Case ID: scl_14/html/0522-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Nott, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

The Bank of the State vs. Edward Croft, Indorser.
    
    Ecvery renewal of a note is a discharge of the prior note; because the re* newed note is a substitute for the former.
    Where a note, to which the defendant was indorser, had become due, io bank, but had by mistake been consolidated with a note of the drawer with other indorsers, by the attorney in bank of all the parties, who waa authorized to renew their notes, and the note, which defendant had indorsed, was suffered to remain in bank a year, before the mistake was discovered,aud then his agentrenewed the note again, it was held that the defendant was not liable, as the subsequent renewal was irregular, and nc notice of demand on the drawer and non-payment of the first note having been given to the defendant or his agent.
    Tried before judge Huger, fall term, Richland district* 1825.
    This was an action of assumpsit, on a promissory note* for six hundred dollars, payable to the defendant or order. Plea non assumpsit.
    It appeared, that on the first of March 1822, anote drawn by Robert Singleton, payable to defendant and endorsed by him, had been discounted by the branch bank in Columbia, and was then due. On the same day another note, drawn by the said Singleton, and endorsed by R. English and Pressly Garner, was discounted by the bank. The note endorsed by Croft was entered up as paid. On the third of May., the note endorsed by English and Garner was renewed for five hundred dollars On the 5th of July, a note for thirteen hundred and fifty dollars drawn by Singleton, and endorsed by English and Garner was discounted* This note it seems was regained as a renewal of the note for five hundred dollars and anothes with the same drawer and endorsers; which note of thirteen hundred and fifty dollars was renewed in full, with the same drawer and endorsers, until the 13th June 1825, when English and Garner insisted that they were only responsible for ten sixteenths of the thirteen hundred and fifty dollars of the note, and ought not to be made to pay up the other six sixteenths, which had been improperly amalgamated with their note. On investigation si appeared, that the note due on the first of March 1822, for six hundred dollars, and endorsed by the defendant, had been posted in the books of the bank, as endorsed by English and Garner, in consequence of which Dr. Green, who was the attorney of Singleton as well as of English and Garner, put in the note of the first of March 1822, drawn by Singleton and endorsed by Singleton and Garner. No notice had been given to the defendant in person or to his attorney, that the note due on the first of March was not paid.' On the contrary it was entered up in bank as paid, And the defendant was informed in the Spring of 1823, when application was made by him for that purpose, that he was not indebted to . the bank, either as drawer or endorser. After this, Singleton absconded, when on the application of English and Garner, in 1825, to be released from the payment of six sixteenths of the note for thirteen hundred and fifty dollars it was discovered that Dr. Green, misled by the books of the bank, had substituted a note of -ingleton’s, endorsed by English and Garner, for one of Singleton’s endorsed by the defendant. English and Garner were discharged, and Dr. Green drew another note in the name of Singleton and endorsed it in the name of the defendant. Dr. Green had power only to remeto the note endorsed by defendant for Singleton. The court regarded the note of March 1822 as paid, and the defendant not bound by the unauthorized act of Dr. Green in 1825. A nonsuit was ordered.
    
      Preston, thought the judge had no right to poll the jury after they had found their verdict.
    Contended the renewal was within the power, which was to sign his name to all notes, as drawer or indorser, intended for renewals of notes previously given to the bank.
    Green acted as director and agent. As director he had access to the books, not as agent. The mistake was made by Hayne the Cashier upon the Entering Book; and Green, he admitted, may have been lead into the mistake by these books. It is enough that there was a clear mistake, which he contended would not exempt the defendant, and the' sole question was whether a note put in so long after the former could be considered a renewal? Does in'ervention of time destroy the character of a renewal? He thought not. It was the question to be determined.
    Black did say that the substitution of the other note by mistake xvas paying the former note; but he thought the same might be said of every note. The renewal of the note is the payment of the former note, by the renewal. Besides the' directors, when they discovered the error, entered the note in question as a renewal, which shews the opinion of that board was, that it was a renewal, and they are the best judges of that fact, as it is a question of fact depending upon the practice of the bank. The power of attorney was not limited to any particular time. There can be no question of bis power existing to renew, and he considered this a renewal.
    Besides the power given, is, to sign any note intended as a renewal. Take the case of a protest, and after a week, month and soforth it may be renewed. 11 is the common practice. Notes are sometimes renewed a month or two after protest, as. accidents often cause protest, which when explained the note is suffered to be renewed, the back interest and protest being paid up.
    Did Garner and English become responsible? no; for Green had no right to give an original note for them; and as to them, it was an original, so that the case stands as if there bad been no renewal but the note lost by mistake, for a year, and after the mistake detected, mightnotarenewal ofithave been given by the attorney or by the party himself? Dr, Green being agent for both sides must be considered as having had notice of the nonpayment of the joint note indorsed by Croft. It is to be presumed that he being a director had notice of nonpayment, and as the note of English and Garner was given by Green the agent by mistake, it will be regarded as intended to pay the other and shew thereby notice of nonpayment of the note Croft endorsed, and which had not been regularly renewed. Any renewal Mr. Croft might have made, his 'attorney might make And the question is could Croft have renewed it upon discovery of the mistake?' If Mr. Croft upon discovery of Jhe mistake put in a similar note, to continue the debt, then it is a renewal, for it is a note simular to a former note; exactly like it, it may be said, and giveu for it; which he conceived to be a renewal. The length of time which may elapse, cannot determine the question whether renewal or not.
    The bank made the mistake as well as the agent, and therefore the bank officers telling Croft, before the mistake was detected, that 1ns name was not in bank can have no weight. Croft was bound in morality to renew, and therefore his agent’s renewing was valid.
    This was a fact, however for the jury, and the court had no right to order the nonsuit at any stage of the proceeding. The matter of discharge is always for tin. jury. (1 Cranch 200.) Where the discharge is by implication or upon circumstances it must be left to the jury and is not for the court.
    
