10 Wend. 314 | N.Y. Sup. Ct. | 1833
By the Court,
The evidence offered by the plaintiff ought to have been admitted. The admission of the fact that the note had been presented at the bank for discount and rejected, threw upon the holder the burthen of shewing that it came fairly and honestly into his possession and for a valuable consideration, in order to repel the suspicion thus cast upon his title. For this reason the evidence was not only admissible, but indespensable.
But it is said the evidence offered would have shewn a perversion of the object of the note, by the application of it to a purpose different from the original intention of the makers, and that this was known to the holder. There is no pretence for this position, so far as two of the makers, Ganson and Curtis, are concerned, and I am of opinion that even the surely cannot make this objection. Rathbun cannot be considered in any better condition than an accommodation acceptor of a bill of exchange after an unqualified acceptance. The party thus accepting, or thus signing as maker, by operation of the law merchant, engages to pay the bill or note according to its tenor and effect. It is a letter of credit in the one case to the drawer, and in the other to the co-maker, to the extent of the bill or note, without any restriction as to the design or object for which the paper is made. These are familiar principles, and will be found in all the treatises upon bills of exchange and promissory notes.
In Dennison v. T. L. Bacon and another, 10 Johns. R. 198, the object of the note failed. It was given to raise money for a specified purpose, to which it had not been applied; and one of the payees attempted to enforce the collection in violation of the agreement under which it was given.
New trial granted.
On the argument, the counsel for the defendants relied much upon the case of Dennis ton v. T. L. Bacon and another, 10 Johns, it. 198, in support of the position, that where the terms upon which a note is given fails, the surety is discharged. There a note was given by Timothy L. Bacon and Abner Bacon for $1000, which it was agreed should be discounted at a bank, be paid by instalments, and renewed from time to time for the period of 168 days. The note was payable to W. Gere and it. Elliot, and when discounted, $500 was to be passed to the credit of T. L. Bacon by Elliot, and the residue was to he applied to the use of Gere and A. Bacon, one of the makers of the note. The note was offered for discount, but did not pass; having been endorsed in blank by the payees, Elliot filled in the name of Demisión as endorsee, and a suit was brought in Ills name for the benefit of Elliot, and the court, on a case made, ordered a nonsuit to be entered. The counsel particularly called the attention of the court to the opinion in that case, where it is said, “ the note was offered^and rejected by the bank—the object of it failed, and it ought to have been returned to the parties who gave it,” and remarked that although Elliot by the terms of the agreement was. entitled to one half of the amount of the’note, yet a nonsuit was entered. In answer to which the counsel for the plaintiffs here ¡¡urged that the principal ground upon which the decision was made in the case of Demisión v. Bacon was, that the plaintiff sought to enforce payment of the note according to the face, whereas by the terms of the agreement, it was to be paid by instalments and on an extended credit, and so this decision was understood by this court in the Bank of Chenango v. Hyde, 4 Coioen, 573. The plaintiff) therefore, was nonsuited, not because the note had been rejected when offered for discount, but because he sought to enforce its payment in violation of the terms of payment which had been agreed upon between the parties.