Case Name: Morris Bernstein, Respondent, v. Moses R. Crow et al., Appellants
Court: New York Supreme Court, Appellate Term
Jurisdiction: New York
Decision Date: 1897-12
Citations: 22 Misc. 99
Docket Number: 
Parties: Morris Bernstein, Respondent, v. Moses R. Crow et al., Appellants.
Judges: 
Reporter: New York Miscellaneous Reports
Volume: 22
Pages: 99–101

Head Matter:
Morris Bernstein, Respondent, v. Moses R. Crow et al., Appellants.
(Supreme Court, Appellate Term,
December, 1897.)
1. Negotiable instruments — Bona fide holder — Acceptance for accom.7 modation of payee.
The defense that a draft was made and accepted without consideration and for the accommodation of the payee is not available, either to the drawer or to the acceptor, as against a bona fide holder for full value and before maturity.
2. Same — Admission that a corporation accepted — Estoppel by pleading.
Where the acceptor, a corporation, interposes to an action brought upon the draft an answer which expressly admits that it accepted it, thajt statement, under the provisions of section .522 of the Code of Civil Procedure, “ must, for the purposes of the action,, be (taken as true,” and the corporation cannot subsequently avail itself of allegations of the answer, stating that it received no donsideration and that the acceptance was unauthorized, as a means of attacking the validity ■of the acceptance. '
Bernstein v. Crow, 20 Mise. Hep. 729, affirmed.
Appeal by defendants from an affirmance by the General Term of the City Court of a judgment in favor of plaintiff.
Franklin Bien, for appellants.
Wahle & Stone, for respondent.

Opinion:
McAdam, J.
The action is on a $250 draft drawn by the defendant Crow, October 16, 1896, on the New York & Westchester Water Company, payable five days after date to the order of Stephen J. Stilwell, and indorsed and delivered by Stilwell to the plaintiff. The draft was accepted by the drawee on presentation.
The action is defended by the drawer and the drawee, and the defense is that the draft was made and accepted without, consideration for the accommodation of the payee. The plaintiff, however, is a bona -fide holder of the paper for full value, before maturity, so that this defense is not available as against him either by the drawer' or the drawee. 1 Pars. Notes & Bills, 279; Mechanics' Bank ing Assn. v. N. Y. & S. W. L. Co., 35 N. Y. 505; Bank of Attica v. Pottier & Stymus Co., 17 N. Y. St. Repr. 327; 4 Lawson's R. & R., § 1593; Farmers & Mechanics' Bank v. Butchers & Drovers' Bank, 16 N. Y. 125; Heuertematte v. Morris, 101 id. 63. .
An attempt was made.at the trial to attack the acceptance by the company as having been made by some person on behalf of the company .without authority.
The second'paragraph of the complaint alleges " That thereafter, on or about October 28,-1896, said note was duly presented to the New York & Westchester Water Co., who wrote across the face of it, in red ink, the following: 'N. Y., Oct. 28, 1896, accepted. Payable Novemher 9, 1896. N. Y. & Westchester Water Co. C. F. Jordan.' "
This allegation of- the complaint is expressly admitted by paragraph I of the answer of the company. And paragraph III of the company's answer avers: " This defendant, further answering and as a separate and distinct defense, avers: That the defendant Hew York & Westchester Water Company is a domestic corporation created by and. under thé laws of the State of Hew York, and that this defendant accepted said note alleged in the complaint herein without any consideration being received by it for the acceptance of such note, and that the person accepting the same had no authority from the defendant corporation to accept the saíne."
The company haying expressly admitted the acceptance of the draft by it in the first paragraph of its answer, and reiterated the admission in the third paragraph, was not at liberty to thereafter deny the existence of such fact or to prove any state of facts inconsistent therewith. Fleischmann v. Stern, 90 N. Y. 110. There can he no issue as to an allegation not controverted.
The Code (§ 522) provides that " Each material allegation of the complaint, not controverted by the answer must, for
.the purposes of the action, he taken as true." Merely making a counter-statement, or giving a different version of the matter from that contained in the complant, without denying the allegations therein contained, is not a controversion of such allegations.- Wood v. Whiting, 21 Barb. 190, 198; West v. Am. Ex. Bank, 44 id. 175, 179; Abbott's Tr. Brief, § 552.
Having expressly admitted that it accepted the draft, the allegation of acceptance must, in the language of the Code provision referred to, " for all the purposes of the action he taken as true."
This construction of the pleadings eliminates from the record most of the exceptions relied on, and as there is no merit in the remaining ones, the judgment must he affirmed, with costs.
Daly, P. J., and Bischoff, J., concur.
Judgment affirmed, with costs.