Continental National Bank v. First National Bank

108 Tenn. 374 | Tenn. | 1902

Wilkes, J.

The bill in this case seeks to hold the First National Bank of Nashville liable to the Continental National Bank of Memphis for about $30,000.

The ground of liability as claimed is, that the Nashville Bank in its own interest, and for its own benefit, falsely and fraudulently represented to the Memphis Bank that certain parties on paper’ presented to it for discount were good and solvent, when, as a matter of fact, they were insolvent, and the Memphis Bank, in consequence, lost the greater part of the money loaned.

The Nashville Bank denied all allegations that tended to show liability on its part. A jury was demanded for the trial of issues of fact by the complainant, Memphis Bank, and a large number were presented. They were finally narrowed down to six on the part of the complainant, and two on the part of defendant.

The jury returned a finding upon most of the issues, but reported that as to the first issue, upon which the other four submitted by complainant were based, they could not ’ agree.

The six issues presented by complainant were interdependent — that is, all of them were dependent upon the first, and to some extent on each other.

The first issue was, in substance, did the Nashville Bank represent that the parties inquired about, Duncan, G-aines & Morrow, were solvent, and that a loan to them was desirable.

. The second was, did the Memphis Bank make the loan upon the faith of these representations; the third, were they false; the fourth, did the Nashville Bank know they were false when made; fifth, was the Nashville Bank interested in the loan procured; and sixth, did it receive the proceeds or any part of the loan for its own benefit ?

The jury having been unable to find that the Nashville Bank ever represented the solvency of the parties, the other issues dependent on it failed with it.

Taken together, these issues did not present the case made out by the bill of fraudulent concealment and procurement of the loan, and the Judge so stated, and added that if they were all found for complainant, he would not give a decree upon them in complainant’s favor; but he said that the two issues submitted by the defendant were decisive of the case. He, however, permitted all of the issues to go to the jury. The trial Judge ought to have excluded such as he deemed immaterial, but this is not an error of which complainant can complain.

The first issue submitted by the defendant was, whether the Nashville Bank procured a broker in Nashville to negotiate the loan for its benefit; and the second was, did the Nashville bank make false and fraudulent representations to the Memphis Bank in order to effect this loan for its own benefit.

These two issues presented all the features necessary for a decision of the case upon its merits and covered the charges in the bill, and were determinative of the questions involved. The jury answered both in the negative, and under the facts thus developed there could not be liability on the part of the Nashville Bank. •

We need not go into the details of the exceptions made as to the findings of the jury on complainant’s issues, as all of them might have been disregarded by the Court below, and judgment rendered alone upon the issues as presented by defendant, and the Court no doubt did base its judgment upon the latter, disregarding complainant’s issues.

It is said that the Court below erred in excluding an opinion claimed to have been expressed by Dr. Morrow, and his apparent contradiction by Mr. Watts. The statement of Dr. Morrow was first called for by defendant’s counsel. He, however, abandoned and withdrew it, and it was then reintroduced by the complainant’s counsel. We need not go into the details of this matter. The opinion and statement of Dr. Morrow was, in the first instance, incompetent, and should not have been introduced. It was merely his opinion that the present suit was a blackmailing scheme. It was properly withdrawn by defendant’s counsel. Tt was improperly reintroduced by complainant’s counsel. Its contradiction by Mr. Watts, if it is a contradiction, was unimportant, and as to a collateral and immaterial matter, which complainant’s counsel had himself improperly placed in the record.

It is said the Court below erred in allowing evidence of the good character of W. M. Duncan, as to his business character and standing for honor and integrity. The Court of Chancery Appeals finds there was no error in this, since the business honor and ■ integrity of Mr. Duncan was involved and assaulted in the bill.

The objection was a general one, without specifying specific grounds, and for' this reason should not have been sustained.

But we think the rule in Tennessee is that in cases where a party is charged with a great moral wrong, he may introduce evidence of good character and invoke the presumption of innocence. Rogers v. Stokes, 3 Pickle, 298; McBee v. Bowman, 5 Pickle, 140; Spears v. Ins. Co., 1 Bax., 370; Henry v. Brown, 2 Heis., 213; Scott v. Fletcher, 1 Tenn., 488.

