VOL. IV.]

THIRD NATIONAL BANK OF BALTIMORE v. BOYD.

[No. 5.

the bank, which the jury shall find to amount to want of ordinary vigilance and care, the defendant is responsible therefor.

6. That the degree of care which the defendant was bound by law to take of the bonds of the plaintiff in its custody under the agreement set forth in the plaintiff's first prayer, is not to be determined by the care which the defendant may have seen fit to take of similar property of its own at the same time. And the fact that the defendant lost a large amount of its own moneys and securities at the same time, and in the same way, with the bonds of the plaintiff, is therefore not in itself sufficient to exempt the defendant from liability to the plaintiff in this action, unless the jury shall find that the care which the defendant took of its own property was reasonable care.

The defendant offered eleven prayers, of which all but the tenth were either granted by the court or conceded by the plaintiff's counsel. The tenth, which the court rejected, is contained in the opinion of this court. The defendant excepted. The verdict and judgment were for the plaintiff, and the defendant appealed.

The cause was argued before Bartol, C. J., Stewart, Bowie, and Alvey, JJ.

Henry Stockbridge & Thomas Donaldson, for the appellant. The memorandum of the 5th of February, 1866, could not be construed as a contract made by the bank, as neither the discount clerk, nor the president who dictated its terms, had any power to make such contract for the bank, and it does not appear that such contract was ever authorized by the board of directors or desired by them, or even known to them; and though such deposit, and subsequent deposits of the same nature, by the plaintiff, were known to the cashier, yet neither had he any authority to enter into such an undertaking for the corporation. Such powers are not vested in any of the officers named, and only the action of the board of directors, or the acquiescence of the board after knowledge of what had been done, could impose such a responsibility upon the bank. 13 Stat. at Large, 101; Rev. Stat. U. S. 998, 999; Morse on Banking, 128, 129, 133, 138; Wiley v. First National Bank of Brattleboro', 47 Vermont, 546; Foster v. Essex Bank, 17 Mass. 497; Lloyd v. West Branch Bank, 15 Pa. 172; Scott v. National Bank of Chester Valley, 72 Ib. 471; United States v. City Bank of Columbus, 21 How. 356.

National banks, under the terms of the act of Congress, have no power to receive special deposits, either gratuitously or for hire; and if they were responsible for the plaintiff's bonds, while they were held as collateral security for indebtedness, that responsibility ceased with the indebtedness, or certainly after the plaintiff had had a reasonable time to withdraw them; and no notice from the defendant, requiring such withdrawal, was necessary. Wiley v. First National Bank of Brattleboro', supra; First National Bank of Lyons v. Ocean National Bank, 60 N. Y. 278; Foster v. Essex Bank, 17 Mass. 497; 1 Sm. L. C. 338.

Even if the general principles laid down by the court below in regard to the responsibility of the defendant in this case are correct, yet there was error in granting the plaintiff's first prayer; because a few points in the evidence are selected, and the jury are instructed that they may take those points into consideration, in forming a judgment on the question of

Vol. IV.]

THIRD NATIONAL BANK OF BALTIMORE v. BOYD.

[No. 5.

whether there was exercise of the proper degree of care on the part of the defendant, in the custody of the plaintiff's special deposit. As there was a large body of evidence produced on both sides, bearing on this very question, and as all such evidence should have been fully considered by the jury, and due weight given to every part of it; and as the jury was the sole tribunal entitled to decide the relative importance of the various items of such evidence, - the terms of this instruction were not only misleading, but, in this respect, were a direct invasion by the court of the province of the jury. Hurtt v. Woodland, 24 Md. 417; B. & 0. R. R Co. v. Boteler, 38 Ib. 568.

The measure of damages fixed in the instruction is error, the true rule being the value of the property at the time when it was demanded. Maury & Osbourn v. Coyle, 34 Md. 235.

John H. Thomas & S. Teackle Wallis, contra. Corporations are, on general principles, vested with all incidental powers which are necessary for the purposes of their organization, and which are not prohibited by their charter. Plank Road Co. v. Young, 12 Md. 477-84; The Penn., Del. & Md. Nav. Co. v. Dandridge, 8 Gill & John. 318-19; Angell & Ames on Corporations, pages 218-232, ch. 8, secs. 2 and 12, ed. of 1846. Taking of special deposits is part of the ordinary business of banking. Marine Bank v. Fulton Bank, 2 Wall. 255, 256.

Power to make such contracts as that on which the appellant was sued in this case, was expressly conferred on national banks by the act of Congress under which the appellant was organized. Act of Congress 3d June, 1864; 13 Stat. at Large, Brightly's Supplement, page 58.

The 8th section of this act empowers them to "exercise under this act all such incidental powers as shall be necessary to carry on the business of banking, by discounting and negotiating promissory notes, drafts, bills of exchange, and other evidences of debt; by receiving deposits, by buying and selling exchange, coin, and bullion; by loaning money on personal security," &c. Personal security here, means the security of personal property. All of the other transactions previously mentioned are on the security of persons. These words were added for the purpose of making it clear that national banks were to have the right to take personal property as security, and by taking it, if accompanied, as in this case, with possession, to assume liability for its proper custody.

