By the Oourt,
Paine, J.
Tbe following is a statement of tbe facts of this case, so far as they are material to tbe right understanding of tbe decision of tbe court. Lathrojo & Go. borrowed money of tbe Hacine County Banlc with which to purchase wheat. Tbe wheat was purchased on tbe joint account of Lathrojo & Go. and Mann, Yail & Co., of Buffalo, and was shipped to tbe latter for the purpose of meeting tbe two bills of exchange which Lathrop fy Go. drew in favor of tbe bank on Mann, Yail & Co., for tbe sum of $3,000 each. These drafts were drawn at thirty days, were accepted, and were discounted by Bradley, Curtis & Co., of Chicago, to whom they were indorsed by tbe bank. Before their maturity, Mann, Yail & Co. suspended payment, and tbe drafts were protested. Bradley Curtis & Co., the holders, also suspended at about tbe same time, being indebted to tbe Racine County Banlc in a sum exceeding tbe amount of tbe drafts. Tbe cashier of tbe bank made some effort to collect this indebtedness of Bradley, Curtis & Co., but failed; and in March, 1855, being about four months after tbe maturity of tbe drafts, be assigned this account of tbe bank to Mann, Yail & Co., for tbe purpose of enabling them to offset it against tbe drafts in tbe bands of Bradley, Curtis & Co. Tbe [475]*475assignment was in writing, and. contained an agreement that the bank would do nothing to hinder Mann, Vail & Co., their assigns, from collecting the debt or any part of it. The note of Mann, Vail & Go., payable one day after date, taken in payment. Mann, Vail & Go. made ineffectual attempts to find Bradley & Curtis for the purpose of suing them and enforcing a set-off. A suit was commenced, but service not obtained. So the matter continued for more than two years, until, in the fall of 1857, the cashier procured from Bradley & Curtis a re-assignment of the drafts to the bank, to be applied on the debt of the bank against them, which was the same debt that had been assigned to Mann, Vail & Go. The bank then commenced this suit against Laihrop & Go. as the drawers of the drafts, and the latter rely on the transaction between the bank and Mann, Vail & Go., with respect to the drafts and the account of the bank, as a defense, claiming that the account against Bradley, Curtis & Go., on which the drafts were re-assigned to the bank, was, at the time, owned by Mann, Vail & Go., the acceptors, and that the drafts must be considered as paid for with their property, and the drawers therefore discharged.
The counsel for the plaintiff claimed that the assignment of the account to Mann, Vail & Go. was made by the cashier without the authority of the board of directors, and that it was not within the general scope of his power as cashier, and was therefore invalid. But we think this may be conceded for the purposes of the case, and yet that the question was entirely immaterial, for the reason that it abundantly appears from the evidence that the assignment was ratified by the bank. It was regularly entered upon their books, so as to show fully the nature of the transaction, so far as the fact of the transfer of the account and the consideration for it were concerned. These were examined and reported correct by committees appointed for that purpose, and the reports adopted by the board. The note of Mann, Vail & Co. appeared in the semi-annual reports to the bank comptroller; as a part of the “ bills receivable ” belonging to the bank, which reports were made under oath. We think the jury should have found a ratification of the assignment, notwith[476]*476standing anything that was offered to be proved by the plaintiff upon this point; and that therefore the rejection of this evidence, and the refusal of the court to give the instruction asked as to the powers of the cashier, ought not to reverse the judgment.
The remaining question arises upon the evidence offered by the plaintiff to show that, at the time of the assignment to Mann, Yail & Go., it was agreed that it was for the jrar-pose of enabling them to make the set off, and that their note should not be collected if they failed in making it. This evidence was rejected, for the reason, as it seems, that it would vary the written agreement. The counsel for the appellant contends that this was erroneous, and that the rule excludes parol evidence to vary a written agreement only where the question arises between both parties to it, and not where it arises between one of the parties and a stranger. Some authorites were cited which seem to sustain such a distinction. But from the view we have taken we do not deem it necessary to enter upon a close examination of them. But we must say that even if such a distinction exists, and is properly applicable in some cases, we think there is great doubt of its applicability here. Eor if it be conceded that the rights of Lathrop Go., depended upon the character of the assignment of the account to Mann, Yail & Co., then it would seem, necessarily, that its character should be determined according to its legal effect between the parties to the instrument. Eor it would be very strange, if, as between them, the assignment was absolute, and vested the unqualified ownership of the account in Mann, Yail & Co., to say that the bank could, as against Lathrop & Go., show it to be entirely different, although their rights depended on the precise effect of that transfer.
