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THE UNITED STATES, PLAINTIFFS IN ERROR, v. THE CITY BANK OF COLUMBUS.

December 1, 1858

THE UNITED STATES, PLAINTIFFS IN ERROR,
v.
THE CITY BANK OF COLUMBUS.



THIS case was brought up by writ of error from the Curcuit Court of the United States for the southern district of Ohio. The facts of the case and also the instructions given to the jury upon the trial are all set forth in the opinion of the court. It was argued by Mr. Hull and Mr. Black (Attorney General) for the United States, and by Mr. Stanbery for the defendant. The Attorney General contended that it might be true that the cashier had no power to make the appointment, yet the directors had such power, and the cashier's letter may fairly be considered as a certificate that the appointment had been legally made; because, if the directors had appointed Miner, the cashier would have written just such a letter as he did write. Amongst other illustrations of this principle was the following: If it were true that the appointment of an agent by a corporation must be evidenced by an entry on the minutes, or by any other writing, then it might plausibly be urged that the cashier or other certifying officer has only the power of certifying to a copy of such record or writing. But there is no such rule of law. In the Bank of the United States v. Dandridge, (12 Wheat., 64,) it was distinctly decided by this court that the acts of a corporation, though not reduced to writing, are valid and binding, and may be proved aliunde. It is true that this doctrine did not command the assent of Chief Justice Marshall, who, in an able dissenting opinion, maintained the contrary; but it is now well-established law. (See Angell and Ames on Corp., sec. 284; Conro v. Port Henry Iron Company, 12 Barbour Sup. Ct. Reps., 53; Burgess v. Pue, 2 Gill, 287; Richardson v. St. Joseph Iron Company, 5 Blackford, 148; Badger v. Bank of Cumberland, 26 Maine, 435; Elysville Manufacturing Co., v. Okisko Company, 1 Md. Chy. Dec., 398.) These authorities conclusively establish that, unless the charter provides otherwise, (as in this case it does not,) the appointment of an agent need not be in writing, or entered upon the minutes, but may be by parol, and provable like other facts. But if this be so, there is no foundation for the assumption that the cashier can only certify the agency by copying the record of the appointment, for non constat that there is any record. And no custom of this bank is shown to the contrary. Even if it had been, it could have no effect unless the Secretary of the Treasury had notice of it; but, in fact, that cashier testifies that meetings of the board were held not entered on the minutes. We have thus far shown–– 1st. That the directors had the power to appoint an agent to make this contract on behalf of the bank. 2d. That the appointment of such agent need not be entered on the minutes, or reduced to writing. 3d. That the cashier is the proper officer to certify the fact of such appointment. But the act of the cashier, whichin the scope of his duties, is the act of the bank. (Badger v. Cumberland, 26 Maine, 435; Story Agency, sec. 114; Angell and Ames Corp., sec. 300.) It matters not that the thing certified was not true in fact. A principal is bound by the false and fraudulent representations of his agent in the scope of his authority. (Story Agency, sec. 139; ib., sec. 452.) The next proposition is, that the bank having, through their cashier, asserted that Mr. Miner was agent, and the Secretary of the Treasury having acted on that information, the bank is now estopped to deny it. The doctrine of estoppel in pais is thus distinctly stated by Lord Denman in Pickard v. Sears, (6 Ad. and Ellis, 469; 33 E. C. L. Reps., 117:) 'But the rule of law is clear, that where one, by his words or conduct, wilfully causes another to believe the existence of a certain state of things, and induces him to act on that belief, so as to alter his own previous position, the former is concluded from averring, against the latter, a different state of things as existing at the same time.' This doctrine is recognised by all courts of the common law. (See Brown v. Wheeler, 17 Conn., 353; Carpenter v. Stillwell, 12 Barbour Sup. Ct. Reps., 136.) This doctrine applies to corporations as fully as to individuals. (Angell and Ames on Corp., sec. 238, p. 232.) In Lovett v. German Reformed Church, (12 Barbour Sup. Ct. Reps., 81,) the court held the corporation estopped by the acts of acting trustees, though not rightfully in office. In Bank of Genesee v. Patchin Bank, (3 Kernan's Reps., N. Y., p. 317,) the same doctrine is recognised. But a corporation can do acts, or make declarations, in no other way than through its officers and agents. Therefore a corporation will be estopped by the acts or declarations of its officer or agent, acting in the sphere of his authority, in all cases where an individual would be estopped by his own. Applying the above rules to this case, we find every ingredient mentioned by Lord Denman as required to make an estoppel. This bank, through the written certificate of their cashier, he being the officer empowered by the usage of banks to certify its doings, has wilfully caused the Secretary of the Treasury to believe that Miner was authorized by the bank to contract for the transfer of funds. The Secretary was thereby induced to act on that belief, and to place in the hands of said Miner $100,000, to be transferred to New Orleans. The bank is therefore concluded from averring that Miner was not at that time its agent. The case is therefore with the plaintiff upon the law.

The opinion of the court was delivered by: Mr. Justice Wayne delivered the opinion of the court.

Mr. Stanbery, for the defendant in error, contended that it was not within the power of a cashier, in virtue of his office, to make such a contract, or rather to authorize another to make it, and referred to 8 Wheaton, 360; 6 Peters, 59; 12 Eng. Law and Eq. Rep., 389; 1 Selt. N. Y. Rep., 332.

The nature and importance of the contract was such as to require the judgment of the directors. This is altogether beyond the usual business of buying and selling exchange. Neither the charter nor the by-laws gave this power to the cashier.

5. It has been argued that the letter of Moodie purports to be a certificate that Miner was duly authorized by the bank; and as the cashier is the certifying officer of the acts of the board, the bank is estopped from denying the truth of this certificate.

In the first place, this letter contains no certificate of an authority given by the board; but if it did, nay, if it purported to copy a resolution of the board, and it should appear there was no such resolution, the bank would not be bound.

The argument on the other side would indirectly make the principal liable in all cases where the agent clothes his unauthorized act with a false representation of authority from the principal.

This subject is well discussed in the Mechanics' Bank v. The New York and New Haven R. R. Co., 3 Kernan, 636.

The only question arising on this record is, whether the court erred in so much of the charge to the jury as is set out in the bill of exceptions. Objections were taken in the course of the trial to testimony, but no exceptions were taken to the rulings of the court upon them. The declaration in the case contained two counts–one of them alleging that a contract had been made between the City Bank of Columbus and the United States, by which the bank agreed, on the 1st November, 1856, to transfer one hundred thousand dollars of the public money from New York to New Orleans by the first of January, 1851, free of charge; and the other account for money had and received by the bank for the use of the United States.

The charge given by the court was confined to the first count. The bill of exceptions set out the following evidence, which was introduced by the United States to show a contract with the bank.

The following letter was written by the cashier of the bank:

CITY BANK OF COLUMBUS,

Columbus, Ohio, 26th October, 1850.

SIR: The bearer, Colonel William Miner, a director of this bank, is authorized, on behalf of this institution, to make proposals for the purchase of United States stocks to the amount of one hundred thousand dollars. He is also authorized, if consistent with the rules of the Treasury Department, to contract, on behalf of this ...


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