They are not prohibited from so taking it as security for either contemporaneous or future transactions. If the act had intended so to limit their power, it would have done so in express language, as it did in reference to mortgages on real property. See sec. 28.

A pledge may be given as well for a future and contingent debt, as for an existing one. Story on Bailments, sec. 300; Conard v. Atlantic Ins. Co. 1 Peters, 448.

A bank is responsible for negligence in the discharge of its undertaking to collect a draft without any special consideration for the assumption of that duty. If such an undertaking be a legitimate element of banking business, the taking of collaterals for its own security must be equally so, and equally within the power of national as well as state banks. Chicopee Bank v. Philadelphia Bank, 8 Wall. 641.

The contract was one which either party to it could terminate at pleas

Vol. IV.]

THIRD NATIONAL BANK OF BALTIMORE v. Boyd.

[No. 5

ure, subject to such rights as had already accrued under it. The appellant had as much right to deliver the collaterals as the appellee had to demand them. So long as neither of them exercised that right, they were held under the original contract. The appellant recognized the distinction between them and similar property held by it as a gratuitous bailee. It required all of its customers to remove boxes and valuables which they had left with it for their own accommodation and security merely, but retained the property in question, as collaterals, under the original agreement, and so held them at the time they were stolen. Either party to a tenancy at will may terminate it. But until it is terminated; both of them remain liable to all of its obligations. So did both parties to this contract, so long as they permitted it to remain in force, as it was when the collaterals were stolen. Under such circumstances, the liability of the appellant, to the full extent defined by the instructions of the court, seems clear. Erie Bank v. Smith, Randolph & Co. 3 Brewster, 9.

National banks are liable for the loss of property held by them, merely for the accommodation of their customers, without any consideration for the keeping of it, except the profit derived from their customers doing with them their banking business. But the conrt below did not consider it necessary to decide, and did not decide that point. It is not involved in this appeal. White v. Bank, 4 Brewster, 234; Pattison v. Syracuse Nat. Bank, 4 N. Y. S. Ct. Rep. 96; Skull v. Kensington Bank, Leg. Int. March 25, 1873; First Nat. Bank of Iowa v. The Ocean Bank, Court of Common Pleas of New York, 23d March, 1873; Smith v. First Nat. Bank in Westfield, 99 Mass. 605-11; Scott v. National Bank of Chester Valley, 72 Penn. 471.

The particular circumstances which the jury were told by the plaintiff's first prayer they might, not must, consider, were all proper for their consideration. That prayer is not liable to the objection that it gave to these circumstances undue prominence. Where a question of negligence or of care is one of mixed law and fact, there is no other way in which a jury can be properly instructed on what their verdict ought to depend than by directing their attention to the particular facts into which they should inquire. B. & 0. R. R. Co. v. Schumacher, 29 Md. 168, 174-5; Maury & Osbourn v. Coyle, 34 Ib. 237; Erie Bank v. Smith, Randolph & Co. 3 Brewster, 9; Story on Bailments, secs. 11, 12, 15, 17, 136, 332; B. & 0. R. R. Co. v. Worthington, 21 Md. 275, 282-4; Cumb. & Penn. R. R. Co. v. State, 37 Ib. 126; Cumb. v. Camden & Amboy R. R. Co. 2 Daly, 454; Ewalt & Myers v. Harding & Hopkins, 16 Md. 170.

The right of a party in any case to segregate facts, and to ask proper instructions in reference to them is well established. Williams v. Woods, Bridges & Co. 16 Md. 220; Birney v. N. Y. & Wash. Telegraph Co. 13 Ib. 341; Parkhurst v. N. Central R. R. Co. 19 Md. 472. See also 17 Wall. 382, 383.

Even if the degree of care ought to have been defined in such legal language, the court did so define it, at the instance of the appellant, and did instruct the jury that the plaintiff was not entitled to recover if the defendant had used ordinary care.

66

The plaintiff's first prayer properly rested his right to recover on the failure on the part of the defendant to exercise such care and diligence in

Vol. IV.]

THIRD NATIONAL BANK OF BALTIMORE v. BOYD.

[No. 5.

the custody or keeping of them (the collaterals), as, at the time they were stolen, banks of common prudence, in like situation and business, usually bestow in the custody or keeping of similar property belonging to themselves;" and his seventh instructed the jury, that it was their province to determine, from all the facts and circumstances of the case, whether that amount of care had been used or not. B. & O. R. R. Co. v. Fitzpatrick, 35 Md. 22, 44.

It was no defence to the appellant that it had lost its own property, if it had not taken of it the necessary amount of care, and therefore the plaintiff's sixth prayer, in connection with the defendant's ninth prayer, was properly granted. Doorman v. Jenkins, 2 Ad. & El. 258 (29 E. C. L. 82); Tracy v. Wood, 3 Mason, 132; 2 Smith's Leading Cases, 340; Story on Bailments, secs. 64-7; Erie Bank v. Smith, Randolph & Co. 3 Brewster, 9.

