First National Bank of Friendship v. Weston — 68 N.Y. St. Rep. 514

Majority

p. 514

First National Bank of Friendship, N. Y., App’lt, v. Abijah Weston, Impleaded, etc., Resp’t.

(Supreme Court, General Term, Fifth Department,

Filed June 21, 1895.)

Headnote

1. Bills and Notes — Accommodation—Notice.

A bank, upon discounting a note, presented by the first indorser, is not chargeable with notice that the indorsements thereon were for the accommodation of the maker.

p. 515

3. Same.

It is not the duty of a person, about to purchase negotiable paper, to make any inquiries, not required by good faith, as to possible defenses of which he has no notice, either from the face of the paper or facts communicated at the time.

Appeal from a judgment, dismissing the complaint.

Chas. S. Cary, for app’lt; John H. Waring, for resp’t,

— This action was brought upon a promissory note dated December 31,1891, made by the firm of George Van Campen & Sons, payable to the order J. K.Van Campen, and indorsed by the payee and by the firm of Weston Bros., as second indorsers. The indorsement of thefirm name of Weston Bros, was made by William W. Weston, one of the members of the firm, solely for the accommodation of the makers, without consideration, and not in the business of the firm of Weston Bids. It was presentéd to the plaintiff for discount by the payee, J. K. Van Campen, in the month of September or October, 1892. It was discounted by the plaintiff’s cashier, and the proceeds thereof were applied in payment of a promissory note falling due” that day, which was one of a series of notes made by the same makers and bearing the same indorsements as the note in suit. The first note of the series was discounted by the plaintiff, and the proceeds thereof were placed to the credit of George Van Campen. Whether he was a member of the firm of makers did not appear from any affirmative evidence on the trial. Abijah Weston alone defended, setting up as his defense that the indorsement of his firm name was made without his consent, and not in the business of his firm ; that it was presented to the plaintiff for discount by the makers, which was alleged to be notice to the plaintiff that his firm was an accommodation indorser.

Many of the facts of this case are similar to those of the case of Smith v. Weston, 68 St. Rep. 513 , which was argued at the same time with this case ; but a different question arises here. Both parties requested the direction of a verdict in their favor, respectively, in the Smith Case, thereby submitting the questions of fact for the decision of the court, and the decision was in favor of the defendant. But such was not the case here. The plaintiff, at the close of the evidence, asked to have the questions of fact submitted to the jury. His request was Fefused, and a verdict was directed for the defendant. The plaintiff’s cashier, Minor Well-man, testified that the note in suit was sent by mail to the plainiff bank by the payee, J. K. Van Campen, with a requést that it should be discounted and the proceeds used to take up the note heretofore referred to and which was held by the bank ; that J. K. Van Campen paid the discount; that he did not know that he was one of the makers of the note; neither did he know who composed the firm of makers; that he had no knowledge who composed the firm of makers; that he had no knowledge who J. K. Van Campen represented in this correspondence, and did not know who composed the firm of George Van Campen & Sons ; that he discounted the note on the strength of the indorsement of

p. 516

Weston Bros.; that that firm was the only one he knew anything about. There was evidence in the Smith Case justifying the court in finding that the note was, to the knowledge of the plaintiff, presented for discount oy the makers, and hence presumably had its inception in their hands. . That circumstance was notice to the plaintiff. Smith that the note belonged to the makers, and that the indorsement in the name of Weston Bros, was made for the makers’ accommodation, without consideration. If presented by the first indorser, as in this case, the presumption would be that it had its inception in his hands. It is not the duty of parties about to purchase negotiable paper to make any inquiries not required by good faith, as to the possible defenses of which they have no notice, either from the face of the paper or facts communicated at the time. Daniel, Neg. Inst. § 775. The evidence presented facts which should have been submitted to the jury.

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

All concur.