Kelly v. Burroughs — 1 N.Y. St. Rep. 161

Majority

p. 161

Kelly v. Burroughs.

(Court of Appeals,

Filed March 26,1886.)

Headnote

1. Pbomissoby notes—When accommodation indobseb liable to subsequent INDOBSEB.

Where the maker of an accommodation note procures an indorser, and' then delivers the note to a second indorser, who has it discounted, and. turns the proceeds over to such maker, if the second indorser is sued by the bank, and pays the judgment, he becomes a holder for value, and entitled to indemnity from the first indorser.

3. Witness—Personal Transaction with deceased party—Code Civil

Procedure, § 829.

Where the maker of the note was dead, and defendant, the first indorser, claimed that plaintiff was improperly allowed to testify to the transaction between himself and Evans. EM, that defendant was not of the class of persons protected by section 829 of the Code of Civil Procedure.

Appeal from order of general term, second department, affirming judgment entered upon a verdict directed at a. circuit court by Mr. Justice Pratt.

Mr. Fisher, for appellant.

Mr. Boss, for respondent.

The complaint states that on the 30th of November, 1881, one Evans made and executed his promissory note, payable four months after date to the order of the defendant for $600; that the defendant indorsed the-note; that so indorsed, and before maturity, the note was transferred to the plaintiff for value. It alleges presentment for payment, protest, and notice of non-payment, and that plaintiff is the owner of the note. The defendant answered, but denied none of the allegations of the complaint.. He set up, however, that his indorsement was without consideration, and for accommodation, and upon information and belief, that it had no legal validity binding upon him at all -until at or about the time of its date, when it was discounted for and at the plaintiff’s request at the Commercial Bank, and the proceeds paid to the plaintiff. For a second defense the defendant alleges that the lióte was paid.

Upon the trial the plaintiff put in evidence the note, signed by Evans as maker, indorsed first by the defendant,.

p. 162

and second by the plaintiff. He computed the interest. It is obvious that upon the case as it then stood the plaintiff had made out his cause of action. The admissions in the pleadings, the possession of the note, the computation of interest, established the right to recover, and the amount due. But he. also proved that the Commercial Bank had recovered a judgment against the maker and himself upon the same note; that he paid its amount to the bank, and had the judgment satisfied as to himself. It was proven, also, that the note was the property of the bank at the time suit was brought against Evans and Kelly. The defendant then testified that he indorsed the note at the request and for the accommodation of Evans, the maker, and returned it to him; that the plaintiff procured the note to be discounted, had the money placed to his own credit, and ofi the same day drew the money. The plaintiff then testified that he indorsed the note and procured it to be discounted at the request of the maker, and gave the proceeds to him. Other evidence was given to the same effect. The defendant’s counsel asked to go to the jury upon the testimony. The plaintiff’s counsel requested the court to direct a verdict in favor of the plaintiff. The court refused the defendant’s request, and directed a verdict in favor of the plaintiff for the amount claimed. The defendant afterwards made a motion for a new trial, which was denied. From that order, and from judgment upon the verdict, an appeal was taken to the general term, where the judgment was affirmed. The defendant appeals from the judgment of affirmance to this court.

We think the appeal must fail. Conceding that both indorsers became so at the request and for the accommodation of the maker, the defendant was still hable, as first indorser, to the plaintiff as second indorser, and when the latter paid the amount of the note to the bank, and took it up, he became a holder for value, and entitled to indemnity from the defendant. Concerning the facts there was no dispute, and consequently no occasion to present them to the jury. The mere fact that the plaintiff, who testified to important particulars, was interested, was unimportant in view of the fact that there was no conflict in the evidence, or any thing or circumstance from which an inference against the fact testified to by him could be drawn. The cases cited by the appellant -lack this element, while Lomer v. Meeker ( 25 N. Y., 361 ) sustains the ruling of the trial court. It is claimed, however, by the appellant, that the plaintiff was improperly allowed to testify to the transaction between himself and Evans. Evans was dead, and the contention is put upon section 829 of the Code. I am unable to per

p. 163

The other exceptions seem to have neither substantial nor technical merit. The defendant suffers from a relation to the note, which, at the request of Evans, he voluntarily assumed, and not from any error of the court in enforcing his liability. We think the judgment should be affirmed.

All concur, except Rapallo, J., absent.