Harford National Bank v. Rutledge

Thomas, J., delivered the opinion of the Court. In 1896 the appellee, Charles A. Rutledge and Elizabeth W. Rutledge, his wife, of Harford County, executed two promissory notes in favor of Allen Hoffman, of that county, ■one dated Rocks, Maryland, February 19, 1896, for $544.5(1, payable three months after date, with interest, and the other dated Rocks, Maryland, March 14th, 1896, for $1,082.26, payable two months after date, with interest from date, and ¡shortly thereafter the notes were discounted by the Harford Rational Bank of Bel Air for the payee. Mr. Williams, the president of the bank, states that about the sixth of May, 1896, a short time before the notes matured, the payee, Allen Hoffman, came to him with the note of H. C. Campen or H. C. Campen and Company, who were ⁵¹ canned goods brokers in Bel Air, and wanted the note discounted by the bank; that he made some investigation about the note, and being satisfied with it he had it discounted for him and the proceeds placed to his credit; that Mr. Hoffman afterwards drew his check and paid the Rutledge notes, and that after they were paid he>, Mr. Williams, required him to leave them with the bank as collateral for Mr. Hoffman’s other obligations at the hank, and delivered them to the cashier who filed them away, and that they have “remained in possession of the hank ever since”; that on the 17th of October of the same year “a petition in insolvency was filed” against Air. Hoffman, whose liabilities to the bank at that time amounted to over $18,000.00, and that suit was brought in the Circuit Court for Harford County on the Rutledge notes on the 29th of January, 1897.

The record shows that Charles A. Rutledge was summoned to the February Term, 1897, and that the writ having been returned “non estf’ as to Airs. Rutledge, it was renewed from term to term until she was summoned to ‘the Alay Term, 1899. In the meantime the ease against Mr. Rutledge had under the rules of Court been carried to the stet docket, but after the appearance of Airs. Rutledge it was reinstated on the trial docket; the cases were consolidated, and on the 11th of September, 1900, upon the suggestion and affidavit of the defendants, the Court directed the record to be sent to the Circuit Court for Baltimore County for trial.

The record was not transmitted to the Circuit Court for Baltimore County until the 7th of September, 1910, and on the 19th of the same month that Court entered a judgment by default in favor of the plaintiff, and the judgment was extended for $3,025.66. with interest from date. The judgment was subsequently stricken out, and the case was tried in December, 1913, upon issues joined on tbe pleas of “never promised,” etc., and “not indebted,” etc. Mr. Williams further states that after1 the suggestion and affidavit for a removal was filed in the Circuit Court for ⁵² Harford County he took for granted that the defendants would have the record sent to Baltimore County, and that he lost sight of the case until the spring of 1910; that there remains of Mr. Hoffman’s indebtedness to the bank, as of the last of December, 1902, $3,000.00; that Mr. Hoffman resigned as a director of the bank on thé 14th of October, 1896, and that he died on the 26th of January, 1897, and that the date, 20th of May, 1896, on the back of the notes is the date of notice sent to the defendants that the bank held the notes and desired payment. Mr. Finney, who was cashier of the bank at the time the Butledge notes were paid by Mr. TIoffman, says that Mr. Yrilliams handed him the notes and told him to1 hold them as collateral; that he placed them in an envelope upon which he endorsed the amount of the notes, and that the date stamped on the back of the notes is the date of the notice he sent to the makers that the notes were due or overdue; that ho was cashier of the bank for four or five years and left it in 1899; that Mr. Hoffman was an active director of the bank, who sometimes missed meetings of the directors, like other directors, but that he did not think he missed many, and that Mr. Hoffman’s office “at one time was across the way from the bank, and at another time was in the next building.” Dr. Rutledge, one of the defendants, who1 was seventy-three years of age at the time of the trial, testified that in 1896 and 1897 his principal business was canning corn and tomatoes', and that he owned a large farm on which he raised most of his “canned goods;” that Mr. Hoffman, who was a canned goods broker and a director of the Harford Rational Bank, rendered him financial assistance in his business, and had been doing so for ten years; that he had given Mr. Hoffman a bill of sale of the tomatoes and corn canned by him in 1895, which were stored in a warehouse at Rocks, to secure such amounts as he owed him; that before he and his wife execute the notes in this case, which he under- ⁵³ Flood were to be discounted at tbe Harford National Bank, he went to the hank and told Mr. Williams, the president, that the understanding between him and Mr. Hoffman was that the notes were to be secured by the bill of sale be had given Mr. Hoffman, and were to be paid out of tbe proceeds of sales of the canned goods mentioned in the bill of sale; that when the goods were sold a sight draft would he attached to the bill of lading, and that he wanted the hank to see that the proceeds of the sales of the goods, and of the drafts were applied to the payment of the notes, and that Mr. Williams promised that he would do so; that he and ihs wife signed the notes, and that when he sold and shipped the goods in May, 1896, he took the bills of lading to Mr. Hoffman, and that sight drafts on the consignees for the amount of the sales, with the bills of lading attached, were collected through the bank; that sometime after the goods were shipped he had a settlement with Mr. Hoffman; that Mr, Hoffman told him the notes had been paid and paid him the difference between the amount for which the goods sold and the amount xhe witness owed him, and told him that the notes were in hip hank box; that in order to feel certain that the notes had been paid according to the understanding with tbe bank and Mr. Hoffman, be went to the bank to see about it, and tliat Mr. Williams told him that the notes had been paid, but that he did not at that time get the notes from the bank because Mr. Hoffman bad told bim that they were in his bank box; that the goods sold for more than enough to pay 1he notes, and that after he went to the bank and Mr. Williams told him that the notes had been paid, he never heard anything further of them until he was summoned in this case, after Mr. Hoffman’s death. During the trial, which resulted in a verdict and judgment in favor of the defendants, from which the plaintiff has appealed, the plaintiff reserved twenty-three exceptions, the first twenty-two of which relate to rulings of the Court ⁵⁴ on the evidence, and the twenty-third is to the action of the Court’ on the prayers.

