Eichelberger v. Murdock

Le Grand, C. J., delivered the opinion of this court., This was an action brought by the appellees against the appellants, to recover the amount of certain drafts, and a promissory note, drawn and made by Lake &> Co., of New Orleans, and by the appellants endorsed. The drafts and notes were discounted at the Union Bank of Baltimore, for the accommodation of Lake & Co. ' There is no question of sufficiency of demand and notice, nor of the genuineness of the paper. The dispute arises out of a state of facts which may be thus indicated: It appears from the record, that on the 13th day of February 1843, the Union Bank of Maryland, as. collateral security for the payment of a specific liability of Lake & Co., held one hundred and fifty shares of the stock of the Farmers and Merchants Bank of Memphis, Tennessee; and on that day received from Lake & Co., the following letter: “Baltimore, February 1843. — The President and Directors of the Union- Bank of Maryland, are hereby authorized to hold the one hundred an(l fifty shares of the stock of the Farmers ³⁷⁷ and Merchants Bank of Memphis, now standing in their name as a general collateral security for all our liability to the said bank at present existing or which may hereafter be incurred by us. Lake &• Co.” On the 14th day of June, the bank received the following note: “Baltimore, June 14th, 1843. — In conformity with the original understanding between Messrs.

W. F. & A. Murdock and ourselves, in regard to their paper discounted for our use, by, and now held by your bank, we beg to inform you that any surplus arising either from sale or otherwise of the F. &> M. Bank, of Memphis stock, now held by your bank, and for any other paper of ours your bank deems itself insecure in, is to go towards the liquidation, with your bank of any of our said paper drawn or endorsed by W. F. & A. Murdock. With great respect, &c. Lake & Co.” On the 8th day of September 1843, Lake &■ Co. authorized the bank to sell the stock which had been hypothecated, and which was accordingly done on the 9th of the same month, realizing therefor $69.50 per share, making in the aggregate $10,425. In notifying Lake & Co. of the sale, Mr, Mickle, the cashier of the Union Bank of Baltimore, after stating the amount of sale, says, leaving “a surplus according to the statement of account herewith submitted, of $2243.44, which surplus has been paid over to Messrs.

W. F. & A. Murdock, under your letter to the bank of the 14th of June last,” On the same day the amount ($2243.44) was paid to the Messrs. Murdock, and receipted for by them. In the receipt given by them is the following: — “ We hereby, in consideration of the receipt of the above mentioned sum of money, guaranteeing the said Union Bank of Maryland from all loss or damage they may sustain by reason of the said payment.” After these facts were given in evidence, it was proven, that the bill of exchange, promissory note and draft, to recover the amount of which this suit, was brought, were assigned on the 26th day of August 1843, to the appellees, the bank receiving therefor from them the full amount thereof. It was shown by the receipt of Lake & Co., dated the 15th day of April 1841, that ³⁷⁸ the appellees’ notes in their favor, or endorsements of Lake &• Co’s own paper of various dates and sums, in the aggregate amounted to nearly $22,000; all of which notes and endorsements were granted for Lake & Co’s sole use and accommodation; and proved that the notes, or the renewals of such as were stated in the receipt as being in the hands of the Union Bank of Baltimore, continued to be so held.at the time of the sale of the Memphis bank stock.

The appellants then proved, that they had stopped payment sometime prior to the sale of the stock; and also, that prior to, and up to the time of the trial, one of the appellees was a director of the Union Bank, and knew and approved of every step taken by the bank in regard to the liabilities of Lake &■ Go., and especially of the arrangement of the 14th of June 1843, and the sale of the •9th of September following. On this state of case, the appellants submitted two prayers to the court, both of which, were "rejected; the appellees, also, offered two prayers, the first of which was rejected, and the second granted. Both parties appealed; but inasmuch as the appeal of the appellees in this case has since been dismissed, it is not necessary we should review the action of the court below in regard to the first prayer of the appellees. The theory of the prayer, granted by the court on behalf of the appellees, is, that if the