Ecker v. First National Bank , 59 Md. 291 ( 1883 )

Miller, J.,

delivered the opinion of the Court.

This appeal is from a judgment recovered by the appellee against the executor of Jonas Ecker who died in August, 1870. The case was tried before the Court without the intervention of a jury, and upon an agreement waiving all errors in pleading, and admitting all testimony that would he admissible under any state of pleadings. In order to understand the cause of action, and the defence thereto, it is necessary to state briefly the material facts disclosed by the record.

It appears then that Ecker, Stouffer and Hawk, were partners trading under the firm name of J. Ecker & Co. This firm was indebted to the Bank on two notes, one for §3000, dated the 3rd of April, 1869, at ninety days, and the other for $1200, dated the 6th of May/ 1810, also payable at ninety days. These notes were not only signed in the firm name, hut also by the partners themselves, so that they were in fact not simply firm notes, but the joint and several obligations of the individual partners, and they constitute-the cause of action. They were not produced at the trial, hut evidence was given tending to show they had been lost or destroyed, and their contents were proved. This suit was brought against the executor of Ecker on the 2nd of February, 1880, and the defences set up are, 1st, that these notes had been paid and discharged so as to relieve the estate of Ecker from any responsibility on' account thereof, or for the debt they represented, and 2d, limitations.

We find no error in the rulings of the Court upon the question of limitations. The declarations of the executor as set out in the plaintiff’s third, fourth, fifth and sixth prayers, if found by the Court or jury as matter of fact to have been made, amount to a sufficient acknowledgment of the debt to remove the bar of the Statute. But the main and important question in the case is, was the Court right in granting the plaintiff’s eighth prayer to the effect that there is no legally sufficient evidence in the cause from which the Court can find that the indebtedness due to the Bank on account of these notes on the 8th of May, 1872, was wholly paid and discharged so as to relieve the estate of Ecker from any responsibility therefor ?

It is proved that on the 8th of May, 1872, which was long after the death of Ecker, and long after the notes became due, Stouffer and Hawk, the surviving partners, went to the Bank, paid $200 in cash and gave a note for $4000, that being the unpaid balance of the two notes, and thereupon the cashier delivered up these notes to them or to one of them. This $4000 note was signed in the firm name as well as by Stouffer and Hawk individually. The partnership, however, was dissolved by the death of Ecker, and the surviving partners could not use tlie firm name so as to hind his estate for the new note. Hurst & Berry vs. Hill, 8 Md., 399. The attaching, therefore, of the old firm name of J. Ecker & Co. to this note was a nugatory act, and it became simply the joint and several note of the individuals who signed it.

It was clearly competent for the Bank on the one hand, to receive and accept the $200 in money and the new note, and for Stouffer and Hawk, on the other, to pay and give the same in absolute payment and discharge of the antecedent notes and the debt they represented. If such was the express agreement between these parties, the law allows it so to operate. Nor is it necessary that such an agreement should be expressed in terms, but it may be established by the facts and circumstances attending the transaction, and whether there was such a contract or not is a question of fact for the jury. Haines & Eppley vs. Pearce, 41 Md., 231; Yates vs. Donaldson, 5 Md., 396; Thompson vs. Percival, 5 Barn. & Adol., 925. The inquiry then is, are there any facts disclosed by the testimony in this record, which, if believed by a jury, would be sufficient in law, to justify them in finding that such a contract existed.

The mere fact that the cashier received the new note, and understood or supposed it was in payment of the antecedent indebtedness, did not bind the Bank, or amount to such payment. In our opinion a cashier, as such, has no power to accept a note signed by two parties only, in payment and discharge of a note upon which another party was also bound with the two, so as to release such third party from his indebtedness to the Bank. Such an act does not fall within the well-known range of powers and duties naturally and necessarily pertaining to the office of cashier. He cannot, virtute officii, release a surety upon a note even though the Bank holds other security to which it might resort, nor make collateral contracts or agreements of any kind. Morse on Banking, 175, 189. Whether usage or custom in this particular Bank would suffice to confer such authority upon its cashier, is a question we need not decide, because there is no proof in this record that the cashier had ever before so acted in a similar case.' He testifies that he took the $4000 note without the previous direction or knowledge of the Directors, “ hut as had always been his usual custom.” This, however, is far from saying that it had been his habit or custom to take such a note in payment of antecedent notes or debts, and in release of parties bound thereby.

