Mechanics' Bank of Alexandria v. The Bank of Columbia

by William Johnson

United States Supreme Court

18 U.S. 326

Mechanics' Bank of Alexandria  v.  The Bank of Columbia

ERROR to the Circuit Court for the District of Columbia.

This was an action of assumpsit, brought by the defendants in error against the plaintiffs in error, on the following check:

No. 18. MECHANICS' BANK OF ALEXANDRIA.

June 25th, 1817.

Cashier of the Bank of Columbia,

Pay to the order of P. H. Minor, Esq., Ten thousand Dollars.

WM. PATON, Jr.

$10,000

This check was offered in evidence by the plaintiff below, and testimony to prove that the said Paton, before, at the time, and subsequent to the drawing of the said check, was cashier of the said Mechanics' Bank, and the said Minor the teller thereof; and in order to prove that the said check was drawn by the said William Paton in his capacity as cashier, and was so understood by him, and so understood by the said Bank of Columbia, their officers and servants; evidence was further offered to prove, that from the 5th of May, 1817, to the time of drawing the said check, there was kept in the said Mechanics' Bank, by the proper officer thereof, a book of printed checks in blank, for the purpose of being used by the cashier, in drawing his official checks; and that the check in question had been cut out of the said book: That the said Cashier, in his official character, had frequently used the blank checks out of the said book, in drawing upon other banks in the district, and there was no other difference between the checks so drawn, and the check in question, other than the letters 'Cas.' or 'Ca.' being superadded to the name of the said William Paton, Jun. in the checks so drawn upon the said other banks: That although the said check book was intended for the use of the bank, the checks in the same were sometimes used for other purposes: That the business of the said banks was sometimes managed through the medium of letters, and in such official correspondence, it was usual to subscribe the names of the cashiers, with the addition of some letters denoting their capacity of Cashier; but such form was sometimes omitted, and was in no case deemed indispensable, when, from other circumstances, such correspondence appeared to be official. The plaintiffs further offered in evidence two letters of the said William Paton, directed to William Whann, Cashier of the Bank of Columbia, each signed with the proper name of the said William Paton, without the addition of Cashier, or the letters 'Cas.' or 'Ca.' one of which letters related to the private concerns of the said William Whann, and the other to the concerns of the bank.

Evidence was further offered to prove that the check given in evidence as aforesaid, was, (together with a number of other checks, drawn by the said William Paton upon other banks, with the addition in his signature of the letters 'Ca.' and 'Cas.' and cut out of the official check book,) sent by the said Paton, on the 12th of July, 1817, by the hands of the said Philip H. Minor, then being teller as aforesaid, to Richard Smith, Cashier of the Office of Discount and Deposit of the Bank of the United States at Washington, to be paid in liquidation of a balance due from the said Mechanics' Bank to the said Office of Discount and Deposit: That the said letter was delivered by the said Minor to the said Smith, and the checks and moneys contained in the same were applied to the credit of the said Mechanics' Bank. That among the checks so sent, was one for $17,626 5, written upon, and cut out of the check book aforesaid, and in the words and figures following, to wit:

Mechanics' Bank of Alexandria, July 12, 1817. No. 32.

Cashier of the Branch Bank of the United States, Washington Pay to the order of Philip H. Minor, amount of discount made me, which I believe is seventeen thousand six hundred and twenty-six dollars and five cents.

WM. PATON, Jun.

That the said Richard Smith, about the 17th of July, 1817, did cause the same to be presented to the Bank of Columbia for payment, and the same was accordingly paid, and was thereupon immediately charged to the said Mechanics' Bank.

Evidence was further offered to prove that the said Richard Smith considered the said check as the official check of the said William Paton, and it was so paid by him; and that the Cashier of the Bank of Columbia also considered it as the official check of the said Paton, and it was so paid by him.

Evidence was further offered, on the part of the Mechanics' Bank, to prove that the said William Paton, at the time he drew the said check, declared it was his private individual check; that he had funds in the Bank of Columbia to meet it, and that it was passed by him to the said Mechanics' Bank as the individual check of the said William Paton. And evidence was further offered to prove that the Mechanics' Bank paid to the said Paton the amount of the said check.

Upon the evidence thus offered by the plaintiffs below, the counsel for the defendants objected to the whole of the said evidence, and insisted, that if the said check for 10,000 dollars, could be used as evidence against the said Mechanics' Bank, that the character of the said check could only be decided by the check itself, and that no parol or other testimony could be received to explain the same, and objected to the testimony offered upon that ground. But the Court overruled the objection, and gave it as their opinion to the jury, that the said check was, in connexion with the other evidence, proper and competent evidence in this case against the said Mechanics' Bank, and that it was competent to explain the character of the said check; or, in other words, to prove, by parol or other testimony, that the said check was drawn under such circumstances, and in such a manner, as justified the plaintiffs in considering it as an official check, and paying it as such, and charging the same to the debit of the defendants. And the evidence offered as aforesaid, with the said check, was admitted by the Court, and given in evidence to the jury.

