Real Estate Investment Co. v. Smith & Russel

Opinion by

Mr. Justice Fell,

This action was upon a promissory note made by Smith and Russel to the order of Wm. B. Smith, and by him indorsed, and upon which the plaintiff paid its full face value. The defence was that Wm. B. Smith obtained and used the money for his own benefit.

The circumstances under which the money Avas borrowed and the firm note taken payable to the order of one of its members, who received the money, were fully explained by John J. Ridgway, the president of the company. Wm. B. Smith requested the loan for the purpose of paying Avages due by the firm of which he was a member. While the loan ivas doubtless made as a favor to him, it was for the business of the firm, and to the firm, and the firm note Avas taken. The note was not brought to Mr. Ridgway for discount, but Avritten by him after the needs of the firm had been made known, and in carrying out his intention to loan to it. There was nothing connected with the negotiation to suggest an improper use of the firm name, or to put the plaintiff upon inquiry.

The offer of the defendant went only to show that the firm did not receive the proceeds of the loan, and that the other partner had no knowledge of it. This under the established facts did not make out a defence.

The judgment is affirmed.