Franklin Bank v. Cooper

Tenney, J. — When this case went to the jury it was upon a bond given by the cashier of the bank, and the defendant’s testator as one of his sureties. Among other duties required of the cashier, in the condition of the bond, was, “ and shall account for all notes, drafts and moneys, drafts, notes and property, heretofore intrusted to his hands and possession as cashier of said bank, since he has held said office.” The defence to the action was, that the bond was obtained by fraud. That facts material to the risk were known to the president and directors of the bank, which were not known to the defendant’s testator, and which were not communicated to him, but were concealed from him. And evidence was introduced for the purpose of establishing these propositions. The jury were instructed, that if at the time the bond was given, the cashier was a defaulter, and that fact was unknown to the defendant’s testator, but was known to the president and directors of the bank, and they neglected to apprise him of that fact, they having a reasonable opportunity to do so, before he executed the bond, such a neglect would be a fraud upon the testator and would vitiate the so far as he was concerned.” These instructions are well supported by this case as reported in 36 Maine, 179, and no question is made thereon. But exceptions are taken to omissions to give certain instructions, requested by the plaintiffs, some of which are not relied upon; and also to the admission of certain testimony objected to by them. The requests, numbered six, seven and eight for instructions, were, that fraudulent concealment would be negatived, by the finding of certain other facts, stated in the requests. The fraud alleged, was of that character, which might be shown by facts and circumstances, no one of which was — 551 — suited to prove it without further evidence, but altogether might clearly satisfy the jury of its existence, when little of it was positive and directly bearing upon the issue. What influence the facts assumed in the requests might have upon the question of fraudulent concealment, was beyond the power of the Court to state to the jury, as a rule of law. It was properly submitted to the jury to determine what would constitute a reasonable opportunity for the president and directors of the bank to give the defendant’s testator 1 information of the cashier’s defaults. It would have been clearly erroneous in the Judge to have instructed the jury,! that there was no fraudulent concealment, because Cooper did not call on Otis for information, nor see him, after it was proposed by the cashier to obtain his signature, even if Otis had not avoided giving the information. If the president and directors had just ascertained with much labor and research, that the cashier was a defaulter, and Cooper was ignorant thereof, and they had reason to suppose, that ho was thus ignorant, no known principle of law, would confine the reasonable opportunity, to that which would be afforded by a call by Cooper for information, upon the president and directors, or to a meeting with them after the cashier had proposed to them to obtain him as a surety. Neither is it a settled principle of law, that the president and directors of the bank, would be relieved from the imputation of fraudulent concealment, after obtaining the knowledge, that the cashier was a defaulter, which knowledge they had, under such circumstances, that they had no reason to believe the defendant’s testator was possessed of merely by the omission to seek after and volunteer unsolicited explanations. One element in this species of fraud is, that the party charged therewith, has full knowledge of facts, which cause the transaction to be a departue from such, as are expected to occur in the usual course of business of that description, subjecting the other party, only to the ordinary risks attending it; and the latter is not supposed to be under even — 552 — a reasonable apprehension, of that, of which the other has this perfect information. Under the circumstances relied upon in defence of this action, if the president and directors were informed by the cashier, that he designed to obtain the name of Cooper upon this bond, and they received it afterwards from the cashier without seeing him, when he was near and could readily be found, the omission to give him the information, that the principal in the'bond was a defaulter, so important for him, cannot be treated as an honest transaction, when silence would be a fraudulent concealment, if he executed the bond in their presence. Such distinctions have no basis, and cannot be upheld. The third requested instruction was, that “ if the jury believe that John Otis, president of the bant, had no communication with said James Cooper, verbally or in writing, touching his signing said bond, before signing the same, there is no ground for any presumption that said Cooper was deceived or imposed upon by said Otis, in obtaining his signature.” . It is contended, that as to the first branch of this requested instruction, the jury should have been told that there could be no concealment, if the parties did not directly or indirectly come together; and it is said, there was not the slightest evidence that they ever did. It is well settled, that if an instruction cannot be given entire with legal propriety, no exception can be taken, because not given in a modified form. If no communication, either verbal or written, had taken place between Otis and Cooper, very important communications may have taken place between them in other inodes. And it seems to have been relied upon, that this negotiation between the president and directors and the defendant’s testator was through the cashier. At any rate, evidence is introduced, by which it appears that the president