The Act of 10 April 1816, c. 44, incorporating the Bank of the
United States, does not, by the ninth rule of the fundamental
articles, prohibit the bank from discounting promissory notes or
receiving a transfer of notes in payment of a debt due the
bank.
The Bank of the United States and every other bank not
restrained by its charter, and also private bankers, on discounting
notes and bills, have a right to deduct the legal interest from the
amount of the note or bill at the time it is discounted.
The Bank of the United States is not restrained by the ninth
rule of the fundamental articles of its charter from thus deducting
interest at the rate of six percent on notes or bills discounted by
it.
Banks and other commercial corporations may bind themselves by
the acts of their authorized officers and agents without the
corporate seal.
The negotiability of a promissory note payable to order is not
restrained by the circumstance of its being given for the purchase
of read property in Louisiana, and the notary before whom the
contract of sale is executed, writing upon it the words
"ne
varietur," according to the laws and, usages of that state and
other countries governed by the civil law.
The statutes of usury of England and of the states of the union
expressly provide that usurious contracts shall be utterly void,
but without such a provision they are not void as against parties
who are strangers to the usury.
The statute incorporating the Bank of the United States does not
avoid securities on which usurious interest may have been taken,
and the usury under the act of the Legislature of Georgia cannot be
set up as a defense to a note on which it is taken. It is merely a
violation of the charter, for which a remedy may be applied by the
government.
This was a suit brought by the
Page 21 U. S. 339
defendants in error against the plaintiff in error in the court
below upon a promissory note drawn by him, dated 26 March, 1818,
for the sum of $10,000, payable to the order of one John Nelder on
1 March, 1820. The plaintiffs below, in their petition, made title
to the note through several mesne endorsements, the last of which
was that of the President, &c., of the Planters' Bank of New
Orleans, through their cashier, as agent. The answer of the
defendant below set up several grounds of defense: (1) that the
Bank of the United States purchased the note in question from the
Planters' Bank, which was a trading within the prohibitions of the
charter of the Bank of the United States; (2) that the transfer was
usurious, it having been made in consideration of a loan or
discount to the Planters' Bank, upon which more than at the rate of
six percentum per annum was taken by the Bank of the United States;
(3) that the cashier of the Planters' Bank had no authority to make
the transfer; (4) that the making the promissory note by the
defendant below was not a mercantile transaction or governed by
mercantile usages or laws, because it was given as the part
consideration of the purchase by him of a plantation and slaves
from the said Nelder, and that the notary before whom the contract
of sale was executed and recorded wrote on the note the words
"ne varietur," by which every holder of the note might
know it was not a mercantile transaction, and could obtain
knowledge of the circumstances under which it was given. And the
answer proceeded
Page 21 U. S. 340
to state that Nelder had no title to a part of the plantation
and slaves and that the note ought not to be paid until the title
was made good, and prayed that the matters thus alleged and put in
issue might be inquired of by a jury.
The issue was joined, and it appeared in evidence on the trial
that the note in question was discounted for the Planters' Bank by
the Bank of the United States, and, after deducting for the time
the note was to run a sum equal to the rate of six percent per
annum, the residue was carried to the credit of the Planters' Bank,
which was at that time indebted to the Bank of the United States in
a large sum of money. The counsel for the defendant below moved the
court to instruct the jury upon this evidence
"that the receiving the transfer of the said promissory note,
and the payment of the amount in account, as stated in the
evidence, was a dealing in notes, and such dealing was contrary to
the provisions of the act incorporating the said bank."
The court refused to give the instruction prayed for, but did
instruct the jury "that the acceptance of an endorsed note in
payment of a debt due is not a trading in things prohibited by the
act."
The court also instructed the jury that the discount taken by
the Bank of the United States was not usurious and would not defeat
their right to recover the amount of the note.
