National Bank of Chambersburg v. Grimm

MeerimoN, C. J. after stating the ease: It appears that the defendant executed the note sued upon to the Taylor Manufacturing Company, and the latter company sold and endorsed it to the plaintiff. Whether it was negotiable or not (and there was some question as to this), it belonged to the plaintiff at and before the time this action began, and the defendant, the maker thereof, bad knowledge of this fact then and ever thereafter. Moreover, so far as appears, he then had no debt, claim or demand, legal or equitable, against the company io which he gave the note, that he could *96 set against it, or avail himself of, as a counter-claim or other defence, whereby to prevent the plaintiff from recovering from him the sum of money therein specified. He had no claim against that company until in the years 1889 and 1890. So that, at the time this action began, the plaintiff was plainly entitled to recover — the defendant then owed it — the amount of the note mentioned, which he was bound and refused or failed to pay. In June of the last mentioned year, the attorney of the plaintiff, who was also the treasurer of the Manufacturing Company named, and the defendant, agreed between themselves that if the defendant would make sale of certain machinery of the company, take notes therefor and deliver the same to the company, then, when the notes should be collected, the defendant’s commissions for making such sales should be applied in payment of the note of the plaintiff sued upon. Thereafter, the defendant made such sale, delivered the notes taken on account of the same to the company and the latter collected the same. The defendant’s commissions amounted to a sum of money more than sufficient to pay the note, the subject of this action. There was no evidence to show that the company ever delivered the notes taken for the machinery to the plaintiff, or that the defendant’s commissions were ever applied' to the payment of the note in question. Indeed, the jury found, as a fact, that it had never been paid. It appears that McDowell, as attorney for the plaintiff, only had authority to collect the note. He, hence, had no authority to go beyond that and agree to take anything in discharge of the note but money. He had no authority to take the defendant’s right to commissions for selling the machinery referred to in discharge of the note. It does not appear that he undertook to do so. Moye v. Cogdell, 69 N. C., 93; Herring v. Hottendorf, 74 N. C., 588; Williams v. Johnston, 92 N. C., 532; Ward v. Smith, 7 Wall., 447; 7 Wait’s Actions and Defenses, 435. *97 The fair and just interpretation of what he and the defendant agreed upon, was, that the commissions, when collected, should be applied to the payment of the plaintiff’s note, that is, the treasurer of the company, as for it, agreed that when the notes should be collected, then the money received in payment of the defendant’s commissions should be paid through its treasurer to the plaintiff. The plaintiff was not a party to that agreement, nor was it intended that it should be. The attorney intended no more than to say that he would take the commissions, when collected in cash, as payment. It was not intended, so far as appears from the evidence, that the arrangement should be accepted by the plaintiff in discharge of its note. The attorney had no authority to so agree, nor does it-appear that he intended to do so. When, therefore, the Manufacturing Company collected the defendant’s commissions for selling the machinery,and failed to pay the same to the plaintiff, and became insolvent, made an assignment of its property, the loss of the commissions was not that of the plaintiff, but that of the defendant. It was his misfortune that he failed to follow up His right, and compel the appropriation of his commissions as contemplated by himself and McDowell. We are, therefore, of opinion that the Court’s instructions to the jury, complained of, were correct. Affirmed.