Copyright
James H Monroe.

Monroe's digest of standard decisions of the courts of last resort of the United States, Canada, England, Scotland and Ireland : upon questions in law and equity relating to banks, banking, commerce, trade and manufacturing online

. (page 48 of 80)
Online LibraryJames H MonroeMonroe's digest of standard decisions of the courts of last resort of the United States, Canada, England, Scotland and Ireland : upon questions in law and equity relating to banks, banking, commerce, trade and manufacturing → online text (page 48 of 80)
Font size
QR-code for this ebook


sidered in connection with all that transpired, and, among other things,,
with the explanation subsequently given to the effect that the entry
was made by the bookkeeper, as well as the other circumstances.
Certainly the testimony referred to was not entirely conclusive, and 1
was for the judge to pass upon in connection with the other evidence-
upon the trial. Although the circumstances are quite strong to show
that the second and thii'd notes were discounted and the previous note
taken up, yet there was an explanation of these facts which, if believed,,
tended very much to support the finding of the judge ; and we are not
at liberty to disturb the same. Auburn City National Bank v. Hun-
siker, et aZ., 72 N. Y. App. 252.

2643. A party authorized to sell property, in the absence of any
express limitation of his powers, is authorized to do any. act, or to-
make any declaration in regard to the property found necessary to-
make a sale, and usually incidental thereto. This action was brought
to have three promissory notes, made by plaintiff payable to his own
order, and indorsed by him, declared void for usury, to compel a can-
cellation thereof, and return of certain stock pledged as collateral, and
for an injunction, receiver, etc. The notes were delivered by plaintiff
to B. & Co., note brokers in the city of New York, of whom plain-



OF STANDARD DECISIONS. 36

tiff had been in the habit of purchasing commercial paper to a large
amount, and to whom he was indebted upon account, to be sold at a
discount of 12 per cent., and the avails to be applied upon plaintiffs-
account. B. & Co. sold the notes to defendant G. at the rates stated.
Prior to the execution by plaintiff of any note, and before B. & Co.
had received any authority to sell, G. applied to the latter to purchase
notes, saying he desired first-class business paper only. B. & Co.,
said they would have paper of that kind, and mentioned the plaintiff's
name. Shortly after they procured a note from plaintiff, with authority
to sell at a discount of 12 per cent., and apply the proceeds to his indebt-
edness to them. B. & Co., sent this note to G., who purchased it at 12 per
cent. Held, it cannot be successfully contended that the notes in
question had an inception before they were passed to G. The indebt-
edness to B. & Co. would have been a good consideration for them,
and had that been merged in them, and they given as evidence of its
existence ( Wilkie v. Roosevelt, 3 John. Cases. 66), they would have had
an inception prior to the taking of them by G. But they were not
given for that indebtedness. They were made for just the purpose for
which they were used, to be sold at a discount of 12 per centum per
annum. The avails of the sale were to be applied on the indebtedness,,
and thus only was the indebtedness affected by them. That being so,,
it is plain that they were taken by G. at a usurious discount ; and
that they are void, unless Ahern is estopped from setting up the usury.
An estoppel arises in such cases when the maker of the note, before-
the sale of it, has declared to the buyer that it is a business note, and
the buyer has so acted thereupon as that he will be harmed if the
usury is known. Was Ahern brought within that rule ? He did not
in person make such declarations. It is claimed that B. & Co. were
his agents, and that they made such declarations acting as his agents,
and with power to make them. We will first see whether they did so-
represent, and then whether they had authority so to do ; or, if not,
whether their act in so doing had been adopted and satisfied by Ahern.
Ahern v. Goodspeed, 72 N. Y. App. 108.

2644. The trial Court found that B. & Co. made declarations to G.,.
at the time, and of a purport sufficient to bring them within that rule r
and that G. acted upon those declarations. It is manifest that he
would be pecuniarily harmed if the usury is shown, and the notes de-
clared void therefor. The plaintiff urges, however, that there was no
evidence to sustain the finding above mentioned. The testimony thnt
the declarations were made by B. & Co. is sufficient to sustain the find-
ing in its substance, so far as the making is concerned. G. asked of
them for first-class business paper. They said they had a good supply.
They opened their book and began to show their business paper. He
said he wanted first-class business paper, secured by collaterals. They
told him they had just the notes some of that class of paper that is, as
I read it, first-class business paper, secured by collaterals. He had be-
fore that bought paper of them impliedly business paper. It is shown
that it was accompanied by collaterals. The}* said that they would
have some of that that is, paper of that character ; and then men-
tioned the name of Ahern. They said that they had some of that kind
of paper, and told him about the standing of Ahern. All that had
been before declared concerning it still attached to it, and made a part



