Majority
p. 621Pearce & Miller Engineering Company, Resp’t, v. George H. Brouer et al., App’lts. {New York City Court, General Term, Filed December 17, 1894.)
Headnote
1. Bills and notes—Bona fide holder.The transfer of a note before maturity, as collateral security for moneys advanced or loaned in good faith, constitutes the transferee a bona fide holder to the extent of such advance or loan.
2. Trial—Direction of 'verdict.
Where both plaintiff and defendant ask for a direction of verdict, they waive the right to have the questions of fact passed upon by the jury.
Appeal from a judgment entered on a verdict directed by the court in favor of plaintiff.
Cantor & Van Schaich, for app’lts ; John F. Booth, for respt.
The question presented on this appeal is whether the plaintiff was the bona fide holder of the note in suit to the ■extent of the money actually advanced upon it, and for which it was held by him as collateral security. The transfer of a negotiable protnissory note before maturity as collateral security for moneys advanced constitutes the transferee a bona fide holder when the loan or advance -was made in good faith. Brookman v. Metcalf, 32 N. Y. 596 ; Belmont Branch Bank v. Hoge, 35 N. Y. 65 . If the holder of such paper has paid but a part of the- consideration or value, he is entitled to be considered a bona fide
p. 622
holder pro tanto (Huff v. Wagner, 63 Barb. 215 ), and may recover his actual payment ( Williams v. Smith, 2 Hill, 301 ). The evidence of the plaintiff, by William H. Stalmaker, its secretary and! treasurer, is to the effect that about the 23d or 24th of December, 1892, one Mr. Starr, who was then indebted to the plaintiff for moneys previously advanced, in the sum of $385, brought to plaintiff the note in suit, “ dated Dec. 12, 1892, whereby defendants promised to pay to the order of themselves, three months after date, $1,000, value received,” signed “ Brouer & McGown,” and also indorsed “ Brouer & McGown,” and wanted a further advance of $75, which plaintiff let him have, upon receiving the note as collateral security for the $385 previously owing and for the $75 then advanced. The note was not paid at maturity, and the plaintiff, by producing the, note on the trial, established a prima facie right to recover the $75 actually advanced on the faith of the security. The defendants introduced evidence to show that the note was made without consideration, and delivered to Mr. Starr, the person who pledged same with plaintiff, to be procured to be discounted, and the avails turned over to the defendant. This evidence tended to show a diversion of the note, and imposed upon the plaintiff the burden of showing good faith. This was a question which properly belonged to the jury, but, inasmuch as both plaintiff’s and defendants’ counsel asked for a direction at the close of the case, they waived the right to have the questions of fact passed upon by the jury, and, as there is evidence to sustain the direction of the court below, the judgment must be affirmed, with costs.
All concur.
Cases cited
- Belmont Branch of State Bank of Ohio v. Hoge 35 N. Y. 65 p. 621
- Huff v. Wagner 63 Barb. 215 p. 622