But we shall not examine this point further, for the reason that we are of the opinion that the evidence offered by the plaintiff, even if admitted, ought not to have varied the result, but that giving it all the effect it could have been enti-titled to, the jury should still, under proper instructions, have found a verdict for the defendants. And as justifying this conclusion, we will refer, in addition to those already stated, [477]*477to the following important facts which were established satisfactorily by the evidence:
First. Although Mann, Yail & Co. suspended payment ™ the fall of 1854. yet they were considered responsible long . , -, ,, . n -, r . s after that, and after the assignment of the account to them. Mann himself testifies, that for two years after that assignment, they were in a condition to have secured the amount of these drafts. That the bank itself considered them responsible, is evident from the assignment and taking their note in payment. For even the parol evidence offered upon this point, and rejected, went to show that if Mann, Yail & Co. succeeded in making the set-off, then the only recourse of the bank would have been upon their note. And it is clear that the bank would not have made this arrangement, which, if carried out as contemplated, would clearly have discharged the drawers, unless they had supposed the note of Mann, Yail & Co. to be good at that time.
Second. On the same day of the assignment, the cashier of the bank informed Lathrop that he had made an arrangement by which Lathrop & Go. were relieved from the drafts. The cashier does not remember this, and does not think he said so. But Lathrop testifies to it positively, and both his testimony and Mann’s show that, in their subsequent dealings, the drafts were treated as settled, which shows that La-throp must have got such information from some source.
Third. After the assignment there were extensive dealings between Lathrop & Co.
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By the Oourt,
Paine, J.
Tbe following is a statement of tbe facts of this case, so far as they are material to tbe right understanding of tbe decision of tbe court. Lathrojo & Go. borrowed money of tbe Hacine County Banlc with which to purchase wheat. Tbe wheat was purchased on tbe joint account of Lathrojo & Go. and Mann, Yail & Co., of Buffalo, and was shipped to tbe latter for the purpose of meeting tbe two bills of exchange which Lathrop fy Go. drew in favor of tbe bank on Mann, Yail & Co., for tbe sum of $3,000 each. These drafts were drawn at thirty days, were accepted, and were discounted by Bradley, Curtis & Co., of Chicago, to whom they were indorsed by tbe bank. Before their maturity, Mann, Yail & Co. suspended payment, and tbe drafts were protested. Bradley Curtis & Co., the holders, also suspended at about tbe same time, being indebted to tbe Racine County Banlc in a sum exceeding tbe amount of tbe drafts. Tbe cashier of tbe bank made some effort to collect this indebtedness of Bradley, Curtis & Co., but failed; and in March, 1855, being about four months after tbe maturity of tbe drafts, be assigned this account of tbe bank to Mann, Yail & Co., for tbe purpose of enabling them to offset it against tbe drafts in tbe bands of Bradley, Curtis & Co. Tbe [475]*475assignment was in writing, and. contained an agreement that the bank would do nothing to hinder Mann, Vail & Co., their assigns, from collecting the debt or any part of it. The note of Mann, Vail & Go., payable one day after date, taken in payment. Mann, Vail & Go. made ineffectual attempts to find Bradley & Curtis for the purpose of suing them and enforcing a set-off. A suit was commenced, but service not obtained. So the matter continued for more than two years, until, in the fall of 1857, the cashier procured from Bradley & Curtis a re-assignment of the drafts to the bank, to be applied on the debt of the bank against them, which was the same debt that had been assigned to Mann, Vail & Go. The bank then commenced this suit against Laihrop & Go. as the drawers of the drafts, and the latter rely on the transaction between the bank and Mann, Vail & Go., with respect to the drafts and the account of the bank, as a defense, claiming that the account against Bradley, Curtis & Go., on which the drafts were re-assigned to the bank, was, at the time, owned by Mann, Vail & Go., the acceptors, and that the drafts must be considered as paid for with their property, and the drawers therefore discharged.
