Calvert Bank v. J. Katz & Co.

• Decision Date: 21 June 1905
• Parties: CALVERT BANK v. J. KATZ & CO.
• Court: Maryland Court of Appeals

61 A. 411

102 Md. 56

CALVERT BANK v. J. KATZ & CO.

Court of Appeals of Maryland

June 21, 1905

Appeal from Baltimore City Court; Henry D. Harlan, Judge.

Action by J. Katz & Co., for the use of William G. Towers, against the Calvert Bank. From a judgment in favor of plaintiff defendant appeals. Reversed.

Argued before McSHERRY, C.J., and FOWLER, BRISCOE, BOYD, PAGE PEARCE, SCHMUCKER, and JONES, JJ.

S.S Field, for appellant.

Forrest Bramble, for appellee.

JONES J.

In this case the appellee was a depositor in the bank of the appellant corporation, and on the 25th day of April, 1903 brought an action of assumpsit against the appellant in the Baltimore City court. The action was brought under the rule day act, and the account filed with the narr., which contained only the common counts, shows that the cause of action was the claim of a balance due the appellee as of December 23, 1901, on a statement of account with the appellant. The appellee obtained a judgment, and the appellant brought this appeal, and alleges error in the rulings of the court below in four several exceptions; three of these being to rulings in relation to the admission of evidence and one to action upon the prayers. From the disclosures of the record the suit appears to have grown out of the following facts: Prior to September 1, 1901, there existed a partnership between Jacob Katz, the appellee here and Louis Katz, his brother, under the firm name of J. Katz & Co. In August, 1901, prior to the dissolution of the firm, which will be presently mentioned, Louis Katz made and signed a promissory note, payable to H.J. Hahn, and indorsed the same in the name of the firm. This note was for $200, at four months, and was discounted for H.J. Hahn by the appellant bank in the early part of August, 1901, and was in renewal of a note of $300, similarly indorsed, and previously discounted by the appellant; the difference between the two notes being paid to the bank. The firm dissolved September 1, 1901, and Jacob Katz, appellee, continued in business under the same firm name, and in November following opened an account with the appellant in the firm name, but informed the officials, or some of them, of the bank, "that he had no partner; that he was trading as J. Katz & Co." The note of $200 fell due in the early part of December, 1901, and, not having been paid, it was protested, and notice of protest was sent in usual course. Shortly thereafter, some of the checks of the appellee having been refused payment by the bank, he called at the bank about Christmas, and "saw the president with reference" to the refusal to pay the checks, and was informed that he had no money to the credit of his account, because the note of $200 which has been mentioned had been charged to his account. It does not appear that the appellee at the time made any protest against this action of the bank, or any objection on the score of not being liable on the note; but the president of the bank testified that at the interview between him and the appellee about the time indicated the latter said that charging the note to his account put him to considerable inconvenience, and requested that the matter of charging the note be allowed to go over until after the first of the year, and said if that was done "it would be all right." This request was refused. Subsequently (it does not appear just when) the appellee's attorney wrote to the president of the bank, and was invited to call, which he did, and the president, as the attorney testifies, "explained to him about the note, and showed him the note." No protest against or objection to the action of the bank on the score of non-liability of the appellee on the note appears to have been made at this interview. On the contrary, the attorney subsequently got the bankbook of the appellee balanced, and received with the book all of the vouchers for the charges, including the note, which would hardly have happened upon an intimation that the charging of the note was to be disputed. The note has been retained ever since by the appellee or his attorney, and is now reported as lost. It does not appear that the bank (appellant) ever heard further as to the note, or as to its action in putting it to the appellee's account, until this suit was brought in April, 1903. In the meantime, in August, 1902, the appellee brought suit against H.J. Hahn, the payee of the note, the cause of action in which was in part the $200 note in question, and recovered a judgment in the suit, which included the item of the note. Now, if we assume the foregoing facts to be in proof, the note, which is the basis of the whole controversy here, was made and indorsed by the partner of the appellee while the partnership existed. Upon the face of the transaction it was intended to impose a liability upon the partnership by the indorsement made, and most likely this was what gave the note the credit that enabled the payee to discount it. While it may not have been a partnership transaction, it purported, on the face of it, to make the partnership liable. Nothing appears in connection with the indorsement of the note or its negotiation to show that what was done in that connection was done without the knowledge, consent, or authority of the appellee as a member of the firm. The case, though differing to some extent from the facts in that of Manning v. Hays, 6 Md. 5, falls within the principle there illustrated, where the court said: "Although it is clear that one partner cannot bind his copartner in regard to a matter which is exclusively his own, yet the fact of its being his private business must...