Hocking Valley Bank v. Barton

The opinion of the court was delivered, by

Williams, J.

— The uncontradicted evidence — that given by the defendant as well as that given by the plaintiff — shows that the note in suit was discounted by the bank for the payee before maturity, at the usual rate; and it is not pretended that the defendant has paid it to the bank, nor is there any evidence that it has been paid by the payee. What boots it, then, that the defendant has paid the amount of the note to the payee, or that the latter has received moneys for the use of the defendant, which it was agreed between them should be applied to the payment of the note ? Unless the bank authorized the payment, or has in some way released the defendant, he is still liable to it for the note. It is not alleged that the bank authorized the payment, but it is insisted that it did not take the note in the usual course of business, and, therefore, holds it subject to the equities existing between the maker and payee. This is the defence set up on the trial, and zealously contended for here. But what is the evidence to sustain it ? The bank, as we have seen, discounted the note for the payee before maturity; and if so, took it discharged of all equities between the maker and payee, unless there was some special understanding or agreement which took the case out of the usual and ordinary course of business. What, then, are the facts relied on as tending to show that the bank took the note under some special arrangement with the payee, and not in the usual course of business ? They are these: Payment of the note was not demanded of the maker at maturity — demand and notice were received by the payee; the note was not sent to the exchange office of Dick for collection until about fifteen months after it was due; it was retained by the bank in the meantime, at the request of the payee, upon the understanding had with him that he would pay it there without putting the bank to the trouble or cost of collecting it; and after it had been sent to Dick for collection, and suit had been brought on it, the cashier declared to Mr. Pettis that though it had been in the bank, it was held by such an arrangement that Latta, to whom it was originally given, could have taken it at any time. Now do any or all of these facts tend to show that the note was not taken in the usual course of business, or that it is held subject to the equities betwéen the maker and payee ? Do they show that it was not discounted by the bank for the payee before maturity, or that in discounting it the bank agreed to release the maker, and to look only to the payee for payment ? It seems to us that they do not. It is not an unusual circumstance for the endorser to waive demand and notice. The bank was under no obligation to demand payment of the maker at maturity, and it did not release him by retaining the note, at the request of the payee, upon his promise to pay it there without putting the bank to the trouble or cost of collecting it. Nor has the defendant any reason to complain of the indulgence, for he might have discharged his liability by .depositing the amount of the note in the exchange office where it was made payable.

Surely there is nothing in any or all of these facts sufficient io show that the bank is not the boná fide holder of the note, and entitled to recover the amount thereof from the defendant. And what do the declarations of the cashier amount to, admitting that they are admissible in evidence as against the bank ? Do thejr tend to show that the bank did not discount the note before maturity ? Or if it did, that the note was paid by the payee, or that the bank agreed to release the maker? Nothing of the kind. Taken strictly as proved, all that the declarations show is, that the bank held the note under such an arrangement with the payee that he could have taken it at any time. They have this extent — no more. And what was meant is apparent from the testimony of the two cashiers — whose depositions were read in evidence by the defendant — that the bank retained the note at the request of the payee, and upon his promise to pay it there, and thaffunder this arrangement he could have taken it at any time. But he could not have taken it without complying with the arrangement, and there is nothing in the evidence to warrant the inference that he could.

Our conclusion upon the whole case then is, that there was no sufficient evidence tending to show that the bank did not discount the note at all; or, that having discounted it, the bank agreed to' look to the payee alone for it, and release the maker; or that it charged and surrendered it to the payee to settle with the maker, and it was error to submit these questions to the jury. It follows that all the evidence given by the defendant, under exception, tending to show that he has a defence as against the payee, was improperly received, and should have been excluded. But if it were otherwise, the payee’s letters were clearly inadmissible. The bank is not claiming to recover on the title of the payee, but on its own title as endorsee of the note before maturity, and cannot be affected by the subsequent ex parte declarations of the payee. As between the bank and the defendant, the payee’s letters to the latter, amount to no more than would his unsworn verbal declarations, and come directly within the rule which excludes hearsay evidence. But as we have said, all the evidence given on the subject should have been excluded; yet having been admitted, the court should have instructed the jury, on the whole case, that there was no sufficient evidence that the bank took the note out of the usual course of business, or that it held it subject to the equities between the maker and payee, and that payment to the latter constituted no defence as against the bank.

Judgment reversed, and a venire facias de novo awarded.