The counsel for the plaintiff claimed that the assignment of the account to Mann, Vail & Go. was made by the cashier without the authority of the board of directors, and that it was not within the general scope of his power as cashier, and was therefore invalid. But we think this may be conceded for the purposes of the case, and yet that the question was entirely immaterial, for the reason that it abundantly appears from the evidence that the assignment was ratified by the bank. It was regularly entered upon their books, so as to show fully the nature of the transaction, so far as the fact of the transfer of the account and the consideration for it were concerned. These were examined and reported correct by committees appointed for that purpose, and the reports adopted by the board. The note of Mann, Vail & Co. appeared in the semi-annual reports to the bank comptroller; as a part of the “ bills receivable ” belonging to the bank, which reports were made under oath. We think the jury should have found a ratification of the assignment, notwith[476]*476standing anything that was offered to be proved by the plaintiff upon this point; and that therefore the rejection of this evidence, and the refusal of the court to give the instruction asked as to the powers of the cashier, ought not to reverse the judgment.
The remaining question arises upon the evidence offered by the plaintiff to show that, at the time of the assignment to Mann, Yail & Go., it was agreed that it was for the jrar-pose of enabling them to make the set off, and that their note should not be collected if they failed in making it. This evidence was rejected, for the reason, as it seems, that it would vary the written agreement. The counsel for the appellant contends that this was erroneous, and that the rule excludes parol evidence to vary a written agreement only where the question arises between both parties to it, and not where it arises between one of the parties and a stranger. Some authorites were cited which seem to sustain such a distinction. But from the view we have taken we do not deem it necessary to enter upon a close examination of them. But we must say that even if such a distinction exists, and is properly applicable in some cases, we think there is great doubt of its applicability here. Eor if it be conceded that the rights of Lathrop Go., depended upon the character of the assignment of the account to Mann, Yail & Co., then it would seem, necessarily, that its character should be determined according to its legal effect between the parties to the instrument. Eor it would be very strange, if, as between them, the assignment was absolute, and vested the unqualified ownership of the account in Mann, Yail & Co., to say that the bank could, as against Lathrop & Go., show it to be entirely different, although their rights depended on the precise effect of that transfer.
But we shall not examine this point further, for the reason that we are of the opinion that the evidence offered by the plaintiff, even if admitted, ought not to have varied the result, but that giving it all the effect it could have been enti-titled to, the jury should still, under proper instructions, have found a verdict for the defendants. And as justifying this conclusion, we will refer, in addition to those already stated, [477]*477to the following important facts which were established satisfactorily by the evidence:
First. Although Mann, Yail & Co. suspended payment ™ the fall of 1854. yet they were considered responsible long . , -, ,, . n -, r . s after that, and after the assignment of the account to them. Mann himself testifies, that for two years after that assignment, they were in a condition to have secured the amount of these drafts. That the bank itself considered them responsible, is evident from the assignment and taking their note in payment. For even the parol evidence offered upon this point, and rejected, went to show that if Mann, Yail & Co. succeeded in making the set-off, then the only recourse of the bank would have been upon their note. And it is clear that the bank would not have made this arrangement, which, if carried out as contemplated, would clearly have discharged the drawers, unless they had supposed the note of Mann, Yail & Co. to be good at that time.
Second. On the same day of the assignment, the cashier of the bank informed Lathrop that he had made an arrangement by which Lathrop & Go. were relieved from the drafts. The cashier does not remember this, and does not think he said so. But Lathrop testifies to it positively, and both his testimony and Mann’s show that, in their subsequent dealings, the drafts were treated as settled, which shows that La-throp must have got such information from some source.
Third. After the assignment there were extensive dealings between Lathrop & Co. and Mann, Yail & Co., which were conducted upon the understanding that these drafts were settled.
