Birmingham Trust & Savings Co. v. Whitney — 95 A.D. 280

Majority

p. 280

Birmingham Trust and Savings Company, Respondent, v. Peter Whitney, Appellant.

Headnote

Alteration of a draft by adding the word “ dash.”, to the indorsee’s name — when it does not discharge-the indorser from liability—res gestae.

Peter Whitney, the payee of a draft drawn by Harry Hawkins upon the Hawkins Lumber Company, indorsed the draft “Pay to the order of T. O. Smith, Peter Whitney,” and'forwarded the draft to Smith, who was the cashier o£ at bank, together with the following letter: “ Enclosed please find 90 days’ acceptance to the Hawkins Lumber & Coal Co. As per agreement with Mr. Harry Hawkins, please discount this paper and send Hew York Exchange for the net proceeds of the draft.”

Smith, on receipt of the draft, added to his name on the indorsement the abbreviation, “ Cash.” The bank discounted the draft and transmitted the.proceeds to Whitney.

In an action brought by the bank against Whitney on the draft, Smith testified that his arrangement with Hawkins in reference to the. discounting of drafts was that he should discount the drafts as cashier of the bank and not in his personal capacity.

Held, that the addition by Smith of the abbreviation “ Cash.” to his name on the indorsement, did not relieve Whitney from liability on the draft;

Tliat evidence of the conversation between Smith and Hawkins was admissible as part of the res gestae and because Whitney had requested the discount “As per agreement with Mr. Harry Hawkins.”

Appear by the defendant, Peter Whitney, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of' the clerk of the county of New, York on the 2.7th day of . January, 1904, upon the decision of the court rendered after a trial before the court without a jury at the New York Trial Term. '

p. 281

J. Harry Hull, for the appellant.

Frederick P. James, for the respondent.

This action is against the indorser of a draft drawn by Harry Hawldns upon the Hawkins Lumber Company of Birmingham, Ala., and accepted by the drawee. The payee is Peter "Whitney (this defendant), who indorsed it, “ Pay to the order of T. O. Smith, Peter Whitney.” It was discounted by the plaintiff. It was forwarded by Whitney himself to T. O. Smith, who was cashier of the plaintiff, On receiving the draft, Smith added to his name the word “Cash.” (an abbreviation of “Cashier”) above the signature of Peter Whitney. In transmitting 'the draft to Smith Whitney wrote as follows:

“Enclosed please find 90 days’ acceptance to the.Hawkins Lumber & Coal Co. As per agreement with Mr. Harry Hawkins, please discount this paper and send' New York Exchange for the net proceeds of the draft. Yours truly,

; “PETER WHITNEY.”

The plaintiff discounted “ this paper ” and T. 0. Smith, Cashier, remitted to Peter Whitney the whole amount of the draft, less six dollars discount. Whitney received the money, the check for it being payable to his order, and it was paid through the New York Clearing House. Whitney now sets up, as the only defense to the action, that a material alteration in the indorsement of the note was made consisting of the addition by Smith of the word “ Cash.” after his name on the indorsement.

To add a word of description to the name of an indorsee is not a material alteration of a note or draft, when it is intended by the "parties that the paper shall go to the indorsee in the exact capacity or relationship indicated by the. title affixed. But here it is a matter of no. consequence whether there was a material alteration of the indorsement or not. The court below found, and the evidence fully sustained the finding, that the addition was authorized, if not in express terms assented to, by the defendant. He, in his note inclosing the draft to Smith, says, “ As per agreement with Mr. Harry Hawkins, please discount this paper.” Mr. Smith’s evidence

p. 282

shows that his agreement and understanding with Mr. Hawkins was that he should discount the paper as cashier of the plaintiff, and that he was not to have a personal relation to the., subject. Smith testifies that his conversation with Hawkins concerning, the discounting of paper was in his,relation of cashier of the bank.- Hawkins was president of the lumber company, and Smith, as cashier of the plaintiff, had been in the- habit of discounting paper for that company on the application of Hawkins, and it' was in.the -same relation that the conversation was had respecting the discount of the draft in suit. , .

It is objected that the conversations between Smith and Hawkins were inadmissible, but it is evident that they were part of the res gestee. -The defendant himself made those conversations’ admissible, because in sending the draft to Smith to be discounted, as, said before, he. asked for. the discount, “ As per agreement with Mr. Harry Hawkins.” Therefore,. it was proper to show what that .agreement was.. ...

The judgment should be affirmed, with costs.

O’Brien, Ingraham, BIatch and Laughlin, J J., concurred.

; Judgment affirmed, with costs.