was charged with having had an agency in obtaining the signature of Cooper to the bond before its execution by Charles Cooper, and he is repre — 553 — sented as having made no reply to the charge. It was for the jury to judge of the effect of this evidence. This instruction was properly withheld. The ninth requested instruction was, that “ unless Cooper, when he executed the bond, was induced by the misconduct of the plaintiffs or their agent to suppose the bond was different from what it really was, he is not permitted to avoid his liability, by proof that he did not understand the import of the bond.” The jury were instructed, that if the defendant’s testator was a man of business, and well able to read the bond which he signed, the law presumed that he knew and understood all the provisions therein contained. And the defence was not that the testator was imposed upon, in signing a bond containing a provision that he knew not of, but as the case finds, that facts material to his risk, unknown to him, but known to the president and directors, were concealed from him. Again, there was no attempt made, at the trial, to show that Cooper was ignorant of the existence of the retrospective clause in the bond, when he signed it, as an independent fact, and no suggestion made, that such fact could be a defence, if proved. But every thing in the case upon this point is, that Charles Cooper charged the president, after the death of his father, with fraud and corruption; told him his father sent for the cashier, while he lay sick ; and that he heard the cashier tell his father, that he did not know the clause was in the bond when he signed it; that the cashier said, that the bond that was intended to be given, was accepted; that the president took it before it was signed; and that the next day he came down and handed him another bond, which he supposed was the same one which had been agreed to, and asked him to run over, and get his father and brother to sign it, and he would wait for Mm; that he told him of his father’s astonishment and surprise at the retrospective clause, and that it was the basest fraud. To this the witness stated, he recollected no reply — 554 — from Mr. Otis. In this evidence, tbe charge was, that there had been a gross fraud in obtaining the signature of the defendant’s testator; that charge, and the one, that the testator was ignorant of the retrospective clause, were inseparably connected; if one is to be inferred to be true, from the silence of the party addressed, equally so must the other. There is no foundation, therefore, for the instruction, in the evidence, if the defendant had relied upon the want of knowledge simply, that the retrospective clause was in the bond. The evidence of the interview between Charles Cooper and the officers of the bank, early in the spring of 1848, which was objected to, appertained to the business of the testator with the bank, and the conversation, which took place, might with propriety be regarded as acts, which were admissible, inasmuch as Charles Cooper went there for the purpose of settling his father’s account. A conversation is also represented by Charles Cooper as having taken place between him and the president of the bank, in the street in Hallowell, in a month or two after the death of the testator, which was on June 17, 1849. They had a talk about the bond and reference; called on Otis for a copy; told him he had found there was a retrospective clause, and that he was astonished at it; charged him with obtaining the bond by fraud; told him his father did not know there was such a clause in the bond when he signed it, and it was a fraud on him; asked him how he could reconcile it to his conscience to trap him into signing the bond. He said he did not think he had done his father wrong j he had been on the bond in previous years, and they had neglected to take bonds three or four years, and his father would, undoubtedly, have signed them if asked j he expressed some doubt about the validity of the bond; said father’s estate would never be troubled. This evidence was objected to, but admitted. At the time of this conversation, the Act of June 9, 1849, authorizing the choice of three trustees, to close up the — 555 — affairs of tbe bank, had not been accepted. The vote of acceptance was on Oct. 22, 1849, when Otis, Eaton and Yonng were chosen trustees. The declarations or admissions of a director of a bank, respecting its past transactions are inadmissible as testimony. Polleys v. Ocean Ins. Co., 2 Shepley, 141. Was the conversation between the president of the bank and Charles Cooper, in the summer of 1849, respecting past transactions ? Part of it was certainly of this character. It is true, the witness called for a copy of the bond, but the call being in the street, several miles from the bank, it is not to be understood, that it was made under the expectation of obtaining it at that time. No attempt was made to adjust the difficulty, but all had reference to what had been done before. The president spoke of having neglected to take bonds of the cashier before, and that the testator would have signed such, had they been presented. These admissions of Otis had a tendency to show a concealment of the fact, that the cashier was a defaulter, and we think they were inadmissible, from Otis as president. Whether Charles Cooper was a competent witness or not, on account of having been a surety on the defendant’s bond as executor and discharged by the Judge of Probate, without having given notice to those interested, is a question which it is not important to decide, inasmuch as upon another ground the case must be sent to another trial; and under the law as it now stands, a surety upon a bond is a competent witness for the principal therein without a discharge. Exceptions sustained.