The Houston daily post. [volume] (Houston, Tex.) 1886-1903, 1896-01-29


turlty the bill OF exchange was presented
TO the gin company for payment. Pay
,nent was refused ami the bill was duly
protested. At this date and for some
time afterwards the drawer OF the bill
had funds on deposit with the Citizens
bank In an amount larger than the
amour, of the bill OF exchange.
l. AZ soon as the liability OF the in
dorser was fixed, by the non-payment
and protest. and at any time thereafter
during the continuance of such liability.
the indorsee bank had the right to apply
any moneys coming into its hands In due
course Of business. belonging to such IN
dorrsr. to the payment of the indorser's
liability uron the contract. and the ir-
dorser had no right in law or equity 10
compel the bank to proceed against the
accentor. but upon payment of the bill.
he would have had the right to It's sur
render. whereunon he might have pro-
re-A~' ~-"f1e. .ta ar0e-.nr
? While the law protects the innocent
holder at the expense OF negligent hut In
nocent acceptor. II does not permit the
former to Use his vantage ground for the
purpose Of going beyond his protection
and wilfnllv innicting on the latter a
wrong IN order 10 favor the fraudulent IN
dorser who In justice and good conscience
ought to pay the bill
The bank had the undoubted right TO
say 20 the Forge company: "You have
Endorsed us paper which. as between
you ana the acceptor. the latter ought
not to pay. We have money belonging
10 You in our hands sufficient to satisfy
your contract of Endorsement now due,
ana we elect to avail ourselves of our
equitable right TO apply same ms an Offset
and IN settlement of your contract and
return to you the paper. rather than pur-
sue the innocent acceptor In another juris-
diction, especially since such pursuit can
not possibly be necessary for our protec-
ton. We Will not use the shield thrown
around us by law. solely for our protec-
tion as Innocent purchasers. as a subter-
iuge to aid you In enforcing. through us.
an unjust demand" The case then comes
10 this: The indorser in good Conscience
SHOULD pay, the bank has its funds In its
hands sufficient to satisfy the demand
with a perfect right In equity to offest
same In satisfaction Of the bill The
pursuit OF the acceptor in a foreign juris-
dlction Is clearly not necessary to the
bdnk protection, but can only serve to
cut the acceptor off from a lust defense
ana compel 1t to pay a sum OF money
wh'ch In equity it should not pay. Under
theSe circumstances, with knowledge of
the failure Of consideration probably at
the time Of the filing of the original ans
wer but certainly when the deposition of
IT'S oiueers wero taken, the bank presses
It's claim 10 judgment upon its plea of in
nocent purchaser. In n suit Instituted az
M instance and expense OF the indorser
Whiie expressly waving It's equitable
right Of offset, 1t invokes the application
by The court of another equitable prln-
eipl' not for It's protection. but for the
sole and evident purpose of aiding the
lndorser to obtain an undue advantage
over the acceptor.
Reversed and remanded against defend
ant In error.
Opinion by Denman, J.
MERCHANTS' NATIONAL BANK VS. r.
t. McANuLTY ct al; suit on certain
promissory notes; from Tarrant county.
Second district-Afflrmed in part and
reversed and rendered IA part
Inc Merchants National bank had n
note executed by the Ryland Gold Mining
company for the sum OF SOS 1876 80. which
TAYLOR \. b. Smith, W. F.. Lake. A. NJ.
h-ii'n Thos. Roche and Il. T. McAnultv
Al the time when this note became due
, Two new notes were given in lieu thereof
GATED March b. 1891. one Tor 81 $50. signed
oy all the parties and another for ssaio,
slsheh by all the parties except McAnulty
WHO refused to sign the latter note Nc
Annuity sned the first note with the nm
standing that 1t was not to be delivered
10 the bank nor become effective until IL
was signed by Sallie Huffman. Sallie
thurman did not sign the note, but II was
.,s 49, u 70 tHe nahK ana became assets
~ ~ ~ tle ming OF the suits on
.ue NUS ,oa SWSSey PAID to the bank the
oInH W S-.''p on the notes. the bank
80, 80, ~. az ~ ti,he 10 discharge Swasey
rom iurtheT HAoiHty TO 1t upon the notes,
ana another note executed by the same
p "a yes yes, eHcsp' McAnulty, for tho sum OF
S-',9',''V, me sum ot sl2,2FS Of the money
pau ny SWasey was credited upon the two
notes embraced in this suit
The court OF civil appeals rendered iudr.
meht IN faVor OF The bank against all OF
tae detenaahts except Swasey. 1t also
heln uhat SWaseN was entitled to take
nothlng upon his plea over against his CO.
Defendants
l. II Is general and familiar rule OF
law that. when two or more persons en-
ter into n contract for the payment OF
money to third person. the law at the
, same time raises an implied obligation a.
between tn, ohligors In such contract that
each will bear his proportionate part OF
the burdens of the contract. and in case
one of them should discharge all of the