Case Name: Whittington vs. The Farmers Bank of Somerset and Worcester
Court: Court of Appeals of Maryland
Jurisdiction: Maryland
Decision Date: 1823-06
Citations: 5 H. & J. 489
Docket Number: 
Parties: Whittington vs. The Farmers Bank of Somerset and Worcester.
Judges: The cause was argued before Buchanan,, Earle, .Dorsey, and Stephen,. J. by
Reporter: Reports of cases argued and determined in the General Court and Court of Appeals of the State of Maryland, form 1800 ... [to 1826]
Volume: 5
Pages: 489–499

Head Matter:
¡COURT OF APPEALS, (E. S.) JUNE TERM, 1823.
Whittington vs. The Farmers Bank of Somerset and Worcester.
No dilatory plea can he received after the rule day unless the fact upon which it is founded occurred subsequent to the rale day
Hie handwriting of the diawee and endorsers of a promissory note being proved, the note may he read in evidence without proof of its having been pro. tested
The protest of a promissory noté is not evidence of itselfin eliiefof the fact of a demand on the drawer. If the notary public was dead, the case would be govern*ed by different considerations
It is no objection to a protest, which is stated to have been mad'* at the request of The Tanners Hank of Somerset and THorcrder^ instead of The President., 8ce the corporate name jw^Parol evidence is admissible to p»*ove tli t a wi men order entered among the proceedings of,the J board of directors of a hmk, was rescinded and annulled, by a subsequent verbal order, of which Jno £ minute in writing was made
\ The parol proof of such verbal order need not establish the fact that the order w*s rescinded by the board of directors at a regular meeting of the hoard at the ordinary place of meeting, consisting of the prt sulent, and not less ¡han the number of directots, required by the charter for transacting the ordinary budness of tin* «auk— nor need such parol testimony show the day and year on which the order h id been rescinded
In an action on a promissory note endorsed to a bank, the defendant cannot set off against the elahn of tin- bank any stock h** may have therein
The general i*sue being pleaded, the plaintiffs are not bound to show that they are a body eorpo-
The defendant cannot retain in his hands the amount specified in the pyomisssory note on which the action i*» brought by the hank, although the hank may have in its no ession mon ey, dividends of stock, or other profits of the hank, to «he same or greater amount, belonging to the defendant; lie can only claim to haYe deducted from the note, mon *y Or other funds in the possession ofthe bank belonging* to him
lie has a right co avail himself of any fraud, mistake or imposition, practised on him as an individual; but he cannot, as a stockholder, claim an al’owance in an action again*thim by the bank as the endorsar oí* a pro nissoiy not-, for miv mismanagement of the Dissident and directors of the bank
Evidence tint there, vas n t a sufficient number of directors ofthe bank present at the time of making a certain order, competent to transact business of that description, ami that funds had been withdrawn, from the hank under that order, when the charier required a greater number of directors, whereby* the defendant, as a stockholder, had been deprived of a dividend on his stock, &c— He/rf, that the evidence whs inadmissible
The dot* írbi'.t, in order to show that there was mon>*y *n the bank on which he was entitled to a dividend, and which should be credited against the claim of «he bank, proposed the following question to the e. shier of the bmk, viz “You ‘*ay ihat this bank is insolvent, specify some particular creditor, and say whut is the evidence of the amount of lus debt?” for the pú pose of showing whether the claimants, or alleged creditors, were genuine or spurious, or were satisfied, &c Held, that the ques- ' tion was improper to V answered
* The court refused to direct the jury that the testimony of a witness was insufficient and not competent* in law, on account of its vagueness and uncertainty, to prove the rescinding of an order adopted by the hoard of directors
The defendant may set off against tin* claim, of the hank, any money lie has in the hank, or any dividends or «-refits declared by the bMik to be due to him as a stockholder; hut he cannot be allowed for the value of his stock; and thceourfc refused to direct the jury, that money illegally drawn from the bank is to he considered to he in the vault of the bank, for the benefit of -the stockholders and •. creditor* of the bank, fee
