Case Name: BARRINGTON and others against The BANK of WASHINGTON
Court: Supreme Court of Pennsylvania
Jurisdiction: Pennsylvania
Decision Date: 1826-09-19
Citations: 14 Serg. & Rawle 405
Docket Number: 
Parties: BARRINGTON and others against The BANK of WASHINGTON.
Judges: 
Reporter: Reports of cases adjudged in the Supreme Court of Pennsylvania (Sergeant & Rawle)
Volume: 14
Pages: 405–425

Head Matter:
[Pittsburg,
September 19, 1826.]
BARRINGTON and others against The BANK of WASHINGTON.
IN ERROR.
Where the presiding judge of a Court of Common Pleas regularly certifies a case for trial to a special court, on the ground of an alleged interest in himself, and the parties go on to trial without objection to the jurisdiction, this court will not, in a doubtful case, sustain an exception to the jurisdiction of the special court, though it appear from the certificate of the judge, that in his own opinion he had no interest, and- though this court should be of opinion that he was not disqualified, on account of interest, from being a witness in the cause.
IK, in an action on a bond with a condition, the defendant plead non est factum and performance of the condition, and, on the eye of trial, receive from the plaintiflj instead of a regular assignment of breaches, an informal specification of them, and go on to trial on the merits, this amounts to an agreement of tlie parties to waive irregularities in the pleadings; and, consequently, this court will not reverse the judgment, because the cause was tried without having been regularly put to issue.
The sureties in the official bond of a cashier of a bank, created under the act of assembly of 1814, the condition of which bond is, “ that he shall well and truly perform the duties of cashier, to the best of his abilities,” not only undertake for the fidelity and honesty of the principal, but also that he shall perform the office with competent skill and ability; and if he transcends the known powers of a cashier, by changing the securities of the bank without their knowledge, and loss has accrued by the abuse of his trust, the sureties are answerable for the loss.
But, in such a case, the measure of damages is, not the amount of the debt lost, but the amount which might have been recovered, if the securities had remained. • unchanged; and this should be submitted to the jury upon the evidence.
If no evidence be given of a written appointment of a cashier, evidence is admissible to show, that the person alleged to be cashier, acted as such in the various . duties of that office; and though a resolution of the board of directors, directing the cashier to require certain monies to be paid to him, at the banking house, on or before a certain day, is not evidence per se, yet, connected with other testimony, it is evidence of his appointment.
Query, whether, if a bank has forfeited its charter, and is unable from the funds paid in to satisfy its debts, an original subscriber, who has transferred his stock, is a competent witness, for the bank, to increase its funds ? An assignee of bank stock is no further liable than as a stockholder.
The entry in the book of minutes of a resolution of a certain number of directors, but not a competent number to make a board, that the name of one of the obli-gors in the cashier’s official bond be struck out, provided the others agree thereto, is not evidence to show the consent of the other obligors to the alteration of the bond; but it is evidence to shqw that the bank was then in possession of the bond unaltered, and that the other obligors had not then consented to the alteration.
■Where a bond contains an erasure, it is for the jury to decide, upon the evidence, whether it is the identical contract declared on or not. But the law views the alteration of such an instrument with a jealous eye, and requires satisfactory evidence to be given by the obligee that the alteration, if in a material part, was made without his consent; or,.if with his consent, that the consent of all the parties in interest was also given.
Where the obligee makes it a part of his case that the bond was in his possession, with the names of all the obligors to it, and afterwards brings suit upon it, omitting one of the obligors, whose name appears to have been erased from the bond, it is an admission that the alteration was made with his consent; and it lies upon him to show that it was made with the consent of all the other parties in interest.
The record of this case being returned on a writ of error to the Court of Common Pleas of Fayette county, accompanied by several bills of exceptions, it appeared that The'Bank of Washington, the defendants in error, brodght an action of debt against the plaintiffs in error, John Barrington, Daniel Moore, and John Hughes, surviving obligors of Thomas Jtcheson, upon a bond in the penal sum of thirty thousand dollars, conditioned that the said John Barrington should “ well and truly perform the duties of cashier of the bank, to the best of his abilities.” The defendants pleaded, non est .factum and performance of the conditions of the bond; and the plaintiffs assigned breaches, by filing a paper containing thirty-four specifications of charges against the said Barrington, in his official character. There was no replication to the plea of non est factum, nor any rejoinder to the plaintiffs’ assignment of breaches.
The cause was tried at a special court, held by his Honour Judge Shaber, in consequence of the following certificate of his Honour Judge Baird:—
“ I have been requested by the counsel of the plaintiffs to certify this cause for trial, at a special court, on the ground, that although I may have no direct interest in the issue, yet they conceive I have, in the questions of law to be determined in the case.
“ An extract has also been furnished from the specification of claim, referring me to certain items, in order to sustain the suggestion made. I have carefully examined them, and cannot see in what way I can be considered as interested in any question that can arise concerning them in that case. With respect to the item which is marked No. 13, the transfer was made with the consent of the directors, in order to close my concern with the bank. But, if it was not legally made, which I am willing shall be inquired into, the stock is still mine. I have already offered to submit that question to decision in any way the bank may wish, and will myself abide the result. I can never consent, that the cashier or his sureties, shall be involved on account of any transactions of the bank with me. Some time, ago I proposed to Mr. Brady, the attorney who spoke to me on the subject, that I was ready at any time to come to any adjustment with the, bank on that point; and. if they could show that the stock was not worth its nominal amount at the time of the transfer, I would make up the deficiency; or if it should turn out that the transfer is invalid, I will retain the stock, and pay the balance of my account. As to item No. 15, I know not what it means. My whole stock was one thousand three hundred and sixty-five dollars, and yet there appears also a charge of nine hundred and ten dollars against the cashier. It must be a mistake, as that stock was included in the other credit. As to the suggestion, that this stock was the property of other persons, I can at any time show, that it is unfound-
ed. I have the receipts for all the instalments paid by myself. It has been shown to Mr, Evans, who handed the papers to me.
