77 N.Y.S. 159 | City of New York Municipal Court | 1902
This is an action on two promissory notes, on each of which the defendant is an accommodation indorser. By his amended answer he interposed the same seven separate defenses to each note, and to the fourth, fifth, and .sixth defenses to the first note and their duplicates in the case of the second note plaintiff demurs on the ground that they are insufficient in law upon the face thereof. In the fourth defense the defendant alleges, in substance, that the plaintiff on or about July 27, 1898, entered into two agreements with Cooke and Welty, by which they leased from the plaintiff a certain so-called veriscope and set of photographic films, and entered into a. copartnership with the plaintiff to carry on the business of giving public exhibitions of the Corbett-Eitzsimmons sparring contest by means of the veriscope in certain territory in the vicinity of Australia. The defendant then sets up that, for the purpose of inducing Cooke and Welty to enter into these agreements, the plaintiff represented and warranted to them that the veriscope so to be leased was a practical invention, in good working order, and could be successfully operated by means of calcium light at low cost, and that said photographic films were clean and well printed, and could be satisfactorily used for the purpose contemplated by the parties, and that Cooke and Welty entered into the contracts in reliance upon said representations and warranties; and the defendant alleges that the veriscope so leased was not as represented and warranted, and that, in consequence of these defects, Coolce and Welty were put to great expense in carrying on said business, and were obliged to abandon a part of the territory,
The question involved here relates to the right of an accommodation indorser or accommodation surety to avail himself of a cause of action for damages for breach of contract existing in favor of his principal. A case which is closely in point is Gillespie v. Torrance, 25 N. Y. 306, 82 Am. Dec. 355. In that case it was held that the accommodation indorser on a note given for chattels sold cannot, at law, avail himself of a breach of warranty as to the quality of such chattels by way of defense, recoupment, or counterclaim. In that case the note was one of several given for oak timber sold to the maker by the plaintiffs, and the indorsement was for the accommodation of the maker. The indorser, when sued upon the note, set up as a defense a breach of contract of warranty in regard to the quality of the timber. The court of appeals held that the trial court was right in holding that the defendant could not set up the breach of warranty as a defense, partial or total, in the suit on the note. The facts set up in the fourth defense amount to a cause of action in favor of Cooke and Welty against the plaintiff for breach of warranty. This cause of action is personal to Cooke and Welty. The defendant may not in any way prejudice the right of Cooke and Welty to maintain their action to recover damages for such breach of warranty. The defendant cannot take that cause of action unto himself, and under
“Even if the defendants had been sued as guarantors or sureties upon the collateral undertaking, they could not avail themselves, in exoneration of their liability, of a cause of action for damages for a breach of contract existing in favor of their principals.” Newton v. Lee, 139 N. Y. 332, 34 N. E. 905.
It is true that an accommodation indorser or guarantor cannot be held liable upon a note which never had any validity whatever. If the note is absolutely void at law,—as, for instance, if it is obtained by means of illegal duress, by violence or threats, or if any one, where there is no debt whatever, imposes upon a person, and by means of fraud secures a note to be executed, having no validity whatever, in such cases the surety can show a total failure of consideration, and can show that there never was any debt whatever to secure. In the case at bar, however, there is no allegation of fraud. There is nothing but an allegation of breach of warranty, which constitutes no defense to the indorser. It has been held in some cases that a surety may avail himself of an existing claim in favor of an insolvent principal, but to do so the insolvency of the principal must be alleged. Schickle, Harrison & Co. v. Hazard (Sup.) 12 N. Y. Supp. 874.
In support of the fifth defense it is claimed that, because this note, as alleged, was given in the course of partnership dealings, this court has no jurisdiction of an action brought by the payee against the indorser. In the first place, the contract between the parties to this action is something entirely separate and apart and distinct from the alleged partnership agreement between the plaintiff and Cooke and Weltv. The contract between the parties to this action is a contract "
The sixth defense is equally as bad as the fifth. If no accounting is necessary, the plaintiff cannot be compelled to make the makers of the note parties to. this action, and the fact that he has elected not to join the makers is no defense to the indorser.
The plaintiff should therefore have judgment sustaining the de.murrer, with costs'.