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the president of the bank for an extension upon.” The learned court below held of time upon the note, on the condition that the extension of the time of payment that he should pay ten per cent. interest

was sufficiently definite to meet the rethereon, and should continue to do business with the bank as a depositor and quirements of the law, and that it was otherwise.

founded upon a valid consideration, and 2. That between August 16, 1875, the therefore the endorser was discharged.

We are not able to concur with the court date of the maturity of the note, and December 8, 1875, the date of the closing of as to the character of the agreement for his account, he had on deposit in the bank extension of time of payment. Nothing sufficient funds to pay the note.

is said about it in any other part of the Under these facts we consider the law paper, except the fifth clause, and there it

is distinctly stated that no particular time of the case to be properly stated in Miller

was specified or agreed upon. The rev. Stem, 2 Penn'a St. Rep. and that the

mainder of the clause speaks only of a surety or endorsed is discharged1. By virtue of an extension of the time proposition for more time to pay the note,

an increase of the rate of interest to be of payment, which was sufficiently defi

paid, and a continuation of business by nite to meet the requirements of the law,

Lowenstein with the bank. We see no and

element of certainty in this as to the time Because there was a valuable and

when the note was to be paid. On the sufficient consideration in the case. Therefore judgment is now entered in contrary, that time is essentially indefinite

and uncertain, and there was nothing to favor of the defendant, and against the

prevent the bank from bringing suit on plaintiff, non obstante verdicto.

the note the next day after the agreeThe specifications of error were

ment to extend was made.

This being so, I. The court erred in holding that the the endorser could, by paying off the note, defendant was discharged by reason of demand its surrender, and commence the extention of time, as follows: "By an action immediately. This consideravirtue of an extension of the time of pay. tion brings the case clearly within the ment, which was sufficiently definite to operation of the rule as stated in Miller v. meet the requirements of the law.”

Stem, 2 Barr 386, and the line of cases 2. The court erred in entering judg- | which have followed, and never questionment upon a point which was not re

ed it. All the elements of the rule are served.

thus presented in Henderson's Adminis3. The court erred in directly judg: trator v. Ardery's Administrator, 12 Cas. ment to be entered in favor of the defen

451. "That a creditor, having a princidant non abstante verdicto.

pal debtor and a surety, discharges the Opinion by Green, J. May 25, 1883. surety by entering into an agreement

We assume that the matters contained with the principal, which can be enforced in the fifth clause of the agreement of at law or in equity, whereby he extends facts signed by the parties constituted an the time of payment for any indefinite actual agreement, though it is not so ' period beyond that mentioned in the origstated. The sixth clause, however, refers inal contract, is proved abundantly by our to the subject of the fifth as “the agree- | authorities." In Miller v. Stem, the case ment aforesaid." As there stated, the turned upon this very question, together

1 agreement between the bank and Lowen- with an absence of consideration.

1

On stein, extending the time for the payment page 288 we said ; “But mere consent to of the note in suit, was indefinite, as "no forbear for a loose and uncertain period particular time was specified or agreed does not tie up the creditors' hands.'

And also: "To take away from the plain- greatest facilities should be afforded for tiff a just debt in order to relieve a surety, the use of bank deposits by means of justice requires there should be a clear, checks drawn against them. The free distinct agreement by the creditor, placed use of checks for commercial purposes beyond reasonable doubt for a time cer- would be greatly impaired if the banks tain or total forbearance, or forbearance could only honor them on peril of relievfor a reasonable time.” 'In Brubaker v. ing endorsers, without an investigation of Okeson, 12 Cas. 522, Strong, J., said : discounted paper. This question does not “Nothing short of an agreement to give seem to have frequently arisen in the time, which binds the creditor, and pre- | courts, but in three cases out of four to vents his bringing suit, will discharge the which we have been referred, the right of surety."

