Hartshorn v. Brace & Graves

By the Court, Johnson, J. The only question of any importance in this case, is whether the defendants were discharged from their liability as indorsers, by the act of Isaac W. Harts-horn, when he advanced the amount to the Yates County Bank, and took the note. This would undoubtedly have operated as a payment of the note, so far as the defendants were concerned, had it been done without their assent. The law would have presumed a payment as to them, especially as the Yates County [129] Bank held the note for collection merely. (Burr v. Smith, 21 Barb. 262.) But the, evidence is clear, on both sides, and entirely without conflict, that the defendants consented that said Hartshorn might advance the money without canceling the note¡ and hold it against them as his security, for a certain time. Hartshorn refused to advance the money without such an agreement, on their part, and the bank refused to surrender the note without erasing their names, until they were authorized in writing, by the defendants, to do so. There can be no question therefore as to the fact, and the justice must have determined the matter as a question of law. As a question of law, upon these facts, there can be no doubt that the note was a valid subsisting obligation, in the hands of Hartshorn, after it came to his hands in the manner it did, against both the makers and these defendants as indorsers; because, if we concede fully that the Yates County Bank was wholly without authority from the Metropolitan Bank to transfer the note to a third person, the defendants are in a position which estops them from denying the authority. Having consented that the holder might transfer it, and that J. W. Harts-horn might hold it as an obligation against them, if he would advance the money and take it up, and he having acted and advanced his money, on the faith of such assent, they cannot now be heard to allege a want of authority in the holder, to transfer the note. In any aspect, the Yates County Bank had sufficient authority to bind the defendants, by a transfer. It had the authority of the defendants themselves, if it had not that of the Metropolitan Bank, and that is good as against them. It is claimed by the defendants that the justice found as a conclusion of fact, that the note was paid, and that the defendants did not agree that it might continue good as against them in the hands of Hartshorn. But if he did, it is entirely against all the evidence, and the judgment should be reversed for that reason. The agreement, however, was fully proved, and is to have a reasonable interpretation. The liability of the defendants as [130] indorsers was fixed, and it seems to me the meaning and intent tion of all parties was merely to extend the time of payment on the note ten days, for the benefit of the indorsers as veil as the makers. [Monroe General Term, September 7, 1857. The judgment of the county court and of the justice should therefore be reversed/ Johnson, Welles and T. R, Strong, Justices.]