Case Name: THOMAS DEWEY vs. WILLIAM B. COCHRAN
Court: Supreme Court of North Carolina
Jurisdiction: North Carolina
Decision Date: 1856-12
Citations: 4 Jones 184
Docket Number: 
Parties: THOMAS DEWEY vs. WILLIAM B. COCHRAN.
Judges: 
Reporter: North Carolina Reports
Volume: 49
Pages: 184–188

Head Matter:
THOMAS DEWEY vs. WILLIAM B. COCHRAN.
A note, made payable to “ T. D., cashier,” negotiable and paj^able at a particular bank, which is made for the purpose of being discounted at that bank, but is rejected and not discounted, is afterwards sold and delivered by the principal therein, without the assent of the sureties, to a third person; Held, that T. D. could not recover against the surety on such note, for the benefit of such third person.
ActioN of debt, tried before Bailey, «J., at the Eall Term, 1855, of Cabarrus Superior Court.
The following ease agreed, was submitted for the judgment of the Court.
The note declared on is as follows:
u $927,00. Ciiablotte, N. C., April 13th, 1854.
Eighty-eight days after date, we, Caldwell and Hagins, as principals, and N. T. McEntyre and ~W. B. Cochran, as sureties, promise to pay to Thomas W. Dewey, Cashier, or order , nine hundred and twenty-seven dollars, for value received. Negotiable and payable at the branch of the bank of the State of North Carolina, at Charlotte.5’ (Signed by the persons named in the note.)
The said note was made on a printed form, prepared by the bank, and according to which, most of the notes discounted were framed, but was in blank as to the amount It was offered for discount by Hagins, one of the principals therein named, to John Erwin, the president of the bank at Charlotte, who informed the party offering it that it could not be discounted. The usual mode of doing business in this bank is, for the makers to offer the note for discount, and it is submitted to a board of directors. If they approve of it, it is discounted by the cashier, and it then becomes the property of the bank. If rejected by the board, the note is returned to the makers, or thrown aside as worthless. After Hagins was informed by the president of the bank that the note could not be discounted, he carried the same to Charleston, in South Carolina, without the knowledge or consent of the sureties, or either of them, and the firm of Caldwell & Hagins being previously indebted to S. S. Earrar and Brothers, he filled up the blank with the sum of $927,00 and delivered the note to that firm, in discharge of this previous indebtedness. The note was sent to Mr. Dewey by Earrar & Brothers for collection, and when it fell due, at their instance he had it protested for non-payment. Suit was then instituted by Earrar & Brothers, in the name of Thomas "W. Dewey, cashier, on the note in question. It is further agreed, that after the conversation with the president of the bank above referred to, the note was not submitted to the board of directors to be passed on; and it is further agreed, that the note was made by the persons signing it, with the view of being discounted at the bank.
Upon this special case it is agreed that, if the Court shall be of opinion for the plaintiff, judgment is to be rendered for $1012,07, of which sum $927,00 is principal money ; but if of a contrary opinion, judgment of nonsuit is to be rendered.
On Consideration of the case agreed, his Honor, being of opinion with the defendant, ordered a nonsuit; from which judgment the plaintiff appealed.
Osborne and Boyclrn, for plaintiff.
Wilson, for defendant.

Opinion:
Nash, C. J.
The action is on a note of which the following is a copy : " Eighty-eight days after date, we, Caldwell & Hagins, as principals, and E. T. McEntyre and "William B. Cochran, sureties, promise to pay to Thos. W. Dewey, cashier, or order, nine hundred and twenty-seven dollars. Yalue received. Negotiable and payable at the branch of the bank of the State of North Carolina, at Charlotte." This note -was presented to the president of the proper bank, at Charlotte, when the holder was informed that the bank would not discount it. Mr. Hagins, one of the firm of Caldwell & Hagins, the principals in the note, took it to Charleston, in South Carolina, where he transferred it, by assignment, to S. S. Ear- rar & Brothers, in payment of a debt due them by Caldwell & Hagins.
The action was brought to the County Court of Cabarrus, where judgment was rendered against all the parties to the note. Cochran alone appealed to the Superior Court. Cochran was one of the sureties.
The first enquiry is as to the nature of the contract into which the sureties entered. They bound themselves to pay to Thomas Dewey, or his order, the stun mentioned in the. note. To the validity of every contract it is essential that it receive the assent of the parties, to be bound either as payers or performers. Parsons on Contracts, 399. In this case it is not pretended that Thomas Dewey ever accepted the note. On the contrary, the bank, through its president, and whose officer, Mr. Dewey was, refused to receive the note. There is, then, no contract between Mr. Dewey and the defendant. Mr. Dewey has not the legal title to the note. But the action is brought not for the benefit of Mr. Dewey or the bank, but for the use and benefit of Farrar & Brothers, to whom it was assigned by Hagins. Did they, by this agreement, acquire such an interest in tire note" as to enable them to bring this action in the name of Thomas Dewey, the original payee ? We think they did not. The note in question is made payable and negotiable at the branch of the bank of the State, at Charlotte. What is the meaning of the word negotiable ? It is admitted that the note is in the usual form of such instruments. Put into plain English, the word negotiable means that the money is to be -borrowed from the bank designated. The sureties bound themselves that if the bank would discount the note, they would pay it at maturity ; but they do not promise to pay any other holder of the note who does not claim through the bank. Many reasons might exist why they would not be willing to incur that responsibility when they would not be willing to incur it with a private individual. If the note was discounted at the bank, they knew that, after ninety days, they could take up the obligation or refuse to prolong their responsibility by joining in a renewal of the note, and then the bank might, and would, proceed to collect it. If negotiated'to a private individual, years might pass before they knew where it was, or before it was presented for payment, nor could they, until it was presented for payment, know certainly that it was outstanding; whereas, if in the bank, he would know where to go, and he could, at any time after maturity, ascertain whether it had been taken up and discharged by his principal, and, if not, be enabled to secure himself. It never was intended by the defendant that the note should be thrown into market in any other way than as pointed ont in his contract. The principle controlling the case is fully stated in Respass v. Latham, Bus. Rep. 138. That was an action of debt upon a sealed instrument, which was payable to Mrs. Parker. "When presented to her she refused to lend the money upon it, and it was returned to the obligors. Subsequently one of the obligors, and for whose-use the money to be raised was intended, induced the payee to endorse it without recourse, and the money was advanced upon it by the plaintiff. The Court say, " The instrument, in its original concoclion, was not intended by the defendants to be thrown into market to raise funds from any one who would advance them, but from a specified individual, and that person refusing to lend money upon it, it must be shown that the defendants agreed to the new intent, that is, becoming bound to Eespass, which docs not appear."
In our case, the source from ' which the money was to be borrowed is specified in the instrument, to wit, the branch bank of the State, at Charlotte; and the bank having refused to discount it, the note, as to the defendant, the surety, died, and could not be revived by a transfer to Farrar & Brothers without his assent. Of all this the beneficial owners were apprised from the face of the note. At any rate, the fact that Mr. Dewey, the original payee, as cashier of the bank, had not endorsed it, taken in connection with the tenor of the note, was sufficient to put them on the enquiry.
According to the case agreed, the Judge below gave judgment of nonsuit, which is affirmed.
Pee Cueiam. Judgment affirmed.