Case Name: Denniston against T. L. Bacon and another
Court: New York Supreme Court of Judicature
Jurisdiction: New York
Decision Date: 1813-05
Citations: 10 Johns. 198
Docket Number: 
Parties: Denniston against T. L. Bacon and another.
Judges: 
Reporter: Johnson's Reports
Volume: 10
Pages: 200–201

Head Matter:
Denniston against T. L. Bacon and another.
NEWYORK,
May, 1813.
By an agree-A. and B., 11 note for 1*000 y-order at the J3ank™ and to* t!°e"folló - terms .• “ to In 56days,one Rfth in na days, and the remainder in endorsed the s«°nted" )he°b fused to disasuit vlás^tl rerwards brought on the note a-maker, by an iTwa'Iatimi't” ted, sued for «he benefit of the payee: ¡haiT'asffbrai at the bank on certain ’ wer^refoe, »t ought to have been returned to the maker; as it would be a fraud in the payee to negoliate it, without notice of the aereenientunder which it was made and received by him; and that, as between the original parties, the note and the agreement] formed one contract; and the terms on which it was made having failed, the maker of the note was discharged from it,
THIS was an action of assumpsit, brought by the plaintiff, as endorsee of a promissory note, dated the 24th of July, 1810, by hich the defendants promised, 60 days after date, to pay to the order of William Gere and Robert Elliot, one thousand dollars at the Mohawlc Bank. Value received. It was admitted, at the búal, that the plaintiff claimed in behalf of Robert Elliot, the one half of the note with interest. The defendant gave in evidence h'om Elliot, as follows: “I have made an agreement with the Mohawk Bank for drawing one thousand dollars from the capital, by the note of Timothy L. Bacon and Abner Bacon, endorsed by William Gere and myself, 500 of which is to be for the account and benefit of the said Gere and Abner Bacon, the other 500 to be for myself, which I am to pass to the credit of T. L. Httcoii’s account. The note to be offered on the following terms: ^ per cent, to be paid in at the expiration of 56 days; 20 per cent, at the end of 112 days, and the remainder at the expiration °f 168 days. Albany, July 20,1810.” The note in question, which was the one referred to in the above letter, was offered for ’ discount at the Mohawk Bank, but was not discounted. The blank endorsement to the plaintiff was filled by Elliot, without the consent of the drawers, or of Gere. The defendant T. L. Ba~ con having been discharged under the insolvent act, the plaintiff ° ... entered a nolle prosequi as to him.
A verdict was taken for the plaintiff, subject to the opinion of die court, on a case containing the facts above stated, and it was agreed that if the court should be of opinion that the plaintiff was not entitled to recover, the verdict should be set aside, and a judgment of nonsuit be entered, otherwise, a judgment to be entered for the plaintiff.
Foot, for the plaintiff.
Van Vechten, contra.

Opinion:
Per Curiam.
Though the plaintiff sues as endorsee of the note, it is admitted that he sues in behalf of Elliot, one of the original payees, and the merits of the case, and the terms upon which the note was given, are open for examination, equally as if the suit was between the original parties to the note. The letter of Elliot explains the condition upon which the note was given, and tile purposes to which it was to be applied. The object of the parties was to raise money at the Mohawk Bank, the one half of which, when raised, to be applied to the use and benefit of Gere, one of the payees, and of Abner Bacon, one of the makers, and now the only defendant; and the other half was to be applied by Elliot, the other payee, to his account against T. L. Bacon, the other maker. But this was not all. The note was to be offered for discount on certain terms of extended credit and payment by instalments. The note was offered and rejected by the bank. The object of it failed, and the note ought accordingly to have been returned to the parties who gave it. It would have been fraudulent in the payees to have negotiated the note, and sent it into the world, without notice of the agreement under which it was drawn and received. Nor ought the payees to be entitled to regard it as binding, except in the way in which it was agreed. The present defendant, A. Bacon, ought not to be held as security for T. L. Bacon, except upon the terms specified in the letter. Those terms changed the face of the note essentially; and instead of paying according to the face of the note, the makers were to pay by instalments and on an extended credit. As between the original parties, the note and letter must be taken together as forming one contract; and then it is clear that when the terms upon which the note was to be offered to the bank were not accepted, the parties were discharged from the note. The plaintiff is therefore not entitled to recover, and, according to a stipulation in the case, the verdict is lobe set aside, and a nonsuit entered.
Judgment, of nonsuit.