It also appeared in evidence that the board of directors of the
Planters' Bank, on 21 of October, 1818, passed a resolution
"That the president and cashier be authorized to adopt the
Page 21 U. S. 341
most effectual measures to liquidate, the soonest possible, the
balance due to the office of discount and deposit in this city [New
Orleans], as well as all others presently due and which may in the
future become due to any banks of the city."
The endorsement of the note was made to the Bank of the United
States on 5 September, 1819, and before the commencement of the
present suit, to-wit, on 27 June, 1820, the board of directors of
the Planters' Bank passed another resolution, to which the
corporate seal was annexed, declaring that the two notes of the
defendant below (of which the note now in question was one)
"were endorsed by the late cashier of the Planters' Bank, by
authority of the president and directors, and delivered to the
office of discount and deposit of the Bank of the United States,
and the amount passed to the credit of the Planters' Bank,"
and that
"the said board of directors do hereby ratify and confirm the
said act of their said cashier as the act of the president,
directors, and company of the Planters' Bank."
Upon this evidence, the court instructed the jury that the
cashier had authority to endorse the note and that his endorsement
operated a valid transfer.
It further appeared in evidence that the said note was
originally given as a part consideration for the purchase money of
a plantation and slaves purchased by the defendant below of Nelder,
with a covenant to warrant and defend. The contract of sale was
drawn up, executed, and recorded before a notary according to the
laws
Page 21 U. S. 342
and usages of the State of Louisiana. The notary, upon the
giving of this note and other notes for the purchase money by the
defendant below, wrote on each note the words
"ne
varietur." The court instructed the jury that the writing of
these words did not affect the negotiability of the note.
The defendant below excepted to these several instructions, and
the jury found a verdict for the plaintiffs, on which judgment was
rendered by the court below, and the cause was brought by writ of
error to this Court.
Page 21 U. S. 347
MR. JUSTICE STORY delivered the opinion of the Court.
The Bank of the United States brought an action in the District
Court for Louisiana District against William Fleckner, the
plaintiff in error, upon a promissory note of Fleckner dated 26
March, 1818, for the sum of $10,000, payable to one John Nelder or
order, on 1 March, 1820, for value received, and the bank, in its
declaration by petition, made title to the same note through
several mesne endorsements,
Page 21 U. S. 348
the last of which was that of the President, &c., of the
Planters' Bank of New Orleans, through its cashier as agent. The
answer of Fleckner sets up several grounds of defense: first, that
the Bank of the United States purchased the note in question from
the Planters' Bank, which was a trading within the prohibitions of
its charter; secondly, that the transfer was usurious, it having
been made in consideration of a loan or discount to the Planters'
Bank, upon which more than at the rate of six percent per annum was
taken by the Bank of the United States; thirdly, that the cashier
of the Planters' Bank had no authority to make the transfer;
fourthly, that the making of the promissory note was not a
mercantile transaction or governed by mercantile usages or laws,
because it was given as a part consideration for the purchase by
Fleckner of a plantation and slaves from Nelder, and that the
notary before whom the sale was executed and recorded, wrote on the
note
"ne varietur," by which every holder of the note
might know it was not a mercantile transaction, and could obtain
knowledge of the circumstances under which it was given. And the
answer proceeds to state that Nelder had no title to a part of the
plantation and slaves, and that the note ought not to be paid until
the title was made good, and it then prays that the matters thus
alleged and put in issue may be inquired of by a jury. The issue
was joined, and on trial the jury found a verdict for the Bank of
the United States, and the cause now comes before
Page 21 U. S. 349
us upon a writ of error and a bill of exceptions taken at the
trial.
The various grounds assumed by the answer, which are
substantially the same as taken by the exceptions, will be
considered by the Court in the order in which they have been
mentioned.
And first as to the alleged violation of the charter by the Bank
of the United States in purchasing the note in question. The Act of
Congress of 10 April, 1816, ch. 44. incorporating the bank, in the
ninth rule of the fundamental articles, declares, s. 11, art. 9,
that
"The said corporation shall not, directly or indirectly, deal or
trade in anything except bills of exchange, gold or silver bullion,
or in the sale of goods really and truly pledged for money lent and
not redeemed in due time, or goods which shall be the proceeds of
its lands. It shall not be at liberty to purchase any public debt
whatsoever, nor shall it take more than at the rate of six
percentum per annum for or upon its loans or discounts."
