Case Name: CHARLES DEWEY, CASHIER, &c. vs. CANNON BOWERS & AL.
Court: Supreme Court of North Carolina
Jurisdiction: North Carolina
Decision Date: 1844-06
Citations: 4 Ired. 538
Docket Number: 
Parties: CHARLES DEWEY, CASHIER, &c. vs. CANNON BOWERS & AL.
Judges: 
Reporter: North Carolina Reports
Volume: 26
Pages: 538–542

Head Matter:
CHARLES DEWEY, CASHIER, &c. vs. CANNON BOWERS & AL.
A. gave Ms promissory note to the Bank of the State, to which B. & C . were sureties. When the note became due, A. offered to discharge it by a draft on New York, which the Bank declined ; but offered to send on the draft for collection, and, if it was paid at maturity, to apply the proceeds to the discharge of the note. Afterwards, the Cashier of the Bank, by mistake, supposing the draft to be paid, cancelled the note and delivered it up to A. the principal. It was soon after ascertained that the draft had been protested, and in fact it never has been paid: Held, that under these circumstances, the Bank was entitled to recover, from both the principal and the sureties, the amount of the note so cancelled and delivered up.
Appeal from the Superior Court of Law of Wake county, at the Special Term in June 1843, his Honor Judge Battle presiding.
This was an action of assumpsit, in which the jury found a verdict for the plaintiff, subject to the opinion of the Court upon the following case:
In the month of August, 1836, the defendant, Cannon Bowers, offered at the Bank of the State in Raleigh, a promissory note for discount, payable to Charles Dewey, the Cashier of the Bank, which is in the following words, to-wit:
“$6000. Ora nge County, Aug. 17th, 1836.
Six months after date, we, Cannon Bowers principal, and Charles'McCauley and Reuben C. Poe, sureties, promise to pay Charles Dewey, (Cash’r.) or order, six thousand dollars, negotiable and payable at the Bank of the State of North Carolina, at Raleigh, for value received.
CANNON BOWERS,
Charles McCauley,
REUBEN C. POE.”
This noto was made in order to procure a loan by its discount at the Bank for the sole usé of Bowers, was offered for discount by him for his own benefit, he being the principal therein, and the same being made by the said Charles Mc-Cauley and Reuben C. Poe merely as his sureties. The note was discounted by the Bank, and, after deducting by way of discount and retaining in advance the interest for the time the note had to run, the neat proceeds were passed to the credit of and paid to Bowers. When the note fell due, Bowers applied at the Bank to take it up. He offered for that purpose, in part, a bill or draft for $>5U00, dated Mobile, January 30th, 1837, drawn by Alexander McCowen and Co. on G. R. Wilson and Co. of New York, _ in favor of Bowers, at sixty"days after sight, and endorsed by Bowers, and cash for the residue of the note. The Bank declined to accept this draft in payment, on the ground that the parties thereto, except Bowers, were unknown; but agreed to take the draft and send it to New York for collection, the proceeds, if paid when it fell due, to be applied towards the payment of the note. Bowers assented to this, deposited the draft to be collected, and applied accordingly, and paid in cash the residue of what was due on the note, beyond the amount of the draft. The draft was immediately sent on to New York and was there accepted, but when presented at its maturity, payment was refused and the draft protested. The officer of the bank, in entering the draft on the books of the bank, by mistake stated it as falling due ten days sooner than in fact it did. Of this mistake in the entry, Bowers had no knowledge. On the eighth or ninth day after, by this mistaken entry, the draft appeared to have become due, Bowers applied at the bank to knowjf the draft had been paid, and to obtain a surrender of his note, The officer of the bank, re- ' fen-ing to the said entry, and it appearing that eight days passed since the draft had become due and payable, and no notice of its dishonor having been received, supposing jkgj.gfQj.g {Jjqj draft had been paid, delivered up the note to Bowers, having first cancelled it in the mode used in the bank by cutting it through with an iron instrument, and, upon-the supposition of the draft being paid, intending thereby to cancel it, Bowers having then no information of the mistaken entry as to the time of the draft falling due, and not intending in any way to deceive the plaintiff or the bank. A few days after- this, notice of the dishonor of the draft was received,-; and thereupon the bank communicated to the parties the fact, and the mistake made by the officer, tendered the draft, and required payment of what remained due or a new note to be given therefor, which being refused, this action was brought by the plaintiff, the Cashier of the Bank, and to the use of the Bank, in which he declared in several counts on the note, and for money lent, &c. It is contended by the plaintiff, that, the note never having been in fact paid, but having been surrendered and cancelled upon a mistaken supposition of payment, he has a right to recover thereupon against all the defendants. It is contended for the defendants; 1st, That the plaintiff never had any right to recover upon the said note — that, though in a note discounted by the hank, interest for a loan may he taken or retained in advance, yet the plaintiff has no such right, and, that, under the circumstances, this note was usurious and in law void-. 