Moore v. Bank of the Metropolis
IN error to the Circuit Court of the United States, for the county of Washington, in the District of Columbia.
The Bank of the Metropolis, on the 27th of September, 1837, instituted an action of assumpsit against Thomas P. Moore, the plaintiff in error, on a promissory note dated the 16th day of February, 1837, payable sixty days after date; by which the defendant, Thomas P. Moore, P. H. Pope, and Richard M. Johnson, by George Thomas, their attorney at Washington, jointly and severally promised to pay to the plaintiffs the sum of five thousand dollars current money of the United States, for value received.
The declaration also contained a count on the same note, stating it to be the note of Thomas P. Moore, to the plaintiffs, and also a count for the amount of the same note as so much money paid, laid out and expended, at the special instance and request of the defendant, and for the same sum had and received by the defendant to the use of the plaintiffs.
The defendant pleaded non assumpsit, and the cause was tried before a jury in November 1838, and a verdict and judgment rendered in favour of the plaintiffs. The defendant filed two bills of exceptions, to the ruling of the Court on matters presented on the trial; and he afterwards prosecuted this writ of error.
The first bill of exceptions stated:
On the trial of this cause the plaintiffs, to sustain the action on their part, proved by a competent witness, that on the 27th March, 1834, the said defendant with Richard M. Johnson and P. H. Pope, executed their joint and several note, and on the same day by their checks, drew from the said plaintiffs the proceeds thereof, which had been carried to their credit; that said note was not paid at maturity, but lay over unpaid until the 30th January, 1836, when it was cancelled; that on the 30th day of January, 1836, the said parties executed and delivered to the said plaintiffs their promissory note, which was discounted by said plaintiffs and the proceeds thereof carried to the credit of said drawers, and the interest in arrears paid. That on the 29th of February, 1836, the said parties executed and delivered to George Thomas, at that time cashier of the Bank of Metropolis, a power of attorney, which said power of attorney was given for the single purpose of acting for said parties in relation to said last mentioned note and the renewal thereof; and that the said George Thomas, professing to act by virtue of said power of attorney, under said power of attorney made and executed the note mentioned and described in the declaration; that the same was then discounted by said bank, the proceeds carried to the credit of the said drawers, and the arrears of interest upon the former and last preceding note, together with the discount of this note paid and credited on said account, and the said note dated 30th January, 1836, was cancelled, but witness does not recollect by what person said interest or discount was paid. To the admissibility of which notes or any of them, or any matter above stated in evidence, the defendant objects; but the Court overruled the objection and permitted all of said notes, and the proceedings in regard to them and the matters stated, to be given in evidence to the jury. To which opinion of the Court the defendant excepted.
The second bill of exceptions stated:
In addition to the evidence contained in the aforegoing bill of exceptions, the plaintiffs offered evidence tending to prove that the banks in Washington county in the District of Columbia, have been in the practice (some banks for less, and some for more than twenty years) of taking and discounting notes in the form of the one now in suit, made directly to the banks or some of the officers for their use whenever offered, and that the banks preferred to loan upon such paper; that the reason of this practice has been one of mutual convenience to the borrower and the banks, the first being saved from the costs of protest, and the last being saved the risk of a failure to give notice to the endorser; and that it was very usual for the banks to lend money on a pledge of stock, taking in return the single note of the borrower, payable to the banks, or some of their officers, without endorsement. The plaintiffs further gave evidence by competent testimony, tending to prove that it had been the practice of, and usage of the various banks in Washington county in this district, to discount, indiscriminately, paper on which there was an endorser or endorsers, or on which all the parties were drawers, and the paper drawn directly to the bank itself, or some of its officers, acting in behalf of the bank; that both were considered equally the subjects of discount, but that the witness cannot recollect at this moment any particular instance, in which, when all the parties were non-residents, as is and was the case with the alleged makers of this note, the bank has discounted on that paper alone, though he has no doubt such cases existed; but that in all of the said banks the major part of the accommodation paper discounted was in the form of notes drawn by one party in favour of another person who endorsed it to the bank, and that this particular note in suit was discounted in the usual manner. The defendant then offered evidence tending to prove that on the 27th of March, 1834, the plaintiffs discounted the joint and several note of R. M. Johnson, P. H. Pope, and the defendant, for the amount of $5000, (being the same note