It certainly cannot be a just interpretation of this clause that
it prohibits the bank from purchasing anything but the enumerated
articles, for that would defeat the powers given in other parts of
the act. The 7th section declares that the bank shall have capacity
to purchase, receive, &c., lands., &c., goods, chattels,
and effects, of whatsoever kind, nature, and quality, to an amount
not exceeding fifty-five millions of dollars, and the same to sell,
grant, demise, alien, and dispose of. And where the act means to
prohibit purchases of any particular thing, it uses the very term,
as in the prohibition
Page 21 U. S. 350
of purchasing any public debt in this very clause. And certainly
there is no pretense to say that if discounting promissory notes be
a purchase in point of law, it could have been the legislative
intention to include such an act in the prohibition. It is
notorious that banking operations are always carried on in our
country by discounting notes. The late Bank of the United States
conducted, and all the state banks now conduct, their business in
this way. The principal profits of banks, and indeed the only thing
which makes them more valuable than private stock, arises from this
source. The legislature cannot be presumed ignorant of these facts,
and it would be absurd to suppose that it meant to create a bank
without any powers to carry on the usual business of a bank. The
act contemplates throughout an authority to make loans and
discounts. It provides expressly for the establishment of offices
of discount and deposit, and the very clause now under
consideration recognizes the power of the bank to make loans and
discounts and restricts it from taking more than six percent on
such loans or discounts.
But in what manner is the bank to loan? What is it to discount?
Has it not a right to take an evidence of the debt which arises
from the loan? If it is to discount, must there not be some chose
in action or written evidence of a debt payable at a future time
which is to be the subject of the discount? Nothing can be clearer
than that by the language of the commercial world, and the settled
practice of banks, a discount by a bank means,
ex vi
termini, a deduction or
Page 21 U. S. 351
draw-back made upon its advances or loans of money, upon
negotiable paper, or other evidences of debt, payable at a future
day, which are transferred to the bank. We must suppose that the
legislature used the language in this its appropriate sense, and if
we depart from this settled construction, there is none other which
can be adopted which would not defeat the great objects for which
the charter was granted and make it, as to the stockholders, a mere
mockery. If, therefore, the discounting of a promissory note
according to the usage of banks be a purchase within the meaning of
the 9th rule above stated (upon which serious doubts may well be
entertained), it is a purchase by way of discount, and permitted by
necessary inference from the last clause in that rule.
The true interpretation, however, of that rule is not that it
prohibits purchases generally, but that it prohibits buying and
selling for the purposes of gain. It aims to interdict the bank
from doing the ordinary business of a trader or merchant in buying
and selling goods, &c., for profit, and uses the words "deal"
and "trade," in contradistinction to purchases, made for the
accommodation or use of the bank or resulting from its ordinary
banking operations. And that this is the true sense of the rule is
strongly evinced by the 12th section of the act, which enforces a
penalty for the violation of this very rule. It enacts that if the
bank,
"or any person or persons for, or to the use of the same, shall
deal or trade in buying or selling goods, wares, merchandise, or
commodities whatsoever,
Page 21 U. S. 352
contrary to the provisions of this act, all and every person,
&c., shall forfeit, &c., treble the value of the goods,
&c., in which such dealing and trading shall have been."
The words dealing and trading are used as equivalent in meaning,
and they are connected with "goods, wares, merchandises, and
commodities," which words, in mercantile language, are always used
with reference to corporeal substances, and never to mere choses in
action. And as there is no reason to suppose that the penalty was
not intended to be coextensive with the prohibitions of the 9th
rule, the exception of bills of exchange in that rule was either
inserted
ex majori cautela or designed to authorize the
purchase and sale of bills of exchange at a price above their par
value. At all events, doubtful phraseology of this sort cannot be
admitted to overrule a clear legislative intention of authorizing
discounts, and if so, as there are no words restricting the
discounts to any particular kind of paper, the right must equally
apply to all kinds.
