CHAPTER XI.

EVIDENCE.

Competency of Bank Officials on Bank's behalf.

IT may now be laid down, in general terms, that the officer or agent of the bank is a competent witness in its behalf, even concerning a transaction which he himself conducted or in which he was interested or engaged. In such cases it must frequently happen that the officer or agent will be personally and closely interested in the determination of the litigation. For if the bank should fail of success by reason of any inaccuracy, irregularity, or wrongfulness in his proceedings, it must be anticipated as a natural result that he will himself be sued by the bank, either upon his official bond or his common-law liability, and held to answer for the consequences of his default, besides suffering all the collateral mischief of a loss of his position and reputation. The latter fact of course could not operate to render him incompetent, but must be confined to affecting his credibility. The former fact however goes directly to the question of his competency. It is not to be supposed that the extension of the general rule to cover these cases has been allowed to take place without opposition. But the several decisions have been uniformly in favor of the admission of the testimony, so that the matter must at last be regarded as definitively settled according to the above doctrine.

The simplest class of cases, those in which the objectors to the competency certainly had but very little ground to stand upon, were those wherein the officer or agent had been formally and sufficiently released by the bank from all manner of claim

which it might have against him, even if he should appear to have been in default. No difficulty seems to have been experienced in disposing of these in favor of the admissibility.1 The next step in advance was taken in the cases in which some possible question might arise as to the liability of the officer or agent to the bank, by reason of something which it might appear or might be claimed that he had done. But admitting a possibility that he might be held by the bank, yet this was by no means equivalent to the established fact that he certainly could be so held. It was an assumption, which might so obviously prove erroneous, that the court could not be expected to make it. The contingent impropriety of receiving the testimony could not be allowed to have equal effect with a positive impropriety. So again in these cases the narrow question of intrinsic competency was evaded, and the evidence was admitted as it were through a side door.2 But it was not of course always possible, however much the courts might have wished it to be so, thus satisfactorily to flank the main position of the objectors. Sooner or later the question of the intrinsic competency of such persons as witnesses must arise and must be decided fairly upon its own merits; and it having finally arisen in various States, the courts of each, thus far without an exception, have decided to admit the testimony offered. The Supreme Court of the United States and the text-books on evidence have adopted the same rule. The obvious necessity of the case has conquered all lesser objections. It must be that an officer should be allowed under oath to state what he had done; since otherwise the bank was so

1 Farmers' & Mechanics' Bank v. Champlain Transportation Co., 18 Vt. 131; 23 id. 186; Johnson v. Farmers' Bank, 1 Harring. 117.

2 Franklin Bank v. Freeman, 16 Pick. 535; Union Bank v. Knapp, 3 id. 96. 3 United States Bank v. Stearns, 15 Wend. 314; Farmers' & Mechanics' Bank v. Champlain Transportation Co., 18 Vt. 131; Huntress v. Patten, 20 Me. 28; Jackson v. Bank of the United States, 10 Penn. St. 61; 2 Starkie on Evid. 753, 767 and 768, n. 2; 1 Greenleaf on Evid. 416, 417; Cookendorfer v. Preston, 4 How. (U. S.) 317; Franklin Bank v. Freeman, 16 Pick. 535. See also Wiggin v. Freewill Baptist Church, 8 Met. (Mass.) 301.

utterly tongue-tied that it must fall an inevitable sacrifice to the most unworthy plaintiff, and furnished an obvious temptation to dishonest suits. The same necessity had admitted the testimony of a porter to the fact of his having delivered goods for his employer; and had allowed factors and brokers, even when receiving a percentage for commission, to testify in behalf of their principals.

Shareholders as Witnesses.

A shareholder in the bank, by assigning away his stock, may render himself a competent witness in its behalf. Neither is it too late for him to make the assignment after the suit has been begun. If a statute of the State in which the bank is incorporated declares stockholders to be liable to the holders of notes of the bank in case of the insolvency of the corporation, the contingent liability under this law of one who has at any time previous been a stockholder will not impair his competency as a witness. His interest in the affairs and prosperity of the bank is too remote to be permitted to have this effect, at least unless there is some evidence of inability on the part of the bank to meet its liabilities.2

Customs and Usages.

