Fifth Avenue National Bank v. Parker — 39 N.Y. St. Rep. 257

Majority

p. 257

The Fifth Avenue National Bank, Resp’t, v. Samuel W. Parker, App’lt.

(New York Superior Court, General Term,

Filed May 4, 1891.)

Headnote

Pbomissoby note—Discount—Bona fide pubchaseb.

A bank discounted a note for the indorsers, parties not keeping an account in the bank, five days before its maturity, and having no notice of any infirmity in their claim against the maker; the note not being paid at maturity, the bank brought an action against the maker, omitting to sue the indorsers at their request. Held, that the bank was a bona fide purchaser of the note, and might recover against the maker.

Appeal by defendant from judgment entered on verdict against Mm.

T. M. Tyng, for app’lt; Charles Donohue, for resp’t

—The action was against the defendant as maker of a promissory note. The payee, - after endorsing the note, had transferred it to the plaintiff. The only question upon the trial was and upon the appeal is, whether the plaintiff were incontrovertibly shown to have been a bona fide purchaser of the note.

The defendant’s counsel did not claim that the jury should pass upon the credibility of the witnesses who testified to the circumstances of the discounting of the note. These circumstances did not disclose any notice to the plaintiff of any in

p. 258

firmity in the claim of the endorsers against the defendant. The plaintiff gave the face value of the note, less interest to the day of maturity.

Some particular facts on which appellant relies will be noticed.

It is said that plaintiff did not pay money on the faith of the note. The facts are to the contrary. Although the plaintiff’s president was content to take the note, without examination of the defendant’s responsibility as maker, it was not an admissible inference, that he did not intend to rely and did not rely upon the defendant’s liability upon the note. " It was certain that there was no purpose of excluding anything that might be in any contingency security.

‘It is further argued that the note was not taken in the usual course of business. This argument is based in part upon the fact that the note was discounted five days before its maturity. This cannot be an unusual instance. For, when a note is to be discounted will depend upon the desire of the holder to obtain money for it. That desire may arise at the last part as well as at the first part of the running of the paper. The discounter would see nothing suspicious, in the fact that the holder had not wanted money, until the time he applied. But in accordance with the fact, it is said that it was not usual for the bank “ to discount a note five days before maturity, for a party that has not got any account in the bank.” There is no inference from this, that when a person not a depositor applied, for a discount it would be out of the course of business to discount, because such applications were not frequent.

After the discounting of the note, the plaintiff at the request of the endorsers, omitted to sue them but brought this suit against the maker. It is supposed that this would permit a jury to infer in some way, that the plaintiff had discounted the note with notice that the endorsers had no action upon it against the defendant. If, as it has already been said, the plaintiff obtained title, it would not have been of any benefit to the defendant, that he should have been sued jointly with the endorsers. The result in such an action would have been the same as the result in this action, namely, a judgment against the defendant. The fact that the endorsers were not sued indicated a friendly feeling to them. This may have existed at the time of the discount The indulgence of such a feeling would not prevent the plaintiff, gaining a good title free from defenses provided otherwise there was good faith and an absence of notice of defenses.

The judgment should be affirmed, with costs.

Sedgwick, Oh. J., and McAdam, J., concur.