“ With respect to all the other items, I can only say, that I know nothing about them. The date of all the transactions is subsequent to the time when I left the bank, and ceased to take any interest in its concerns. I certify, however, that I have a controversy pending with The Bank of Washington, arising out of a contract made with the directors. How far my interest, in that case, can have any relation to acts of the cashier, done without the authority of the board, I cannot at present see. I have no doubt, however, that, in the view of the managers of the bank and their counsel, questions may arise affecting me in some way; and l am therefore induced to certify the case to his Honour Judge Shalee, President of the Fifth Judicial District of this state, for trial, at a special court, as I am requested to do. And I also certify all facts really existing which may be necessary'to give him jurisdiction of the case. Thomas Baird.
“ Washington, Pa., July 26th, 1824.”
The specifications, referred to in the judge’s certificate, were these:—
No. 13. — July 28. — He has credited the account of Thomas H. Baird this day with cash $1365, whereas it appears by the entry, to be the amount of seventy-eight shares of stock, at par value, without the authority of the directors, - - - ... - - $1365 Interest to Dec. 31st, 1822, 3.5.3, - ■ - 280
No. 15. — July 28. — He has credited the stock account of Thomas H. Baird, with fifty-two shares of stock, the property of other persons, some of whom are deceased, .$910 Interest to Dec. 31st, 1822, 3.5.3, ' - - 186
On the trial, one of the subscribing witnesses, after having proved that the bond was originally executed, not only by the defendants and Thomas Jlcheson, deceased, but by a certain Bobert Haslett also, whose name had been erased before the commencement of the suit, was asked by the plaintiffs’ counsel, “ who acted as cashier of The Bank of Washington?’’ The defendants’ counsel objected to the question being answered, alleging, that the minutes and proceedings of the Board of Directors in writing ought to be produced, to show the appointment, if any had been made. The court overruled the objection, and the.defendants’ counsel excepted to their opinion. In answer to the question, the witness stated, that John Barrington acted as cashier of the bank, signed the notes, and continued to act in that character until the bank wound up its business. Notes of the Bank of Washington were produced, which were proved to have been signed by the said John Barrington as cashier. The witness further stated, that he did not know to whom the bond was delivered; and that the name of Robert Haslett was not, when he last saw the bond, obliterated by having a pen drawn through it, as it was when he gave his testimony.
George Morgan, the next witness produced' by the plaintiffs, after having stated that he was a director of The Bank of Washington, was asked by the plaintiffs’counsel, “if the Board had appointed John Barrington cashier?” To this question the counsel of .the defendants objected. He was then asked, “if there was an appointment of the cashier made in writing?” To this he answered, that “there was: That he was secretary of the Board,and put the appointment of cashier in writing himself; and afterwards asked Mr. Barrington to leave a blank in the minute book, where he could insert, in his own handwriting, the appointment of cashier; but he never did it, and could not tell what had become of the minute in writing, which he made of the appointment. He had made no search for it, and it had escaped his recollection until he was asked about it on the trial.” The witness was then asked again, “whether the Board had appointed John Barrington cashier?” The question was again objected to, and the court sustained the objection.
The plaintiffs then offered to read in evidence a resolution of the Board of Directors, dated August 31st, 1814, in the following words, viz. “On motion ordered, that the cashier be directed to require the commissioners to. pay the monies of the bank in their hands to him, at the banking house, on ór before Wednesday next.” The evidence was objected to by"the defendants’ counsel;, but admitted by the court, to whose opinion exception was táken.
The plaintiffs then offered, as a witness, Dr. Samuel Murdoch, who was objected to,- on- behalf of the defendants, on the ground that he was a stockholder; to prove which, the defendants produced the stock book. The plaintiffs then produced the transfer book, from which it appeared that he had, on the 3d of February, 1823, transferred a part of his stock to Alexander Murdoch, and the residue of it, on the 13th of November 1824; before the earliest óf which periods, it appeared that the bank had forfeited its charter. It also appeared, that the nominal amount of each share of stock was fifty dollars; that only seventeen dollars and fifty cents had been paid on each share, transferred by Dr. Murdoch, and that the bank owed debts which it was unable to pay. The court having overruled an. objection made by the defendants’ counsel, to the admissibility of Dr. Murdoch as a witness, an exception was taken to their opinion. , '
Upon being sworn, Dr. Murdoch stated, that the endorsement on the paper, purporting to be the bond on which this action was brought, was in his handwriting; that he had received the paper ■ from Thomas Price, who had been a director of the bank, but he could not recollect at-what time.
Thomas II. Baird, being nest offered as a witness on the part of the plaintiffs, was objected to on the ground of interest. It was admitted by the plaintiffs, that he had been a stockholder, but they alleged that he had transferred his stock. It appeared from the stock hook that he had been a stockholder, but no transfer of his stock was to be found in the transfer book. There was, however, a letter of attorney in the following words, viz. “ I assign and transfer and make over to The Bank of Washington, all the shares which I hold or have an interest in, in the bank, in whatsoever names they ma}' be; and I do hereby authorize and empower John Barrington, Esq., to make this transfer on the books of the said bank, at any time, with as full effect as I could do myself. Witness my hand and seal, this 7th of July, 1S19. Thomas II. Baird.’'
“ Attest, Catherine Barrington.”
The stock account of Judge Baird was likewise produced by the plaintiffs, and No. 13 of the plaintiffs’ specification of breaches, stated above, was read by the defendants’ counsel, in further support of their objection to his testimony. The court, however, admitted the witness, and sealed a bill of exceptions.
In giving his evidence, this witness declared that he could not recollect when he first saw the bond. He thought he saw it among the papers of the bank. He had no recollection of the execution of the bond, or that it had ever been offered to the Board. Whether or not it was taken in his absence, he could not tell. He found it lying in the bank, and he thought he put it into a blank book of his in the bank. Afterwards, when he left the bank, he handed it to some gentleman, but could not say to whom. He knew of no act of the Board, or of himself, to discharge Robert Haslett. The minutes were generally kept by Barrington. He had a conversation with Barrington on the subject of the erasure of the bond, when he came out of the last special court. The deponent told Barrington, that he must have made the erasure. He replied, that if he did, it must have been in the presence, of the Board, and with their assent. The deponent told him he thought it was, for such was his impression.
The plaintiffs, for the purpose of showing the existence of a bond to which the name of Robert Haslett was signed, over which the Board of Directors had control, next' offered to read a resolution on the minutes of the six following named directors, viz. Thomas H. Baird, President, Thomas JLcheson, R. Hamilton, D. Norris, and James Orr, of the date of the 19th of •ffpril,. 1815, in these words, viz. “Resolved, that the name of Robert Haslett be struck off the said bond of security for the cashier, provided the other sureties consent thereto.” The evidence was objected to by the defendants’ counsel, on the ground that the resolution was entered into by á number of members of the Board, incompetent for that purpose. The court overruled the objection, and admitted the evidence, upon which an exception was taken.