In this case there are two counts in trover and two in case: one for violation of the duty imposed by law to deliver the bonds when demanded, if no indebtedness existed, for which they had been pledged; the other of the duty to keep them with such care that they should not be lost through the default of the defendant. The evidence was that the bonds had been stolen in the interval between Saturday afternoon, the 17th, and Monday morning, the 19th of August, 1872. The conversion, if the counts in trover were relied on, consisted not in the refusal to deliver them after they had been stolen, for then it was impossible—but in permitting them to be stolen.

If the counts in case were relied on, the obligation to keep the bonds so that they should not be lost by the fault of the defendant was broken by permitting them to be lost or stolen. The time of the loss of the bonds, under either count, was that at which the wrong to the plaintiff was done, and that at which the value of the property should be estimated. After the conversion was committed, or the liability in case had accrued, no demand to perfect the plaintiff's right was necessary, and his delay in making a demand which could not be complied with did not have the effect of postponing the period at which the value of the property should be taken as a standard of damages. Baltimore Marine Ins. Co. v. Dalrymple, 25 Md. 304-5; Williams v. Woods, Bridges & Co. 16 Ib. 220; Dietus v. Fuss, 8 Md. 157-160.

In actions on contracts, one is liable for the breach from the time he renders himself incapable of performing it, or refuses to perform it, or otherwise violates it. Sedgwick on Damages, 6th edit. page 419, note 2 [352]; Williams v. Woods, Bridges & Co. 16 Md. 220, 259; Dugan v. Anderson, 36 Ib. 581, &c.; 1 Robinson's Practice, 453.

Neither plaintiff nor defendant can claim, after either of these occurrences, that any locus penitentiæ remains which postpones the period at which the damages are to be estimated; nor can it be postponed by any subsequent demand for the performance of it made by the plaintiff, after the contract had been disaffirmed or violated by the defendant, or the performance of it had become impossible. Williams v. Woods, Bridges & Co. 16 Md. 220, 259; Baltimore Marine Ins. Co. v. Dalrymple, 25 Ib. 304-5.

Vol. IV.]

THIRD NATIONAL BANK OF BALTIMORE v. Boyd.

[No. 5

BARTOL, C. J., delivered the opinion of the court. This suit was brought by the appellee, to recover the value of certain coupon bonds and stocks, that passed like bank notes, by delivery; which had been deposited by the plaintiff with the defendant, and which had been stolen from the defendant, in consequence of its alleged failure to exercise ordinary care in the custody of them.

The case is one that, from its nature, depended at the trial below mainly on the questions of fact arising upon the evidence, with regard to the manner in which the bonds were lost, and the vigilance and care exercised by the bank in their custody. These were questions exclusively for the jury, whose province it was to decide whether there was any want, or omission of ordinary care and diligence on the part of the bank, from which the loss of the plaintiff's property resulted. These questions were submitted to the jury by the circuit court, were decided by them against the bank, and we have no authority or power to review their verdict.

All the prayers asked by the defendant, being either conceded by the plaintiff's counsel or granted by the circuit court except the tenth; the only matters presented for our consideration on this appeal arise upon the defendant's tenth prayer, which was refused; and the first, fourth, fifth, sixth, and seventh prayers of the plaintiff, which were granted.

It appears by the evidence that the appellant was a bank organized under the National Currency Act of 1864." The firm of William A. Boyd & Co., of which the appellee was senior member, was a large customer of the bank, through which all the banking business of the firm was transacted, and from which it received accommodations as needed. On the 5th day of February, 1866, the firm was indebted to the bank about $5,000, when the appellee voluntarily proposed to the president of the bank, to deposit with the bank a large amount of bonds, about $37,000, as collateral security for his present and future indebtedness. The terms of the deposit, as agreed on between Mr. Boyd and the president, were dictated by the latter to the discount clerk and were as follows:

"THIRD NATIONAL BANK, February 5th, 1866.

"William A. Boyd has deposited with the Third National Bank of Baltimore $20,000 in United States 5-20 bonds, and $1,500 5-20, July, 1865; $5,000 Hudson County, New Jersey; $5,000 Town of Saratoga, New York, 7 per cent. bonds; $5,000 Stock of Third National Bank of Baltimore, as collateral security for the payment of all obligations of Wm. A. Boyd and Wm. A. Boyd & Co. to the Third National Bank of Baltimore, at present existing, or that may be incurred hereafter, with the understanding that the right to sell the above collaterals, in satisfaction of such obligations, is hereby vested in the officers of the Third National Bank. [Signed] A. H. BARNITZ, Discount Clerk."

This paper was kept by the cashier of the bank in the same envelope with the bonds, afterwards memoranda were inclosed therein, signed by the appellee's attorney and by the cashier, showing that certain of the bonds originally deposited had been withdrawn, and others deposited to replace them.