
    *Stainback v. The Bank of Virginia.
    April Term, 1854,
    Richmond.
    1. Principal and Agent—Power of Attorney to Draw, Endorse or Accept Bills Scope of Authority.—A power of attorney to draw, endorse or accept bills, and to make and endorse notes, negotiable at a particular bank, in the name of the principal, in the absence of anything' to show a different intention, must be construed as giving' authority to act only in the separate individual business of the principal : And an endorsement of a bill by the agent In the name of his principal, for the ben ell l of the agent, is beyond his authority, and does not bind the principal.
    2. Sense — Same Knowledge of Third Party That Agent Is Exceeding Authority—Effect.- -A parti dealing with the agent, with knowledge or means of knowledge that under such a power he is endorsing the name of his principal for his own. benefit, is not entitled to recover from tthe principal.
    3- Same—Same—Same.—The fact that the attorney who was the drawer of the bill upon which he endorsed the name of his principal, held the bill at the time it was discounted by the holder, ami that the proceeds were passed to his credit, are of themselves full proof that the attorney was acting for his own benefit, and not that of his principal.
    This was an action of assumpsit in the Circuit court of Petersburg, brought by the Bank of Virginia against Littleberry F. Stainback, as endorser of three bills of exchange, each for five hundred pounds sterling, drawn by F. C. Stainback upon T. W. Clagett of London, and protested for nonacceptance. The bills purport io be endorsed by Littleberry p. Stainback, by F. C. Stainback his attorney. Two of them bear date the 6th, and the third the 7th of February 1843. This case presented the same questions as to the protest and notice as arose in the next preceding case, but they are not noticed by this court. The case turned upon questions arising out of the endorsement by the attorney.
    On the trial of the cause, after the plaintiffs had introduced in evidence the three bills of exchange, the "^protests and the evidence as to the dishonor of the bills and the notice, they introduced a power of attorney in the following terms : “Know all men by these presents, that I, Littleberry F. Stainback of the town of Petersburg, state of Virginia, have made and appointed Francis C. Stainback of the town of Petersburg, state of Virginia, my true and lawful agent and attorney, for me and in my name and behalf to make, or endorse my name on, any note negotiable and payable at the office of discount and deposit of the Bank of Virginia in Peters-burg; also to endorse my name on any bill of exchange negotiable at the office aforesaid, and to subscribe my name to any such bill or note, or to any endorsement thereof, or any acceptance of any such bill; also to draw in my name or sign and subscribe to any check payable and negotiable at the said office of discount and deposit in Petersburg as aforesaid; hereby ratifying, allowing and confirming all and every act that my said agent and attorney shall do in and about the premises. And I the said Eittleberry E. Stainback, for myself, my heirs, &c., do hereby covenant with the president, directors and company of the Bank of Virginia, and their successors, that this power of attorney shall continue in full force and virtue until due notice shall be given in writing to the cashier of their office in Petersburg of itst revocation; and that all notices of the protests of any bill or note made, endorsed or accepted by me, shall be good and sufficient in law, if given to my attorney aforesaid in my absence from the said town of Petersburg, state of Virginia. In witness whereof, I have hereunto set my hand and seal this 19th day of March 1833.
    B. E. Stainback. [Seal.]”
    This power of attorney was deposited in the Bank of Virginia at Petersburg when it was executed, and *had remained there ever since, unrevoked, until after the bills of exchange on which the action is founded were discounted by that bank. On the 12th of February 1843 E. E. Stainback addressed a note to the cashier of the bank, directing him to deliver the power of attorney to F. C. Stain-back : and on the next day F. C. Stainback, as the attorney of B. E. Stainback, by endorsement on this note, which was attached by wafers to the power, revoked it from that date.
    It was proved that F. C. Stainback was born on the 25th of February 1816; that at the date of the power of attorney the defendant was a merchant in Petersburg, and F. C. Stainback, who is his son, was a clerk in- his store, and engaged in no business on his own account; that F. C. Stainback had never been engaged in any business on his own account until the partnership of B. E- Stainback, Son & Co. was formed, which commenced business March 5th, 1837; said firm consisting of the defendant B. E- Stainback, F. C. Stainback and James Macfarland, who married a daughter of the defendant. That Macfarland died in the latter part of the year 1841, leaving the defendant and F. C. Stainback surviving him, the latter of whom had the sole charge of settling up the business of the firm. That the bills on which this