p. 531Riverside Bank, Appellant, v. W. Martin Jones, Respondent, Impleaded with The Schlicht Heat, Light and Power Company.Headnote
Accommodation note—liability thereon where it is assigned to secure an existing indebtedness, since paid.A note made for the accommodation of a corporation, and delivered hy the corporation to a hank as collateral security for an existing indebtedness from the ■ corporation to the bank, cannot be enforced by the bank where it appears that all of the indebtedness of the corporation to the bank, which existed at the time the note was delivered or which was incurred intermediate the delivery of ■ the note and its maturity, has been extinguished.
Motion by the plaintiff, Riverside Bank, for a new trial upon a case containing exceptions, ordered to be heard by the Appellate Division in the first instance upon the dismissal of the complaint by direction of the court after a trial at the New York Trial Term.
lyman L. Settel, for the appellant. j
W. Martin Jones, respondent, in person.
This action was brought to recover the amount of a promissory note made by the defendant to the order of the Schlicht Heat, Light and Power Company, and used by it at the plaintiff’s bank before maturity. At the close of the trial a verdict was directed for the defendant and plaintiff’s exceptions were ordered to be heard in the first instance by the Appellate Division.
We are of the opinion that the trial court properly directed a verdict for the defendant. The note in suit was delivered by the defendant to the power company without any consideration therefor and solely for its accommodation. The power company delivered it to the plaintiff bank as collateral security for the payment of an indebtedness then existing of the power company to the bank. All of the indebtedness of the power company to the bank which existed at the time the note was delivered, or which was incurred intermediate the delivery of the note and its maturity, has since been paid. The payment of such indebtedness relieved the defendant from all liability upon his note. Any indebtedness of the power
p. 532company which was contracted, as well as any extension of credit given, after the maturity of the note, in no way hound him. There is nothing in the record which would have justified the jury in finding that the plaintiff, at the time the action was commenced, had any claims against the Schlicht Company incurred prior to the maturity of the note in suit; in other words, there is nothing to show that the plaintiff parted with value, or gave credit, upon the strength of the defendant’s note. The trial court, therefore, could not do otherwise than direct a verdict. As to the motion for an extra allowance we do not see how we can pass upon any such question. There is no authority for its reference to the Appellate Division and we think that that question must be determined in the court below before the taxation of costs.
The-plaintiff’s exceptions must, therefore, be overruled and. judgment ordered for the defendant, with costs.
Van Brunt, P. J., O’Brien, Ingraham and Hatch, JJ., concurred.
Exceptions .overruled and judgment ordered for defendant, with •costs.