Tellon v. City Bank of Columbus

Gookins, J. This action was brought by the City Bank of Columbus against Tellon, as the maker of a promissory [120] note payable to one Warren, as agent of the Columbus Inswrance Company, and indorsed to the plaintiff. ■ The defendant answered, that the note was given for the premium upon a policy of insurance issued by said company to the defendant, upon the steamboat Bunker Hill, No. 3, for one year from the 8th day of February, 1851; that on the 21st of October, 1851, the policy was cancelled by mutual agreement between the parties, whereby, as to 120 dollars of the note the consideration had failed. In another paragraph, the defendant pleads the said 120 dollars by way of set-off. La another paragraph, he pleads as set-off the sum of 60 dollars accruing by the cancelling of a policy on the steamboat Empire, issued by the same company, cancelled October 20th, 1851, which would have expired December 18, 1851 — the premium for one year being 340 dollars — which latter policy was issued to Meekin and Faucett, “and whom it might concern,” and which, the defendant alleged, he held at the time of cancellation. Reply in denial. There was a trial by the Court, finding for the plaintiff for the whole amount of the note and interest, new trial refused, and judgment. The record contains the evidence, from which it appears that the note was given for the consideration stated. The defendant gave in evidence the policies of insurance. On that for which the premium note was given was the following indorsement: “ Office Columbus Insurance Company, New Albany, October 20, 1851. This policy of insurance is hereby cancel-led and declared void from date; also that there is due to the holders thereof one hundred and twenty dollars for-unexpired time thereon, from the Columbus Insurance Company.—F. Warren, agent.” The other policy had a like indorsement, of the same date, stating the amount due upon it from the company at 60 dollars. The policies were cancelled in consequence of the company having become insolvent. Warren, the agent, testified that after issuing the policy [121] on the Bwnker Hill, No. 3, and receiving the note, he forwarded it to the home office. He could not remember who took out the policy-on the Empire, but thought it was Tellon. Tellon had an interest in the boat. He gave it to Tellon when cancelled. He did not know where the premium note for that policy was when cancelled. Thinks he told Tellon, at the time of the cancellation, that the notes were perhaps not in the company’s hands, but belonged to other parties, as the company was in the habit of selling or disposing of its notes. He had no special instructions to cancel the' policies. He had before cancelled policies, and his acts had been approved by the company. These were in cases of the sale or transfer of the property insured. A circular from the company, addressed to the agent, was given in evidence, setting forth the causes of their failure. It directed the agent to pay any losses that might have occurred at his agency, and directed the return of premiums for the unexpired term ‘of any policies issued by him — giving certificates to the holders for .such amounts as he might be unable to refund. The defense here set up is relied on both as a set-off, and as a failure of consideration. It cannot be regarded as a failure of the original consideration of the note. The insolvency of the company did not of itself constitute such failure; (Hone v. Boyd, 1 Sandf. 481); and whatever merits there may be in the defense, viewed in either character, must depend upon the transaction of October 20, 1851, being a matter of defense arising between the original parties after the transfer of the note; and the only question is, whether Tellon had notice of the transfer when this occurred. The statute provides that whatever defense or set-off the maker may have had, before notice of the assignment, against an assignor, or against the original payee, he shall have also against the assignees. 1 R. S. p. 378, s. 3. We are not inclined to disturb a verdict upon mere weight of evidence, where there was evidence to weigh; but having carefully considered the proof in this case, we [122] are unanimously of the opinion that the evidence of notice was insufficient. There was nothing tending to show that notice was given by the holders of the note- — from whom it ought to have come. A statement from a person not professing to have any knowledge upon the subject, that perhaps it had been transferred, as that was their habit, seems to us to come far short of the notice which the statute requires. J. Collins, for the appellant (1). JR. Crawford, for the appellee (2). Whether the claim of 60 dollars was a proper set-off, we do not think it necessary to decide. The cause will be remanded for a new trial, upon which the proof touching that demand may be different, and an opinion in respect to it would be premature. Per Cwriam. The judgment is reversed with costs. Cause remanded, &c.