Case ID: ny_244/html/0504-01.html
Source: Caselaw Access Project
Author: {"author": "", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Mercantile Factors Corporation, Appellant, v. Warner Bros. Pictures, Inc., Respondent.
    
      Debtor and creditor ■ — • bills, notes and checks — notes of third party given to plaintiff as collateral security for debt of defendant — plaintiff may not recover face value of notes where portion of debt remaining unpaid is less in amount.
    
    
      Mercantile Factors Corp. v. Warner Bros. Pictures, Inc., 215 App. Div. 530, affirmed.
    (Submitted October 22, 1926;
    decided November 23, 1926.)
    Appeal from- a judgment of the Appellate Division of the Supreme Court in the first judicial department, entered March 24, 1926, affirming a judgment in favor of plaintiff entered upon a verdict directed by the court on motion of defendant. The action was to recover upon promissory notes made by a third party to the order of defendant as payee and indorsed over to the plaintiff by the defendant as collateral security for a loan made by plaintiff to defendant. The question was whether a creditor who receives from its debtor notes made by third persons and transferred to the creditor as collateral security for the debt, may recover the full amount thereof in an action against the debtor on its enforcement of the notes when the portion of the debt remaining unpaid at the time of trial is less than the amount for which the notes were drawn.
    
      Samuel Meyers and Harry Hausknecht for appellant.
    
      Abel Cary Thomas and Joseph H. Hazen for respondent.
   Judgment affirmed, with costs; no opinion.

Concur: His cock, Ch. J., Cardozo, Pound, McLaughlin, Crane, Andrews and Lehman, JJ.