The plaintiffs then offered to read in evidence to the jury, the bond of which proof had been made, as stated above, without further evidence, which was objected to by the defendants’ counsel, who produced and read to the court the Fifth Fundamental Article of an act of assembly, entitled, “An act regulating banks,” passed the 21st of March, 1814, and the following ordinances or by-laws of the said corporation, viz.-— ’ ,
“ARTICLE SECOND.”
“Sect. I. The directors shall keep fair and regular entries in a book, to be provided for that purpose,, of their proceedings; and, on every question where two directors shall require it, the yeas and nays of the directors voting, or the names of the members, who make and seco'nd a motion, shall be duly'inserted on the minutes, and these minutes shall at all times, on demand, be produced to the stockholders, when at a general meeting the same shall be required.”
“ Sect. VII. The minutes of the preceding meeting shall be read before the Board of Directors proceed to any business, and no debate shall then be admitted, nor question taken on the business of such meeting, except as to errors and inaccuracies.”
The court overruled the objection, and permitted the bond ÍQ be given in evidence; upon which the defendants’ counsel excepted to their opinion.
Among the charges of official misconduct contained in the plaintiffs’ specification of breaches, was the following, viz.—
¥• No, IS. — Joseph Pentecost’s debt due to the bank; he discharged the endorsers, and took insufficient security for the same, without the authority of the directors, - - $10,328,20. Interest to Dec. 31st, 1S22, 3.4.12, 2,QS8,Q7.”
It appeared, that Joseph Pentecost was indebted to The Bank of Washington to the amount of ten thousand three hundred and twenty-eight dollars, and twenty cents, which was due upon three notes; one for one thousand dollars, endorsed by George Baird} one for four thousand two hundred and fifty dollars, endorsed by George Morgan; and one for five thousand six hundred dollars, endorsed by James Brice and William' Jlshhroolc: That Barrington, the cashier had, on the day .of Jlugust,1819, taken the bond of Joseph Pentecost,^conditioned for the payment of ten thousand three hundred and twenty-eight dollars, in annual instalments, from the date of the bond, which contained a warrant of attorney, authorizing the entry of judgment thereon, with a n’.5.u?e prohibiting judgment from being entered until default had been made in the first or some subsequent instalment. Several witnesses were examined as to the circumstances of the above-mentioned endorsers, the result of whose testimony was, that George Baird’s circumstances were considered good in 1819, and George Morgan’s and James Rice’s doubtful; and that William JLshbrook was insolvent. It Appeared, further, that judgments to a considerable amount had been entered against Joseph Pentecost previous to the date of the bond, and that between its date and the time of his default in payment, several other judgments were entered against him; and that, on a sale of his property, made subsequently to the entry of the judgment on the bond taken by Barring-ton, there was an excess, (though not a very considerable one,) in the amount of sales over the aggregate amount of judgments .entered before the date of the bond, which was applied to judgments entered subsequently to its date, but before the entry of judgment upon it.
At the close of the trial, Shalek, President, charged the jury as follows:—
“The present action is brought by,The Bank 'of Washington against John Barrington and his sureties, to recover damages arising from breaches of the condition of a bond, given to indemnify the plaintiffs from any failure in John Barrington in the faithful performance of his duties, as cashier of The Bank of Washington.
“The bond of which oyer is given by the plaintiffs, is dated the 25th day of Jlugust, 1814. Its penalty is thirty thousand dollars. To the plaintiffs’ declaration, which is in debt, the defendants have pleaded non est factum and performance of the condition. The plaintiffs have putin a replication of non-performance, and have assigned no less than thirty-four breaches of the condition. A few specifications have been abandoned; the greater part of them, however, the plaintiffs have endeavoured tp sustain by testimony: — of their success in so doing, so far as facts are in issue, you are the exclusive judges; so far as the law is concerned, you will receive it from the court, and apply it to the facts that have been satisfactorily made out. ■
“The first point to which I shall direct your attention, is the .construction of the condition of this bond. Although the instrument is very inartificially drawn, I find, upon examination, that the clause which defines the boundaries of the parties’ liability, pursues, or nearly so, the terms of the fifth fundamental article of the general banking act of 1814.
“The condition of the obligation is, “that John Barrington shall well and truly perform his duties of cashier, to the best of his abilities.” The question then is, What is such faithful performance of his duties? Is it, as has been alleged, simply that he shall not defraud his employers? or is he not bound to conform to the general'principles upon which all such institutions are conducted? The .cashier of a bank has much indeed intrusted to him. Not only the money of the stockholders, but that of depositers is in his power. In the management of the business of the bank he has certain discretionary powers: in the employment of these he must govern himself with that degree of caution which a prudent man would exercise in his own affairs; and this discretion does not extend to those acts for which a board of directors is especially constituted, and such as fall within their customary duties. If, therefore, he undertakes to change the nature of the securities of the institution, without the assent of the Board, (unless, indeed, the circumstances are of a nature that render it peculiarly necessary to the institution, which circumstances he ought to make out. on the trial,') and loss accrues from such change, he will become liable for breach of duty.
“For mere mistakes, errors of calculation, such as in the management of great banking concerns must frequently occur, a cashier undoubtedly ought not to be held responsible. If the errors are so numerous as to afford reasonable ground to presume gross negligence, the rule would be otherwise; and if the errors are such as tend evidently to the benefit of the cashier himself, such errors would create strong suspicions against that officer, and, in proportion to the frequency of their repetition, and amount, would raise a presumption of a want of due fidelity in him. Where a party undertakes to act for another, he must show either the authority or the acquiescence of the principal. It would be singular, indeed, if it lay upon the party contending against the exertion of the power, to show that the person professing to act as agent, had no authority to do so.
