C. S. Bowen Co. v. Maryland National Bank

Melvin, J., delivered the opinion of the Court. In this case the appellant (plaintiff below), C. S. Bowen Co., Inc. (Bowen), claims that the appellee (defendant below), Maryland National Bank (Maryland National), is liable to it for negligence and conversion. More specifically, Bowen claims that Maryland National wrongfully credited to the checking account of “Mrs. Patricia M. Andrews and Charles S. Bowen” at Maryland National checks belonging to Bowen and has failed to reimburse it for the full amount of those checks. It is claimed that Mrs. Andrews, Bowen’s employee, stole the checks from Bowen and that Maryland National accepted them for deposit in spite of a restrictive endorsement on all of them reading “For Deposit only, C. S. Bowen Company”.

After a jury verdict in favor of Maryland National in the Superior Court of Baltimore City (Ross, J., presiding) and a judgment entered thereon, Bowen appeals, presenting us with three questions for decision: 1 (1) Did the trial court err in not granting Bowen’s motion for a directed verdict “on the issue of Maryland National’s liability”? (2) Did the trial court err “in failing to instruct the jury that if they found the checks deposited by Andrews in the Andrews account at Maryland National were stamped ‘For Deposit Only, C. S. Bowen Company’, they would have to find Maryland National liable”? (3) Did the trial court err “in admitting irrelevant ²⁸ and prejudicial activities of the president of C. S. Bowen”? The Evidence -Bowen is described in the testimony as a “small” Maryland corporation 2 located in Baltimore City engaged in the business of selling and servicing paint spray equipment and sandblasting equipment.

Mrs. Andrews was hired by Bowen in October 1965 as a bookkeeper. Her duties were “to pick up the mail, to make deposits, keep the books and do some filing, those type of things”. According to Bowen’s president (Mr. Whitaker), with reference to deposits, “If a check came in the mail she was supposed to take it out, stamp it with ‘Deposit only to C. S. Bowen’ and then she would post it to the ledger card to whatever account it was to show that the invoice had been paid and then, of course, that posting, was posted into the cash receivable ledger and the check was put on a deposit slip and taken to” the Union Trust Company for deposit in Bowen’s checking account at that bank. Bowen had no account at Maryland National. ²⁹ On 20 March 1967, Mrs. Andrews, without the knowledge or authority of Bowen, went to a branch bank of Maryland National in Baltimore City and opened a “regular” joint checking account in the names of “Mrs. Patricia M. Andrews and Mr. Charles S. Bowen”.

She signed her name to a signature card and was asked to have Mr. Charles S. Bowen do the same. As “Charles S. Bowen” did not exist, Mrs. Andrews could not comply with this request. Instead, she took the card out of the bank, wrote the name “C. S. Bowen” on the card and returned it to the bank. Mrs. Andrews’ bank statements and deposit slips, introduced in evidence, showed that thereafter, between March 1967 and September 1968 Mrs. Andrews periodically deposited in the “joint” account checks totalling in the aggregate approximately $80,000.00, and that she drew on the account for her personal wants and needs.

Bowen claims that all the checks deposited by Mrs. Andrews were checks she had stolen from it, and that Maryland National is liable to it for their face amounts because, according to Bowen, all the checks were restrictively endorsed with a rubber stamp reading “For Deposit Only, C. S. Bowen Company ”. Maryland National does not contest the fact that Mrs. Andrews stole checks from Bowen or that some of the stolen checks may have been accepted by it for deposit in her “joint” account. Maryland National does, however, vigorously contend that Bowen has failed to meet its burden of showing which checks deposited by Mrs. Andrews belonged to Bowen or how they were each endorsed. Maryland National further claims that the evidence is such that the jury could have reasonably believed that Mrs. Andrews had repaid to Bowen the amounts of whatever checks she had stolen from Bowen and therefore that, in any event, no damages have been proven.

As its principal witness, Bowen called Mrs. Andrews to testify. She admitted that she had stolen checks from her employer and deposited them in her “joint” account. Her scheme for covering up her peculations was daring, if not ingenious. When a Bowen customer was billed, one of ³⁰ Andrews’ duties was to receive a “green copy” of a numbered five-piece invoice.

