Emmet v. Northern Bank

Headnote

Emmet v. Northern Bank of New York, 173 App. Div. 840 , affirmed.

Appeal from a judgment entered October 14,1916, upon an order of the Appellate Division of the Supreme Court in the first judicial department, reversing a judgment in favor of defendant entered upon a decision of the court on trial at Special Term, and directing a judgment in favor of plaintiff in an action to procure the cancellation of a promissory note executed in the name of the Title and Guarantee Company of Rochester by two of its executive officers. Plaintiff demanded that this note be surrendered and canceled for the reasons: That it was executed without authority of the Title and Guarantee Company; that it was executed as the result of a fraudulent conspiracy to which defendant was a party, for the purpose of raising funds to pay an antecedent indebtedness of the Bankers Realty and Security Company to defendant; that the plaintiff received no consideration for such note. Defendant - contended: That the note was validly issued; that not only did plaintiff receive consideration for the note, but that such consideration was transferred from plaintiff into the pockets of plaintiff’s sole stockholder, the .¿Etna Indemnity Company, a Connecticut corporation, and was used by the indemnity company to reduce its liabilities pro tanto in the Northern Bank, and that defendant should have judgment for the amount of the note. At Special Term the court rendered a decision for the defendant, upon which judgment was entered dismissing the complaint and awarding to defendant on its counterclaim the sum of $50,000,-the amount of the note, with interest and costs. The Appellate Division reversed the judgment and directed judgment for plaintiff; that defendant deliver the note to plaintiff for can-

collation; that the counterclaim be dismissed on the merits, and that the defendant be perpetually enjoined from beginning any action or proceeding upon the note.