Alton v. First Nat. Bank

• Decision Date: 22 October 1892
• Parties: ALTON v. FIRST NAT. BANK OF WEBSTER.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

157 Mass. 341

32 N.E. 228

ALTON v. FIRST NAT. BANK OF WEBSTER.

Supreme Judicial Court of Massachusetts, Worcester.

October 22, 1892

The case was submitted on the following agreed facts:

In the spring of 1889, and for some time previously, one William Walker carried to the defendant bank, a national banking association located at Webster, Mass., a number of instruments in writing, indorsed in blank by this plaintiff and himself, a copy of one of which is as follows "$150. So. Woodstock, Ct., March 4, 1889. Received of W.H. Walker, this day, one bay horse,--Vinton horse,--one express wagon, for which I promise to pay said Walker or order one hundred and fifty dollars, five months from date at First Nat. Bank, Webster, with interest at ----- per cent.; said property to be and remain the entire and absolute property of said Walker until paid in full by me; and I hereby agree not to sell or dispose of and to keep said property in good order and condition, as the same now is and, should said horse die before said sum is fully paid, I hereby agree to pay all sums due thereon; and should said property be returned to or taken back by said Walker I agree that all payments made thereon may be retained by said Walker for the use of said property. CHARLES H. MOORE. Witness I.L EDMUNDS. Indorsement: W.H. WALKER. J.R. ALTON." The amount of such paper was about $4,400. Walker then supposed the instruments to be negotiable promissory notes, and the defendant, understanding and believing said instruments to be negotiable promissory notes, discounted them for said Walker, and credited the proceeds thereof to his account upon their books. The defendant discounted said paper, relying largely upon the strength of the plaintiff's indorsement. There was no want of certainty on the part of either Walker, the defendant, or the plaintiff as to the actual contents of the several papers. The plaintiff, living at New Boston, in Thompson, Conn., about four miles from Webster, had indorsed said instruments at said Walker's request, and solely for his accommodation, supposing them to be promissory notes. He received no consideration for said indorsement. Plaintiff believed at the time of his indorsement that if he had to pay the paper he could hold the property described in it as collateral security for the payment. The plaintiff indorsed these instruments understanding that it was Walker's purpose to raise money by obtaining their discount, and that it was to aid him in this that the indorsements were requested. He did not at first know where the discounts were to be obtained, but prior to January 1, 1889, he was informed by one of the directors that the defendant bank was discounting for Walker notes with the plaintiff's indorsement, and was asked by him for a statement as to his financial condition, and the amount of his indorsements for Walker. The plaintiff, in reply, stated his financial condition, and that he thought that he was the indorser for Walker to the amount of $2,200 or $2,300. He also stated that he understood that he was liable to pay in case Walker did not. In June, 1889, Walker fled, making no provision for the payment of his indebtedness to the defendant. The defendant bank, understanding said instruments to be promissory notes, caused the same, as they became due, to be protested, of which the plaintiff had notice. After Walker's departure, the plaintiff deposited with the defendant bank $1,300, directing that it be applied to the payment of the notes upon which he was indorser, as they should mature. $1,061 of the money so deposited was applied as directed. The plaintiff, desiring to obtain possession of certain of these instruments before they were due, went to the defendant bank, and got three of his own notes discounted, and paid the proceeds thereof and a certain small sum besides, amounting to $710.20, to the defendant for an equal amount of these instruments not yet due, and same were thereupon delivered to him by the defendant. At the time the plaintiff deposited said $1,300, with directions as aforesaid, and at the time he paid the $710.20 for the instruments not yet due, he still supposed them to be negotiable promissory notes, and that he was liable on them as indorser. Afterwards he was advised otherwise, and refused to pay any more of said instruments, whereupon the bank brought suit against him on one of these instruments in Connecticut, which was decided in his favor, being the case of Bank v. Alton, reported in 60 Conn. 402, 22 Atl.Rep. 1010. This action is brought to recover back the money so received by the bank, viz., the sums of $1,061 and $710.20, making in all the sum of $1,771.20; and it is agreed that the declaration may be taken as if it specified these two sums, and the aggregate of them.

COUNSEL

W.S.B. Hopkins and Frank Bulkeley Smith, for plaintiff.

Frank P. Goulding, for defendant.

OPINION

HOLMES J.

Lord WESTBURY sometimes is...