National Mechanics' Bank v. National Bank

Bowie, J., delivered the opinion of the Court. The appellee instituted suit in the Superior Court of Baltimore City, in June, 1866, against the appellant and filed its ¹⁶ narr. containing the. common counts in assumpsit. The object of the suit was to recover the sum of $25,000, the amount of an order issued on the 23d of April, 1866, by the appellee in favor of the appellant, in the following words: The Nat. Bank op Baltimore, April 23, 1866.

Clearing House will transfer to the Mechanics’ National Bank, twenty-five thousand dollars of balance due us. $25,000. (Signed,) J. Thos. Smith, Teller. The parties to the suit were both members of the Baltimore Clearing House Association.

The Constitution, and resolution of April 25, 1864, altering the eighth section of the Constitution, and also the form of Clearing House certificates, were given in evidence. Prom these it appears the object of the Association was “the effecting at one place, and at one time, of the daily exchanges between the several associated banks, and the payment at the same place, of the balances resulting from such exchanges.”' Sec. 6 provides: “The association shall appoint one of their members to be a depository of such coin (or greenbacks) derived from the exchanges as any of the associated banks may desire shall remain on special deposit for safe keeping; and the depository shall issue therefor, in proper form, certificates in convenient amounts, signed by the cashier or paying teller, which shall be received in payment of balances and shall be negotiable only among the associated banhs.” By the 8th section of the Constitution, as amended by resolution of the 25th of April, 1864, it is declared, “the hour for making exchanges at the Clearing House shall be half past eight o’clock, A. M. The debtor banks shall pay at the Clearing House daily, by 11 o’clock, the balances due from them respectively, either in legal tender currency or certificates, and the creditor banks may receive the respective ¹⁷ balances clue to them by 12 o’clock, provided all the balances due from the debtor banks shall then have been paid.” Sec. 9. “Should any one of the associated banks fail to pay the balance due from it by 11 o’clock, the depository bank shall notify such delinquent bank, and if, after such notice, the money is not paid by 12 o’clock, such bank shall be considered as ruled out by such default, and notice thereof given immediately by the depository to the respective banks, who shall forthwith furnish to the depository, the amount of such balance, in proportion to their respective balances against the defaulting bank, resulting from the exchanges of that day; and the amount so furnished to the depository shall constitute claims on the part of the responding banks respectively, against the defaulting bank.” The appellee delivered the Clearing House transfer order on the morning of its date, about 10.30 A. M., to L. P. Bayne, who, at the time of its delivery, left his memorandum check for the same amount drawn on the appellee, with whom he kept no account and where he had no funds, and L. P. Bayne soon afterwards delivered the transfer order to the appellant, who placed the same to the credit of Bayne’s account with it, which was then largely overdrawn. The transfer order not having been presented at the Clearing House, until after the balances due the appellee on that day had been paid, and the appellant having settled its balances at the Clearing House with other funds, demanded payment of the same of the appellee, who refused to pay it, unless the appellant would give its check for it. In the meantime Bayne had failed.

Several days after-wards, (after some correspondence between the parties as to the right of the appellant to retain or use the transfer order,) the appellant sent the order to the Clearing House, where" it was settled from balances due the appellee, and returned to it in a sealed package, in liquidation of its balances. The appellee then instituted suit, and the verdict and judgment being in its favor, an appeal was prayed. ¹⁸ Three bills of exception were taken by the appellant. The first and second to the admission of testimony tending to prove that Bayne, or Bayne & Co. were the agents of the appellant, in purchasing the transfer order on the Clearing House; the third to the granting of the first, second, and fifth prayers of the appellee as presented, and to the granting of its third and ninth prayers with modifications. The first and second bills of exception, and the first and second prayers 'of the appellee, included in the third bill of exception, present questions as to the order, admissibility and competency of the evidence to charge the appellant as principal, for the acts of its supposed agents.

Although varying in form, these are almost identical in substance, and will therefore be considered and disposed of together. It was admitted, that at a former trial of this cause, in which the same issues were joined, the jury not being able to agree were discharged without giving any verdict, and that at that trial, Patrick Gibson, late cashier of the appellee had been examined and cross-examined as a witness, and since died. By agreement, the testimony of Mr. Gibson as taken by a stenographer at the former trial, was admitted to be read to the jury, subject to exceptions. On the third interrogatory being read, viz: “Can you state any conversation that took place between L. P. Bayne and yourself, on the 23d of April, 1866, with regard to a transfer order ? ” the defendant’s counsel objected to the admissibility in evidence of any statements of L. P. Bayne, so as to aifect the defendant, on the ground that the declarations of Bayne were not evidence to prove his agency for the defendant, and that, as part of the “res ' gestee” they were not admissible, until the agency had been established by other evidence.

Which objection was sustained by the Court. The appellee then proceeded to examine Messrs. Carter and Smith; the former, paying teller of the appellee for ten or twelve years prior to April, 1865, and the latter, paying teller since. ¹⁹ Mr. Carter testified that, as paying teller of the appellee, he had repeatedly issued Clearing House transfer orders to the appellant, through Mr. Bayne, who was the first person who applied for such orders in favor of the appellant, in payment of which, Bayne always at first, brought checks of the cashier of the appellant on their bank, at the time he obtained the transfer orders; and during the latter part of his service, Bayne would sometimes leave his own memorandum check, and would shortly afterwards, in a few minutes return and take it up with a check of the appellants on their bank. He had no recollection of Bayne having paid for the Clearing House transfer orders, in any other way.