364 MONROE'S DIGEST

of the continuous transaction. It was taken by G., and sold by B. &
Co., as the note which was the subject of offer by them, and of considera-
tion by him, and of his and their acts and declaration. It was taken
in reliance thereon. Though at the hour, or during the daj r , of the
making of a representation as to property offered for sale, the subse-
quent vendee, then negotiating for it, or the like of it, does not con-
clude a bargain for it, if he afterwards, as a continuation of the negotia-
tion, becomes a purchaser, the representations are still a part of the
res gestse, and bind the maker of them (see per Holt, C. J. Lyney v.
Selby, 3 La. Raym. 118-20; Wilmot v. Nurd, 11 Wend. 584). As to
the other two notes, the testimony of G. is explicit that B. & Co. told
him, at the time of sale of them, that they were business paper, and
the best kind of business paper. From all that is testified to by G.,
the inference is easy and natural that he would not have taken the
notes, had he not believed that they were business paper, and that he
so believed, from what was said and took place between B. & Co. and
him. Ibid.

2645. If B. & Co. were agents of Ahern, with authority to make
such declarations, and to do such acts concerning the notes, he also is
estopped. B. & Co. were not the agents of G. He went to their place
of business to buy of them what they had to sell, for themselves or
others. They did not own these notes. If they had owned them, the
notes would have had an inception in their hands, and a different ques-
tion would have arisen. So they did not sell them as their own. They
sold them for a principal, who could be no other than Ahern. They
had been his agents in brokerage, or other pecuniary transactions, for
:some time. It was from such things that his indebtedness to them
grew up. They charged him their commission on the sale of these
notes to G., and thus he paid them their hire as his agents. His in-
debtedness was paid by the sale of these notes, and he received and re-
tained a check of B. & Co. for a balance thereafter due to him from the
.avails of the sale. Ibid.

2646. Here arises an interesting question in the case. When B.
& Co. made the representation to G., upon which the first note was
taken by him, that note was not in existence, nor had Ahern authorized
them to sell a note of his to G. or other person. It is said that they
were not then his agents, and that whatever they said at that time
could not affect him. It is not needed that there be an express act of
ratification, in order to hold the principal. His subsequent assent may
be inferred from circumstances, which the law considered tantamount
to an express ratification. And the acts of the principal are to be con-
strued liberally in favor of the adoption of the acts of an agent. ( Cod-
wise v. Hacker, 1 Caines R. 526, per Kent, J. p. 540.) It already ap-
pears that Ahern know that the first note made by him was to be sold
by B. & Co. He also knew, as his testimony shows, that it was to be
sold in pursuance of a prior negotiation at a discount of twelve per
centum per annum. He knew that the note was not business paper.
He had been a large purchaser of paper of B. & Co., hence knew their
mode of effecting sales of paper. It is to be inferred that he knew that
in the purchase of paper, at a greater rate of discount than seven per
centum per annum, the buyer usually exacted a representation that the
paper sold was business paper, so that he might rely upon the fact,



OF STANDARD DECISIONS. 365

if indeed the paper was such, or upon the estoppel if it was not.
Ibid.

2647. Ahern adopted the results of B. & Co.'s acts and declara-
tions. He received and has kept the fruits of their action with G. It
is a fair inference that he falls within the second branch of the princi-
pal, which we have above stated, by which a person ratifies the acts of
one acting as his agent, without authority at the time. The maxim r
is, omnis ratihabitio retrotrahitur et mandata priori acquiparetur.
Every ratification is retrospective, and is equivalent to a prior com-
mand. On this ground the plaintiff Ahern is to be held estopped
from setting up usury in the first note. On the ground of a prior
authority, he is to be estopped from setting up usury in the other two-
notes. Ibid.

2648. Drafts did not specify any place of payment ; they were
drawn and discounted in Canada. Defendant pleaded usury. Held t
that the contract was to be governed by the laws of Canada, not of this
State, and as by the laws of Canada usury is not a defence, the plea-
was not sustainable. Merchants' Bank of Canada v. Griswold, 72 N.
Y. Ap. 472.

