Burrill v. President of Nahant Bank

Shaw, C. J.

The question in this case is, whether the mortgage from the Nahant Bank, under which the demandant claims, is a valid security. Upon the facts agreed, several exceptions were taken, upon which the cause has been argued.

In the first place, the deed duly executed under the corporate seal of the bank, and produced by the party claiming under it, is prima facie a good title ; and it is for those, who wish to set it aside, to impeach it. If therefore the parol evidence as to the proceedings of the directors and the circumstances under which the deed was executed, was inadmissible, it leaves the deed unimpeached.

But if we look beyond the deed itself at the facts testified and the votes given in evidence, it appears that the plaintiff had an action against the bank, which was about coming to judgment and execution, when the plaintiff might by law have levied his execution on the same premises embraced in the mortgage ; to prevent which the directors agreed to give him a deed, he executing a bond not to put into circulation the bank bills on which he had recovered judgment.

It was contended that a board of bank directors, exercising themselves a delegated authority, have no power to delegate an authority to any committee to alienate or mortgage real estate, and that if the authority of the committee was to convey, they had no power to mortgage. To both parts of this objection we think there is an answer. In the first place, we think the exception takes much too limited and strict a view of the powers of bank directors. A board of directors of the banks of Massachusetts is a body recognized by law. By the by-laws of these corporations, and by a usage, so general and uniform as to be regarded as part of the law of the land, they have the general superintendence and active management of all the concerns of the bank, and constitute, to all purposes of dealing with others, the corporation. We think they do not exercise a delegated authority, in the sense in which the rule applies to agents and attorneys, who exercise the powers especially conferred on them- and no others. We think, therefore, that a board of directors may delegate an authority to a committee of their own number, to alienate or mortgage real estate ; that an authority to convey necessarily implies an authority to execute suitable and proper instruments for that purpose; and, in case of a corporation, to affix the corporate seal to an instrument requiring it.

As to the committee’s having exceeded their authority, by executing a mortgage, under a general authority to convey, so that the authority was not pursued ; the court are of opinion, without stopping to inquire whether such act did pursue the authority, that the case shows a ratification by the board of directors. The directors accepted the bond of defeasance which referred to the deed, and acted upon it; the cashier paid the costs ; and the general tenor of the evidence proves such ratification. The court are therefore of opinion that the mortgage was valid and binding on the bank, and that the plaintiff is entitled to recover.

Judgment on the verdict.