She was supposed to post the amount shown by the invoice on the customer’s individual ledger card and place the green copy, in numerical sequence, in a loose-leaf monthly notebook. Two copies of the invoice were sent to the customer when he was billed for his purchase; another copy was used for “back orders” when necessary, and the fifth, or “gold copy”, was placed in a “customer file” to facilitate filling a customer’s re-order of the same item. The “green copy” was the “control copy”. Mrs. Andrews said that her scheme was, from time to time, to hide the green copy of the invoice and not post the amount due on the customer’s ledger card or anywhere else among Bowen’s records.

Thus, when Bowen’s accountant made his customary monthly examination of the company’s books, he would find no record of the customer’s order (which was kept with the “gold copy” and not ordinarily checked by the accountant, or anyone else unless there was a re-order) and no record of an account receivable from that customer. Mrs. Andrews, however, in furtherance of her scheme, kept a notation of her own of the “green copy” of the invoice she had hidden, listing the customer’s name and the amount he had been billed. Then, when the customer’s check arrived in the mail, instead of depositing the check in Bowen’s account at the Union Trust Company, she deposited it in her “joint” account with the fictitious “Charles S. Bowen” at Maryland National. She said she repaid Bowen for some of the checks but she did not know how much was “involved” and had “no idea” how much she owed Bowen.

She said her method of repayment was to “go to the bank and purchase money orders and put them back in, but I don’t know how much”. In September 1968, Mr. Whitaker discovered Mrs. Andrews’ dishonesty while she was on vacation. By letter dated 19 September, Bowen’s attorney notified Mr. John O. Montgomery, Maryland National’s security" officer, that Mrs. Andrews “has apparently misappropriated funds of the Corporation by employing the use of an account in the Maryland National Bank” and “that under no circumstances ³¹ should any of the funds which you presently have on hand be released to anyone without authority of Mr. Whitaker”. Mr. Montgomery received the letter 20 September and on the same date ordered that the account be “frozen to prevent any further payment from the account”.

At that time the balance in the account was $4,353.06, Despite the “freeze” order, however, Maryland National continued to honor some checks drawn on the account that were outstanding at the time the “freeze” order was given. On 21 September, Mr. Montgomery interviewed Mrs. Andrews. She gave him a list of seven checks she said she had deposited in her “joint” account. This list (Defendant’s Exhibit No. 1) contained only the amount of each check with the payor’s name noted after six of the amounts.

The payor of one of the checks, in the amount of $3,909.08, was Bethlehem Steel Corporation. The evidence is uncontroverted that the named payee of this check was “C. S. Bowen Company, Inc.”, that its only endorsement was by a rubber stamp reading, “For Deposit Only, C. S. Bowen Company”, and that it was accepted for deposit by Maryland National to the credit of Mrs. Andrews’ joint account on 18 September 1968. It is also uncontroverted that on 19 November 1968, Maryland National repaid to Bowen the amount of the check because, according to Mr. Montgomery, Mrs. Andrews had told him at his 21 September interview with her that “This was money that belonged to C. S. Bowen and Company”. It is clear that this check is not one of the checks for which Bowen seeks damages in conversion or negligence.

With respect to the payees of the checks she “took from C. S. Bowen”, Mrs. Andrews said “some were made out to C. S. Bowen Company, some were made out to Patricia Andrews”. At another point in her testimony she said, “They were all made out to C. S. Bowen”. Regarding the endorsements, Mrs. Andrews testified she used a rubber stamp that belonged to Bowen on all the checks she stole. According to her, the rubber stamp read, ³² “ ‘For Deposit Only, C. S. Bowen Company, Inc.’ ” or just “ ‘C. S. Bowen’ ”.

In a pre-trial deposition, Maryland National’s security officer, Mr. John 0. Montgomery, testified that Mrs. Andrews told him that “some of the checks she had put in her account belonged to the company, and some of them didn’t”. At trial, Mrs. Andrews testified that, except for “several” of her pay checks legitimately received from Bowen, all of the checks she deposited were checks belonging to Bowen. Her cancelled pay checks, however, for the period covering the life of the “joint” account do not show that she deposited any of them at Maryland National.

Thus, there is some evidence that Bowen was indeed the owner of all the checks deposited by Mrs. Andrews. I At the close of all the evidence, Bowen, the plaintiff below, moved for a directed verdict. The motion was denied. On appeal, Bowen argues that the trial court erred in not granting the motion “on the issue of Maryland National’s liability” and asks that we remand the case for a new trial on the issue of damages only.

