Case Name: Franklin Bank versus Steward & als.
Court: Maine Supreme Judicial Court
Jurisdiction: Maine
Decision Date: 1853
Citations: 37 Me. 519
Docket Number: 
Parties: (*) Franklin Bank versus Steward & als.
Judges: Tenney and Howard, J. J., concurred.
Reporter: Maine Reports
Volume: 37
Pages: 519–541

Head Matter:
(*) Franklin Bank versus Steward & als.
Of the powers and duties of agents.
Of the admissibility of declarations made by agents.
Of those declarations made by agents, which are to be viewed as parts of the res gestee, and are admissible in evidence.
Of those declarations made by agents, which are not to he viewed as part of the res gestee, and are not admissible as evidence.
Of the character and extent of the agency pertaining to the cashier of a bank.
It is not a part of the duty pertaining to the office of a cashier, to give to customers of the hank, information as to transactions of the lank which have leen fully transacted and past.
Such information, if given by the cashier, will not bind the bank.
The declarations of the cashier, giving information as to a past transaction of the bank, though such transaction pertained to his own department of the business of the bank, are not receivable as evidence against the bank.— Per Shepley, C. J., and Tenney and Howae.», J. J. “Rice and Appleton, I. J., dissenting.
The surety on a note to the bank sent his agent after the pay-day, to inquire of the bank whether the note had been paid. To that inquiry the cashier, in the hanking room, declared that the note had been paid. In a suit by the bank against the surety, — Belds that the declaration made by the cashier was inadmissible as evidence against the bank.
A surety on a note to the bank, having in his possession the property of the principal, with which he might have secured himself by attachment, sent his agent, after the pay-day, to inquire of the bank whether the note had been paid. To that inquiry the cashier, in the banking room, declared that it had been paid; whereupon the surety, relying upon that information, surrendered the property to the principal, who soon afterwards failed, became and has continued to be insolvent. In a suit by the bank against the surety, “ Held, that the declaration made by the cashier was inadmissible as evidence against the bank. — Per Shepley, C. J., and Tenney and Howard, J. J. — Rioe and Appleton, J. J., dissenting.
On Report from Nisi Prius, Wells, J., presiding.
Assumpsit on a note to the plaintiffs, dated Dec. 16, 1845, for $350, payable in ninety days from date, and signed by David C. Dinsmore as principal, and by Stephen Webber and James Steward as sureties. The general issue was pleaded and joined. The plaintiffs read in evidence the note declared on. The defence set up was that the note had been paid. To prove such payment, among other wit nesses, the defendants called John Frost, who testified that, in the spring of 1846, after the ice broke up in the Kennebec river, he, at the request of Steward, (then being con» nected with him in the business^of sawing lumber,) called at the Franklin Bank, for the purpose of ascertaining whether said note had been paid, and inquired of Hiratn Stevens, the cashier, in the banking room, if the note aforesaid, on Which said Steward was surety, had been paid; to which question said Stevens replied that it had been; that he, the witness, then left the bank, no further inquiry being made, and communicated said answer to Steward; that Steward and himself had then lumber in their possession belonging to Dinsmore, which they had sawed for him, with which Steward might have secured himself by attaching it; that they had a lien upon it for the sawing and stumpage; that they detained said lumber severa,! days, until the witness Was informed upon said inquiry, that said note had been paid; that they then gave up the lumber, on payment of the lien; that Dinsmore failed in business in June or July, 1846, and has ever since continued Insolvent, and is now worthless.
The plaintiffs, among other evidence, to show that said note was not paid, examined Joseph Eaton, Esq., who had been first called as a witness by the defendants, and who was one of the trustees chosen by the stockholders of said bank, who testified that said note was, in December, 1848, turned out to said trustees as an unpaid note, and as part of the assets of the bank, by said Stevens, as cashier; that said Stevens died in September, 1849; that there Was no entry on the books of said bank of any payment of said note; that, on the contrary, there appeared from the said books to be a balance of upwards of $200 against said Dinsmore.
It was proved that said Steward and Webber had resided In Gardiner since said note was given, and were then, and have continued to the present time to be men of property.
