Case ID: ohio_8/html/0535-01.html
Source: Caselaw Access Project
Author: {"author": "Judge Wood", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Riley and Van Amringe v. Johnson, Anderson, and Shipley.
    Where signatures are obtained to a blank paper, to be filled up for money, upon false pretenses, and are delivered in blank in payment of a precedent debt, and the note written by the creditor’s agent, the securities are not bound.
    Assumpsit, reserved in Muskingum county.
    The issue of fact, on non assumpsit, was submitted to the court under the statute, instead of a jury. The facts, agreed by counsel, are as follows:
    That the defendant, Johnson, resided in Martinsburg, Knox ^county, in May, 1837, and had for years carried on an extensive business as a merchant. The 2d of January, in that year, he was indebted to the plaintiffs, who resided in Philadelphia, Penn., more than $3,000 for moneys lent to him by them, and Van Amringe called upon him at Martinsburg for payment, but obtained nothing. On that day Van Amringe and Johnson rode together to Nashport, where the defendant, Anderson, resided, and had astore, in connection with Johnson, conducted under the name of Johnson & Anderson. They arrived late in the afternoon, and took lodgings near the store. In the evening Johnson called on Anderson, and inquired if he did not want money? Anderson replied, he could use it if he had it. Johnson then said, he was going to Zanesville the next day and would try the banks; that it was best to draw two notes for $1,500 each, and if he could get the $3000, $1,000 of it should go to the Nasbport establishment. He then wrote in figures, $1,500 at the top on the left hand of two pieces of paper, and he and Anderson and Shipley signed their names, iollowing each other, to each piece of paper, on the right hand, some distance from the top, leaving room, and intending to have promissory notes written over their signatures. Johnson took the papers, returned to his lodgings, and handed them to Van Amringe, who dated them January 2, 1837, and filled them up as notes, for $1,500 each, one at ninety days after date, payable to the order of the plaintiffs at the Bank of Granville; the other in like manner1, at four months. Upon these notes this suit is brought. Van Amringe and Johnson left Nashport the next morning, the former not having visited the store or met Anderson during his stay. Van Amringe received the notes of Johnson in part of the plaintiffs’ account against him, and gave him credit on account for $3,000. He left them at the Granville Bank for collection, where they were protested for non-payment, and the plaintiffs then charged them to Johnson. Johnson, up to May, 1837, was in good credit, supposed to have ample means, and responsible for a much larger sum than $3,000; but about that time absconded totally insolvent, leaving the plaintiffs wholly unpaid, and without other security than the notes.
    Stillwell, for plaintiffs:
    Insisted, that the facts entitled them to a verdict for the amount *of the notes, as no fraud is proven upon the plaintiffs in obtaining the notes, and none will be presumed from the circumstances. These notes were negotiable, fairly taken in payment, not received as collateral security. He commented upon the following cases cited: 8 Cow. 423; 9 Wend. 170; 12 Wend. 523, 593; 10 Wend. 85; 20 Johns. 636; 5 Johns. Ch. 54; 3 Kent’s Com. 81; 2 Wheat. 66, 73; 2 Peters, 170, 182; 5 Wend. 66; 16 Pick. 574. If we are not entitled to recover against Anderson, with whom the issue is joined, we claim judgment against the other defendants, who are in default. As to this he cited 1 Pet. 47; 11 Pet. 86.
    
      Goddard and Converse, contra :
    Claimed that the law arising on the state of facts is with the defendants on the issue ; that Yan Amringe was grossly negligent in taking such an obligation in blank, when by a walk of only a few feet he could have seen the defendant Anderson, and learned if he intended to be bound. They cited 8 Wend. 423; 9 Wend. 170; 10 Wend. 85; 12 Wend. 523, 593 ; 16 Pick. 579.
   Judge Wood

delivered the opinion of the court:

Do the facts in this case give the plaintiffs a right to recover? Johnson was in the plaintiffs’ debt a sum greater than the notes he delivered. The notes wore negotiable, and if negotiated for a valuable consideration without notice, the right of the holder would prevail, even against a true owner ; but such consideration must be actual, the holder must have incurred loss, by giving credit to the paper, or by paying a fair equivalent for it. If he has done, if the plaintiffs have done neither, but have merely taken the paper (or a pre-existing debt, their condition is improved if they recover, but nothing is lost by their failure, as they remaiu as before. In such case thé equity of the holder is not superior to that of the owner. Such is substantially the language of the court of errors in New York. 20 Johns. 637. Spencer, Judge, said, that in all the cases cited, in which such transfer had been valid, the notes or bills had been taken in the usual course of trade, for a present consideration, and not as security for an antecedent debt. And whoever receives a note, negotiable on its face, in payment of a precedent debt, takes its subject to all its equities between the original parties. -In such cases, the holder has no ^equity superior .to the maker, and the law will leave him in possession who already has it. These principles are recognized in 10 Wend. 86, and appear to decide this case. The notes in question were not received in the usual course of trade, for a valuable consideration, in the meaning of those terms, applicable to such cases, but for a precedent debt. Failing in this suit, the plaintiffs lose nothing. They remain in the position they were in when they took the .notes, and may sue on their original cause of action. The notes received were no payment and bar no right.

We have, so far, considered the transaction between Johnson and Yan Amringe bona fide. It might, we think, be viewed in a very different light. During the visit of these gentlemen at Nashport, Yan Amringe remained at his lodgings; he did not visit the store of Anderson, though himself a merchant, and within a few rods twelve or fifteen hours; made no inquiries about Anderson’s business or standing; was not seen by him; but as soon as the notes were handed to him, he filled them up to himself, retained them as his own, and the parties departed together. The state of case, and conduct of these men, strongly impress the mind with the belief, that the whole business was previously arranged between them; and this impression is strengthened by the subsequent absconding of Johnson totally insolvent. If this is correct, fraud is fixed upon the plaintiffs. In such a state of case they can not recover. A note made for the maker’s own accommodation for discount at bank, can not, upon the refusal of the bank to discount, be transferred to one having knowledge of the facts, so as to enable him to recover. 6 Ohio, 249.

Judgment for defendant.