Nazarkiewich for fifteen fully paid-up Issue, and demurrer and joinder to shares in the company, of £250 each, the 7th and Sth pleas. four acceptances for £250 each of the At the trial before Denman, J., at company, dated the 26th of June, 1874, the last Michaelmas Sittings in Middleat thirty days, four months, six months, sex, the facts above set out were proved, and nine months, respectively, and £190 and a verdict for the plaintiffs was taken in cash, “in part discharge of our claim by consent for the dainages in the decof £6,000, and provided the above bills laration, with leave to the defendant to are paid at maturity, we agree to re- inove to enter it for him, or to reduce lease our charge or interest in the book the damages to such sum as the court debts of Mr. Nazarkiewich."

might direct; the court to draw all The defendant was chairman of the necessary inferences of fact. company, but he did not agree to the

The demurrer was dropped, all the repurchase and transfer to the company points being considered upon the arf Nazarkiewich's book debts.

gument of the motion, The declaration in the first count set

Held, We think the defendant is enont the agreement of the 20th of De- titled to judgment. It was argued that ember, 1873, between the plaintiffs and he was discharged as surety, and that Nazarkiewich, and the guarantee of the

was made out by the facts. defendant to the plaintiffs of the same date, and averred that Nazarkiewichthat another person is going to do some

To say that a person becoming aware had caused shares in the company to the

thing, which, if done, will discharge nominal value of £3,750 to be issued

him from his contract, is therefore to the plaintiff's, and that they had not bound to warn him of the consequences been redeemed.

of his doing it, is not a tenable propoThe second count contained an addi-sition. That brings it round to the tional averment that the plaintiffs, by question whether, on the facts, what the authority of the defendant, assign- has taken place has had the effect of ed their interest in the book debts to discharging the surety. Upon that it the company.

has been established for a very long The defendant in his pleas traversed time, beginning with Reese v. Berringvarious allegations in the declaration, ton, 2 Wh. & Tud. 4th ed. p. 974, and but the only pleas material to this re- downwards, that a surety is discharged port were the seventh, upon equitable by giving time, upon the principle that grounds--that the defendant was dis- a creditor, whe, without liis consent, charged by the agreement between the gives time to the debtor, deprives the plaintiffs and Nazarkiewich for the surety of his remedy, viz, to use the transfer by the plaintiff's of their inter name of the principal creditor to sue est in Nazarkiewich's book debts to the the debtor. If that is suspended for a company--and the eighth, npon equi day, or even an hour, although the surelife yra:wds--that the defendant wisty is not injured, and possibly may even discharged by the material variation have been benefitted, nevertheless it is without his knowledge of the terms of established that that discharges the the agreement set out in the declara- surety. Whether that is a just princition.

ple is a matter it is far too late now to

think about; but from the time of able to the order of one C. The draft Rees v. Berrington it has been unques" was drawn for $27, and after its delivtioned, and has been said so many times ery to the payee it was fraudulently althat nothing but the legislature can tered to $2,750, and was afterwards make any alteration. Now in the pres- presented to and accepted by the plainent case it is not by giving time, but tiff. The forged draft was sent by one there has been an equal interference H., of Baltimore, to A. B. & Co., of with the rights of the surety. He had New York city, in a letter received by the right to have the book debts to look them, Aug. 16, 1869, asking for a sterto as his security; that right he has ling bill of exchange, at sixty days, on been deprived of by releasing the book London, for the amount of $2,750. A. debts by the wilful act of the plaint- B. & Co. deposited the draft on the day iffs. Taking it as it stands here, it it was received, in defendant's bank, seems to me the defence is made out, with other checks and drafts, and were and the defendant is entitled to judg- credited with the amount of it. The ment.

draft was presented to plaintiffs, who Opinion by Blackburn, J.; Mellon accepted it, payable at the Leather and Quain, J.J., concurring.

Manufacturer's Bank. It was present

ed there and certified, and was paid by NEGOTIABLE PAPER. FORG- said bank, through the clearing house,

ERY. LIABILITY OF DRAWEE in regular course of business. A. B. AND ACCEPTOR.