“ An important ground of defence arises under the plea of non est factum; that is, that the bond declared on is not the bond given by the. defendants. The bond was originally signed by five persons. Since its sealing, and subsequent to its delivery, it has been defaced, by the erasure of the name of Robert Haslett, in the body of the instrument, and the pen has been drawn over his signature, opposite to his seal.' What is the-effectof this erasure? If made by the obligee, without the consent of the obligor, whether the erasure be in a material or immaterial part of the bond, it would thereby become void, and the plaintiff could not recover. If the erasure be made by the obligor himself, in a several bond, the obligor could not by such act discharge his responsibility. It does not appear very clearly to whom the bond was originally delivered. It must have been kept amongst the papers of the bank, and was taken from there by Judge Baird, President of the institution, and delivered by him, afier his resignation, to Mr. Brice, a director. Had this paper come into the hands of Judge Baird, free from erasure, it would then have become incumbent on the plaintiffs to satisfy you, as to the- person who made the erasure, and by whose directions it was made, and if by the assent of the obligors, or either of them, to show that fact to the jury. If the obligee produces a bond on which there is an erasure, and which came into his hands without one, he must explain and account for it. The presumption is, that it was done by him, unless lie gives circumstances in evidence to destroy that presumption. Whether you are satisfied that the bond on which this action is brought, was delivered to the proper officers of the bank and held by the institution, I am unable to say. If you are, by whom and by whose directions was the erasure made? If made by the cashier at the instance, and by the instructions of the directors,- and without the assent of the other obligors, the bond is void; if made with their assent, it is still good against them. The evidence to show the assent of the obligors is certainly very slight, and if upon that subject you are not satisfied; should you believe the erasure made by order of the Board, I am not aware upon what principle you can find against the defendants. But it is contended, in this case, that the bond was in the hands of Bar-rington, one of the obligors; that as cashier of the bank he held it; and that, when he delivered it to-Judge Baird, the erasure was already made. If made by Barrington, without the consent of the Board, it was a fraudulent act in him, and his co-obligors are not discharged thereby. Whether the erasure was made by him or not, and whether with or without the order of the directors, and whether with or without the assent of the other obligors, you will decide from the testimony.”
The court then proceeded to charge the jury upon the several specifications of charges against John Barrington. In relation to the 21st specification, the court adverted to the principle which had been already laid down, with respect to the duties and liabilities of a cashier, and likewise to the testimony given upon this specification.
The judge then charged the jury, “ that if they believed that John Barrington had taken upon himself, without any authority from the Board of Directors, to discharge the endorsers upon the notes drawn by Joseph Pentecost, and to substitute in their place Pentecost’s judgment, or if the cashier, without such authority, had done any other act by which the endorsers had been discharged, such discharge of the endorsers was a breach of the condition of the bond, and he, together with his sureties, became responsible for the amount of the notes from which such endorsers had been discharged by the act of the cashier.”
To this opinion, the counsel of the defendants excepted.
Kennedy and Biddle, for the plaintiffs.in error.
1. The special court had no jurisdiction of this case. The act of assembly of the 15th of March, 1816, Purd. Dig. 422, provides for special courts, where the judge before whom it would be regularly tried, has been counsel, or has a personal interest in t he cause. And the act of the 33d of March, 1818, Purd, Dig. 424, which is a supplement to. the first, and narrows its provisions* ■declares, that when the president of any judicial district shall be personally interested in the event of any suit pending, or to be instituted in his district, or shall have been concerned as counsel for either of the parties, or those under whom they claim, touching the same subject matter; or whenever it shall happen, that the title under which either party, claims has been derived through sUeh president, such suits shall be the subjects of the jurisdiction of special courts. Judge Baird had not been counsel in this cause, and it does not appear that he was personally interested in the event of it. The ground upon which the defendant below asked for a special court was, that the judge was interested in some points of law, which might be decided; and the judge, in his certificate, expressly declares, that he knows of no interest he has in the event of the suit. He was afterwards admitted as a witness, which is conclusive upon the question of interest, so far as the. opinion of the court below goes. No consent of the defendants to the jurisdiction of the special court appears upon the record; and, if it did, it would not confer jurisdiction. Where a court'is of limited jurisdiction, the want of jurisdiction need not be pleaded in abatement, but may be taken advantage of any time.
2. The cause was not put to issue. The plea of non est factum was without replication or issue; and there was no rejoinder to the plaintiffs’ assignment of breaches of the condition of the bond. The manner of pleading on a bond with a penalty is, a declaration •for the penalty; a plea of performance; a replication, assigning breaches, and a rejoinder to that replication. Postmaster General v. Cochran, 2 Johns. 413. Caverly, v. Nichols, 4 Johns. 189. The record showed no agreement of counsel to waive formal pleadings, or a joining of issue, without which the judgment is erroneous. 2 Binn. 33. 3 Serg. & Rawle, 577.
3. The bond ought not to have been received in evidence. The act of the 21st of March, 1S14, Purd. Big. 56, makes it the duty of the Board to take a bond from the cashier, with two sureties, &c. But there was no evidence of a delivery of this bond by the obligors, nor of an acceptance of it by the obligees. The subscribing witnesses'did not prove a delivery. The only evidence was, that it was found among the papers of the bank; but this was no proof of delivery nor of acceptance. It might have been sent to the Board for their approbation of rejection, and not acted upon. Delivery is essential to a deed; it takes effect from delivery, and there can be no delivery without acceptance. 1 Shep. Touch. 57, 58. 2 Bh Com. 397. Jackson v. Phipps, 12 Johns. 41S. There is no presumption that the bank accepted the bond. It was their interest to reject it, in order to get better security. The acceptance ought to appear on the minutes of the Board, which the act of assembly directs to be kept. . There was an erasure, in consequence of which the bond was void; and it ought not to have gone, to the jury for that reason, as there was no evidence to account for it. Esp. Ev. 129.
4. The construction given by the court below to the condition of the bond was erroneous. The condition prescribed by the act of. assembly, is for the faithful performance of the duties of the office; but, in the bond in question, the words, “to the best of his abilities,” were added, which not being required by the act, are to be rejected. The part of the charge complained of, is' that which mates the securities responsible for the cashier’s mistake of his duty: for example, in undertaking to do what was not intrusted to him, but reserved for the Board of Directors, in consequence of which a loss happened. Sureties are favourites of courts, both of law and equity, and are not to be bound beyond the terms and precise scope of their engagements. Ludlow v. Simons, 2 Caines, 29. In the case of The Union Bank v. Clossey, 10 Johns. 271, it was held, that the sureties were bound only for the honesty of the first teller of the bank, and not for errors of judgment; and the same principle applies to this case. The obligation of the securities extended only to the honesty of the cashier, not to his abilities. Different banks intrust different matters to the discretion of the cashier; and it is often a nice matter to trace the line between the powers of the cashier and those of the directors. The bank had ceased discounting, and was winding up its concerns, when Pentecost’s notes were given up, and his judgment bond taken in exchange, and the cashier might well consider the bond as the best security; but for this error of judgment his securities were certainly not responsible.