The c »uvt refused to direct the jury, that if the defendant was entitled to stock in the hank, and that the funds ofthe hank are solvent, and there would he a surplus to be applied to the stockholders, they were bound in assessing damages, to admit the true value of such stock as a ser off against the claim of the bnnk, Alsu, that nnies3 it is proved that the funds of the bank are insufficient to pay the debts of the bank, the jury are to presume that the funds are sufficient to discharge, as well the debts and claims against the bank, as all stockholders, Ike. Also, that if it appeared to the jury to he true that the preamble to a supplement to the act of incorporation of the bank, contains suggestions of matters and things not true, and that the president or directors did not apply for or give their consent to the said supplementary act, that then it was obtained through fraud, &e, and is unconstitutional, null and yoid
Appeal from Worcester county court. This was an action of assu npsit, brought in the names of The President 'and Directors of the Farmers Bank of Somerset and Worcester, (now appellees,) against Whittington, (the appellant,) as the indorsor of a promissory note drawn on the 25th of February 1818, by R. J. II. Handy, ami payable 60 days after date to J. C. Handy, or order, for $5790, and endorsed by J. C. handy to the appellant, or order, and by the appellant endorsed to the appellees. The note Was made negotiable at The Farmers Bank of Somerset and Worcester', and payable at the house of J. P. Dvffi&ld, in the town of Snoia Hill, The declaration was in the usual form, stating the manner in which the note was drawn, and the endorsement thereof by J. C. Handy to the defendant, and that he endorsed the note, “his own proper hand being thereon subscribed, and by that indorsement appointed ths con*®hts of tlie said note to be paid to the said Farmers Bank of Somerset and Worcester, or its order, for value of it received,” &c¡ Th~e declaration averred, that on the 29th of April 1818, at the house of J. P. Duffield, in the town of Snow Hill, the said Farmers Bank of Somerset and Worcester presented the note, with the endorsements made thereon, to R. J. Id Handy, and requested payment', &c. and on the same day at the said house gave notice by S. ÍI. the proper servant for that purpose of the said Farmers Bank, &c. that the said note had become due, and exhibited the said note, &c. and inquired for the defendant for the purpose of demanding payment, &c. The defendant having been ruled to plead, at the third term after the action vims brought, viz; May term 1822, “suggested to the court that there is no plaintiff in court, And that the corporation known by the riame and style Of The President and Directors of the Faimers Bank of Somerset and Worcester, is dissolved and dead, and that there is no such body corporate in beipg; and the said Whittington saitli, that the said writ and declaration, and the matters therein contained, are not sufficient in law to compel him to answer to the said writ and declaration, to which said writ and declaration the said Whittington is under no necessity, nor in any wise bound by the law of the land to answer. And the said Whittington defends the force and injury when, &c. and saiih,” &c. pleading the general issue, and exhibiting an account in bar, being for 100 shares of stock in the said bank of 85000, and the profits and dividends thereof. Issue was joined.
1. The defendant, on the third day of the court, (May term 1822, being the third term after the’ action was brought,) made a suggestion upon the record, that there is no plaintiff in court, and that the corporation, which appears as-plaintiff, is dead, and that there is no party in court authorised to act as attorney for the said nominal plaintiff; and offered to prove the same by the charter, and proceedings-in the said bank,'and acts of assembly. But the- court, [Martin, Ch. J.3 was of opinion, and so decided, that no dilatory plea could be received, unless the fact upon which that dilatory plea was founded occurred subsequent to the second day of this term, at which time the. rule to plead expired. The defendant excepted.
2. The plaintiffs at the,trial offered in evidence the promissory note mentioned in the declaration, after the signatures of the drawer and endorsers had been, proved, to, which the defendant objected, on the ground that it did, not appear from the note that the same had been protested according to law;, which objection was overruled by the court. The defendant-excepted.
