Hardy v. Chesapeake Bank

• Decision Date: 18 June 1879
• Parties: THOMAS A. HARDY, JR., EDWARD M. HARDY and WILLIAM C. HARDY, trading as HARDY & BROS. v. THE CHESAPEAKE BANK.
• Court: Maryland Court of Appeals

51 Md. 562

THOMAS A. HARDY, JR., EDWARD M. HARDY and WILLIAM C. HARDY, trading as HARDY & BROS. v. THE CHESAPEAKE BANK.

Court of Appeals of Maryland

June 18, 1879

APPEAL from the Superior Court of Baltimore City.

The case is stated in the opinion of the Court.

Exceptions.--At the trial the plaintiffs took nine exceptions:

The first and seventh exceptions were to the rulings of the Court, in excluding the check-book of the plaintiffs. The first exception is sufficiently stated in the opinion of the Court. The plaintiffs offered, as stated in the seventh exception, to prove by the production and proof of their check-book, that a memorandum testified by a witness on behalf of the defendant, to have been made by the plaintiff Edward M. Hardy, in pencil, to show how his account stood, on the 10th October, 1873, and which memorandum witnesses on behalf of the defendant had testified to be substantially the same in the balance shown by it, as the account on the books of the bank, was incorrect, and did not show the state of the account as truly appearing by the check entries in said check-book, but the state of the account as falsely and fraudulently kept by Holmes, by passing the additions at the foot of each page of the stubs on said check-book, by means of which fraud said Hardy was misled in making said memorandum. Which offer and testimony offered were rejected by the Court, and the plaintiffs excepted.

The second exception was to the refusal of the Court to permit Mr. Beck, book-keeper of the plaintiffs, to answer the following question: Whether or not, in making a search for the missing checks, he had examined the books of the firm (which plaintiffs offered to produce by witness,) to trace out if the amount of those checks, or any of them, had passed into the funds of Hardy & Bros., and had been applied to their use, and if yea, what had been the result of such examination?

The third exception was to the refusal of the Court to admit in evidence the confession of Holmes referred to in a letter of the plaintiffs to the defendant, dated the 18th October, 1873, and which confession was written by Holmes and signed and sworn to by him before a justice of the peace prior to the 15th October, 1873, wherein he confessed and acknowledged the forging by him of the several checks, of the forgery of which the plaintiffs had offered proof, which confession the plaintiffs offered in evidence in connection with the plaintiffs' letter to the defendant and the defendant's answer thereto.

The fourth and eighth exceptions were to the refusal of the Court to admit Edward M. Hardy, one of the plaintiffs, as a competent witness, notwithstanding the death of his co-plaintiff, Thomas A. Hardy, Sr., who resided in Norfolk, Virginia, and never took any part in the business of the firm of Hardy & Bros., of which he was a member. The defendant, as appears in the fourth exception, did not object to the competency of E. M. Hardy, to prove that the parties named in the declaration as plaintiffs, composed the firm of Hardy & Brothers, and also did not object to that part of the offer, to prove that he made diligent search for the checks alleged in the proffer to have been missing, and that he could not find them, in so far as the evidence as to said search was proffered to lay the foundation for the introduction of secondary evidence of the contents of such missing checks; but the defendant objected to his competency to show, that certain checks not produced, charged against the firm by the defendant in the bank-book in evidence, were never drawn or paid by the firm, and that if there were ever any such checks in existence they were false and forged; and that all of said forged checks were issued without the knowledge or privity of the plaintiffs or any of them; and that the fact that any of them had been paid, was not known to or suspected by the plaintiffs, or any of them, until on or about the 10th October, 1873. In the eighth exception it appears, that the plaintiffs offered Edward M. Hardy in rebuttal, as a witness, to testify as to various conversations with him, proven by various witnesses for the defendant, and to contradict the said witnesses in respect thereto.

The fifth and sixth exceptions were to the allowance by the Court of questions addressed by the defendant to Wilson, a witness for it, and the answers thereto, relative to the motives and conduct of a forger under given circumstances, and to the fact that if a check had imperfection in the signature, such imperfection was sufficient to indicate to witness' judgment that the check was genuine. The questions are set out in the opinion of the Court.

