United States National Bank v. Ewing

The note sued upon was made by Madden and endorsed by Ewing for the accommodation of the maker, and by him was transferred to the plaintiff as added security upon a precedent debt. The holder parted with nothing upon receiving it, surrendered no right and no security, and made no new agreement in reliance upon' it. In its hands it was, therefore, open to the defense that made for one purpose it had been used for another, and that its diversion had served to discharge the endorser.

The trial court held that no such legal diversion had been established, and the contention here is that the evidence on that subject should have been submitted to the jury as requested by the defendant.

The endorser testified that he gave his name upon the express assurance of the maker that the note would be negotiated in Louisville,. Kentucky, in answer to the endorser’s objection that he did not wish to put his name to paper which might be sued in New York. He added: “ I finally made the endorsement on his assurance, and relying upon it that the note would be negotiated in Louisville, and that he would meet it at maturity.” There is no contradiction of this evidence unless it be in the silence of the • written cotemporaneous memorandum which provided some security for the endorser. If that raised a question of fact as to the existence of the agreement it should have been decided by the jury.

The answer made by the general term is in substance that the writing contained no restriction upon the use of the note, and the paroi proof showed only a remark by the maker as to its intended use, which did not amount to a restriction; that if negotiated in Louisville the endorser could and would have been sued in New York; and the place of discount was immaterial. But we held in Benjamin v. Rogers, 126 N. Y., 70 ; 36 St. Rep., 393 , that “ the surety has the right to impose any limit he may choose upon his liability, and that he may always fix the precise terms upon which he is willing to become a surety, whether those terms seem to be material or immaterial.” The restriction here, does not seem to be material, and yet may have been so in the mind of the endorser, and for reasons sufficient to him. He swears that he lent his name upon condition that the note should be negotiated in Louisville. If his testimony, read in connection with the writing, left possible- the inference that no restriction was intended, the inference was one of fact, and not of law, and should have been left to the judgment of the jury.

The judgment should be reversed, and a new trial granted, costs to abide the event.

All concur, except Andrews and Gray, JJ., not voting.