The evidence of said Frost to the declaration of said Stevens was objected to by the counsel for plaintiffs, but the objection was 'overruled.
The Judge Instructed the jury, that, if they believed the testimony of Erost, and that Stevens, when employed by the plaintiffs, as cashier, actually declared said note to be paid, upon the inquiry of said Erost of him, at the request of Steward, whether it had been paid, they were authorized from that evidence to infer payment of said note: also that, if they believed that said Stevens, when so inquired of by Erost, told him said note had been paid, and said Erost communicated that information to the sureties, and they acted and relied upon that information, and lost the opportunity of securing themselves out of the property of said Dins-more in consequence of said information, the said sureties should thereby be discharged, whether said note had actually been paid or not; and that, if either of the defendants was entitled to a verdict, the verdict must be for all the defendants, for it must be against all or none.
If said testimony of Erost was legally admissible, and if said instructions to the jury were correct, the verdict, which was for the defendants, is to stand; otherwise, the same is to be set aside, and a new trial granted.
Allen, for the plaintiffs.
L. M. Morrill, for the defendants.

Opinion:
Shepley, C. J.
— The question presented is, whether a declaration of the cashier of the bank, that the note had been paid, was properly admitted as evidence.
The powers and duties of the officers of corporations are usually determined by their charters and by-laws, and by the laws of the State. Many of the powers and duties of the officers of banks are so determined in this State. Their general management is committed to a board of directors, who are the general agents of their respective banks, and who appoint their cashiers. The laws of the State require the cashiers to perform certain duties, and that each should give a bond with sureties for the faithful performance of his duties. The laws regard them therefore, as having certain official duties to perform. They may become the agents of their respective banks for the performance of other duties. If they assume such duties, the extent and limit of their powers should be exhibited by proof of the acts which they have been held out to the public as accustomed to perform. When a bank presents its cashier as habitually performing certain acts or duties, these may be regarded as-official acts or duties, and for the performance of them, he may be considered as its general agent. He cannot be regarded as a general agent for the transaction of all the business of the bank. The directors alone are authorized by law to make discounts; and they alone can make contracts binding upon it. A cashier, it is well known,- is allowed' to present himself to the public as habitually accustomed to make payment for its bills or notes payable to other persons. To make payment for bills and notes discounted by fie directors. To receive payment for bills of exchange-, notes and other debts, due to the bank. To receive money on deposit, and to pay the same to the order of the depositors. He is presented as having the custody of its books, bills, bills of exchange, notes and other evidences of debt due to it, and indeed of all its movable property. As making entries in its books, and as keeping its accounts and a record of its proceedings.
In many banks these duties are performed in part by tellers, clerks or other assistants, but generally, it is believed, under his super intendance, and- he might at any time assume the performance of them, and perform them, if able to do so, without such assistance.
His true position appears to be, that of a general agent for the performance of his official and accustomed duties-. While acting within the seope of this authority he would bind the bank, although be might violate his private instructions. Hatch v. Taylor, 10 N. H. 538; Planters' Bank v. Cameron, 3 Sm. & Mar. 609.
Is it the duty of a cashier to give information respecting the past transactions of the bank to those dealing with i-t ? If so, it must in this ease be. regarded as a part of his offi sial duty, for there is no evidence, that he had been held, cut by the bank as accustomed to give such information. If a suit were commenced on the bond, securing a faithful performance of his official duties, and the only breach assigned, was that of giving false information respecting a past transaction of the bank, no judgment, it is believed, could be x-endered against him and his sureties, upon pleadings putting that matter only in issue. Neither the cashier nor his sureties undertake, that he shall retain in his memory past occurrences and transactions, to whieh he was at the time a party. The most assumed by them is, that he shall keep a correct account of them, for exhibition, upon the books of the bank. The books, papers and documents of the bank ordinarily are, and are designed to be, the true exponents of its past transactions. Upon these alone would a bank, or any intelligent dealer with it, consent to rely for information respecting such transactions with testimony upon o'ath, if need be, respecting the facts.
