Colmary v. Fanning

Thomas, J., delivered the opinion of the Court. This appeal is from a judgment of the Baltimore City Court, recovered by the plaintiff on certain promissory notes of the defendants. The narr. contains the common counts., and eight special counts, alleging the execution by the defendants of eight promissory notes, payable on demand to the order of Mrs. S. McS. Colmary, one dated December 1st, 1899, for $2,000; one dated May 1st, 1900, for $2,000; one dated January 1st, 1901, for $2,000; one dated February 1st, 1901, for $1,000; one dated January 4th, 1902, for $3,000; one dated January 16th, 1903, for $1,000; one dated February 9th, 1900, for $2,500, and one dated February 23rd, 1906, for $2,500; and that the defendants paid her the interest thereon up to July 1st, 1908; that Mrs. S. McS.

Colmary, after the first of July, for value received, endorsed said notes to the plaintiff, who duly demanded payment thereof, but the defendants did not pay the same. The notes were filed with the declaration, and each is endorsed by the payee. The defendants pleaded “never indebted as alleged”; that they did not promise as alleged, and limitations, and for a fourth plea, by way of equitable defense, they alleged that Abram H. Colmary, one of the defendants, from time to time furnished additional capital to the firm of A. II. Colmary & Co., and that the agreement was that the defendants should pay the interest on such capital to Abram TI.

Colmary; that ⁵⁵⁰ for each of these advancements of additional capital, by the direction of Abram EL Colmary, the senior member of the firm, promissory notes were drawn payable to1 Mrs. Sadie MoSchane Colmary, the wife of Abram H. Colmary, and signed in the firm name; that checks of the firm for the interest on the sum represented by each of said notes, were drawn as and when such interest fell due, payable to the order of Sadie MoSchane Colmary until the 30th of June, 1908; that each of such 'checks for interest was endorsed by the said Sadie McS., Colmary and delivered to her husband, and the money on said checks was then collected by the said Abram II. Colmary and used by him for his own purposes; that since the 30th of June, 1908, the interest on the sum represented by each of said notes has simply been credited in the account of A. EL Colmary on the books of the defendants; that said notes were executed not for the purpose or with the intention of establishing or acknowledging any indebtedness of the firm of A. EL Colmary & Co-, to Sadie McS. Colmary, and were not understood by her as creating or acknowledging any such indebtedness; that the fact was, and was well known to the said Sadie McS. Colmary, that the said notes were each and all of them only intended and understood by the parties concerned to be a convenient form of voucher for the amount advanced as capital for the firm of A. EL Colmary & Co. by Abram EL Colmary, and that it was not intended or understood by any of the parties interested or concerned that sáid Sadie McS.

Colmary should have any beneficial or personal interest in such notes or in the money intended to be represented by them; that great family differences have arisen between the said Sadie McS. Colmary and Abram IE. Colmary, and that they separated about the month of October, 1908, and that it was only after such domestic differences arose that the said Sadie McS. Colmary set up any claim to an interest in said notes or pretended to have any right or title therein; that the said Abram EL Colmary has forbidden the payment of said notes to the said Sadie McS.

Colmary or any assignee of her’s; that the entire beneficial ⁵⁵¹ interest in said notes is now and has always been in Abram TEE. Colmary, and was so intended to be by all the parties thereto when they were executed; that the plaintiff received and acquired said notes when on their face they were overdue and dishonored, and that the defendants believe and charge that the plaintiff received said notes without paying any valuable consideration for them, and that ho did not receive them in good faith, hut that he received them, and afterwards brought this suit, for the wicked and unworthy purpose of aiding the said Sadie MeS. Colmary in harrassing and embarrassing her said husband. Tho plaintiff joined issue on the first and sooond pleas, replied to the third plea, alleging that the cause of action did accrue within three years before this suit, and for a first replication, “upon equitable grounds, to tho fourth plea by way of equitable defense,” alleged that he acquired title to tho notes in good faith, “for fail and valuable consideration,” before they were overdue;, and without any knowledge of, or reason to suspect, any of the matters alleged in said plea, and that he brought suit in good faith and not for the purpose of embarrassing, etc., Abram IT.

Colmary. For “a second replication, upon equitable grounds, to the fourth plea by way of equitable defense,” the plaintiff alleged, upon information received since the filing of said plea, etc., that the matters stated in said plea were not true, and, upon like information, averred “that tho said notes were given by the said firm of A. II. Colmary & Company in evidence of and as representing money of the said Sadie MeS. Colmary loaned by her to the said firm of A. IT.

Colmary & Company, which notes and the money represented thereby were her own sole and separate property to all intents and purposes, and as and when executed were del ivered to her and remained in her possession up to the time of the purchase of the same by the plaintiff.” The defendants joined issue on the replication to the third plea, and demurred to the first and second replications to the foxirth plea. The demurrers were.overruled, ⁵⁵² and the defendants joined issue on the replications to the fourth' plea. Ho question is made, however, in this Court in regard to the pleadings, and the only exception reserved during the trial is to the ruling of the Court on the prayers. The defendants offered four prayers, all of which were rejected by the Court below, but the exception to that ruling so far as it relates to the second and third prayers is not pressed.

