong, (ante page 519.) The money', when received by the Cash- , , . • , , J . ,. „ ier Loche, _became incorporated into the mass of proper-jy which belonged to the plaintiffs, and which by the *534 plaintiffs was confided to bis. care. It was not, in his bands, the money of the Bank of Newborn, nor his own; but was the money of the State Bank, for which, that institution,.ahd not Locke, teas responsible to the depositor. . "When he loft the-office, he was bound to leave there all . that had been deposited there,to enable his employers to meet the engagement assumed through him. It is therefore immaterial whether the depositor has called,or shall ever call upon the plaintiffs for the money. The right of 'the.plaintiffs depends upon its having been paid into, the Bank,and upon-Xoc/ce’s-h'aving withdrawn it for purposes not-thoso of the Bank. The argument, cannot be ad- ' mitted for a moment, that when a Cashier withdraws-from á Bank, he lms a right to carry, with him all 'money in deposito and keep it until the Bank shall have -satisfied the depositors'. .With what are their demands to .be satisfied, when the Cashier has the funds ?

The second objection arises under the general issue and is founded on the sixth fundamental article of the ninth section of the Bank charter.' The words óf it are: “Every Cashier, before he .enters upon, the duties .of his. •Tbffice; shall be-required to give bond with two or more ■ “ sureties to the satisfaction of the directors, in a sum not less than $10,000, with condition for his good beba-“viourN ..'The. terms of .the bond' on which this-snit has been brought have been already mentioned. It is insisted, that a corporation is bound to act in strict conformity to its charter, and that acts and contracts not authorised b.y it arc void, or at all events,' those are which do not. conform to the charter, in.those cases in which the charter does prescribe particularly the form-; or subject matter of.the contract; and .that.here the second provision for settling and paying over the monies, is an addition to that mentioned in -the charter, and a- . voids the wliole-bond, or at least, that the matter added is-void.. " .

. The objection supposes that the bond taken, varies sitbstantially in the condition from that mentioned in' the act, for it is not supposed to be argued that it must be confined to its very words. That'would make it al *535 together inoperative, since the act does not say in so ma-11 y w°rds, in what respects, or as to what duties the Cashier shall be oí good behaviour. The variance is suPPosed t° consist in the difference between “good be-haviour” and “accounting, settling and paying over all monies” — the former only referring to integrity, and the latter including capacity, diligence, and ability to pay. The authority on which this distinction is taken, is the case of the Union Bank v. Clossey, (10 John. 271,) in which that doctrine is laid down, and it is held, that overpaying a check by mistake was not a breach of a bond “well and truly to perform the duties of the office of teller.”

The breach here, is the omission of the plain duty of entering on the books of the Bank a credit to a customer's account, by means of which omission, the Cashier was enabled to escape being charged, as between himself and the Bank, with the sum which ought so to have been credited, and also enabled to retain to his own use, until it was a long time afterwards otherwise discovered. This could not, we think, he good behaviour, in any sense of that term. If he was not obliged duly and skilfully to enter the credit according to the approved methods of book-keeping, ho was at least obliged, as a man of integrity, to enter it in some way. But to us it seems, that the construction of those words, contended for by the counsel, is not the true one. The object of the Legislature was to have the institution secured in the performance of all the acts which were incumbent on the Cashier as duties. The State took a largo interest in the Bank, and private citizens embarked their money in it, at the invitation and upon the faith of the State. It cannot be supposed that mere honesty of purpose, or rather the absence of dishonest intentions, on the part of the Cashier, was all the State meant to require, but further, skill, diligence, punctuality — for these qualities are necessary to the duties on the discharge of which the success, nay the existence of the institution essentially depended. The doctrine of the case from New-York cannot prevail over these reasons, if that doctrine were *536 such it is supposed to be. In the-' case of Minor v. the Mechanic's Bank of Alexandria, (1 Peters' Tep. 46,) it was held that the words, “well and truly execute the clu-tics of the office of Cashier,55 includes not only honesty, but skill and diligence. These words are the same as those in the bond sued on in 6ithe Union Bank v. Clossey;” which was then cited and relied on. But the doctrine of the case in New-York, is not that supposed, "as we think. The case before the Court was that of a mistake -in the Teller, and found to be really such, in the count of money. It may be true that those words do not form a guaranty against all mistakes,or imply the utmost and perfect, but only reasonable capacity and diligence; and therefore that an act which eren a careful and' very competent person may.commit, would not amount to nonperformance. But until the mistake be shewn on tiro part of the defendants, the omission to make any entry whatever, cannot he regarded as good behaviour, and the omission to account for the money in any way, cannot butbe considered as a culpable omission. So that the breaches here, appeared to be breaches of that part of the condition which does conform to the charter; as well' as of those which are more specific as to the particular duty of payment. Nor do we think these latter words import that the Cashier shall pay, at all events, all the monies that might come to his hands, so as to insure against accidents, robbery, or the like.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Morehead Banking Co. v. Tate
30 S.E. 341 (Supreme Court of North Carolina, 1898)

Cite This Page — Counsel Stack

Bluebook (online)
15 N.C. 529, Counsel Stack Legal Research, https://law.counselstack.com/opinion/president-of-the-state-bank-v-locke-nc-1834.