Commonwealth Bank v. Goodman

Thomas, J., delivered the opinion of the Court. This suit was brought by the appellee, George Goodman, against the Commonwealth Bank of Baltimore to recover the amount deposited in his account in the bank and alleged to have been paid out by the bank upon fraudulent and forged orders. The declaration contains the common counts for money lent, money received and money found to be due on accounts stated, and three special counts. During the trial of the case in the Superior Court of Baltimore City, which resulted in a verdict and judgment in favor of the plaintiff for $690.73, the defendant reserved eight exceptions to the rulings of the Court on the evidence and the prayers.

The evidence shows that the plaintiff, a colored man, -was employed for a number of years by Mrs. Jane S. Whitelock, of Mt. Washington, Baltimore County, at twenty dollars, per month, and that after her death he was employed as coachman for her daughter, in Carroll County, Maryland. During Mrs. Whitelock’s lifetime the plaintiff’s wages were paid by checks, and each month he was given a check for one-half of his wages (ten dollars), drawn in favor of the Commonwealth Bank for account of George Goodman. After Mrs. Whitelock’s death the checks were issued by the executors or trustees of her estate; the one for ton dollars, drawn in favor of the bank for account of George Goodman, was ⁴⁵⁴ mailed directly to the bank, and the other was mailed to Goodman in Carroll County.

While, in the service of Mrs. Whitelock, Goodman rented a room from James H. Webb, another colored man, at 917 North Eutaw street where he kept his trunks and clothes and lived upon most friendly terms with Webb and his wife and daughter, Priscilla and Edith Webb. He was particularly fond of the daughter, Edith Webb, and on the 10th of August, 1908, he gave her two dollars with which to open a savings account for him in the Commonwealth Bank of Baltimore. Edith Webb, who was then about fifteen years of age, took the money to the bank and had an account opened in the name of the plaintiff. The bank gave her a bank book, and a signature card to be signed by the plaintiff and returned to the bank, and she returned the card to the bank signed as follows: his “10137 X George Goodman. mark" “Witness by Edith Webb. “Address:'917 N. Eutaw St.” The bank book was always in the possession of Edith Webb, and the plaintiff testified that he gave it to her to take care of for him, and that prior to Mrs. Whitelock’s death when he received the checks for his monthly wages he gave the check payable to the bank to Edith Webb to deposit for him, and that he also gave her money to deposit.

When he went to Carroll County to live he left his trunk and clothes in the room in Webb’s house. He says he did not pay rent for the room after he went to Carroll County, but that he left his trunk and clothes in the room so that he would have a. place to go whenever he was in Baltimore, and that he paid for the use of the room on such occasions, and that he left his bank book in the possession of Edith Webb in order that she might take it to the bank each month and have his check, which was sent to the bank, entered therein. During the years he was employed by Mrs. Whitelock he went to the ⁴⁵⁵ bank a number of times to draw some money. He could not tell how many times he went to the bank for that purpose, but did remember having withdrawn twenty dollars on March 5th, 190!), fifteen dollars on August lltli, 1909, and ten dollars and twelve dollars on two other occasions, and he states that he always took Edith Webb to the hank with him.; that he took her the first time so she could identify him as the man to whom the account belonged, and that he never went to the hank after the fall of 1911.

The evidence also shows that nearly all of the money deposited and entered in the hank hook of the plaintiff was paid out from time to time to Edith Webb on orders or receipts signed like the signature card referred to and presentation of the bank book, and Edith Webb testified that when the plaintiff was with her she immediately handed the money to him. Except in one insiance, when the order wTas in the form of a letter, all of the orders or receipts were on blanks furnished by the hank and they were brought to the hank, signed as we have stated, with the hank book. In a few instances Goodman’s mark on the order or receipt was witnessed by one of the officers of the hank. The plaintiff testified that he never authorized Edith Webb' to make any withdrawals in his absence, and that he never made his mark on any of the orders or receipts on which the money was drawn without his knowledge.

It further appears from the evidence that eight of the checks made payable to the hank for account of Goodman, amounting to $100.00, were only credited in Goodman’s hank book to the amount of $25.00; that these eight checks were collected by the hank, and that some of them were1 endorsed hv Edith Webb, but that not one of them hears, the endorsement of George Goodman. Charles A. Nicholson, the teller of the hank who had charge of the savings department, was sick at the time of the trial, and his testimony was taken prior to the trial before a notary public. When shown two of the checks that were not entered in hank hook of the plaintiff and did not hear his endorsement he testified that he would not have paid either ⁴⁵⁶ of them without Goodman’s endorsement. It also appears from the evidence that in a number of instances the amount deposited was withdrawn the same day or on the day following.

