Bank Commissioners v. St. Lawrence Bank

The exception to the report of the referee was, that no valid subsisting legal demand in favor of Henry Tan Rensselaer against the St. Lawrence Bank, was proven before the referee. And in support of that exception, it was, upon the argument, insisted that the notes which were paid by Mr. Tan Rensselaer were void; that he was not under any legal obligation to pay them; and that the payment made by him was voluntary, and gave him no legal claim against the St. Lawrence Bank. This argument is not according to the equity of the case. Mr. Tan Rensselaer was *438one of the officers of the bank, authorized by a resolution of the board of directors to raise money for the bank to pay its circulating notes. In pursuance of that authority, he purchased state stocks from the City Bank of Albany, and for those stocks the fifteen notes were given. The notes were protested, and Mr. Van Rensselaer was called on to pay the notes, and he did pay them. By paying the notes, he paid for the stock which had been applied in paying the circulating notes and debts due from the bank. And I can discover no difficulty in holding that when Mr. Van Rensselaer paid the notes, he paid money at the request and for the use of the bank. He acted as the agent of the bank in giving and paying the notes, and thereby became a creditor of the bank.

The notes are said to be void, by the fourth section of the act of the 14th of May, 1841, which forbids any banking association or individual banker, as such, to issue or put in circulation any bill or note of the said association or individual banker, unless the same be payable on demand, and without interest. In the case of Swift and others v. Beers, (3 Denio, 70,) the supreme court held that such a note was void, and that a guaranty of the payment of such a note was also void; but it did not appear in that case that the guarantor had received any consideration for the guaranty; and without a consideration he would not be liable. His undertaking was to pay the debt of another. I know of no case in which it has been held that the bona fide indorsee of such a note might not recover against his indorser. In this case the City Bank of Albany wras a bona fide indorsee of the notes for value; that bank may have parted with the state stocks upon the credit of the indorsers.

It has not yet been decided that an officer of a bank who makes a note in the name of the bank, does not bind himself, although he does not bind the bank. Mr. Van Rensselaer made the notes as president of the bank; but as president of the bank he had no right to make such notes; he did not thereby bind his principal. But I see no objection to holding that he bound himself. But whether he did or did not bind himself as *439maker and indorser of the notes, he as the agent of the St. Lawrence Bank, purchased and paid for the stock for the bank, and as a creditor is entitled to the sura awarded to him by the referee; and the decree of Justice Willard ought to be affirmed, with costs.

Decree affirmed.