Allen v. McFadden — 48 N.Y. St. Rep. 88

Majority

p. 88

Isaac W. Allen, Resp’t, v. James J. McFadden, App’lt.

(Supreme Court, General Term, Fifth Department,

Filed October 21, 1892.)

Headnote

Bills and notes—Seed note—Bona tide holdee.

The action was brought by an endorsee upon a promissory note given for wheat purchased by defendant from the Pennsylvania Seed_ Company, the transaction being tile usual grain swindle. Held, that notwithstanding the fraud in the original transaction, the questions as to whether the note had an inception upon its delivery and whether plaintiff was a bona fide holder were for the jury, and their verdict in plaintiff’s favor on those questions would not be disturbed.

• Appeal by the defendant, James J. McFadden, from a judgment entered in Niagara county, May 1, 1891, on the verdict of a jury at the circuit, and also from an order entered January 18,

p. 89

1892, and entered in the clerk’s office January 21, 1892, denying his motion for a new trial made upon the minutes of the court.

Q. G. T. Parker, for app’lt; E. M. & F. M. Ashley, for resp’t.

This action is upon a promissory note, given in the sum of one hundred dollars, made by the defendant to E. A. Clapp, or bearer, for seed grain. It bears date August 12,1889, and was payable on the 1st day of October, 1890. Before the maturity of the note it was transferred by Clapp to the plaintiff, who paid therefor the sum of $95.00.

The transaction out of which the note grew was the usual grain swindle, perpetrated in this instance by a company styling itself the Pennsylvania Seed Company, Limited. The defendant agreed to buy of this company twenty bushels of wheat at fifteen dollars a bushel, less thirty-three and one-third per cent, commission for selling, with a bond of the seed company accompanying the agreement that it would sell for the defendant on or before Sept. 1, 1890, twenty bushels of wheat, to be derived from the crop of that year, at fifteen dollars per bushel, less thirty-three and one-third per cent, commission for selling it; so that the defendant would thereby be enabled to pay out of the transaction this note of $100, together with another one of fifty dollars, given at the same time, and have a handsome margin left.

As we have repeatedly held, this, scheme was a result of a joint fraud of the seed company and of the buyer of the grain, and we do not care at this time to enter upon any discussion or statement of the reasons which have lead us repeatedly so to characterize the transaction.

The jury has found that the plaintiff bought the note of Clapp in good faith, holding as a matter of fact, doubtless, that the note had its inception upon the delivery of it by the defendant -to Clapp, notwithstanding any fraud existing in the contrivance made by the defendant and the agent of the company, one Barger. See Sanford v. Moss, 45 St. Rep., 710 ; 18 N. Y. Supp., 673 , and Joy v. Diefendorf 40 St. Rep., 491 .

Judgment and order appealed from affirmed.

Dwight, P. J., Macomber and Lewis, JJ., concur.