suit is founded, were received by the Bank of Virginia at Petersburg from F. C. Stain-back, and their proceeds passed on the books of the bank to his credit: that two of the bills were lodged with the bank on the 6th, and so passed to his credit on the 7th of February 1843, which was the regular bill day at the bank, and the third bill was lodged with the bank on the 7th, and so passed to his credit on the 9th of the same month, which was a regular discount day at said bank. That at these dates F. C. Stainback was a merchant in Petersburg, and had been since about July 1842, in good credit, engaged in shipping produce and drawing bills. That *the defendant had been engaged in no active business since the dissolution of the partnership of B. E. Stainback, Son & Co.; had removed to his farm, which lies just beyond the corporation line oi; Petersburg, and was seldom in town; though he was in February 1843 the owner of ships.
    It was further proved by the cashier of the Bank of Virginia at Petersburg, that it was understood by him at the time said bills were negotiated, as a matter generally known at the time in Petersburg, that F. C. Stainback went to Charleston in January 1843 to buy cotton, and that he made large purchases, and that the cashier supposed and believed at the time, that the said bills were drawn on shipments, but he did not know on what shipments; nor did he know for whom the purchases in Charleston had been made. That on the morning of the 7th day of February 1843, the account of F. C. Stainback in the Bank of Virginia at Petersburg was overdrawn, the balance against him being three thousand one hundred and ninetj'-three dollars and eight cents; that his deposits and discounts on that day amounted to eight thousand five hundred and sixty-two dollars and sixty cents, and his checks to seven thousand nine hundred and eighty-nine dollars and thirty cents, leaving a balance of two thousand six hundred and nineteen dollars and seventy-eight cents against him on the morning of the 8th; that his discounts and deposits amounted on the 8th to three thousand seven hundred and ninety-two dollars and twenty-eight cents, and his checks to six thousand nine hundred and ninety-nine dollars and forty-nine cents; leaving a balance of five thousand eight hundred and twenty-six dollars and ninety-nine cents against him on the morning of the 9th; that his discounts and deposits on that day amounted to four thousand seven hundred and seventy-eight dollars and seventy-eight cents, and that no check of liis was paid *or presented for payment on that day; and that his account continued to be overdrawn until the 16th of February 1843.
    It was further proved that F. C. Stain-back was generally regarded as the agent of his father; that the transactions of E. E. Stainback, Son & Co. had been very large, and after the death of Macfarland, one of the partners, sometimes amounted to one hundred thousand dollars a month at the said bank. That after the death of Macfarland in 1841, about July 1842 F. C. Stainback was in the habit of signing and endorsing the name of the defendant on bills and notes negotiated at said bank, as it is endorsed on the bills in evidence in this cause; but that none of the bills so drawn or endorsed had been dishonored, and that none of the said notes had been taken up by the defendant. That P. C. Osborne, one of the endorsers on the bills -on which this action is founded, is a son in law of the defendant, and resided in Petersburg. That from about the month of April 1842 the indebtedness of E. E. Stainback, Son & Co. to the plaintiffs on their accommodation was rapidly reduced, and F. C. Stainback frequently used his own checks, and funds apparently his own, to make payments and deposits for the benefit of that firm; and that P. C. Stain-back frequently put his name on paper of ~L¡. E. Stainback, Son & Co. as last endorser, so that he might have the control of the proceeds of the discounts. That when the bills in evidence in this case were negotiated, P. C. Stainback had on deposit to his credit at said bank, notes and inland bills considered good, to the amount of upwards -of thirty thousand dollars, running to maturity, which were withdrawn by him on or about the 13th of Pebruary 1843.
    It was also proved by the cashier of the bank at Petersburg, that he was present at the meeting of the board of directors when the bills in this case were ^negotiated, and that he had no knowledge that the proceeds of said bills were not to be used for the benefit of the defendant; that several foreign bills' drawn by P. C. Stainback after the revocation of the power of attorney, were endorsed by the defendant with his own hand and by P. C. Osborne, and were negotiated by the Bank of Virginia at Petersburg, and the proceeds passed to the credit of P. C. Stainback; one of them for one thousand pounds, being drawn on T. W. Clagett of London; and that in Pebruary 1843 there was an account in the name of L. E. Stain-back, Son & Co. on the books of said bank, which was, however, merely a continuation of their accommodation at the bank, which was about the 1st of Pebruary 1843 reduced, by P. C. Stainback’s check for six hundred dollars, to about live thousand dollars.
