Lynch v. Goldsmith

• Decision Date: 30 September 1879
• Citation: 64 Ga. 42
• Parties: Lynch. v. Goldsmith.
• Court: Georgia Supreme Court

64 Ga. 42

Lynch. v. Goldsmith.

Supreme Court of the State of Georgia

(September Term, 1879.)

Negotiable instruments. Indorsement. Protest. Charge of court. Before Judge Clark. City Court of Atlanta. December Term, 1878.

Goldsmith sued Lynch as indorser on five certificates of deposit differing only in dates and amounts, one of which is copied in the first head-note, aggregating $1,450.00, besides interest. The declaration was in the short statutory form with copies attached. The defendant pleaded as follows:

1. The general issue.

2. That on December 9, 1873, the defendant exchanged *the certificates sued on with plaintiff for a house and lot, and indorsed them in blank solely for the purpose of passing the title thereto, and not with any intention of becoming liable on said indorsement, as was well known to the plaintiff.

3. That at the time of this exchange, the certificates were worth par, and were selling in Atlanta at eighty cents on the dollar, whilst the house and lot were not worth more than $2,000.00.

4. That no demand was made on the Dollar Savings Bank, the place where said moneys were left on deposit, before this suit was brought.

5. That said certificates were made and were payable at the Dollar Savings Bank, a chartered bank having its place of business in the city of Atlanta, that payment was never demanded, that said certificates were never protested, and that defendant was never notified of any demand or of any protest.

The plaintiff introduced in evidence, besides the five certificates sued on, three others aggregating $550.00, which had been transferred to him by defendant at the same time, and with which he had subsequently parted.

The plaintiff testified, in brief, as follows: Came into possession of the certificates on December 9, 1873. Made repeated demands on the Dollar Savings Bank, and on each of its officers, but it was in a state of suspension, and has so remained ever since. The certificates were not protested. The bank was a chartered institution doing business in the city of Atlanta. Told defendant that the certificates had not been paid.

Defendant introduced the deed to the lot for which he exchanged the certificates. It purported upon its face to be in consideration of $2,000.00.

J. M. Willis testified, in brief, as follows: Was cashier of Dollar Savings Bank. It suspended September 25, 1873. Itwas pot into the hands of the stockholders on October 1st, and on the 4th of the same month W. S. *Thomson, Esq., under their direction, took charge of it. After that, witness assisted him. Subsequently plaintiff came into the bank and asked witness how they were getting on? to which he replied that they were trying to get the bank on its feet again, etc. Plaintiff showed him some certificates which he had bought of Lynch, but made no demand for payment. The certificates then sold for 60 to 75 cents on the dollar. It was then thought that the bank would pay all of its debts and leave something for the stockholders.

M. Lynch, the defendant, testified, in brief, as follows: There was about $175.00 in interest due on the certificates at the time of the trade. They cost him $2,003.40; that is to say, he had to pay $3.40 more than the principal to get one of them. On or about December 1, 1873, plaintiff asked defendant if he had any money in the Dollar Savings Bank. Defendant replied that he had, and inquired what plaintiff would give for the certificates? Plaintiff said he had no money, but would give a house and lot for them. Defendant replied that he did not want a house and lot, but would rather sell them for cash and throw in the interest. After that, every time plaintiff passed his store, he would come in and talk about the "swap." Defendant continued refusing until plaintiff told him to go and look at the house, which he did, and after consulting with his partner he consented to trade. Plaintiff came to see him from seven to a dozen times on the subject. In not exceeding twenty minutes after defendant consented to swap, plaintiff brought the deed and put it on his show case. Defendant then got the certificates, when plaintiff said that as they were payable to his order he must indorse them, and he (plaintiff) would stand between him (defendant) and danger, but he could not do anything with them unless defendant's name was on them. Defendant then indorsed them in blank. He did not put his name there to be liable if the bank failed to pay; if hehad ever thought that he would be liable he would not have done it. It was solely *on the faith of plaintiff\'s promise to stand between him and danger that he in-dorsed. Two or three days after the trade, and after defendant had been to the house, and had seen that it had only two good rooms in it, and two shedrooms, he met plaintiff and said: "I did not think you would swindle me; I want you to rue back, and I will give you ten dollars for the trouble of drawing the papers." Plaintiff declined this proposition. For various reasons stated, does not regard the house and lot as worth more than $1,500.00, if that, though it is assessed by the city at $1,800.00.