3. The plaintiffs, after having read in evidence the promissory note above mentioned, offered in evidence a protest of the said note, made on the 29th of April 1818, at the request of The Farmers Bank of Somerset and Worcester, by a notary public. To which the. defendant objected, on the grounds that the said protest appears to have been made at the request of The Farmers Bank of Somerset and Worcester, instead of The President and Di■rectors oj the Fanners Bank of Somerset and Worcester. The objection was overruled. The defendant excepted.
4. Evidence having been offered to prove that the following order was entered upon the proceedings of the board, of directors, of the Farmers Bank of Somerset and Worcester, on t!;e 24th of October 18IT, to wit: “On motion, Ordered, That a call bo made on all the debtors of this institution, of ten per cent, and giv.e a.privijege to them to surrender stock of the .institution, at the rate allowed to stockholders in paying the last instalment, of all or any part of the debts due the institution., This order to operate on all notes becoming due after the first of December next;” which order appearing upon the record of proceedings of the board of directors, and it not appearing from the said record that it had been rescinded at ahy.time subsequent to the 24th of October 1817; and it having appeared in evidence, that the defendant was possessed of. 100 shares of the capital of said bank, of the value of §50 per share, and that he had made a tender to the board of directors to comply with the terms of the order, on the 18th of July 1821, which tender and proposition are as follow; “July 18th, 1821. It is ordered and agreed by this board, that the president and cashier be authorised to settle and adjust the claim of this institution against ff. Whittington; and if the said Whittington has or shall procure stock or notes of this institution, or stock or estate in the ■pro perty formerly belonging to The Union Company, that the same, or any part thereof, shall be accepted and received in- discharge of his debt to this institution a,t par, to the amount thereof, which may be transferred or delivered to the institution. ” Upon said tender and proposition appears the following endorsement; “Rejected as to the manner of payment.” The defendant then moved the court to instruct the jury, that forasmuch, as the said order appears upon the proceedings of the said board of directors in writing; an.d forasmuch as it does not appear; in writing, among the proceedings, of the said board of directors, that' the said order had been rescinded at any time subsequently to the 24th of October 18X7, that therefore parol evidence cannot now be’introduced to rescind and annul the-said written order; and that the defendant is entitled to an allowance of any amount of stock which he may. possess in the Farmers Bank of Somerset and Worcester, as an account in bar against the amount for which this suit is brought, under the said order of the said board,' adopted on the 24th of October 1817., Which direction the court refused to give; but were of opinion, and so directed the jury, that if they should believe from the evidence, that the order of the 24th of October; 18.17 was passed by the president and board of directors, that so long as that order was in force and unaltered, the defendant might tender-stock in payment of his debt to tire bank'; but if the said order was rescinded or annulled by the president and board of directors, consisting of at least five directors and the president, by a parol order, that the president and directors were not compelled to receive the said stock in payment of the defendant’s debt, after the rescinding the order as aforesaid. The court were also of opinion, -that if there was an order made by the president and directors to rescind the said'order of the 24th of October 1817, and no minute in writing or memorandum made of the same, -that it may be proved by parol evidence. The defendant excepted.
5. .The defendant then moved the court to instruct the jury, that no parol evidence can prove the rescinding of the order of the 24th of October 1817, before mentioned, unless such evidence establishes the fact, that the said order was rescinded by the board of directors at a regular meeting of the said board, atjAie ordinary place of meet-. ing of the board, consisting of the president ind not less than five directors; and also that such parol testimony should show the day- and year on which the said order had been so as aforesaid rescinded. Which the court refused to give. The defendant excepted.
6. The defendant then prayed the court to direct the jury, that they should make any deductions or allowance from the amount claimed by the plaintiffs, by reason of any .money or funds or slock, which may be in the hands of the plaintiff's, belonging to the defendant; and that the jury shall make deductions from the amount claimed by the plaintiffs of money, funds, stock or. credits, belonging to the defendant, in the hands of the plaintiffs. Which direction the court also refused to give; but were of opinion, and so directed the jury, that if they believed from the evidence that the defendant had money or other funds in the bands of the plaintiffs, that they pught to deduct the' amount of such money or funds from the plaintiffs’ claim; but the defendant cannot, in this action, set off against the claim of the plaintiffs any stock he may have in the Bank of Somerset and Worcester, unless the jury shall believe from the evidence, that the order of the 24th pf October 1817, before mentioned, is still in force, or the said stock was rendered by the defendant to the plaintiffs in payment during the time the said order was in force, and before it, was rescinded. The defendant excepted,
7. The defendant then prayed the court to instruct the jury, that under the general issue pleaded in this action, • the plaintiffs must show that they, are a body corporate; Which instruction the court refused to give. The defendant excepted.
