118 N.Y.S. 297 | N.Y. App. Div. | 1909
Lead Opinion
The defendant’s son was a member of the firm of H. J. Hearn & Co., engaged in the dry goods business. On April 30, 1907, the defendant had indorsed for the accommodation of the firm a note for $5,000, which the plaintiff had discounted. Subsequently the defendant went to Europe, and on the fourteenth day of June following, H. J. Hearn wrote him a.letter explaining the financial difficulties of the firm and the necessity for larger working capital, and that the firm must have at least $10,000 immediately, and reminding the defendant that he had said before he left that he had seen the people at the bank (manifestly referring to the plaintiff) and had stated that they would take care of the firm, and that the bank had refused to discount the firm’s paper without the defendant’s indorsement, but that with such indorsement the firm could have $15,000, and that all that was necessary to obtain the money
It is "conceded that a contract to indorse a note, of one, provided another will discount it, is a promise to answer for the .debt of another" and, therefore, within the provisions of the Statute of Frauds. It was held in Canille v. Crane (5 Hill, 483) that such a promise is not an original one but collateral and one to answer for the debt of anothez’, and hence must be in-writing.;, and' that case has been followed in this State. The cablegram sent by defetidant to the plaintiff, standing alone, is not a sufficient memorandum to satisfy the Statute of Frauds. ' The first- question is, .whether the . letter written by Hearn to the - defendant and the defendant’s cable to the bank can' be read together so- as., to make a contract between the parties. , . *
The judgment should be reversed and a new trial ordered, with costs to the, appellant to abide the event. • , ■
McLaughlin, Clarke and Soott, JJ.,. concurred.
Concurrence Opinion
(concurring):
I concur in the reversal of the judgment because there is no proof that the letter was written to the defendant in behalf of the plaintiff bank or by its authority or with its knowledge and assent. The cablegram alone not being a sufficient memorándum in writing to satisfy the Statute of Frauds, and it being necessary to read the letter in connection with it tó constitute any contract at all, it became incumbent upon , the plaintiff to show some relation to it before it could take the benefit of it and graft it onto- the cablegram for- the purpose of piecing out the incomplete agreement. -
1 do- not concur in the proposition, however, that-even, if" the, plaintiff had- proved that the letter was sent with its. knowledge or acquiescence or at its suggestion., no binding contract would have
When the note of April thirtieth became due, the plaintiff saw fit, without protesting it so as to bind the defendant, to take a new note in its place made by the firm alone and without the defendant’s indorsement. This effectually released the defendant from any liability respecting this old note or the renewal taken in its place, for the taking of this renewal note cannot be claimed to have been in pursuance of the defendant’s cablegram. Restricting the defendant’s liability to $10,000 only (including the prior note which he had indorsed, and which the plaintiff by its act released him from liability on), it would leave only one of the two remaining $5,000 notes upon which he would be liable in any event.
The note discounted July fifteenth did not become due until after the defendant returned from Europe and learned that the plaintiff had acted upon his cablegram by granting the discounts. Assuming that the defendant is released from liability on the note discounted June twenty-sixth, because it became due and the firm went into bankruptcy before he had any knowledge that the plaintiff had acted upon his cablegram, a different situation applies to the July fifteenth note because he had notice respecting that before it became due. As to that note I think the plaintiff would be enti
While I concur in the reversal of the present judgment for the-indicated defect in the proof, I do not think, for the reasons which I have endeavored .to point out, that the defendant can wholly escape liability if such proof shall be supplied.
Judgment reversed and new trial ordered, with costs to appellant to abide event.