First National Bank v. Taliaferro

McShebry, J., delivered the opinion of the Court. This case is before us for the second time. On the first occasion Miss Taliaferro was the appellant; now the bank has appealed from the judgment recovered against it. On the former appeal it was decided that the blank powers of attorney signed by Miss Taliaferro, and delivered by her to I. Parker Veazey, merely authorized Veazey to sell the registered Virginia consols belonging to Miss Taliaferro, and entrusted by her to him for sale; and that by no possible construction could those powers of attorney be regarded, as conferring authority upon Veazey to hypothecate the consols to the bank as security for his own debt thereto.

It was further held that the Bank had notice of Veazey’s restricted authority, and that it consequently did not acquire any title to these securities against the rightful owner. 71 Md., 200 . Upon the second trial, which resulted in the judgment from which this appeal was taken, the bank offered to prove by several witnesses that, according to a custom or usage amongst banks, bankers and brokers in Baltimore, registered Virginia consols were treated as negotiable, when accompanied by powers of attorney like those executed by Miss Taliaferro; but the Superior Court excluded the proffered testimony, and this ruling forms the ground of the first and second exceptions in the record now before us. There is no error in this ruling. Without considering the numerous objections urged against the admissibility of this testimony, it is sufficient to observe that no custom or usage can ever be allowed to contravene the law.

If the powers of attorney were only powers to sell, and did not authorize Veazey to pledge the securities for his own debt, as was distinctly decided on the former appeal, — and that decision must govern us now, Brown vs. Somerville, 8 Md., 444 ,— no custom or usage prevailing amongst banks, bankers and brokers could possibly change the legal charater of ¹⁷⁰ the powers of attorney, and convert them into totally different instruments capable of effecting results never contemplated by the person who executed them. Foley & Woodside vs. Mason & Son, 6 Md., 37 ; Allen vs. Saint Louis Nat. Bank. 120 U. S., 20 . In the case last cited, the Supreme Court, in disposing of a similar q uestion observed, that the finding of the Circuit Court that the transactions between the factors and the plaintiff “were all according to the general usage of trade between banks and cotton factors at Saint Louis,” could not aid the plaintiff, “because the usage attempted to be set up was not shown to have been known to the defendants or to other owners of cotton; and because it ivas contrary to law. in that it undertook to alter the nature of the contract between the factors and their principals, which authorizes them to sell, but not to pledge.” The custom or usage referred to in the ojsinion filed on the first apqseal in the case at bar, was a custom or usage in accord with the legal effect of the powers of attorney, and not one repugnant thereto.

The appellant, after showing- that Veazey was out of the State of Maryland, and that the contract made by him with the bank, when he pledged these consols, was delivered up to him after the sale of the consols by the bank, offered to prove the printed part of the contract under which Yeazey hypothecated Miss Taliaferro’s securities. The refusal of the Court below to allow this to be done is the error complained of in the third bill of exception. This ruling was clearly correct. What possible effect could the contract made by Yeazey and the bank, without Miss Taliaferro’s privity, or knowledge, have upon her right to recover from the bank?

Yeazey was not her agent to pledge the consols, but only to sell them; and nothing that he did in palpable breach of his restricted and limited authority — restricted and limited as the bank necessarily knew or had reason to ¹⁷¹ sirspect —