The evidence in the case shows that the note in question was
discounted for the Planters' Bank by the Bank of the United States,
and after deducting, for the time the note was to run, a sum equal
to the rate of 6 percent per annum, the residue was carried to the
credit of the Planters' Bank, which it seems was then indebted to
the Bank of the United States in a large sum of money. It is
immaterial to the decision of the point now under consideration
whether the discount was for this purpose or not, for whether
the
Page 21 U. S. 353
proceeds were to be paid over or carried to the general credit
of the party or applied to the payment of a preexisting debt, the
transaction was still in substance a discount, and therefore not
within the prohibitions of the 9th rule of the charter. The
district judge, therefore, who sat at the trial was perfectly
correct in refusing to charge the jury as the counsel for Fleckner
requested,
"that the receiving the transfer of the said promissory note,
and the payment of the amount in account, as stated in the
evidence, was a dealing in notes, and such dealing was contrary to
the provisions of the act incorporating the said bank."
And he was equally correct in charging the jury, "that the
acceptance of an endorsed note in payment of a debt due is not a
trading in things prohibited by the act." And this was the whole of
his charge on this point brought up by the exceptions.
It may be added upon this point that even if the bank had
violated the rule above stated by this particular transaction, it
is not easy to perceive how that objection could be available in
favor of Fleckner. The act has not pronounced that such a violation
makes the transaction or contract
ipso facto void, but has
punished it by a specific penalty of treble the value. It would
therefore remain to be shown how, if the bank had a general right
to discount notes, a contract not made void by the act itself could
on this account be avoided by a party to the original contract who
was not a party to the subsequent transfer.
Page 21 U. S. 354
The next point arising on the record is whether the discount
taken in this case was usurious. It is not pretended that interest
was deducted for a greater length of time than the note had to run
or for more than at the rate of six percent per annum on the sum
due by the note. The sole objection is the deduction of the
interest from the amount of the note at the time it was discounted,
and this, it is said, gives the bank at the rate of more than six
percent upon the sum actually carried to the credit of the
Planters' Bank. If a transaction of this sort is to be deemed
usurious, the same principle must apply with equal force to bank
discounts generally, for the practice is believed to be universal,
and probably few if any charters contain an express provision
authorizing in terms the deduction of the interest in advance upon
making loans or discounts. It has always been supposed that an
authority to discount or make discounts did, from the very force of
the terms, necessarily include an authority to take the interest in
advance. And this is not only the settled opinion among
professional and commercial men, but stands approved by the
soundest principles of legal construction. Indeed, we do not know
in what other sense the word "discount" is to be interpreted. Even
in England, where no statute authorizes bankers to make discounts,
it has been solemnly adjudged that the taking of interest in
advance by bankers upon loans in the ordinary course of business is
not usurious.
If indeed the law were otherwise, it would not follow that the
transfer to the bank of the present
Page 21 U. S. 355
note would be void, so that the maker of the note could set it
up in his defense. The statutes of usury of the states, as well as
of England, contain an express provision that usurious contracts
shall be utterly void, and without such an enactment the contract
would be valid, at least in respect to persons who were strangers
to the usury. The taking of interest by the bank beyond the sum
authorized by the charter would doubtless be a violation of its
charter for which a remedy might be applied by the government; but
as the act of Congress does not declare that it shall avoid the
contract, it is not perceived how the original defendant could
avail himself of this ground to defeat a recovery. The opinion of
the district judge that the discount taken in this case was not
usurious and would not defeat the right of recovery of the
plaintiffs was therefore unexceptionable in point of law.