The defendants below then prayed the opinion of the Court, and their instruction to the jury, that the check for 10,000 dollars, produced in evidence by the plaintiffs, is, on the face of it, a private, and not an official check, and of itself cannot, in law, charge the Mechanics' Bank with the payment of the said 10,000 dollars; and that the said William Paton was liable in his individual character for the payment of the same. Which opinion the Court refused to give.

They also prayed the Court to instruct the jury, that the check aforesaid was, upon the face of it, prima facie evidence of its being the private individual check of the said William Paton, and the possession of the said check by the said Mechanics' Bank, if proved to be in their possession, was prima facie evidence that they had paid a value for it; and that unless the Bank of Columbia should satisfy the jury by other evidence than the said check, that it was an official check of the cashier of the said bank, that the jury should find their verdict for the defendants. Which instruction the Court refused to give.

The defendants below also prayed the Court to instruct the jury, that if they should be of opinion, that the check was drawn by the said William Paton as his individual check, and was received by the said Mechanics' Bank, as the individual check of the said William Paton, and that the bank paid to the said Paton the full amount of the said check, that then the said bank having received the amount thereof from the bank of the United States as aforesaid, would have a right to retain the amount of the said check as against the said Bank of Columbia, notwithstanding the said Bank of Columbia may have been under an impression that it was the official check of the said William Paton. Which instruction the Court refused to give.

A bill of exceptions was filed, and a verdict and judgment thereon having been rendered for the plaintiff, the cause was brought by writ of error to this Court.

     March 8th.
      

Mr. Swann, and Mr. Lee, for the plaintiffs in error, argued, 1. That parol evidence to prove the character or capacity in which the check was drawn, was clearly inadmissible. The check bears, on the face of it, all the qualities of a bill of exchange. It binds the drawer in his individual capacity. When it is competent for a party to bind himself individually, parol evidence cannot be introduced to show, that what he has in fact done in his own name, was intended to be done as an agent for others.a If one of several partners promise individually to pay a debt, he will not be permitted to show that it was due jointly from himself and his partners.b And, generally, all parol evidence to contradict, or vary, a written instrument, is inadmissible.c The object of the testimony in the present case, is, not to show that the drawer is liable to a greater or a less extent than that expressed on the face of the check, but to make a corporation, whose servant he was, liable for a debt which, according to the face of the instrument, is a private debt. For if the check, on the

 a
  
Frontin v. Small, Lord Raym. 1418. Salk. 96. Wilks v. Pack, 2 East, 142. Preston v. Merceau, 2 Wm. Black. 1249. Meres v. Ansell, 3 Wils. 275.

 b
  
Murray v. Somerville, 2 Camp. N. P. 99.

 c
  
Russell v. Clarke, 3 Dall. 424. and the cases there cited. face of it, was an official one, the evidence was unnecessary; and introducing it is an admission that the instrument itself was not sufficient to bind the corporation. 2. The evidence of the debt being a written instrument, the construction of it is matter of law for the decision of the Court, and the Court ought to have instructed the jury, that the check was, on the face of it, a private, and not an official check, and could not bind the Mechanics' Bank. 3. But at all events, the check was prima facie evidence of its being the private check of the drawer, and the possession of it by the plaintiffs in error, was also prima facie evidence of their having paid a valuable consideration for it. 4. Again; this action cannot be maintained, because the contract upon which it is brought was not made in conformity with the charter of the Mechanics' Bank, which provides, (s. 17.) 'that all bills, bonds, notes, and every other contract or engagement on behalf of the corporation, shall be signed by the president, and countersigned by the cashier; and the corporation shall, in no case, be liable for any contract or engagement, unless the same shall be signed and countersigned as aforesaid.'

Mr. Jones and Mr. Key, contra, insisted, 1. That the check, upon the face of it, did not purport to be the private check of Paton, but the check of the bank, drawn by him as its Cashier, and that the presumption was, that it was an official act. 2. But supposing it to be equivocal on the face of the instrument, whether he acted in his official or private capacity, extrinsic parol evidence, to show in what capacity he acted, was admissible. This would not be evidence to contradict the written instrument, but only to explain it.d Suppose the Bank of Columbia had sued Paton, the date and entire face of the check would have been sufficient to defeat their action. There was enough to raise a presumption that he acted officially, because the act was within the scope of his authority. No rule of law obliged him to add to his name any designation of his official character; and even supposing him to be liable in his individual capacity, it does not follow that his principals are not liable for what he has done, the presumption being strongly in favour of the official character of the act. And if it be doubtful whether he is personally liable to the Bank of Columbia, he is certainly liable to the Mechanics' Bank, whose servant he was; who had the best means of knowing and correcting the fraud or mistake; and who, upon the principle of the rule de damno evitando, ought to bear the loss. 3. As to the law incorporating the Mechanics' Bank, it has no application to this case, unless it be contended that it would extend to the case of a deposit, and every other case where the law implies a contract. The action is not brought upon any such express undertaking as the act contemplates must be signed by the President, &c.; but upon an undertaking which the law implies, and which it may as well imply in the case of a corporation as of an individual.

     March 13th.
      

Mr. Justice JOHNSON delivered the opinion of the Court.

Notes