Case ID: nys_34/html/1062-01.html
Source: Caselaw Access Project
Author: {"author": "\n      DYKMAN, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

MEAD v. CHASE.
    (Supreme Court, General Term, Second Department.
    July 26, 1895.)
    Negotiable Instruments—Action eor Diversion.
    In. an action to recover damages for diverting a note from the purpose for which it was given, the complaint alleged that plaintiff made the note payable to the order of defendant, who was the cashier of a bank, and that defendant promised to use the note for the purpose of taking up other notes of defendant lying in the bank; that defendant fraudulently procured the note to be discounted by the bank, and used the proceeds for his own benefit. Defendant denied all the allegations of "the complaint, and alleged that plaintiff gave the note for an indebtedness to the bank. It appeared that the note was delivered either to the teller or bookkeeper of the bank, and not to defendant, and it did not appear that defendant ever had the note in his possession. Held, that plaintiff did not prove a cause of action against defendant.
    Appeal from circuit court, Dutchess county.
    Action by Jeremiah Mead against George W. Chase for diverting . a note from the purposes for which it • was intended. The complaint was dismissed, and plaintiff appeals.
    Affirmed.
    Argued before BROWN, P. J., and DYKMAN and PRATT, JJ.
    A. M. & G. Card, for appellant.
    Hackett & Williams, for respondent.
   DYKMAN, J.

The plaintiff in this action alleges in his complaint that he made his promissory note for $6,400, payable on demand to the order of the defendant, who was cashier of the Pawling National Bank; that the defendant promised and agreed to use the note for the purpose of paying and taking up three promissory notes of the défendant" which were then lying in the bank, overdue; that, relying upon that promise, he delivered the note to the defendant, who fraudulently diverted the note from the purpose for which it was so delivered, and procured it to be discounted, and used the proceeds thereof for his own benefit; that by reason of the false and fraudulent representations so made by the defendant, and the diversion of the note for $6,400, the plaintiff has been damaged in that amount, for which he claims judgment. The defendant, in his answer, denied that the note was made or delivered to him to pay or take up the three notes mentioned, or any other notes, and also denied that he promised or agreed to use the said note to pay or take up such notes. On the contrary, the defendant alleged that the plaintiff made and delivered the $6,400 note to the bank, and that the plaintiff was at that time indebted to the bank in the amount for which that note was given, for checks paid by the bank for him, for money loaned to him, and for interest thereon, and that the said $6,400 note was delivered by the plaintiff to the bank for said indebtedness, and was duly credited to the plaintiff on the books of the bank, as it was agreed with the plaintiff that it should be at the time when that note was delivered. The defendant also denied that he ever made any false or fraudulent representations to the plaintiff, or that he fraudulently or otherwise used the proceeds of the said note,, or diverted it from the uses and purposes for which it was given. The case came on for trial at the circuit, and at the close of the plaintiff’s testimony a motion was made in behalf of the defendant to dismiss the complaint, on the ground that the plaintiff had proved no cause of action against the defendant. The motion was granted, and the complaint was dismissed, and from the judgment of dismissal the plaintiff has appealed to this court.

The only issue which was presented by the pleadings was whether the plaintiff delivered the $6,400 note to the defendant to take up the notes then held by the bank, and whether the defendant fraudulently diverted it from that purpose, and had it discounted, and used the proceeds thereof for his own use and benefit. The record contains no evidence to show that the note was ever delivered by the plaintiff to the defendant, but, on the contrary, the plaintiff himself stated that he delivered the note to either Mr. Haight, the teller, or Mr. Tabor, the bookkeeper, of the bank; and as it was so delivered, either to the teller or the bookkeeper, it was, in the eye of the law, delivered to the bank. It was therefore to the bank, and not to the defendant, that, the plaintiff delivered his note. It does not appear in any way that the defendant ever took it from the possession of the bank, or ever had it in his possession. There is sufficient in the case to show that the note was given by the plaintiff for his indebtedness to the bank upon his overdue paper, and interest thereon, which was then lying in the bank. The note shows on its face that • certain stocks were given as collateral security for its payment, and, the day after the note was delivered to the bank, plaintiff gave his mortgage on property he owned in Connecticut to secure the payment of this note, and other notes, which he admits and states in the mortgage he owes to the bank. It is entirely plain that the plaintiff proved no cause of action against the defendant, and the complaint was properly dismissed. Judgment should be affirmed, with costs. All concur.