Case Name: Richard Williamson, President of the Bull's Head Bank v. John T. Mills
Court: New York Court of Common Pleas
Jurisdiction: New York
Decision Date: 1858-10
Citations: 2 Hilt. 84
Docket Number: 
Parties: Richard Williamson, President of the Bull’s Head Bank v. John T. Mills.
Judges: 
Reporter: Hilton's Common Pleas Reports
Volume: 2
Pages: 84–90

Head Matter:
Richard Williamson, President of the Bull’s Head Bank v. John T. Mills.
A dealer with a hank, upon effecting with it a call loan, lodged, as collateral security for its repayment, notes endorsed by the defendant. On the loan being called in, the cashier of the bank, acting under the impression that the amount on deposit by the dealer was sufficient to cover the sum owing, delivered the securities to the dealer, who returned them to the defendant. Afterwards, upon the cashier requesting their return, they were obtained from the defendant, who, at the time of giving them up to the dealer, said he might take them back to place matters just where they were when they were given up to him by the bank.
It appearing that the loan had not been paid, held, in an action afterwards brought by the bank against the defendant as endorser on the notes thus lodged as collateral, that the mere charge of the loan in the dealer’s account, in the absence of proof that the amount on deposit was sufficient to cover the charge, was not such an act as operated to discharge the defendant from liability as endorser upon the collateral notes; and, although they had been at one time delivered up to the defendant,'yet their return to the bank, under the circumstances shown, revived the original liability of the defendant as endorser, and the bank was therefore entitled to recover. Bbady, J,, dissenting. , ■..
Appeal from a judgment of the general term of the Marine Court. The action was brought against the defendant as endorser of a note for $200, made by one James Pelton.
It appeared that Jacob D. Mills, a brother of the defendant, applied to the plaintiffs for a loan of $500. The president of the plaintiffs told him to get the defendant’s name as collateral, and the bank would make the loan. Jacob D. Mills thereupon applied to his brother, the defendant, who gave him the note in suit, endorsing it, together with two others, amounting in all to $400; and also gave him his own note for $100, thus making up. the $500 applied for. The bank made the loan to Jacob D. Mills, upon call, receiving the four notes as collateral security for its repayment.
Jacob D. Mills was a depositor with the bank, and, during the time he had the loan, continued to make deposits. On June 2d, 1855, he called at the bank, having then on deposit about $406, when the cashier informed him that the loan had been charged to him, and directed one of the clerks to give him up the collaterals. The cashier testified that they were given up on the promise, by Jacob D. Mills, to raise the money and pay the loan. The collaterals thus given up to Jacob D. Mills were by him returned to the defendant. A few days after this occurrence, however, the cashier requested Jacob D. Mills to return to the bank the notes so previously given up to him. Upon his application to the defendant for them, they were again delivered to him, the defendant saying, at the time, that he might take them back to place matters just where they were when the notes were given up to him. The notes were returned accordingly.
The justice rendered judgment in favor of the plaintiffs, which was affirmed by the general term of the Marine Court, and from the judgment of affirmance the defendant appealed to this court.
Chas. B. Hart, for the appellant.
Benj. T. Kissam, for the respondent.

Opinion:
Daly, J.
It appears, by the defendant's own showing, that when the bank charged the loan on the $500 note against the account of Jacob Mills, that Jacob had not funds in bank sufficient to pay it. Charging it against Jacob's account, therefore, could not operate as a payment of the loan unless the bank so intended. That they did not so intend, is evident from their demanding the return of the securities withdrawn by Jacob Mills, and that the defendant concurred in these views appears by his returning the securities to them. If it could be gathered, from the testimony, that the $406 which Jacob had on deposit, had been applied by the bank on the $500 loan, then the indebtedness on that loan would be reduced to $94, and, as the bank, on the 21st of June, discounted the collaterals for the benefit of Jacob Mills, it might be inferred that they meant to look to him for the $94, and not to rely upon the collaterals as a security for its payment. But, for all that appears in the testimony of Jacob Mills, he may have drawn from the bank all that he had upon deposit. The cashier of the bank swears positively that the $500 note has not been paid, and Jacob Mills does not swear that it has been. The extent of his testimony is that he had $406 on deposit when the note was charged, and it is to be presumed that if he left that sum in the bank, and has not withdrawn it, he would have said so. To rebut the positive statement of the cashier that the loan had not been paid, it was incumbent upon the defendant to have shown, by the testimony of Jacob Mills, that Jacob had never withdrawn the $406, but left it to be applied by the bank towards the payment of the loan. If he had shown this, then the fact that the bank had charged the loan against the account of Jacob, and that they had realized'$106.54 upon the col laterals, which together was more than the $500 note, it would have warranted the conclusion that the bank had been paid the loan for which the collaterals were security, and that the defendant was not liable to them upon the note in suit. The subsequent discounting of the collaterals by the bank, for the benefit of Jacob, was a strong circumstance to show that they regarded the $500 note as paid; that, by making a new loan upon them, they no longer held them as security for the former loan ; but it was not enough, in the absence of certain and positive evidence that the $406 had gone to the use of the bank. This the defendant could easily have shown; and, as he did not, the presumption is to be taken against him.
I think the judgment should be affirmed.
Ingraham, First Judge, concurred.