72 F. 145 | U.S. Circuit Court for the District of Southern New York | 1895
La Follette, on August 10, 1894, made Ms promissory note, in writing, dated on that day, whereby, for value received, he promised to pay to the order of the New England Milling & Manufacturing Company, five months thereafter, at No. 54 Wall street, in the city of New York, the sum of $5,000. This note he delivered to said company, througn its president, the defendant Records, upon, an express agreement and understanding that the same was to be sold and discounted by said company for cash only, and the proceeds thereof paid over and accounted for to La Follette. The note was fraudulently and wrongfully diverted from this purpose by the holder, and, without any valuable consideration passing to La Follette, was transferred by indorsement
The note was not paid at maturity. It was held in the bank for a few days, and then sent to its attorneys, with instructions to begin this suit, to which all parties to the note are made defendants, except the Delavergne Company. This was done by the bank officers at the special instance and request of the company. The company has not secured the bank, otherwise than by its original in-dorsement of the note, nor has it even agreed to keep its bank account good for $5,000 during the pendency of this suit. The bank officers, however, are satisfied that the company is entirely solvent, and that, if they fail to collect the amount of the note and interest in this action, they will be able to obtain it from the company, and do not expect to be put to any expense for costs or lawyer’s fees in the event of failure, as the customer whom they are thus accommodating will undoubtedly reimburse them. It is upon these facts that defendant relies, but they do not constitute a defense to this action. The bank, as bona fide owner of the note, had the right to choose whom it would sue. It does not lose the right so to choose because the motives which induce it to make such choice may be reprehensible. No doubt, the arrangement whereby its customer is secured an unfair advantage through the instrumentality of the bank, which such customer could not have obtained without its subservient action, was a mean and iniquitous transaction; but this action is brought on the law side of the court, and must be determined as principle and authority require. Judgment for plaintiff.