#### The First National Bank of Camden, Plaintiff, *v.*Charles Carleton, Defendant.

(Supreme Court, Onondaga Special Term,

February, 1899.)

Confession of judgment — Sufficiency of statement.

The indorser of a note for $68.91, payable in three months for value received with interest, confessed judgment to a bank upon a statement which first set out a copy of the note and of its indorsement and continued as follows: “ which said note was duly discounted at said bank after having been indorsed by me. Said note was at maturity not paid and was thereupon duly discounted, and now remains wholly unpaid, and there is now due from me thereon to said plaintiff the sum of $80.38.”

*Held,*that the statment was sufficient, as it could be fairly inferred therefrom that the defendant had indorsed a note of which a copy was set forth, that after he had so indorsed it the note was discounted by the plaintiff, that when it matured it was not paid, that it remained unpaid at the time of the confession, and that there was due thereon from the defendant to the plaintiff $80.38.

Application by subsequent judgment creditor to set aside a judgment for $80.38 and costs confessed by above-named defendant to above-named plaintiff, upon the ground that the statement of facts in said confession out of which the purported indebtedness arose is insufficient.

Said statement is as follows:

*“*The following is a concise statement of the facts out of which the debt arose constituting the said liability. On a certain promissory note of which the following is a copy:

*537“ $68.91. Camden, N. Y., *Dec.*26, 1895.

“ Three months after date I promise to pay to the order of" Charles Carleton, Sixty-eight 91/100 Dollars, at the First National Bank of Camden, N. Y.

“ Value received with interest.

“ Jambs Carleton.

“ (Indorsed.) Cttart.es Oarletoh.

which said note was duly discounted at said bank after having been indorsed by me. Said note was at maturity not paid and was thereupon duly discounted, and now remains wholly unpaid, and there-is now due from me thereon to said plaintiff the sum of $80.38.”

A. C. Woodruff, for motion.

R. S. Johnson, opposed.

Hiscock, J.

The statement of facts in the confession of judgment under review is certainly not a model form, and yet after considerable hesitation I have concluded that it meets the requirements of the. Code, The following facts are either stated or are fairly inferable from the statement, namely, that the defendant indorsed a promissory note of which a copy is set forth; that after he had so indorsed it the note was discounted by the plaintiff; that afterwardswhen it matured it was not paid, and at the time of the confession remained wholly unpaid, and there was due from defendant to the-plaintiff thereon the sum of $80.38. The exact date when defendant indorsed the note or when it was discounted by the bank is not specifically set forth, but it is a fair inference from the statement that it was sometime within three months between the date of the note and the date' when it matured, and this omission is not very material because the amount of defendant’s liability upon the note-when discounted would be computed from the date and amount of’ the note without reference to the date when it was discounted. . The-date of the discount would simply bear upon the consideration which the bank would then pay for the note rather than upon the amount of defendant’s liability thereon which would be fixed from the date-itself of the note, it being made with interest. It is not stated interns that the plaintiff at the time of the confession of judgment was-the owner and holder of the note. But this is a fair inference from *538the facts stated that the plaintiff had discounted, and, therefore, became the owner of the note, and that at the time of the confession there was due from defendant to plaintiff a certain amount, which, in addition to the presumption of a continuance of ownership once proved, fairly indicates that plaintiff then held the note and the indebtedness arising thereupon against defendant. This allegation in a statement that a certain amount is justly due to the plaintiff from the defendant is one of significance and weight. Citizens’ National Bank v. Allison, 37 Hun, 135, 138. Neither is there any separate statement of the amount of principal and interest, but this is a mere matter of computation from the face of the note.

The question then arises upon which many similar statments have been held fatally defective, whether there is any sufficient allegation of an actual indebtedness upon the note to plaintiff. It hás been so often held that the mere statement of the making or indorsement of a promissory note is not sufficient to sustain the confession of judgment that citations upon that question are unnecessary. It must appear that there is a real indebtedness of which the note is evidence; that the note was given for some actual consideration which supports it and the confession of judgment thereupon. This leads to a consideration of the allegation that the note was discounted by plaintiff, and of the meaning of the term “discount.” I think it may be held that the term has acquired a well-defined meaning; that when used as in this'statement it means that the bank purchased or acquired the note and advanced upon it in money the amount thereof less such percentage as it retained for interest. I think it may further be inferred that the bank did no unlawful act but discounted it at a legal rate. This latter is not very material, because while if the bank discounted the note at an illegal rate that might furnish some defense to the note, defendant would not be bound to raise that defense, and in the case of .a legal discount at least his liability would be measured by the amount of the note according to its terms and not by the amount which plaintiff actually advanced upon it.

These views in regard to the meaning of the word “ discount ” are sustained by National Bank v. Johnson, 104 U. S. 271, 276.

There is further found in the statement the allegation in connection with the assertion that said note was not paid at maturity that it was “thereupon duly discounted.” This is clearly an inadvertent use of the word “ discounted ” for the word “ protested.” But even if the allegation is disregarded on account of such mistake the *539effectiveness of the statement is not destroyed. If it be assumed that there is no statement that the note was duly protested, that would, of course, furnish a basis for defense by defendant to the note. Upon the other hand, it is perfectly well settled that defendant might waive this defense, and that his original liability upon the note would be a good consideration for a new obligation or for a confession of judgment.

The motion is, therefore, denied, with $10 costs.

Motion denied, with $10 costs.