      Gregg,
    
    the power of attorney, does not give power to renew all notes, but only such as he owed in the bank, and the question is, did he owe any note in the bank at that time. He had not been protested on the last note and. had no notice, therefore he did not owe any note in the bank when this pretended renewal was made. The power is to receive notice, not to waive notice. Seems a clear case that he did not owe tire note on both grounds. Not similar to a case of a drawer, the indorser is o .ly liable upon express conditions, which conditions here have not been complied with In the case in Cranch, there was notice to the drawer. If the court sees the jury clearly cannot give a verdict, they may support the monsuit made below.
    
      Preston in reply.
    The power speaks of all notes which he now owes or may owe in the bank, therefore the power is to the utmost extent of renewals.
   Nott, J.

It appears that Robert Singleton gave two notes, but at what time or for what amount is not stated. One was payable to the defendant Edward Croft, and endorsed by him for discount in the bank of the State. The other was payable to R. English and P. Garner, by whom it was endorsed for the same purpose: By some mistake of the cashier the two notes were posted in the books of the bank, as endorsed by English and Garner. Dr. Green was the agent of all the parties, and authorized to renew any notes which they owed in bank, either as drawers or endorsers. By thus consolidating the two notes the name of Croft, as endorser, was omitted. This consolidated note was renewed by Dr. Green with Garner and English as endorsers for more than a year before the error was detected. When the mistake was discovered Dr. Green renewed the two notes in their original form, one endorsed by English and Garner, and the other by Croft. In the mean time Croft had applied to the bank to knowwhether he owed any thing to the bank, either as a drawer or endorser, and was informed that be did not. Singleton had left the State. Upon application being made to the defendant for payment, as endorser of this last renewed note, he refused and contended that he was discharged, and that the last renewal by Dr. Green was unauthorized. This was an action brought against him as endorser. The court regarding the first note as paid, and the last renewal unauthorized, ordered a nonsuit This is a motion to set aside that nonsuit.

I do not consider the original note in this case as paid. Every renewal is a discharge of the prior note, because the renewed note is a substitute for the former. But this note was not renewed. The consolidation of the two notes wag unauthorized and therefore could not be a renewal of this. The note on which the defendant was endorser still remained, and does to this day remain obligatory upon Singleton. Whether the endorser was exonerated is another question. Thai note must be considered precisely ag if no renewal had been attempted. Now the law on that subject is, that when notdl falls due, application must be made to the drawer, and notire of non-payment given to the endorser. And without such demand and notice the endorser is exonerated. The presiding judge in his report says, “ no notice had been given to the defendant in person or to his attorney, that the note due on the first of March was not paid, on the contrary it was entered up in Bank as paid.” The failure of the bank to demand payment of Singleton, when the note became due or of his agent exonerated the endorser. The subsequent renewal therefore was irregular and could not make the defendant Hable. It is said that the presiding judge was mistaken in supposing that the note was entered up in bank as paid. But that is immaterial. Suppose it to have been passed over unnoticed, which I think is the light in which it ought to be considered, still the endorser was discharged, no demand having been made of the drawer for more than a year. The nonsuit was therefore properly ordered and this motion must be refused.

Preston, for the motion.

Gregg, contra.