8. The defendant then moved the court to instruct the jury, that although the promissory note given by the defendant, as exhibited in evidence, is evidence of so much money being in his hands or possession as in the promissory note is specified, yet that the defendant may retain the same in equity and conscience, though not at law, provided they were satisfied from the evidence, that the plaintiffs have in their hands or possession, money, dividends of stock, or other profits of The Farmers Bank of Somerset and Worcester, to th.e same or greater amount belonging to the defendant; and that the jury should so find- their verdict. Which instruction the court refused to give, but were of opinion, an! so directed the jury, that if they believe from, the evidence that the defendant has money or other funds ^le ^ant^s of the plaintiffs, they ought to deduct the amount of the sanie from, the plaintiffs’ claim in this case. The defendant excepted.
9. The defendant then moved the court to direct the jury, that the.defendant, under the plea of non assumpsit has a right to avail himself of any fraud, mistake or imposition, practised on him in the transactions of. the said bank, whereby it may appear to the jury that the claim of the plaintiffs, as exhibited againsphim, is unlawful, and to show that nothing in equity and conscience is due to the plaintiffs. Which instruction the court, refused to give, because it was in too general terms, and might mislead the •jury; but they were of opinion, and so directed the jury, that the defendant has a right in this action to avail himself of any fraud, mistake or imposition, practised on him ¡is an individual, but that he cannot claim an allowance in this case for any mismanagement of the President and Directors, as a stockholder in this bank. The defendant excepted.
10. The defendant then offered to read in evidence the proceedings had before the board of directory of the Farmers Bank of Somerset and Worcester, at a meeting by them held on the 29th of November 3,815, viz. “November 29th,, 1815. Present, John C. -Handy, President, James Givans, James B. Robins, (qualified,) John S-Martin, E. K. Wilson. Ordered, that Mr. Wilson be requested to attend to tbe business of this bank in the proposed convention at Annapolis. On the 2d, Ordered that the cashier may permit the account of the Union Company to run up to the sum of- 85CÍJ0; after that sum has been drawn by them, interest to be paid until paid up, which is pledged to be paid bn or before the 15th of March 3 816”— with a view to show that there was not a number of directors present at that time competent to transact business of that description, and that funds had been withdrawn from the bank in consequence of tbe ordérs of that, day, adopted as aforesaid by the president and four directors, when, tlie charter of incorporation, and the act of assembly under which they acted, required a president and five directors for the transaction of such business. Whereby he alleges that he, as a stockholder, has been imposed on by the plainiiffs, and deprived of a dividend on the said sum of §5000, from the date of the said order to the present time; and that as no dividends have been allowed the stockholders on the said sum, and as the' sdifte has been illegally withdrawn from the vaults of the bank, the same should in law be still considered and presumed to be in the vaults of the said bank; and that the jury have a right in this action to make him an allowance of a reasonable dividend on the same, and deduct the same from the plaintiffs’ claim. But the court were of opinion, that the said evidence was inadmissible, and refused to let it go to the jury. The defendant excepted.
11. The defendant then addressed the following questions to J. P. Duffield, a witness introduced and sworn on tlie part'of the defendant, which witness was the cashier of the Farmers Bank of Somerset and Worcester, to wit: 4lYou say that this bank.is insolvent, specify some particular creditor, and say what is the evidence and the amount of his debt?” 'for the purpose of showing whether the claimants or alleged creditors were genuine or spurious, or counterfeit claimants or creditors; for upon the introduction of the evidence of their alleged claims, it may appear in evidence that the said alleged claims were either satisfied, or the evidence of the debts might be counterfeit bank notes, and if so, that thereby it would appear that there is money in bank on which the defendant is entitled, to a dividend, which should by the jury be carried to his credit against the claim of the plaintiffs. To the answering of which questions the plaintiffs objected; ¡jnd which objection was sustained by the court. The defendant excepted.
