PAINE V. CENTRAL VERMONT B. CO.
YAL11l LOCK M'ANUF'G CO.
(Circuit Court, D. Vermont. December 1,1882.)
DOCKET FEE-COPY OF ANSWER.
Where there was no hearing and no decision of the court, no docket fee ia provided hy the statute; but copies of an answer required by the rules to be furnished are taxable.
In Equity. Betts, Atterbury ([; Betts, for plaintiff. Henry A. Harman, for defendant. WHEELER, D. J. This cause was discontinued by the orator with costs to the defendant. The clerk in taxing costs refused to tax a docket fee of $20, and for the answer; and the defendant appeals from this taxation. The discontinuance was the vOluntary act of the party. There was no hearing and decision of the court; therefore no docket fee is provided for by the statute. .No costs for the ,answer itself are provided for, and none are taxable for it. The copies of an answer required by the rules to be furnished are taxable. The making the answer is an incident to the appearance, and no statute makes any allowance for it. The rule (equity rule 25) in regard to itisa limitation without anything to operate upon, as the statutes 'and rules now stand.
(Circuit Cowrt, D. Vermont.
PROMIlISORY NOTE-DEFENSES-PAROL TESTIMONY-SUIT BY INDORSEE-EQUlTms.
Defendant, a railroad corporation, executed a note, payabie on demand, for money loaned by the payee, with the understanding that such note should stand against assessments on payee's subscription to the capital.stock of de.' fendant, and be delivered up when the stock was issued. ' Assessments large enough to cover the note were made. Afterwards, and three or four months after its' date, the note was transferred to the plaintiff as security for a loan. The difl'erence between the amount of the note and· the assElsSlllents was paid in cash; and the stock was delivered after the plaintiff' took the note. Held, that in a suit brought by the holder of such a note against defendant it was subject to :all defenses that it would have been subject to in ,the, handsQf the original parties, as it must be considered as having been by the plaintiff after maturity, being payable on demand, under have put him upon inquiry, and that parol testimony was admissible to show the understanding between the original parties at the time the note was given
Heman S. Royce and Eleazer R. Hard, for plaintiff. Daniel Roberts, for defendant. WHEELER, D. J. The note on which this suit is brought was given for n:;oney lent, was payable on demand with interest, and was to stand against assessments on the subscription of the person to whom it was originally made payable to the defendant's capital stock. came to the of the plaintiff between three and four months after it was made. Assessments on that subscription large enough to cover the note were made and stood against that person before the transfer of the note to the plaintiff; the balance of the assessments was paid by him, so that the amount due on the assessments exactly equaled the note at the time the plaintiff took it. 'rhe note was to be given up w:henthe stock certificates should be delivered; but the note· was in the hands of the plaintiff, and the certificates were delivered to the subscriber on his assurance that he would procure the note and give it up. The evidence by which these facts as to the assessments were· proved was objected to, and it is argued that it was not admissible to. affect the note, and that without it there would be no defense to the: note. There is no question but that parol evidence is inadmissiblO' to alter, contradict,. or vary a written instrument, in an action upon the.instrnmentas claimed by the plaintiff,but that rule is not applicable to this proof. This evidence did not vary the note nor its obligation. It recognized the note as a valid instrument according to its terms, but showed an obligation from the holder to an equal amount. to be set off against the note. There is no fair question hut that the evidence is admissible if the facts established by it would affect the note in the hauds of the plaintiff. At the time the plaintiff took thO' note it had not been demanded;' and if it had been it would not have but. by making the offset, a.ccording to the understandbeen ing.The plaintiff took it for valne as security for a loan actually advanc.ed. If he cannot recover upon it he may lose some of the 'money lent; if he does recover upon it the defendant may lose thO' assessment. The question arises here as to which, under the law, should stand this risk of loss. The plaintiff took the title of the person he. dealt with to the note, and acquired all the rights of that person upon the note. Those rights were to .have the note set off against the assessments. If the plaintiff's rights are no greater than that he cltnnot recover; . He has no greater rights, unless the defendant is bound to stand to the note as due in the hands of the plaintiff on account, of his position in respect to it as induced by the act of the defendant
PA.INE V. OENTRAL VERMONT R.
