New Orleans Canal & Banking Co. v. Escoffie

The judgment of the court was pronounced by Slidem,, I. Boycesis sued upon a bond executed in favor of the plaintiffs by Ufo. Escoffie, formerly Sophia Anderson, as principal, and Boyce as surety, in which, however, the parties also acknowledged themselves as jointly and severally indebted to the plaintiffs, and expressly bind -themselves in solido. Boyce in .his .-answer sets up various grounds of defence, which we will separately state and .examine. I. He pleads .that he is merely the surety of Sophia Anderson, and as such is entitled to the .benefit of discussion. He points out, in his plea, certain property of Sophia Anderson, and makes a tender of a sum for costs to carry on the discussion. The plea cannot be sustained. The Code is clear and conclusive against it. The obligation of the surety towards the creditor is, to pay [831] him in case the debtor should not himself satisfy the'ddbt; and the property of such debtor is to be previously discussed or seized, unless the surety should have renounced the plea of discussion-, or should be bound in solido with the debtor, in which case tile effects of his engagement are t©' be regulated by the same principles which-have been established for debtors in solido. Civil Code, art. 3014; see also art. 2089. Smith v. Scott. 3 Rob. 260. Duranton, lib; 3, tit. 14, § 332. II.- He pleads that the bank has granted delay t'o'the'pfihtíipál debtor, wiflw oufi his consent; also that the bank postponed the sale of certain property mortgaged-by Sophia Anderson to secure the bond, and granted-unnecessary delays' in the-execution of the writ'of seizure and sale, until, in the mean while, the' property became greatly depreciated in value, when it Was sdld on execution,- and bought by the bank.- Some delay did occur in the execution of an order of' seizure and sale, which'was attributable partly to the written request of the de-fendant himself, and partly to the sherifif’s inability to obtain a mortgage certificate, by reason of the absence of the parish judge, and the subsequent vacancy' in that office. "We find no evidence of any act done by the' bank to the detriment of the defendant in the prosecution of their mortgage; nor are we aware of any rule of law which compelled them to resort to their mortgage rights at all,before calling upon Boyce, the debtor in solido-. III.- The defendant pleads that the bond was given in' settlement' of a- debt’ due to the bank by Win.-R. Anderson, deceased, and by Sophia Anderson, his-Widow in-community : That Brewer, the executor of Anderson, as an inducement to the defendant to-sign the bond, transferred to him-four notes drawn by Mrs. Escoffie, and endorsed by Brew'er individually,- and as executor, and by' Culbertson, payable at the Canal Bank’s office at Alexandria,-as a collateral security to indemnify the defendant against the consequencesof signing the bond: That’ before the notes matured they were deposited in-the office-of the Canal Bank’s1 branch at Alexandria-, for the benefit and security of- the defendant, and to be collected and proper measures taken thereon, which the bank was bound to do; but that, when the notes fell due, the bank neglected-to have the notes protested,- or any demand made, or notice to endorsers given,- whereby he has sustained-damage to the amount of the notes, which he pleads in reconvention. The facts material to the consideration of this branch of the defence are':that the Canal Bank originally held Culbertson’s note, endorsed by W. R. Anderson and by Boyce, which was protested at maturity, and Boyce was notified. The present bond was given- in payment of that note, upon which-, by protest and notice, Boyce had become unconditionally liable, and upon which suit had been brought against him. Before Boyce signed the bond, Brewer, as executor of Anderson, promised to give Boyce the notes as collaterals for his indemnity. The bond bears-date on the 21 December, 1841. On the first of March, 1842, Breiver, as executor, by notarial act, transferred- the four notes to Boyce as M collateral security,” and “ to indemnify Boyce from all loss that he may sustain on account of the suretyship on the bond.” This act was not notified to the bank till 1846 ; but on the day of its execution, Breioer went with Boyce to-the office of the bank, and stated to the cashier their agreement that the notes-should- be a collateral security for Boyce, as the surety on the bond. The notes-,with other assets of Anderson’s estate, had been left by the executor at th© bank for safe keeping, in a bundle or envelope. The four notes were taken out of the package and put in a separate envelope, upon which was endorsed a [832] memorandum that they had been transferred by the executor to Boyce, as his collateral security for his suretyship on the bond of Sophia Anderson. On the back of the notes are pencil memoranda over the initials of Chew, cashier, stating as to one: “No funds”; and as to the other: “ Not protested by request of Brewer, and no funds.” The cashier states that notes were very often deposited at the bank for safe keeping, and without having any connection with the business of the bank ; that if they had been deposited for collection, they Would have been entered on the books of the bank; that no entry in the books was ever made; that the agreement between Brewer and Boyce had no connection with the execution of the bond, so far as' the bank was concerned ; that he never Was authorised to receive, and never did receive, the-notes as security for the bond ; and that it was a mere- deposit for safe keeping at the request of the parties; that when Brewer originally deposited them for safe-keeping, he said there was no necessity for protesting them, as he was first and last endorser; that Boyce never asked him to have them protested ; and that when notes are brought for safe-keeping they are not protested, unless it be requested. In 1846, Boyce exhibited his notarial act of transfer from Brewer to Chew, the cashier of the bank, who gave hinr the' notes. There are several other circumstances tending to show that the bank had no connection with, nor interest in the notes, as collaterals; and that in fact Chew, personally, was considered as the friendly depositary of the parties,- Brewer and Boyce. Among them the most prominent are, that Brewer brought suit in 1844, against Chew, individually, to compel him to give up the notes, which Chew refused to do without Boyce’s consent. This suit was dismissed at Boyce’s instance, and a written agreement was signed by Brewer, as executor, that the notes should remain in Chew's hands. So when Boyce twice received the note from- Chew, he receipted- to him individually, and not as cashier. Both the suit and these receipts were long after the maturity of the notes; and no complaint appears to have been made by either Brewer or Boyce, about the omission to protest, until it was set up in the present action. It is quite clear, under this state of facts, that there is no liability upon the bank by reason of the non-protest of the notes, and the omission to notify the endorsers. In the most favorable view for the defendant, and considering the bank, and not Chew, personally, as the depositary, it was a mere deposit for safe-keeping, and not for collection; and the notes were not a collateral security to the bank, but merely to Boyce, as botween him and Brewer, the executor. Chew’s testimony as to the usages of banks, and the mode of depositing for collection, is in accordance with experience. There is no ground whatever to charge the bank for any loss which may have resulted from the omission to protest. Judgment affirmed.