Wright v. Commercial and Sav. Bank

• Decision Date: 15 September 1983
• Docket Number: No. 58,58
• Citation: 297 Md. 148,464 A.2d 1080
• Parties: , 39 A.L.R.4th 1099, 36 UCC Rep.Serv. 1687 Betty Jean WRIGHT v. COMMERCIAL AND SAVINGS BANK.
• Court: Maryland Court of Appeals

Page 148

297 Md. 148

464 A.2d 1080, 39 A.L.R.4th 1099, 36

UCC Rep.Serv. 1687

Betty Jean WRIGHT v. COMMERCIAL AND SAVINGS BANK.

No. 58.

Court of Appeals of Maryland.

Sept. 15, 1983.

Michael Bowen Mitchell, Baltimore (Michael Waring Lee and David B. Allen, Baltimore, on brief), for appellant.

Stephen M. Waldron, Bel Air (T. Carroll Brown, Bel Air, on brief), for appellee.

Argued before MURPHY, C.J., and SMITH, ELDRIDGE, COLE, DAVIDSON, RODOWSKY and COUCH, JJ.

COLE, Judge.

In this case, we must determine whether a depositary bank, at the direction of one co-owner of a joint checking account, may delete the name of another co-owner without that person's permission. The facts giving rise to this issue are as follows.

In 1964, Betty Jean Wright and her husband, Verlon, opened a joint checking account in the name of Level Building Supply at the Commercial and Savings Bank. The signature card for this account indicated that either party could draw on the account with only one signature and that the balance of the account was payable to the survivor. The card did not specify any procedure for removing a co-owner's name from the account.

After marital problems arose and Betty Jean went to Florida, Verlon instructed the bank to remove Betty Jean's name from the account. Although initially suggesting that Mr. Wright "change over to a new account," the Bank complied with his request and crossed Betty Jean's name from the signature card, with the notation "removed 6-6-76." The bank did not notify Betty Jean that her name had been removed from the account.

In August of 1976, Betty Jean went to the bank and requested a counter check on the Level Building Supply account in order to withdraw $500.00. Because her name was no longer on the account, a teller refused to give her a check.

Betty Jean sued her husband and the bank in the Circuit Court for Harford County. Counts III and IV of her second amended declaration were directed to the bank, alleging breach of the contract as a result of the bank's removal of her name from the joint checking account. The trial court granted the bank's motion for a directed verdict at the close of the Plaintiff's case; Betty Jean thereupon appealed to the Did the Court of Special Appeals err in holding that a depository bank is not liable for damages resulting from the bank's removal of the name of one co-owner from a joint checking account at the direction of the remaining co-owner without notice to or permission from the former joint owner?

                Court of Special Appeals, which affirmed  Wright v. Commercial & Sav. Bank, 51 Md.App. 398, 407, 445 A.2d 30 (1982), concluding that "the right of a joint depositor to withdraw all the funds from a joint account encompasses the right to delete the name of another on a joint account."   The intermediate appellate court also noted that Betty Jean had abandoned her wrongful dishonor claim at oral argument.   Taking exception to the latter conclusion, she filed a motion for reconsideration pointing out that this issue was raised in her brief and at oral argument.   The Court of Special Appeals denied this motion for reconsideration on May 4, 1982.   Betty Jean filed a petition for a writ of certiorari posing the basic issue as follows
                

We granted certiorari to consider the question thus raised, ¹ which we have separated into the contract and wrongful dishonor issues.

I

Betty Jean's primary claim is that the bank breached its contract by removing her name from the Level Building Supply account, which she co-owned with her husband. On direct examination, Daniel Fitzpatrick, the bank's executive vice-president, agreed that the written evidence of this contract was the signature card for the account. The face of this card indicated that Verlon and Betty Jean opened an account, titled Level Building Supply, at the Commercial and Savings Bank, Bel Air, Maryland, and that only one signature was required to use the account. The language on We agree and declare that all funds now, or hereafter, deposited in this account are, and shall be, our joint property and owned by us as joint tenants with right of survivorship, and not as tenants in common; and upon the death of either of us any balance in said account shall become the absolute property of the survivor. The entire account or any part thereof may be withdrawn by or upon the order of, either of us or the survivor.

the reverse side of the card relevant to this type of account provided:

It is especially agreed that withdrawals of funds by the survivor shall be binding upon us and upon our heirs, next of kin, legatees, assigns and personal representatives.