inserted in the first bill of exceptions,) and that at the time of discounting said note, the plaintiffs reserved out of the proceeds thereof the sum of $103 33, as interest, or discount upon the same, for four months and four days; that the said note lay over unpaid until the 30th day of January, 1836, when the sum of $450 was paid on the same, as interest in arrear; and that on the same day a second note was given by the same parties to the plaintiffs (the same note which is also inserted in the first bill of exceptions) in renewal of the first described note, payable in six months from its date, which was discounted by the plaintiffs, who at the time of said last mentioned discounting received the sum of $153 33, as interest on the same for six months and four days; that the said second note, also, lay over until the 16th day of February, 1837, when the sum of $166 67, was paid on it as interest in arrear, from the 30th July, 1836, to 16th February, 1837, and on the same day the note in suit was given in renewal of the last described note, which said note in suit was discounted on the day of its date by the plaintiffs, who received on said day of its date, the sum of fifty-three dollars and thirty-three cents, as the interest in advance, for sixty-four days. Whereupon the defendant prayed the court to instruct the jury as follows:
1st. If the jury believe from the evidence, that the note in suit was given in renewal of other notes previously given by the same parties to the plaintiffs, and that the plaintiffs received or reserved in advance, as discount, the interest, at the rate of six per centum per annum, on the amount of debt mentioned in said notes, or any of them, for the times they or any of them had to run, then the receipt or reservation of said interest in advance, is evidence of usury; and the jury may infer usury from the same.
2d. That if the jury believe from the evidence, that the note in suit was given in renewal of other notes successively given by the same parties to the plaintiffs, for the amount of $5000 loaned to the said parties by the plaintiffs; and that at the time of the original loan the plaintiffs reserved the interest on the said sum of $5000, at the rate of six per centum per annum, for the time the original note had to run, or that at the time of renewing or discounting the note in suit, the plaintiffs received of the makers thereof, or any one for them, the interest in advance for the period of sixty-four days, then said facts are evidence of usury in the transaction, and the jury may infer usury from said facts on the note in suit.
3d. That if the jury believe from the evidence, that the note in suit was given to the plaintiffs in renewal of a note for the same amount, drawn by the same parties, directly to the plaintiffs, as payees, payable six months after date, which had been previously discounted by the plaintiffs, for the accommodation of the said parties, and that on said note, drawn at six months, the plaintiffs received at the time of discounting it, the interest in advance for six months and four days, at the rate of six per cent. per annum on the amount of said note, then the said facts are evidence of usury, and it is competent for the jury to infer usury in the note in suit.
4th. If the jury believe from the evidence, that the plaintiffs received on the day of the date of the note in suit, the sum of $166 67, as and for interest alleged to be due from the 30th July, 1836, to the 16th February, 1837, (six months and seventeen days,) on a prior note for $5000, given by the same parties to the plaintiffs, falling due on the said 30th July, 1836, and that the note in suit was given in renewal of said note, falling due on the 30th July, 1836, then the plaintiffs have taken illegal interest, and it is competent for the jury to infer that the note in suit was given in pursuance of an usurious agreement.
5th. That the written power of attorney, executed to George Thomas by the defendant, together with R. M. Johnson and P. H. Pope, gives no authority to said Thomas to execute a joint and several note in behalf of said parties; and that the defendant cannot be charged in this action by reason of any joint and several note, purporting to be executed by the said R. M. Johnson, P. H. Pope, and this defendant, by the said Thomas, as their attorney, under said written power.
But the Court refused to give any of the said instructions to the jury, and the defendant excepted.
The power of attorney referred to in the bills of exceptions was in the following terms.
Whereas we have a joint and several note of hand discounted in the Bank of the Metropolis-Now
Know all men by these presents, that we, Richard M. Johnson, Thomas P. Moore and P. H. Pope, all of the State of Kentucky, do hereby nominate, constitute and appoint George Thomas, of the city of Washington, our true and lawful attorney in fact, and by these presents do authorize and empower him, for us, and in our names, to sign our joint note to the president and directors of the Bank of the Metropolis, for five thousand dollars, for our accommodation, and the same to renew, from time to time, as it may become due, for the whole or any part thereof-Hereby ratifying and confirming all and every the act and acts of our said attorney, in and about the premises, so long as the bank shall continue the accommodation to us. In witness whereof, we have hereunto set our hands and seals, at the city of Washington, the 29th day of February, 1836.
