Hilliard v. Lyons
| Decision Date | 19 August 1910 |
| Citation | 180 F. 685 |
| Parties | HILLIARD v. LYONS. [1] |
| Court | U.S. Court of Appeals — Third Circuit |
Morton Hunter, for plaintiff in error.
John S Wendt, for defendant in error.
Before BUFFINGTON and LANNING, Circuit Judges, and ARCHBALD District judge.
This action is brought by the receiver of the Allegheny National Bank on a promissory note for $10,000, executed by the defendant to the order of the bank and discounted by it. The defense set up is the want of consideration. The contention is that the defendant signed the note at the instance of William Montgomery, the cashier of the bank, upon the understanding that he was to invest the proceeds for her which he failed to do, in consequence of which she got no benefit from it, and therefore is not liable, the bank being affected by the participation of the cashier in the transaction. The production of the note made a prima facie case, the signature being admitted; and, no defense in the opinion of the court having been shown, a verdict was directed.
The action being between the immediate parties to the note, the failure of consideration was available to the defendant, if properly made out, but the difficulty is that it was not. The defendant relies on the fact that she did not herself get the proceeds, or that they were not credited to her, Montgomery testifying that he does not remember who got the money except that she did not. But the bank was not bound, as it is claimed, to see that she got the money in this way. It is enough that it was put at the disposal of Montgomery, her agent in the transaction; and that he got it there can be no question. It is averred by the defendant, in her affidavit of defense, that having signed and delivered the note to Montgomery in blank, for the purpose of having it filled out and discounted for her, Montgomery negotiated it with the bank, and appropriated the proceeds. The admissions in the affidavit were evidence for the plaintiff, and, while it does not appear that the affidavit was formally offered, these admissions were twice made the basis of objections to offers by the defendant, which had the effect of bringing them upon the record, as did the affirmance by the court of the plaintiff's point that under the pleadings and evidence the verdict must be in favor of the plaintiff. It is not the same as if the affidavit was a mere admission, which, with her attention called to it, the defendant might possibly explain away. By rule of court where the case was tried the affidavit was a pleading, of which the court took notice, and by which the defendant is concluded while it stands. And, in view of the express averment there made by the defendant that Montgomery got the money, it is idle to urge that what became of it was not shown. It is only disputed facts that have to be proved, and, this being undisputed, no proof was required.
It is said, however, that Montgomery was the cashier, and that therefore the bank had notice of the fraud and was affected by it. But that in dealing with the bank with respect to this note he was the agent of the defendant, whatever his official position outside of that, there can be no question. The defendant herself testifies that he was to negotiate the note for her as he did, and in doing so he certainly did not represent the bank, and neither did he in receiving and making away with the...
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