2dly. That, upon the facts herein before stated, the -note had been paid or discharged as against all the parties. 3dly. That, if not so as to Bowers -the principal, yet as to the sureties it had been discharged. 4thly. That this plaintiff cannot recover, upon the counts for money lent, against -any of the defendants, under the circumstances herein before stated. 5thly. That, if not so as to Bowers, the principal, -yet as to the sureties no recovery can be had upon these -counts. 6thly. That, if the defendant Bowers is liable to this action of the .plaintiff upon all .or .any of the counts in- his declaration, had he been sued alone, yet, the plaintiff not being entitled to recover against the othar defendants also, there cannot be a judgment against either of the defendants. Should the Court be of opinion that the plaintiff is entitled to recover against the defendants,, or either of them, upon all or any of the counts in the declaration contained, judgment to be entered for the plaintiff according to such opinion — otherwise a judgment of non-suit to be given.
His Honor pro forma gave judgment for the plaintiff against all the defendants, from which judgment the defendants appealed to the Supreme Court.
Badger & Iredell for the plaintiff.
WIL Haywood for the defendants.

Opinion:
Daniel, J.
The mere giving up by Dewey to Bowers of the note given by the defendants to the bank, was not a payment or satisfaction of it. It was not an act, which of itself affected the validity of the note. For if it was delivered up to the maker by mistake, or if it had been obtained by .deceit, it still would be a good and valid note, and the right of the plaintiff would not be thereby impaired. It is then to be regarded as matter of evidence, to shew the nature of the transaction, and the intention of the parties. The proceeds of the bill of McCowen & Co. on New York, " if paid when it fell due," was agreed' by the parties, to be applied towards the payment of this note. The bank, as the agent of Bowers, the holder- of the- said bill, immediately sent the bill on to New York, and it was there accepted by the drawers — but when it arrived at maturity, it was protested for non-payment. This New York bill having never been paid, the defendants' note- in bank, therefore, by force of the agreement, has never been paid. The plaintiff delivered up the note to'the defendants, under the-mistaken belief, of both himself and Bowers, that the money which was due on the New York-bill- and which belonged to Bowers, had been paid to the agent of the plaintiff in. New York. The plaintiff did not deliver up the note to Bowers, because, it was paid, for that was not in fact done," but under a false im-A J pression by him, that it was paid. Would it not outrage every thing like justice to permit the defendants to go quit of this note, on the plea of payment? Suppose that Bowers had given, in payment, the amount in forged bank bills and both parties then believed them good bills, and the plaintiff had then told Bowers that he was paid,- and had delivered up to him. his note — -there is no doubt, but that the plaintiff might,- notwithstanding, recover on the original note, on giving notice to the defendants, to produce the original note at the trial. The recovery on parol evidence would be on the ground of mistake in delivering up the written note.- When we ask ourselves the question, whether the plaintiff and Bowers did not each believe that Bowers, the bolder of the New York bill,- had realized the money due on it, and had paid it into the hands of the plaintiff's agent in New York? We must answer, that they did so believe, and that the note in bank was then punched and delivered up on that mistaken belief. For us to say after that, that the note was paid or discharged in law, would,: it seems- to us, be monstrous. But we are not without authority to -support our opinion. Olcot v Rathbone, 5 Wendell, 490, was a case, where the cashier of a bank, on a note holden by the bank falling due, accepted a check on. a third person for part of the amount, and a new note for the balance, and delivered up the old note. It was held, on the check being dishonored, that an action might he maintained on the original note, against the maker, to recover the amount of the check — and that the bare fact of delivering up tbe old note, Was not sufficient evidence that the check and new npte were received in payment. Secondly, the money appears to have been loaned by the bank; the taking out of the interest, therefore, when the loan was made, was not usury. It seems to us, that the law is in favor of tbe plaintiff, and that the judgment must be affirmed.
Per Curiam. Judgment affirmed.