First National Bank of Carlisle v. Graham

• Decision Date: 13 October 1875
• Citation: 79 Pa. 106
• Court: Pennsylvania Supreme Court
• Parties: First National Bank of Carlisle <I>versus</I> Graham.

79 Pa. 106

First National Bank of Carlisle versus Graham.

Supreme Court of Pennsylvania.

May 26, 1875.

October 13, 1875.

May 26th 1875.

Before AGNEW, C. J., SHARSWOOD, MERCUR, GORDON, PAXSON and WOODWARD, JJ.

Error to the Court of Common Pleas of Cumberland county: Of May Term 1875, No. 72.

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S. Hepburn, Jr., and W. F. Sadler, for plaintiff in error.—As to the first error, they cited Smith v. First Nat. Bank of Westfield, 99 Mass. 605. The definition of gross negligence as given by the court below is but the definition of ordinary negligence: Jones on Bailment 21, 22, 47; Tompkins v. Saltmarsh, 14 S. & R. 279; Phila. & R. Railroad v. Spearen, 11 Wright 300; Coggs v. Bernard, 1 Ld. Raym. 909; Foster v. Essex Bank, 19 Mass. 479; Pack v. Alexander, 3 M. & C. 789; Lloyd v. W. Branch Bank, 3 Harris 176; Scott v. Nat. Bank of Chester Valley, 22 P. F. Smith 471. Under the facts in this case the question of negligence was a question of law: Pitts., F. W. & Ch. Railroad v. Evans, 3 P. F. Smith 250; Howard Express Co. v. Wile, 14 Id. 206; Glassy v. Hestonville Railroad, 7 Id. 172; N. Penna. Railroad v. Heileman 13 Wright 60; McCully v. Clarke, 4 Id. 406; Penna. Can. Co. v. Bentley, 16 P. F. Smith 34; Lance v. Griner, 3 Id. 206.

On the 15th assignment of error, they cited Lloyd v. W. Branch Bank, 3 Harris 176; Merchants' Bank v. State Bank, 10 Wall. 604; Floyd's Acceptances, 7 Id. 667; U. S. Bank v. Bank of Columbus, 21 Howard 364; Mechanics' Bank v. Bank of Columbia, 5 Wheaton 326; United States v. Dunn, 6 Peters 51.

J. Hays and J. H. Graham, for defendant in error, as to the admission of Mrs. Trout's testimony, cited: Pratt v. Richards, 19 P. F. Smith 58; Bank v. Smith, 8 Phila. R. 76; Tompkins v. Saltmarsh, 14 S. & R. 280. What is gross negligence is for the jury; Doorman v. Jenkins, 2 Ad. & E. 256; Parsons on Cont. 89, 690; Addison on Cont. 627; Lancaster Co. Nat. Bank v. Smith, 12 P. F. Smith 54.

Mr. Justice WOODWARD delivered the opinion of the court, October 13th 1875.

On the 22d of October 1868, Fannie L. Graham, the plaintiff below, deposited United States bonds, amounting to $4000, in the First National Bank of Carlisle, for safe-keeping. They were to be returned on the return of the receipt which was given to her by Chas. H. Hepburn, the cashier. Never having been returned, this suit was brought to recover their value. On the part of the defendants evidence was introduced to show that the bonds, together with money and securities belonging to the bank, its officers and other parties, had been stolen from the vault on the 5th of August 1871. Upon the trial the plaintiff was permitted to prove by Mrs. Trout that "she had a deposit of government bonds in the same bank for safe-keeping; that she drew the interest and premium on her bonds regularly until the bank closed; and that, though living just opposite the bank, she never knew or heard of the alleged disappearance." The object of the offer was stated to be "to rebut the presumption that there ever was any robbery, and to show that the bonds remained in the bank till its close." The testimony of Mrs. Trout was followed by that of F. S. Dinkle, to the same general effect. Its admission raises the first question the record presents.

