the 12th of November 1841, this being the day previous to her marriage, at which time the balance against Daniel appeared to be about 967. In 1843, Daniel became insolvent. Being then indebted to the bankers in a sum exceeding 500l., they, on the 24th of April 1843, commenced an action at law against the Plaintiffs, to recover the amount secured by the promissory note of 500l. The Plaintiffs thereupon instituted this suit, in order to get relieved from their liability under the note. Thus far the facts of the case were beyond dispute ; it is now necessary to state the material allegations of the bill and the evidence in support of them. The bill alleged, that the signature of Miss Kendray to the note had been obtained by a scheme or plan between her uncle and the agent of the banking company, entered into previous to her coming of age. That she signed it with reluctance, and entirely through the influence which her uncle and aunt had acquired over her. That it was represented to be a matter of form, and that she would never be required to pay any thing in consequence. The bill stated, that the note was given for the amount then in arrear, which the bill alleged had been discharged by subsequent payments by Daniel; and that, under the circumstances aforesaid, the note was fraudulent and void, and ought to be delivered up to be cancelled. The bill charged "that if the note was ever discounted by the company, the same was not discounted, or the amount thereof credited to Daniel, until some time after the date thereof, and was so discounted unknown to the Plaintiffs, and was not carried to a separate VOL. VII. account 1844. ARCHER v. HUDSON. 1844. ARCHER v. HUDSON. account to the debits of the Plaintiffs and Daniel, but remained in the possession of the company, as a note payable on demand by Daniel; and the company, by so dealing with the note, destroyed such right, if any, as they previously had, to hold the same as a collateral security for the balance due from Daniel to the said company; and that the subsequent payment by Daniel to the company exceeded the amount of the promissory note, and of the balance then due to the company, and ought, if necessary, to be applied to the satisfaction of the note and of the balance." The bill prayed a declaration, that the promissory note had been fraudulently obtained from the Plaintiff by Daniel and the Banking Company, and was fraudulent and void against the Plaintiffs; and that if not fraudulent and void, then for a declaration, that the subsequent payment to the bank ought to be applied in reduction of the balance due on the promissory note. The answer denied all the allegations of the fraud and the alleged scheme, and stated, "that about the months of November or December 1837, the account of Daniel with the Banking Company being overdrawn, Daniel proposed to Mr. Hauxwell, that he and his niece Frances Kendray should give to the Banking Company a joint and several promissory note for 500l. and interest, as a collateral and continuing security to the company for the balance that might, from time to time, become due from Daniel to the said Banking Company on his account with them, and that the same should be a continuing guarantee to them for the balance of the banking account of the said C. Daniel." The evidence on the part of the Plaintiffs went to shew the control and influence which Mr. and Mrs. Daniel had acquired and exercised over their niece, the subsistence of an intimacy between Daniel and Hauxwell, and of the knowledge of the latter of the circumstances, fortune, and situation of Miss Kendray, but there was no evidence whatever of any fraudulent scheme between the parties. Hauxwell was examined as a witness for the Defendants. He denied the alleged intimacy between himself and Daniel, and stated as follows: "Daniel was allowed by me to overdraw his account at the said Thirsk branch of the York Union Banking Company to a small amount, because I considered him safe. At the end of December 1837, Daniel had overdrawn his account the sum of 70l. 7s. 2d. In the latter part of December 1837, Daniel mentioned to me his wish, that the Branch Bank would allow him to overdraw his account for his accommodation to a greater extent; he gave as a reason why he wished so to draw, that he would thereby be enabled to go into the market and buy his leather for ready money, instead of buying leather and paying with acceptances. When Daniel so applied to me, he wished to be allowed to overdraw to the extent of 500l. I asked him what security he could give, and he proposed his niece Frances Kendray. He said he had not spoken to her on the subject, but he would do so, and let me know. About a week afterwards, Daniel called at the Branch Bank, and stated to me, that he had spoken to his niece, and she was agreeable to sign a promissory note for 500l., but she did not like to come to the Bank, from a fear of causing some suspicion that she was going to be bound for her uncle to the Bank; that if I would prepare a note in the usual form, and take it down some evening to his (Daniel's) house, where she resided, she would sign it." 1844. ARCHER บ. HUDSON. 1844. ARCHER v. HUDSON. The same witness also stated: "That he accordingly prepared a joint and several promissory note, and took it to the house of Daniel between the 1st and the 6th of January 1838. That he produced the promissory note, and told Miss Kendray that it was a joint promissory note for 500l., but we did not want 500l. of her uncle at that time, (the balance owing by him at that time being very small), but that he might want money to the extent of 500l., and he asked her, if she was willing to sign the note he then produced; to which she answered, that she was willing to do so. He then requested her to read the said promissory note, which she did accordingly. That Daniel then signed the promissory note, and immediately afterwards the said Frances Kendray signed her name to it. That before the note was signed by the said Daniel and Frances Kendray, he told the said Frances Kendray, that supposing her uncle should want money to the extent of 5007., by her signing that note, she made herself liable to the Bank to the extent of 500l. and interest, in case the Bank should ever want that amount of him; she said that she perfectly understood it." The witness also said, "I then stated, that the said promissory note was to be a security for the amount then due to the said Bank from the said Christopher Daniel, or for any amount that might be due, either upon the open account, or upon bills running to the extent of 500l. and interest;" and the witness said, "In my opinion and judgment, the said note was signed by the said complainant Frances Kendray readily and not reluctantly, nor in ignorance, but with the full knowledge of the liability she was thereby incurring." The cause now came on for hearing. Mr. Mr. Kindersley and Mr. Rolt, for the Plaintiffs, contended, first, that the transaction was void ab initio, the promissory note having been obtained by an uncle, standing in loco parentis, from his niece immediately after her coming of age. That the principles of the Court with regard to transactions between guardian and ward (a), and parent and child (b), were applicable to the present case; that the protection of infancy continued after the Plaintiff attained her majority (c), and that the Defendants, who took with notice, by their agent, of the invalidity of the transaction, were bound. Secondly, that there was no memorandum shewing that the note was given as a security for a floating balance. Thirdly, that by the mode of dealing with the note in December 1841, the position of the surety had been altered; for the note, instead of being kept as a continuing guarantee for the ultimate balance due from the principal, as the Defendants said was the intention, had been cashed, and an immediate right to sue for the whole amount created; Bonser v. Cox. (d) Fourthly, that the 500l. having been treated as a loan from the 12th of November 1841, every subsequent payment made by Daniel to the bankers must be applied in exoneration of the surety. Mr. Turner, and Mr. Elmsley, contrà, for the Banking Company. The bill alleges and proceeds on a fraudulent contrivance between Daniel and Hauxwell, of which there is not the slightest proof. The transaction was bona fide on the part of the Banking Company; their advances did not exceed 70%. at the time, and they had no inducement to procure the Plaintiff in joining in assisting (a) 1 Mad. Ch. Pr. 123., and (c) See 3 Swan. 69. 1844. ARCHER บ. HUDSON. 110. |