Court Opinion

ID: 8631944
Source: CourtListenerOpinion
Date Created: 2022-11-24 19:39:04.764576+00
Date Added: 2024-06-11T16:55:47.905503
License: Public Domain

OPINION OF
THE COUET.
This action is brought on two notes given by defendants to J. B. Danforth & Co., for one thousand and seventy-six dollars, and indorsed by the payees to the plaintiff. After one of the notes became due, Donahue, who owed, the claim, in the fall of the year 1S41, made an arrangement with the payees, by their agent, to pay both notes by procuring a credit to b" given on a note held by William M’Lane on Danforth & Lewis, for three thousand dollars. The holder of this note agreed to enter the credit, and proper entries were made in the books of.the defendant, in an account current with William M’Lane. The defendant, Donahue, passed to the other defendant, M’Lane, other paper in payment; but the actual credit was not indorsed on the note, until some time in February, though the arrangement for the credit was made in October preceding. Danforth & Co. were formed by Danforth & Lewis. Afterwards that firm was dissolved, and the firm of Danforth & Hildebran was formed. This firm was dissolved, and Danforth had the control and management of its concerns. The agent who made the arrangement as to the payment above stated, was fully authorised to act in the premises as attorney' in fact for J. B. Danforth & Co. Danforth, at the time, was at Philadelphia. On his return to Louisville, Kentucky, and before he was informed of the above arrangement, he assigned the notes of Donahue to the plaintiff, as cashier of the Bank of Kentucky, as collateral se*134curity — the notes, at the time of the assignment, being over due. And from these facts, the question arises whether the notes were paid.
There can be no doubt, as between the original parties to the notes now sued on, there was payment. The power of the agent of Danforth & Co. is not questioned. And, in this respect, it cannot be material to which of the firms the notes were due, for Dan-forth had the settlement of the concerns of both firms. But the evidence is, that the notes were due to the first firm. M’Lane agreed that a credit should be entered on a note held against Danforth & Lewis for three thousand dollars. At this time M’Lane & Donahue were in partnership, and on the books of the firm, Donahue was charged with the amount. So, as regards these partners, the transaction was completed; and Donahue, by proving the agreement and entry, could have obliged his partner to enter the credit He did enter it after the lapse of some months, to take effect from the time of the transaction. Now could not this arrangement have been set up as payment by Donahue, had suit been brought against him by Danforth & Co.? Of this there can be no doubt. Had suit been brought against Dan-forth & Co. on the three thousand dollar note, they could have set up the arrangement, as so much paid on that note.
The only remaining question is, whether the assignment of the notes deprives the defendants from setting up this defence. As the notes were assigned to the plaintiff after they became due, the equities between the original parties remained open, although the credit on the three thousand dollar note was not indorsed until after this assignment. The plaintiff should have made inquiry as to any equities which might be alleged against the notes. Being over due they were dishonored, and he was bound to know any and every equitable defence which might be made against them.
These instructions were given to the jury, and they found a verdict for the defendants. Judgment.