People's Bank of Denton v. Turner

Bond, C. J., delivered the opinion of the court. The appellant bank, having a sum of money on deposit in its savings department in the names of “Annie E. Turner or Florence E. Thompson, or survivor,” claimed a right to set off against its liability on the deposit a note of Florence E. Thompson’s in a larger amount. The claim was not successfully maintained in a suit against the bank by Miss Turner, and rulings of the trial court considered unfavorable to it form the subject of this appeal. Miss Turner, in the year 1927, withdrew money from a savings account she had in the Bank of Ridgely in the same county, received for it a draft to her order on the Union Trust Company of Baltimore, and gave the draft, indorsed by her, to her brother-in-law, A. W. Thompson, with instructions to deposit the amount in the savings department of the People’s Bank of Denton, as it was actually deposited, to the credit of “Annie E. Turner or Florence E. Thompson, or survivor.” Florence E. Thompson was Miss Turner’s sister.

Thompson, making the deposit, indorsed the draft himself, and he was given a pass-book. There was testimony on behalf of the bank that he declared the money to be his own, and that he subsequently made additional deposits on the account, and, bringing the pass-book, made withdrawals. On the other hand, there was testimony from which the jury could find as a fact that Miss Turner alone continued in sole ownership of the money, took and retained the pass-book, and made all deposits and all withdrawals except one ⁴³² made for her by Mrs. Thompson, with the pass-book temporarily in her possession for that purpose. In 1931, the People’s Bank bought the assets and assumed the liabilities of the Bank of Ridgely, and the latter became a branch of the People’s Bank.

In that transaction the note of Mrs. Thompson’s, given by her to the Bank of Ridgely, was taken over, and there was testimony that it was valued as an asset on the supposition that the People’s Bank would have security in the right to set off money in the savings account in the two names. In 1934, Miss Turner attempted to withdraw the whole amount remaining on deposit, sending the pass-book and a check for it, but the bank refused payment on the ground that it had this lien or right to set off. Miss Turner’s present suit for the full amount of the deposit followed. The contentions of the bank on appeal all proceed from an assumption that the entry of the deposit, on its face, gave the bank a lien or right to set off against it the debt due from a single one of the two persons named.

And in that the court is not able to agree. It is true that the entry rendered the deposit subject to withdrawal by either one. See Code, art. 11, sec. 76. And it served to designate those with whom and against whom the bank had the rights and obligations incidental to deposits.

But it did not designate any separate interests in them, and mark the deposit as belonging to either one. Separate interests were left undetermined by it. 'Separation, for ascertainment of a right of set-off which the bank might have against either one, could be worked out only by external evidence. And the external evidence received fails to support a finding that Mrs. Thompson had a separate interest in the money, which would make it applicable to the payment of her debt. On the contrary, it tends to show that Miss Turner was the sole actual owner, as the jury found.

Many past decisions of this court illustrate the possibility that under the same or similar entries deposits of money might represent funds of both persons, or of one not indebted. Matthias v. Fowler, 124 Md. 655 , 93 A. 298 ; Whalen v. Milholland, 89 Md. 199 , 43 A. 45 . The record does not disclose any rules or by-laws of the ⁴³³ bank controlling presentation of the pass-book for withdrawals, but the arguments in the case seem to assume that the pass-book was required, as usual. And if this be true, the bank’s obligation was to pay out the money to that one of the two who came with the pass-book.

Mercantile Savings Bank v. Appler, 151 Md. 571, 576 , 135 A. 373 . A set-off of Mrs. Thompson’s debt could be had only by debarring all privileges and rights that might be secured to Miss Turner by the entry and by retention of the book. Instead of paying, as it contracted, to either who might come with the book, the bank would be selecting one payee of