Jewett v. West Somerville Co-operative Bank

Authority of Treasurer of Co-operative Bank to accept Order. There is nothing in the nature of the business to be done by co-operative banks, or in the express provisions of the statutes, which indicates that their treasurers can create liabilities on the part of such corporations by their signatures to commercial paper, or by their indorsement or acceptance of such paper; and where, in an action against a co-operative bank as the acceptor of an order, it is plain that its treasurer had no implied authority by virtue of his office, and the bylaws and the oral testimony tended strongly to show that he had no actual authority to bind it by his acceptance of the order, a ruling requested that the plaintiff is not entitled to recover should be given.

Contract, against a co-operative bank, organized under the general laws of Massachusetts, as acceptor of the following order: “ Boston, 19 March, 1897. To West Somerville Co-operative Bank. Please pay to Elbridge K. Jewett two hundred and fifty (250) dollars out of the second payment due me on mortgage on part of Lot A, Newbern Avenue, Medford, said payment to be made when the plastering is done. Margaret McGovern, by Michael P. McGovern, her Att.” “ This order is hereby accepted. O. H. Perry, Treas.” At the trial in the Superior Court, without a jury, before Mason, C. J., the plaintiff testified that, previous to the date of the order, he held a second mortgage on the property described therein; that on said March 19th the defendant paid the first mortgage on the property, and all of said second mortgage except about two hundred and fifty dollars; that he first talked about the giving of this order with one Delano, who represented the defendant at his office; that Delano said that Perry would accept the order, and that the money would be paid when it became due; that so far as he knew Delano never saw the order till action was brought on it; that the order was drawn up after he had discharged his mortgage and had left Delano’s office by Barnes-at his office; and that between April 15th and 18th, the house then being plastered, he demanded payment of the treasurer, who said he was ready to pay the order at any time when McGovern would sign a receipt in full for the payment due at that time. Perry testified that no vote was ever passed by the board of directors of the defendant authorizing him or any one else to accept this order or any order; that he never accepted any order in the name of the bank; that he had no authority so to do; that there was no custom in the bank for him to accept orders in the name of the bank; that he never accepted any other orders as treasurer; that he accepted one other order about the same time he did this one, to be paid on the same conditions as the one in question, that is, when the payments were made, if made at all; that this other order had never been honored or paid by the bank; that no one else connected with the bank knew that he had accepted these two orders; that all money was paid out by the bank by check payable to the borrower, signed by the treasurer and countersigned by the president; that he did not tell Jewett that he would pay the order when McGovern signed a receipt in full; that he told him that the money was not due and had not been recommended by the security committee; that when the payment was due and paid he would see that his amount was taken out; and that that was the arrangement, and he could not do it in any other way. The by-laws of the defendant corporation contained the following provisions regarding its officers and their duties: “ The officers of this corporation shall consist of a president, a vice president, a secretary who shall be clerk of the corporation, a treasurer, and fifteen directors. . . . The board of directors shall have the general management of the business of the corporation. . . . The treasurer shall receive from the secretary all moneys paid to the corporation, and give his receipt therefor. He shall pay all drafts of the secretary when signed by the proper officers. He shall be the custodian of all deeds, mortgages, mortgage notes, policies of insurance, or other securities of the corporation. . . . He may discharge any mortgage held by this corporation .upon the receipt of the amount due thereon, provided that the discharge shall be approved in writing by one director. . . . The board of directors shall appoint an attorney, who shall examine all titles to property offered as security for loans, and shall prepare all papers of a legal nature required by the corporation.” The defendant requested the court to rule that the defendant had no power to make itself liable as acceptor of the order, and that, if such acceptance was made, it would be ultra vires and void; that the treasurer of the defendant corporation had no authority to accept the order declared on in the name and behalf of the defendant, and make the defendant liable thereon; and that, on all the evidence, the plaintiff was not entitled to recover. The Chief Justice declined so to rule, and found for the plaintiff in the sum of two hundred and sixty-eight dollars and forty-nine cents; and the defendant alleged exceptions.