Hall v. Whiton

The action was brought upon a promissory note made by the defendant, Caroline W. Whiton, to the order of one L. C. Whiton, and by him given to one Elmer E. Cooley as security for a pre-existing debt of $700, and to secure a guaranty of a mortgage for some $650, and which note thereafter, it is claimed, came into possession of plaintiff. It appears by the evidence that the note was to be held as collateral security, and that Cooley was simply to hold the note for the indebtedness that then existed. A few days before the maturity of the note, Cooley delivered the same to the plaintiff, an employé of the Lakewood Trust Company, who gave a draft for $1,200 on the Lakewood Trust Company to Cooley, for which plaintiff gave his check, although it did not appear if the draft was ever paid. Over two months after the maturity of the note, and subsequent to its transfer to the plaintiff, both Cooley and Whiton signed a memorandum as to the proceeds of the note, which memorandum appears in evidence. On motion the trial justice struck out all testimony of both Whiton and Mathews as to the limitations placed on the note, and also held that there was no question for the jury as to whether or not the plaintiff was a bona fide holder for value, and directed a verdict for the plaintiff for the full amount of the note in suit.

We think it was incumbent in this case upon the plaintiff to show that he was a bona fide holder for value, and the burden of proof in that respect was upon him. American Exch. Nat. Bank v. New York Belting & Packing Co., 148 N. Y. 698 , 43 N. E. 168 ; Nickerson v. Ruger, 76 N. Y. 282 ; Bank v. Noxon, 45 N. Y. 762 . Upon the testimony as it appears in the record, we are of opinion that the learned trial justice erred in refusing to submit the question to- the jury as to whether or not the plaintiff held the note sued upon for value, or became a bona fide holder thereof, as the circumstances attending the procurement of the note by the plaintiff, and all the-transactions surrounding the same, were all proper subjects to be im quired into, and to be left to the jury for their determination. Vosburgh v. Diefendorf, 119 N. Y. 360 , 23 N. E. 801 , 16 Am. St. Rep. 836 . And as was recently held in this department in the case of Cahen v. Everitt, 67 App. Div. 89 , 73 N. Y. Supp. 549 , by Patterson,, J., it is neither possible nor necessary to lay down a general rule as to what constitutes bad faith, but here we are impressed by the evidence that the case should have gone to the jury on that subject; and from the testimony as to what plaintiff gave for the note, and the circumstances under which he acquired it, and as an interested party, his-credibility was for the jury. These remarks of Mr. Justice Patterson in the case supra can well be applied to the case at bar.

We are bound by the record in this case, and therein we find an order duly entered denying the motion for a new trial, made upon-

Talcing the evidence as given on the trial in its most favorable light towards plaintiff, we think the defendant had the right, in view of the fact that said note was not to be sold or assigned until certain events happened as stated in the agreement in evidence, to have the question determined by the jury as to whether or not the plaintiff became a bona fide holder thereof for value, and that the direction of a verdict for the plaintiff in this respect was error. For the reasons stated, the judgment and order appealed from must be reversed, and a new trial granted, with costs to appellant to abide the event.

Judgment and order reversed, and new trial granted, with costs to appellant to abide event.

DELEHANTY, J., concurs. HAS CAFF, J., dissents.