Elliot vs. Abbot, 12 N.H. 549

Parker, C. J. The note in this case was drawn payable to the Ashuelot Bank, and there offered for discount. On being refused at the bank, because the bank was not discounting, the cashier referred Townsend, the principal, to the plaintiff, who discounted it, giving an order upon his deposit in the bank. Under such circumstances the plaintiff, with the assent of the bank, might well have maintained an action in the name of the bank, to recover the note for his own use. 4 Cowen 567, Bank of Chenango vs. Hyde. And in that case Mr.

Justice Sutherland, in delivering the opinion of the court, says: “ The question is not whether the bank has a general authority to act in the capacity of a trustee, but whether the bona fide holder of a promissory note, in which the bank is nominally the payee, has a right to sue in the name of the bank.

I apprehend, if the bank had refused the use of its name, a court of equity would have compelled it to allow such use, on proper terms.” The doctrine thus suggested seems to be very reasonable; and we are of opinion that in this case the plaintiff might have brought his action in, the name of the bank, giving, the bank an unexceptionable indemnity against costs; and that the bank could not, under such circumstances, have objected to the prosecution of the action.

Nor could Townsend, or the defendant, have made any objection to the maintenance of an action in the same manner as if the bank, instead of the plaintiff, had furnished the money. The plaintiff in our opinion might, also, on the facts in this case, have maintained an action on the note in his own name, declaring on it as made payable to himself, by the name of the President, Directors & Co. of the Ashuelot Bank.

Townsend, who had procured the plaintiff to discount it, and delivered it to the plaintiff, as the promise of himself and the defendant, could not surely be admitted to say that it was not a promise to the plaintiff; and the defendant, who received from Townsend, by way of payment, a part of the money received from the plaintiff, with knowledge how it was obtained, without making any objection, and who af-terwards in several instances recognized the plaintiff’s right to it, in such a manner that it would be competent for a jury to find a promise, on his part, to pay, if that fact would avail the plaintiff, must be held by all these acts to have ratified the act of Townsend in passing the note to the plaintiff, as a promise and obligation to him.

If both the defendants concurred in delivering the note to the plaintiff, as their promise to him. it is immaterial by what name the promise is made to him. He is, in such case, the person to whom the promise is made. And if one so delivers it, and the other afterwards ratifies the act, the result is the same. It would seem that the plaintiff might also maintain an action on the note in his own name, declaring on it as a promise to pay the bearer, upon the ground that the name of the payee might, if he so elected, be regarded as fictitious. 2 N. H. Rep. 446, Foster vs. Shattuck.

It would certainly seem to be as available to the plaintiff, as if the name of the payee had been left blank. 2 Mau. Sel. 90, Cruchley vs. Clarance. And it is not clear that the plaintiff might not, on the facts before us, maintain an action on a count for money had and received. The defendant had in fact part of the amount of the note, in money received of the plaintiff. It is true that he received this, not directly from the plaintiff, but as a payment of so much money on a debt due from Townsend to him.

But as the note was made partly to raise money, in order that Townsend might pay such money to the defendant, and as he received part of the identical money furnished by the plaintiff, knowing how it was procured, and after-wards recognized the plaintiffs claim ; it would not be a very forced construction, so far as the plaintiff is concerned, and for the sake of the remedy, to hold that the money was received to the use of the defendant, as well as of Townsend, although, as between themselves, the defendant was but a surety.

The form of the plaintiff’s action, however^ will not permit us to place the case on any of these grounds. It is not brought in the name of the bank; and as he declares only upon a note made to the bank, and indorsed to him, the case, if it can be sustained in its present shape, must be so upon that ground only. Although the bank never had any interest in this note, we see no objection to regarding it as having been made to them, and indorsed to the plaintiff, if the indorsement can be upheld upon the evidence. The promise is in terms to the bank.