If the question were presented to the deliberate consideration of any well managed bank, whether it would consent to make its cashier its official agent to communicate information respecting its past transactions, can there be any doubt, that it would refuse to do so ,• and that it would choose to refer to its records, books, paper and other documents as the proper source of information ? If the qixestion were put to a cashier and his sureties so varied as to inquire, whether they would regard it as the official duty of the cashier to give such information, can there be a doubt, that it would be answered in the negative ? If so, this would show, that it could not have been the intention of the bank or of its cashier, that it should be within the scope of his 'official duties.
It may be said, that the eashier is the only person, from whom a dealer with the bank can obtain such information.
He may be the agent to 'communicate such information, as it is the duty of a bank to give respecting past transactions to those dealing with it. But is a bank obliged to communicate any such information further, than it is to be ascertained from its records, books, paper and documents ? It cannot be regarded as assuming responsibilities or duties in this respect greater than those imposed upon individuals.
Persons may, and they often do, communicate information respecting their past transactions with others. This may be both useful and desirable for the correct and convenient transaction of business,- but this does not prove, that a person is under any legal or moral obligation to do so. No suit could be maintained for a refusal to do it. The facts might not be sufficiently fresh in his recollection to enable him to do it. Or his present business might be too important and pressing to allow him to enter upon a history of past transactions. Such communications are matters of courtesy and of convenience, not of right.
Being no more matters of duty or of right on the part of a bank than on the part of an individual, its cashier cannot be considered its official or authorized agent to make them, unless they constitute a part of some transaction performed at the time of making them.
There may not be an entire conformity in the decided cases to rules believed to be well established for the reception or exclusion of the declarations, representations or admissions of agents; while an examination of them will exhibit but few cases opposed to rules generally approved.
The declarations, representations or admissions of an agent authorized to make a contract made as inducements to or while making the contract, are admissible as evidence against his principal.
They are also admissible as evidence against him, when made by his agent accompanying the performance of any act done for him.
They are not admissible and do not bind the principal, when not made as before stated, but at a subsequent time.
While it is generally stated in the decided cases, that the subsequent admissions of an agent, of what he had previously done, are not admissible as evidence against his prin cipal, there are cases, in which a conversation after the business appears to have been completed was held to be admissible. In the case of Mortimer v. McCallan, 6 Mee. & Wels. 58, Lord Abinger says, "As a general principle it is undoubtedly true, that conversations with an agent after the transaction, are not evidence against his principal; but the question is whether this be not part of the res gestee." After some further remarks he observes, " it is a conversation between an agent and principal after the transaction is concluded, but a conversation at the time he is dealing with him and a part of the res gestee."
In the case of the Bank of Monroe v. Field, 2 Hill, 445, the admissions of the president of the bank were received respecting the payment of a note, but they were made upon an examination of. its books and were therefore regarded as a part of the res gestee.
There are a few cases to be found in which the declarations of an agent made after the transaction had been completed appear to have been received as evidence against his principal; but they are at variance with the well established and generally received rule in England and in this country.
The principles upon which the declarations of an agent can be received as evidence against his principal were so correctly stated by that accomplished jurist, Sir Wm. Grant, in the case of Fairlie v. Hastings, 10 Ves. 123, as to command general approbation. In that opinion he said: " As a general proposition what one man says, not upon oath, cannot be evidence against another man."
" What the 'agent has said may be what constitutes the agreement of the principal; or the representations or statements may be the foundation of or the inducement to the agreement. Therefore, if writing is not necessary bylaw, evidence must be admitted to prove the agent did make that statement or representation. So in regard to acts done, the words with which those acts are accompanied frequently tend to determine their quality. The party therefore to be bound by the act must be affected by the words. But except in one or the. other of those ways I do not know how what is said by an agent can be evidence against his principal. The mere assertion of a fact cannot amount to proof of it; though it may have some relation to the business, in which the person making that assertion was employed as agent."
It is worthy of notice that these principles are not stated to be applicable to the declarations of special agents only but to all descriptions of agents. That they necessarily exclude the declarations of all agents not made at the time and not constituting a part of some transaction. And they appear to haye been uniformly so regarded. Langhorn v. Allnutt, 4 Taun. 511; Betham v. Benson, 1 Gow. 45; Garth v. Howard, 8 Bing. 451; Mortimer v. McCallan, 6 Mee. & Wels. 58.
