Case Name: The President, Directors, and Company of the Hartford Bank versus Samuel Barry
Court: Massachusetts Supreme Judicial Court
Jurisdiction: Massachusetts
Decision Date: 1821-03
Citations: 16 Tyng 93
Docket Number: 
Parties: The President, Directors, and Company of the Hartford Bank versus Samuel Barry.
Judges: 
Reporter: Massachusetts Reports
Volume: 17
Pages: 75–78

Head Matter:
The President, Directors, and Company of the Hartford Bank versus Samuel Barry.
The cashier of a banking company may, ex offido, endorse a promissory note the property of the company, and authorize a demand on the maker and notice to the endorsers.
Where an endorsed promissory note was made and discounted for the benefit of the maker at usurious interest, and thus first put into circulation, the maker was held an incompetent witness to prove the usury.
Assumpsit against the defendant, as endorser of a promissory note, made by one Benjamin Eaton, jun., payable to the defendant in four months from the date and grace, dated May 20th, 1819.
At the trial before the chief justice, at the last November term in this county, the plaintiffs, to prove notice, produced evidence that at the request of Samuel Frothingham, cashier of the branch of the United States bank in Boston, a demand was made on the maker and notice given to the endorser on the 23d of September. The note had been transmitted from the Hartford bank to FrotKingham by the cashier of that bank; but no evidence of any [ * 95 ] express authority for this purpose was given to * the jury, nor was any evidence offered to show his general authority in such cases.
It was thereupon objected by the defendant, that this evidence was insufficient to prove any notice by the plaintiffs; and also, that the notice relied upon was given before the note became due. But the chief justice admitted the same, and instructed the jury that they might thereupon find a verdict for the plaintiffs.
After the evidence for the plaintiffs was closed, the defendant offered Eaton, the maker of the note, to prove that it was an accommodation note, endorsed at his. request by the defendant; that it was discounted for him, at a greater rate of interest than six per cent, per annum, by one Asher Adams ; and that Adams then claimed to act as the agent of the plaintiffs. But the chief justice refused to permit Eaton to be sworn as a witness; and a verdict was returned for the plaintiffs, subject to the opinion of the Court on the foregoing facts.
J. T. Austin, for the defendant,
would not insist upon the point taken at the trial, that the notice, if any, was given too early , acknowledging that authorities were against him.
But he contended that no demand or notice was sufficient, unless given by the holder of the note or his authorized agent . In the case at bar, the property of the note was in the plaintiffs. The sending of the note to Mr. Frothingham did not transfer the property to him. He could not do many acts which the owner could, as extending the credit, further negotiation, &c. The property being in the plaintiffs, it needed their corporate act under seal, or at least by vote, to give any one the power to demand payment for them.
The defendant, however, relies most on the rejection of Eaton as a witness, as entitling him to a new trial. The objection to his competency rests on the decision of this Court, in the case of Churchill vs. Suter , supported by the decisions of the [ * 96 ] Supreme Court in New York. But *this case is clear of the point there decided, which excludes a party to a negotiable instrument, as a witness to prove it originally void. It has been repeatedly ruled that he is a competent witness, to testify to any facts subsequently arising, which go to show it void . In the case at bar, we offered Eaton to prove usury subsequent to the making and endorsing of the note.
Prescott, for the plaintiffs.
The cashier of the Hartford bank was the proper person to endorse the note in behalf of the plaintiffs. If the parties had lived in Hartford, he was the person who would have received payment of the note, and would have been competent to discharge them. This is the proper business of that office in all banking institutions. He might have come on to Boston, and given the notice and demanded payment in person. The objection to his transferring this power to another seems rather captious than solid.
The objection to Eaton’s competency rests on the decision in Walton vs. Shelly , and the numerous cases to the same effect. Adams was the agent of Eaton and the defendant. If there was usury in the negotiation, it was confined to those persons. The plaintiffs knew nothing of it. If they had been privy to it, then the case would have been within that of Powell vs. Waters. Adams was not the agent of the plaintiffs, who, in truth, knew nothing of him, or of the pretended usury. The case is in fact that of Churchill vs. Suter. The taint was given to the note, if at all, before it went into circulation.
Austin. One object of Eaton’s testimony was to prove Adams the agent of the plaintiffs, and that the usury was paid to him and received by him, in that character, and for the use of the plaintiffs.
See Bayley, 69.—Kyd, 5, 6.— Chitty on Bills, 74.
11 East, 115, Esdaile vs. Sowerby.—2 D. & E. 167 Tindall vs. Brown.—2 Campb 177.—7 Mass. Rep. 485.
4 Mass. Rep. 156.
10 Johns. 231, Woodhull vs. Holmes.—15 Johns. 270, Skilding vs. Warren.—17 Johns. 176, Powell vs. Waters.
ID.SfE. 296.

Opinion:
Parker, C. J.,
delivered the opinion of the Court.
We are all of opinion that Eaton was not a competent witness to prove usury in the sale of the note to the broker Adams; the note not having been put in circulation until then. The cases cited from Johnson's reports establish this point, *viz., [ * 97 ] that a party to a note, who is otherwise competent, may be a witness to impeach the consideration by any fact happening after the note was made; such as usury upon any transfer. Rut we consider the note in the case at bar as made to all substantial purposes when Eaton procured it to be discounted, which was the purpose for which it was made. It had never before been uttered, and could not have been used by Eaton, he being the promisor, except by selling it; and when he sold it, it became efficient as a negotiable note. To admit him, therefore, to prove usury in this case, would be to defeat the salutary principle, by which a party to a note is precluded from disparaging it by his testi many .
As to the demand made on the maker of the note, and notice of non-payment to the endorser in the case before us, we can see no sound objection. The cashier of the Hartford bank put his official signature on the back of the note, and sent it to the cashier of the branch bank in Boston, for the purpose of making the demand, and it was by him caused to be done. It is insisted that this act of the cashier of the Hartford bank was without authority from the corporation. But we think that the authority may be implied; it being the duty of cashiers to see to the preliminary measures necessary to a suit upon notes. A cashier cannot transfer the property of the corporation in a note, without authority from them, or perhaps, from the directors, pursuant to powers vested in them by the corporation ; but he may do what is requisite for the recovery of a note. The defendant in this case has no right to deny the authority of the cashier; for the corporation ratify his act, by bringing the action upon the act done by him. Had the note been sent on without any endorsement by the cashier, the demand would have been good. The endorsement amounts only to authority to deliver the note to the maker or endorser, as either should pay it; and the payment to the person holding the note, under such circumstances, would have been a discharge. There is no case which [ * 98 ] * requires that the person making the demand, should be authorized by letter of attorney; it is sufficient that he has been requested to perform the act, and that he has the note to deliver on payment.
Judgment on the verdict.
[The doctrine is unsound. See note to Packard vs. Richardson, post, 197— Ed.]