5. The Court of Common Pleas charged the jury incorrectly upon the doctrine of erasure. The charge was, that if Barring-ton (who was the officer and agent of the bank,)' made the erasure, without the knowledge of the obligors, the' bond was ,not void as to them. The law is otherwise. Erasure by a stranger, without the privity of the grantor or grantee, makes a deed void. 1 8hep. Touch. 68. If a bill of exchange be altered in a material part, even by a stranger, it discharges the endorsers. Chitty on Bills, 130. The alteration of the date of a promissory note by the payee, avoids it. Bank of the United States v. Russel, 3 Yeates, 391. Stephens"?. Graham, 7 Serg. & Rawle, 50S. The alteration of a bond, by inserting another obligor, without the consent of the original obligors, vitiates the instrument. O’Neal v. Long, 4 Crunch, 160. PARSONS, C. J., in Smith v. Crooker, 5 Mass. Rep. 538, lays down the general rule to be, that an alteration by a stranger, without the privity of the obligor, avoids the bond. The same rule is recognized in other cases. Den v. Wright, 2 Halsted, 177. Pi-got’s Case, -11 Coke 27. 2 Bulst. 247, S. C. Pemberton’s Lessee' v. Hicks, 1 Binn. 14. The bond ought not to have gone to the jury, without some evidence by the plaintiffs accounting for the erasure, or showing that it was done by the consent of the obligors.
6. In saying to the jury, that if the paper came into the hands of Judge Baird free from erasure, it would lie on the plaintiffs to account for the erasure, the court below was wrong. It would lie on the plaintiffs to account for the erasure, if it existed, as it undoubtedly did, before the paper came into the hands of Judge Baird. A positive misdirection is error, though other parts of the charge may be to the contrary. Work v. Maclay, 2 Serg. & Rawle, 415.
7. There was error in instructing the jury, that if the chashier discharged the endorsers on any notes, by changing the securities, he and his sureties were answerable to the amount of the notes. This part of the charge related to Pentecost’s debt of ten thousand dollars. If the cashier acted in this matter to the best of his judgment, as he probably did, his sureties are clearly not liable. Besides, it is probable that the whole amount of this debt could not have been recovered, if the securities had not been changed, and the measure of damages should have been the amount lost by the bank, in consequence of the change of securities, and no more. flndrews v. Pardi, 5 Ray, 2,9. Purviance v. dingus, 1 Rail. 185. Russel v. Palmer, 2 Wils. 325. Rearborn v. Rearborn, 15 Mass. 318. Sherman v. Goodman, 13 Mass. 188.
8. The i’esolution of the Board of Directors, of the 31st of Jiu-gust, 1814, was irrelevant, and therefore not evidence. The object was, to prove that Barrington was cashier; but the resolution does not mention Barrington. Besides, there was a written paper proving the appointment, and this ought to have been produced.
9. Dr. Murdoch was interested, and, consequently, not a competent witness. He was a stockholder when the bank became insolvent, and was liable, in case of a deficiency to pay the debts of the bank, for that portion of his subscription, which had not been called for and paid up; and this liability he could not divest himself of by a subsequent transfer of his stock. The charter was forfeited before the transfer.
10. Judge Baird was also an incompetent witness, on the ground of interest; for if the bank recovered of Barrington and his securities, on account of a transaction with Baird, Baird is bound to indemnify them. Besides, he had been a stockholder, and had not transferred his stock to the bank, but only given Barrington a power of attorney to make the transfer. The bank did not enforce the conveyance. On the contrary, they claimed from Bar-rington the whole amount of the sum credited by him to Judge Baird’s account, and have obtained a verdict and judgment for the whole amount. Towle v. Stevenson, 1 Johns. Cas. 110. God-win v. Hacker, 1 Caines, 527. In truth, the stock remained the property of Judge Baird, and therefore he was clearly interested. [N. B. This point was made by Mr. Kennedy alone; his colleague being of opinion that it could not be sustained.]
11. The resolution respecting the striking out of Haslett’s name from the bond, ought not to have been received in evidence, because there was not a competent number of members present, as required by the act of assembly, 7 Serg. & Rawle, 392. It was a resolution, too, in their own favour, and thus they made evidence for themselves.
12. In saying to the jury, that he was not aware upon what principle they could find for the defendants, the President of the 'court below expressed himself too vaguely, and left the jury to judge of the law, which was error.
Baldwin, for the defendants in error.
1. The parties agreed that this cause was the proper subject of a special court, and no objection to its jurisdiction appears upon the record. The acts of 1816 and 1818 are both in force; the latter being a supplement to the former. The judge certifies the cause for a special court when he thinks propel*. This cause was regularly certified, and no objection made. This court, thére-fore, cannot take cognizance of any objection now made. Judge Baird, at the conclusion of the certificate, says, “ I certify all facts really existing, necessary to give jurisdiction.”
2. The exception, founded on the want of joining issue, ought not to prevail; because it may be collected from the record, that both parties agreed to try the cause, and consider the issue as joined upon the pleadings, as they were. The charge of the court shows that the parties considered the issue joined, both on the plea of non est factum and the plea of performance, with the assignment of breaches by the plaintiffs. There is no settled rule of this court, that a judgment must be reversed, unless mention is made of issue, and no case to that effect can be produced. The pleaof non est factum concludes to the country, and thus presents a direct issue. If the assignment of breaches is not replied to, it is the.fault of the defendants, of which they cannot take.advantage. In Neto York, mis-pleading is cured by verdict, (12 Johns. 353;) and here the most trifling circumstance is laid hold of to prevent the reversal of judgment for want of an issue, after trial on the merits. 2 Serg. & Rawle, 337. 9 Serg. & Rawle, 67.
3. (The counsel for the defendants in error was told by the court that it was unnecessary to argue the third exception.]
