Fogarty v. Wilson
| Decision Date | 09 March 1883 |
| Citation | 15 N.W. 175,30 Minn. 289 |
| Parties | Daniel E. Fogarty v. Thomas P. Wilson |
| Court | Minnesota Supreme Court |
Appeal by defendant from an order of the district court for Ramsey county, Simons, J., presiding, refusing a new trial after verdict for plaintiff.
Order affirmed.
Geo. B Young, for appellant.
The evidence shows that after indorsing the note to plaintiff (about March 1, 1880,) the German-American bank reported the note as paid and credited as paid -- the same report and credit it would have given the First National bank, had the note been collected from a party liable on it. It did not report that the money collected was in fact the proceeds of a sale. There is no evidence that the First National was ever informed of the transaction between the German-American and plaintiff, and it must have received, accepted and retained the payment as being just what it was reported to be. The German-American had no title under the indorsement for collection, and could transfer none, and the proof is undisputed that it did not assume or intend to transfer the title of the First National. The plaintiff and the bank officers are agreed that they supposed the failure to protest made the German-American the owner of the note, and that it was the purpose of the indorsement to plaintiff to transfer this supposed title only. The transaction must have been either a payment to or a sale by the First National. It was not a sale, for the First National could not be made a seller without its knowledge or consent; and it was a payment by the German-American with money furnished by the plaintiff. Lancey v. Clark, 64 N.Y. 209; Burr v Smith, 21 Barb. 262; Eastman v. Plumer, 32 N.H 238. And see Harrison v. Hicks, 1 Porter, (Ala.) 523; Blundell v. Vaughan, 20 Miss. 625; Jones v. Wilson, 3 John. 434; Belshaw v. Bush, 11 C. B. 191; Cook v. Lister, 13 C. B. (N. S.) 543, 578, 582, 594; Simpson v. Eggington, 10 Exch. 845; Walter v. James, L. R. 6 Exch. 124; Felton v. Bissell, 25 Minn. 15; Sandford v. McLean, 3 Paige, 117, 122.
The indorsement "without recourse" made by the First National in June, 1881, -- 15 months afterwards, -- could not operate as a ratification of the sale, which was not made nor understood to be made on its behalf, nor operate to change a sale of the German-American's supposed title into a sale of the title of the First National. Nor is there any evidence that the latter ever knew of the sale or intended to ratify it.
Even if, as against the maker of the note, the payment could be rescinded and a sale made, (and there is no evidence of any rescission or intent to rescind,) this could not be done to the prejudice of the guarantor. He guarantied the "collection" of the note. While still owned by the First National, and about March 1, 1880, it was collected, and the full amount due upon it was received by the owner as and for a payment. It is immaterial from whom the owner collected the sum that was received and accepted as payment. The note having been collected, whether from the maker or a stranger, the guaranty was functus officio, and the guarantor discharged.
It appears that long before the indorsement in June, 1881, the defendant knew the First National had received the amount of the note, and he believed the note paid. During the period between March 1880, and June, 1881, the First National (the owner of the note, as it was a subsisting note) could not have sued the maker upon it, and certainly the plaintiff could not. Cook v. Lister, supra; Archambau v. Green, 21 Minn. 520. This suspension of the right of action against the maker discharged the guarantor, ( and his liability could not be revived by the indorsement made in June, 1881.
O'Brien & Wilson, for respondent.
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.,...
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