The same principles are recognized and the same rules prevail in the Courts of the United States. United States v. Gooding, 12 Wheat. 469; American Fur Company v. United States, 2 Peters, 364; Barclay v. Howell, 6 Peters, 498; Westcott v. Bradford, 3 Wash. C. C. R. 500; Maury v. Tallmadge, 2 McLean, 157.
Mr. Justice Washington, stated the rule very concisely and clearly in the case of the American Fur Company v. The United States, "whatever an agent does or says in reference to the business in which he is at the time employed and within the scope of his authority is done and said by the principal."
The same principles and rules appear to have been received as the established law in many States of the Union. Woods v. Clark, 24 Pick. 35; Haynes v. Rutter, Id. 242; Stiles v. Western R. R. Corporation, 8 Metc. 44; Corben v. Adams, 6 Cush. 93; The Fairfield County Turnpike Corporation v. Thorp, 13 Conn. 173; Thallhimer v. Brinckerhoff, 4 Wend. 394; Rossiter v. Rossiter, 8 Wend. 494; The Bank of Monroe v. Field, 2 Hill, 445; Hannay v. Stewart, 6 Watts, 489; Stewartson v. Watts, 8 Watts, 392; City Bank of Baltimore v. Bateman, 7 Har. & John. 104; Franklin Bank v. Steam Navigation Co., 11 Gill. & John. 28; Strawbridge v. Spawn, 8 Ala. 820; Tomlinson v. Collett, 3 Blackf. 436; Waterman v. Peet, 11 Illinois, 648.
A different or more extended rule cannot be received in this State, without overruling decided cases. Haven v. Brown, 1 Greenl. 421; Gooch v. Bryant, 13 Maine, 386; Maine Bank v. Smith, 18 Maine, 99.
It is but a perversion of language to say, that a declaration made when no act is performed, and having reference only to a past transaction, is a part of the res gestee. To do this would be destructive of the rule, by abolishing all distinction between declarations made at the time, and constituting part of a transaction and those made subsequently and having no connexion with it.
With respect to the propriety of any attempt to extend or vary the rule, or to restrict it to special agents, the remarks of Tindall, C. J., made in the case of Garth v. Howard, are peculiarly appropriate. ' " It is dangerous, (he says,) to open the door to declarations of agents beyond what the cases have already done. The declaration itself is evidence against the principal not given upon oath; it is made in his absence when he has no opportunity to set it aside, if incorrectly made, by any observation or any question put to the agent; and it is brought before the court and jury frequently after a long interval of time. It is liable therefore to suspicion originally from carelessness or misapprehension in the original hearer; and again to further suspicion from the faithlessness of memory in the reporter and the facility with which he may give an untrue account. Evidence therefore of such a nature ought always to be kept within the strictest limits, to which the cases have confined it."
In the present case one of the sureties sent a messenger to the bank sometime after the note had become payable, to inquire whether it had been paid. Upon inquiry of the cashier then in the discharge of his duties in the bank, he received for answer that it had been. This was communi cated to one of the sureties who thereupon surrendered property of the principal in his hands, from which he might have obtained payment. This he was under no obligation to do without a production of the note or other satisfactory evidence of payment. The messenger does not appear to have communicated to the cashier that he was requested by any party to the note to make the inquiry, and the cashier might have concluded that it was an impertinent attempt to pry into the private concerns of a debtor. It does not appear that any inquiry was made whether the note had been delivered to the maker. It in fact remained uncanceled in the bank. Or that the cashier made any examination of the books of the bank or of its notes to ascertain whether payment had been made, or that he was requested to do so.
The declarations of the cashier made under such circumstances cannot be regarded as legally admissible evidence against the bank. Nor can the instructions to the jury respecting the effect of that testimony be regarded as correct.
Verdict set aside and new trial granted.
Tenney and Howard, J. J., concurred.
Rice and Appleton, J. J., dissented.