Petrie v. Feeter

| N.Y. Sup. Ct. | May 15, 1839

By the Court,

Nelson, Ch. J.

I am unable to discover any principle that will justify the ruling of the learned judge at the circuit, unless the defendant is implicated in th & fraud of Dygert, of which I see no evidence—none, certainly, which would warrant the conclusion as matter of law. To sustain a verdict in this case upon that ground, the point should have been found by the jury.

It is true the note was over due, but the defendant, before he took it, first consulted one of the makers, and purchased upon the faith of his statement; and the very payment now sought to be recovered back was made at the time.

Feeter advanced to Dygert, Upon the strength of the note thus purchased, $218 in cash; and in the absence of bad faith, his equity to this amount is as strong and ev'en stronger than the plaintiff’s, who was acting under a mistake, because the defendant trusted to his representations that the note was a valid security. When the plaintiff urges that he was deceived by Dygert, the defendant may reply that he would also have been deceived, had he not taken the precaution to obtain his assent to the purchase. It is not for him now to retract, and shift the loss upon one who has acted under his advice. At most, the plaintiff could only be entitled to the difference between the two sums received and advanced by Feeter upon the note. But I do hot see how any part of the payment can be recovered back.

Admitting that the note was received beyond the $218 for a precedent debt, the farthest the court has gone, where a note has been negotiated in fraud of the maker, is to allow the fact to be set up by way of defence. No case has been referred to where a suit has been sustained to recover back money paid by the maker in such a case, and, I venture to say, none can be found.

It is true the case is distinguishable from that class of cases) in this : thqt here the fraud upon, the plaintiff in the negotiation was not discovered till after the payment. But that is his misfortune, and no fault of the defendant. This matter, when allowed by way of "defence, stands upon a consideration of the equities existing between the parties : but I think it would be carrying them too far, and beyond the foundation and reason of the rule, to permit them to be turned into a legal right, upon which a suit may be sustained to recover back the money when paid.

New trial granted, costs to abide event.^*

* See Watson’s ex’rs v. M'Laren, 19 Wendell, 563, and th,e cases there -cited, in support of the principal position in this case, that the maker is bound hy his declaration that he was holden for the payment of the note.