4. The condition of the bond was correctly construed. The language of the court below was, that “the cashier should-exercise such care and prudence, as a man should reasonably use in his own affairs.” This was right, for, by accepting the office, the cashier undertakes for a reasonable knowledge of his duty. 1 Li-vermore on Agency, 339, 341. The court also said, that “the cashier should not usurp the powers reserved to the Board, and that if he exchanged one security for another, he should be responsible for any loss.” This was the least that could be said; ,and even this was qualified, by the court, by excepting extraordi nary cases of emergency, and involuntary mistakes in calculation. It is not law, that this bond only stipulates for the honesty and morality of the cashier. Every man is responsible for gross negligence, and especially an officer who receives a salary. Gross negligencemakes even a gratuitous agent responsible, and an agent for reward is held more strictly. Livermore on Agency, 342, 352.
5. Barrington, the cashier, by whom the erasure was made, was no stranger, but one of the obligors; and no case goes so far as to say, that this would discharge the others. It was an act of infidelity in his office, for which the obligors are responsible. It is not generally true, that every alteration by a stranger avoids a deed. If the seals of a deed be torn off by a child, the deed is good. Palmer, 403. Latch. 226. A deed torn by a stranger, by accident, remains valid. Bro. Ab. 88. 13 Pin. 44. An estate conveyed by deed remains, though the deed be destroyed. Pent. 297. 2 Johns. 84. An alteration by one of several obligors, does not affect a'bond. Shep. Touch. 68. iGallison, 69, 71. 15 Johns. 297. Cro. El. 40S, 546. 5 Co. 23.
6. It is hot necessary to defend every word of the charge of the court below. It is enough, if, upon the whole, it can be supported. One part may be explained by another. The charge, upon the whole, was right, — that, if the bond was altered by the consent of the obligors, it was void. As to its coming to the hands of Judge Baied, the meaning of the judge was, that if it came to his hands unaltered, it lay upon the plaintiffs to,show how, and by whom it was altered; and in this there was no error.
7. The only proper measure of damages, in this case, was the amount of Pentecost’s notes delivered up. These notes had been discounted by the bank, and were not due when they were given up by the cashier. What they were then worth, it was impossible for the jury to'ascertain. They might have been paid or secured, although neither the drawers nor endorsers were worth the money. In commercial law, if a man gives up a note or bill, he makes it his own. Miner v. Tagert, 3 Binn. 204. Chitty on Bills, 258, 272, 375. IS Pez. 20, 21. 3 Johns. 230.
8. The resolution of,the Board of Directors, of the 31st of August, 1814, was not irrelevant, because it showed that there was an existing cashier; and it was shown, by other evidence on the part of the plaintiffs below, that Barrington was cashier de facto. It was introductory to evidence of the cashier’s' bond, on which suit was brought.
9. Dr. Murdoch having sold out and transferred his stock, he had no longer any interest, and was therefore a competent witness.
10. [The counsel thought it unnecessary to speak to this exception, in consequence of what had fallen from the court]
11. The resolution of the directors, authorizing Haslett’s name to be striken from the bond, was evidence, notwithstanding there were not enough members present to constitute a Board, because the minutes being kept by Barrington, his acts were evidence against him and his sureties; besides which, it was evidence that the Board was in possession of the bond.
12. [The court informed the counsel, that'he need not argue ¿he twelfth exception.]

Opinion:
The opinion of the court was delivered by
Duxcan, J.
The real matter in controversy between the parties, was on the construction of the instrument declared on, as the joint obligation of the plaintiffs in error, and its binding force on them, after the material alteration, by the erasure of the name of Robert Haslett, one of the joint obligors.
The other questions are subordinate; but, as the case goes back, and all the points may be relevant, it is made the duty of this court to give an opinion on all.
The first error assigned, is to the jurisdiction of the court. The presiding Judge of the Court of Common Pleas thought proper to certify and return this case for trial to the special court, and the parties went on to trial without exception, as on a case properly certified. The requisite certificate has been given to confer jurisdiction, and' the course of the argument shows the propriety of the certificate; for even the' counsel of the plaintiffs in error draw different conclusions, as to the interest of the President. While one admits that he had no interest, and was a competent witness, the other contends, totis viribus, that he was interested, and therefore improperly received; and it is one of the errors assigned, and which this court is now' to decide, that he was incompetent as a witness. In a ease so circumstanced, every unprejudiced man will admit,' that the judge, even though, in his private judgment, he might suppose he had no interest, yet he took the safest and justest ground, in certifying the cause. It was a case of doubt and difficulty: — the judge has certified all the facts necessary to give the special court jurisdiction, and we are not, in a court of error, to say he has improperly certified, when all parties agreed, without objection to the jurisdiction, to go on to trial; even though we decide, that, as the record stands, he was a competent witness.
The second error is, that the-cause was not.put to issue, there being no replication to the plea of non ést factum, and no rejoinder to the plaintiffs' assignment of breaches. After a trial ort the merits, in any case, (I speak here, only my own opinion,) where the party has had the full benefit of his defence to the action, I would feel a strong disposition to maintain the verdict. I have before expressed this opinion in Jordan v. Cooper, 3 Serg. & Rawle, 583. It has been so settled in Massachusetts. 9 Mass. Rep. 552. And, in New York, in Snyder v. Snyder, 4 Cowen, 394, the court suffered the replication to be added by way of amendment, nunc pro tunc, where the plaintiff had neglected- to reply to the statute of limitations. The courts in Westminster Hall, have nearly done the same thing. But, without now deciding the general question, all the members of this court, who heard the argument, are of opinion, that, on inspection'of this record, i£ shows an agreement of the parties to go to trial, waiving the impropriety of the pleading on the record, as it stood; for on the eve of the trial the defendants pleaded performance of covenants, and received, instead of a regular assignment of breaches, an informal specification. The parties agree to go on to trial "on a specification of charges relating to' the suit of The Bank of Washington, Pennsylvania, v. John Barrington and sureties." After this, it would reflect little credit on the administration of justice, to set aside a verdict in which the court and j'ury had occupied many days; and when it appears that there was a minute investigation of every matter which the plaintiffs in error suggested,as a defence; where they had the benefit of all the defence and evidence, as well on the plea of non est factum, as on each breach stated in the specification.
