140 N.Y.S. 217 | N.Y. App. Div. | 1913
The action is on a promissory note for $3,000 made by the Architects Standard Bronze Company and indorsed by it and the defendant. The note was acquired by plaintiff for value before maturity and came due November 25, 1909, when it was duly protested for non-payment and notice given to defendant. The defense was that simultaneously with the delivery of the note a chattel mortgage was given by the company as collateral security therefor, and 600 shares of the capital stock of said company were also given as collateral security; that plaintiff, without the knowledge or consent of defendant, had satisfied the mortgage and had sold the stock. The defendant also pleads payment.
The plea of payment is predicated upon the fact that after the note in suit had become due, the plaintiff received and accepted from the bronze company its successive notes for the indebtedness, payable from time to time, the last one apparently having been payable some time after June, 1910. The testimony both of the plaintiff and of a Mr. Rhodes who had been bookkeeper of the bronze company and who delivered the so-called renewal notes to plaintiff, was that plaintiff accepted the new notes, as he expressed it, as “collateral security” for the original note now sued upon, and that plaintiff positively refused to give up the original note. Plaintiff’s own story is, and it is the only evidence upon the subject, that he never agreed to extend the'time for the payment of the amount due,
As to the other defenses resting upon the sale or surrender of the security given for the note, it is plain that they are not complete, but only partial defenses by way of setoff. The stock was sold, and the chattel mortgage satisfied long after the note became due. All that defendant is entitled to is a credit for the amount realized, or which might have been realized upon this security. The plaintiff proved what he received for the stock and expressed his willingness that the proportionate amount of this sum might be. charged against him. It was open to defendant to show, if he could, that the stock was worth more than was realized upon it, but this he made no attempt to do. So as to the chattel mortgage. The defendant, for all that appears in the case, was entitled to have the value of the chattels applied to the payment of the note, but, as he was asserting an affirmative defense, it was for him to show what the value was. There is no presumption where a chattel mortgage is given as part security for an" indebtedness, that the value of the chattels equals the amount of the debt.
The judgment should be reversed and a new trial granted, with costs to appellant to abide the event.
Ingraham, P. J., McLaughlin, Laughlin and Dowling, JJ., concurred.
Judgment reversed and new trial ordered, costs to appellant to abide event. Order to be settled on notice.