Kohn v. Henderson — 30 N.Y. St. Rep. 374

Majority

p. 374

Julius A. Kohn, App’lt, v. Malcolm Henderson, Resp’t.

(Supreme Court, General Term, Second Department,

Filed February 10, 1890.)

Headnote

Comtbact—Bills ahd motes.

Defendant and plaintiff’s firm entered into an agreement by which the latter was to advance certain moneys upon defendant’s note to aid in procuring a charter and constructing a railroad and if they deemed expedient would advance more and take a half interest therein. Thereafter they did advance more upon another note which provided that upon repayment, their interest in the road should cease. Held, that the notes were intended merely as vouchers for the money advanced and that there was never any expectation that they would be paid.

Appeal from judgment in favor of defendant, entered on verdict directed by the court.

This action was brought to recover upon two promissory notes, one> dated October 14, 1886, for $12,874, and the other dated November 19, 1886, for $3,000.

The plaintiff brings the action as assignee of J. A. Kohn & Co,

The defendant alleges in his answer as a defence, that he was a copartner of the firm of J. A. Kohn & Co., and that the notes were executed as vouchers, merely of moneys advanced to him for the benefit of said firm, to be invested in the building of a railroad in Texas, and not to be paid by him personally.

A contract between defendant and plaintiff’s firm recited that, the parties were considering the expediency of building a certain railroad and desired a charter and right of way and that defendant had agreed to devote his time to that pur • pose, and plaintiff’s firm thereby agreed to advance $5,800' on defendant’s note, with security, and that if said firm should determine to invest more in the enterprise they would deposit $25,000 and become jointly interested therein with defendant to the extent of one-half of the stock, etc., after repaying their advances. Subsequently another contract was made, by which said firm agreed to furnish capital to equip twenty miles of road,

p. 375

and if they did not, then upon repayment of the sums advanced on defendant’s notes at maturity their interest in the enterprise should cease.

Nathan Bijur, for app’lt; Moore & Moore, for resp’t.

This is an action on two promissory notes, and the defense is that they never were commercial paper, and were executed by the defendant merely as vouchers for money advanced by the plaintiff and his associates, to be disbursed by the ■defendant for the promotion of a railroad enterprise in which all the parties were interested, and that there never was any intention or expectation that the note would be paid.

The testimony produced on the trial, and the circumstances surrounding the transaction, support the theory of the defendant, and -the trial judge directed a verdict in Ins favor.

We concur in the views expressed by the trial judge in his assignment of his reasons for directing a verdict for the defendant, and wo iind no necessity for any extended remarks at this time.

The judgment should be affirmed, with costs.

Barnard, P. J., and Pratt, J., concur.