Denton Nat. Bank v. Kenney
| Decision Date | 22 June 1911 |
| Citation | 81 A. 227,116 Md. 24 |
| Parties | DENTON NAT. BANK v. KENNEY. |
| Court | Maryland Court of Appeals |
Appeal from Circuit Court, Caroline County; Philemon B. Hopper and Wm. H. Adkins, Judges.
Suit by Arthur J. Kenney against the Denton National Bank and others. From a judgment for plaintiff, the first-named defendant appeals. Reversed as to that defendant.
Joseph C. France and Henry R. Lewis, for appellant. T. Alan Goldsborough, for appellee.
Argued before BOYD, C.J., and BRISCOE, PEARCE, BURKE, URNER, and STOCKBRIDGE, JJ.
The appellee on this record held a mortgage upon the property of Joseph E. Hammel and wife amounting, with interest, to the sum of $1,150.76. By the directions of the appellee, this sum, in payment of the mortgage, was paid by a check of Oscar Clark, drawn on the Denton National Bank, to the order of William H. Deweese, the attorney of the appellee. This check is in these words:
At that time Mr. Deweese was sick, and he died in February, 1907, insolvent. On the 8th of October, 1906, being too helpless to write his name, the check was indorsed as follows and sent to the bank for deposit:
"Test: May Gootee.
his "Wm. H. X Deweese, Arty." mark
The bank returned the check to Mr. Deweese, and informed him that it would not deposit the same to his credit under this indorsement. The check was then indorsed in these words and returned to the bank, and the proceeds were credited to his individual account:
"Test: May Gootee.
his "Wm. H. X Deweese." mark
On the day the check was deposited, William H. Deweese was indebted to the bank, on overdraft, in the sum of $32.18. On November 26, 1906, an overdue promissory note for the sum of $800, payable to the Denton National Bank and signed by William H. Deweese and Harvey L. Cooper, as joint makers, was, by direction of Harvey L. Cooper, a comaker of the note, and who was also the president of the Denton National Bank, charged to the account of Mr. Deweese. The whole amount standing to the credit of Mr. Deweese on the books of the bank at that time, and against which the note was charged, was then represented by the proceeds of the check of Oscar Clark mentioned above. The bank also charged against the account the overdue draft of $32.18. Frederick R. Owens was appointed and qualified as administrator of the personal estate of William H. Deweese, and the bank paid over to him as administrator the sum of $80.19; the amount remaining to the credit of Deweese upon its books at the time of his death.
This suit was brought by the appellee against Harvey L. Cooper, Frederick R. Owens, administrator of William H. Deweese, and the Denton National Bank, to recover the money which the bank charged, under the circumstances mentioned, to the account of Deweese.
The seventh paragraph of the bill charges that, "in addition to the information furnished the officers and directors of the said the Denton National Bank and to the said Harvey L. Cooper, by the wording of the check aforesaid, the said officers and directors of the said the Denton National Bank and the said Harvey L. Cooper, surety on the said note and president of the Denton National Bank, had actual knowledge of the fiduciary relation which the said William H. Deweese bore to the entire account to which this said note was charged up."
The prayers of the bill are, first, for a decree declaring the Denton National Bank to be indebted to the plaintiff in the sum of $806.67, the amount of said note charged up to said account, with interest from November 26, 1906, until paid; second, that a decree be passed, directing Frederick R. Owens, administrator of the said William H. Deweese, to pay to the plaintiff the sum of $80.09, the portion of the above account paid to him by the bank, and for further relief.
The bank, in its answer to the bill of complaint, admitted that it received for deposit from William H. Deweese, on the 8th day of October, 1906, a properly indorsed check of Oscar Clark for $1,150.76, and averred that it had received this check in the usual course of business, and that at the time of the deposit of that check the account of Deweese was overdrawn to the extent of $32.18. It admitted the execution of the note by Deweese and Cooper for the sum of $800, as stated in the bill, and that the note, with interest, was charged as alleged to the account of William H. Deweese. It denied that it had any knowledge or information at the time the check was deposited that Deweese was insolvent, or that it had any knowledge of any fiduciary relation existing between Deweese and the appellee, or any other person, so far as this deposit or account was concerned, but that it believed and treated the account, as it actually was, the individual account of William H. Deweese. It admitted that it charged to his account the $32.18 referred to, and that it paid to Frederick R. Owens, the administrator of William H. Deweese, the sum of $80.09, the balance remaining to the account of the deceased. The answer further avers that, so far as the bank "had any knowledge or had any reason to believe, at the time of the charging of the said note and overdraft, the money standing to the credit of the said William H. Deweese was his private account, subject to his check, and liable for any overdue indebtedness to said defendant, and the charging up of said note and said shortage was done in good faith, and in the regular course of business, with the consent of said William H. Deweese and ratified by him."
The material averments of the answer of Harvey L. Cooper appear in the fifth and seventh paragraphs, wherein it is denied that the note was charged to the account of William H. Deweese by his direction, either as surety or as president of the Denton National Bank; and he avers that he had no knowledge that the note was charged against the account of said Deweese until some time subsequent to the time when that was done; and he further denies that he had any knowledge of any fiduciary relation existing between Deweese and the plaintiff.
The answer of Frederick R. Owens, the administrator, need not be particularly examined. It admits the receipt from the bank of the sum of $80.09, and states that this amount is deposited to his credit as administrator in the defendant bank. The general replication was filed, and the testimony was taken in open court.
The case was heard upon the bill, answers, and testimony. The court dismissed the bill as to Harvey L. Cooper; but as to the Denton National Bank and Frederick R. Owens, the administrator, it ordered and decreed, first, "that the defendant, the Denton National Bank, pay to the plaintiff the sum of eight hundred and six dollars and sixty-seven cents ($806.67), the amount of the note in controversy in this suit charged up to said account, and also that the said the Denton National Bank pay to the plaintiff the sum of thirty-two dollars and eighteen cents ($32.18), the amount of the overdraft mentioned in said cause charged to the said account, represented by the check of eleven hundred and fifty dollars and seventy-six cents ($1,150.76), mentioned in this cause; secondly, "that Frederick R. Owens, the administrator of the personal estate of William H. Deweese, deceased, pay to the plaintiff eighty dollars and nine cents ($80.09), the amount of the plaintiff's money, as represented by the aforesaid check of eleven hundred and fifty dollars and seventy-six cents, paid over to the said Fred R. Owens, administrator, by the defendant, the Denton National Bank." The bank was ordered to pay the costs of the proceeding. The appeal before us is taken from this decree by the bank alone.
William H. Deweese had been a depositor of the bank prior to the date of the check in question. This check was a negotiable instrument under article 13, §§ 20 and 22, of the Code of 1904. It was drawn on the Denton National Bank, and was made payable to William H. Deweese, Atty. It was indorsed by him in blank, and the amount of the check credited to his individual account. This credit was given upon the faith of the check, the title to which passed to the bank under the indorsements.
It is said in Tyson & Rawls v. Western National Bank, 77 Md. 416, 26 A. 521, 23 L. R. A. 161, that ...
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