Case ID: miss_10/html/0523-01.html
Source: Caselaw Access Project
Author: {"author": "Per Curiam.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

John G. Trible, et al. vs. The Bank of Grenada, use of William Minter.
    A note made payable to a bank for discount, and not discounted by the bank, but afterwards discounted by another party, may be sued upon in the name of the bank, for the use of the real holder.
    In such case, it is competent for the real holder to resist an offset of the notes of the bank, by proof that the note never belonged to the bank.
    In error from the Yalobusha circuit court.
    The bank of Grenada brought suit for the use of William Minter, against the plaintiffs in error, on a promissory note, for $500, payable to the bank of Grenada, or order. The note is in these words.
    
      “Noy, August 25, 1838.
    
      “ We severally and jointly promise to pay to the Bank of Grenada, or order, five hundred dollars, without defalcation, for value received, payable and negotiable at the banking house in Grenada.
    “ John G. Teible, Principal.
    
    
      “ Feancis G. Trible, Surety.
    
    
      “ Levi Davis, Surety.
    
    
      • “ Joseph J. Wright, Surety.”
    
    The cause was submitted to the jury on the plea of payment. The plea of the general issue was filed, but afterwards withdrawn. A third plea was filed, in which the defendants say they are the holders and bearers of notes and certificates of deposit of the bank, more than sufficient in amount, to cover the sum sued for, which they are ready to set off against the claim sued on. To this plea a demurrer was 4 filed, and was sustained by the court.
    A verdict and judgment were given for the plaintiff. The bill of exceptions filed in the record sets out the note sued on as above. George W. Topp, who was introduced as a witness by the plaintiff, testified that he drew the note. The consideration was in part a note due, by the principal defendant, to Chisholm & Minter, and the balance, about $ 180, notes of the bank of Grenada and the Lexington banks. The note was made for the purpose of having it discounted in the bank of Grenada, and was left with witness for that purpose, but it was never presented for discount, and never was the property of the bank. Chisholm & Minter negotiated the note, not as agents of the bank, but “in the ordinary course of their common business.” To this testimony defendants objected, “ as varying the instrument sued on.” Witness farther stated that he knew the facts stated above, because he had charge of the business of Chisholm & Minter. They acted as agents of the bank. William Minter became the holder of the note, by the transfer of it to him by Chisholm & Minter, to secure him against, certain liabilities he had incurred for them. F. E. Plummer, a witness, stated that he was president of the bank of Grenada, that Chisholm & Minter were agents of the bank before the date of the note sued on ; did not recollect when their agency terminated. This note was never in the bank. Joseph E. Nelson, a witness, slated that he heard the defendant speak of a suit brought by the Bank of Grenada, and that he wanted to buy notes of the bank as a set off. Some few weeks before the spring term of the court in 1842, Nelson sold him about $400 of the notes of the bank, for that purpose. (This suit was commenced at the November term, in 1841.) Defendant bought the notes for twenty-five cents on the dollar, with the privilege of returning them, if he did not use them.
    The defendant offered to read in evidence notes of the bank of Grenada, amounting to as much as the note sued on with interest, but the court excluded them from the jury, and would not allow the defendant’s counsel to say anything of favor in reading them; which opinions of the court were excepted to, and this writ of error prosecuted.
    
      A. C. Baine, for plaintiffs in error.
    1. The bill of exceptions shows that the note is payable to the Bank of Grenada, Mi.
    
      2. That the note was taken by Chisholm & Minter as the agents of that bank.
    3. That they transferred it to William Minter, the usee; and that to indemnify him against a precedent liability for them.
    When this was proved, the usee was either proved out of court, or we had all right of set-off against him, that we would have had if the suit had been by the bank, without any usee.
    Because, first, there is no rule better established than this, that a note or bill received or taken on account of a precedent debt or demand, is not bona fide held; but that any defence may be made against it in the hands of such holder, that could have been made against the payee. See 10 Wendell, 85 ; Dickinson v. Tillinghast, 4 Paige, 215 9 Johns. Rep. 337; Payne v. Cutler, 13 Wend. 605.
    This note, however, is in legal contemplation, for every purpose, still the property of the bank, ufiencumbered with any trust. Because Chisholm & Minter, being the agents of the bank, could not trade on their own account. See Story on Agency, and authorities cited.
    An agent can derive no profit or advantage from transactions in the cause of his principal’s business; but all the profits go to the principal. See S.tory on Agency, 194-203.
    Further, even if it had been a bona fide transfer, it becafiie the holder to show that he took it anterior to the law of 1840, prohibiting banks from transferring their paper.
    
      W. G. Thompson, for defendant in error. ~
    It is difficult to conceive on what ground the defendants below claimed the right of setting off the issues of the Bank of Grenada, against the note sued on in this "case. It was clearly prcfven that this note never was the property of the bank; that the contract was with Chisholm & Minter individually, and not as the agents of the bank, and that they negotiated it, in the language of the witness, in the ordinary course of their common business. The usee in this suit took the note from them as an indemnity against liabilities he had incurred on their account. It is presumed, that his right to appear as usee in the suit will not be contested. He stands in the same relative position with a party holding a note as collateral security for a debt due to himself, and who has an indisputable right to bring an action in his own name.
   Per Curiam.

This suit was brought on a promissory note payable to the Bank of Grenada, which sued for the use of William Minter. The defendants pleaded payment, and attempted to make an oifset, by introducing the notes of the bank. To defeat the offset, the plaintiff introduced a witness who proved that the note was taken to be discounted in bank, but that it never had been discounted, and never was the property of the bank, but that it had been transferred by Chisholm <$£ Minter, to whom it was originally given in payment of a debt, to William Minter, for a valuable consideration. The president of the bank, was also introduced, who proved that the note-never had been discounted by the bank. Chisholm & Minter, it seems, were the agents of the bank, and authorized to make advances on cotton and take notes, and the defendant’s counsel insists that this note was taken by them as agents, and is still the property of the bank. The court admitted this explanatory ^ proof, and ruled out the offset.

That it is competent for the real holder to sue on a note made payable to a bank for the purpose of being discounted, but which is not discounted, was settled in the case of the Commercial Bank of Natchez v. Claiborne, 5 Howard, 301. That it is competent for the real holder in such case to sue . in the name of the bank, and to resist an offset in the notes of the bank, by proof that the note never belonged to the bank, was fully settled in the case of Graves v. The Mississippi and Alabama Railroad Company, 6 Howard, 548. This case is not distinguishable in any one feature from that, and the decision is therefore conclusive against the plaintiffs in error.

If it had been fully established that Chisholm & Minter acted as the agents of the bank in taking this note, the question might be different, but the weight of testimony preponderates greatly against any such conclusion.

Judgment affirmed.