& Co., on Aug. 16th, sent a bill of exN. Y. COURT OF APPEALS.

change on London. for the full value of White et al, applts., v. The Conti-the draft, to H., by mail. Plaintitt's nental National Bank, respt.

were not advised of drafts drawn upon

them by W., except by the presentation Decided March 21, 1876. .

thereof for payment, and they were The drawees of a bill of exchange are not notified of the alteration in the draft only held to a knowledge of the sig. until October 6th, when they gave nonature of the drawer; and in accepting and paying a bill which has been tice to defendant. The court, at the fraudulently raised after delivery to trial, left it to the jury to say whether the payee, they merely vouch for the defendant could have saved itself from genuineness of the signature of the loss if it had known of the forgery on drawer, and may recover back from the 17th of August, and charged that the holder whatever they may have paid over the amount of the bill as if, by relying on the acceptance and originally drawn.

payment of the draft by plaintiff's, The holder of such a raised bill is held the defendant has lost an opportunity

to a knowledge of his own title, and of protecting itself, it was entitled to a of the endorsements of the bill prior verdict. The jury rendered a verdict to his. This action was brought to recover

for the defendant. $2,750, and interest thereon, from Aug.

Hamilton Odell, for applt. 18, 1869, received by defendant upon a

Wm. Allen Butier, for respt. sight-draft, dated Aug. 9, 1869, drawn Held, error; That defendant acted by one W., at Buffalo, on the plaintiff's upon other evidence of its right to the banking firm, in New York city, pay-money than the statement or actions of

plaintiffs; in dealing with the bill and Judgment of general terın, aflirminy its avails it acted upon the apparent judgment on verdict for defendant retitle and genuineness of the instru-ersed, and new trial granted. ment, and the respons:bility of those

Opinion by Allen, J. from and through whom they received it; plaintiffs therefore owed no

ACCOUNT STATED. duty to defendant in respect to the for

N. Y. SUPREME COURT. GEN'L TERM. mer; and that plaintiffs owing no duty,

FIRST DEPARTMENT and making no misrepresentations could

William Barker, admr., applt. v. not be chargeable with negligence which Newton W. lloff, trustee, &c., respt. could defeat their right to reclaim the

Decided May 5, 1976. money paid, and there was no estoppel to bar this action. (3 Comst., 230; 40| Where an account stated is plead in N. Y., 391 ; Continental Nat., Bk. v.

defence to an action, and plaintiff

avers that it was made at defendant's Nat Bk. of Comm., 50 N. Y., 575,

request to influencc the action of andistinguished.)

other, but without effect, and that the Plaintiffs, as drawers of the bill, were accounts were in fact still open, it only held to a knowledge of the signa

should go to the jury as to whether

the account was in fact still open. ture of their correspondents, the drawers; that by accepting and paying the bill

Appeal from judgment dismissing they only vouched for the genuineness the complaint at special term. of such signatures, and were not held Plaintiff's intestate, Smith Barker, to a knowledge of a want of genuine- had for some years been executor and ness of any other part of the instru- trustee of one John Peniz. In June, ment, or of any other names appearing 1872, said Smith Barker died, leaving thereon; or of the title of the holder. the estate of Peutz largeiy indebted to (9. M. & W., 54; 46 N. Y., 77; 10 him for moneys expended in its behalt, Wall., 604; 18 id.. 604; 4 Comst., 147.) commissions, &c. Subsequently defend That defendant is held to a knowledge ant was appointed trustee of said estate. of its own title, and the genuineness of This action is brought to recover said the indorsements, and of every other indebtedness. The answer, by way of part of the bill other than the signature defence sets up an account stated, sign. of the drawers within the general prin-ed by plaintiff, as adıninistrator, &c., of ciple which makes every party to a prom-the Peutz estate. Plaintiff replies that issory note or bill of exchange a guar after the death of the intestate, and beantor of the genuineness of every pre-fore the appointment of another trustee, ceding indorsement, and of the genu- the account was prepared at the request ineness of the instrument. (15 N. Y., and with the assistance of defendant, 575 ; 40 Id., 4.6; Story on Notes, SS who dictated the same. That defend135, 379-381.) The presentation of ant prepared it for the purpose of inthe bill, and the demand and receipt of ducing one Townsend to quality as the money thereon were equivalent to trustee of Peutz's estate, as Townsend an indorsement. The drawees had a

had refused to qualify until he knew right to act upon the presumptive own.

how the aircounts between the two esership of the defendant as the apparent holder.

tates stood. That as an inducement for

his signing it, the defendant had prom- A promissory note, actually made and ised that there should be a full account

signed in the city of iVashington,

but dated at Leavenworth, in the ing, so soon as a trustee should be ap

State of Kansas, and sent to the Secpointed. Townsend eventually refused

ond National Bank of Leavento qualify, and defendant was appointed worth, and by it discounted, is to be trustee instead.

governed as respects a question of At the trial the complaint was dis

Usury by the laws of Kansas. missed, and judgmeift rendered for the To take out interest in advance on disdeferdant on the pleadings.

counting a note by a bank is not usu

rious. Rowan & Hehn, for applt.