He took Bayne’s memorandum check, until he could bring the cashier’s check of the appellant. Bayne never brought his own certified check to the appellee for transfer orders whilst witness was there. It was a common thing for Bayne to obtain transfer orders for the appellant. Mr. Smith testified that he succeeded Carter as teller of the appellee; that he had as teller in April, 1866, issued Clearing House transfer orders to the appellant; he thinks Bayne usually applied for them, and that he gave them by the order of the cashier.

Bayne, during witness’ period of service, paid for them by his (Bayne’s) certified checks on the appellant’s bank. Bayne usually, when he got the transfer orders, left his memorandum checks on the appellee’s bank, in which he kept no account; that Bayne kept his account in the appellant’s bank. Having testified that the transfer order of April 23d, 1866, for $25,000, drawn by the appellee in favor of the appellant, on the Clearing House, was in his hand writing, he was requested to state the circumstances under which it was given; he stated, that on the 23d of April, 1866, Mr. Gibson, the cashier of the Bank of Baltimore came to his desk accompanied by Mr. Bayne, and said, while Bayne was standing by, “Mr. Smith, the Mechanics’ Bank wants a transfer order for $25,000, give Mr. Bayne an order for that amount, in favor of the Mechanics’ Bank.” ²⁰ The appellant objected to what Gibson said to the witness, being given in evidence to the jury, upon the same ground on which the declarations of Bayne, had been hereinbefore objected to; but the Court overruled the objection, and allowed the evidence, on the ground that there was some evidence in the case, the weight of which the Court was not called upon to determine, which tended to prove that Bayne had acted as the agent of the defendant, in the matter of obtaining .transfer orders from the plaintiff, in favor of the defendant for its use, — the Court reserving to itself the right to modify this ruling, if it should deem it proper in the progress of the cause to do so. The declarations of Gibson, in the presence of Bayne, admitted under the ruling of the Court, (which constitutes the subject of the first exception,) were offered under very different circumstances from those which accompanied the declarations of Bayne, previously excluded.

These were not preceded by any evidence tending to show a previous course of dealing by Bayne, in the name and on behalf of the appellant, with the appellee, for Clearing House transfer orders, or any previous transactions between the parties, in their corporate capacities; but were an isolated occurrence as far as the record shows, in which Bayne, for the first time, represented himself as acting for the appellant. On the contrary, the testimony of Carter and Smith, tended to show continuous antecedent dealings, in which the checks of the appellant were used to procure transfer orders, and other facts were developed, from which privity between the appellant and Bayne, as principal and agent, might have been inferred. Declarations of a broker or agent are not “per se” evidence of agency : but when evidence of facts “in pais” tending to show the relation of principal and agent existed, has been offered directly or circumstantially, it is then the province of the jury to determine whether there is such proof of agency, as to make the declarations of the supposed agent, binding on the principal. ²¹ It is not the province of the Court to determine the question of agency “vel non ,” more than any other fact involved in the issue; but, to decide whether there is any evidence tending to prove agency. Whether there be any evidence -or not is a question for the judge, whether it is sufficient evidence is a question for the jury. 1 Greenleaf’s Ev., sec. 49. “The preliminary question is to be tried by the judge, though he may in his discretion, take the opinion of the jury upon the facts, on which the primary question depends.” 1 Greenleaf’s Ev., sec. 49.

In Rosenstock vs. Tormey, 32 Md., 182 , this Court alluding' to the practice of allowing parties to introduce evidence which was irrelevant “per se,” upon the assurance of counsel, it would be followed up by evidence which would make it relevant, remarked: “We are not aware of any decision that has applied the rule to a case where declarations or acts of agents are offered for the purpose of binding principals. On the contrary, it is plainly said in Marshall vs. Haney, 4 Md., 511, that the declarations of an agent are not admissible to bind the principal under any circumstances until the agency is first clearly established, and the language of the Court in Atwell, vs. Miller, 11 Md., 359 , is to the same effect. It is conceded of course, that to entitle the plaintiff to recover in this action, there must be proof that Hoflin was duly authorized to give the order and direct the purchase on the joint account of the defendants.” “This authority or agency, need not be proved by writing; it may be inferred from facts and circumstances, from the permission and acceptance of his services, and subsequent, adoption and ratification of his acts will suffice. But before his admissions, declarations or acts were admitted to bind the defendants, we think the Court, should have required the production of some proof tending to show the existence of such agency or authority.” “ The failure however to do so, is not in this instance an error requiring a reversal of the judgment, because we are of ²² opinion there was some evidence adduced tending to show the agency, and fully sustaining the refusal of the Court — which is the subject of the fourth exception — to exclude Hoflin’s statement, on the ground that no such proof had been given, and the defendants were not therefore in fact, prejudiced by the ruling in the second exception.” It is clear from the context, in which the citation from Marshall and Haney and Atwell and Miller , is embodied, this Court did not intend to decide that full proof of agency should be required, before the acts and declarations of the supposed agent, were submitted to the jury.

In Marshall vs. Haney, it does not appear there was any preliminary evidence offered of the agency of Kinkle, whose declarations were proposed to be offered in evidence to the jury to bind the defendant. In passing upon the exception to these declarations,