THIS case was brought up by writ of error from the Circuit Court of the United States for the southern district of Ohio.
The facts are stated in the opinion of the court.
It was argued by Mr. Stanbery for the plaintiffs in error, and by Mr. Marbury for the defendants, upon which side there was also a brief filed by Mr. Smythe, which was adopted by Mr. Swayne.
Mr. Stanbery contended that a certificate of deposit is in no sense cash, or money; it is simply an acknowledgment of a debt, with a promise of payment. The transaction between Hood and Woodward & Dusenberry was simply the exchange of one form of negotiable security for another.
This was clearly a breach of trust, and a perversion of the authority to use the note for the loan of money.
Thorold v. Smith, 11 Modern, 71, 87.
Bartlett v. Pintland, 10 Barn. and Cress., 758.
Atkins v. Owen, 4 Ad. and Ellis, 819.
Nightingale v. Devisone, 5 Burr., 2589.
1. This was an action of assumpsit, in which the plaintiffs below, the defendants in error, Woodward & Dusenberry, recovered of the defendants below, the plaintiffs in error, Poorman et al., the sum of $4,473.76, being amount of the cash balance of $2,997.67 due to the defendants in error, with interest thereon from December, 1849, to the date of the judgment, with costs.
2. The whole amount originally loaned and advanced to Poorman et al. was the sum of $6,000. This loan was made on the joint and several note of Poorman et al. for $15,000, dated Somerset, Ohio, October 24th, 1849, and payable to the order of Woodward & Dusenberry, thirty days after date.
3. With this note in his hands, Thomas Hood, one of the joint makers thereof, applied to W. & D., in the city of New York, for a loan of $6,000, and requested them to deliver to him their certificate of deposit of that amount, to the credit of John Ritchey, Esq., cashier.
4. Thereupon the note was delivered to W. & D., and on the faith thereof the certificate of deposit was delivered to Hood. Ritchey, the payee, duly endorsed the certificate; and when it was presented, subsequently, by the bona fide holders thereof, to Woodward & Dusenberry, they paid the full amount thereof in cash, according to its tenor and obligation.
5. The certificate of deposit, so granted, was in effect, as the court below correctly instructed the jury, money, and came within the authority to borrow money-an authority which Hood had expressly received from the other makers, and which, moreover, he possessed independently as one of the joint makers of the note.
6. No restriction or limitation was placed on Hood's power as to the amount of the loan, nor as to the mode, or form, or kind of funds, in which it was to be effected. He had a general authority as joint maker and holder to borrow or raise money on the note, in any way not illegal, for the benefit of himself and his associates.
7. The transaction was just the same in legal contemplation and in substance as if he had received the $6,000 in specie or bank bills, or the check of Woodward & Dusenberry, and then deposited the amount with them, and taken their certificate of such deposit.
8. The certificate was of the deposit of so much money, and in fact it yielded in money, on presentation, the full sum of $6,000, expressed on its face.
9. The makers of the note lived in Ohio, where they wanted to use their funds; and for their convenience and accommodation this negotiable certificate of deposit of cash, answering their purpose as cash, was granted.
10. The class of cases relied on by the plaintiffs in error, such as Bartlett v. Pintland, (10 Barn. and Cres., 758; Atkins v. Owen, 4 Ad. and Ellis,) merely hold that a naked agent, authorized to receive payment, cannot do so by discharging a debt due from himself to the party by whom the payment should be made. (See observations upon those cases-Dunlap's Paley's Agency, 284.)
This court has held, in a more analogous case, (Tayloe v. Merchants' Fire Ins. Co., 9 How., 402,) that where the mode of payment is not prescribed, the agent may exercise a discretion.
11. The judgment should be affirmed, with costs.
The brief adopted by Mr. Swayne contained the following more extended notice of the authorities cited by Mr. Stanbery, and also of some American authorities:
