Fitchette v. Cape Charles Bank, Inc.

132 S.E. 688, 146 Va. 715, 1926 Va. LEXIS 359

• Court: Court of Appeals of Virginia
• Decided: April 22, 1926
• Status: Published

Opinions

Holt, J.,

delivered the opinion of the court.

On May 4, 1921, the Eastern Shore Motor Company, Incorporated, by N. Sternberg, treasurer, executed its note for $9,640.00, payable to Cape Charles Bank, Incorporated, due at sixty days. This note was endorsed by G. L. Fitchette.

On April 4, 1921, N. Sternberg executed his note for $2,500.00, payable to Cape Charles Bank, Incorporated, due ninety days after date. Endorsed on the back thereof is “G. L. Fitchette.”

Both of these notes were originally made by Stern-berg. After the Eastern Shore Motor Company was incorporated the 19,640.00 note was renewed in its name. Sternberg used the proceeds of both of them, and both of them, as they appear in this record, are renewals of preceding obligations and each on its face authorized confession of judgment. Each fell due on. July 5, 1921, and was on that date protested for nonpayment. Notice of protest properly addressed was at once mailed to the endorsers. Judgments on both of them were confessed on July 6, 1921, and executions issued on that day. The large note was paid by Fitchette on the 1st day of May, 1922. The $2,500.00 note has not been paid at all.

At the second September rules, 1922, this, suit was instituted. In the bill it is charged that Fitchette’s name on the $2,500.00 note was a forgery and its prayer is that the judgment be set aside. Depositions were taken and on September 18, 1924, the chancellor of his own motion directed an issue out of chancery. The issue being: “Whether or not the signature of G. L. Fitchette as endorser on the note of N. Sternberg dated April 4, 1921........................is the genuine signature of the said Granville L. Fitchette.” A jury was im-' panelled and on September the 19th, following, this verdict was returned: “Upon the issue submitted to us by the within order, we, the jury, find that the endorsement on the note therein mentioned is not the signature of Garnville L. Fitchette.” In the issue as framed the name is Granville L. Fitchette and in the verdict returned this name appears as Garnville L. Fitchette. No note has been taken of this variance and it will be dealt with as immaterial. Immediately upon the receipt of this verdict the Cape Charles Bank moved that it be set aside as contrary to the law and evidence and as being without evidence to support it. This motion was sustained and by final decree the suit was dismissed, the court being of opinion that it was clear from the evidence that G. L. Fitchette not only signed this note, but afterwards ratified his signature. At the jury trial, by agreement, depositions theretofore taken were read and evidence ore tenus heard.

Fitchette in his deposition denied that he had ever endorsed this note or had ever ratified any endorsement appearing thereon. He also stated that within about a day after he learned of the judgment he placed the matter in the hands of his attorney, Mr. Mears, with directions to take steps “to knock out the judgment.” Mr. Mears’ evidence is to the effect that Fitchette claimed that he had never signed this $2,500.00 note and that he desired him to take such steps as might be necessary “to knock it out,” but he also said that he did not know anything about the judgment until two or three weeks after it was entered. A number of witnesses testified as to this signature and to the effect that upon examination of it they were of.opinion that it was not Fichette’s signature. Among them was one, C. S. Malone, who appears to be an expert of considerable experience. In addition, he introduced several witnesses who gravely impeached Sternberg’s reputation for truthfulness. The sheriff into whose hands, executions on these judgments went said that he was. accustomed to go to Mr. Mears for advice, that he did so in this case and was advised to levy on “what stuff he could find belonging to the Eastern Shore Motor Company.”

For the bank it appears that Sternberg at one time had great influence over Fitchette who seemed to be willing to do what he advised. Sternberg stated that Fitchette’s endorsement was written in his presence and detailed at length the circumstances under which it was done. Mr. Clayton P. King is cashier of the Farmer’s and Merchant’s Trust Bank, into which the Cape Charles Bank has been merged, and was cashier of the latter bank when this note was discounted. He said that it was first a collateral note, but that Sternberg afterwards asked that he be permitted to substitute Fitchette’s endorsement for the collateral. This was done and the collateral withdrawn. His bank held both of these notes and they were the only notes so held in which either the motor company, Sternberg or Fitchette was interested. When asked if he had ever seen Fitchette endorse them, he replied: “I am not absolutely certain. I know he endorsed one of them and the chances are both.” The original $2,500.00 note, which was at that time a collateral note, was first handed to the bank by Fitchette. He never came to the bank after notice of protest and made no direct claim to it that his name was forged.