12. The defendant then moved the court to instruct the jury, that the testimony delivered by J. C. Handy, a witness introduced and sworn on the part of the defendant, and who was the President of the Fanners Bank of Somerset and Worcester, is insufficient, and not competent in law, on account of its vagueness and uncertainty, to prove the rescinding of the order adopted on the 24th of October .1817, (herein before mentioned,) and appearing upon the records of the proceedings of the board of directors. The witness, on being told to repeat the testimony which he had before given upon the subject of rescinding the order adopted at a meeting ef the board oí directors on the 24th of October 1817, said as follows: “It was at a meet-board, the day or particular time I do riot rec°Uecti the order was rescinded, and directions given to me to give notice to the proper officer. There was no memorandum in writing, that I recollect; ánd I do not remember whether that meeting of the board of directors was a regular or special meeting—whether the meeting of .the board of directors was called by me as president; or the number of directors that were present.” Which instruction the court refused to give. The defendant excepted.
13. The defendant then moved the court to instruct the jury, that whatever money has not been .drawn out of the Farmers Bank of Somerset ánd Worcester, agreeably to the charter of incorporation, the legal by-laws of the institution, the laws and constitution of this state, and the constitution of the United States, is to be considered and presumed to be in the vault of the said bank, for the benefit of the stockholders and creditors of the said bank; and that the jury has a right to apply as much thereof as belongs to the defendant, either as a stockholder, individual, or creditor of the said bank, as will bar the claim exhibited against him by the plaintiffs. Which instruction the court refused to give, being apprehensive it would mislead the jury; but were of opinion, and so directed the jury, that the defendant may set off any money he has in the hands of the plaintiffs, or any dividends or profits declared by the president and directors to be due to him as a stock - holder; but that he cannot be allowed for the value of his' stock in this action, unless the jury shall believe from the evidence, that the order of the board of directors of the 24th of October 1817, is still in force, or that he tendered the said stock in payment of his debt before the said order was rescinded; or that he tendered notes of the bank in payment. The defendant excepted.
14. The defendant then produced evidence that he was entitled to 100 shares of the capital stock of the Farmers Bank of Somerset and Worcester, and that he had fully paid up and satisfied to the president and directors of the said bank, the sum of §50 on each share of the said bank ■stock, conformable to the rules, regulations and by-laws of the said corporation, and agreeably to the original act of incorporation. He further offered in evidence the act of assembly, entitled, “An act for the benefit of the Farmers Bank of Somerset and Worcester, and the Salisbury . * . branch/9 passed at December session 1830,:eh. 116, whereby the said corporation is declared no longer capable of discounting bills, drafts or notes, but is by the said law required to close the concerns of the said bank, and to make dividends of the profits among the stockholders of the same institution every two months. He further offered evidence, ■ to prove that the joint property of the said bank, as con-. 'nected with the branch bank at Salisbury, was amply suf-. ficient to pay and satisfy all claims and demands whatever as debts due and owing from the said institution. Upon this evidence the defendant moved the court to instruct the jury, that if, from the evidence thus exhibited to them, they should be satisfied that the defendant was entitled to 100 shares of the capital stock of the said bank; and that the joint funds of the said banks are good and solvent, and capable of paying the creditors of the said institutions; and that after paying all debts and claims to which said institutions were liable, there would he a considerable surplus, which ought to be applied to the benefit of the stockholders, that then and in that case the jury were bound in law, and it was their duty in assessing damages, to admit the true value of such stock as a set off against the plaintiffs’ claim. Which instruction the court refused to give. The defendant excepted.
