9 Daly 446 | New York Court of Common Pleas | 1881
In the case of Wheeler v. Allen (59 How. Pr. 118), as well as in the cases of Mohawk Bank v. Corey (1 Hill, 515), and Montross v. Clark (2 Sandf. 115), the plaintiff was a bonafide holder for value. The case now before us differs from them all in that respect, and we are called on to consider whether the plaintiff, who received the note merely as collateral security for an antecedent debt, is entitled to recover upon it from the defendant Murray, who indorsed it with the expectation that it would be discounted by Mr. Henry Hilton. The jury found by their verdict that the note was not indorsed by Murray upon condition that it should not be used unless it was passed to Mr. Hilton. In other words, they found that'
In the case of Powers v. Waters (17 Johns. 176), the court said that it was of no consequence that a note, which was indorsed with the understanding that it was to be discounted at a particular bank, was in fact discounted elsewhere; for, it did not alter or increase the responsibility of the indorser. In Bank of Rutland v. Buck (5 Wend. 66), the court reiterated that opinion. In Wardell v. Howell (9 Wend. 170), in Mohawk Bank v. Corey (1 Hill, 513), in Duel v. Spence (1 Abb. Ct. App. Dec. 559), in Montross v. Clark (2 Sandf. 115), in Purchase v. Mattison (2 Robt. 76), and in many other cases which might be cited, the law is laid down that the lender of accommodation paper who has no interest in the use of its proceeds, cannot complain that it has been diverted simply because it was not discounted by the person whom he was led to believe would cash it, or because it was used in paying an antecedent debt, though the accommodation indorser expected it would be used to raise money. The effect of these decisions seems to me to settle the law that unless the accommodation indorser imposes some restriction upon the borrower as to the use to be made of the paper, the latter may apply the note to any pur
The case of Rutland Bank v. Buck (5 Wend. 66), to which I have already referred, holds this very doctrine, as do the other cases which I have cited.
When an accommodation indorsement is procured by false and fraudulent representations, the transfer of the note conveys no title to one who receives it as security for an antecedent debt; not because it has been diverted, but because the fraud, practiced upon the indorser, vitiates the instrument in the hands of every one but a tona fide holder for value.
Where the accommodation indorser is interested in the use
In the case before us, there is no evidence that the indorsement of the defendant was obtained by fraud. If there were fraud, no attempt was made to prove it. The jury have found distinctly that the defendant imposed no. restriction upon the use to be made of the note. It is not contended that the defendant had any interest in the proceeds of the -note,, or any concern with the use to which Schoonmaker might apply them. Upon the facts found by the jury, there is no doubt in my, mind that the transfer of the note to the plaintiff was not, in contemplation of law, a diversion of it. If the note were not diverted, then, under the decision of the court of appeals in Grocers' Bank v. Penfield (69 N. Y. 502), the plaintiff, though he received the note as collateral security for an antecedent debt, would be entitled to recover. Such is the law of this state, as settled by the uniform course of decisions.
Though the opinion of the marine court at general term, fails to state whether the judgment of the trial term was reversed because the verdict was against the weight of evidence, or because it was supposed that' even upon the facts found by the jury the plaintiff was not entitled to recover, it is nevertheless apparent that a motion for a new trial was made upon the minutes, and that all the evidence was before the general term, for review. It may be that the general term thought that the verdict of the jury was against the weight of evidence, and that Murray did make it a condition that the note should not be used at all if Hilton would not discount it.
Under these circumstances, we cannot entertain this appeal. As the judgment may have been reversed on the ground that the verdict was against the weight of evidence, we are bound to rbsmiss the appeal, unless we discover that the defendant, took some good exception at the trial; in which event, it is our. duty to render judgment absolute against the plaintiff. I fail to find upon the points of the respondent a reference to any valid exception taken at the trial, and I think, therefore, that
Charles P. Daly, Ch. J., and J. F. Daly, J., concurred.
Appeal dismissed, with costs.