Mr. Topping, counsel for. the bank, testified in part as follows:

“In the spring of 1921, if my recollection serves me correctly, some time after the potato planting season, Mr. Fitchette came to my office in Cape Charles and, while I am not attempting to repeat his conversation verbatim, the substance of it was that he had heard some reports or rumors to the effect that the Eastern Shore Motor Company was not making the progress that it should, and that he had endorsed two notes for Mr. — or Mr. Sternberg had gotten him to endorse two notes for Eastern Shore Motor Company, which were in the Cape Charles Bank and he was very much perturbed about it, in view of this report he had heard. I believe I remember he said he had not even consulted his wife or informed her of his endorsements on those notes, and that he. had been so much disturbed over it that he had not been able to sleep and he said he came to me to find out whether or not these reports about the Eastern Shore Motor Company were true. I told him that I had not heard these reports and I had no personal familiarity with the affairs of the company, but that I had thought it was getting along all right. That I thought so much so that I put some of my money in it, a little of it. And in the course of the same conversation he told me that he had loaned Mr. Stern-berg some money, something over $100.00, quite sometime previous to this conversation, and that he was in need of money to buy some mules with and that he wanted Mr. Sternberg to pay him this money. I don’t know why he told me this, but I remember I told him that I thought Mr. Sternberg would pay him if'he would go to see him. When he left me he said he felt very much better about the situation and told me he was going to see Mr. Sternberg about the payment of this hundred and some dollars he owed him for a loan. I think he told me that he had no evidence of the loan to Mr. Sternberg.”

Sternberg has testified that after Fitchette knew about these judgments he took from him two notes, one for $2,500.00 and one for $1,000.00, to secure him from all loss by reason of this endorsement, that these two notes were delivered by him to Mr. Floyd, Fitchette’s father-in-law, and are still held by Fitchette.

, "On October 21, 1921, three and one-half months after this judgment was obtained, Mrs. Fitchette wrote to Mrs. Sternberg the following letter:

“Bridgetown, Va., Oct. 21, 1921.

“My dear Mrs.-Sternberg:

“Have been intending to write to you for a long time. Mama and. I 'fully intended to go to see you the day we-were over there but we found we didn’t have the time after the crowd decided to come back on the first boat. I want you and your dear mother to come over this, week or next and spend a week with me. I may go-back with you if it will be convenient. At last I feel, like I have gotten straight down here. Have stayed home and worked hard to get things fixed like I wanted them. Am feeling fine and really feel like house keeping-once again. Have felt good since the latter part of the-summer. I think the first time for nearly three years. Am so fat you wouldn’t know me, but it is good I. reckon. Hope so any how, for Flora nearly killed me,, so I think I should have a long rest. Haven’t gotten water put in yet but hope to next year if we make any money. The house has been painted white with green roof and green blinds. • The work was started before-I carried Flora to the hospital and in fact before potatoes were reaped or I don’t suppose it would have-gotten done. I was so disappointed when I found Mr. Sternberg didn’t-come back with Granville yesterday. That makes the third time I have fried chicken for him,, also had some real large oysters especially for him. As nice as we have always been to him I do think he might, have come. Tell him I feel really hurt over it for I cannot understand why he didn’t come. How are the children? You can give Josephine to me. Flora is a. lady now- and has gotten some flesh and is real tall.. Write and let me know if you and Mrs. Frankfurt can. come. With love for all.

“As ever,

“INDIA.”

It will be observed that the issue submitted to the-jury was a narrow one. Is the signature in issue “the-genuine signature of Garnville L. Fitchette?” The jury in reply said that it “is not the genuine signature of Granville L. Fitchette.” Evidence dealing with ratification was taken and the jury was instructed as to it, but as a matter of fact its finding was responsive to issue submitted and did not go beyond it. In other words, the jury has made no finding as to ratification.

Reviewing briefly the facts stated, we see that Stern-berg had great influence over Fitchette. Sternberg was the active man in the organization of the motor-company with no means of his own. Fitchette was putting up the money. The first time this 12,500.00 note was ever heard of it was given to the bank not by Sternberg, but by Fitchette. The proceeds of both notes went the same way — to Sternberg. When this $2,500.00 note was protested Fitchette as endorser was notified on the day of protest. His evidence is that he came to see Mr. Mears within a day after he had notice of judgment. Mr. Mears’ evidence is that it was two or three weeks after that date before Fitchette spoke to him about it. It is not reasonable to believe that a man circumstanced as Fitchette was and who had received notice of such liability would wait two or three weeks before consulting counsel. When we look at Mr. Topping’s evidence we find that before judgment was confessed Fitchette said to him that he had endorsed two notes for Sternberg, or Sternberg had gotten him to endorse two notes for the Eastern Shore Motor Company, which were in the Cape Charles Bank. The bank has never held any notes except those which have been described. In the beginning the difference between Sternberg and the motor company was of little importance to Fitchette. Indeed, the large note when first executed was executed by Sternberg and not by the motor company, just as the $2,500.00 note was. There can be no real doubt about the fact that these' are the notes that Fitchette had in mind when he went, to see Mr. Topping. - .

