American Exchange National Bank v. New York Belting & Packing Co.

26 N.Y.S. 822 | N.Y. Sup. Ct. | 1893

FOLLETT, J.

This action was brought on a promissory note made July 18, 1890, by the defendant, whereby it promised to pay to its own order $5,000, eight months after date, at the Maverick National Bank of Boston. The defense interposed is that the note was made, indorsed, and delivered to the Potter-Lovell Company, as the agent for the plaintiff, for the purpose of having it discounted or sold, and the avails transmitted to the maker. It is also alleged that the Potter-Lovell Company wrongfully pledged it as security for its indebtedness to the plaintiff, and that the plaintiff did not re*823ceive it for value and in good faith. It was shown beyond dispute that the note was made and delivered to the Potter-Lovell Company for the purpose of being sold or discounted, and the avails transmitted to the defendant. May 28, 1890, the Potter-Lovell Company borrowed $100,000 of the plaintiff, and gave its promissory note, whereby it promised to pay that sum four months after date. When this loan was obtained the Potter-Lovell Company held two notes made by the defendant for $5,000 each, one dated February 19,1890, and the other March 26,1890. Whether these notes had been diverted or not does not appear. The Potter-Lovell Company pledged these notes to the plaintiff with other security as collateral to its note for $100,000. The plaintiff was a holder for value of these notes. Bank v. Vanderhorst, 32 N. Y. 553; Brookman v. Metcalf, Id. 591; Moody v. Andrews, 39 N. Y. Super. Ct. 302, affirmed 64 N. Y. 641. Subsequently the Potter-Lovell Company withdrew the notes of February 19th and March 26th, and substituted the one in suit in their place as security for the $100,000 loan, which made the plaintiff a holder for value of this note. These facts were proved by a witness called by the defendant, and it was not in a position to go to the jury on the question of his credibility. The note having been wrongfully diverted, the plaintiff was bound to show, not only that it was a holder for value, but that it had no knowledge or notice of the fact that the note had been wrongfully diverted, or facts from which the fact that it had no notice of the diversion —good faith—is inferable. Vosburgh v. Diefendorf, 119 N. Y. 357, 23 N. E. 801; Bank v. Diefendorf, 123 N. Y. 192, 25 N. E. 402; Joy v. Diefendorf, 130 N. Y. 6, 28 N. E. 602; Sixth Nat. Bank v. Lorillard Brick Works Co., 61 N. Y. Super. Ct. 29, 18 N. Y. Supp. 861. But when it is shown that full value was paid for a note, taken in the usual course of business, and there is no circumstance which tends to show that the purchaser had notice that it had been diverted, it is to be presumed that it was acquired in good faith and without notice of the diversion. Dalrymple v. Hillenbrand, 62 N. Y. 5; Cowing v. Altman, 71 N. Y. 435; Byles, Bills, (13th Eng. Ed.) 123 et seq.; Abb. Tr. Ev. 449; 1 Daniel, Neg. Inst. § 819. The evidence shows that the plaintiff acquired the note for value, and in the usual course of business, and no fact or circumstance has been called to our attention or found by us in the record which rebuts the presumption, or which made the question of notice—good faith—one for the jury. The judgment should be affirmed, with costs. All concur.