First National Bank v. National Exchange Bank

Robinson, J., delivered the opinion of the Court. The plaintiff below, a National Bank in Charlotte, North Carolina, desiring to increase its capital stock, and for that purpose to deposit with the proper department at Washington, $50,000 in United States bonds, employed Bayne & Co., of Baltimore, as its agent to procure and deliver them at Washington. Not having money to pay for them at the time, the plaintiff sent its president, Wilkes, to Baltimore, with a certificate previously prepared in Charlotte, as follows ‘ ‘ First National Bank of Charlotte, North Carolina. “ Charlotte, December 15, 1865. “Received on deposit from Bayne & Co., fifty-five thousand U. S. 5-20 bds. 3d issue, payable to the order of themselves, on return of this certificate. “ John Wilkes, “ Pres’t 1 st Nat. Bk.

Charlotte, N. C.” This certificate was delivered by Wilkes, president, to Bayne & Co., in Baltimore ; and on the 18th of December, 1865, Bayne & Co having endorsed the same, deposited it together with other securities, with the defendant below, a National Bank in Baltimore, as collateral security for a call loan of $80,000, then made by that bank to said firm of Bayne & Co. ⁶⁰⁸ A few days after the delivery of said certificate, the plaintiff deposited in New York, to the credit of Bayne & Oo., a sum sufficient to pay the same, and received in January, 1866¿ verbal notice from Bayne & Co., that the certificate was discharged, and subject to the plaintiff’s order. In March, 1866, the plaintiff received a^ritten notice to the same effect, but it did not apply for its surrender. In April following, Bayne & Oo. failed, and the plaintiff was then notified by the defendant that it held the certificate of deposit for value, and demanded the delivery of the bonds therein mentioned. Wilkes, the president, was sent by the plaintiff to Baltimore to negotiate for the return of said certificate.

He informed the defendant that it had been satisfied by payment to Bayne & Co., and disavowed any legal liability on account of same to the defendant. To avoid suit, however, Wilkes offered to pay $5,000 upon the delivery of the certificate, which the defendant refused, but offered to take $20,000, and threatened suit unless so settled. Wilkes declined to pay this sum, but asked for delay until he could return to Charlotte and consult his directors. He returned again to Baltimore, and new negotiations for compromise of the controversy existing between the two banks in regard to their respective rights to the certificate, were opened.

Wilkes ascertained that the defendant held among its collaterals from Bayne & Oo., a large number of shares of Washington", Alexandria and Georgetown R. R. stocks, the market value of which had been seriously depressed by the failure of Bayne & Go. Having informed himself in regard to the condition of the stock and its supposed value, and after one or two interviews between him and the president and directors of the defendant, it was finally agreed, that the plaintiff should take 400 shares of the Washington Alexandria and Georgetown R. R. stock, 1,000 shares Maryland Anthracite stock, the same being valued ⁶⁰⁹ at $40,000, and 125 shares of the plaintiff’s own stock, valued at $15,000, the latter to be taken by Wilkes himself, inasmuch as he was advised that a National Bank could not buy its own stock, thus making $55,000. Upon the basis of this settlement, the defendant was to deliver up to Wilkes the certificate hold by it for the $55,000 U. S. bonds. The plaintiff paid to the defendant the sum of $40,000, according to the terms of the above settlement, and received the certificate for 1,000 shares Coal stock.

The 400 shares of railroad stock were not then delivered, there being a suit about it at the time of the agreement, which prevented all transfers, but it was regarded and treated by both parties as belonging to the plaintiff. In September, 1869, nearly three years after the date of the above settlement, this suit is brought by the plaintiff' to recover from the defendant the $40,000 paid by it in pursuance of the arrangement above stated. The case, by agreement was tried before the Court, and the plaintiff asked the granting of four propositions of law to govern the Court in deciding upon the facts. The first proposition is to the effect, that if the plaintiff agreed to purchase for $40,000 the R. R. and Coal stock, and paid that sum, then the Court must find for the plaintiff for that amount, provided the Court shall further find that the defendant knew the plaintiff to be a National Bank, and although the Court shall further find that the certificate of deposit was delivered up in consequence of said contract; if by said contract no part of the $40,000 was to be paid for the certificate.

Second, that if the plaintiff agreed to purchase the' said stock for $40,000, and Wilkes also agreed to purchase for $15,000, 125 shares of plaintiff’s stock, and the inducement to both agreements was Wilkes’ desire to obtain the certificate of deposit, and he did so obtain it, that does not enure to make the first contract valid, provided the Court shall find that by the first mentioned ⁶¹⁰ contract, the consideration for which the sum of $40,000 was to be paid, was the railroad'and coal stock, and that no part of said sum was