Case ID: la-ann_27/html/0311-01.html
Source: Caselaw Access Project
Author: {"author": "Taliaferro, J. Wyly, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

No. 5307.
    R. K. Callender v. Golsan Brothers. Jackson & Manson, Warrantors and Intervenors.
    At the time of the discount of the note, which is the subject of the present controversy, Hunter, one of the firm of Callender & Hunter, according to the import of his own evidence, was utterly without authority to do so. He had no right to indorse and discount a note belonging to Callender, the plaintiff, and payable to his order, it matters not how much Callender might owe the late firm of Hunter & Callender; If Callender had given him verbal authority, as contended by defendants and intervenors, the authority was revoked before exercised. But, even without a revocation, Hunter had no authority to indorse and disoount the note in question.
    Authority to indorse and disoount a note for one purpose can not be extended to another.
    As Hunter had no title to the note, his indorsees acquired none, because they had notice of the want of authority in Hunter to indorse and negotiate it.
    APPEAL from the Sixth District Court, parish of Orleans. Saucier, J.
    
      S. N. Ogden, for plaintiff and appellee. T. Oilmore & Sons, and appellants. Ciarle, Bayne é Benshaw, for defendants and appellants.
   Taliaferro, J.

The plaintiff sues the defendants on a promissory note for the sum of $774 34. The intervenors claim to he the owners of the note and oppose the payment of it to the plaintiff. There was judgment in the court below in favor of the plaintiff and the intervenors have appealed. The defendants appear to be mere stakeholders in the controversy. Callender & Hunter were commercial partners doing business in New Orleans. Golsan Brothers in some transaction with Callender, not in any manner connected with the partnership business of Hunter & Callender, became indebted to Callender individually, and gave him two promissory notes each for the above sum ; one of the notes fell due twelfth January, 1873, and the other on the twelfth July following. The firm of Hunter & Callender, it appears, was pressed for money during the latter part of the year 1872, and both members of the firm being in England about that time, Callender according to his statement, instructed Hunter, who preceded him a short time in returning to New Orleans, to negotiate one of the notes (the one to become due on the first of January) and apply the proceeds to partnership purposes. Hunter negotiated both the notes to the intervenors. He states in his testimony that he was authorized to sell both the notes. The authorization to .sell was verbal. On the return of Callender to New Orleans, finding the notes were both negotiated to Jackson & Manson the intervenors, he notified Golsan Brothers not to pay the note last falling due, the one sued upon, to Jackson & Manson, claiming the ownership of the note himself. Golsan Brothers deposited the amount of the note in the Hibernia Bank when it became due for the benefit of the party legally entitled to it. The intervenors assume the position of holders for value before maturity, and without notice of equity between prior parties. Some evidence was introduced for the purpose of showing that the note was not acquired Iona fide by the intervenors. A witness stated that he heard a conversation in Hunter’s office between Hunter and Jackson, one of the intervenors, in which Hunter expressed an apprehension that Callender would sue him for a note, that Jackson said “ let him sue, we can keep him out of it for four years.”

It seems that the partnership between Hunter and Callender was dissolved in January, 1873, and that the note was passed off after the dissolution. The notes appear to have been indorsed with the firm name.

Under the state of facts presented, and the contradictory character of the testimony, we are unable to conclude that the intervenors do not occupy the position they claim, and that they should not be protected.

It is therefore ordered that the judgment of the district court be annulled and reversed. It is further ordered and adjudged that the intervenors be and they are hereby recognized as the legal and proper owners of the proceeds of the note sued upon, and that the same be paid over to them. It is further ordered that the plaintiff’s claim be rejected, and that he pay costs in both courts.

Mr. Justice Wyly was absent and took no part in this decision.

On Rehearing.

Wyly, J.

In September, 1872, R. K. Callender, who had two notes made by Grolsan Brothers, for some seven hundred and seventy dollars each, payable to his own order, in the cash box of his partner Adam Hunter, gave the latter verbal authority, as he testifies, to indorse and collect the first note, payable twelfth January, 1873, but not the second, payable in July of the same year, and apply the proceeds to the payment of a certain draft drawn from Liverpool where both the partners then were, on the firm of Hunter & Callender at New Orleans, Louisiana.

j Hunter testifies that the verbal authority embraced the right to discount both of the notes for the purpose of providing funds, if necessary, to meet the time draft referred to. He, however, found means otherwise, and did not dispose of the notes of Callender for the purpose of providing funds to meet the payment of the Liverpool draft. Subsequently, to wit, early in January, 1873, a few days before the first note fell due, he discounted it with Jackson & Manson and put the proceeds to the credit of Callender on the boohs of Hunter & Cal-lender, indorsing said note as follows : “ R. K. Callender, per Adam Hunter, Hunter & Callender.”

Callender returned from Liverpool about this time and made no objection to the indorsement,and discount of the note. Subsequently the partnership of Hunter & Callender was dissolved and the partners quarreled, Hunter refusing to return to Callender the second note, maturing in July, 1873, when it was demanded by the latter.

Afterward, to wit, on twenty-seventh June, 1873, a few days before the maturity of the last note, Hunter discounted it with Jackson & Manson who knew of the dissolution of the partnership, the indorsement being the same as that written on the'flrst note.

At the time of the discount of this note, Hunter, according to the import of his own evidence, was utterly without authority to do so. He had no right to indorse and discount a note belonging to Callender and payable to his order, it matters not how much Callender might owe the late firm of Hunter & Callender.

If Callender had given him verbal authority in Liverpool in September, 1872, as contended by the defendants and intervenors, the authority was revoked beyond doubt, before it was exercised. But from the evidence we are satisfied, without a revocation, Hunter had no authority to indorse and discount the note in question.

Take his own testimony in regard to the authority to indorse and discount this note, which is flatly contradicted by the evidence of Cal-lender, and it only shows this power was given, if necessary, to provide funds to meet the Liverpool .draft, which the firm of Hunter & Callender succeeded in providing for without the discount of Callender’s notes. Authority to indorse and discount a note for one purpose can not be extended to another.

As Hunter had no title to the note, his indorsees Jackson & Manson, acquired none, because when they discounted the note payable to the order of R. K. Callender without his indorsement, and on the indorsement of Adam Hunter, they were charged with notice of his want of authority to indorse and negotiate said note.

The fact that Callender had ratiñe'd the indorsement and discount of the first note, imposed no obligation on Callender to ratify the indorsement and discount of the second note, especially as his relations as partner with Hunter had ceased, to the knowledge of Jackson & Manson.

It is therefore ordered that our former judgment be set aside, and it is decreed that the judgment appealed from be affirmed with costs.