The signers did promise to pay the bank ; and as they made the promise negotiable, the bank might well transfer it. And it makes no difference to the defendant, whether the bank discounted the note, and then sold and indorsed it to the plaintiff; or whether the plaintiff’, having funds in the bank, furnished the money in the first instance, the bank indorsing the note to him, and the defendant assenting to the transfer. Without the acts showing the defendant’s assent to the discount of the note by the plaintiff, the case of the Bank of Chenango vs.

Hyde is an authority, as far as it goes, to sustain the plaintiff’s right to recover, if the bank has indorsed. We come, then, to the question, has this note been indorsed to the plaintiff, by the bank? Is that allegation in the plaintiff’s declaration sustained? The defendant may deny this. There seems to be no sufficient evidence on which to sustain an indorsement through the acts of the directors.

A majority of them assented, it is said ; but this was at no regularly notified meeting, nor in fact at a meeting of those who did assent, although that would not have been sufficient to have given it the character of

an act of the board. There should have been either the act of all, (and it is not settled whether that would be sufficient, unless they met together,) or there should have been a stated, or regularly notified, meeting, at which all might have been present, in which case the act of a majority of a quorum might have been good. Despatch Line of Packets vs. Bellamy Man. Co. & Trustees, Ante 205, 224. If the indorsement is sustained, therefore, it must be on the ground that the cashier had, under the circumstances, authority to make the indorsement.

It is contended that the cashier has, prima facie, authority to indorse securities held by the bank ; and that if he has not authority to transfer the property of the corporation, by the indorsement of a note or bill, without a vote of the directors, he may do what is necessary to collect notes due the bank, or left for collection, or lodged as collateral security. The authority cited for the plaintiff, 3 Mason 505, seems to hold that the cashier has, prima facie, authority to indorse negotiable securities held by the bank, and thereby transfer the property ; and in Hartford Bank vs.

Barry, 17 Mass. 97, cited for the defendant, although it is said that “ a cashier cannot transfer the property of the corporation in a note, without authority from them, or perhaps from the directors, pursuant to powers vested in them by the corporation,” yet it is said further that “ he may do what is requisite for the recovery of a note.” The usage testified to by the cashier, in this case, is in accordance with the principles stated in the latter case. The cashier here states that in no case has he indorsed to transfer the property of the bank, without a special authority.

His is not a general power of indorsement, if such may, prima facie, exist. But this case does not come within the principle, or the usage. This was not a note belonging to the bank, or held as collateral security, and indorsed to enable the plaintiff to collect it for the benefit of the bank. Nor was it a note indorsed to the bank, and left for collection, and where an in-dorsement over was necessary, or convenient, in order to facilitate the collection for the benefit of the owner.

The ground upon which the cashier may indorse the name of the bank, and transfer the legal interest, in any case, is not because the indorsement is merely nominal, transferring no actual property. If it were so, this indorsement might be supported as the indorsement of the bank. But it is, that the cashier is the agent of the bank for that purpose : — that by virtue of his appointment as cashier, the bank authorizes him to make indorsements in such cases. Tested by this principle, the indorsement in this case must fail.

It is not the act of the bank, because not made by an agent having power to make an indorsement in such case. The directors are the general agents of the bank. The cashier is a special agent, and a matter of this kind is not within the scope of his authority. It can make no difference that the bank had no interest in this matter, or that the bank and the directors have not dissented. There has been no confirmation of the act of the cashier, by the bank, or the directors, and there is no evidence of an assent to this indorsement, by the defendant.

The plaintiff’s allegation that the note was indorsed by the bank, therefore, fails ; and this is a material allegation as the case now stands. But it is apparent, from the views we have taken of the case, that the merits are with the plaintiff. The objection to his recovery arises not from the want of a cause of action against the defendant, upon the note declared on, but from the failure of the proof to support the particular form in which the declaration is framed.

Instead, therefore, of rendering judgment for the defendant, as we should do on this case if the merits were with him, the plaintiff, after the verdict is set aside, may, if he desire it, have leave to amend upon terms, and the action may then stand for trial. Verdict set aside, and leave to amend.