Bank of the University v. Tuck ( 1895 )

Lumpkin, Justice.

We do not think the legal questions involved in this case are very difficult of solution. The controversy between the parties was really one of fact, rather than of law. The reporter’s statement sets forth a condensed abstract of the pleadings and the evidence. The trial judge committed errors which necessitate another hearing. Our present decision is not intended to be final or •conclusive upon the merits, but the case is left open for the jury to decide under appropriate, legal instructions, which will doubtless be given when the next trial takes place.

1. One who pays a negotiable promissory note, exe■cuted by himself, to any person other than the holder, without taking up the instrument, ought to see to it that the person receiving payment has a right to make the ■collection. By making the .note negotiable, the maker •expressly contracts to pay the same to any person who may lawfully acquire title to it in due course of trade. He therefore cannot rest upon the assumption that payment to the original payee will necessarily discharge .him. Of course, as against one who takes a promissory note after its maturity, the maker may set up the defense that he had already paid it to the original payee before •its assignment by the latter; but where one takes such a note before its maturity, such plea of payment will not, in every instance, be available. The rule as settled, by the authorities seems to he, that in such a case the holder, notwithstanding the previous payment of the note by the maker to the original payee, may collect it .again, unless one of three things appears: first, that the, payee was the holder’s general agent for the collection ■of such papers; or, second, had special authority to collect in the particular instance; or, third, that the money collected by the payee in fact reached the holder’s hands. It will be obvious, without further elaboration, .that if the payee collected for the holder under his authority, either general or special, or if the holder actually received the money collected by the payee upon the note, this should be an end to the matter. Otherwise, the law renders the careless maker liable to pay a second time.

2; There is not a particle of evidence in the record .authorizing even an inference that the bank, which was •.the plaintiff below, did anything whatever to deceive Tuck, the maker of the note, or to mislead him into the belief that the Reaves "Warehouse Company, the payee of the note, was in any sense the agent of the bank for its collection; or, that in making payment to the warehouse company, Tuck was influenced by any act or conduct on the part of the bank. The court therefore erred in giving to him by its charge the benefit of any such hypothesis.

B. It will also appear from an inspection of the record, that the question of express agency for the bank on the part of the warehouse company was not involved in this case at all. There was absolutely nothing in the evidence to show that the bank had in express terms ever made the warehouse company its general agent for the collection of papers of this kind, or for any other purpose, or had specially authorized it to collect this particular note from Tuck. Nor was there any evidence of ratification by the bank'of such collection. It follows that certain of the charges complained of, relating to the subject of express agency and of ratification, while they may in the abstract have been correct propositions of law, were not at all applicable to the facts in issue, and ought not to have been given.

4. Without intending to express or to intimate the slightest opinion as to how the jury should have found, we think there was evidence sufficient to authorize the submission to them of the question as to whether or not the alleged course of dealings between the bank and the warehouse company was sufficient to establish an implied agency for the collection, by the latter, of the note in controversy. The court therefore did not err in dealing with this question in its charge to the jury, and the instructions given in this connection were substantially correct.

5. It appears that the note of Tuck, with others, was transferred in writing by the warehouse company to the bank “as security” for “advances made” by the bank to the warehouse company. We think it clear that this instrument was ambiguous as to what “advances” were thus secured. Parol evidence to explain the meaning of the contract in this respect was therefore properly received, and the court appropriately instructed the jury in this connection.

6. We deem it unnecessary to discuss the rule announced in the 6th head-note. The correctness of what is there said is too obvious to be seriously questioned.

Judgment reversed.