Greening v. Patten

Cassoday, J. We are convinced from the evidence that the $800 obtained of Corcoran was the property of Patten and not of Greening and O’Neil, they being mere sureties upon his note; and that when Patten paid and took up the coupons and presented them, or a receipt of their payment, to McCabe, the chairman, he had thereby fully satisfied and fulfilled the purposes for which the note was given; and that McCabe thereupon surrendered the note to Patten because Patten had fulfilled and satisfied the conditions for which the note was given to the chairman. The transaction clearly shows a payment of the note by Patten, and not a purchase of it by Greening and O’Neil; and especially is this so as to the MeCooles, who only signed as sureties, and who had no knowledge. nor information of the transaction between Patten and Greening, nor of the transaction between Patten and Mc-Cabe, both of which occurred after the maturity of the note. The case of Eastman v. Plumer, 32 N. H., 238, was not as favorable to the surety as this. There the principal maker paid and took up the note with money belonging to a third person, who had sent the principal with the money to purchase the note as his agent. To the same effect is the very clear opinion of Woodruff, J., in Chester v. Dorr, 41 N. Y., 279; and so also the decision in Lancey v. Clark, 64 N. Y., 209. We would refer, also, to the opinion of Dixon, C. J., in Pelton v. Knapp, 21 Wis., 70, 72, and Cravath v. Esterly, 26 Wis., 675; Watson v. Wilcox, 39 Wis., 643. It follows that the payment of the note fully discharged the McOooles from all further liability. As to Patten a different question is presented, for he re-issued the note in consideration of the signatures of Greening and O’Neil; and, as it was due at once, and the Corcoran note not till a year later, we are inclined to think [151] than an action can be maintained against Patten, as he is estopped from alleging that the note is paid. "Whether this note was valid in its inception, may be a serious question. The law prescribes the duties, liabilities and responsibilities of the town treasurer. The funds collected by him belong to the town, to be kept and paid over as prescribed. Gan the town treasurer, by any arrangement with the town board, convert such funds into his own private property, and substitute therefor some agreement of the treasurer, different from that prescribed by law? Gan the town board, by taking such note, postpone the time of payment of the town treasurer, and, if so, for what period? It may be that this was a mere defalcation, and a settlement therefor; but, if so, it is a little singular that subsequent to the giving of the note he was reelected and again qualified. We do not, however, pass upon this question, but prefer to rest our decision upon the other grounds. We therefore hold, (1) That where the principal maker of a note past due, without,the knowledge or consent of his sureties to the.same, borrows money upon a new note with other sureties, for the purpose of taking up the first note, with the understanding that the first note, when taken up, shall be transferred to such new sureties as collateral security, and the money so borrowed is used in fulfilling and satisfying the purposes for which the first note was given, it amounts to a payment of the same, and the sureties thereon are thereby discharged. (2) That the principal maker, by so transferring the first note, after its payment, to the new sureties in consideration of their becoming such, is thereby estopped from alleging that such first note was in fact paid. (3) Whether a town treasurer can borrow moneys in his hands, or supposed to be there, and give a valid note therefor, quaere. By the Oourt. — The judgment is reversed, and the cause is remanded for a new trial as to all of the appellants except Patten; and as to him the judgment is affirmed.