The plaintiffs offered in evidence the notes sued on, and proved the signatures of the defendants thereto as the makers, He then proved by Mrs. Colmary, the wife of Mr. Colmary. one of the defendants, that she and said defendant were married in 1879, and that until she discovered his infidelity in 1908, he was always very generous to her and constantly and regularly made her presents of money; that for many years prior to this suit, the business formerly conducted by the defendants under the film name of Clark, Colmary & Co., and subsequently conducted by them under the name of A. H. Colmary & Company, was and still is very profitable, and that her husband had derived during a period of many years a large income from said business; that as far back as 1880 she opened accounts in her name with various savings banks in Baltimore, and the money deposited therein was made “subject to her own exclusive order;” that she deposited in these accounts her savings from the money given her from time to time by her husband, and that she kept the bank books in a little trunk in her bureau; that the money so given her from time to time by her husband were intended to be and were absolute gifts, and that the money deposited in the savings banks was her “absolute property;” that from time to time, “usually when she was suffering from an affection of the throat which rendered it imprudent for her to leave the house in bad weather,” her husband made deposits for her in said banks, but that with the exception of a comparatively short time before she discovered her husband’s infidelity, she kept all of her savings ⁵⁵³ banks books in the little trank in ber bureau, “her husband taking them occasionally only for the purpose of making deposits to her credit and thereafter returning” them to her; that Mr. Colmary “stated to her on numerous occasions that in making her these gifts of money he wanted her to he absolutely independent, and that in the event of anything happening to him she would have the money in the savings banks as her own, independent of his business, so that she would not be embarrassed whilst the business was being wound up, or if anything of an unusual nature should happen.” She was shown the pass book issued to her by the Central Savings Bank containing the following entry: “Ro. 25292. Sadie McS. Colmary also subject to the order of A. II. Colmary, either or the survivor,” and asked to state what part of that entry was made in the book when the account was opened in 1888, and she replied: “'My name only and also the number 25292,” and stated that the name of A. II.

Colmarv was not entered in the book originally. She was then asked to state under what circumstances the words “also subject to the orden' of A. H. Colmary, either or the survivor” were entered in the book, and she replied: “As I said this morning, Mr. Colmary has always been very generous with me, and it was an understood thing for many years and years ago that at my death all that I had should go to him; the only stipulations were my two diamond rings, and I agreed that they too should be his as long as he remained unmarried, but everything else was to be his absolutely.” She further testified that she executed a will for the purpose of carrying out that understanding, and that he told her that he had executed a will for the purpose of making a like provision for her; that after she executed her will she had a conversation with him about the money she had in the savings banks, in which “He asked me if I would mind having his name put on my bank books, to have the account in our mutual, names so that in the event of my death he would not have to pay any Court costs in order to get the balance that might ⁵⁵⁴ be in the banks at the time of my death;” that she accordingly went to the Central Savings Bank “and asked them to put his name on this book,” and that they did it without saying anything; that she told them that she “would like to have the account made so that if” she “should die the balance, at” her “death would go to Mr. Oolmary without having to go through the Orphans’ Court;” that she could not recall the exact time that it was done, but that it did not seem “so awfully long ago;” that the money that was deposited in the savings banks was her money, that Mr. Cohnary had given it to her and that for a number of years she always deposited it herself; that she kept the bank books in the little trunk, the one referred to in the other case and what she had said in her testimony was “absolutely” true with respect to all of her bank books. Her attention being-called to the note' dated February 1, 1901, and the entry in the Central Savings Bank book Ho. 25292 of a withdrawal of $1,000 on February 1st, 1901, she stated that she drew the money out and took it to the factory and gave it to Mr. Oolmary and that he gave her the note; that she got the money indicated by the entry in the same book of. a withdrawal of $3,000 on January 4th, 1902, and took it to the factory and gave it to Mr. Oolmary and got the note of that date for that amount; that she got the $1,000 indicated by the entry in the same book of January 16, 1903, and that she took that to the factory and got the note of that date for that amount; that book Ho. 25292 was practically closed on January 16, 1903, and that the balance in that book of $2,999.07 was entered in a new book, Ho. 71079, opened in the same bank that day in the name of “Sadie McS. Oolmary, in trust for herself and A. II.