The customs and usages of a bank in the regulation and conduct of its business and daily affairs may be given in evidence for the purpose of corroborating testimony already given, when, if offered independently, they would be inadmissible. Thus where the plaintiff's assertion that a deposit of a certain amount had been made by him on a certain day had been directly contradicted by the officer of the bank, who testified positively that no such deposit had been made or was entered on the books, it was held that the officer might go on to state what

1 Meighen v. Bank, 25 Penn. St. 288.

2 Ibid.; citing also Willing v. Consequa, 1 Pet. 301; Curcier v. Pennock, 14 Serg. & R. 51; Irwin v. Lumberman's Bank, 2 Watts & S. 190.

was the usual course of business in the bank and pursued by himself, from which the unavoidable inference must be that no such deposit could have been made without his knowledge or without his having entered it on the books. Had the effort been to supplement the mere fact of the non-entry by the evidence of the usage as an independent additional fact, the question raised upon the admissibility would have been different and would doubtless have been decided differently. But the officer had positively alleged the non-receipt of the deposit, and he only corroborated this assertion by giving his reasons and means of knowledge.1

Of course if the fact of the usage itself, or of conformity to the usage in the particular case, is the matter which is itself under discussion, testimony descriptive of the usage is strictly admissible. So it has been held that where the sufficiency of demand and notice is in question, the notary public who performed these duties may state what his usual practice is; for he may state what he did in this especial case, and may then state that it conformed to his usual practice. Nay, he may even go farther and state that he believes it to be in conformity also with the usual practice of other notaries in the same city.2

Explanation of Mistakes.

Any mistake, accidentally made by an officer, in a transaction on behalf of the bank, may be explained by his own evidence of the circumstances.8

Declarations of an Officer or Agent.

Declarations and admissions of the officer or agent of a bank bind the bank only when they are made by him officially with the intent of binding the bank, and either within the scope of his general official employment, or by virtue of a special 1 Meighen v. Bank, 25 Penn. St. 288.

2 Cookendorfer v. Preston, 4 How. (U. S.) 317.

3 Bank of South Carolina v. Rose, 1 Strobh. Eq. 257.

authority lodged in him by the directors. Otherwise, like the remarks of any third person, they are utterly incompetent.1 The declarations of directors, even, more than those of other officers, are impotent to bind the bank; for the reason that no individual director, as such, has any power whatsoever in reference to the affairs of the bank. Consequently it is difficult, or impossible, for him to commit it to any thing, even to knowledge. Only when and as he is acting in conjunction with his co-directors, is he intrusted with what may be described as an undivided share in the general administration of its affairs. But to him individually, at least in his capacity strictly of director, no department of those affairs is allotted, and his sole admission or declaration in any department is therefore in excess of both his duty and his authority, and is null and meaningless in law.2

As a general rule statements made by a bank officer concerning any past transaction, though the matter to which they refer is one which falls within the scope of his employment, will not be regarded as binding upon the bank. They are considered to be given simply as a matter of favor to the inquirer. The officer owes no duty to the bank to answer interrogatories which relate only to a completed transaction. He is not employed for that purpose, or held out by the bank as intrusted to fulfil such a function. The interrogator simply requests a favor from the officer personally, which if granted can create no liability as against the bank. But an exception will arise to this rule where the officer of the bank knows that his answer to the inquiry is to form the ground of future action on the part of the inquirer, so that accurate information is not

1 Stewart v. Huntingdon Bank, 11 Serg. & R. 267.

2 Hartford Bank v. Hart, 3 Day, 491; Pemigewassett Bank v. Rogers, 18 N. H. 255; Loomis v. Eagle Bank, Disney, 285. See also Soper v. Buffalo and Rochester R.R. Co., 19 Barb. 310.

3 Pemigewassett Bank v. Rogers, 18 N. H. 255; Franklin Bank v. Steward, 37 Me. 519; Lime Rock Bank v. Hewett, 52 Me. 531; Franklin Bank v. Cooper, 39 id. 542; Sterling v. Marietta and Susquehanna Trading Co., 11 Serg. & R. 179.