15. The defendant then moved the court to direct the jury, that if they should, from the evidence exhibited, believe that the defendant was entitled to 100 shares in the •capital stock of the said company, and that the stockholders of the said bank bad accepted the provisions of the act of assembly, entitled, “An act for the benefit of the Farmers Bank of Somerset and Worcester, and the Salisbury branch,” passed at December session 1820, ch. 11.6, and had acted and proceeded to collect the debts, and pay off the creditors of the said institution, agreeably to the terms of the said act of assembly, that then and in that case, if the plaintiffs do not by competent evidence show that the joint funds of the said corporation are insufficient to pay the whole debts of the said corporation, they have a right, and ought to presume that the joint funds are sufficient to discharge, as well the debts and claims against the said institution, as all stockholders in the said bank; and they are boimd in assessing damages to admit as a set off the ñilí amount of cápitál stock held by the defendant at the -just vá*ue ^ereo^ Which instruction the court refused to give.The defendant excepted.
16". The defendant then stated, that by the original act iof incorporation of the said bank, passed at November session 1811, ch. 19S, it is, in the sixth section Of that act; enacted as follows: “And be it enacted;, That the affairs of the said bank shall be managed by sixteen .directors and á president; eight of the directors to be resident in Worcester county, and eight iii Somerset coúñty.” He further stated; that the preamble of the act of 1820, ’ch. 116, is as follows, viz, “Whéréás it has been deemed advantageous by the stockholders of the Farmers Bank of Somerset and Worcester, and the Salisbury Branch Bank, that the affairs of the banlfs should be settled, and the corporation dissolved, and to that end hath petitioned the legislature of Maryland f’ and this preamble, he alleges, contains a suggestion of matters and things not true; and he alleges, that neither the president nor directors did apply or give their consent to the changes made in the said act of incorporation by the said act of 18'20, ch. 116; arid he further states and alleges, that it was not deemed advantageous by the stockholders of the Farmers Bank of Somerset .and Worcester, or by the stockholder's of the Salisbury branch bank; that the' said change or reduction of the number of directors, from sixteen to seven, should be made, nor were they ever . consulted or advised upon the subject, nor did they ever prefer a petition to the legislature' for that purpose; and that the last mentioned act was. passed? without their consent first had and obtained according' to law. If these statements, allegations and suggestion’s, should, appear to the jury to be true, from the evidence introduced in the case,then and in that cas® the defendant contends,' that the said? act was obtained through fraud, imposition, and surprise, and is void. The defendant then moved the court.to instruct the jury, that the said last mentioned aet of assembly is unconstitutional, null and void; and if so, .that the' present action cannot be sustained,- it having been brought, by virtue of the said act of assembly of 1820, ch. 116; andtliey are bound to find a verdict for tire, defend ant. Which; Instruction the court refused to give.- The defendant ex*. cepted. The verdict and judgment being in favour of the plaintiffs, the defendant appealed to this Court.
The cause was argued before Buchanan,, Earle, .Dorsey, and Stephen,. J. by
The Appellant iñ pferson, arid by-
Chambers, for the appellees.

Opinion:
The opinion, of the court was delivered by
Dorsey, J.
This Court concur with the court below in; the opinions expressed by them, in the íst,. 2d,. 4th,, 5th,, 6th, 7th, 8th,, 9th; 10th,. 13th, 12th, Í3tÜ, 14th, 1 fifth: and 16th bills of exceptions; brit they diffei-. froxh the coiirt her low, in permitting- the protest, set ont in the third bill óf exceptions, to go tó, the jury... We hold it to be dear, that the protest Of a.px;omissOry note is hot evidence of itself in chief of the fact of demand; and as there is no, párcíl proof of a demand sel forth..in the expeptiofi, it is', difficult to conceive, that the protest was produced fot any ether purpose than prdvin.g á demand op,the drawer, if the notary public had been dead, and.thjá fact appeared, by the record, the case would, háve been governed by different considerations. We áre of opinion that the judgment of the court below must be reversed..
JUDGMENT feEVEliS.SPj.AND PfepCEpENDO AWAEDS»