Ticonic Bank v. Smiley

The opinion of the Court was drawn up by Whitman C. J. This being an action of assumpsit, to maintain it, there must be evidence of a promise, either express or implied. It is not pretended that there was any express promise. Was there an implied one? The defendant was the holder of a note of hand, made to him by one Homans, and lent it to Thomas Smiley, in order that he might pledge it to the plaintiffs, and thereby obtain delay of payment for a debt he owed them; and he having deposited it for that purpose, before it had been indorsed by the defendant, an agent of the plaintiffs called on him to indorse it; and he thereupon put upon the back of the note, “indorser not [229] holden, David Smileyat the same time remarking, he had no doubt the note was good; and he was then aware of the object of Thomas in putting the note into the hands of the plaintiffs. It appears that, at, the same time, Homans had an account with the defendant, on which there was a balance of $51,80 due from the latter, which, as the note had then been due for a long time, it would be the right of the maker to have set off, as in payment of it, fro tanto, in whose ever hands it might be found; and this right he availed himself of when sued by the plaintiffs. This balance, it is insisted, under these circumstances, that the defendant must be considered as having impliedly promised to pay to the plaintiffs. If the defendant is liable for the amount claimed upon the ground of an implied promise, it must be because he has received that amount for the plaintiffs, or because they have paid that amount for him. There is no other possible ground upon 'which such a promise can be raised. Now, has he received any sum of money for them ? It does not appear that he had ever received any sum whatever, expressly in payment of the note. When, therefore, he received the balance due on the account he could not have received it for the plaintiffs. But, by the operation of law, the plaintiffs have been compelled, in effect, to pay a debt due from him. The note was transferred to the plaintiffs as being wholly due. Both parties must so have understood it; and so in fact it was; but the maker had a balance of an account against the defendant, constituting a debt due by the latter to the former. This, at the time the plaintiffs took the note, and when the defendant indorsed it, was unknown to them. If the defendant was aware of it, he did not acquaint them with the fact; and from his conduct we must presume it did not occur to him. The plaintiffs, not being apprised of any such claim in set-off, were entitled to find the note free from any such claim; but by operation of law were, nevertheless, compelled to pay a debt, which in equity and good conscience the defendant should have kept from being so claimed and paid. He therefore may be consid [230] ered, as having in effect, requested, or, perhaps more properly, as having compelled the plaintiffs to pay the amount claimed. The mode in which the defendant indorsed the note exonerates him, only, from being liable in the case of the avoidance or inability of the maker; and is no bar to a claim like the one here set up. Such indorsements are very- common, and the extent of the meaning of them, is well understood and defined. It is never understood, in such cases, if payments have been made, or if set-offs can be claimed, when the note exhibits no indication of them, and the indorser leaves the indorsee in entire ignorance of any thing of the kind, that the indorser is free from responsibility. Defendant defaulted.