Bell v. McNiece — 43 N.Y. St. Rep. 793

Majority

p. 793

John Bell et al., Resp’ts, v. James McNiece et al., App’lts.

(City Court of New York,

General Term,

Filed February 8, 1892.)

Headnote

Bills and notes—False representations.

Where it appears that plaintiff received the note in suit from the payee in payment of a pre-existing debt, and parted with no value at the time of its transfer, it is error to exclude evidence to prove the defense alleged that it was procured from the maker by false representations.

Appeal from judgment in favor of plaintiffs entered upon verdict directed by the court.

John H. V. Arnold, for app’lts; Harley & Prendergast, for resp’ts.

The defendant McNiece made a promissory note payable to defendant Byrne, who before maturity endorsed it over to plaintiffs.

The defendant McNiece in his answer alleges that said note was obtained from him by the defendant Byrne by false representations and without consideration therefor, and that plaintiffs were not holders of the same for value.

The trial justice directed a verdict for plaintiffs for $504.19.

The testimony shows that the note in suit was received from defendant Byrne by plaintiffs as a payment on account of material furnished him by plaintiffs prior to their acceptance of .said note.

The defendant McNiece then endeavored to prove that the defendant Byrne obtained the. note in question by false representations, and that no consideration was given therefor. The trial justice excluded all such proposed testimony. In our opinion his rulings in this respect were clearly erroneous.

As above indicated, the testimony shows that the note in suit was received by plaintiffs and applied by them in payment of a pre-existing debt; it does not appear that at the time of such acceptance they parted with value or relinquished some right because of the endorsement over to them of said note. Under these circumstances they received the note subject to any and all •defenses which might have been urged against their endorser Byrne. Prince et al. v. The Never Rip Jersey Co., 37 St. Rep., .677.

Therefore it was error for the trial justice to exclude the testimony “offered by defendant McNiece tending to show that the note was obtained by false representations and without value.

J udgment reversed and new trial ordered, with costs to appellant to abide event of action.

McG-own and Yan Wyok, JJ., concur.