94 N.Y.S. 880 | N.Y. App. Div. | 1905
This action is brought upon two: promissory notes made by the firm of I. N. E. Allen & Co., composed of the defendants, to the order of the North.State Lumber Company, indorsed by the latter, discounted for its benefit before maturity by the First National Bank of Durham, N. C., and after maturity transferred by the bank to the plaintiff.
At the close of the trial the court dismissed the complaint as to the-defendant Bacon, and directed a verdict against the defendant Allen for the balance shown to be due upon the notes. From the judgment two ajipeáls are taken; the first by Allen from that part which Was entered on the verdict against him, and the second by the plaintiff from that part which dismissed the complaint as to the defendant Bacon.
The sole contention of the appellant Allen, as appears from his brief before this court, is that the complaint should have been dismissed as to him, on the ground that the plaintiff is not the real party in interest within the meaning of section 449' of the Code of Civil Procedure and, therefore, not entitled to maintain the action.
This brings us to a consideration of the appeal by the plaintiff from that part of the judgment which dismisses the complaint as to the defendant Bacon. The learned trial justice, in dismissing the complaint as to him, held as matter of law that the notes were accommodation paper, made by the defendant Allen without the knowledge, consent or authority of his copartner Bacon, and were not given in the course of the partnership business; that the First National Bank of Durham had knowledge of all these facts at the time it discounted the notes and for these reasons there could be no recovery against Bacon. The rule which the court followed in reaching this conclusion is undoubtedly correct (Smith v. Weston, 88 Hun, 25; affd., 159 N. Y. 194), but, under the evidence presented in this case, it was error to. hold as matter of law that the notes were accommodation paper. That was a question of fact for the jury.
As to the North State Lumber Company, it appears that it was a foreign corporation engaged in cutting timber, transforming it. into lumber and selling it in the general market. On-January 8, 1900, through tits president, Cochran, it wrote to Allen Co. stating that it had a large quantity of hard-wood timber, and that it desired to deal with an eastern firm with a view- of making an arrangement for disposing of its lumber and receiving financial assistance. As to this, the letter states, “We also wish to deal with such a house that will share: with, us some of their strength financially. We do not care for money in advance, for we have good ■ credit of our own, but to give you an example of how we would like, to deal is this. To allow us to draw three and four months’ drafts and have them accepted, Which we will discount here in our own' bank, and during the maturity of said drafts we will ship lumber to cover same. Now if you can see your way clear to enter into such an agreement with us, we would consider dealing with you.” In response, Allen & Co., through their managing partner, Allen, wrote on January fifteenth, requesting further details as to the standing of the corporation and the quantity of lumber which it eould furnish, the letter saying: “If you can give us business
In addition to this testimony several letters were introduced, which need not be referred to in detail, further than to say that they contain recitals to the effect that the corporation was expecting and endeavoring to furnish lumber to Allen & Co. in order that the firm might dispose of it in the New York market. And, as tending to show that tire notes were given in pursuance of the understanding referred to in the above evidence, it was proven with
From this recital of the evidence it is apparent that the jury-might have found that the notes were given in the course of the business of Allen & Go. as wholesale dealers in lumber in order tiiat they might obtain lumber to sell and thereby earn a commission, or make a profit; and that the corporation in return for the notes was to ship to the firm lumber, the value of which would be credited upon them. In other words, that the notes were given in consideration, of lumber to be furnished to the firm by the corporation, intermediate their date and their maturity. This understanding would make Allen & Co. the party that would ultimately pay the notes, and they would receive full value therefor in lumber furnished by the corporation. The presumption that this was the understanding ar.d agreement upon which the notes were given is strengthened somewhat by the form of the notes themselves. They contain recitals that they are given for “ value received,” and it will be observed that Allen & Co. is the maker and not the indorser. Had the notes been accommodation paper, intended to be ultimately paid by the lumber company, with Allen & Co. only assuming the liability of a surety, then the usual commercial practice would have dictated that the notes should be made, not as they were, but witli the corporation as maker and the firm simply as indorser. Although the defendant Bacon denied that the notes were given for value, we think the evidence above cited- was sufficient to warrant the jury in finding otherwise.
We. are also of the opinion that the evidence would have justified a finding by the jury that Allen & Co.,, subsequent to the discount of the notes, received a part of the proceeds thereof through checks drawn by the lumber company to the firm upon the account into which the proceeds-of the notes went. The testimony upon this subject, however, is not entirely satisfactory, and we- do not wish to base our decision upon it, nor need it be adverted to in detail, as it may be changed materially upon the retrial which must necessarily be ordered. •
It follows from what has been said that the appeal of the defendant Allen is without merit, and so much of the judgment as he appeals from must be affirmed, with costs to the plaintiff, and that the part of the judgment which dismisses the complaint as to the defendant Bacon, and from which the plaintiff appeals, must be reversed, with costs to t]ie plaintiff appellant to abide the even t.
Patterson, Ingraham, McLaughlin and Hatch, JJ., concurred.
Judgment, so far as appealed from by defendant Allen affirmed, with costs to plaintiff; that part of the judgment which dismisses complaint as to defendant Bacon reversed, with costs to plaintiff appellant to abide event.