Scott v. Parker — 25 N.Y. St. Rep. 865

Majority

p. 865

David Scott and Sophia V. Bluhm, as Executors, etc., of William N. Beach, Deceased, Pl’ffs and App’lts, v. S. Webber Parker, Impleaded, etc., Def’t and Resp’t.

(City Court of New York, General Term,

Filed May 31, 1889,)

Headnote

1. Bills and notes—Panties.

A note drawn payable “ to the order of estate of William IT. Beach,” ig

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substantially the same as if drawn to the order of a fictitious person, and in legal effect the note is payable to bearer, under the provisions of the statute (2 R. S. [6th ed.], p. 1160, § 5), which provides that “such notes made payable to the order of the maker thereof, or to the order of a fictitious person shall, if negotiated by the maker, have the same effect and be of the same validity, as against the maker and all persons having knowledge of the facts, as if payable to bearer.”

2. Same—Pbima facie holdebs fob value.

The maker, by negotiating the note, transferred title to it without indorsement; and the note presumably came into tbe possession of the plaintiffs in the condition they presented it at the trial, with the names of all the indorsers on, and they -were prima facie, at least, holders for value.

3. Same.

This construction that the note is in legal effect payable to bearer under the stetute cited, frees the matter from the application of the doctrine laid down in Moore v. Gross (19 IT. Y., 227) and kindred cases, and leaves those cases entirely inapplicable to the issue here involved.

Tbce action is against the defendant Parker as the indorser of a promisory note, in these words:

" $1,000. New York, January 19, 1887.

On demand, after date, we promise to pay to the order of estate of William N. Beach, one thousand dollars, at American Exchange National Bank, New York, value received, with interest until paid.

THE IVANHOE PAPER 00.,

S. Webber Parker, Treas. Indorsed: S. Webber Parker.

D. Scott.”

It was admitted on the trial that William N. Beach died February 13, 1883, leaving a will by which the plaintiffs were appointed executors, and that on March 12, 1883, the will was duly admitted to probate, and that the executors thereupon duly qualified. The making and indorsing of the note were admitted, and the protest of the note on November 21, 1887, and the certificate of the notary that service of notice of protest on the defendant Parker was made on the same day were admitted in evidence.

The plaintiffs produced the note and offered it in evidence, and upon these proofs rested their case.

A verdict was directed against the Ivanhoe Paper Company, the maker, from which no appeal has been taken, and the trial continued against Parker, the indorser. The main defense pleaded by Parker was that the note was indorsed by him for the accommodation of David Scott and Sophia V. Bluhm, but no evidence was offered to prove this allegation save inferences to be drawn from the following:

The note is dated in January, and Parker swears it was not indorsed by him until August fifth, following.

Mr. Shelp, the assistant treasurer of the paper company, testified that, as such officer, he received a $1,000 check on January nineteenth, but did not know where it came from, but he was allowed to testify that Mr. Scott had told him that the $1,000 came from the estate of William N. Beach.

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This evidence was objected to on the ground that the declarations of one executor could not bind the estate, and on the further ground that Scott was a subsequent indorser, and the evidence proposed was a declaration to relieve himself from liability. The objection was overruled under exception, and a motion to strike out the evidence was denied under exception.

Albert 0. Hall, a witness produced by the plaintiff, then testified that he had a conversation with the defendant Parker about November, 1887, and that Parker told him that the heirs would never lose a dollar by him; that he did not want the plaintiffs to press the thing; that as soon as he got around he would pay it (the note).

The plaintiffs’ counsel asked to go the jury on the evidence. The court denied the motion, and dismissed the complaint as to Parker, and the plaintiffs appeal.

Arnoux, Bitch & Woodford, for app’lts; Peter B. Vermilyea, for resp’t.

The note sued upon was not an obligation made to the estate represented by the plaintiffs. The maker owed the estate nothing at the time the note was made; it was given to the executors for an advance of money made by them, and the action should have been brought in their names as individuals. This objection was not raised in the answer or in the court below, and the addition of the title of “executors, &c.,” to their names may, therefore, be regarded as surplusage. The note was, in legal effect, payable to bearer, under the provision of the statute which provides that “ such notes, made payable to the order of the maker thereof, or to the order of a fictitious person, shall, if negotiated by the maker, have the same effect and be of the same validity as against the maker and all persons having knowledge of the facts, as if payable to bearer.” 2 E. S. (6th ed.), p. 1160, § 5.

The estate of William N. Beach could neither speak, think nor act. It consisted of certain inanimate and incorporeal things called property of which he died seized. The testator had no transaction with the defendants, they owed him nothing, and when he died they were not indebted to his estate. They could not become indebted to it after his death. They might become indebted, however, to its executors or trustees, as its legal representative. The estate could not lend money on notes or such like securities, and if the executors did, they did so on their own account and at their own risk. The note in suit must, in view of all the facts, be regarded as one payable to a “fictitious,” for it is not payable to a “real” person.

As was said in Lyon v. Marshall (11 Barb., at p. 248), “it certainly is not a promise to pay the testator, for he is described as deceased.

It was not an agreement with the estate, for it could

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make no such contract. It was not a promise to the executors, because they are not named therein. The words “Estate of Wm. N. Beach ” as payee of the note, do not represent either an individual or a corporation or any legal entity whatever. The defendant, Parker, drew the note and signed it for the paper company, and endorsed it knowing these facts, so that as to the company as well as to himself, it was under the statute a note payable to a fictitious, person, and by force of the statute payable to bearer.

This construction accords with the rule laid down in Lyon v. Marshall (supra); Bowles v. Lambert ( 54 Ill., 239 ). and Tittle v. Thomas (30 Miss , 122).

The maker, by negotiating the note, transferred title to it without endorsement (Plets v. Johnson, 3 Hill, 112 ; Maniort v. Roberts, 4 E. D. Smith, 83; Willetts v. Phœnix Bank, 2 Duer, 121 ; Central Bank v. Lang, 1 Bosw., 202 ), and the note presumably came into the possession of the plaintiffs in the condition they presented it at the trial with the names of all the endorsers on, and they were prima facie at least holders for value. 1 he construction we have put upon the note under the statute cited, frees the matter ' from the application of the doctrine laid down in Moore v. Cross ( 19 N. Y., 227 ) and kindred cases, and leaves them entirely inapplicable to the issue involved.

These views render it unnecessary to consider the admissibility of the declarations of Scott as a co-executor, and bring the contention down to the single question whether ' there was sufficient" to go to the jury. The admission made by Parker to the witness Hall was one against his interest, and in it he substantially acknowledged the debt, saying as soon as he got around he would ■ pay it. The case, ought to have gone to the jury, and the refusal to submit it was error. For these reasons, the judgment must be reversed and a new trial ordered, with costs to abide the event.

Nehrbas and Holme, JJ., concur.