FIRST NAT. BANK OF PLATTSBURGH
There is also another reason why this order should not be sustained. It was made when it was well known by all, including the judge who made it, that another judge had been appointed, whose qualification and assumption of the duties of the office it was reasonable to anticipate might occur any day. By a little care and inquiry it could easily have been learneci jl1st when this would happen, and thus avoid unnecessary have been done, as there was no such conflict, .andespecially emergency as demanded·' ht,sty action. Judicial officers, of all others, the greatest care in the exercise of .the important power should delegated to them. In view of all the circumstances, I think the order was improvidently made. . To. hold it valid would be. a precedent justifying a. practice which courts should discourag.e rather than sustain. Courts have sustained the acts of de facto officers only as a matter of necessity, to avoid serious damage to those not at fault; but the encouragement of a careless practice on this subject would result in far greater injury than bemifit. Rather is it better that it be understood that the acts and orders of those without the legal right to exercise official trnst must pass the ordeal Of the closest scrutiny, and be ratified only so far as justified by public policy and necessity. The defendants' motion to set aside the order complained of is granted.
FIRST NAT. BANK OF PLATTSBURGH V. SOWLES
(Circuit Court, D. Vermont.
REPRESENTATION AS TO ANOTHEll'S CllEDIT.
Defendants, as directors, during a run on their bank, posted in the bank a notice, signed by them, and addressed to the general public, representing the bank to be solvent. Plaintiff saw the notice, and, after a consultation with the directors, loaned the bank money, which was lost. Held, that the notice, not being addressed to plaintiff, could not entitle it to recover from the directors, under R. L. Vt. § which provides thaI; TIO action shall be brought to charge any person upon a representation concerning the credit of another, unless such representation is in writing, and signed by the party to be charged; and the fact that the notice was signed by defendants as directors would prevent llo recovery from them individually, even if the notice were a sufficient representation in writing.
Such representation in wdting cannot be aided by evidence of al1ditional verbal representations.
At Law. G. H. Beckwith, for plaintiff. Willard Farrington and Geo. A. Ballard, for defendant Burton.
WHEELER, J. This suit is brought upon alleged representations by the defendants that the First National Bank of Bt. Albans was sound and solvent, wherehy the plaintiff' was induced to loan it $10,000; and after a trial by jury, on which a verdict was directed for the defendants, has now been heard on a motion for a new trial. The laws of Verroont pro-
FEDERAL REPORTER, vol. 46.
vide that "no action shall be brought to charge a person upon or by:reason of a representation or assurance made concerning the character, conl duct, credit, ability, trade, or dealings of another person, unless such representation or assurance is made in writing, and signed by the party to be charged thereby, or by some person thereunto by him lawfullyauthorized." R. L. § 983. And that "the word ·person' may extend and be applied to bodies corporate and politic." Section 21. There was a run on the First National Bank of S1. Albans. The defendants were a majority of the directors, and signed and had posted conspiouously in the public banking-room, this: "NOTICE. This bank is sound, and will pay all its liabilities, and creditors lleed not have any fears of loss, as we have sutlicient assets to pay all liabilities. "st. Albans, Jan'y 14, 1884. E. A. SOWLES, "0. A. BURTON,
The president of the plaintiff read this notice, and afterwards, on the same day, on consultation and discussion with the defendants as to the prospects of their bank, made this loan, for which he took collaterals, from which the plaintiff has realized all but about $1,900 of the loan. The plaintiff insists that whether the statements in the notice were relied upon in making the loan should have been submitted to the jury, with directions to find for the plaintiff, if they were. There was a representation in writing of the credit and ability of the bank, signed by the defendants; and this claim of the plaintiff has some plausibility. But that such a representation was so made somewhere, at some time, to some person, by the persons sought to be charged, is not sufficient; it must be made to the person seeking to charge them. In Gmnt v. Naylor, 4 Cranch, 224, a letter of credit, addressed to John & Joseph Naylor & Co., was delivered to John and Jeremiah Naylor, there being no such firm as John & Joseph Naylor & Co., and the writer was sought to be charged, on the corresponding section of the statute of frauds, by John and Jeremiah Naylor. As to this Chief Justice MARSHAJ,LSaid: .. In such a case, the letter itsl'lf is not a written contract between Daniel Grant. the writl'r. and John and Jeremiah Naylor. the persons to whom it was deliv\'rl'd. To admit parol proof to make it such a contract is going further than courts have ever gone where the writing is itself the contract, not evidence ot a contract, and where IJO preceding obligation bound the party to ellter into it." The same judge said in Russell v. Clarke, 7 Cranch, 69, on the same statute: "It is the dutv of the individual who contracts with one man on the credit of anothl'r not trust to ambiguous phrases and strained constructions, but to require an explicit and plain declaration of the obligation he is about to assume." The requirement for charging a person in that section was similar to that in this. This writing was not deli vered to, nor to anyone for, the plaintiff, and the plaintiff WRsnot one of those for whom it was obvi-
AMERICAN WHEEL CO.
ously intended. If it had peen signed by the defendants as individt,als instead of as directors, it would not appear to have been a representation to the plaintiff on which they could be charged, within the meaning of this statute. But, further, this notice was an official statement of the defendants as directors, on its face made to the then creditors, to inspire confidence, rather than as individuals, to procure loans. The evidence by which the notice was sought to be pieced out would make a case on oral representations, which is what the statute forbids. The statute stands squarely in the way of any recovery by the plaintiff, and precludes all necessity for examining the cases referred to, where no such statute prevails. Motion denied, stay vacated, and judgment on verdict for defendants.
BROWN v. AMERICAN WHEEl, Co.
(Circuit Court, N. D. New York.
RIGHTS OF ACCOM).IODATION
July 9, 1891.)
Defendant bought out a company for which plaintiff was an accommodation indorser, agreeing to pay $26,000 of its debts, and, on notice that the notes on which plaintiff was indorser was part of the $26,000, requestfJd plaintiff to continue his indorsement, and agreed to pay the notes. Plaintiff did so, and was compelled to pay the debt. Held, that defendant was liable to plaintiff, though the debt was not in fact a part of the $26,000 assumed by it, and though it had paid other debts to the amount of $26,000.
At Law. Frank Rice, for plaintiff. Thomas Hogan, for defendant. WHEELER, J. The plaintiff has paid $9,000 as an accommodation indorser. The question raised by the demurrer to the complaint is really whether he paid it for the defendant. According to the allegations of the complaint, he was accommodation indorser for the Shortsville Wheel Company. The defendant bought out that company, and agreed to pay $26,000 of its debts, and, on notice that the paper on which the plaintiff was so an accommodation indorser was a part of the $26,000, "requested the plaintiff to continue his indorsement, and assist the defendant by continuing to carry said loan" "for a short time, until the defendant could and would pay and discharge the same; that in compliance with said request, and for the sale accommodation and benefit of the defendant, and relying upon the said promise and agreement of the defendant to pay the same, the plaintiff" "continued or renewed his indorsements," and has been compelled to pay in consequence of them. The want of any allegation that the debt which the plaintiff has paid was in fact a part of the $26,000 of debts which the defendant agreed to pay, or that the defendant has not paid debts of the Shortsville Wheel Company 'to the amount of $26,000 besides this, is the principal ground