Denniston v. Bacon

Per Curiam. Though the plaintiff sues as endorsee of the note, it is admitted that he sues in behalf of Elliot, one of the [201] original payees, and the merits of the case, and the terms upon which the note was given, are open for examination, equally as if the suit was between the original parties to the note. The letter of Elliot explains the condition upon which the note was given, and tile purposes to which it was to be applied. The object of the parties was to raise money at the Mohawk Bank, the one half of which, when raised, to be applied to the use and benefit of Gere, one of the payees, and of Abner Bacon, one of the makers, and now the only defendant; and the other half was to be applied by Elliot, the other payee, to his account against T. L. Bacon, the other maker. But this was not all. The note was to be offered for discount on certain terms of extended credit and payment by instalments. The note was offered and rejected by the bank. The object of it failed, and the note ought accordingly to have been returned to the parties who gave it. It would have been fraudulent in the payees to have negotiated the note, and sent it into the world, without notice of the agreement under which it was drawn and received. Nor ought the payees to be entitled to regard it as binding, except in the way in which it was agreed. The present defendant, A. Bacon, ought not to be held as security for T. L. Bacon, except upon the terms specified in the letter. Those terms changed the face of the note essentially; and instead of paying according to the face of the note, the makers were to pay by instalments and on an extended credit. As between the original parties, the note and letter must be taken together as forming one contract; and then it is clear that when the terms upon which the note was to be offered to the bank were not accepted, the parties were discharged from the note. The plaintiff is therefore not entitled to recover, and, according to a stipulation in the case, the verdict is lobe set aside, and a nonsuit entered. Judgment, of nonsuit.