2649. It appears that the plaintiff's intestate, G., and the defend-
ant lent to one J., the owner of a patent right, $5,000, G. contributing
$1,000 and the defendant $4,000. J. gave his note therefor to the de-
fendant, payable in four months, and assigned to him the patent right
as collateral security ; and also gave him an agreement to convey an
interest in the patent right for the benefit of himself and G. It ia
further agreed that they should be jointly interested in the loan, the
collateral security and the agreement to convej r an interest in the
patent in the proportion of one to four. At the same time the defend-
ant gave the note in suit to G. as evidence of his interest in the loan
and security, with the express agreement that it should not be de-
manded or paid until the defendant should receive payment of the loan
to J. At maturity J. did not pay his note, and with the consent of
G. the patent right was sold by the defendant at auction to one T. for
an amount equal to the sum, with interest, for which it was held as
collateral security ; and, at the request of G., the defendant took T.'
note for the amount, with the agreement that the defendant should hold
it as the joint property of himself and G., and that a company should
be formed to use and work the patent. This was in effect carrying out
and executing the agreement previously made, that defendant should
not be called upon to pay his note till J.'s note was paid, by substitut-
ing for payment in cash and interest to the same amount in the note
given by T. This agreement is not inconsistent with terms of the note.
It was made when the note was due, after the sale of the collateral se-
curity, when G. had the right to enforce the payment, and when the
defendant could have paid it from the proceeds of the sale, instead of
taking the note of T. It was a mode of payment agreed upon between
the parties. Ward v. Winship, 12 Mass. 480. The agreement had a
sufficient consideration in the fact that the defendant took the note in-
stead of cash at G.'s request. A.'s, an additional agreement, was made
at the same time, which was part of the foregoing, as to the use the de-
fendant might make of the note, which he held for their joint benefit.
And it was agreed that if the defendant would subscribe to the stock



366 MONROE'S DIGEST

of the company, and pay for the same with the note held for their joint
benefit, the note in suit might remain, and the defendant should not be
called upon to pay it, until the profits of so much of the stock as
equitably represented the amount of the note should be sufficient to pay
it. Relying on this agreement, the defendant afterwards subscribed to
the stock, paid for the same with the note of T., instead of demanding
A cash payment from T., and he has never received any profits what-
ever. Gr. having agreed to this method of payment, his administratrix
<jannot recover on this note, in violation of his agreement. Gleason
v. Saunders, 121 Mass. 436.

2650. In an action on a non-negotiable promissory note made by
"the defendant to the plaintiff for $4,000, dated the 7th December, 1872,
it appeared that the note when made had no stamps, but that after-
wards, in July, 1874, the plaintiff showed the note to her attorney,
who informed her that it should have been stamped, and told her to
affix stamps for the double duty. Through some misunderstanding
she affixed only single stamps ; and afterwards, in September, 1874,
she sent the note to the attorney, when he, having discovered this,
acting as plaintiff's agent, affixed the required double stamps. Held,
that the plaintiff was not a " subsequent party to the note," or a
" holder without becoming a party," within 83 Vic., ch. 13, 12, so as
to have enabled her to have affixed the double duty, and rendered the
note valid, although she might have made it valid by affixing, as agent
for the maker, stamps for the single day, when the note was delivered
to her. Escott v. Escott, 22 C. P. 305. Adhered to, and Wolley v.
Hunton, 33 U. C. R. 152, dissented from. Held, however, under 37 Tic.
<;h. 47, 2, that the double stamps affixed to the note in September,
after the passage of the Act, by the attorney as plaintiff's agent, ren-
dered the note valid, for that the plaintiff then first acquired knowledge
within the Act of stamps being necessary, it being found by the
learned Judge that her previous omission to affix them was through
error and mistake, and without any intention on her part to violate the
law. House v. House, 24 Upper Canada Com. Pleas Rpts. 526.

