Bank of Alexandria v. Peter Saunders

Bank of Alexandria v. Peter Saunders. If a bank discount a note, knowing that it was tbe intention of tbe party offering it, that tbe proceeds should be applied to discharge a particular note held by tbe bank, those proceeds cannot be applied by tbe bank to tbe discharge of any other note. Assumpsit against the indorser of a note made by John McPherson & Son, for $3000, upon which the bank had discounted $2500 for the accommodation of John McPherson & Son, on the 18th of March, 1817, and w'hieh fell due on the 20th of May, 1817; on which day the bank discounted a new note of John McPherson & Son, indorsed by the defendant for $2500, and protested the note for $3000, and applied the new discount to other claims against John McPherson & Son upon their notes indorsed by the defendant. [MAJORITY — The Court,] The Court, (Morsell, J., contra,) at the prayer of the defendant’s counsel, instructed the jury, that if they should be satisfied by the evidence, that the note for $2500, dated on the 20th of May, 1817, was drawn, indorsed, and offered to the bank for discount, with the intent to renew, or pay the note for $3000 falling due on that day, and that the bank discounted it, knowing that it was so offered with that intent, the bank was bound so to apply the proceeds of the new discount, and could not now recover upon the note for $3000. Verdict for the defendant