Dante State Bank v. Calenda

• Decision Date: 25 March 1936
• Docket Number: No. 7535.,7535.
• Citation: 183 A. 873
• Parties: DANTE STATE BANK v. CALENDA.
• Court: Rhode Island Supreme Court

183 A. 873

DANTE STATE BANK

v. CALENDA.

No. 7535.

Supreme Court of Rhode Island.

March 25, 1936.

Exceptions from Superior Court, Providence and Bristol Counties; Antonio A. Capotosto, Judge.

Action by the Dante State Bank against Giovannina Vittoriosa Calenda. Verdict for plaintiff on its declaration and for defendant on her plea of set-off, and plaintiff brings exceptions.

Exceptions sustained in part, and case remitted for new trial.

Huddy & Moulton and Stuart H. Tucker, all of Providence, for plaintiff.

Dooley, Jackvony, Curran & Dunn and Louis V. Jackvony, all of Providence, for defendant.

MOSS, Justice.

This case was brought for the nonpayment of a promissory note for $2,000 made by the defendant to the plaintiff. The defendant pleaded the general issue and also a plea in set-off that the plaintiff was indebted to her in the principal sum of $12,000, with interest thereon, on four certificates of deposit aggregating that sum. At the conclusion of the trial in the superior court, the jury found a verdict for the plaintiff on its declaration and for the defendant on her plea of set-off, and assessed damages for her in the net sum of $11,300.

No motion for a new trial was filed, and the case is now before this court upon the plaintiff's bill of exceptions, based on ninety-four exceptions taken by it at the trial during the introduction of evidence and ten exceptions to charges given by the court to the jury and to the refusal of the court to give charges requested by the plaintiff.

The principal undisputed facts are as follows: The note sued on was dated December 9, 1931, and was payable on demand. The certificates of deposit on which the plea in set-off was based were issued by the plaintiff payable to the order of Giovannina Vittoriosa, the maiden name of the defendant, in the aggregate amount of $12,000. The first two of these, for $2,000 and $3,000 respectively, were issued on August 31, 1928. The third, for $5,000, was issued on April 3, 1930, and the fourth, for $2,000, was issued on January 15, 1931. Another certificate of deposit for $10,000, payable to her order, was issued by the plaintiff on August 31, 1928. This she personally cashed on December 9, 1931, and at the same time she borrowed from the plaintiff $2,000, for which she gave to it the promissory note on which its action is based.

The two certificates for $3,000 and $5,000, respectively, were paid by the plaintiff to the defendant's husband, Allessandro Calenda, on October 8, 1931, being indorsed by him in her maiden name. The two for $2,000 each were likewise paid by the plaintiff to him on October 20, 1931, being likewise indorsed by him in her maiden name and also in his name. These certificates, thus indorsed, were paid by the plaintiff bank, through its treasurer, Joseph R. Carley, to the defendant's husband in reliance on a power of attorney under seal from her to him, which was on file at the bank and which had been signed by her, and purports to have been acknowledged by her before Ralph Di Luglio, who was then secretary of the bank, on September 20, 1930. It was signed by Ernest Di Luglio, then its vice president, as a witness. By its terms she appointed her husband her attorney and authorized him "to do any and all matters connected with my account in said Dante State Bank" and "to transact any and all business, and any and all nature of business, as if I were there in person." It also contained at the end the following clause: "I further authorize him to use my funds and to use his own name in handling them."

She testified that she never in any way authorized him to cash any of her certificates or assented to his cashing of them. She, however, admitted that the signature on the power of attorney was hers, but testified that she did not understand what it was and would not have signed it if she had understood. As to whether it was explained to her and as to whether she was misled into signing it, there was conflicting testimony, later on in the case, by her on one side and by these two Di Luglios on the other.

The $8,000 paid, as above stated, by the bank to the defendant's husband on October 8, 1931, was at once used, at the request of Ralph Di Luglio and with the knowledge of Ernest Di Luglio, in partial payment of a $9,500 note of Domenico Di Luglio, held by the Rhode Island Hospital Trust Company. The rest of the money necessary to pay this note in full was at the same time contributed by one Natale Cellini, and the two of them then received in equal parts 650 shares of the stock of the plaintiff bank which belonged to Domenico Di Luglio and had been held by the Rhode Island Hospital Trust Company as security for the payment of the note. This stock Calenda and Cellini held for some time, until the plaintiff went into liquidation early in 1932, and as holders of it they exercised some control over the affairs of the plaintiff.

