#### The Twelfth Ward Bank, Respondent, *v.*James Rogers, Impleaded, Etc., Appellant.

(City Court of New York, General Term,

January, 1901.)

Bills and notes — Consideration for a discount for an indorser — Bank president’s naked promise to him, that he shall not be liable, is void.

Where the indorser of a renewal note procures its discount by a bank and with the proceeds voluntarily pays another similar note held by a third party and upon which he is an indorser, a consideration moves to the indorser which enables the bank to recover of him upon the renewal note.

The president of a bank has no power to make a naked promise to the indorser of a note, which he is about to discount for the bank, that the indorser shall not be liable to the bank upon it.

Appeal from a judgment entered upon a verdict directed by the trial justice, and from an order denying a motion for a new trial.

Action upon a renewal promissory note against the indorser thereof. The defense was no consideration, that the note was indorsed for -accommodation at the request of the plaintiff, and upon its promise that the indorser should not be liable. Prior to 1892, the persons mentioned in the opinion, Steers, Campbell and the defendant Eogers, were creditors of one Jacob Steifler, the owner of the real estate mentioned in the opinion. It was foreclosed. Woodward took title by agreement, and thereafter gave back to Steers, Campbell and Eogers, the defendant, mortgages upon the said premises. The Steers mentioned in the opinion, as president of the plaintiff, died in 1899, and before this trial.

Earley & Prendergast (Martin J. Earley, of counsel), for appellant.

Charles W. Dayton, for respondent.

Conlan, J.

The action is brought upon a promissory note made by one Woodward to the order of and indorsed by the de*734fendant Rogers, which was a renewal of a former note similarly signed and indorsed. The former note had been discounted and was held by the Hamilton Bank; the note in suit was discounted and held by the plaintiff. A brief statement of the facts leading up to the transaction, which resulted in the making of the note in suit, is substantially as follows: Prior to 1892, one Woodward, Steers, Campbell and the defendant Rogers were interested in the ownership of a piece of real estate in the city of Hew York, and required the sum of $5,000 to complete the building thereon, and it was arranged that this sum should be raised by three notes of $1,666.67 each, to be made by Woodward, one to each of the three, and indorsed by the other two, in each instance. Hpon the further understanding that each of the three indorsers should be liable only upon the note made to his order. This agreement was carried out and Woodward gave mortgages to each of the three indorsers for the amount of the note, plus a sum which was due them from the former owner of the premises. Campbell had the notes discounted at his bank. Subsequently his bank refused to carry the notes any longer, and Campbell paid off his note and refused to indorse the other two, and they were taken by Rogers to the Hamilton Bank. Steers failed in 1893, and, as his indorsement was then worthless, renewals of the two notes bore the indorsement of Rogers only. The Hamilton Bank thereafter refused to carry both notes; it is said that the mortgage held by Steers has been assigned to the plaintiff bank, and Rogers, hearing of this, called on the president of the plaintiff, who was the brother of Steers, and explained the situation to him and requested him to have at least one of the notes taken by the plaintiff. In a subsequent conversation between the plaintiff’s president and the defendant, the situation was discussed and Woodward was sent for at Steers’ request, and,he, Woodward, shortly afterwards told Rogers that the plaintiff bank would take the note. Rogers took to the bank a note for $1,666.67, dated October 3, 1895, made by Woodward and indorsed by Rogers, and the bank discounted the same, and with the proceeds Rogers paid the Steers note held by the Hamilton Bank. This last note was renewed several times, but a renewal thereof was protested in October, 1896, and this brings the history of the transaction down to the time when the note in suit was given. Rogers informed Steers, the plaintiff’s president, that he would not go on the note any more, and Steers *735suggested a meeting of all the parties, and one was held at the Harlem Club; Bogers again stated that he should not renew the note, and Woodward said he was anxious to have the note renewed and make his account in the bank alive, and Steers said he didn’t see that, by Bogers going on the note, it would add to or decrease his liability, and the testimony of Bogers on this subject is that Steers said to him: “ We will take the same position and hold you as my brother did,” and that Bogers replied: “Do you mean that?” and Steers answered, “Well, I want to show you that I am not what you think. I am all right.” And the defendant says he himself gave no consideration for this promise of Steers. The new note was given and several times renewed, and on the last renewal the note in suit went to protest.

Hpon a former appeal the judgment, which was also upon a verdict directed by the court, was reversed, principally upon the ground that it did not appear that Bogers ever received the proceeds of the note in suit, which was discounted by the plaintiff. The evidence upon the last trial is conclusive upon the question, for he himself testifies that he received the proceeds of the note and with them paid the Steers note in the Hamilton Bank. The note given in renewal of the note originally discounted by the plaintiff in no way changes the liability of the defendant Bogers, nor releases him from his liability to the plaintiff bank upon the discounted note; if, as is claimed by Bogers, the bank had security for the discounted note, Bogers by paying the amount due to the hank would be entitled to be subrogated to the bank in relation thereto, and the security, *pro tanto >*would become his, and he could thus escape responsibility therefrom; but whether or not there was any such security does not alter the situation as to Bogers’ liability; if any new promise was made upon the giving of the renewal there was no consideration for it, as Bogers himself testified. Steers could not thus bind the bank to whom the note belonged. It is not pretended that the transaction was one with Steers individually; he was acting for the bank, and the situation was as well known to Bogers as it was to any other person having any 'interest in the matter.

The learned counsel for the appellant urges the decision of this court, on the first appeal, as controlling in the present instance, and while we see no reason to change our views upon the subject, as the case was then presented to us, there is another ele*736ment in the record before us which we think calls for a different ruling. Upon the former trial it was not in evidence that the defendant had been benefited by the discount of the note he presented to the plaintiff, and we did not think that he should be liable therefor; but it now appears that the proceeds were placed to his credit and that he received the same to his own use, and with them took up one of the notes held by the Hamilton Bank. If he was not liable upon that note, he certainly was not called upon to pay it voluntarily, and his paying that note with the moneys obtained from the plaintiff, whether he was liable upon it or not, would in no sense change his liability to the plaintiff upon the note discounted by it for him; and whether or not he signed any of the renewal notes received from him, or any other person, by the bank, he could not discharge himself from the liability already incurred. So that, in any aspect of the case the recovery upon the last trial was just and, upon the evidence which he himself presented, we do not think there was any error committed by the trial justice in taking the case from the jury and directing a verdict in favor of the plaintiff. We have given the case more than ordinary consideration. Our examination of the record and the briefs of counsel have failed to convince us that we should interfere with the determination reached by the trial justice. Judgment and order appealed from affirmed, with costs.

HoOabthy and Scotchman, JJ., concur.

Judgment affirmed, with costs.