Kohn v. Henderson — 5 Silv. Sup. 518

Majority

p. 518

Julius A. Kohn, Appellant, v. Malcolm Henderson, Respondent.

Supreme Court, Second Department, General Term,

February 10, 1890.

Headnote

Bills, etc. Voucher.—No action can he maintained on a note which was given merely as a voucher for money advanced, and never intended or expected to he paid.

Appeal from judgment in favor of defendant, entered on verdict directed by the court.

This action was brought to recover upon two promissory notes, one dated October 14, 1886, for $12,874, and the other dated November 19, 1886, for $3,000.

The plaintiff brings the action as assignee of J. A. Kohn & Co.

The defendant alleges in his answer as a defense, that he was a copartner of the firm of J. A. Kohn & Co., and that the notes were executed as vouchers merely of moneys advanced to him for the benefit of said firm, to be invested in the building of a railroad in Texas, and not to be paid by him personally.

A contract between defendant and plaintiff’s firm recited that the parties were considering the expediency of building a certain railroad and desired a charter and right of way, and that defendant had agreed to devote his time to that purpose, and plaintiff’s firm thereby agreed to advance $5,800 on defendant’s note, with security, and that if said firm should determine to invest more in the enterprise they would deposit $25,000 and become jointly interested therein with defendant to the extent of one-half of the stock, etc., after repaying their advances. Subsequently another contract was made, by which said firm agreed to furnish capital to equip twenty miles of road, and if they did not, then upon

p. 519

repayment of the sums advanced on defendant’s notes at maturity their interest in the enterprise should cease.

Nathan Bijur, for appellant.

Moore & Moore, for respondent.

This is an action on two promissory notes, and the defense is that they never were commercial paper, and were executed by the defendant merely as vouchers for money advanced by the plaintiff and his associates, to be disbursed by the defendant for the promotion of a railroad enterprise in which all the parties were interested, and that there never was any intention or expectation that the note would be paid.

The testimony produced on the trial, and the circumstances surrounding the transaction, support the theory of the defendant, and the trial judge directed a verdict in his favor.

We concur in the views expressed by the trial judge in his assignment of his reasons for directing a verdict for the defendant, and we find no necessity for any extended remarks at this time.

The judgment should be affirmed, with costs.

Barnard, P. J., and Pratt, J., concur.