Fourth. Before the assignment, pending the attempts by the cashier to obtain payment from Bradley, Curtis & Co., the cashier in a letter expressly requested Mann, Yail & Co. not to pay the drafts, with a view to enable the bank to secure their claim against Bradley, Curtis & Co., by transferring it to Mann, Y. & Co., as it afterwards did.
We think these facts constitute a complete defense to the drawers. The bank and the drawers occupied the relation to each other of subsequent and prior indorsers. Then the substance of the transaction is, that the bank, the subsequent [478]*478™^-orser> ^or Purpose of securing a claim against tlie holder, -who has become insolvent, interferes with the pay-°f paper by the acceptors, requests them not to pay, and subsequently transfers its claim against the holders to , . , “ . , . „ them, for the purpose of having it set on against the drafts, thus securing its claim by the acceptors’ note, which it was then to collect At the same time it informs the drawers that they are relieved from the paper, and they deal extensively with the acceptors for several years on that hypothesis. Unless we entirely misapprehend the matter, stronger grounds for holding the drawers discharged could not well be presented. It is true that, at the time of these transactions, the bank was not’ the holder of the drafts. But by interfering with the regular discharge of the paper, for the purpose of collecting its claim against the holders, we think its action should have the same effect, as far as the prior indorsers are concerned, as though it had been actually the holder at the time. And we then think the defense is complete upon two grounds: First. The transaction was an extension of the time of payment to the acceptors. For, suppose the bank had, after making the assignment, paid the drafts on the same day, as indorsers, to Bradley, Curtis & Co., could they then have maintained an action against Mann, Tail & Co. before the expiration of the days of grace on their note ? It would seem not. For if the agreement was, as was offered to be shown by this parol evidence, that the assignment was made for the express purpose of paying the drafts with the account, the bank covenanting to do no act that should hinder its collection, and Bradley & Curtis being insolvent at the time, it would seem clear that the bank could not immediately pay the drafts, and then recover on the drafts and also on the note against Mann, Vail & Go., and thus shift off upon them its worthless claim against Bradley, Curtis & Co. This was therefore an agreement, if taken as claimed by the bank, by which it extended the time of payment to the acceptors, at least to the extent of the time which the note of Mann, Vail & Co. had to run. And we think the effect of such a transaction should be the same upon prior indorsers, as though the bank had again become the holder, before the [479]*479maturity of tlie note of Mann, Vail & Oo. That effect is to discharge the drawer or indorser. Burge on 211; Byles on Bills, chap. 18.
The other ground upon which the defense may rest, is that of estoppel. It is evident that the defendants, in their subsequent dealings with the acceptors, acted upon the information of the cashier that they were relieved from that paper. It thus comes directly within the familiar principle that where one has made a representation, upon which another has acted and would, as a consequence, be injured if the first were allowed to deny the representation to have been true, he shall be estopped from denying it. No one can believe that Lathrop & Go. would have remained inactive for three years, without attempting to secure themselves for their liability on those drafts, if they had not been induced thereto by the representation of the cashier. Such is not the habit of business men of ordinary prudence. And it must be presumed upon such facts, that they would be injured by allowing the bank now to turn round and hold them as drawers. It would seem a palpable violation of the entire spirit of the law relative to the vigilance and good faith of parties to negotiable paper, toward prior parties to whom they intend to have recourse.
And it may be observed that the very application of the account to the drafts which these defendants insist on, is the one which it was the express object of the agreement between the bank and Mann, Vail & Oo. to secure. And in buying back the drafts, they expressly applied that account as the consideration. They should then, be treated as paid with the property of Mann, Vail & Co., and the remedy of the bank is on their note. To hold otherwise would be to allow the bank to take its chance of securing its claim against Bradley, Curtis & Co., through several years of delay caused by its own arrangement, and then, when Mann, Vail & Co. become irresponsible, to step in and defeat the accomplishment of its own agreement, and have recourse upon the drawers, who, during all this time, had taken no steps to protect themselves on account of the very arrangement made by the bank.
[480]*480We think there was nothing in the parol esddence offered that should have had any effect to change the verdict, and that the rejection of it ought not, therefore, to reverse the judgment
The judgment is affirmed, with costa