The third, fifth, and twelfth specifications of error, all relate to one great question of fact,---the question whether, after the erasure of the name of Robert Haslett, the bond became the joint obligation of the plaintiffs in error and Thomas Acheson; or whether that act did not render it void. I have reserved. this question, to be considered in the last view to be taken of this ease..
The fourth error assigned, is the construction of the condition of the bond; — "That John Barrington, the cashier, shall well and truly perform the duties of cashier of the bank aforesaid, to the best of his abilities." .It has been contended, that, "to the best of his abilities," restrains the guarantee to acts of infidelity and dishonesty, and that they were so intended,'not being used in the general banking law; and therefore if the act be done ignorantly, but not dishonestly, however injurious it may be to the institution, however contrary to the official duties of the cashier, still, if there be no corrupt motive, the securities are not liable. While I admit the ingenuity, I cannot agree to the solidity of the argument. The covenant is, that the cashier will discharge the duties of his appointment; that is, with competent skill and abilities. A man who accepts an office or trust, of any kind, contracts that he will exercise it with competent skill and ability; and his sureties, who are bound that he will execute it according to his ability, warrant for the performance of this contract of the officer. A man cannot go beyond his abilities; but, in appointments of this kind, it is an undertaking that the officer will act according to the duties of his station; and if he transcends the known powers of a cashier; by changing the securities of the bank, without their knowledge, and loss has accrued by the abuse of his trust, the loss falls within the words of the condition, and the sureties are re sponsible for the amount of such actual loss. Of the charge of the court, in this particular, the plaintiffs in error have not just cause of complaint.
But I am of opinion, that they have sustained the seventh specification of error. Barrington's sureties were not by his misconduct, by his change of securities, by his acceptance of Pentecost's judgment, and agreement to suspend proceedings on that judgment, converted into the securities of Pentecost: they are only responsible for the damages which probably resulted from the change; and then the bank should have shown that they could have recovered the whole, or part of the debt, by evidence of the circumstances of Pentecost and his endorsers. 2 Wils. 328. Whether there was sufficient to pay in whole or in part, if the security had remained unchanged, should have been left to the jury. It was a question of quantum damnificatus; not a commercial question, nor an action for a tort committed by the securities, but indemnity for a loss proved to have been sustained; an open question of actual pecuniary loss; not a closed one, where the measure of damages was the amount of the debt, but one for the consideration of the jury; — what has been the injury sustained; what has the bank lo'st by this unauthorized act of the agent? If the security was good, then the bank has lost the whole debt by the change. If partially good, then the amount of the sum, which probably would have been recovered from them. If nothing could have been recovered from them, then only nominal damages against the sureties. The damages cannot be in the nature of punishment, or penalty. Now, under this charge of the court, there might have been recovered from the sureties more than the bank could have recovered from their debtors. Place the bank in statu quo, the damages would be compensatory: — go beyond this, and they are vindictive, and vindictive damages are never-given against sureties. .
The eighth assignment of error, is in admitting evidence of the 'Board of Directors of the 31st of August, 1814. As this cause goes back, it is proper to state under what' circumstances the entry would be evidence. The evidence of George Morgan, being received to show the actual appointment of Barrington by a Board of Directors, and the written memorandum of that appointment, if, on a proper search, that paper cannot be found, proof must be made of its contents, and the direction given to Barrington to enter it on the minute books, leaving a blank for Mr. Morgan to insert the name of the cashier. But if no evidence was given of anymemorandum in writing, nor trace of entry to be found of the appointment, evidence would be admissible to show that Barrington continually acted as' cashier of the Bank. The books of the bank were all in his handwriting, and kept by him; all bank notes were attested by him; every act which would fall within the functions of a cashier being proved to have been done by him; the bond, the deed of the defendants, stating him to be the cashier; all this would be satisfactory evidence of his appointment as,cashier; and though the entry of the 31st of August, 1814, might not be evidence per se, yet, connected with the other evidence, it would be evidence of his appointment; and all this would satisfy even an allegation that he was duly appointed.
If the bills of exceptions on which the ninth and tenth errors are assigned, had stated that Dr. 'Murdoch and Judge.Baird had béen original subscribers to the bank, it would have been a roost serious question, whether, as the bank had forfeited its charter, and was unable, from the funds paid in, to pay its. debts, they would have been competent witnesses to increase a fund, to lessen the debts that otherwise might fall on them, in proportion to their original subscription; for only seventeen and a half per cent, has been paid in, of fifty per cent, subscribed. But this is not so stated, — it may be so, or it may not be so. As the cause goes. back, and is a very interesting one, it is desirable it should go back without prejudicated opinions, on matters, which, from the state of the record, it is not made the duty of the court to decide. On another trial, if such be the fact, it should be so stated; but the fact is not apparent on the record, that these gentleman were original subscribers. They may be so, or only assignees. If assignees only, they would not b.e liable further than as stockholders. The court does not perceive any interest Judge Baird has in the event of the trial. The cashier had discharged him from so much debt to the bank as his stock amounted to. I cannot see that the securities could recover from him in any form of action,. if judgment was rendered against them for this item in the specification. .
The eleventh exception respects the entry of a resolution of certain directors, but not a competent number to constitute a Board, of the 19th of April, 1815, in the book of minutes, in the handwriting of the cashier: " Resolved, that the name of Robert Has-lett be struck off the said bond of security for the cashier, provided the other securities agree thereto." I cannot say, that the evidence was not admissible for any purpose. Had it been offered for the purpose of showing a consent by the plaintiffs in error to the alteration, it should have been rejected; but it is some evidence;' it is evidence that the Board was in possession of the bond, with all the names on it, in April, 1815. It proves that the bank then held the bond unaltered, and that the obligors had not then consented that the name of Haslett should be struck out, and be no longer bound, and they continue to be bound.