    The said cashier also proved that he was authorized by the board of directors, and that it is not unusual, where large dealers with the bank, especially dealers who are •drawing foreign bills, and persons having large deposits of bills and notes to their credit running to maturity, to permit them to overdraw their accounts for a few days in the course of business, where he has reason to believe that a discount will be obtained of the bills or notes lodged with him on next discount day. That the overdrawing aforesaid of P. C. Stainback was known to the said cashier, but was not made known by him, nor, as far as he knows, in any other way, at the time said bills were discounted, to the board of directors by whom they were discounted.
    Upon this evidence the defendant moved the court to instruct the jury as follows:
    1st. If you believe from the evidence that the bills on which this suit is brought were received by the plaintiffs from P. C. Stain-back, and discounted by them for his accommodation; and that the plaintiffs knew or had reason to believe, that the money was *obtained by the said P. C. Stainback for his individual benefit, then the plaintiffs are not entitled to recover against the defendant by force of the power of attorney given in evidence by them. But if "the jury believe that the plaintiffs received the said bills from the said P. C. Stainback, and passed the proceeds to his credit, then it was incumbent on them to satisfy themselves that the money was obtained for the use and benefit of the defendant.
    2d. If you believe from the evidence that the power of attorney given in evidence in this case, was made by the defendant whilst a merchant in Petersburg, and P. C. Stain-back his son, was under age and a clerk in his store, and engaged in no business on his own account, and that the object of the defendant in making the said power was to authorize his said son to transact his business at the Bank of Virginia at Petersburg, and that this was known to the plaintiffs: And if you believe that the bills on which this suit is founded were not endorsed by the said F. C. Stainback in the course of transacting and attending to the business of the defendant at the said bank, but for the said F. C. Stainback’s own use and accommodation, and that the same were discounted by the plaintiff's for the accommodation of said F. C. Stainback, then the plaintiffs are not entitled to recover against the defendant by force of said power of attorney.
    3d. If you believe from the evidence that the power of attorney given in evidence in this cause was made by the defendant whilst a merchant in Petersburg, and whilst the said F. C. Stainback his son was a clerk in his store and under age, and engaged in no business on his own account, and that the object of the said defendant in making the said power was to authorize and empower his said son to sign liis name to bills, notes, &c., in the business of the said defendant, and not to authorize the said F. C. Stainback to use the name of *the defendant for his the said F. C. Stainback’s own benefit, and that this was known to the plaintiffs: And if you believe that the bills on which this suit is brought were not endorsed by the said F. C. Stainback in the business or for the benefit of the defendant, but for the said F. C. Stainback’s own use and accommodation, and that the same were discounted by the plaintiffs for the accommodation of said F. C. Stainback, then the said plaintiffs are not entitled to recover against the said defendant by force of said power of attorney.
    The court refused to give these instructions or any of them; and instructed the jury as follows:
    That the power of attorney offered in evidence in fhis cause, from the defendant to his son F. C. Stainback to endorse bills, notes, &c. for the defendant at the branch Bank of Virginia in Petersburg, gave the said F. C. Stainback no power to endorse bills or notes for his own benefit, or that of any other person except the defendant himself: that the endorsements made upon the bills exhibited in evidence in this cause, in the manner in which the same are made, are not inconsistent with the power of the said E. C. Stainback to endorse bills and notes for the benefit of the defendant, but within the scope of his authority to endorse bills for that purpose. If, therefore, the jurj' shall believe from the evidence in the caus'e, that the plaintiffs discounted said bills without notice of, or just cause to suspect, any intended fraud or misapplication of the proceeds thereof from the use and benefit of the principal, that then the defendant is bound by said endorsements; and any subsequent misapplication of the proceeds of said bills (if there were any) will not defeat the right of the plaintiffs to recover of the defendant. The defendant excepted to the opinion of the court.
    There was a verdict for the plaintiffs, and a motion *by the defendant for a new trial, which was overruled, and judgment rendered for the plaintiffs; when the defendant again excepted; and applied to this court for a supersedeas, which was awarded.
    Joynes and Patton, for the appellant.
    