Oolmary, joint owners, subject to the order of either, the balance at the death of either to belong to the survivor;” that she made the withdrawals noted in bank book Ho. 71079 except the two of February 9th and February 23rd, 1906, of $2,500 each, and that these two tvere the only sums withdrawn from any bf the banks by ⁵⁵⁵ Mr. Colmary, and that at the time he withdrew them he haiided her the two promissory notes for $2,500 hearing the dates mentioned. She was then shown the pass hook issued by the Hopkins Place Savings Bank in 1897 in the name of “Mrs. Sadie McS. Colmary, in trust for herself and A H. Colmary, joint owners, subject to the order of either, the balance at the death of either to belong to the survivor,” and she stated that she opened the account herself, and told the officer of the hank just what she told the officer of the Central Savings Bank, viz: that she “would like to have the account so that if she should die the balance remaining in the bank at the time of her death would go to her husband without having to pass through the Orphans’ Court,” and that the officer of the hank “used a rubber stamp and handed the hook out to her without saying anything.” She was then asked if she knew what “in trust for yourself and A. II. Colmary meant,” and she said it “meant that at my death he would have a right to all the balance that was there in my hank book,” and that she told the bank that she wanted to leave the money so that “it would he that way;” that that was what her husband asked her to do, and she was endeavoring to carry out his request; that she withdrew $2,000 of the money she had in that bank and on the same day she handed it to the firm of A. II.

Colmary & Company; and that all of the notes sued on were given to her in exchange for currency as she described; that she has not been repaid any of the sums loaned by her to A. H. Colmary & Co. or to Clark, Colmary & Go., and represented by said' notes; that at first she put tho notes in her bureau drawer, and afterwards she bought the tin box and put them.in it and kept.the box in her bureau drawer; that she always kept the hank hooks in her bureau drawer up until, “well, perhaps within a couple years prior to 1908, when Mr. Colmary asked me—at least he suggested rather, that if I would let him have the bank hooks that he could save me—I had some throat trouble at the time'—and he said he could save me the trouble of going ⁵⁵⁶ to the bank, that he would send my deposits for me, and if I would give him my books they could be kept at the factory,” and that she gave him the books; that there was nothing said about giving him the books so as to give him the money in the bank, and the only ground upon which he made the suggestion, and upon which she gave him the books, was to save her the trouble of going to the bank. When she was asked if she got the books back, she said that after this trouble developed she was advised to get the books and that she asked for them, and as they were not brought to her she told Mr. O’Brien (her counsel) and he spoke to Mr. Oolmary about it, and Mr. Oolmary said he would bring them back and told her to tell Mr. O’Brien that he had done so, but that he did not bring them.all back; that she did not know at the time fhat he did not .bring them all back, but supposed that he had returned them all; that Mr. Oolmary then went abroad and she found that there were one or two of her bank books missing; that she told Mr. O’Brien about it and he told her to go and get them; that she had the key of the safe, and that Mr. Oolmary had told her to use it if it was ever necessary for her to do so, and had shown her how to open the safe; that her sister, Mrs. McGraw, went with her to the office of the defendants, and when she got there she asked Mr. Jones, the bookkeeper, to open the safe for her and handed him the key for that purpose, and that she found the one or two bank books and took them home. Referring to the notes sued on, Mrs. Oolmary stated further “that Mr. Oolmary told her one day that he had to go out 'in the market to borrow some money to tide over a certain season of the year in his business, and that he said to her, now was her chance to take some of the money out of the savings banks and loan it to the firm, and that by so doing she would get double the amount of interest; that this was before she made the first loan represented by the notes mentioned in the declaration and that thereupon; and thereafter from1 time to time at the request and suggestion of her husband she withdrew the sums of ⁵⁵⁷ money represented by the notes in cash from the savings banks and turned the money over to the firm, receiving in exchange therefor the promissory notes sued on, and that the only notes sued on which were not given in exchange for money which she personally withdrew from the savings banks were as heretofore stated the notes dated February 9th, 1906, and February 23rd, 1906, for the sum of $2,500 each, but that these notes were delivered to her at the time when the withdrawals were made from her bank accounts by her husband, and that each loan made was made upon the suggestion of her husband,” and that the change made in her savings banks books at the request of her husband “was not made upon all the books.” When asked what happened with reference to the payment of the interest on the notes prior to her separation from Mr. Oolmary, how it was paid, etc., she said. “Well, he collected it, but as I have already said, he was generous with me, and I did not ask him what he did with it;” that he was always making her very liberal gifts of money, and she was putting some of it away and enjoying the balance; that he was “extremely prosperous in business,” and that “He has told me more than once, quite a number of years ago that he would not tell me how much over $10,000 per annum his income was, but he would tell me it was at least $10,000, but that I might have a swell head if I knew how much above that sum it amounted to,” and that he was giving her money freely at the time the interest accrued on the notes. Referring to the two notes dated respectively February 9th and February 23rd, 1906, she said “that about that time she was suffering from bronchial throat trouble,” and was having serious trouble on account of it, and because of that fact her husband was most considerate and offered to attend to it for her, and to save her from going to the banks; that he handed her the two notes on the day ho withdrew the money from the bank, and that they had been in her possession ever since until she delivered them to her attorney.

On cross-examination, in reply to the question, “You say you ⁵⁵⁸ executed mutual wills, that is, you executed a will leaving everything you might have at the time of your death to him and he executed a will for your