The bank book issued to the plaintiff contained the following rules or regulations printed therein purporting to constitute the contract between the plaintiff and the bank: “Deposits entered in this book are not subject to check, but may be withdrawn at any time on order and presentation of the book, the Bank reserving the right to demand 30 days’ notice, if it so desires. “Interest allowed at the rate of 3% per cent, per annum on sums of five dollars and multiples thereof, for every calendar month that such sums remain on deposit. “Accounts closed within the four calendar months following date commencement receive no interest. “Interest will be computed to the 1st day of April and 1st day of October of each year and entered on depositors’ books on and after the 10th day of the months above named. “Possession of the book of deposit shall be sufficient evidence of ownership thereof; and although the Bank will endeavor to prevent fraud on its depositors, yet all payments which shall be made by the Bank to any person producing the book of a depositor, shall be valid as against the depositor, and a full and effectual release thereof to the Bank. “Should a depositor lose the book, immediate notice thereof must be given to the Bank.” The defendant offered evidence to show that the bank exercised reasonable and ordinary care in paying out the money of the plaintiff; that the plaintiff authorized Edith Webb to draw the money in Ms account in the bank whenever she desired to do so, and to sign his name and witness his mark to orders or receipts for that purpose, and that he got the benefit of a large part of such withdrawals. Charles ⁴⁵⁷ A. Nicholson, the teller of the bank testified, that after the account was opened by Edith Webb the plaintiff came to the bank and told him that she “attended to all his business for him, and that whatever she did was all right.” This evidence was corroborated by Edith Webb and others, but. the plaintiff denied that he made any such statement or authorized Edith Webb to draw the money. By-laws or regulations like those contained in the bank book of the plaintiff have been adopted by savings banks and have been ixpheld by the Courts as necessary for the protection of such banks. It is not contended by the appellant that the regulations referred to, which were printed in the bank book as the contract between the plaintiff and defendant, relieve the bank from its obligation to exercise ordinary care in paying out the money of a depositor, but the bank insists that in this case the burden was on the plaintiff to show that it did not exercise ordinary care and that he has failed to meet that burden.

The rule of ordinary care on the part of the bank applicable to cases of this kind is clearly stated and its application illustrated in the cases cited in the extensive notes to Kelley, Administratrix, v. Buffalo Savings Bank ( 180 N. Y. 171 ), 69 L. R. A. 317, and Hough Avenue Savings Bank v. Anderson ( 78 Ohio St. 341 ), 18 L. R. A. (N. S.) 431. This, rule does not deprive a savings, bank of the protection of its contract with a depositor, but simply imposes, upon it the consequences of its own negligence or want of ordinary care. 3 Ruling Case Law, pp. 706-709. It is said in 3 Ruling Case Law, page 709: “As to what constitutes a negligent payment the oxdy practical general rule to which savings banks can be safely held in such dealings is the rule of ordinary care, leaving it to be applied in the light of the. special circumstances that characterize each separate case.

The question of due care and diligence on the part of the bank is one of fact for the jury if the evidence is conflicting, and one of law if the evidence is undisputed, and can lead to but one ⁴⁵⁸ reasonable conclusion. When negligence is relied on, the burden of proving the issue 'is on the depositor.” The learned Court below granted the defendant’s eighth prayer placing on the plaintiff the burden of showing that the bank did not exercise ordinary care, but rejected its first prayer which asserted that there was no evidence in the case legally sufficient to sustain that burden, and in reviewing this ruling we must assume the truth of all the evidence tending to support the plaintiff’s contention. As to the checks drawn in favor of the bank for account of the plaintiff which do not bear his endorsement and which were not placed to his credit there can be no question. The evidence shows that they were collected by the bank but were credited in the account of the plaintiff only to -the extent of twenty-five dollars, and the teller of the bank, when shown two of these checks, testified that he would not have paid either1 of them without the plaintiff’s endorsement.

In the absence of evidence satisfactorily explaining the failure of the bank to credit these checks in the account of Goodman the plaintiff was clearly entitled to recover the amount not so credited. In regard to the payments made by the bank to Edith Webb on presentation of the bank book and orders and receipts bearing the name of the plaintiff and his mark, witnessed by her or by one of the officers of the bank, we think the plaintiff has failed to show want of ordinary care on the part of the bank. According to the uncontradicted evidence in the cáse the bank account was opened by Edith Webb; and all of the deposits of money and checks prior to the time the1 plaintiff went to Carroll County were made by her ; she was given the bank book and signature card; she took the signature card home and returned it to the bank after it had been signed by the plaintiff by making his mark, and Ms mark was witnessed by her; the plaintiff went to the bank with her on several occasions and received from the bank payments made by it, directly to him or to her, on presentation of the bank book and orders or receipts with his name ⁴⁵⁹ and mark on them witnessed Toy her; on other occasions he received payments from the hank on orders or receipts on which his mark was witnessed by one of the bank officers, and every time he went to the bank he took Edith Webb with him and she presented the bank book. Under such circumstances there was no reason why the officers of the bank should have suspected that any of the orders or receipts presented by Edith Webb were forged or fraudulent.

On the contrary, the way in which the account was