W. S. Thomson, Esq., testified that he took charge of the assets of the bank for the stockholders about October 1, 1873, and so remained until January, 1874. The bank was adjudicated to be bankrupt about March 24, 1874, and witness and Candler were appointed trustees, and have since had charge as such. About December 10, 1873, certificates of deposit sold for 80 cents cash as an investment. They were then worth from 75 cents to par. Plaintiff never made any demand on witness for the payment of the certificates held by him.

The above synopsis of the evidence for the defendant will clearly show the nature of the case and the questions involved. It is only necessary to add that the plaintiff, in rebuttal, controverted every material statement. He insisted that he parted with his house and lot for the certificates on a bank in a state of suspension solely and expressly on the faith of defendant's indorsement, and that he only did this in response to the urgent and repeated solicitations of defendant; that his house was well worth $2,200.00, the price charged, not $2,000 00 as erroneously stated in the deed; that the interest on the certificates at the time of the trade amounted to about $200.00; that from the suspension of the Dollar Savings Bank, defendant was in a great state of excitement and alarm lest he should lose his money, and seemed to be of the opinion that because plaintiff was the cashier of the Georgia Banking and Trust Com-pany, with *which the Dollar Savings Bank kept an account, and in close intimacy with the officers of the latter institution, that he could save him in some way; that defendant was not satisfied to leave the certificates with him simply for collection, but insisted that he (plaintiff) should become interested in them in some way, and after many entreaties and importunities on the part of defendant this trade was made; that the house was well worth the sum asked, and that defendant well knew that plaintiff would never have taken the certificates therefor unsecured by his indorsement, so as to be protected in case he failed to collect from the bank.

There was testimony upon collateral points tending to sustain and refute the statements of the parties at interest, not deemed material here.

The jury found for the plaintiff the full amount sued for, with interest.

The defendant made a motion in avert of judgment as follows, to-wit:

1. Because said defendant, if bound at all upon the instru-ments sued on, was bound as a security, and was liable as a security, and not as an indorser, and he was improperly sued in said action as appears on the face of the record.

2. Because the Dollar Savings Bank, the maker of said instruments sued on, and on which said defendant was so liable, if liable at all, as security, was not sued.

3. Because the instruments sued on were not in law such as could be transferred by blank indorsement, and thus create the liability on the person making such indorsement, of indorser as known to our law.

4. Because no demand and notice were averred as is necessary to charge an indorser on a negotiable instrument, payable at a chartered bank, if said instruments sued on are promissory notes and so payable.

The motion was overruled and defendant excepted.

The defendant also filed his motion for a new trial upon the following, amongst other grounds, to-wit:

1. Because the court erred, in charging the jury as follows: *"It is immaterial, gentlemen, whether this is called a promissory note or what is the particular class or style of paper this is under the law. It is sufficient that it is negotiable paper. The paper is in evidence, and undisputed as to its contents, and it is a promise on the part of the bank to pay to Lynch, or his order, the sum of money. It draws interest at 7 per cent. per annum, if on call, and at 10 per cent. by the year. I say that that is substantially the contents of the papers that are sued on. It was not, in my judgment, necessary that upon this paper there should have been any demand upon the bank for its payment, or as a consequence, any protest or notice of protest to Lynch to hold him liable, if you believe that at the time of this indorsement this bank was in a state of suspension. But so far as the demand is concerned, if you believe that a demand was made upon the president or the cashier of this bank, or both, that would satisfy the requirements of the law so far as demand is concerned."

2. Because the court erred in charging as follows: "Every indorsement of a paper is a new contract as between the indorser and the person to whom indorsed, who is called the indorsee, and is an engagement upon the part of the indorser, if that indorsement is not upon any condition, not limited or qualified in any way, that he will become liable to the indorsee or any one to whom he may indorse that paper according to the legal...