The first exception was to the competency of Dr. Rutledge as a witness for the defendants, and it is insisted by the appellant that as the suit was instituted in 1897 that question must be determined by the provisions of the Act of 1888, Chapter 315, which was then in force. It is not claimed that Dr. Rutledge was not a competent witness under the Act of 1902, Chapter 495, but the contention of the learned counsel is that notwithstanding that Act did not except from its operation pending cases, it could not apply to them, and they rely upon the cases of Dashiell v. Baltimore, 45 Md. 615 , and Gable v. Scott, 56 Md. 176 . In Dashiell’s Case the Court held that where a statute repeals and re-enacts a prior Act, and the repealing Act contains substantially the same provisions as the law repealed, the latter continues in force, Judge Milleb saying: “The repealing and enacting part of the Ants of 1874, take effect at the same time, and the enacting part (Ch. 218) substantially re-enacts the provisions of the first statute. There is high authority for the position that where a prevailing law contains a substantial re-enactment of the previous law, the operation of the latter continues uninterrupted.” In Gable v. Scott, supra, the Court followed the rule announced by Judge Milleb in Dashiell’s Case.

The Act of 1902, however, did not re-enact the provision of the Act of 1888, but made a very radical change in the law, by which a party to1 a contract is permitted to testify where the other party is dead, except in actions or proceedings by cr against executors or administrators in which judgments or decrees may be rendered against them, and in the cases of Duckworth v. Duckworth, 98 Md. 98 , and Justis v. Justis, 99 Md. 81 , where the proceedings were begun prior to the passage of the Act of 1902 (Ch. 495), and the testimony was given after that Act went into effect, othis Court held that the surviving parties to the transactions there involved were competent witnesses under the provisions of that Act. ⁵⁵ The Act of 1902 was amended by the Act of 1904, Chapter 001 (Sec. 3 of Art. 35, Code of 1912), which also provided that it should not apply to pending cases, etc., as to which the provisions of the Act of 1902 were continued, m force. Dr. Rutledge having stated that he was engaged in the canning business in the years 1895, 1896 and 1897, he was asked by his counsel how he was engaged in the canning business during those years, and the Court having overruled the plaintiff’s objection to the question, he replied that he was “engaged in canning, raising fruit for canning,” and that he had a large farm and raised most of his canned goods, and the Court overruled plaintiff’s motion to strike out his answer. The witness stated that the last goods he canned at Rocks was in 1895, and was then asked by his counsel who assisted him in the canning business in 1895, and the Court having overruled the plaintiff’s objection to the question, the witness replied: “I suppose you mean financial assistance?” And when counsel said: “Yes,” he said: “Allen Hoffman had been doing it for the last ten years.” He stated further that Allen Hoffman was a canned goods broker and a director of the Harford Hational Rank and lived in Bel Air. The words “Secured by Bill of Sale,” were written on the face of the note for $1,082.26, and after the witness had testified as we have stated, his counsel called his attention to' the reference on the notes to a bill of sale and asked him what the bill of sale covered, to which question the plaintiff objected, and after the Court overruled the objection, the witness answered: “The bill of sale on canned goods that I had back in 1895,” and the plaintiff then moved to strike out the answer, which motion, the Court overruled.

