Case ID: ny-st-rep_60/html/0636-01.html
Source: Caselaw Access Project
Author: {"author": "Bischoff, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Ephriam C. Gates et al., App’lts, v. Ellen Williams, Impleaded, etc., Resp’t.
    
    
      (New York Common Pleas, General Term,
    
    
      Filed June 27, 1894.)
    
    Bills and Notes—Indorsement—Consideration.
    Where an indorsement is made for the accommodation of the makers, the acceptance of the note by the payee before maturity and in discharge of the makers’ precedent debt, furnishes adequate consideration for the indorser’s promise.
    Appeal from an order of the general term of the city court of New York which reversed a judgment for the plaintiffs rendered upon a verdict directed in their favor, and directed a new trial. Action by the payees named in a promissory note to recover against an indorser.
    
      George W. Stevens, for app’lts; James A. Deering, for resp’t.
    
      
      Reversing, 52 St. Rep. 425.
    
   Bischoff, J.

The plaintiffs, being the payees named in the note in suit, were prima facie liable as first indorsers, and could not maintain this action against the defendant-respondent in -the absence of an agreement whereby the latter assumed to be answerable as indorser to the former, Bornstein v. Kauffman, 53 St. Rep. 69, and cases cited. Conceding this the plaintiffs alleged in their complaint that the note, indorsed by the defendant, was given by the makers in payment of the purchase money for certain lumber thereafter to be supplied by the plaintiffs to the makers for use in the defendant’s proposed building, and that at the time of the plaintiffs’ acceptance 'of the note, and in consideration of such acceptance, the defendant promised to pay if at maturity the makers did not. An agreement to the effect stated was denied by the defendant. The trial court directed a verdict for the plaintiffs, the judgment whereon was reversed by the general term of the court below, the particular ground for reversal being that the agreement alleged in the complaint was without support in the evidence. That the reversal was error is obvioufi It is not to be sustained upon any ground as none of the exceptions taken during the trial present error.

On the trial the plaintiffs failed to establish the agreement alleged, but thelfe was sufficient evidence from which it appeared that the note, indorsed by the defendant, was accepted by the plaintiffs in satisfaction and discharge of a demand which arose from the past supply of lumber, by the plaintiffs to the makers of the note, and for use in the defendant’s building; and the note was so accepted by the plaintiffs under circumstances which admit of no other reasonable inference than that the defendant assumed to be answerable as indorser to the plaintiffs, upon the makers’ default, in consideration of the plaintiffs’ acceptance of the note for the purposes stated. This last mentioned evidence was substantially conceded on the part of the defendant to be true, as 'we shall hereafter show, and was admitted without objection. Unless therefore the agreement proved was in itself insufficient to constitute a cause of action the objection that the cause of action as alleged, was unproved in any essential particular was not available to the defendant, Frear v. Sweety 118 N. Y. 454; 29 St. Rep. 972. If necessary in support of the judgment the appellate court may conform the pleadings to the proof. Reeder v. Sayre, 70 N. Y. 180; Harris v. Tunbridge, 83 N. Y. 92. The indebtedness of the makers to the plaintiffs, in the amount for which the note was given, was conceded. The plaintiffs’ collector, Robinson, testified that he was sent by his employers to collect their demand, and that, having met the defendant, the indorser, he was by her referred to her husband, at the latter’s place of business, there to meet her, with Fritz & Hafner, the makers of the note, for the purposes of a settlement relating to the construction of her building; that he met the defendant’s husband, and Fritz- & Hafner, at the place appointed, but did not see the defendant though she was in another part of the house; that he then requested payment of the plaintiff’s bill; that Fritz stated that he was without money; that the witness then offered to accept Fritz & Hafner’s note for the amount provided the defendant would indorse it; that Fritz thereupon produced the note in suit, signed by his firm, and payable to the otder of the plaintiffs, and handed it to the defendant’s husband, who was present throughout the interview and assumed to act for his wife; that the defendant’s husband took the note out of the room, returning with it shortly afterwards, indorsed by the defendants ; that the note, so indorsed, was thereupon delivered to the witness, either by Fritz or the defendant’s husband, and that the witness in exchange therefore gave Fritz the plaintiff’s receipted bill against Fritz and Hafner. That Robinson was referred by the defendant to her husband, on the occasion alluded to by the witness, was nowhere denied; and that the defendant’s husband assumed to act as her representative, with her knowledge and approval, clearly appeared from her husband’s testimony when examined as a witness for his wife. The witness last alluded to not only admited his presence and participation in the negotiations which led to the delivery of the plaintiffs’ receipted bill, and that he had just made a payment for his wife to Fritz & Hafner on account of the building matter, but he fully corroborated Robinson’s statement that the defendant was in an adjoining room and indorsed the note at the husband’s procurement. The defendant’s husband further corroborated Robinson with regard to the latter’s refusal to accept Fritz & Háfner’s note except with the defendant’s indorsement. From the defendant’s own admissions, it was obvious that when she indorsed the note she was aware that it was intended to be delivered to the plaintiffs in liquidation of their claim against the makers. Fritz, one of the makers, and a witness for the defendant, testified to the same effect. But whether, or not, the defendant had personal knowledge of that fact, was immaterial, since, for the purposes of the negotiation and delivery of her indorsement, she had constituted her husband her agent. True, the defendant and Fritz contradicted Robinson in so far as they said that it was Fritz who took the note out of the room to secure the defendant’s indorsement, but while so doing they equally contradicted the defendant’s husband. Whatever may have been the fact in that respect, it was of no substantial • importance, in view of the further and conceded fact that the defendant’s indorsement was procured with the cognizance and approval of her husband, who, for the purposes of the negotiation of the note for the maker’s account, represented his wife, the indorser. From the conceded facts, as they are narrated above and appear to us from the evidence, the conclusion is irresistible, that the defendant, acting for the purpose by her husband as her authorized representative and agent, intended the plaintiffs through their collector, to understand that the note was given in liquidation of the maker’s indebtedness to them, and that, if at maturity the makers failed to pay, she would pay the amount. Hence in legal effect such was her promise. Any claim for the defendant that she indorsed the note for the accommodation of the plaintiffs was, if her testimony to the effect that the payees were utter strangers to her was true, preposterous, and, assuming that the defendant’s indorsement was made for the accommodation of the makers, the acceptance of the note by the plaintiffs before maturity, and,in discharge of the maker’s precedent debt, furnished adequate consideration for the defendant’s promise. Mech. & Traders' Bank v. Livingston, 6 Misc. Rep. 81;-55 St. Rep. 394. Onr conclusion is that there was no substantial defense to the plaintiffs’ cause of action as it was proved without objection, and that a verdict for the plaintiffs was properly directed.

The order of the general term of the court below should therefore be reversed, and the judgment of the trial term be affirmed, with the costs of both appeals to the present appellants.

All concur.