227 A.D. 413 | N.Y. App. Div. | 1929
The following is the opinion of Noonan, J.:
The defendant bank seeks to interplead Trotzky & Sons, Inc. On July 15, 1928, Trotzky & Sons, Inc., a domestic corporation, made a promissory note in the sum of $2,000, payable to the order of the plaintiff at the defendant bank on November 15, 1928. On the date the note was due the plaintiff payee had it certified by the defendant. Thereafter on the same day the plaintiff indorsed the note and presented it to the defendant for payment and payment was refused. Trotzky & Sons, Inc., on being notified of the certification asked the defendant to stop payment on the note on the ground that the note had been given to the plaintiff on the day of its making by Nat Trotzky, the secretary of Trotzky & Sons, Inc., and a brother of Ben Trotzky, also an officer of the corporation and a brother-in-law of the plaintiff, for the specific purpose of having it discounted and of turning the proceeds over to the corporation, which was at that time in need of money. The plaintiff not being able to discount the note was requested to return it, but he informed Nat Trotzky that he had lost it. On account of the relationship of the plaintiff to Ben Trotzky, the word of the plaintiff that the note was lost was accepted, and Trotzky & Sons, Inc., did not stop payment on the note. This is the story that was told to the defendant bank, and at the request of Trotzky & Sons, Inc., payment was refused when the certified note was presented at the bank. The plaintiff’s story is that the note was given to him in payment of a loan he had made to a predecessor corporation of Trotzky & Sons, Inc., the obligation to pay which had been assumed by the latter corporation. In this action the plaintiff sues the defendant bank on its contract of certification and contends that once having certified the note it is bound to pay the same and cannot refuse payment to protect any equity or defense that the maker might have against the payee of the note. The defendant bank has received indemnity from Trotzky & Sons, Inc., in the form of a deposit of double the amount of the note to protect it against any loss, and is willing to deposit the amount of the note in court so that if Trotzky & Sons, Inc., is substituted as party defendant in place of the bank the question of the ownership of the proceeds of the note may be fought out on the trial. The general rule is that upon the certification of a check or note at the request of the holder the drawer or maker is discharged since the certification is equivalent to an acceptance by the drawee (Neg.