Weckler v. The First National Bank of Hagerstown. before stated, the carrying on of such a business is prohibited to these associations. Nor can we perceive it is anywise necessary to the purpose of their existence, or in any sense incidental to the business they are empowered to conduct, that they should become bond-brokers or he allowed to traffic in every species of obligations issued by the innumerable corporations, private and municipal, of the country. The more carefully they confine themselves to the legitimate business of banking as defined in this law, the more effectually will they subserve the purposes of their creation. By a strict adherence to that, they will best accommodate the commercial community, as well as protect their shareholders. Such is our construction of this statute, and it is supported by the best considered authorities and the decided preponderance of judicial opinion in other States. This eighth section is almost identical in terms (and as respects the present question completely so) with the Banking Act of New York, of 1838, ch. 260, and the Court of Appeals of that State, in Talmage v. Pell, 3 Seld. 328, held that banking associations formed under that law have authority only to carry on the business of banking in the manner and with the powers specified in the act, and have no power to purchase State stocks, to sell at a profit or as a means of raising money, except when received as security for a loan, or taken in payment of a loan or debt. In speaking of the transaction under review in that case, the court say the banking company "purchased these bonds as they might have purchased a cargo of cotton to send to market to be sold at the risk of the vendor for the highest price that could be obtained. No authority to traffic in either commodity is expressly given by the law of 1838. It is, therefore, claimed as a power incident to the business of banking. But the 18th section of the act declares that this business shall be carried on by discounting bills, notes and other evidences of debt, by loaning money on real and personal security, by buying and selling gold and silver bullion, foreign coin and bills of exchange, etc. The subjects pertaining to the business of banking are designated, and the express powers of the association are limited to them, and to such incidental powers as may be necessary to transact the business thus defined by the legislature." They then proceed to show that the claim to base the validity of the contract upon any incidental power was unfounded, and pronounce the transaction illegal, and the assignment by the company of mortgages which they held as collateral security for the purchase, void. So also in recent decisions of the courts of last resort in several of the States where this act of Congress, and especially its 8th section, has been considered, we find it construed in entire accord with the view we have taken of it. Weckler v. The First National Bank of Hagerstown. We refer to Fowler v. Scully, 72 Penn. St. 456; Shinkle v. First National Bank of Ripley, 22 Ohio St. 516; Wiley v. First National Bank of Brattleboro, 47 Vt. 546; S. C., 19 Am. Rep. 122; and First National Bank of Lyons v. Ocean National Bank, 60 N. Y. 278; S. C., 19 Am. Rep 181. In the last-mentioned case there is a very able opinion of the court by ALLEN, J., in which he says he fully concurs in the views expressed by Judge WHEELER in the Vermont case, and in reference to the case of Van Leuven v. First National Bank of Kingston, shortly reported (the opinions of the judges not being given) in 54 N. Y. 671, which has been pressed upon our attention by the appellant's counsel, he says it decided no general principle, but by a divided court it was determined "that the contract in that case, under the circumstances, was the contract of the corporation, and not the individual contract of the president." We are, therefore, clearly of opinion that this business of selling bonds on commission is not within the scope of the powers of the corporation, and the bank could not, under any circumstances, carry it on and being thus beyond its corporate powers, the defense of ultra vires is open to the appellee. 8 G. & J. 248. And it follows from this that the bank is not responsible for any false representations made by its teller to the appellant, by which she was induced to purchase the bonds in question. Hence there was no error in the court's instruction to the jury nor in rejection of the appellant's first and second prayers. But by the third and fourth counts of the declaration, and the appellant's third and fourth prayers it is sought to give another character to the transaction, and to place the right to recover upon a different ground. They present the case in this view, viz. that there was no sale and purchase of the bonds, but by the false representations of the teller the appellant was induced to receive them instead of money, in payment of the draft on New York, which she presented at the bank to be cashed or collected. It is argued that in this aspect, the transaction amounts to the same thing as if the teller had cashed the draft, by paying her over the counter in depreciated or worthless bank notes, representing them to be good. But the answer to this position is, that there is no evidence in the record to support it. The proof shows that on the 6th of Octo ber, 1871, the appellant presented at the bank a draft on New York, for $1,047, and asked Mr. Newcomer, the teller, if it was good, and if he would cash it. The teller gave her $47 in money, and a certificate of deposit for the balance to the effect that she "has deposited in this bank $1,000, payable to the order of herself on return of this certificate properly indorsed." This instrument is in the usual form of a certificate of Weckler v. The First National Bank of Hagerstown. deposit, bears date the 6th of October, 1871, and is signed by the teller for the cashier. There is a discrepancy in the testimony as to whether any thing was said at that time about investing her money in Northern Pacific boads. According to her testimony, as stated in the record, it may be inferred the alleged false representations were then made, but whether before or after she received the certificate of deposit does not clearly appear, and according to the testimony on the other side, nothing was said about these bonds until some ten or twelve days thereafter, when she returned and insisted upon investing her money. But it is immaterial when this occurred, because it is an undisputed fact that she received and accepted the certificate on that day, long before the bonds were delivered to her. The draft to the extent of $1,000 was received by the bank as money, and as such it passed to her credit, and she became the creditor of the bank for that amount as an ordinary depositor. Whatever may have been said at or before this time, it is clear beyond dispute that by this transaction the draft was, as