      D. May and Stanard, for the appellees.
    
      
      The principal case is cited in DeVoss v. City of Richmond, 18 Gratt. 363; also, 2 Va. Law Register, 692. See monographic note on “Agencies'’ appended to Silliman v. Fredericksburg, etc., R. R. Co., 27 Gratt. 119.
    
   SAMUELS, J.

The several endorsements on which this suit is founded, were made under color of authority conferred by the power of attornej' which was the subject of consideration in the case of Stainback v. Read & Co. recently decided in this court. This case, like the case above mentioned, turns upon the questions:

1st. Whether the endorsements were made in the proper exercise of the. agent’s authority.

2d. If not, whether there is anything in the dealing between the bank and the agent, which should bind the principal, notwithstanding the agent’s want of authority.

After the evidence had been heard on the trial in the court below, three several instructions were moved for by the defendant’s counsel, predicated upon portions of the evidence tending to show that the agent, in making the endorsements, was not acting in the business of the principal, but for the agent’s own benefit, and praying the court to instruct the jury, if they believed this fact, they should find for the defendant. These instructions were refused by the court; and therein the court erred. If the agent did in fact endorse the name of his principal on the bills for the agent’s own accommodation, he exceeded his authority, and the endorsements standing alone do not bind the principal.

2d. As to the second question: In the case above mentioned it was declared that under certain circumstances *therein mentioned, a principal might be bound by the act of the agent, although the agent may have exceeded his authority. This modification of the general rule in regard to a power to endorse, &c., applies in the case of an innocent holder for value, who has become such by the act of an agent apparently within the scope of his authority. The court, in the absence of all proof tending to prove the fact, should not have submitted it to the jury to find whether the bank was an innocent holder. So far from showing that the bank might have been deceived and "was probably deceived by the agent, the evidence tends strongly to prove the reverse. In legal intendment the bank knew the limits of the agent’s written authority; they had that authority in their own keeping"; the bills were drawn by the agent in his own name and behalf; the name of the principal, who was the payee, was endorsed by the agent; and yet the bills are found in the hands of the drawer and offered by him for discount for his own benefit, and they are discounted accordinglj’’, and the proceeds applied to the credit of the agent’s own individual account. At the time the proceeds of the bills "were so applied to the agent’s credit, he was indebted to the bank in a large amount; and thus his debt was paid, so far as the proceeds of the bills extended. In every stage of the proceeding with which the bank was connected, it was perfectly apparent that the business of the agent, and not of the principal, was to be promoted.

It will not do to say that the agent might, by a certain disposition of the proceeds, have indemnified his principal; and that the bank could not know that he would not do so. The answer is obvious, that the proceeds of the bills "were at once applied to his own benefit on the books of the bank, with its full knowledge and consent. If the possibility that an agent may indemnify his principal against abuse of power *may be relied on to bind the principal, the practical and beneficial effects of limitations in powers will be destroyed; for in every case the agent may possibly indemnify his principal against such abuse.

The remaining questions growing out of the protests, and the mode of transmitting the notices of dishonor, are considered in another case between the same parties; and I refer to what is there said as expressing my opinions on those questions.

I am of opinion to reverse the judgment, and remand the case for a new trial to be had in conformity with the principles herein declared, if on such new trial the proof shall be the same in substance as on the former trial.

ALLEN and DANIEL, Js., concurred.

MONCURE and LEE, Js., dissented.

The judgment was as follows :

It seems to the court here, that the power of attorney from L. E. Stainback to E. C. Stainback, given in evidence at the trial, as between the principal and agent, gave the attorney no authority to endorse the bills given in evidence, with the name of L. E. Stainback, for the accommodation of the attorney; and that parties dealing with the attorney, and having the. means of knowing that he, in endorsing the name of the principal and obtaining a discount thereon, did so for the accommodation of the agent and not of the principal, cannot recover of the principal. It further seems to the court, that the facts appearing in the record, that the attorney, who was also the drawer, held the bills at the time they were offered for discount and discounted by the defendants in error, and that the proceeds were passed to the credit of the attorney, the drawer as aforesaid, are of themselves full proof *that the attorney was acting for his own benefit and not that of his principal; all which was known to the defendants. It therefore seems to the court that the Circuit court erred in refusing to give in substance the three several instructions moved for by the plaintiff, and in giving that which was given in lien thereof.

Therefore, it is considered bj* the court that the judgment aforesaid be reversed and annulled, and that the defendants pay to the plaintiff his costs expended in this court; that the verdict of the jury be set aside, and the cause remanded, with instructions that if upon any future trial the evidence shall be in substance the same as at the former trial, and if the defendant in the court below shall ask it, the court shall instruct the jury in accordance with the opinion of this court, as herein declared.  