But, notwithstanding the cashier had no power thus to bind the corporation either by virtue of any special authority previously given, or by implication from usage and custom, still it was competent for the Directors to ratify his act when it was communicated to them, and if they approved it, or with full knowledge acquiesced therein, the Bank will be bound as effectually as if previous authority had been expressly delegated. On this point there is, in our judgment, evidence to go to the jury. It is proved not only that the old notes were delivered up by the cashier to the parties executing the new note, hut that the President of the Bank (who was one of the Directors) knew that this had been done. The cashier also testifies that the Board of Directors ratified his act; that the transaction of the 8th of May, 1872, was submitted to the Board and was approved by them; that the offering book on which there was an entry of this transaction was submitted to the Board and was approved ; that there was an entry of “paid ” opposite this transaction in the book when it was submitted to the Board and they made no objection to it; and that such an entry opposite to the memorandum of any transaction signifies either that the note was paid in cash or a new note was given; that he did not call the special attention of the Board to this transaction, and nothing in particular was said by him to the Board in regard to it. From this we infer, and think a jury would he justified in inferring that the entry of “paid” in this book when it was before the Board, appeared opposite to, or so as to indicate that the old notes were paid by the $200 in cash and the new note. It is also proved that the Bank accepted and took a renewal of the $4000 note on the 4th of September, 1874, and that interest was paid on the same up to the 27th of January, 1875 ; that on the 1st of February, 1874, the firm of Stouffer & Hawk had a credit of $2100 with the Bank, and they were considered solvent until about the 6th of February, 1875, when Hawk and wife gave a mortgage on certain real estate to secure this and other debts owing by Stouffer and himself to the Bank; that the Bank subsequently received $1707.81 on account of this mortgage, and also the sum of $1110 from the sons of Stouffer, with the agreement on the part of the Directors of the Bank that the same would be received in full satisfaction of their father’s share due on the $4000 note, and a receipt for that sum, as the principal and interest of his share thereof, was endorsed on that note by the cashier in pursuance of this understanding and agreement between the Bank, and the sons of Stouffer who made the payment; that the Bank never filed any claim against Ecker’s estate until after Hawk had conveyed his property to a trustee for the benefit of his creditors; and that the cashier of the Bank has, within the last year, charged the $4000 note up to profit and loss.

The facts and circumstances disclosed by this proof, if found by a jury to be true, are legally sufficient to justify them in finding that there was an express agreement between the Bank on the one side and Stouffer and Hawk on the other, that the money and note paid and given on the 8th of May, 1872, should be received and accepted in payment and discharge of the antecedent notes to which Ecker was a party, and of the debt they represented. In so deciding we do not mean to say there is not in the record opposing evidence, upon which a jury would be equally justified in finding the contrary. All that we decide is that the question whether there was such a contract or not must be left to the determination of the jury, and that there was error in granting the plaintiff’s eighth prayer.

For this error the judgment must be reversed, and a new trial awarded. We find no error in the granting of the plaintiff’s third, fourth, fifth, sixth, seventh and ninth prayers, nor in the rejection of the defendant’s prayers; but it follows from what we have said there was error in the granting of the plaintiff’s first, second and eighth prayers. Upon the new trial, if the verdict he in favor of the plaintiff, the bond required by the Act of 1876, ch. 345, must, he given before a judgment is entered thereon.

(Decided 1st February, 1883.)

Judgment reversed, and new trial awarded.