Workingmen's Building & Loan Ass'n v. Roumfort , 98 Pa. 85 ( 1881 )

Mr. Justice Mercur

delivered the opinion of the court,

On withdrawing from the association the defendant in error-accepted an order on the treasurer of the company, duly signed by the president and secretary, for the sum the former was entitled to receive. The order was dated on the 5th of February, but was not handed to him until the 27th. At its date the money in the hands of the treasurer was not sufficient to pay it. Its delivery was therefore withheld, until other and sufficient funds had been put into his hands. At the time of its delivery the funds were sufficient. Failing to get the money on the order, on the 16th of March he gave it to Luerssen, the treasurer, taking his check dated four days thereafter for the amount. On presenting this check at bank there was no 'money to meet it. On the 4th of April, in place of this check, he took the note of Luerssen, at thirty days with interest, payable to the order of George Faerster and William- M. Hamer, and by them indorsed. They paid the note before or at maturity, so-the defendant in error received the money before he commenced this suit.

It is not necessary to discuss the question whether giving time and taking the note with security operated as a payment of his claim against the association, before the note'was actually paid, as the case does not stop there. The note was paid. The money was received by the defendant in error, and is still retained by him. He now claims that, inasmuch as Faerster and l-Iainer indorsed the note of Luerssen under a mistaken belief that they were security for him as treasurer of the association, it gives a right of action to recover the same money of the company. If this note had been given at the request of the company, and the defendant in error had been compelled to repay the money to the indorsers, a different question would arise; but such are not the facts presented here. The court charged “ the question of Roumfort’s liability to repay to the indorsers is not involved here, and whether he is, or is not, does not affect the liability of this defendant.” In this the learned judge erred.

If the debt due the defendant in error has been fully paid to him under an arrangement with Luerssen, who was justly bound to pay it, we cannot see on what principle the association has again become liable to pay it. The court appears to have blended the rights of the defendant in error with the rights of the indorsers. It therefore charged that “the suit is marked for the use of George Faerster and W. H. Ilamer, the equitable plaintiffs, and the court can protect their interests in case of a recovery.”

Several reasons may be stated why this view is not correct. They were not parties to the action. The suit was brought in the name of the defendant in error alone. After the case was ' put at issue he caused the suit to be marked for the use of Faerster and Iiamer ; but they afterwards, by their counsel, appeared in court and protested against the suit being-so marked, all of which is shown by the record. This was a most unequivocal disclaimer of the submission, of any of their rights to be passed upon in the trial of the cause. Having thus withdrawn, the suit stood as if tlieir names had never been put on the record. It should then have been tried as it was commenced, on the exclusive right of the defendant in error. If the indorsers acquired any right of action by reason of their payment of the note, it was either against the defendant in error, or Luerssen, or both of them. A right to recover in this suit depends on the validity of a lawful claim of the defendant in error against the association, and not on the equities of the indorsers. By indorsing and paying the individual note of Luerssen they did not become creditors of the association.

When the order was delivered the latter had enough money in the hands of its treasurer to pay the order. Without so applying it, and after giving a check which was dishonored, he gave this individual note to pay money for which .he was personally liable. To discharge his liability to the association he gave Ills own note to a creditor, to whom it was paid. A misapprehension between the maker and the indorsers of the note as to the liability of the latter as sureties of the treasurer, does not make the association liable to them. There was no privity of contract between it and them. Their purpose was not to pay its debt, but a debt of Luerssen. He had no power to bind the association for the payment of this note, and he did not assume to do so. It follows that the first, tentli and eleventh assignments are sustained, and so much of the sixth as is iu conflict with this opinion. We see no error in. the remaining assignments.

Judgment reversed and a venire facias de novo awarded.