2651. A. and H., a firm doing business in Hamilton, had a draft
for $1,200, accepted by B. at Montreal for their accomodation, falling
due on the 27th of April. H., in order to obtain funds to meet it on
the 26th of April, procured a draft on B. for $600, to be discounted by
the plaintiffs, telling them that it would be accepted, and the proceeds
of it were placed to the general credit of the firm. This draft was sent
to B. for acceptance, and H. on the same day wrote to him, inclosing
the firm's check for $1,200 on the Bank of Montreal, to take up the
$1,200 draft, and requested him to accept that for $600. On the 27th
B. duly paid the draft for $1,200. On the 28th A. and H. had a dif-
ference, and A., hearing from H. that the firm were in difficulties, and
that he intended using their funds in paying B. and another person, A.
thereupon on the 29th drew out on the check of the firm their balance
in plaintiffs' bank, consisting of the proceeds of the draft for $600, of
which A. knew nothing, and of other moneys, and handed it to their
solicitor for the benefit of the creditors generally. Between the 25th
and 29th both the debtor and creditor side of the firm's account had
been dealt with, and the balance Increased in their favor. H. on the
29th, on hearing what A. bad done, wrote to B. that in consequence the



OF STANDARD DECISIONS. 367

check sent him could not be paid, and B. then refused to accept the
draft. On the 2d of May the firm became insolvent, and an assignee
was appointed, to whom the solicitor handed over the moneys deposited
with him. The plaintiffs, however, claimed the amount of the $600
draft, contending that it was only discounted on the faith of its being
accepted, and that as one of the partners had caused its non-acceptance
by his letter to the drawee, there was a failure of consideration, and
that they were, therefore, entitled to follow the money in the as-
signee's hands ; but held, that they were not so entitled ; that the case
was the ordinary one of the discount of a draft on the belief that it
would be accepted; and that the money formed part of the firm's gen-
eral assets and passed to the assignee. Canadian Hank of Commerce
v. Davidson, 25 Upper Canada Com. Pleas Rpts. 537.

2652. The payee of a joint and several note, at the request of the
principal maker, the others having executed it for his accommodation,
sent it to a bank for collection. Plaintiff, at the request of the princi-
pal, and upon the understanding that the note should be transferred to
him, delivered to the bank the amount due thereon, and received the
note. The money was forwarded by the bank to the payee, who re-
ceived it without knowing but that it was a payment, after learning the
facts, however, he retained the money. In an action upon the note,
held, that, although the bank had no authority to sell, yet the reten-
tion of the money by the payee, after knowledge, and his omission
thereafter to demand the note or assert title thereto, was a ratification
of the sale ; and that, at least in the absence of evidence that the
sureties had been by information and a consequent relief that the note
was paid, induced to remain quiet, and so had been injured, plaintiff
was entitled to recover. Coykendall \. Constable, 99 N. Y. 309.

2653. B. Bros. & Co., carrying on business at Morristown and
Syracuse in the State of New York, and also at Brockville in Ontario,
and on the llth October, 1872, at Morristown, signed a promissorj"
note for $500 at three months, payable at a bank at Syracuse to the
order of C. F., a' sleeping member of the firm, who at that time and
until after the maturity of the note resided at Brockville. The note
was indorsed by C. F., as also, but merely for the accommodation of
the firm, by one H, II. and one A. B., both residents of Syracuse. The
note so indorsed was handed to J. W. B., one of the firm, who resided
at Brockville, and was there negotiated by him with a person named
Harding at a rate exceeding 7 per cent., and Harding sold it to the
plaintiff, who also resided in Brockville. The note was left by the
plaintiff with a banker at Ogdensburg, N. Y., for collection, and at its
maturity H. H. came over to Brockville and saw the plaintiff, who
agreed to accept in renewal thereof the joint note of H. H., A. B., and
the defendant at six months, which was accordingly made and depos-
ited with Ogdensburg banker, who then gave up the previous note.
Held, that the note of the llth October, 1872, although drawn up and
made payable in the State of New York, was in fact made and became
a binding contract on all the parties thereto, on its being discounted at
Brockville, and must therefore be deemed a Canada contract and gov-
erned by our laws; and that therefore the law of New York, which
made void any note discounted at a higher rate of interest than 7 per
cent., or any note in substitution thereof, did not apply. The plain-



368 MONROE'S DIGEST

tiff, therefore, having sued defendant on the last named note, Held,
that he was entitled to recover. Cloyes v. Chapman, 27 Upper Canada
Com. Pleas, 22.

2654. When a vendor, who has executed a deed to the land, as-
signs a note executed for the purchase money to a firm as collateral
security for a claim of a smaller amount, it is competent for the sur-
viving partner of the firm, and the administrator of the vendor, he
having died in the meantime, to join as plaintiffs in a proceeding to
enforce the vendor's lien. Reynold's Adm'r, et al. v. West, 32 Ark.
Reps. 244.