Throughout the trial, the proof had been distinct and clear that the fact of the robbery had never been publicly disclosed. The officers feared that such a disclosure would injuriously affect the credit of the bank, and the president and cashier undertook, in their individual capacities, to become liable for the principal, interest and premium of the bonds of depositors that had been lost. Notice was given to the Assistant United States Treasurer in New York, and to the Treasury Department at Washington. The plaintiff was informed of the loss through her brother, residing in Monmouth, Ill., some bonds issued by an association there being among her securities, and notice that they had been stolen having been given to that association by the officers of the bank. This, the plaintiff testified, was three or four weeks after the robbery. She called on the cashier, who told her to say nothing and keep quiet; that it was their loss and not hers. She afterwards saw Judge Hepburn, the president, who made the same request that she should say nothing, and gave the same assurance that she should be paid. As to the other depositors, the proof was definite that, whether wisely or unwisely, all publication of the fact of the robbery was sedulously withheld. What, then, was to be gained by the admission of the testimony of these witnesses? It contradicted no facts alleged on behalf of the defence. It was consistent with the statement of the cashier, that he and Judge Hepburn had personally undertaken to pay the interest on the lost bonds. The facts were not only collateral, but they were superfluous for any legitimate purpose of the plaintiff's case. If the failure to make publication had been disputed, and there had been, in the judgment of the court, other affirmative and express evidence before the jury, on the question whether the whole theory of a robbery had been fabricated, it may be that the ruling would have been justified by the salutary principles which enlarge the field of inquiry where it becomes necessary to develop and expose an attempted fraud. There is nothing in this record to exclude the application of the rule that requires the rejection of all collateral facts which are incapable of affording any reasonable presumption or inference as to the principal matter in dispute. And the reason given in the text-books for the existence of the rule seems peculiarly applicable here: "Such evidence tends to draw away the minds of the jurors from the point in issue, and to excite prejudice and mislead them; and, moreover, the adverse party having had no notice of such a course of evidence, is not prepared to rebut it:" 1 Greenl. Evid., § 52. The case of Pratt v. Richards, 19 P. F. Smith 58, is relied on to sustain the ruling of the court. There, Richards, the lessee of Cooley, had sublet part of the demised premises to Pratt & Co., the defendants. In May 1861, the defendants failed, and asked Richards to cancel the lease. By the evidence offered and rejected in the court below, it was proposed to show that in June or July 1861, Richards had surrendered his entire interest in the premises to the agent of Cooley, the owner, who placed a new tenant in possession of the room the defendants had occupied. The suit was by the assignees of Richards for rent for fifteen months subsequent to May 1851. This court held the evidence to be admissible, and it is difficult to conceive of any principle on which any other conclusion could have been reached. But it is not apparent how that decision can have any bearing as an authority on the question presented here. Nor is the objection of the defendants met by the first suggestion that the evidence of these witnesses was competent because it tended to establish the fact that notice by advertisement or otherwise was not given. The question of notice was not in controversy. It was both proved and admitted by the defendants as part of their own case, that public announcement of the robbery was purposely withheld. The evidence was improperly received.

The next question is presented by the series of assignments which allege error in the instructions given to the jury as to the measure and extent of the responsibility of the defendants. Assuming for present purposes on the faith of the verdict, that the act of the cashier was so far acquiesced in and ratified by the officers and directors, as to create a contract between the plaintiff and the bank, it is manifest that the contract amounted at the utmost to a naked bailment. It was a deposit without compensation. No undertaking was expressed except that the bonds were to be returned on the return of the cashier's receipt. The law regulating such a contract has been settled since the decision of Coggs v. Bernard, 2 Ld. Raym. 909, in the year 1703. "Where a man takes goods into his custody to keep for the use of the bailor," it was said by Holt, C. J., in that case, "he is not answerable if they are stole without any fault in him, neither will a common neglect make him chargeable, but he must be guilty of some gross neglect." The principles which govern the relations between bailors and bailees are succinctly stated in Story on Bailments, sect. 23. "When the bailment is for the sole benefit of the bailor, the law requires only slight diligence on the part of the bailee, and of course makes him answerable only for gross neglect. When the bailment is for the sole benefit of the bailee, the law requires great diligence on the part of the bailee, and makes him responsible for slight neglect. When the bailment is reciprocally beneficial to both parties, the law requires ordinary diligence on the part of the bailee, and makes him responsible for ordinary neglect." In Tompkins v. Saltmarsh, 14 S. & R. 275, Duncan, J., in delivering the opinion of the court, said: "Where one undertakes to perform a gratuitous act, from which he is to receive no benefit, and the benefit is to accrue solely to the bailor, the bailee is liable only for gross negligence, dolo proximus, a practice equal to a fraud. It is that omission of care which even the most inattentive and thoughtless men take of their own concerns. There is this marked difference in cases where ordinary diligence is required, and where a party is accountable only for gross neglect. Ordinary neglect is the want of that diligence which the generality of mankind use in their own concerns, and that diligence is necessarily required where the contract is reciprocally beneficial. The bailee without reward is not bound to ordinary diligence, is not...