Moreover, we have the testimony of Sternberg to the effect that he gave to Floyd, the father-in-law of Fitchette, after the judgment, notes whose face value-was $3,500.00, to secure him against loss by reason of his endorsement and the judgment following. 'It is true that Sternberg’s reputation for truthfulness has-been gravely impeached, but at the trial with this evidence in the record neither Floyd nor Fitchette, who. were both present, went upon the stand nor undertook to deny this statement, and finally, we have the letter of Mrs. Fitchette written three and one-half months-after judgment. • •

After all, the reasoned judgment of men’ stands upon the doctrine of probabilities. We believe those things, that commend themselves to us as inherently probable and we accept, or should accept, with reservations any other conclusion. It is not easy to believe that the cordial relations evidenced by this letter would have-been maintained between these families had Sternberg, perpetrated the gross wrong which Fitchette now charges.

To what degree is a chancellor bound by the verdict-of the jury on an issue directed by him? The rule is-thus stated in Reed v. Axtell, 84 Va. 231, 4 S. E. 587.

“This brings us to the consideration of the- last-principal assignment of error, which is that the circuit court erred in setting aside the verdict of the jury, or rather in disregarding it and in dismissing the petition. And here it may be well to remark, before commenting; upon the evidence which is made part of the record, that a verdict rendered upon the trial of an issue out of chancery stands upon a very different footing from a. verdict rendered upon an issue devistavit vel non, orinan action at common law — the reason being that in the former case the issue is a mere incident of the proceedings, intended to satisfy the conscience of the chancellor, who may, therefore, approve the verdict or disregard it altogether, according to what, in his judgment, the law and the evidence in the particular case require. This is a familiar principle repeatedly recognized by this court. ’ ’

Complainant replies that conceding for the sake of argument the rule thus stated to be the correct one, it applies only when the issue passed on by the jury is a mere incident in the proceedings; citing Fishburne v. Ferguson, 84 Va. 87, 4 S. E. 575; and Miller v. Wright, 95 Va. 337, 28 S. E. 337. In the first of these cases Judge Lewis said: “Moreover, in passing on a complaint of errors in the trial of an issue out of chancery, the court proceeds upon very different principles from those governing in an application for a new trial in an action at common law.” In the latter the court said: “Where a court of equity, in the exercise of a sound judicial discretion, has, in a proper case, where the evidence relating to a particular fact in dispute is contradictory and evenly balanced, directed an issue to be tried by a jury, it is the practice, without good cause for the contrary course, for the chancellor to abide by the verdict, since it is the peculiar province of a jury to decide a question of fact arising in a cause, and upon the weight of the testimony on which it depends.”

There is nothing in the case of Sacks v. Theodore, 136 Va. 466, 118 S. E. 105, which affects this general rule. The court expressly approved this statement of it made in Miller v. Wright, supra, and said that the verdict in the case in judgment was fully sustained by the evidence.

[3] The verdict must “satisfy the conscience of the chancellor.” This, in itself, is an elastic expression. Words oftimes fall into formulae which are but shibboleths to conjure with. Evidence which to one mind is confirmation strong as proof of holy writ may be to another wholly insufficient, and so this statement of the rule generally accepted can never be elaborated into any definite test. Certain it is that the verdict cannot be disregarded and must sometimes be confirmed even though the chancellor believes it to be wrong. To illustrate: Hook v. Hook, 126 Va. 249, 101 S. E. 223, was heard by one of the judges of this court who sat as chancellor. From his decree an appeal was taken and the Supreme Court of Appeals, after reviewing a mass of evidence, reached the- conclusion that there .should have been an issue and so ordered. When the cause was again heard it was submitted to a jury upon practically the same evidence theretofore considered by the court. If the jury in that case had reached a judgment which differed from that of the court in the first instance the chancellor would not have been at liberty to set it aside, even though he adhered to his former judg- ' ment and would, had he been a member of the jury, have contended for a different verdict. If this were not so then the submission to the jury would have been wholly futile. He cannot set the verdict aside where the évidenee is evenly balanced or even where there is grave conflict between witnesses equally credible unless it shocks his sense of right. He can do it where a manifest wrong has been perpetrated. He must, of necessity, weigh the evidence himself and look to all of the attendant circumstances.

The able chancellor in the trial court said in part:

“My conscience is entirely satisfied that he did sign this note; that he ratified it after it was signed, and I conscientiously and sincerely believe that if I were to refuse to set aside this verdict and to enter up a judgr ment, and the matter were taken to a higher court for a review, I don’t think there could be any other view that the Court of Appeals could take of it than that this court erred in refusing to grant this motion. I approach it, gentlemen, with the utmost reluctance, but being an issue out of chancery, being one of which the ultimate responsibility devolves upon the court, and I regretted many times after the developments began to appear in this case, I regretted that I had put counsel and litigants to the extra trouble and expense of litigating this question before a jury; that I had not decided it myself, because I apprehended even before this jury brought in their verdict that this responsibility was upon me, and I might be called upon to exercise the very responsible duty I now perform.”

In this opinion we concur.

The decree of the court below must be affirmed.

Affirmed