Court Opinion

ID: 3642580
Source: CourtListenerOpinion
Date Created: 2016-07-06 05:59:44.626841+00
Date Added: 2024-06-11T15:47:01.948843
License: Public Domain

Assumpsit in which the jury found a verdict for the plaintiff, subject to the opinion of the court upon the following case:
In August, 1837, 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:
$6,000.                              Orange County, 17 August, 1835.
Six months after date, we, Cannon Bowers, principal, and Charles McCauley and Reuben C. Poe, sureties, promise to pay Charles (539) Dewey, cashier, 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. *Page 391
This note was made in order to procure a loan by its discount at the bank for the sole use 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 McCauley 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 net 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 $5,000, dated Mobile, 30 January, 1837, drawn by Alexander McCowen  Co., on G. R. Wilson  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 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 know if the draft had been paid, and to obtain a surrender of his note. The officer of the bank, referring to the said entry,   (540) and it appearing that eight days had passed since the draft had become due and payable, and no notice of its dishonor having been received, supposing therefore that the 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 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, etc. It is contended by the plaintiff that the note never having been in fact paid, but having been *Page 392 
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: (1) That the plaintiff never had any right to recover upon the said note — that, though in a note discounted by the bank, interest for a loan may be 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. (2) That upon the facts herein before stated, the note had been paid or discharged as against all the parties. (3) That, if not so as to Bowers the principal, yet as to the sureties it had been discharged. (4) That the plaintiff cannot recover upon the counts for money lent, against any of the defendants under the circumstances herein before stated. (5) That, if not so as to Bowers, the principal, yet as to the sureties no recovery can be had upon these counts. (6) That, if the defendant Bowers is liable to this action of the plaintiff upon all or any of the counts in his declaration, (541) had he been sued alone, yet the plaintiff not being entitled to recover against the other 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.
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 show the nature of the transaction and the intention of the parties. The proceeds of the bill of McCowen  Co. on New York, "if paidwhen 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 *Page 393 
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   (542) 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 impression 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 holder 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 be maintained on the original note against the maker to recover the amount of the check — and that the bare fact of delivering up the old note, was not sufficient evidence that the check and new note 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 the plaintiff and that the judgment must be.
PER CURIAM.                                           Affirmed.
(543)