185 N.E. 77 | NY | 1933
Summary judgment in the sum of forty-six thousand dollars, together with interest of over ten thousand dollars, has been entered in favor of the plaintiff for the unpaid balance of a promissory note made by one Maria di Francesco to the order of one Alexander Capasso. The note is annexed to the complaint. It is dated June 14th, 1926. It contains a promise to pay the sum of $50,000 "in successive semi-annual payments of not less than One Thousand Dollars each * * * for a period of eight years from date, and the balance then due to be payable on demand thereafter, with interest on the principal unpaid at the rate of six per cent. per annum, payable semi-annually, together with all taxes assessed upon said sum against said payee or the holder of this note."
On the back of the note appear the following indorsements: "New Haven, Conn. June 14th, 1926. Pay to the order of The Italian Discount and Trust Company, with recourse to me, Alexander Capasso. Alexander Capasso. New York, November 30th, 1926, Pay to the order of Alexander Capasso, Italian Discount and Trust Co., Mano Olivetti, Asst. Secy." The defendant is the successor in interest of the Italian Discount and Trust Company which indorsed the note and is subject to all the obligations of that company. *216
The liability asserted by the plaintiff in this action is based upon that indorsement. The defendant does not dispute the validity of the note or the amount due thereon. It disputes only that it is liable, as indorser, to the plaintiff. Upon motion of the plaintiff, the Appellate Division has ordered the answer to be stricken out and has granted summary judgment in favor of the plaintiff and against the defendant.
The answer alleges that the note in suit was secured by a mortgage; that the note and mortgage were indorsed and assigned by Alexander Capasso, the payee, to the Italian Discount and Trust Company as collateral security for money due from him to the trust company; that the debt was thereafter paid and the note and mortgage were then reindorsed and reassigned to Capasso and that the plaintiff took the note with full knowledge and notice of that transaction. The affidavits presented by the plaintiff show that he paid full value for the instrument and had no knowledge or notice of the transaction between the payee and the trust company beyond what is disclosed by the note itself and the indorsements upon it. The proof of these facts is not challenged by the affidavits interposed by the defendant. The question remains whether upon these facts the plaintiff is entitled to judgment. That is a question of law arising on undisputed facts.
There can be no doubt that Capasso, the payee of the note, who had indorsed the note to the trust company "with recourse," could not have maintained an action against the Trust Company upon the subsequent reindorsement and redelivery of the note by the Trust Company to him, even if the note was a negotiable instrument. (Neg. Inst. Law; Cons. Laws, ch. 38, § 80.) The Appellate Division has said that "this inhibition is leveled against the party who has reacquired the note and prevents him from enforcing payment against any intervening indorser to whom he was liable; * * * it is of no avail as *217
against plaintiff, a bona fide holder for value before maturity." (
The maker of the instrument promises to pay not only the sum of $50,000, with interest, which is a "sum certain," but also "all taxes assessed upon said sum" against the payee or holder of the note, and the amount of the taxes which may be assessed thereafter is not a sum certain. (Mechanics Bank of New Haven
v. Johnson,
We have said that "it is well settled that this court will not, for the purpose of reversing a judgment, entertain questions not raised or argued at the trial, or upon the intermediate appeal (citing cases)." (Martin v. Home Bank,
Here the note was spread before the courts below, though doubtless the assumption of both parties that the note was negotiable may have led the courts to refrain from examining the note or considering its legal effect. The question of law presented to the courts below was whether in a suit upon that note the defendant had the right to interpose a defense. Certainly it cannot be said the trial judge had no right to examine the note and consider its effect. Indeed, for all that appears, he may have done so. That was involved in the question presented to him. The same question is presented here, and we must review his decision upon that question as well as the contrary ruling of the Appellate Division. As argument that the ruling was wrong, the appellant has a right to urge here a proposition of law which appeared upon the face of the record and which could not have been avoided if brought to the attention of the respondent in the court below. (Wright v. Wright, supra.
See, also, Murdock v. Ward,
Ordinarily the indorsement of a note, which is not negotiable, evidences not merely an assignment of the note but a new contract by the indorser to pay the note as guarantor or as maker. (Seymour v. Van Slyck, 8 Wend. 403; Cromwell v. Hewitt,
It is said that nevertheless the indorsement, by implication, created a new promise, by the indorsers, of guaranty or payment. To whom was such a promise made by implication? Certainly not to the indorsee who was also a prior indorser "with recourse." Not to subsequent holders of the note, for the note was not negotiable, and any assignee of the note, together with the indorsements upon it, would receive only such rights or title as the assignor possessed.
It is too well established to require argument that ordinarily the assignee of an instrument which is not negotiable takes title subject to all equities and defenses which could be urged against his assignor. (Bush v. Lathrop,
At times, it is true, the doctrine of estoppel may preclude a defendant from asserting a defense against an assignee which he might have asserted against the assignor (See McNeil v. TenthNat. Bank,
The judgment of the Appellate Division should be reversed and the order of the Special Term affirmed.
POUND, Ch. J., CRANE, KELLOGG, O'BRIEN, HUBBS and CROUCH, JJ., concur.
Judgment accordingly.