Bell v. State Bank

Dewey, J. — The state bank, the indorsee of a promissory-note, brought a joint action of assumpsit against Benbridge the maker, and Bell the indorser thereof. The note, as described in the declaration, bears date November 3d, 1841, at Lafayette, and is for 534 dollars payable and negotiable at the branch bank at Lafayette in thirty days from date. Plea, the general issue by both defendants, and sworn to by Bell. Verdict for the plaintiff; motion for a new trial overruled; and judgment upon the verdict. It appeared in evidence, that the note described in the declaration was originally a printed form of a ninety-day note, payable at the branch bank in Lafayette, and purporting to be drawn at that place, with blanks for the date, the name of the payee, and the sum to be paid. In this shape it was signed by Benbridge and indorsed by Bell, with a printed direction in the margin to “ credit the drawer,” also signed by Bell. This blank note was delivered to Benbridge, and by him submitted to the board of directors of the branch bank, for the purpose of renewing a ninety-day note between the same parties, which fell due on the 3d of November, 1841. As Benbridge was not prepared to pay the usual curtailment of the amount of the old note, the directors refused to renew at ninety days, but were willing to do so at thirty days. This determination was made known by the clerk of the bank to Benbridge, who directed the clerk to make the note a thirfy-day note; the blanks were filled up accordingly; and the word ninety in the blank note was stricken out, and thirty inserted in its’ place, making the note such as it is described in the declaration. Bell gave no consent to the change of the note from a ninety-day to a thirty-day note. It was also proved that when the note bócame payable, and on the last day of grace, a formal demand of payment was [458] made at the bank, and that, on the same day, notice of non- . payment was put into the post-office at Lafayette directed to Bell at that place; that Bell lived in the country from four to five miles from Lafayette, and about the same distance from Columbia, where there was also a post-office; that these were the nearest post-offices to the residence of Bell; and that Bell had been in the habit of using the post-office at Lafayette. The questions are, is Bell an indorser of the note described in the declaration? and if so, was the notice of non-payment sufficient? With regard to Benbridge’s liability, there is no doubt. He clearly gave authority to make the note what it is. But as this is a joint action against the maker and indorser (which the statute authorizes,) the judgment must be reversed entirely, unless it is valid against both defendants. The evidence does not present a case of the alteration of a perfected note, but raises a question of the due execution of an implied authority, arising from the indorsement of a note in an unfinished and imperfect state. The general rule of law certainly is, that if a person indorses or signs a blank paper or note, and delivers it to another person that he may raise money with it, he authorizes that other person to render him liable in any amount, and at any time, he may please. There is no restriction in the implied authority in such a case. Russel v. Langstaffe, Dougl. 514.—Collis v. Emmett, 1 Hen. Bl. 313. It must be evident that the nearer the blank instrument approaches to perfection, the more restricted must be the authority; if the sum, date, or time of payment be inserted, they cannot be changed. In the case under consideration, the blank note was not indorsed by Bell for the purpose of enabling Benbridge to raise money upon it in the market, but that he might renew a note in bank between the same parties. We do not mean to say, that had Benbridge abused the trust reposed in him by filling up the note in a manner not contemplated by Bell, and by negotiating it, the purchaser, if ignorant of the improper conduct, could not have recovered against Bell. But the bank was apprized through its officers of the real object of the note, and, therefore, knew the extent of the implied [459] authority of Benbridge in regard to filling up the blanks. What was the extent of that authority? In our opinion it was limited to the right of using the note, so as to make it answer as a ninety-day note in the place of the note already held by the bank; and which became payable on the 3d of November, 1841. Such an authority as this certainly did not empower Benbridge, or the bank, to make the new note payable in thirty days from the time of the maturity of the old note, which was very properly made the date of the substitute. There were two certain restrictions of the implied authority of Benbridge apparent upon the face of the blank note, one had respect to the length of credit, and the other to the place of payment; and he had no more right to alter the first than the last. It will scarcely be contended he was authorized to change the place of payment. Two cases are particularly relied upon by the defendant in error, to show that Benbridge had authority to make the note payable in thirty days from its date instead of ninety. The first is the Mechanics' and Farmers' Bank v. Schuyler, 7 Cowen, 337, in note. The promissory note on which that case was founded, was delivered by the indorser to the maker without any date; the maker antedated it so as to make it run nearly thirty days less than it would, had it been dated when it was made, and then negotiated it to the bank, which was ignorant of the circumstances stated. The indorser was held liable, on the ground that the bank was a bona fide indorsee without notice, and could not be affected by the abuse (if any existed) of the implied authority of the maker in antedating the note. That case can have no application to this, for here the bank was apprized of all the circumstances, and was bound to know that the implied authority of Benbridge was exceeded. The other case referred to is Mitchell v. Culver, 7 Cowen, 336. The note in that case was intrusted by the indorser to the maker for the purpose of raising money upon it; there was a blank for the date, which was so filled up as considerably to shorten the time of payment; and this was done with the knowledge of the person who became the holder'of the note. It was held, nevertheless, that he could recover against the indorser; that his knowledge of the antedating of the note made no [460] difference. The ground of the decision was, that the indorser by intrusting the note, with a blank for the date, to the maker for the purpose of raising money upon it in the market, conferred upon him an implied authority to fill the blank as he might see fit. Under this view of the subject, it is evident that the knowledge of the holder of the antedating of the note by the maker could make no difference, for it was within his supposed authority to do so. But there is this marked difference between that case and the case under consideration. There, the general object of the note which was put in circulation was to raise money in the market; here, the object was very different; it was not contemplated by any of the parties, that a new debt should be created upon the note intrusted to Benbridge, but all knew that its specific and only purpose was to effect a renewal of a ninety-day note in bank, by the substitution of a like note after the usual curtailment of the debt. The authority to Benbridge was to effect that object and no other — at least, such was his authority when dealing with those acquainted with all the circumstances of the case. He had no right, and could confer none, to strike out ninety and insert thirty in the note. We are of opinion, therefore, that Bell is not the indorser of the note described in the declaration. The evidence did not authorize the verdict; there should have been a new trial. jD. Mace, for the plaintiffs.. Z. Baird and R. C. Gregory, for the defendant. As to the question of notice: It was settled in The Bank of Columbia v. Lawrence, 1 Pet. 578, that where an indorser lived on a farm two or three miles from the nearest post-office, a notice of non-payment put into that post-office, and directed to the indorser at the town in which the post-office was, was a legal notice. Upon the authority of that case, we think the notice in the present instance was sufficient. Per Curiam. — The judgment is reversed with costs. Cause remanded, &c.