Ladd v. Augusta Sav. Bank

• Decision Date: 15 July 1902
• Citation: 96 Me. 510,52 A. 1012
• Parties: LADD v. AUGUSTA SAV. BANK.
• Court: Maine Supreme Court

52 A. 1012

96 Me. 510

LADD

v. AUGUSTA SAV. BANK.

Supreme Judicial Court of Maine.

July 15, 1902.

(Official.)

Report from supreme judicial court, Kennebec county.

Action by Philip S. Ladd against the Augusta Savings Bank. Case reported. Judgment for plaintiff.

Argued before WISWELL, C. J., and EMERY, WHITEHOUSE, STROUT, and PEA-BODY, JJ.

H. M. Heath and C. L. Andrews, for plaintiff.

L. C. Cornish and N. L. Bassett, for defendant.

WISWELL, C. J. Between July 7, 1884, and January 3, 1893, the plaintiff made numerous deposits in the defendant Savings Bank, which aggregated on August 1, 1900, with the dividends credited by the bank up to that time, the sum of $2,947.17. Of this amount he withdrew $850. No part of the balance has ever been repaid by the bank to him or upon his genuine order. But on June 10, 1895, the bank paid to a person, who falsely personated the plaintiff and presented his bankbook, the sum of $1,250, and it subsequently paid on two occasions, upon what purported to be the orders of the plaintiff, but which are now admitted to have been forgeries, the sums of $620 and $227.17, the plaintiff's bankbook being presented upon each of these occasions.

In this action the plaintiff seeks to recover the amount of his deposit, less the amount withdrawn by him. It is, of course, conceded that the bank, which had received upon deposit the plaintiff's money to be repaid to him or to some person duly authorized by him to receive it, and which has not paid the same to him or upon his order, is liable, unless by virtue of some stipulation in the contract between the bank and the depositor the payments thus made, under the circumstances of the case, constitute a defense.

So that it first becomes necessary to inquire whether or not there was any stipulation in the contract between this depositor and the bank that would change the general rule as to the latter's liability. When this account was opened by a deposit on July 7, 1884, a bankbook was made out in the plaintiff's name with the first deposit entered to his credit, and the book was sent to and received by him, he not being personally present upon that occasion. This individual bankbook, sent to the depositor, contained several pages of printed rules and regulations in relation to the management of the bank, making of deposits, the withdrawal of funds, and in regard to other matters, among which were the following:

"Deposit Books.

"All deposits are entered in the books of the corporation, and a bankbook given to each depositor, in which every deposit made and every sum withdrawn will be entered. This book will be the voucher and the evidence of the depositor's property in the institution, and of the same validity as a note of hand. Applications for withdrawal of funds, whether in person or by order, must always be accompanied by the deposit book.

"In case of the loss of a deposit book, notice of such loss should be immediately given at the bank. As the officers of the institution may be unable to identify every depositor transacting business at the bank, the institution will not be responsible for loss sustained when the depositor has not given notice of his book being stolen or lost, if such book be paid in whole or in part on presentment."

"Signature of Rules.

"On making the first deposit the depositor will be required to subscribe his name to the rules, regulations, and by-laws of the institution, and thereby agree to be bound by them."

This plaintiff never signed any agreement to be bound by the rules, regulations, and by-laws of the institution. When the first deposit was made in this account he was not personally present, and was never required to sign any such agreement. Prior to the commencement of this account the plaintiff had had deposits in this bank which were entirely withdrawn prior to July 7, 1884, and when the first account was commenced by a deposit in 1874, he then not being personally present, his name was subscribed by the treasurer at that time to a book known as a "Depositors' Book," which contained a provision to the effect that the depositors who signed this book agreed "to accede to and abide by the rules, regulations, and by-laws which are now in force or may be hereafter made for the management of said bank." But it is not claimed that this act of the treasurer in signing the plaintiff's name to this book, being neither authorized nor ratified by the plaintiff, had any binding force upon him.

One method certainly of obtaining and showing the depositor's agreement to be bound by the rules and regulations of the bank was to have him sign a contract to that effect, but this was not the only way. If a depositor in a savings bank receives from the bank a bankbook containing rules, regulations, and conditions which affect his contractual relations with the bank and its liability to him, clearly printed therein, and reads them so that he knows of their existence, and continues to leave his deposit in the bank and to make additional deposits and to hold the bankbook as his voucher, he must be presumed to have agreed to be bound by them, so that they will become a part of his contract with the bank. Gifford v. Bank, 63 Vt. 108, 21 Atl. 340, 25 Am. St. Rep. 744, 11 L. R. A. 794; Heath v. Bank, 46 N. H. 78, 88 Am. Dec. 194. Various other cases to this effect might be cited. This plaintiff had read these rules and regulations, and was consequently bound by them.

But it is claimed that this principle is not applicable in the present case, and that this plaintiff is not so bound, because no record has been introduced showing that these rules and conditions printed in the depositor's bankbook were formally adopted by a vote of the trustees of the institution. We do not think that this is necessary. These rules regulating the methods of business, and constituting conditions in the contracts between the bank and its depositors, when in any way assented to by them, had long been in use and had been printed in the bankbook given to depositors, at least since the year 1883, and for how much longer time is unknown. For all this period of time they had been known to the trustees and recognized by them as the rules and regulations of the bank, and they were printed in the bankbooks with their approval. Whenever changes were made in these rules, it was with the knowledge and approval of the trustees. We think that the adoption of such rules and regulations as these may be shown by their long use with the knowledge and approval of the trustees, as well as by the record of a former vote.

The plaintiff being bound, then, by these rules and regulations, which, by his implied assent, became a part of his contract with the bank, it becomes necessary to inquire as to what extent the bank's liability to him was thereby limited with reference to the two classes of payments, that to a person who falsely personated the plaintiff, and those upon the forged orders; the effect of the rule, as we shall later see, being different in the two cases. First, as to its effect with reference to the payment of $1,250 to the person who claimed to be the depositor.

The rule itself contains language which shows the reason and necessity for its existence, and at the same time contains a limitation upon its effect and meaning. The reason given is because "the officers of the institution may be unable to identify every depositor transacting business at the bank." and this shows that the rule is only applicable to cases where the officers of the institution are unable, by the exercise of reasonable diligence, to identify the depositor, or to perceive the want of identity between the depositor and the person presenting the book for payment. In other words, this provision does not relieve the officers of the bank from the exercise of such care as would be reasonable, under all the circumstances of the case, in order to protect the interests of the depositor and to prevent loss to him by reason of a payment made to a person not entitled to it. That this is the true...