Rugeley v. Smalley

Hemphill, Ch. J. To dispose of this case it will not be necessary to recite or consider in detail the charges of the Court and the various assignments of error. The first charge in substance was, that if the plaintiffs received the proceeds of the draft on Brander, Williams & Co.,, as the funds of Sznalley, or after receiving them consented to243 their application to the payment of the debt sued on, the jury should find for the defendant. We can perceive no substantial error in this instruction. That the plaintiffs did receive the proceeds of the draft as the funds of Smalley, is manifest from the instructions of the letter from Perry & Spell to the plaintiffs. It is very true, that in that letter they were instructed to place the proceeds of the draft to the credit of Perry & Spell, but in the same breath they were also directed to charge the account of Perry & Spell with the amount of the draft drawn by the defendant on the plaintiffs, and which is the subject of this suit. The proceeds of the second draft, then, were to be received on the condition that though credited to the account of Perry & Spell, yet it was not by way of payment or reduction of the debt of Perry & Spell to the plaintiffs, but as a set-off to the amount of the draft paid by plaintiffs for the defendant, which amount they were requested to charge to Perry & Spell; or, in other words, to enter satisfaction on the demand against defendant, and charge the same to the account of Perry & Spell. The credit to Perry & Spell and the charge against these were to be simultaneous acts. The instructions as to both were equally plain and equally binding upon the plaintiffs. They had no right to apply the proceeds of the draft to the credit of Perry & Spell, unless they also charged their account with the amount of the defendant’s indebtedness on the first draft, and by consequence to relieve the latter from his obligation. The plaintiffs contend, but without any sufficient ground, that they had no notice of the defendant’s claim to the proceeds of the draft on Brander, Williams & Go., until they were appropriated to the credit of Perry & Spell, and that they were not bound, on receiving notice afterwards, to change their direction. This position itself is very questionable. They certainly would be bound to surrender the proceeds to the true^owner, when informed of his rights, unless they could show that un [244] der the acts of the parties authorizing the belief that the draft was the property of Perry & Spell, they had been induced to give them further credit, or pursue such a course of dealing as would inflict upon them real injury if the rights of the defendant to the proceeds of the draft were now sustained. This might be sufficient, perhaps, to defeat the claims of the defendant. But no such pretension is set up by the plaintiffs, and they can claim nothing on that ground. Were it admitted that the plaintiffs had no notice of defendant’s rights, through the letter, yet they had such notice shortly afterwards, and when directed to enter satisfaction on their .demand against the defendant, or in other words to charge it to Perry & Spell, they made no answer; and we concur with the Judge below, in the opinion, that from such silence the jury were authorized to infer the assent of the plaintiffs to the arrangement, and that consequently the proceeds of the draft were a fund in the hands of the plaintiffs for the satisfaction of the debt sued upon. But we are of opinion that the letter itself, enclosing the draft to plaintiffs, gave notice of defendant’s rights to the proceeds, and that plaintiffs had no authority to credit the proceeds to the account of Perry & Spell, unless they simultaneously charged said account with the amount due from defendant to the plaintiffs on the first draft, and which, had it been done, would have been in effect a discharge of the defendant’s liability to the plaintiffs. We are of opinion that there is no error in the judgment and that the same be affirmed. Judgment affirmed.