After the plaintiff took its exception to the ruling, the Court said: “All of this is going in with the understanding that it is subject to a motion to strike out,” and when counsel for the plaintiff asked the Court if that meant that they were to be precluded from taking their exceptions at the time, the Court replied: “Ho,” and that unless the evidence was followed up by bringing ⁵⁶ “notice home to the bank/’ he would exclude the testimony on motion to strike it out. Counsel for the defendants then asked Dr. Rutledge the following question: “You say there was a canned goods bill of sale to' secure these notes?” and he replied, “Yes, sir.” Plaintiff’s counsel then stated that he “made objection to both question and answer,” and the Court then said: “If it was to the answer I overrule it; if it was to the question, it comes too' late.” Whereupon the plaintiff excepted to the ruling of the Court, which ruling and the other rulings to which we have referred constitute the grounds of the second, third, fourth, fifth, sixth and seventh exceptions. There was no reversible error in either of these rulings. The answer of the witness in the third exception to the question in the'second could not have injured the plaintiff, and it was entirely proper for the defendants to introduce the evidence mentioned in the other exceptions for the purpose of showing the circumstances under which the notes were given, provided, of course, that the bank had notice of them before it acquired title to the notes, and to explain the reference on the note to a bill of sale.

One of the notes was signed by Dr. Rutledge as agent, and the eighth exception is to the action of the Court in aJlowing him to state why he signed it as agent. We see no objection to the question, and the exception is not pressed in the brief of counsel. In the ninth exception, Dr. Rutledge was asked what goods were included in the bill of sale, where they were “at the time,” and where they were afterwards, and he stated' that they were canned corn and canned tomatoes. Having stated that the notes were secured by a bill of sale, there was no reason why the witness could not show what property was included in the bill of sale, particularly as his defense was that that property was subsequently sold and that the proceeds of sales were applied to the payment of the notes.

In answer to further questions, the same witness testified that the property remained in the warehouse until “we ⁵⁷ shipped” them sometime in May, 1896, and he was then asked to state in whose name they were shipped, to which he replied that they were shipped in his own mame and Mr. Hoffman’s name jointly “because there were more goods there than to pay those notes.” The tenth and eleventh exceptions are to the action of the Court in overruling the objection to the question and the motion to strike out the answer -of the witness. It appears that the Court afterwards struck cut the last part of the answer, and we see no objection to the rest of the answer or to the question. As we have said, the witness testified that before he signed the notes he went to the bank and had an understanding with Mr. Williams that the canned goods included in the bill of sale were to be shipped; that sight drafts were to be attached to the bills of lading and collected through the bank, and that the bank would see that the amount of the drafts, when collected, was .applied to the payment of the notes, and it was therefore important for him to show as a part of his defense how the goods were shipped. The witness further testified that the drafts for the amounts -of the several shipments of the goods went through the bank with the bills of lading attached, and that the president of the bank told him so; that at the time this suit was brought he and his wife were living at Rocks, in Harford County; that after the maturity of the notes he never had .any notice from the bank that the notes had not been paid, and that on the contrary he was told by the president of the bank that they had been paid.

When asked if he had been told by anybody else that the notes had been paid he said: “Yes, sir.” He was then asked: “Who was that?” and he replied that he was told by Mr. Hoffman, and in answer to ihe question: “What Mr. Hoffman was that?” he said: “Mr. Allen Hoffman, who was a director of the Harford National Bank at the time.” The twelfth and thirteenth exceptions •are to the rulings of the Court overruling plaintiff’s objection to the question and refusing to strike out the answer. ⁵⁸ Counsel for the appellant in support of these exceptions rely upon the rule excluding hearsay evidence. But does this, testimony fall within that rule? Leaving out of view the. effect, if any, that should be given to the fact that Mr. Hoffman was an active director of the bank, the defense relied on is that the notes were secured by a bill of sale; that the bank and Mr.