7 Wend. 227 | N.Y. Sup. Ct. | 1831
By the Court,
The defendant says he ought not to pay the bill because no consideration passed between him and Graham, and this was known to the plaintiffs: that is, the defendant accepted the bill for the accommodation of the drawer, which the plaintiffs knew. This is no defence : it was so decided in Smith v. Knox, 3 Esp. R. 46. Lord Eldon there held that where a bill is given for the accommodation of the drawer or payee, and is sent into the world, it is no answer to an action upon'it against the acceptor, that he accepted it for the accommodation of the drawer, and that the fact was known to the holder; in such case the holder, if he gave a bona fide consideration for it, is entitled to recover, though he had full knowledge of the transaction. In that case the plaintiff produced no proof but of handwriting of the parties to the bill.
The ease of Charles v. Marsden, 1 Taunt 224, was very like this case. The action was brought by the endorsee against the acceptor. The defendant pleaded that it was accepted
I know of no decision supporting this plea, and it would be extremely prejudicial to commercial paper, if it could be supported. The acceptor in a bill is considered in the same light as an endorser of a promissory note; and it is well known that much of the paper discounted in our banks is accommodation paper, and it never has been supposed that the endorser in such case is not liable.
Judgment for plaintiffs on demurrer, with leave to amend, on payment of costs.