A contract for a loan of money at a George Hill, for respt.

rate of interest which is legal in the On appeal

place where the contract is made, Held, That the account appears to though the money is to be repaid in have been made in accordance with de a State where the rate of interest is

lower, is not usurious, provided it be fendant's wish, in order to induce Mr.

not a mere device to evade the laws of Townsend to qualify. This object be the State where the money is to be reing known, it was wrong in plaintiff to paid. have assented, but yet, in fact, it did no The action in this case was brought wrong to Mr. Townsend, because he did by plaintiff as holder of a promissory not qualify.

note made by the defendants, Smoot Plaintiff does not seek any benefit and Pomeroy, bearing date on the 27th from the arrangement, made in refer- of November, 1873, for $7,000, which ence to Mr. Townsend, or to urge any note was made payable to the order of claim or demand which was not reserv- the defendant, Darling, at the Second ed between him and defendant when National Bank, Leavenworth, Kansas, that arrangement was made. His claim, with 12 per cent. interest until paid. if it realiy exists, is in nowise connect- This note thus made and endorsed was ed with, nor does it grow out of this transferred by indorsement to the plainarrangement, and therefore the maxim, tiff

. "That where one of two wrongdoers

The cause was tried at the circuit secks an advantage from the unlawful court, and resulted in a verdict for the combination, the defendant is in the plaintiff

. better position,” does not apply.

Sometime before 1873, Smoot, one The issue presented, as to whether in of the defendants, obtained a loan from fact, the accounts are still open, should the plaintiff. (Second National Bank, have been tried. Defendant was not Leavenworth, Kansas,) of $20,000. · entitled to judgment on the pleadings. This loan of $20,000 from the bank

Judgment reversed.

Opinion by Brady, J.; Davis, P. J., was secured by the promissory notes of and Daniel, J., concurring.

Smoot and Pomeroy,

These notes were given, one for $8,USURY. DISCOUNT.

000, one for $7,000 and one for $5,000, SUPREME Court, DISTRICT OF COLUMBIA. were made payable on time, executed

GENERAL TERM. The Second National Bank of Leay and sent from Washington, D. C., to enworth v. Samuel Smoot and others.

the bank in Kansas; and the bank paid Decided January, 1876.

to the defendant, Smoot, the proceeds

[ocr errors]


of these notes, less the discount for the much less per annum than the rate al-
time they had to run, at the rate of 12 | lowed by the law of Kansas.

per annum; the rate of inter 2. That by the arrangeme:t entered
est agreed upon in the notes was 12 per into by which the discount was taken
cent. per annum after the maturity of out of the proceeds of these notes,
the notes until paid. Twelve per cent. whether of original or renewals, the
per annum being the highest rate of in- contract was usurious.
terest allowed by law to be taken for 3. That some one or more of the re-
the loan of money in the State of Kan- newal notes were made payable in the

These notes not being paid at ma- city of New York, in which State the turity, some or all of them, new notes law allowed, upon contracts made by were given in renewal, and the new its citizens to be performed within the notes secured the payment of the State, a rate of interest not to exceed amount due, including principal and 7 per cent. per annum. interest, at the rate above mentioned. Held, No valid contract was made

Thus went on the dealings between for this loan of $20,000, until the notes Smoot and the bank until all of the offered as a security for its payment loan of $20,000, and interest thereon were accepted by the plaintiff, and the was paid, except a note for $7,000, money advanced upon them. dated the 27th of November, 1873, To take out interest in a lvance, is payable 90 days after date at the bank discounting a note without regard to in Kansas, made by Smoot and Pome- the rules of rebate or discount, and roy and indorsed by the other defend there is no distinction between bankers ant, Darling, upon which note this suit and others. is brought.

That a contract for a loan of money The plea interposed was the general at a rate or interest which is legal in a issue. Under that issue was attempted State where the contract is made and to be tried whether, if the loan was not where the loan is to be advanced, usurious in its inception, it did not be though the money is to be repaid in come so by the arrangements that were a State where the rate of interest is made on the renewal of the various lower, is not usurious, provided it notes that were given.

be not a mere device to evade the The defense relied mainly on three laws of the State where the


is propositions :

to be repaid. 1. That the notes given to secure The judgment of the court below the original loan of $20,000, being ac- must be affirmed with costs. tually made and signed in this city and Opinion by Olen, J. sent to Bank of Leavenworth, and by it discounted, it was a contract made in

SALE. Washington, and not in Kansas, and N. Y. SUPREME Court. GENERAL TERM, that the law upon the subject of usury

FIRST DEPT. in this District must govern this contract of loan, instead of the usury laws

Alexander et al., applts. v. Fowler, of Kansas, the rate of interest author respt. ized to be contracted to be paid being Decided May 5, 1876.

« ForrigeFortsett »