As we have observed, there was the bank to pay out the deposit of the no agreement to extend the payment of party in default on his paper, without rethe note in suit for any definite time, and lieving the endorser, has been affirmed. therefore the bank was not prevented | Thus in Maryland, in the case of Martin from bringing suit at any time, and the v. Mechanics' Bank, 6 Har. & Johns, 235, judgment of the court below must be re- in an action on an inland bill of exchange versed for this reason. Another point by an incorporated bank, as the holder of was made, however, though not deter- the bill which they had discounted before mined by the court, notwithstanding it it became due against the payee, evidence was reserved, which, if sound would still was given that the acceptors of the bill defeat the plaintiff's right of recovery.

on the day it became due, and for a long It grew out of the fact that Lowenstein time before, and for several months therecontinued to do business with the bank, after, kept an account at the said bank by and had at various times sums on deposit depositing, and from time to time checkwith the plaintiff sufficient to pay the ing out money, and that on the day the note. It is contended that these funds, bill became due they had no money in being within the power of the plaintiff, bank, but that about a month afterwards an obligation arose to appropriate them a balance was struck between the bank to the payment of the note as in favor of and the acceptors, when they had a sum the endorser, and this not being done, the of money sufficient to have discharged the latter was discharged. We do not think bill. Held, that the bank was entitled to

While it is true that a bank is a mere recover the amount of the bill from the debtor to its depositor for the amount of payee; that the conduct of the holders of his deposit, and therefore, in an action by the bill with regard to the acceptors, was the bank against the depositor, on a note not a waiver of their right against the enupon which he is liable, the latter may dorsers, nor a release as to them; and, as set off his deposit, yet we do not think the between the holders and acceptors, there bank is bound to hold a deposit for the was no payment. The case was elaboprotection of an endorser of the depositor. rately argued by counsel, and fully considA bank deposit is different from an or- ered by court. It was held that a deposit dinary debt in this, that from its very na. of money in a bank by a regular depositure it is constantly subject to the check tor is not to be regarded as an appropriaof the depositor, and is always payable tion by him of the money deposited to on demand. The convenience of the the payment of existing indebtedness of commercial world, the enormous amount his, but rather for the mutual benefit and of transactions by means of bank checks convenience of the bank and depositor, occurring on every business day in all “according to the common course of busiparts of the country, require that the ness in our money institutions." On page

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247 the Chief Justice said : “The mere ceptional character. It is thus stated in placing money in bank on deposit by the Morse on Banks and Banking, on page Messrs. Woods had not of itself the affect 35: “The bank is under the obligation of to discharge the appellant from his liabil- honoring the customers' drafts and checks ity as endorser of the bill; and the not whenever the same are presented for paydiverting, by the plaintiffs, the money ment; provided, that at the time of such from the purpose for which it was so presentment, the balance of the account, placed and received by them in bank, and if then struck, would show a credit in faapplying it to the payment of the bill, was vor of the customer, of funds on which not more to the prejudice of the endorsers the bank has no lien, sufficient to meet the that their forebearing to sue the acceptors sum called for by the check or draft. The and did not amount in law to a waiver of contract so to honor the depositors orders their right of action against either of the is implied from the usual course of busiparties? In Voss v. The German Amer

The deposit is made with the tacit ican Bank, 83 I11. 599, it was held that understanding that the bank shall respond

Ill where the principal on a note payable to to the depositors' orders so long as there a bank has funds on deposit iu the bank is sufficient balance to his credit.” It may after maturity more than sufficient to pay well be that special circumstances may it, the omission of the bank to appropriate exists in particular cases, which will conthe deposit to the payment of the note vert into an obligation or legal duty, as to will not discharge the surety. In New endorsers and others contingently liable, York, in case of the National Bank of that which would otherwise be a mere Newburgh v. Smith, 66 N. Y. 271, it was privilege of the bank. Thus an original held, that where, after the maturity of a direction by the maker and endorser on promissory note held by a bank, and due the one hand, and the bank on the other, protest and notice thereof, the maker that general deposits of the maker should makes a general deposit in the bank, of be applied in discharge of the endorsed an amount sufficient to pay the note, this paper after maturity, or possibly a course does not of itself, as between the bank and of dealing to that affect, might suffice to an endorser, operate as a payment. In create such an obligation. But, in the abthe absence of any express agreement or sende of such circumstances and of special directions it is optional with the bank direction we think that general deposits, , whether or not to apply the money in pay- made after maturity of the depositor's obment; it is under no obligation to do so. ligation, are to be treated in the same The case of McDowell v. The Bank of manner, subject of course, to the option Wilmington, i Harrington 369, in the of the bank, as the same class of deposits