2655. A. purchased a tract of land, executed his note for the pur-
chase money and received a bond for title. B., at the request of A. T
paid the note and the vendor executed a deed to A. ; at the same time
and as a part of the same transaction, A. made his note to B. for the
sum so paid and executed a mortgage on the land to secure it. Held
that no new lien was created, there was merely a transfer of the orig-
inal lien, and a change in the form of the security. Blevins v. Rog-
ers, 32 Ark. R. 258.

2656. The grantor of certain real estate, which was convej'ed to
the grantee in pursuance of a contract made with the grantor by the
agent of the grantee, accepted from the agent, in good faith, as
genuine, a false and forged mortgage on such real estate, purporting to
have been executed by the grantee, to secure a promissory note of the
agent for the unpaid balance of the purchase money. Foreclosure of
the mortgage having been defeated on the ground of its forgery,
though judgment on such note was rendered against the agent, who
was insolvent, the grantor brought an action against the grantee, to en-
force a lien against said real estate for such purchase money. Held,
on demurrer to evidence tending to establish the foregoing facts, that
the plaintiff is entitled to the lien. Fouch v. Wilson, 60 Ind. 64.

2657. Where the purchase money of land is made payable in sev-
eral instalments evidenced by promissory notes due at different times,
the vendor, being the holder of the notes, may inforce his lien against
the land when one or more of such notes have become due, for the pay'
ment thereof without waiting till all of the notes have matured. Furr
v. Morgan, 55 Miss. 389. Notice of non-pa3 T ment to McE., an indor-
ser, both being dated back to July third. In an action to recover
damages for negligence, held, that as the note was made payable at
defendant's bank, and the funds not being there to meet it when it fell
due, a demand for payment was not necessai'y, and all that was re-
quired of defendant was to notify the in dorser of non-pa} 7 ment ; that
notice having been sent on the next business day it was in time ; and
that if the mistake occurred as alleged, defendant was not liable ; but
the presumption was that the note was not paid by mistake, but vol-
untarily on the credit of the maker, in which case the payment could
not be retracted, it discharged the indorser and so rendered defendant
liable. Whiting v. City Bank of Rochester, 77 N. Y. 363.

2658. The only evidence to sustain the allegation of mistake con-
sisted of a telegram from defendant's assistant cashier to plaintiffs,
stating that defendant had remitted for the note by mistake, and a let-
ter of a similar purport with a statement that the note had been pro-
tested and the indorser notified. Evidence was given by plaintiffs to



OP STANDABD DECISIONS. 369

the effect that the note was not protested, or notice of non-payment
mailed, until after defendant had learned of the failure of U. Held,
that the fact that there was a mistake was not so conclusively proved
as to justify the court in refusing to submit the question to the jury.
Whiting v. City Bank of Rochester, 77 N. Y. 363.

2659. The holder of several past due promissory notes, against
the same parties, may bring separate actions upon each ; and a recovery
in one, and satisfaction of the judgment, is not a bar to the other
actions. The fact that the notes were given upon settlement of one
and the same demand does not make each a part of the original demand,
so as to compel the bringing of a single action upon all of the notes.
Nathans \. Hope, 77 N. Y. 420.

2660. The holder of a promissory note owes an accomodation in-
dorser no active duty to secure or protect his interest. Smith v. Er-
win, 77 N. Y. 466.

2661. Where a promissory note is made in this State, by a resident
thereof, bearing date here, by its terms payable at some place in the
State, with no rate of interest specified, and no intention of the maker
existing that it will be taken elsewhere for discount, if it is first nego-
tiated in another State, at a rate of interest lawful there, but greater
than that allowed by the usury laws of this State, it is invalid. Dick-
inson v. Edwards, 77 N. Y. 573.

2662. Judgment on a note or contract operates as a merger of
it; and when the judgment is binding personally it can be introduced
in evidence, and relied on as a bar to a second suit on the note. El-
dred v. Bank, 17 Wall. U. S. 545.

2663. Under the provision of the statute (1 R. S., 768 5), pro-
viding that promissory notes made payable to the order of the maker,
or of a fictitious person, if negotiated by h.im, shall have the same
validity, as against him and " all persons having knowledge of the facts,
as if payable to bearer," the facts of which a person must have knowl-



Online LibraryJames H MonroeMonroe's digest of standard decisions of the courts of last resort of the United States, Canada, England, Scotland and Ireland : upon questions in law and equity relating to banks, banking, commerce, trade and manufacturing → online text (page 48 of 80)