RH. M. JOHNSON, [SEAL.]
P. H. POPE, [SEAL.]
T. P. MOORE. [SEAL.]
Witness, SAM. STETTINIUS.
The case was argued by Mr. Brent, Jun., for the plaintiff in error; and by Coxe for the defendant.
Mr. Brent contended that the Circuit Court had erred in refusing to give each instruction prayed for; and it was further insisted on, in behalf of the appellant;
1st. That the usage of the banks, as given in evidence, can have no possible bearing on the questions of law involved in the instructions asked for, but that, being a question of fact, it was incumbent on the appellees to have asked for an instruction as to its effect, if believed by the jury.
2d. That the usage proved is insufficient to exempt the transaction from usury.
3d. That no established usage is proved in the case.
The objection of the plaintiff in error, is to the allowance of the Court to the plaintiff below, to give a joint and several note in evidence, under a power of attorney authorizing the execution of a joint note only. The power was to give a joint note, and the note on which the suit was brought was a joint and several note. In 2 Johns. Rep. 19, it is decided that an authority to give a note of a particular date, is not an authority go give a note of any other date.
A joint note is not the same as a joint and several note; on the former, one writ only can issue, all the parties must be used together; put on a joint and several note, suit may be brought against each of the persons who are parties to it. This is material as to costs.
Another matter for consideration, and one which is material, is that the act of the assembly of Maryland gives a right to contribution in favour of those who are sureties from co-sureties; and a surety paying may have an assignment of the judgment when he pays it. This makes it most important that the power of attorney should be strictly pursued. When the attorney departs from the authority given to him by his principal, although for his benefit, his acts do not bind the principal. 7 Barnwell and Creswell, 278. Ambler's Rep. 498.
It was argued in the Circuit Court that the word 'several,' in a power of attorney may be rejected as surplusage, and the joint powers given retained. This position cannot be sustained. Cited Sugden on Powers, 210; to show how important and essential an adherence to forms is deemed.
Admitting that the execution of a power may be sustained, where there is surplusage in the terms of it, yet this exists only when the acts to be done, or done under it, are divisible. But this set-off can only be obtained by the aid of a Court of Chancery.
In this case the action was brought on the note as 'joint and several.' Then the election was to treat the note as 'joint and several;' and yet, when the objection was made, the note was set up as a joint note. A power of attorney to three persons to execute the powers granted, cannot be executed by two. An authority to do a thing in one way, cannot be performed by executing it in another way. The note should not, therefore, have been given in evidence. Cited 1 Peters, 29. 1 Roll's Abridg. 529. L. placetum, 15. As to the ratification of the act of an attorney by the receipt of the money, and its appropriation to pay a prior note for the same sum, then due, it must be considered as not having been the act of the defendant. He was absent, and ignorant of the transaction.
It may be said that there was evidence to support the money counts in the declaration. But this cannot affect the right of the plaintiff to have the judgment of the Cirtuit Court reversed. Cited Greenleaf vs. Birth, 5 Peters, 135.
The counsel was proceeding to argue the question of usury, raised by the second bill of exceptions: the Court would not permit the argument, the point being considered settled.
Coxe for the defendant:--
The discounting of the note by the bank was a continuation of a former loan. Cited Barry vs. Foyles, 1 Peters, 316. Minor vs. The Mechanics' Bank of Alexandria, 1 Peters, 47.
If parties to a joint note are sued severally, they should plead the matter in abatement. It is not regular to make the objection under a plea to the general issue.
But the verdict of the jury was upon the whole matter; and the evidence given was legal, and sufficient to sustain the money counts in the declaration.
Mr. Brent stated that the object of the plaintiff in error was to get rid of the verdict for five thousand dollars. He is perfectly willing to pay his portion of the debt.
Mr. Justice THOMPSON delivered the opinion of the Court:--