Payment to or on check of the survivor shall be subject to the laws relating to inheritance and succession taxes and all rules and regulations made pursuant thereto.

Thus, the signature card indicates that the bank and the Wrights entered into a three-party contract. The bank accepted their account and all parties agreed that either of the named depositors could draw on the account. However, nothing contained in this signature card suggests that the bank could strike the name of one of the co-owners from this account, thereby unilaterally terminating that person's right to use the account. While the language indicates that each person assumed the risk that the other might withdraw any or all funds in the account at any given time, it does not suggest that either assumed the bank could remove one of their names from the account without that person's consent.

The bank argues, however, that the signature card alone does not comprise the entire contract between the parties. It contends that the laws dealing with the relationship between banks and their customers and the accepted practices and usages of trade also must be considered as part of the agreement between the parties. When so considered the Section 5-303 of the Financial Institutions Article, Md.Code (1980), governing "Joint Accounts," adds nothing to that which is expressly stated on the signature card--that the money in the joint account may be withdrawn by either co-depositor. Title 3 of the Commercial Law Article, "Commercial Paper," governs transactions with negotiable instruments, in this case, a check; however, that provision of the Code does not address the relationship between a bank and its depositor except as those parties might deal with a specific check. Title 4 of the Commercial Law Article covers "Bank Deposits and Collections"; however, not even Subtitle 4, specifying the "Relationship Between Payor Bank and Its Customer" provides a specific resolution of this issue. Thus, we find no applicable statutory provision which is dispositive of the question posited.

                bank maintains that it was authorized to delete Mrs. Wright's name from the account.   The bank alludes to the Commercial Law and Financial Institutions Articles of the Maryland Code to buttress its point.   Our cases make indelibly clear that Maryland adheres to the general rule that parties to a contract are presumed to contract mindful of the existing law and that all applicable or relevant laws must be read into the agreement of the parties just as if expressly provided by them, except where a contrary intention is evident.   Design & Funding v. Betz Garage, 292 Md. 265, 276, 438 A.2d 1316 (1981);   Wilmington Trust Co. v. Clark, 289 Md. 313, 320, 424 A.2d 744 (1981);   Dennis v. City of Rockville, 286 Md. 184, 189-90, 406 A.2d 284 (1979);   Beca v. City of Baltimore, 279 Md. 177, 182, 367 A.2d 478 (1977);   Prince George's Club v. Carr, 235 Md. 591, 607, 202 A.2d 354 (1964);   Holmes v. Sharretts, 228 Md. 358, 367, 180 A.2d 302 (1962);  Baltimore v. Employers' Ass'n, 162 Md. 124, 130-31, 159 A. 267 (1932).   However, our examination of these articles discloses nothing supporting the bank's contention that it had authority to delete a co-owner's name from a checking account under the circumstances of this case
                

We observe, however, that Title 1 of the Commercial Law Article does suggest possible ways in which terms of a (1) A course of dealing is a sequence of previous conduct between the parties to a particular transaction which is fairly to be regarded as establishing a common basis of understanding for interpreting their expressions and other conduct.

                contract may be amplified.   Section 1-205 provides in part
                

(2) A usage of trade is any practice or method of dealing having such regularity of observance in a place, vocation or trade as to justify an expectation that it will be observed with respect to the transaction in question. The existence and scope of such a usage are to be proved as facts. If it is established that such a usage is embodied in a written trade code or similar writing the interpretation of the writing is for the court.

(3) A course of dealing between parties and any usage of trade in the vocation or trade in which they are engaged or of which they are or should be aware give particular meaning to and supplement or qualify terms of an agreement. [Emphasis supplied.]

Under this provision, a particular course of dealing or usage of trade, if demonstrated, would be sufficient to supplement the terms of the agreement between the parties. Obviously, the party asserting the practice would be required to carry the burden of proof. In this case the bank did not attempt to establish a course of dealing; it did attempt to demonstrate a usage of trade. As such, the bank was required to produce evidence of a practice common to the banking industry rather than proof of a mere routine or usual procedure at the subject bank. See generally Chesapeake Bank v. Swain, 29 Md. 483, 501 (1868); Duvall v. Farmers Bank of Md., 9 G. & J. 31, 50 (1837); T & L Leasing Corp. v. General Elec. Credit Corp., 516 F.Supp. 1131, 1134 (E.D.Pa.1981); First Federal, Etc. v. Union Bank & Trust, 291 N.W.2d 282, 286 (S.D.1980). In the instant case, the only evidence remotely tending to support this contention was...