, State of Delaware, holds the contrary doc- made at any other time and before matur: trine ; but we think the better reason is ity; that is, according to the general usage with the three preceeding cases, above and understanding prevailing in the comcited. It is beyond question that the bank mercial world. We fully recognized the in the absence of any special appropria- rule that where a principal creditor has tion of the deposit by the depositor, would the means of satisfaction actually or pohave the right to apply a general deposit tentially within his grasp, he must retain to the payment of any existing matured them for the benefit of the surety ; but indebtedness of the depositor. But that we regard the case of bank deposits as an privilege is a right which the bank may exception to the rule. We are not preor may not exercise in its discretion. As pared to say, and do not hold, that when before stated, a bank deposit creates a the bank has funds of the maker in hand, forin of indebtedness of a peculiar and ex- at the time of bringing suit, the endorser

VOL. IV.

No. 32

a

YORK LEGAL RECORD. Appeal from the decree of the Court of

Common Pleas of Luzurne county.
THURSDAY, OCTOBER 11, 1883.

May 21, 1883. GORDON, J. On the may not avail himself of the maker's right 11th of September, 1879, a judgment was of set-off in defence. In such a case the obtained by Roger Wood, for the use of equities of the maker touch the holder

M. C. Earley, against the borough of directly, and are available to the endorser.

Pleasant Valley, in the sum of $476.93. Such was the decision of this court in case

On the 30th of August, 1880, a mandamus of Sitgreaves v. The Bank, 13 Wright

was issued for the collection of this judg362, and we know of no reason why that

ment, which was returned served upon doctrine would not be as applicable to the

M. T. Hoban, the treasurer of said bor. case of a deposit as to any other form of

ough, who, for answer thereto, alleged obligation by the bank to the maker. But

that there was no money in the treasin the present case the doctrine is inap

ury. It seems that at the same time, Hoplicable, because at the time of bringing ban, the treasurer, was the owner of two this suit, it does not appear that the plain- judgments against Early, No. 378 and tiff held any money of Lowenstein's on

379 of May Term, 1877, which it appears, deposit. In addition to this, it was part turned out to be worthless, because of the of the agreement for extension of the time insolvency of the defendant. Then, on of payment between Lowenstein and the the 14th of June, 1882, the borough coun

, bank that he should continue to do busi- cil, at a special meeting passed an ordiness with the bank. If he could not draw

nance directing the purchase of said out funds deposited, he could not do banking business, and we think there is a clear judgments from Hoban, for the sum of ,

$150. It does not appear, from this ordiimplication from the agreement for extension that Lowenstein was to be at judgments were purchased, but Hoban,

nance, for what reason or purpose these liberty to draw against his future deposits, in his testimony, explains that he brought notwithstanding the dishonor of the note

about the arrangement, and made the asin suit. Such an understanding would

signment, for the purpose of having them operate against the right of the bank to

collected through the aid of the borough. appropriate such deposits to the payment It further appears that he agreed to inof the note. In view of these considera- demnify it for any costs and expenses tions, we think the learned court below

that might be incurred by its officers in was in error in not entering judgment in

the conduct of this business. The meanfavor of the plaintiff for the amount of the ing of this transaction is easy of comprenote and interest, on the point reserved, hension. The borough was to be used as in accordance with the verdict of the

an instrument for the collection of Hojury.