The next point is whether the endorsement of the note by the
cashier of the Planters' Bank was sufficient to transfer the
property to the original plaintiffs. The evidence on this point was
that the board of directors of the Planters' Bank on 21 October,
1818, passed a resolution
"That the president and cashier be authorized to adopt the most
effectual measures to liquidate, the soonest possible, the balance
due to the office of discount and deposit in this city [New
Orleans], as well as all others presently due, and which may in the
future become due to any banks of the city."
The endorsement was made to the Bank of the United States on 5
September,
Page 21 U. S. 356
1819, and before the commencement of this suit,
viz.,
on 27 June, 1820, the board of directors of the Planters' Bank
passed a resolution, to which the corporate seal was annexed,
declaring that the two notes of the defendant (of which the present
note was one)
"were endorsed by the late cashier of the Planters' Bank by
authority of the president and directors and delivered to the
office of discount and deposit of the Bank of the United States,
and the amount passed to the credit of the Planters' Bank, and that
the said board of directors does hereby ratify and confirm said act
of their said cashier as the act of the president, directors and
company of the Planters' Bank."
The act incorporating the Planters' Bank has been examined by
the court, and as to the appointment of the cashier and the
authority of the board of directors it does not differ materially
from acts incorporating other banks.
It authorizes the president and directors to appoint a cashier
and other officers of the bank, and gives the president and
directors, or a majority of them,
"full power and authority to make all such rules and regulations
for the government of the affairs and conducting the business of
the said bank as shall not be contrary to this act of
incorporation. [
Footnote
1]"
It contains no regulations as to the duties of the cashier, nor
any express authority for the corporation to make bylaws. The whole
business of the bank is confided entirely to
Page 21 U. S. 357
the directors, and of course with them it would rest to fix the
duties of the cashier or other officers. Whether they have in fact
made any regulations on this subject does not appear, but the acts
of the cashier, done in the ordinary course of the business
actually confided to such an officer, may well be deemed
prima
facie evidence that they fell within the scope of his
duty.
The first objection urged against this evidence is that the
corporation could not authorize any act to be done by an agent by a
mere vote of the directors, but only by an appointment under its
corporate seal. And the ancient doctrine of the common law that a
corporation can only act through the instrumentality of its common
seal has been relied upon for this purpose. Whatever may be the
original correctness of this doctrine as applied to corporations
existing by the common law, in respect even to which it has been
certainly broken in upon in modern times, it has no application to
corporations created by statute, whose charters contemplate the
business of the corporation to be transacted exclusively by a
special body or board of directors. And the acts of such body or
board, evidenced by a written vote, are as completely binding upon
the corporation and as complete authority to their agents as the
most solemn acts done under the corporate seal.
In respect to banks, from the very nature of their operations in
discounting notes, in receiving deposits, in paying checks, and
other ordinary and daily contracts, it would be impracticable to
affix the corporate seal as a confirmation of each individual act.
And if
Page 21 U. S. 358
a general authority for such purposes under the corporate seal
would be binding upon the corporation because it is the mode
prescribed by the common law, must not the like authority,
exercised by agents appointed in the mode prescribed by the
charter, and to whom it is exclusively given by the charter, be of
as high and solemn a nature to bind the corporation? To suppose
otherwise is to suppose that the common law is superior to the
legislative authority, and that the legislature cannot dispense
with forms, or confer authorities, which the common law attaches to
general corporations. Where corporations have no specific mode of
acting prescribed, the common law mode of acting may be properly
inferred; but every corporation created by statute, may act as the
statute prescribes, and the common law cannot control by
implication that which the legislature has expressly sanctioned.
Indeed, this very point has been repeatedly under the consideration
of this Court, and in the case of The Bank of Columbia v.
Patterson, (7 Cranch 299) and the Mechanics' Bank of
Alexandria v. Bank of
Columbia, 5 Wheat. 326, principles were established
which settle the point that the corporation may be bound by
contracts not authorized or executed under its corporate seal and
by contracts made in the ordinary discharge of the official duty of
its agents and officers. We have no doubt, therefore, upon the
principles of the common law, that a vote of the board of directors
of the Planters' Bank was as full authority
Page 21 U. S. 359
for any act of this nature to bind the corporation as if it had
passed under the common seal.