We come, in conclusion, to the consideration of the third, fifth, sixth, and twelfth exceptions. These relate all to the great question on the merits; the erasure of Haslett's name, and whether, from the evidence', he became loosened from this joint obligation, while the responsibility of the others was Pot only continued, but increased. To them the alteration was most material. While it increased their responsibility, it changed the very nature of their obligation. Instead of being the joint bond of five, it became the joint bond of four. It ceased to be the same joint contract. Its identity and individuality were destroyed. The plea of non est factum puts in issue the execution of the bond, and its continuance, as the deed of all the joint parties, to the time of the plea. Formerly the judges decided on profert or view of the deed, whether it was void by reason of interlineation or erasure; but when deeds became voluminous and multiplied, they found it inconvenient to decide on demurrer, and referred it tor the jury. It is now a fact for the jury to decide, whether it is the same identical contract declared on. 10 Co. 92. Bull. N. P. 267. As the law formerly stood, the destruction of the whole deed, or its loss,' amounted at law to a destruction or loss of the debt. If mice gnawed off the seal, the obligation was extinct. This was with some struggle got over in the courts of law; for a man may now declare without profert, Stating the deed to have been lost by time or accident. A spoliation of a part of the deed falls within the same reason. It is unnecessary critically to examine the ancient doctrine; it is sufficient to say, that the same rigour does not prevail as to the alteration of deeds. But, while the same rigour does not prevail, still the law views the alteration with a jealous eye,' and requires evidence by the obligee, for the burthen of proof is on him, that, if the alteration be material, it was done ioith-out the consent of the obligee; or, if done with his consent, the consent of all the parties in interest should be proved. J1 rule of common sense and- justice now obtains, that an alteration in a material part, against the consent of the obligor, does not ovoid the instrument, any more than its total destruction would. Jackson v. Martin. 15 Johns. 295. 2 Evans's Po-thier, 180, 181. And it appears well settled in the Supreme Court of the United States, Speeker and others v. The United States, 9 Cranch, 26, that the name-of an obligor may be rased from a bond, and a new obligor by consent of all parties added, without making the bond void, and such •consent. may be proved by parol. So that the execution and delivery of the bond being proved, and the bank making it part of the case, that in Jlpril, 1815, the name of Robert Haslett was on the bond, by bringing the action against the others, omitting his name, admit that the alteration was made with their consent, and was not a fraudulent alteration of the name of the name, of Haslett; for, if fraudulent and without their consent, then, on the principles stated, it continued the joint bond of all, and the action should have been brought against all, and they could not have dropped the name of Haslett; and if Haslett continued bound, which he did.unless the bank released him, then it is not the joint obligation of these individuals, but their joint obligation with Haslett. It is not the same joint contract, but a different one. The only question then would be, Did all the plaintiffs in error, with Thomas Jlcheson, consent to this alteration? Is there satisfactory evidence of this fact? I would not require a solemn re-execution and re-delivery of the bond. The consent of all might' be proved by parol; but then it should be proved, and not conjectured. It was not a ques-. tion to be inquired into by the jury, whether HasleWs name had been fraudulently erased or not; though it would have been, had he been sued as a joint obligor; for that which is admitted by the pleadings need not be proved. It cannot be denied by the bank, that the alteration was made with their consent. Their allegation is on the joint bond of- four. Was that the view of the case presented to the jury, or were they not instructed by the court to settle two facts, and, if either of them was found against the plaintiffs in error, then the verdict was to be for the bank? In either alternative, the securities-were bound. The first was, — Was the alteration made fraudulently, without the consent of the bank? and, if the jury so found, then, whether the securities consented or not, still they were bound. The other question was, Did they consent? This is the plain meaning of the charge. If it was not, then it was so obscurely expressed by the court, that it would tend to mislead the jury. The judge who delivered the charge, alway's expresses himself with perspicuity: — " It does not," says the opinion, " appear very clearly to whom the bond was originally delivered. It might have been kept among the papers of the bank, and was taken from them by Judge Baied, President of the institution, and delivered by him, after his resignation, to Mr. Brice, a director. Had this paper come into the hands of Judge Baied, free from erasure, then it would have been incumbent on the bank to satisfy the jury, as to the person by whose direction it was made, and if by consent of these obligors, or'either of them, then to show that fact to the jury." But as the bank by this action did .admit that HasleWs name was withdrawn by their Consent, then whoever had the custody of the bond, it was incumbent on the bank to prove that it was by consent of all, and not by consent of either; for if all-did not consent, then it was not the joint obligation of all — i,t was not their deed.
The evidence of this consent the court states to be slight, but the concluding sentence of the charge, the last words to the jury, put it, not on the consent of the obligors, but on the fraudulent alteration of the bond, without the consent of the obligors, by the cashier. " If it was done without the consent of the Board," says the court, "itwas a fraudulent act, and his co-obligors are not discharged." What would be the consequence of that? If the co-obligors were bound, Haslett continued bound; yet it was expressly admitted in the argument, as well" as conceded by the form of action, that Haslett was released. The action is founded on that assumption, and all,the argument on both sides proceeded on this principle. This cannot be right; for on a recovery in this action against the plaintiffs in error, they could have no contribution against Haslett; and, taking the whole charge together, any jury must conclude that they were instructed, that if the alteration was made by Barrington, without the consent of the bank, it was fraudulent against all but Haslett, whether the obligors consented or not; whereas, if it was fraudulent against the bank, the bond retained all its original force, and bound all. If the bond was good as to one, it was good as to all. By the' bank's ratification of the erasure of Haslett's name, they released him; and the obligation being a joint one, the release of one was the release of all; for, if it was not so, then an additional burthen would be cast on the plaintiffs in error, without their consent. This would be manifestly unjust. They have a right to say, " Non in liase vincula venimus. Five were bound jointly, and, without our .consent, you' attempt to make it the joint deed of four. It is not the individual bond we executed." For, in all cases where the obligation was on the deed of the parties, and after, and before action brought, it becomes no deed, either by erasure or addition, the defendant must satisfactorily prove, non est factum. The question is, what it is at the present time ? 5 Rep. 119. Two seal a deed; the seal of one of them is broken off. He shall say, non est factum, and this shall avoid the obligation. Br., Obligation, pl. 93, 3 H 7. And where the alteration is injurious to one of the obligors, the law is reasonable in requiring evidence,, not amounting, I admit, to re-execution of the bond, (yet that was the opinion of the learned judge in Speeker's case;) not requiring all that solemnity, which its first execution did, yet requiring evidence of á consent by all to the alteration, and an agreement by those whose responsibility was. to be increased, to remain bound alone, as if the name of one had not been erased; as if he had never been bound; a quasi re-execution of the bond, by their agreement to continue bound.
I am therefore of opinion, there was error in this part of the charge, and that, for all the reasons given, the judgment should be reversed, and a venire facias de novo awarded.
Judgment reversed, and a venire facias de novo ¿warded.