The ninth exception was to the admissibility of evidence (taken subject to exception) introduced by the appellee, in so far as, and to the extent that it attempted to establish admissions or acquiescence on the part of the plaintiffs whereby it was claimed they were estopped from setting up the forgeries on the checks offered in proof. The plaintiffs then offered the following prayers:

1. The plaintiffs pray the Court to instruct the jury, that the defendant, as a bank receiving deposits, is held by law to the obligation to know the signatures of its depositors, and if the jury shall find from the evidence that the fourteen checks, or any of them, which have been produced in proof by the plaintiffs, and are claimed by them to be forgeries, and for which the defendant claims credit in account, are in fact forgeries, the plaintiffs are entitled to recover in this action.

2. The plaintiffs further pray the Court to instruct the jury, that if they shall find from all the evidence that the first five checks, viz., Numbers 4175, for $140; 4191, for $200; 4222 for $220; 4226, for $100, and 4229, for $200, making in all $860, which have been produced in proof by the plaintiffs, and are claimed by them to be forgeries, are in fact forgeries, the plaintiffs are entitled to recover in this action the amount of said checks, less thirteen dollars, with interest, in the discretion of the jury, from the 18th October, 1873.

And defendant offered eight prayers, (of which the sixth and seventh were omitted from the record,) as follows:

1. If the jury find from the evidence that the plaintiffs, in the year 1873, and for some years before, kept a bank account with the defendant, and that the bank-book offered in evidence by the plaintiffs is their bank-book with the defendant, and that the bank made the entries on the deposit side of said book, and required the plaintiffs to enter the checks drawn by them on the other side, and that said bank account was settled and balanced on said book on the 13th July, 1873, and the balance ascertained to be due the plaintiffs was carried forward in said book and credited to the plaintiffs in the book, and the paid checks embraced in said balances were then returned to the plaintiffs; and shall further find, that Holmes was the confidential clerk of the plaintiffs, and had charge of their check-book and bank-book, and that it was part of his business and duty to enter the checks of the plaintiffs in said bank-book, and to examine and see that the balances were correct, and that all the checks embraced in said balancing were entered in said book by the said Holmes, and among them the following five checks offered in evidence by the plaintiffs, viz:

No. 4175, May 10th, 1873, for $140.00; No. 4191, May 24th, 1873, for $200.00; No. 4222, June 9th, 1873, for $220.00; No. 4226, June 14th, 1873, for $100.00; No. 4249, June 23rd, 1873, for $200.00.

And that said five checks were paid by the bank in good faith in the usual course of business, and shall also find that the plaintiffs continued their account with the defendant, with the balance ascertained by the said settlement of the 13th July entered in said book, as the first item to their credit in the continued account, and kept said account with the defendant, as shewn by said book, down to the 14th October 1873, and that during the whole period of the continued account said balance was considered and acted upon as correct by the plaintiffs and by the defendant, and that said bank-book was settled and balanced again on the 6th October, 1873, as shewn by said book, and that all the checks up to said date, except the four last, were entered in said book by the said Holmes, and that said book was again balanced on the 10th of the same month, as shewn by said book, and that no intimation was given by the plaintiffs to the defendant, that they alleged that any of the checks charged in said bank-book were forged until about the 20th October, 1873; and shall also find that E. M. Hardy, one of the plaintiffs, very frequently looked at the state of his firm's account on the bank ledger, and that on or about September 26th, 1873, being informed by the cashier of the defendant that the plaintiffs' account would be over to the extent of $400, if the defendant should pay a check of the plaintiffs which had come through the clearing house, and that said Hardy admitted that the account would be over, and asked the defendant to discount for his firm a note of $1000 to cover said over-draft and to meet some checks which he said were outstanding, and defendant did discount the said note for said purposes, to save the credit of the firm, and that a money panic was then prevailing, growing out of the failure of J. Cooke & Co., and that defendant was not then discounting paper, except some few renewals, and would not have discounted said note, except for the purposes above stated; and shall also find that on the 9th of October, 1873, plaintiffs were informed by the defendant that their account was over about $180, and the said E. M. Hardy, after making some memoranda in pencil,...