But it is to be recollected that the rights and authorities and
mode of transacting business of the Planters' Bank depend not upon
the common law, but upon the charter of incorporation, and where
that is silent, upon the principles of interpretation and doctrines
of the civil law which has been adopted in Louisiana. The Civil
Code of that state declares that as corporations cannot personally
transact all that they have a right legally to do, wherefore it
becomes necessary for every corporation to appoint some of their
members, to whom they may entrust the direction and care of their
affairs under the name of mayor, president, syndics, directors, or
others according to the statutes and qualities of such
corporations. It further declares that the attorneys in fact or
officers thus appointed have their respective duties pointed out by
their nomination and exercise them according to the general
regulations and particular statutes of the corporation; that these
officers, by contracting, bind the communities to which they belong
in such things as do not exceed the limits of the administration
which is entrusted to them; and that if the powers of such officers
have not been expressly fixed, they are regulated in the same
manner as those of other mandatories. [
Footnote 2] This is all that is contained upon the subject
now under consideration in the title of the code professing to
treat of corporations, and
Page 21 U. S. 360
their rights, powers, and privileges. There is nothing which in
the slightest degree points to the necessity of using a corporate
seal in appointing agents or authorizing corporate acts, and the
fair inference deducible from the silence of the code is that it
does not contemplate any such formality as essential to the
validity of any official acts done by the officers of the
corporation, and gives such acts a binding authority if evidenced
by a vote.
We may, then, dismiss this point as to the necessity of the
corporate seal and proceed to consider another objection stated by
the counsel for the original defendant. It is that the cashier had
no authority to make this transfer; that the resolution of 21
October, 1818, did not confer it originally, and that the
subsequent ratification, by the resolution of 27 June, 1820, does
not give any validity to an ineffectual and unauthorized transfer.
We are very much inclined to think that the endorsement of notes
like the present for the use of the bank falls within the ordinary
duties and rights belonging to the cashier of the bank, at least if
his office be like that of similar institutions and his rights and
duties are not otherwise restricted. The cashier is usually
entrusted with all the funds of the bank, in cash, notes, bills,
&c., to be used from time to time for the ordinary and
extraordinary exigencies of the bank. He receives directly, or
through the subordinate officers, all moneys and notes. He delivers
up all discounted notes and other property when payments have been
duly made. He draws checks from time to time
Page 21 U. S. 361
for moneys wherever the bank has deposits. In short, he is
considered the executive officer through whom and by whom the whole
moneyed operations of the bank in paying or receiving debts or
discharging or transferring securities are to be conducted. It does
not seem too much, then, to infer, in the absence of all positive
restrictions, that it is his duty as well to apply the negotiable
funds as the moneyed capital of the bank to discharge its debts and
obligations. And under these circumstances the provision of the
civil code already cited may be justly applied that where his
powers are not otherwise fixed, they are to be regulated as other
mandatories, or rather as other agents and factors. In point of
practice it is understood, and was so stated by one of the learned
counsel whose knowledge and experience upon this subject entitle
his statement to the highest credit, that these duties are
ordinarily performed by the cashiers of banks. And general
convenience and policy would dictate this arrangement as most
salutary to the interests of the banks. And it may be added that
the very act done by the cashier in this case, with the approbation
of the bank, affords some presumption that it was not a usurped
authority.
