Fogarty v. Wilson

Gilfillan, C. J. Action on defendant’s guaranty of a promissory note, made by one C. S. Wilson, payable to the order of D. Syme & Bro. The answer in effect denies plaintiff’s title and alleges payment. On the note is a general indorsement by D. Syme & Bro., and another (without recourse) by the First National Bank of Minneapolis. The transaction which plaintiff claims transferred the note to him, and which defendant claims amounted to a payment, so that the note was discharged and could not be transferred to plaintiff, was this: D. Syme & Bro. transferred the note, before its maturity, to the First National Bank of Minneapolis. That bank sent it for collection to the German-American Bank of St. Paul. Plaintiff was the note-teller of this bank, and it was his business to attend to the collection or protesting of notes. He protested this note, but he [292] and the bank supposed he had failed to protest in time. He thereupon paid the amount of it to the German-American Bank, and that bank thereupon indorsed the note to him, and paid the amount to the First National Bank. The latter bank afterwards, upon being informed of the whole transaction, indorsed the note without recourse for the purpose of passing the title to plaintiff. The title was thus vested in him, unless the note was discharged, as to the parties liable on it, by the transaction between him and the German-American, or between that and the First National. What effect the payment of the money by plaintiff to the German-American and by the latter to the First National had upon the note, depends upon the intention with which it was paid. If paid with intent to satisfy the note, the payment had that effect; but if without that intent, it of itself, and without reference to any action of the First National after knowledge of that fact, had no such effect; for the relation between the parties paying the money and those liable on the note was not such as to give the latter any right to have the payment appropriated to their benefit, contrary to the intention of the parties making it. Upon the evidence bearing on this point, the plaintiff was clearly entitled to a verdict. There was none tending to prove that either the plaintiff or the German-American Bank had any intention to pay the money for the purpose of discharging the note, or to pay it for or on behalf or for the benefit of the parties liable upon it. It appears that plaintiff supposed himself liable to the German-American for his failure to protest the note, and that bank supposed itself liable to the First National for such failure, and each paid the money to discharge such supposed liability, and neither intended to discharge, or supposed the payment would have the effect to discharge, the contract liability of the parties to the note. It is also incontrovertible on the evidence that they supposed that, upon his paying to the bank the amount of the note, it could transfer the title to him, and he could take it and hold and enforce it against the maker and guarantor, and for that purpose the bank indorsed it to him. In this they were mistaken. The bank could not pass the title, because it was in the First National Bank. But neither that mistake, nor their mistake as to [293] their liability for failure to protest, could make the payment operate as a payment and satisfaction of the note contrary to their intention. Whether the First National Bank could have given it that effect by retaining the money as a payment of the note after it was informed of the character of the transaction, it is unnecessary to decide, as it did not so retain it. The plaintiff having been entitled tó a verdict, it is unnecessary to consider whether there was error in the charge. Order affirmed.