We first consider whether this precise issue is properly before us. It is properly before us only if it was properly presented to the trial court and decided by it in the first instance. Md. Rule 1085. Maryland Rule 552 a provides that in a jury case, “. . .. any party may move ... at the close of the evidence, for a directed verdict in his favor on any or all of the issues.

Such motion shall state the grounds therefor .... ” (Emphasis added.) The motion in this case was general in nature and was not limited to any one issue. Rather it seems to have been directed to “all of the issues” considered by Bowen to be necessary to render Maryland National liable to it for the aggregate amount of all checks deposited by Mrs. Andrews in her “joint” account. The facts, claimed by Bowen to be established by the evidence, were that 1) all the checks ³³ deposited by Mrs. Andrews in her “joint” account were “C. S. Bowen Company checks”; and 2) all the checks were restrictively endorsed with a rubber stamp, “For Deposit Only, C. S. Bowen Company”, and were improperly applied by Maryland National to the “joint” account. Bowen argued that, having established those facts, there was “[no] issue to be submitted to the jury”.

Although Bowen’s counsel also argued that “[t]here is just nothing for the jury to determine with reference to the liability of the bank”, we find nothing in the stated grounds for the general motion for a directed verdict indicating that the motion was limited to the issue of liability alone, leaving the issue of damages to be determined by the jury. Here, there was no concession that there was any issue left for determination by the fact finder. On appeal, however, Bowen seems to concede that the matter of damages is one properly for the jury and asks that we remand the case for a new trial on that issue alone. But, as we have indicated, whether that issue alone should have been submitted to the jury is not a question that was either presented to or decided by the lower court.

The question is therefore not properly before us in this appeal. Md. Rule 1083. Moreover, even if the question were properly before us as having been presented to and decided by the trial judge, we would hold that the motion was properly denied. This is so because the evidence claimed by Bowen to establish Maryland National’s liability, vel non, as to all the checks deposited by Mrs. Andrews is not uncontroverted.

Bowen argued to the trial court that it is the true owner of “each and every” check deposited by Mrs. Andrews. We need go no further than to point out that this argued “fact” is not uncontroverted. Although the evidence may support such a factual finding, it does not compel it. While it is well settled that under Rule 552 a, a trial court may grant a directed verdict to a plaintiff as well as a defendant “on any or all of the issues”, where the court is considering whether to grant such a motion to a plaintiff on any issue as to which he has the burden of proof, the motion should be denied unless the facts are uncontroverted (as ³⁴ opposed to merely uncontradicted) or the parties have agreed as to the facts and such facts and the circumstances surrounding them permit of only one inference with regard to any issue presented by the motion.

See, Alexander v. Tingle, 181 Md. 464 , 30 A. 2d 737 and Pennsylvania R. Co. v. Stallings, 165 Md. 615 , 170 A. 163 . In the latter case, at 619, the Court said: “ .... Nor it is true that the court can say as a matter of law that one upon whom the burden rests has discharged that burden merely because testimony offered by him was not contradicted. To so hold would be to override the decisions in a long line of cases that the jury has the right to disbelieve a witness even when uncontradicted, [citing cases] In Harrison v. Central Construction Co., 135 Md. 170 , at page 180, 108 A. 874, 878 , it was said: ‘When the facts have been ascertained and agreed upon by the parties, or are undisputed, and there is no dispute as to the inferences to be drawn from the facts, the question becomes one of law and may be decided by the court’. “This was said in a case where there was an agreed statement of facts.

And it will be found, on examination of all the cases where like language is used there was no controversy about the facts, [citations omitted]. ‘Undisputed’, as used in these cases, must be taken to mean “uncontested’, rather than ‘uncontradicted’.” II Bowen excepted to the court’s instructions as follows: “.... I requested an instruction, that Your Honor, instruct the jury that if the jury finds that the checks, For Deposit Only, C. S. Bowen, then the jury would have to find the bank was negligent. Therefore, the jury would have to find the bank could not necessarily defend under preclusion ³⁵ section or under the other section that Your Honor read to them.” (Emphasis added) On appeal Bowen contends that, “the court below erred in its instructions to the jury which failed to instruct the jury that if they found the checks deposited by Andrews in the Andrews account at Maryland National were stamped ‘For Deposit Only, C. S. Bowen Company’ they would have to find Maryland National liable”. (Emphasis added) Here again, we find a material difference between the issue actually submitted to the trial court and the issue which we are