But waiving this consideration, let us attend to the actual
features of this case upon the evidence. It is true that the
resolution of 21 October does not directly and in terms authorize
this transfer. It is not a resolution conferring a joint authority
to the president and cashier to endorse any note for the bank. It
simply requires them to
Page 21 U. S. 362
take measures to liquidate the balance due to the original
plaintiffs and other banks. It is merely directory to them, and
leaves them to decide as to the time, the mode, and the means. As
they were not restricted in these respects, they had a resulting
right to employ any of the funds of the bank for this purpose, and
the negotiable paper of the bank was equally within the scope of
the authority as the cash funds if they should deem it proper to
use them. They were at liberty to raise money for this purpose from
the general funds in any way which the ordinary course of business
would justify and which they should deem the most effectual
measures. They might therefore agree that the cashier should
endorse the note in question and should procure it to be discounted
at the Bank of the United States and the proceeds to be carried to
its credit. The presumption that this was an exercise of authority
sanctioned by the president as well as contemplated by the
directors is almost irresistibly proved by the fact that the
Planters' Bank has never complained of, but ratified and approved,
the whole transaction. Some criticism has been employed on the
meaning of the word "liquidate" in the resolution above stated. It
is said to mean not a payment, but an ascertainment of the debts of
the bank. We think otherwise. Its ordinary sense as given by
lexicographers is to clear away, to lessen debts. And in common
parlance, especially among merchants, to liquidate a balance, means
to pay it, and this, we are satisfied, was the sense in which the
words were used in this resolution,
Page 21 U. S. 363
and consequently that the appropriation of this note to the
payment of the debt was within the scope of the authority given to
the president and cashier.
But if this were susceptible of doubt, we think that the
subsequent resolution of the directors of 27 June, 1820, is
conclusive. That resolution is not a mere ratification of the
transfer, but declares that the endorsement was made by the cashier
on 4 September, 1819, by authority of the president and directors.
It is therefore a direct and positive acknowledgment of its
original validity, binding on the bank, and if so it is binding
upon all other persons who have not an adverse interest. But if it
were only a ratification, it would be equally decisive. No maxim is
better settled in reason and law than the maxim
omnis
ratihabitio retrotrahitur, et mandato priori equiparatur, at
all events, where it does not prejudice the rights of strangers.
And the civil law does not, it is believed, differ from the common
law on this subject. [
Footnote
3]
We think, then, that the transfer in this case was made upon
sufficient authority and that therefore the opinion of the district
judge affirming the same doctrine was perfectly correct.
The next point made by the counsel for the original defendant is
that the writing of the words
"ne varietur" upon the note
restricted its negotiability. It appeared in evidence that the note
in question was given as a part consideration for
Page 21 U. S. 364
the purchase money of a plantation and slaves purchased by
Fleckner of Nelder. The instrument of conveyance was drawn,
executed, and recorded before a notary public according to the
usage in countries governed by the civil law. The notary, upon the
giving of this and other notes for the purchase money by Fleckner,
wrote on each note the words in question. There is not the
slightest evidence that, by the law or custom of Louisiana, the
introduction of these words affects the negotiability of these
notes, and without proof of such law or usage, this Court certainly
cannot infer the existence of such an extraordinary and
inconvenient doctrine. Upon the face of the transaction, we should
suppose that the words were written merely for the purpose of
ascertaining the identity of the notes, and the statement at the
bar that this is the explanation given by a very learned notary
confirms this supposition. The opinion of the district judge upon
this point also, asserting that the words did not create any
restriction upon the negotiability of the note, is, as far as we
have any knowledge, a true exposition of the law.
It is unnecessary to pursue this subject further. The judgment
of the court below is
Affirmed with interest and costs.
JUDGMENT. This cause came on to be heard on the transcript of
the record of the Circuit Court of the United States for the
District of Louisiana and was argued by counsel. On consideration
whereof it is ADJUDGED and ORDERED that the
Page 21 U. S. 365
judgment of the said District Court for the District of
Louisiana in this case be and the same is hereby affirmed with
costs and damages at the rate of eight percentum per annum,
including interest on the amount of the judgment of the said
district court.
[
Footnote 1]
Act of 15 April, 1811. 1 Martin's Dig. 568
et seq.
[
Footnote 2]
Civil Code Louisa, tit. 10. ch. 2, art. 13 and 14.
[
Footnote 3]
See Civil Code of Louisiana, tit. 3, ch. 6, s. 4.