Mechanics & Traders' Bank v. Livingston — 53 N.Y. St. Rep. 693

Majority

p. 693

The Mechanics & Traders’ Bank, Resp’t, v. Frederick Livingston et al., App'lts,

(City Court of New York, General Term,

Filed June 19, 1893.)

Headnote

Bills and notes—Accommodation paper—Pledqe—Evidence.

In an action on a note delivered as collateral security with others to plaintiff by the payee, the evidence was conflicting as to whether such pledge was made for the amount of a note or as security for the payee’s account in general and for overdrafts, the amount of the note having been collected from the other collateral. The court charged the jury that if it was made as security for the note plaintiff could not recover, and that the burden of proving that it was made as security for future indebtedness was on plaintiff. Held, that by returning a verdict for plaintiff the jury found that the pledge was made for future indebiedness, and hence the exclusion of evidence that defendants were merely accommodation makers was not fatal error, as in that case defendants would be liable although accommodation makers.

Appeal by defendants from a judgment entered on a verdict returned by jury against them, and from the order denying new trial.

Charles Strauss, for resp't; Geo. F. Martens, for app’lts.

The plaintiff bank sues "upon a promissory note made by defendants to order of Haas & Polialski, and by them indorsed and delivered to the bank. The defendants allege by way of defense, that they were accommodation makers of the note; that the payees delivered it, together with twenty-six other notes, to tliq bank as collateral security for the payment of a note for $3,000 which such payees, at that time, made and delivered to the bank for value, and that the bank has collected $3,000 of such collateral twenty-six notes, and hence has been paid said $3,000 note in full. The proof on trial as to the conditions under which the note in suit and the other twenty-six notes were delivered to the bank by Haas & Polialski was conflicting. The plaintiff bank contending by evidence that these notes were delivered by Haas & Polialski and left with it as collateral security for their account in general, and for any overdrafts they might make, and that they continued to make overdrafts every day up to the time of their

p. 694

failure, and that at the time of their failure they owed the bank about $10,000, and still .owe it about $6,000; On the other hand, the defendants’ evidence shows that the note in suit and the other twenty-six notes were delivered to the bank specifically as collateral security for the payment of the $3,000 note, and that such note has been fully paid. The determination of these disputed questions of fact were properly left to the jury, under a careful charge by the court, to no part of which either side excepted, and by which the jury were told that, “ If you believe that those notes, the one in suit included, were given as collateral security for the note of $3,000, then plaintiff cannot recover.”

This was an instruction to the jury that defendants could not be held liable on the note in suit if it, with the others, had been delivered to the bank as security for the $3,000 note even though the defendants had made and delivered it to Haas & Pohalski for full value received, because it was in proof that the bank had collected more than $3,000 on the other twenty-six notes. Hence it was not fatal error to exclude the proof offered by defendants, that they were accommodation makers of the note in suit. And, moreover, the court instructed the jury, as requested by defendants’ counsel, “That the burden of proof that the note was given for the future indebtedness of Haas & Pohalski to the bank was upon the plaintiff,” and that “ They must establish by a fair preponderance of evidence that the note was given as collateral for future indebtedness, and that unless they do, the defendant is entitled to a verdict.” By returning a verdict for plaintiff under these instructions, they found that the note in suit was given to the bank as collateral security, not for the $3.000 note', but for the future indebtedness of Haas & Pohalski to the bank, and so finding, the defendants would be liable although they were accommodation makers. The judgment and order appealed from are affirmed, with costs.

McGown and Fitzsimons, JJ., concur.