between the bank and herself, cashed or converted into money which became hers in the coffers of the bank, to use and dispose of as she saw fit. It is further shown by undisputed testimony, that these bonds were ordered by the cashier from the Baltimore brokers, and received on the 19th of October, 1871, a few days after the order for them was sent; that they remained in the bank until some time in April following, when the appellant either in person of through an agent returned the certificate of deposit, and got the bonds, paying the interest accrued at the time of the purchase out of the January coupons on the bonds which the teller then cashed for her; that she thereafter retained the bonds, collecting the interest upon them up to July 1st, 1873, and that they were sold in the market at par and accrued interest up to the financial crisis in the fall of 1873. From these facts the law can regard the transaction in no other light than as a purchase of these bonds by the appellant through the teller or cashier, she paying therefor her own money deposited to her credit in the bank. It was entirely competent for the bank to receive it as a deposit of so much money, and there is no evidence in the case legally sufficient to authorize a jury to infer that the teller (acting as he would be in that respect in the discharge of his duty, and within the scope of his employment), cashed that draft by passing off upon her these bonds instead of money in payment therefor. For these reasons there was no error in the rejection of the two last prayers of the appellant, and the judgment must be affirmed. Having disposed of the case in this way, it becomes unnecessary to express any opinion upon the question argued at bar, whether an action VOL. XX.-14 Callahan v. Linthicum. like this will lie against a corporation in its corporate character, for deceit practiced by its officers or agents. Judgment affirmed. Insurance CALLAHAN v. LINTHICUM. (43 Md. 97.) ·recovery by mortgagor of amount paid to mortgagee. Defendant conveyed to plaintiff certain premises, and took back a mortgage for a part of the purchase-money. At the time of the conveyance defendant had a policy of insurance on the premises, and notified the company of the sale and of the mortgage to him, and the insurance was continued to him under the same policy, in the same manner and for the same amount. The premises were burned, and the defendant promised the plaintiff that if he got the amount of the insurance he would give it to him, or allow it on the mortgage. The insurers paid the insurance money. Afterward at the maturity of the mortgage plaintiff paid the full amount of it and demanded the amount of the insurance received. Held, that the defendant was liable in equity to the plaintiff for the money received, and that such liability was a sufficient consideration for defendant's promise to pay it over or apply it, and that an action lay on such promise. CTION for money received by the defendant, appellee, for the use of the plaintiff, appellant. On the 1st day of June, 1869, the appellee conveyed certain real estate to the appellant and took from him a mortgage bearing date the 5th of June, 1869, to secure the balance of the purchase-money. At the time of the sale and conveyance to the appellant, the appellee held a policy of insurance on the buildings on said farm, issued by the Mutual Fire Insurance Company of Montgomery county, and notified the company of the sale and conveyance, and of the fact that he held a mortgage on the property for the balance of the purchase-money. The buildings on the property were destroyed by fire in December, 1869, and the appellant, by letter dated on the 20th of the month, claimed of the insurance company the insurance, which was paid to the extent of eight hundred dollars, before the maturity and payment of the mortgage debt. The debt was subsequently paid in full. It was admitted that the appellant did not insure the property in the Mutual Fire Insurance Company for the benefit of the appellee. It was proved that the appellee, after the fire, promised the appellant that if he (the appellee) got the money from the insurance company he would give it to the appellant, or allow it on the last payment of the mortgage debt; that the appellee called upon the Callahan v. Linthicum. counsel of the appellant and offered to give one-half of the eight hundred dollars to the appellant; which offer the appellant refused, and on the 6th of March, 1873, instituted suit to recover of the appellee the whole amount of the insurance received by him. The declaration contained the common money counts; but the appellant relied altogether upon the count" for money received by the defendant for the use of the plaintiff." The appellee, after the appellant had offered all his evidence and closed his case, asked the court to instruct the jury: "That upon the pleadings and evidence offered by the plaintiff in the cause, he was not entitled to recover." This prayer the court granted, and the verdict and judgment being for the defendant, the plaintiff appealed. George M. Gill, for appellant. This case ought not to have been taken from the jury as it was by the court below. Linthicum having insured the dwelling, etc., before he sold, and the insurance having been continued with consent of the insurance company after the sale, he became trustee, entitled to be paid the loss, and had the right to apply the amount received from the insurance company, to pay the balance of the purchase-money due him, and after receiving such balance, he was bound to account to Callahan for any surplus received; having received the entire balance of the purchase-money, and the further sum of eight hundred dollars from the insurance company, he became bound to pay Callahan the surplus after payment of his balance, and his promise so to pay, as given in evidence, is founded upon a sufficient consideration. Carpenter v. The Providence Washington Ins. Co., 16 Peters, 2; Parsons on Maritime Law, 502, note 2; 1 Phillips on Insurance, 107 and 108 (2d Ed.); Hammond on Fire Insurance, 21, 22; Insurance Company v. Updegraff, 21 Penn. 513; Carruthers v. Sheddon, 6 Taunt. 14. The insurance in the case being on the mutual plan, and Linthicum having given his note, which, under the contract, continued to be a lien on the property sold after such insurance, and until finally settled, Linthicum must be regarded as a trustee, holding the insurance as well for his own protection as for that of the purchaser; this condition of things was recognized by Linthicum, the insurance company and the purchaser, the appellant, and it would seem to follow that Linthicum, the trustee, having received the entire purchase-money, and also eight hundred dollars on account of the insurance, must account to the appellant for the excess in his hand. The whole matter, under the circumstances, was for the jury, and ir taking the case from the jury, there was manifest error. |