ban's judgments; hence, we find, that the Judgment reversed, and now judgment next step which was taken, after the alis entered on the verdict in favor of the leged purchase by the borough, was to plaintiff and against the defendant for obtain the rule to show cause why these $2,977.45, with interest from the date of judgments should not be set off against the verdict, and cost of suit.

that which Early was endeavoring to

collect froni the borough, and this rule, Earley's Appeal.

the court below, on the 15th of July, 1882,

made absolute. Granting, however, that A borough has no authority to purchase a judgment so as to make it a set off against a judgment against the these judgments were bought, and paid borough.

for, in good faith, and for the sole purArticle 9. section 7 of the Constitution, prohibits a borough from loaping its credit to any individual.

pose of subserving the interests of the The prece

borough, there yet remains this question

QUARTER SESSIONS. to be disposed of, whence did this muni

Q. S. of

Adams County. cipality acquire the power to purchase, the outstanding judgments, or other obli

Road in Menallen Township. gations, of its creditors ? We confess

Road Law-Recommittal. that even with the help of the argument

A report of viewers which sets forth that the terminus of the learned counsel of the appellee, we

of a new road was at a "post in the Middletown and

Arendtsville road," will be re-committed to the viewers have not been able to solve this proposi

for amendment, with instruction to more particularly de

scribe the location of the post. tion. It does seem to us, that if a

In re exceptions to report of viewers borough, city, township or county, may vacating and supplying a portion of the buy up the judgments, bonds or notes public road leading from a point on the of its creditors, it may buy those valley road in Menallen township, at line of any other person, and may thus, of lands of Burkhart Wert and Josiah in effect, become a broker or banker. Griest, to a point on the Middletown and But the evils which must, in the nature of Arendtville road, at a line of lands of things, arise from the exercise of such Moses Raffensberger and Abraham Busha power by the various municipalities of ey in Butler township. this Commonwealth, are so obvious, and

Mr. McCreary, for exceptions. the power itself so contrary to every idea

Mr. Swope, for report. that we, as a people, have hitherto entertained, concerning the constitution of

McCLEAN, P.J. The petition in this these public corporations, that we may

case instead of containing too little, may set it down as certain, that it accords not

contain more than enough. with the policy of our government, and dents and practice require that the peti

, that its exercise is therefore not allowable. tion should set forth distinctly the situaBut, as we have already observed, the tion of that part of the road which the facts of this case demonstrate that the bo- petitioners desire to have vacated, not the rough is here being used as a mere instru

route or terminus of the substituted road, ment for the collection of the whole, or

which are entirely for the selection and part of, Hoban's claim, against Early. discretion of the viewers; Chartiers townHoban, for this purpose, could not use

ship road, 12 Wr. 514, vide, Road in the process of attachment, hence, as a

Ross township, 36 Penn'a St. 87. Nelsubstitute, a sale and assignment were re

sons Mill road, 2 Leg. Opin. 54. sorted to, and in this manner he gets the When we take up the Report we find borough's right of set-off; that is, he is the beginning of the substituted part discredited with that right as against Early. tinctly enough stated, but not the ending. But as this is clearly a loan of the credit It was decided in Kyle's Road, 4 Y. 514. of the municipality, it comes within the Tilghman,C.J., that no general rule can be ban of the 7th section of the 9th Article laid down as to the definite points where of the Constitution of 1874, and we are

a road shall begin and end being neces. therefore, compelled to pronounce against sary to be stated in the petition. Id certhis carefully planned and, ingenious tum est, quid certum reddi potest. In the scheme for the collection of a debt. report we have the terminus a quo, the The decree of the court below is now

corner of the garden of Samuel Detrick

and a terminus ad quem, the Middletown reversed and set aside, and it is ordered

and Arendtsville Road. The latter was that the appellee pay the costs.

left to the judgment of the viewers.

The description of a road from the dwelling house of Matthew Miller to the public road leading from Carlisle to Har

.

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