Citizens' Commercial & Savings Bank v. Platt

Grant, J. (after stating the facts). The defense is that Houran & Whitehead were discharged on the first note, and that Whitehead had no authority to sign the firm name to the renewals, or to change the liability from indorser to that of maker. On the first note Houran & Whitehead were indorsers, and not joint makers. On the last note they were joint makers. Peninsular Sav. Bank v. Hosie, 112 Mich. 351 (70 N. W. 890). Whether they were makers or indorsers of the two intermediate notes does not clearly appear; neither is it material. The receipt and acceptance of each renewal note and the surrender of the former note constituted a payment of the former. Childs v. Pellett, 102 Mich. 558, 567 (61 N. W. 54), where this question is discussed and authorities cited. Plaintiff made a prima facie case by proving the execution and indorsement of the note in suit. The burden of proof lay with Houran & Whitehead to show that the first note was not protested, and that they were discharged as indorsers thereof. Conley v. Winsor, 41 Mich. 253 (2 N. W. 31). They failed to show it. It must therefore be [270] assumed that, when the first renewal note was given, they were still liable on the first note. It follows that Mr. Whitehead was authorized to renew the note. If the bank had insisted that they should take the note up and give their own note instead, and Whitehead had so done, he would have been acting within his authority. Mr. Houran, his partner, cannot now defend upon the ground that the indorsement in law made them joint makers instead of simply indorsers. Houran & Whitehead were not accommodation indorsers. An accommodation indorser is one who indorses a bill or note in order to enable another to obtain credit or money on it. Platt & Co., the makers, did not ask Houran & Whitehead to indorse this paper for their accommodation, or in fact to indorse it at all. They gave it in payment of a debt, and Houran & Whitehead, for their own accommodation, asked plaintiff to discount it for their (Houran & Whitehead’s) sole benefit. The plaintiff was dealing with the authorized manager of the firm. It might have insisted upon payment, and a payment by Whitehead for the firm would, of course, have bound the firm. Plaintiff might have refused to renew the note, but have offered to take the note of Houran & Whitehead alone. If they had insisted upon the latter, it would not have been the legal duty of the bank to see the other partner or partners and ascertain if they assented to giving the firm’s note in payment of the other. They were liable. It was due. They had received the consideration. The bank was dealing with the member of the firm who had attended to its financia! transactions with it. It was therefore within the authority of Mr. Whitehead to make the indorsement he did, and thus bind the firm as joint makers. Judgment affirmed. Moore, Carpenter, and Montgomery, JJ., concurred. Hooker, C. J., took no part in the decision.