214 A.D. 232 | N.Y. App. Div. | 1925
One Benjamin B. Green executed a note to the order of a corporation known as the Nikola Chemical Company, Inc. This note was for $12,000 and was payable at the banking office of the plaintiff. It was indorsed by the defendant LaHiff and then delivered to the Nikola Chemical Company, Inc., the payee. The plaintiff bank discounted this note about a week after its execution and credited the account of the Nikola Chemical Company, Inc., with the amount of the note, less the customary discount.
The suit is brought because the note was not paid by either the maker or indorser. When it became due the maker allowed judgment to go by default against him. The indorser, the present defendant, sets forth that the bank through its officers was really the party in interest in the transaction, and that at the time of his indorsement he was promised by duly authorized officers that no liability was to run against him because of his indorsement. The jury found in his favor on the question of fact as to whether or not any such agreement or understanding was had with the bank officers, notwithstanding that the alleged claim that the transaction in question was the bank’s transaction was quite fully disproven by the production of all the original warehouse certificates for certain whisky which defendant claimed were sold by the bank for part of the proceeds of the note, the balance of the proceeds being used to further the scheme of sale.
Our examination of the evidence of the defendant leads to a conclusion that the judgment must be reversed and a new trial ordered notwithstanding these findings of fact, because even assuming that they are conclusive upon appeal, yet the alleged agreement with the bank official making it was wholly outside the scope of his authority, and, therefore, not binding on the plaintiff bank. It cannot be claimed that an agreement with Kern, a director of the bank, would be effectual to release the indorser, since on the showing of defendant’s own witness, Kern was in some measure acting for himself in respect of the sale, since he was to share in the profits personally. His interest was, therefore, adverse to the bank in the transaction, since the promotion of the enterprise was designed to benefit himself even though ostensibly in aid of the bank.
The proof that Golding, the vice-president and manager of a branch of the plaintiff bank, agreed with LaHiff, after Green had asked him to indorse the note in question, not to hold LaHiff
There was also an issue raised by defendant as to whether or not a notice of protest was ever sent to him as indorser at the time of the non-payment of the note, for which reason the case must be remanded for a new trial upon that issue, since it is impossible to discover from the verdict whether or not the jurors found for defendant on the defense which we have found insufficient, even if proven, or upon the denial by defendant of the receipt of the notice of protest.
The judgment, therefore, should be reversed and a new trial ordered, with costs to the appellant to abide the event.
Clarke, P. J., Dowling and Martin, JJ., concur; Merrell, J., dissents.
Judgment reversed and new trial ordered, with costs to the appellant to abide the event.