Draper v. Chase Manufacturing Co. — 2 Abb. N. Cas. 79

Majority

p. 79

DRAPER v. THE CHASE MANUFACTURING COMPANY.

N. Y. Supreme Court, First Department; Special Term,

March, 1877.

Headnote

Complaint. —Pleading.

Where, in an action by the payee of a promissory note against an indorser, it was alleged in the complaint, that after the making of the note, it was indorsed by the defendant, and thereupon transferred for value to the plaintiff; Held, on demurrer to the complaint, that this was not a sufficient averment to admit proof to rebut the presumption that the payee was the first indorser, and therefore not liable to him.

There should have been an allegation that the plaintiff parted with value upon credit of the indorsement, in order to hold the defendant liable.^[1]

Demurrer to complaint.

This action was brought by Albert Draper against The Chase Manufacturing Company as indorser of a promissory note.

The complaint, after alleging the incorporation of the defendants, alleged that on the 10th day of August, 1875, at the city of New York, the defendant, Frank W. Allen, made a certain promissory note in writing bearing date on that day, and thereby for value received promised to pay the plaintiff or order the sum of two hundred and fifty dollars, and the defendant The Chase Manufacturing Co., afterwards indorsed the said promissory note, and the same was thereupon for value received transferred to said plaintiff, who was the lawful owner and holder thereof.

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The complaint contained proper allegations of protest and notice of non-payment.

The defendant demurred to this complaint upon the ground that it did not state facts sufficient to constitute a cause of action. The defendant claimed that the plaintiff being the payee of the note, the complaint contained no sufficient allegation to admit of proof to overcome the presumption that The Chase Manufacturing Co. intended by their indorsement only to become liable as second indorser, and so not liable to the payee.

S. W. Holcomb, for demurrer.

T. C. Cronin, opposed.

[After stating the facts.]—It is the well settled rule in this State that in order to overcome such presumption, the payee must show that the note was thus indorsed to give credit to the note with the payee, and that the payee has parted with value upon the credit of such indorsement (Herrick v. Carman, 12 Johns. 160 ; Nelson v. Dubois, 13 Id. 175 ; Campbell v. Butler, 14 Id. 349 ; Hall v. Newcomb, 7 Hill, 416 ; Moore v. Cross, 19 N. Y. 227 ; Bacon v. Burnham, 37 Id. 614; Phelps v. Vischer, 50 Id. 69 ; Coulter v. Richmond, 59 Id. 478).

It is as well settled that the complaint must allege every fact which it is necessary the plaintiff should prove in order to recover (Kelsey v. Western, 2 N. Y. 506 ; Conkling v. Gandall, 1 Abb. Ct. App. Dec. 423 ).

The allegation in the complaint that the Chase Manufacturing Co. afterwards indorsed the said promissory note, and that the same was thereupon for value received transferred to the plaintiff, it seems to me is wholly insufficient to admit of proof to rebut the presumption above referred to. There is no allegation that the company indorsed the note to give credit to it with the payee, nor that the payee parted with anything upon the credit of such indorsement. The allegations

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contained in the complaint that the note was, after indorsement, for value received, transferred to the plaintiff, contain no allegation that that value was parted with upon credit of the indorsement, which allegation is essential to a recovery.

The demurrer must be sustained, with leave to the plaintiff to amend upon payment of costs.

Cases cited

Moore v. Cross 19 N. Y. 227 N.Y. p. 80