in leaving the note outstanding. If the act of the defendant in 1eal,ing it outstanding induced him to part with his ¥laney without fault, the defendant ought to make the note good to him, ,as it appel!ored to be; but if he was in fault irttaking it he has no ground to hold the defendant to make it good to him. As the note was on demand, it was due presently. It would have to be presented and paid according to the usual course of business, if free from defenses. The time would come when, if outstanding, the presumption would be that it had been demanded, or that a demand had been omitted because known to be unavailing. If this time was such as to make it reasonable to suppose that the note was outstanding because it would not be paid, then the plaintiff was in fault in taking it without inquiring of the maker. Whether the lapse of time was such is a question of law. On this question the authorities are not uniform, but no case shows that more tha;n three months Cltn reasonably be overlooked. Business paper would usually be adjusted within that time, if regular. In this case the circumstance that the holder of the note was borrowing on disadvantageous terms, wo.uld lead directly to the inquiry why he did not resort to the maker of the note when it was due on demand. Had the plaintiff inquired, the presumption is that he would have learned the truth, and both would have been saved from loss. As;he did not inquire, it seems more just, as well as lawful, that he should take the risk brought about by the, failure to inquire, than that the defendant . " " should. It has been argued with much plausibility that thereWBs nothing perfected to meet the note' until the stock certificates were delivered, long after the plaintiff had it, and that, therefore, it Wl'!-S valid when the plaintiff took it. But this argument is not well founded in 'fact. The person who took the note was not a purchaser of stock, but a subscriber for stock. The assessments made the debt due from him, and it was that debt which met the note. He could D.otresi'st payment of assessments pecaus,e the stock certificates were not delivered. The delivery of the certificates did not pay the note, nor create the debt which would pay it. That was merely the occasion when the note was to be delivered ,up. Amer. Bank v. Jen.neJJ8, 2 Mete. 288. The president of the defendant'held out encouragement to the 'plaintiff that the defendant would pay this note if the plaintiff did not succeed in collecting the debt to which it was collateral; and this of thQ defens,e fact has been relied upon by the plaintiff as a now set up. ' There was no new consideration for any ulldertakingin resvec.t.. It ,dges appeal' that the . plaint,iff lost anything. by
reason of what took place on this subject. He has the same right against his debtor since that he had before, and the same rights against the defendant. The plaintiff must stand upon his rights acquired by taking the note at the time and under the circumstances when he took it. The note was at that time overdue, and he took it with the same obligation that it carried in the hands of the person whom he took it of. This principle that overdue paper is taken subject to all defenses is so well settled in the law as to require no citation of authorities to support it. Judgment for defendant.
UNION MUTUAL LIFE INS.
(Oircuit Oourt, E. D. Michigan.
LIFE INSURANCE-FoR BENEFIT OF ANOTHER.
A person may insure his own life and make the policy payable to anyone, though such payee has no interest in the life of the insured. Hence, where a policy was taken out upon the life of one, and made payable to another (who had no legal interest in it) in case he survived the assured, and there was strong evidence tending to show that the transaction was a mere wager, held, that it was properly left to the jury to say whether the policy was obtained in good faith, and not for the purpose of speculating in the hazard of a life in which the plaintiff had no interest. 2.
An applicant for a pulicy was asked the following question: "Has any application ever been made either to this or any other company, upon which a policy was not issued 1" Held, that a negative answer was not improper, although an application had been made which had not been finally passed upon by the company.
3. OF AGENT.
Where an applicant made a full statement of all the facts regarding the name of his usual medical attendant to the subagent who took the application, and the SUbagent, putting his own construction upon the facts, filled in the wrong name, it was held the company could not take advantage of the mistake.
This was an action upon a policy of life insurance upon the life of Augustus E. Baker, "for the sole and separate use and benefit of his brother-in-law, William W. Langdon. But in case of his previous death to revert to the insured." The facts in relation to this policy were substantially as follows: The agent of the defendant solicited Langdon, the plaintiff, to insure his life in his company. This application plaintiff declined, but said to the agent that he might go to