The morning news. [volume] (Savannah, Ga.) 1887-1900, 1895-02-20
THE BANK MUST PAY.
The Lower Courts Rulings Sustained
in the Carhart-MerchRnts Bank


The decision of the supreme court in the
case of George b. Carhart against the Mer-
chants National Bank, affirming the find
ings of the jury in favor of the
plaintiff for SSO,9OO with interest. and the
rulings of Judge MacDonell of the city
court in the case, has just been handed
down; and with this decision probably
ends all of the litigation arising out of the
defaleation of Thomas Gadsden, who was
the banks cashier.
Among the securities which were found
missing, as the result of this defalcation,
were some $4,000 of bonds held for Mr.. L.
]. Guilmartin and about $Sl, 600 in bonds
held for Mr.. George b. Carhart of Brook
Ign, N. Y, for whose account they were
deposited by Mr. Malcolm Maclean, a di-
rector of the bank, and Col Alfred l..
Martin, to secure loans from Mr.. Carhart
The loss of the securities having been as
certained, a demand was duly made by
Messrs. Guilmartin and Carhart for the
bonds which had been held by the bank as
"a special deposit, and not by Gadsden
personally. The bonds having been made
away with a delivery was impossible, and
upon a refusal to pay their value, suits
We're instituted by Messrs. Guilmartin and
Carhart against the bank, which suits to-
gether, make the greatest cause celebre
that Savannah has had of recent years.
Capt. Guilmartin's case was first tried
and upon proof Of the long continued Gus
tom of the bank in receiving such special
deposits, that feature of the case disap-
he. ha,,I
that the deposits were made with it and
not with the cashier, though contending
up to that time that they were bonds in
Mr.. Gadsden's individual custody and not
that of the bank. On further proof that
the bonds were stolen and sold by the
cashier, Judge Harden. then judge of the
city court decided substantially that if
bonds were stolen by the cashier, il was
practically the wrong of the bank as in
his judgment, she cashier was the alter
ego of the bank, and upon that ruling a
verdict was rendered in favor of the plain
tiff, Mr. Guilmartin. The case went to the
supreme court. which held that the judge
of the court below had erred, and that the
theft of the cashier was not the act of
the bank nor was the bank responsible
for the theft of the cashier, provided it
had exercised due diligence in selecting
the cashier, in retaining him in office and
and in supervising him.
The case was then tried again, and upon
proof made that the president of the
bank knew of Mr.. Gadsden's speculations
to some extent, and that he was retained
in Office, Notwithstanding this, under the
charge of Judge MacDonell the jury
found again for Capt. Guilmartin. That
verdict was taken under many exceptions
to the supreme court and that court sus-
tanned the verdict of the jury, holding
that the knowledge of the president of the
speculations Of the cashier to any ex-
tent. was the knowledge of the bank,
and that the jury was justified in its
verdict under the evidence.
This settled the Guilmartin case, and
then came the Carbart case. which had
been awaiting the decision of the supreme
court in the case that went before it.
The Carhart case was defended with
greater vigor and tenacity if possible than
the Guilmartin case, and every objection
possible to the admission of proof Of all
sorts and to the charge of the court and
Of the refusals Of the court charge, was
made. on the first trial of this case in
the city court the result was a Disagree