Corning v. Strong

Smith, J. — This suit was commenced by a bill of inter-pleader. The bill alleges that Strong and Miller, co-partners at Logansport, Indiana, on the 3d of September, 1840, bought of Corning and Horner, co-partners at Albany, New York, a bill of goods amounting to 428 dollars and 37 cents on a credit of six months; they gave no note, but the foregoing amount was charged against them on [330] the books of Corning and Co.; that, on the 30th of May, 1842, Corning and Co., gave to one Robt. E. Ward, their agent, a written order, directing the complainants to pay said amount to said Ward; that, on the 24th of June, 1842, Ward called on the complainants with said order, and a statement of the amount due Corning and Co., and requested a settlement; they then paid him 10 dollars in cash and executed to him their note for 466 dollars and 93 cents. This note was drawn payable to the order of Ward at the branch of the State Bank of Indiana, at South Bend, on the first day of October next ensuing. The statement of the account of Corning and Co., the order to pay the amount to Ward, and a receipt of the latter indorsed upon it, are in the following words: Messrs. Strong and Miller to E. Corning and Co., Dr. 1840. Sept. 3. To merchandise at 6 mos. 28th August,................. $428 37 Interest 15 mos. 3 days,..... 37 69 Due 1st of June, 1842,...... 466 06 Interest to Oct.,............ 10 87 $476 93 Messrs. Strong and Miller: Please pay the above amount to Robert E. Ward, and his receipt shall be your discharge. Eras tus Corning and Co. 1842. June 20. By cash, ................ 10 00 Note due Oct., ........... 466 93 $476 93 Rec’d note as above, which, if paid, will be in full of this acc’t. E. Corning and Co. — R. E. Ward. The bill then alleges, that sometime after the complainants had delivered their note to Ward, but how long after they do not know, Ward indorsed said note in blank, and delivered it to Wheeler and Porter, which firm afterwards indorsed it to John 8. Patterson for their use; that said Patterson, as such indorsee, has sued the com [331] plainants in an action of debt in the Cass Circuit Court; and that Corning and Co. have likewise instituted an action of assumpsit in the same Court for the amount of their account against the complainants, except the sum of 10 dollars paid Ward in cash, and claiming that the note given to the latter is no bar to their recovery. The complainants admit that there remains due from them 533 dollars and 71 cents on said note or account, and aver their readiness to pay the same to the person entitled to receive it. They say they have offered to pay the same to Corning and Co. upon being indemnified, but that the latter refused to indemnify them against the claims of Ward’s assignees. They therefore pray that Corning and Co. and Patterson be required to interplead and adjust the claim between themselves. They offer to bring the money into Court, and pray an injunction to restrain all further proceedings in the actions at law. Upon the above bill being filed, Patterson and Corning and Co. entered their appearance and waived the bringing the money into Court. An injunction was then granted agreeably to the prayer of the bill. Wheeler and Porter answer, denying all knowledge that the note was for a debt due Corning and Co., or of their claim to the proceeds, and alleging that Ward indorsed the note to them for full value, in payment of his own debts. They say they indorsed the note to Patterson merely for collection, and that the latter claims no other interest in it. Patterson also answers, disclaiming all interest. Corning and Co., in their answer, aver that the account still remains due and unsettled on their books; that the complainants neglected and refused to pay the same; and they did authorize Ward to present the account and receive payment in money, but that they gave him no authority other than was conferred by the written order at the foot of their account, and that they never in any way assented to or recognized the giving or the receipt of said note. Upon the above answers being filed, the Court, on the [332] 9th of February, 1846, made a decree dissolving the injunction against Patterson, and perpetually enjoining Corning and Co. from proceeding with their suit at law against the complainants. II. P. Biddle, for the plaintiffs. J. A. Wright, for the defendants. The decree must be reversed. The order directed to the complainants by Corning and Co., did not authorize Ward to accept from the former a note payable to himself, and his doing so did not bind Corning and Co. The receipt of a note for a precedent debt is riot a payment; and an agent sent to collect such debt has no authority to give a discharge upon the receipt of a note or bill. Ward v. Evans, 2 Ld. Ray. 928.—Salk. 442.—Sykes v. Giles, 5 Mees. & Welsb. 645. Upon the same principle it was held by this Court, in Miller v. Edmonston, 8 Blackf. 291, that when notes are placed in the hands of an attorney at law for collection, the attorney has no authority to cancel them upon the receipt of new notes given by the debtors, and that the owners are not thereby barred from bringing suits on the original notes against the makers. An agent with limited powers must conform strictly to such powers or his principal will not be bound. Ward, as the agent of Corning and Co., was authorized to receive payment of their account and receipt therefor. The taking of a note in his own name, payable at a future day, was an attempt to transfer the debt to himself with a postponement of the right to enforce payment. It can, in no sense, be considered a payment of their debt by Strong and Miller, and they were not authorized by the order of Corning and Co. to consider Ward as the agent of the latter for any other purpose than to receive such payment. Per Curiam. — The decree is reversed, with costs. Cause remanded, with instructions to the Circuit Court to dismiss the bill.