It was somewhat in dispute as to whether the transaction was a sale of the stock by Domenico Di Luglio to Allessandro Calenda and Cellini, as the first named testified he understood, or was a loan by the others secured by the stock. Calenda testified that it was a loan, but he was not clear whether he understood it was to Domenico Di Luglio or to the plaintiff.

The $4,000 paid to Calenda on October 20, 1931, and some money of his own were turned over by him to Ralph Di Luglio, who was a son of Domenico Di Luglio, for some purposes not very clearly shown. Calenda testified that this and some other money furnished by him to Ralph Di Luglio was loaned to pay some notes held by the Mechanics National Bank & the Industrial Trust Company. He was not clear as to his understanding of the transaction. Some parts of his testimony indicated that he thought he was loaning the money to the plaintiff; other parts indicated that he thought he was loaning it to the Di Luglios. At any rate, he received as security two deeds to him from Domenico Di Luglio of two pieces of real estate belonging to the latter. Ralph Di Luglio testified that the money was used to pay obligations of his father. There was no evidence that any of the $12,000 went to the plaintiff or to pay any of its obligations, direct or indirect.

The 650 shares constituted a large majority of the stock of the plaintiff bank. Domenico Di Luglio had held them for a considerable time, together with 150 shares more, and up to October 5, 1931, he had been president and a director of the plaintiff Thereafter he continued as director, holding the 150 shares. Ralph Di Luglio was both secretary and a director of the bank and held 10 shares of its stock. Ernest Di Luglio, his brother, was vice president up to October 5, 1931, when he became president. He held none of the stock.

While the above certificates were outstanding, there were also in the plaintiff bank a savings account standing in the name of the defendant and a checking account standing in her name as "Giovannina Calenda, by Allessandro Calenda, Agent." It was proved that he drew in cash on his own receipt the interest for six months on all the certificates of deposit and deposited it in the latter account. He also drew money on both of the accounts at different times.

In returning their verdict, the jury found, on a special issue submitted to them, that the defendant did not know that she was signing a power of attorney to her husband when she signed the instrument in question.

Whether or not she was bound by this instrument, by the terms of which she appointed him her attorney and gave him very sweeping powers to transact business in her name and stead and to use her funds and to use his own name in doing this, and in reliance upon which the plaintiff bank paid to him the $12,000 on four of the certificates of deposit issued to her, is the most vital and important issue in the case. Therefore the most vital and important of the plaintiff's one hundred and four exceptions is the ninety-seventh, taken to that part of the trial justice's charge to the jury which instructed them as to that very issue. This part of the charge was as follows: "If you find that Mrs. Calenda did not give her husband express authority by conduct or in words or did not ratify, knowing the facts, what he may have done, if she did know the facts, and if you find that what is claimed to be a power of attorney was signed by Mrs. Calenda in ignorance of the fact that when she signed that paper she was giving her husband the power of control of funds standing in her name, then the bank is liable for whatever funds standing in the name of Mrs. Calenda the bank paid to the husband."

By this language the trial justice virtually told the jury that if this instrument, to which we shall hereafter refer as the power of attorney, was signed by the defendant in ignorance of the fact that by its terms she was giving her husband the power of control over funds standing in her name, it was not binding on her and the jury must disregard it in arriving at their verdict. In their special finding the jury substantially found that it was so signed, and that was all that they found therein.

In passing on the question of the correctness of such an instruction in this case, it must be kept in mind that the defendant does not understand the English language, in which the power of attorney was written, although from her testimony it is apparent that she is an intelligent woman. The substantial question of law raised by this exception then is whether a written instrument in English, which has been signed by a person named therein as one of the parties, who was intelligent but did not understand that language, is not binding on that person, if he or she did not understand the nature of the instrument, even though no element of fraud was involved and money has been paid out by another in reliance upon the instrument. This question may arise between such person and the other original party to the instrument or it may arise between...