Austin v. Vandermark

Headnote

An accommodation endorsement made by one member of b, mercantile Sim without the assent, either express or implied, of his co-partners, cannot be enforced against the latter, except in favor of a Iona fide holder without notice. Per Nelson, Ch. J,

N. gave L. a business note, endorsed by M., which was transferred to A. After the note fell due, M., being indebted to N., made another note for the same amount, payable to the order of and endorsed by the latter together with V. & Co., and sent it to A. as a substitute for the first note, which he desired should be returned to him, Held, that though the firm name of V. &. Go. was used for M.’b accommodation, the circumstances were not sufficient to charge A. with knowledge of the fact; and that he was therefore entitled to a verdict against all the members of the firm, though the endorsement was made by one, without the knowledge or consent of the others.

Assumpsit, by the endorsees against the endorsers of a promissory note, tried at the Ontario circuit, in November, 1841, before Moseley, C. Judge. The note was for $424,50, dated October 16th, 1839, made by Norton, Bartle & McNeil, payable a the Mechanics’ Bank in the city of New-York, to the order of and endorsed by Norton, Ford & Co. and 0. Vandermark & Co. All the defendants except Frederick Vandermark, of the firm of 0. Vandermark & Co., allowed judgment to pass against them by default. On the trial, the case was this : Norton, Ford & Co. being indebted to one Lane, gave him their note endorsed by Norton, Bartle & McNeil, which was transferred by Lane to the plaintiffs. When this note became due, Norton, Bartle & McNeil owed Norton, Ford & Co., and agreed to the note in question and to get it endorsed by O. Vandermark & Co. for the purpose of taking up the first note on which. Norton, Ford & Co: were liable as principals. The note in question was accordingly made, and endorsed by 0. Vandermark in the name of his firm for the accommodation of the makers. The defendant F. Vandermark was not present when the endorsement was made, nor did it appear that he knew of or assented to it. The note in question was sent, to the plaintiffs in a letter written by McNeil, one of the. makers, dated Phelps, October 30th, 1839. The letter was in these words : “ Gent’n—Above I send you Norton, Bartle & McNeil’s note for amount of Norton, Ford & Co.’s note in favor of Henry Lane for $417 past due, and which you will please return me per mail.” In answer to .this letter, the plaintiffs wrote to McNeil as follows : “ New-York, November 2d, 1839. Sir : We received this morning in yours of the 30th ult. a note drawn by Norton, Bartle & McNeil at 63 days from 16th Oct. 1839, for #424,50, to replace one of Norton, Ford & Co.’s for $411,15, protested for non-payment the 5th ult. By reference &c., you will perceive that the note for $424,50 is $4,44 too much. This amount we will hold subject to your order on payment of the said note.” There was no evidence in the case, other than the above letters and

the notes themselves, to show that the plaintiffs knew the note in question was endorsed by 0. Vandermark & Co. for the accommodation of the makers, or that the name of the firm was endorsed without the knowledge of the defendant F. Vandermark. The judge charged the jury that, prima facie, the plaintiffs were to be considered bona fide holders, and that it lay upon the defendant F. Vandermark, to show the plaintiffs knew, when they took the note, that he did not consent to the endorsement. The judge further charged, that there was not enough upon the face of the notes and letters to show that O. Vandermark & Co. were accommodation endorsers. The jury found for the plaintiffs, and the defendant F. Vandermark now moved for a new trial on a case.