It is true Duncan, having died, was not a party, but he was charged along with the other parties as a co-conspirator to obtain the loan. We see no reversible error in this.

Complainant took the deposition of John P. Williams, but declined to read it.

The defendant thereupon read it, and was then permitted, over complainant’s objection, to orally examine Mr. Williams as to matters not brought out in the deposition.

We think this was a matter to a large extent in the discretion of the trial Judge, and the oral examination of the witness could be allowed in order to arrive at the true facts in the case.

It is said it was error to introduce the books of the bank in evidence. They were produced and identified by the Cashier. It is said the defendants should have gone further and shown by the party who made the entries that they were correct.

The books were introduced to show the state of accounts between the Nashville Bank and Duncan, Gaines & Morrow, the object being to show by the course of dealing between the bank and these parties that the bank was treating and dealing with them as solvent, reliable customers.

It has been held that where it becomes material, either for or against a corporation, and as against a stranger, or as between two strangers, to prove what was done by the corporation; its books and ,records are admissible in evidence, and they are the best evidence. 6 Thomp. Corporations, Sec. 1134.

We think it not necessary that the book-keeper who made the entries should be examined as to their correctness.

At most, be could only testify that the entries made by him are true entries of transactions reported to him by others. In other words, be could only testify that he wrote down what others told him. The Court knows, as a matter o± common information, that there are many persons in the employ of banks, and each has his different department, and each. transaction passes through the hands of several — it may be of many persons. We take a deposit, for instance. It goes into the hands of the receiving teller, thence into the hands of a journal clerk, thence to the individual book-keeper, or such other officials as perform the functions of these officers. When it reaches the hands of the book-keeper, who makes the final entry, which stands as the true statement between the bank and. depositor, it has gone through the • hands of a dozen parties, perhaps, and the last party only records what comes to him through so many hands, and knows nothing, it may be, of the actual transaction. It would seem that the Cashier, whose function it is to overlook all transactions at the counter, and over the books, and test each transaction through all its stages, should be the person most competent to produce the books and vouch for their accuracy.

We do not think there is any reversible error in this assignment. But, however this may be, we do not consider the matter as reversible, if it is error. The books were only introduced to show the state of accounts between the bank and Duncan, Morrow & Gaines, and this was only material on the question of their standing with the bank, and was collateral to the real issue, which was whether the bank made false and fraudulent representations of the condition of the parties. Their account with the bank was only a circumstance bearing on their standing with it, and the confidence of the bank in them was shown by other proof.

Looking at the case as a whole, it is evident that before complainant can recover, it must show that it was fraudulently misled by the defendant to make the loan it did.

Not only did the jury find that this main contention was not sustained by the evidence, but' it found to the contrary, and the Court of Chancery Appeals reports that such finding is abundantly sustained by the record. That Court reports that the record wholly fails to show that the Nashville Bank had anything to do with the broker who was shown to have procured the loan. The testimony of Mr. Moore, the broker,_ is taken, and he is not attacked or contradicted.' lie states that he negotiated the loan and that the bank had nothing whatever to do with it, and that, he did not know that the bank was interested in any way in the loan. On the contrary, he states that he procured the parties to borrow the money on the solicitation of Mr. Neely, the President of the complainant bank, and that Mr. Neely was not only very anxious to get the paper, but that he made no inquiry whatever as to the standing of the parties, but assumed to be entirely familiar with all of them.

Moore was the broker of Mr. Neely in Nashville, and bis warm, personal friend of forty years standing. lie bad made various loans of large stuns for Mr. Neely, and Neely inquired specially of Moore whether be could' not obtain some of Dr. Morrow’s paper, and, after inquiry, found that be could with Duncan & Gaines, indorsers, and be thereupon authorized the loan. .

Upon the whole case we think the complainants have wholly failed to make out a case of fraud upon the part of the Nashville Bank, and to establish any ground of liability against it, and the decree of the Court of Chancery Appeals is affirmed.