Bell v. McNiece — 17 N.Y.S. 846

Majority

p. 846

Bell et al. v. McNiece et al.

(City Court of New York, General Term.

February 8, 1892.)

Headnote

Action on Note—Bona Fide Purchaser—Fbe-existing Debt.

Where the testimony in an action on a note shows that the same was received by plaintiff in payment of a pre-existing debt, it is error for the court to exclude testimony offered by defendant to show that the execution of the note was procured by false representations.

Appeal from trial term.

p. 847

Action by John Bell and another against James McNiece and another. From a judgment for plaintiffs, defendants appeal.

Beversed.

Argued before McGown, Van Wyck, and Fitzsimons, JJ.

John H. V. Arnold, for appellants. Earley & Prendergast, for respondents.

The defendant McNiece made a promissory note, payable to defendant Byrne, who, before maturity, indorsed it over to plaintiff. The defendant McNiece, by his answer, alleges that said note was obtained from him by the defendant Byrne by false representations, and without consideration therefor, and that plaintiffs were not holders of the same for value. The trial justice directed a verdict for plaintiffs for $504.19. The testimony shows that the note in suit was received from defendant Byrne by plaintiffs as a payment on account of material furnished him by plaintiffs prior to their acceptance of said note. The defendant McNiece then endeavored to prove that the defendant Byrne obtained the note in question by false representations, and that no consideration was given therefor. The trial justice excluded all such proposed testimony. In our opinion his rulings in this respect were clearly erroneous. As above indicated, the testimony shows that the note in suit was received by plaintiffs and applied by them in payment of a pre-existing debt. It does not appear that at the time of such acceptance they parted with value or relinquished some right because of the indorsement over to them of said note. Under these circumstances they received the note subject to any and all defenses which might have been urged against their indorser, Bryne. Prince v. Jersey Co., 13 N. Y. Supp. 567 , (City Ct. Gen. Term, Feb., 1891.) Therefore it was error for the trial justice to exclude the testimony offered by defendant McNiece tending to show that the note was obtained by false representations and without value. Judgment reversed. New trial ordered, with costs to appellant to abide event of action. All concur.