MCLEMORE
v.
LOUISIANA STATE BANK

U.S. | 1875-10-01
91 U.S. 27 Supreme Court of the United States (1875) Caution
Also reported at: 23 L. Ed. 196 · 1875 U.S. LEXIS 1329 · SCDB 1875-006
Cited by 73 cases

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Synopsis

In McLemore v. Louisiana State Bank, the Supreme Court addressed whether a bank could be held liable for the loss of collateral pledged as security when military authorities seized and liquidated the bank during the Civil War. The Court held that a pledgee's duty to return collateral is discharged when the pledge is taken by superior force beyond the pledgee's control, and affirmed the judgment in favor of the bank because it had taken reasonable care of the pledged notes and bills and lost possession through military order rather than through any fault of its own.


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Opinion of the Court
Mr. Justice Davis

Mr. Justice Davis delivered the opinion of the court.

It -is unnecéssary to consider whether in all respects the charge of the Circuit Court to the jury was correct, because the record shows the cage of the'plaintiff to be so fatally defective, that the judgment below would not be reversed for instructions, however erroneous. Brobst v. Brock, 10 Wall. 519; Decatur Bank v. St. Louis Bank, 21 id. 301. The case is this: .The plaintiff was the owner of certain promissory notes and acceptances, in possession of the commercial firm in New Orleans of which he was a member, which were pledged by the firm, in 1861 and 1862, to the bank, as security for the' payment of their promissory notes discounted by the bank. These notes were not met at maturity, and, with the collaterals pledged for their payment, remained „ in possession of the bank until June 11, 1863, when it was put in liquidation by order of Major-General Banks, and its effects transferred to military commissioners appointed to close it up. Its officers, while submitting to this order because they had no power to resist it, deemed it unjust and oppressive, and entered a protest against it on their minutes. During the administration of these commissioners, the pledged paper was sold for less than its face. In January, 1866, the military liquidation ceased by order of Major-General Canby, and the effects of the bank which were unadministered were restored to it. The plaintiff, on the ground that the securities were parted with illegally, seeks to make the bank responsible for the proceed-ings. of the commissioners 5 but this he cannot do. Certainly no act was done, or omitted' to be done, by it, inconsistent with its duty-; for it was only bound to take that cafe of the pledge which a careful man bestows on his own property. ' • ' It is true, it was the duty of tbe bank to return tbe pledge, or sbow a good reason wby it could not be returned. This it has done by proof, that without any fault on its part, and against its protest, tbe pledge was taken from it by superior force. Where this is the case, the common as well, as the civil law holds that the duty of the pledgee is discharged. 2 Kent, 579; Story on Bailments, sect. 339; Commercial Bank v. Martin, 1 Annual, 344. That the proceedings of General Banks and the liquidators appointed by him constituted “ superior force,” which no prudent administrator of the affairs of a corporation could either resist or prevent, is too plain for controversy. It was in the midst of war that the order was made, and with an army at hand to enforce it. . There was nothing left but submission under protest. Any other course of action, under the circumstances, instead of benefiting, would have injured, everyone who had dealingswith the bank. It has turned out that the plaintiff has suffered injury, but not through the fault of the officers of the bank; for they retained the notes and bills long after, the paper for which they were given as security had matured, and until they were dispossessed of them by military force. Under such circumstances, they have discharged every duty which they owed to the plaintiff; and, if loss has been occasioned in consequence of the order in question, the bank is not responsible for it.

The judgment is affirmed.


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Citator

Cited By (35 total)

  • …ded and the Federal courts, as well as a majority of the State courts, have held that no other penalties except those provided in the Act can be invoked against a National bank. See Farmers’ and Mechanics’ National Bank v. Dearing, 1875, 91 U.S. 29, 23 L.Ed. 196 and subsequent cases collected at 12 U.S. C.A. p. 343. The Banks argue that some of the penalties assessed against the National bank are in excess of those permitted under the Federal Act, insisting that the only penalty that should be imposed agai…
  • Ferguson v. Five Points Nat'l Bank OF Miami, 187 So. 2d 45 (Fla. 3d DCA 1966)
    …hich are created pursuant to the laws of the Federal Congress. See and compare: Coral Gables First National Bank v. Constructors of Florida, Inc., Fla.App.1960, 119 So. 2d 741; Farmers’ and Mechanics’ National Bank of Buffalo v. Dearing, 91 U.S. 29, 23 L.Ed. 196; Schuyler National Bank v. Gadsden, 191 U.S. 451, 24 S.Ct. 129, 48 L.Ed. 258; Title 12, U.S.C.A. §§ 85, 86. Therefore, the final order of dismissal is hereby affirmed. Affirmed. . There was no contention that there was any benefit to the bank at…
  • …); McCollum v. Hamilton National Bank, 303 U.S. 245, 247-49, 58 S.Ct. 568, 570-71, 82 L.Ed. 819 (1938); First National Bank in Mena v. Nowlin, 509 F. 2d 872, 875 (8th Cir.1975). But see Farmers’ & Mechanics’ National Bank v. Dearing, 91 U.S. 29, 35, 23 L.Ed. 196 (1875). 690 F. 2d at 784-85. The American Timber court also furnished a second justification for its refusal to award prejudgment interest: In addition, increasing penalties will increase the burden on national banks and hence may be inconsistent…

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