Case Name: The First National Bank of Camden, N. Y., Respondent, v. Charles Carleton, Defendant. Oliver Howard, Appellant
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1899
Citations: 43 A.D. 6
Docket Number: 
Parties: The First National Bank of Camden, N. Y., Respondent, v. Charles Carleton, Defendant. Oliver Howard, Appellant.
Judges: 
Reporter: Appellate Division Reports
Volume: 43
Pages: 6–10

Head Matter:
The First National Bank of Camden, N. Y., Respondent, v. Charles Carleton, Defendant. Oliver Howard, Appellant.
Confession of judgment — sufficient statement of the “facts out of which the debt arose” — the words “duly discounted,” construed as intendedfor “duly protested.”
A confession of judgment upon a promissory note, made by the indorser thereof, contained the usual recitals authorizing the entry of judgment, followed by a copy of the note, and concluded, “ 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, and the sum confessed therefor is justly due.”
Heidi that the latter statement, together with the note set forth in the confession, constituted a sufficient statement of the “facts out of which the debt arose,” within the requirements of the statute; .
That, although the indorser might have waived a defense of want of demand and notice, it was plainly to be inferred that the note had been protested, the words “duly discounted,” following the statement that the note was not paid at maturity, being evidently intended for “ duly protested.”
McLennan and Spring, JJ., dissented.
Appeal by Oliver Howard, a judgment creditor of Charles Carleton, the defendant, from an order of the Supreme Court, made at the Onondaga Special Term and entered in the office of the clerk of the county of Oneida on the 8th day of February, 1899, denying his motion to vacate a confession of judgment made by the defendant Charles Carleton in favor of the plaintiff.
The statement and confession is as follows:
“I, Charles Carleton, of the town of Camden, Oneida Co., N. Y., the defendant named in the above-entitled action, do hereby confess judgment in favor, of the First .National Bank of Camden, N. Y., the plaintiff therein named, for the sum of eighty and 38-100 dollars, and do hereby authorize said plaintiff to enter judgment therefor against me.
“This confession of judgment is for money due to the said plaintiff from me. "
“ And 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:
“ ‘$68.91.
Camden, N. Y., December 26, 1895.
“ ‘Three months after date I promise to pay to the order of Charles Carleton sixty-eight and 91-100 dollars at the First National Bank of Camden, N. Y.
“ ‘JAMES CARLETON.
“ ‘Value .received, with interest.
“ ‘ (Indorsed Charles Carleton.) ’
“ 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.
“ And the sum confessed therefor is justly due.”
A. C. Woodruff, for the appellant.
Davies, Johnson & Coville, for the respondent.

Opinion:
Nash, J.:
The fact stated in the confession, that the note was duly discounted by the bank, implies that the note was indorsed by Carleton to the bank and presented in the usual course of business for discount ; that it was taken by. the bank before maturity and the ' amount thereof, less the discount, paid over the counter of the bank to the customer presenting the note for discount. The whole transaction between the indorser and the bank is stated when it is said that the note was duly discounted; that, together with the note set out in the confession in full, and the recital that the note was not paid at maturity, that it remains wholly unpaid and the amount thereof due from the indorser to the bank, constitutes the required statement of " facts out of which the debt arose." By the language of the commercial world a discount by a bank means, ex vi termini, a deduction or drawback made upon its advances or loans of money upon negotiable paper, or other evidences of debt, payable at a future day, which are transferred to the bank. (9 Am. & Eng. Ency. of Law [2d ed.], 468.) To discount means to lend or advance the amount of a security, deducting interest. (Com. v. Commercial Bank, 28 Penn. St. 396.) The origin and consideration of the note must be stated on confession of judgment by the maker, but as the indorser is holden without any consideration moving to him, none need be stated. The object of the statute in requiring a detailed statement of the facts and circumstances out of which the indebtedness arose, is to inform other creditors of the dealings and transactions which had taken place between the parties to the judgment,, that they might ascertain by proper inquiry that the indebtedness-was real and not fictitious, and satisfy themselves, if such was the fact, that the judgment was based on a good consideration and valid in law. This requirement is not only here fully met, by the statement, but the records of the bank afforded the fullest opportunity to the other creditors to ascertain by proper inquiry the particulars of the transaction.
The confession states that the note was not paid at maturity, and that it remained wholly unpaid and that the amount thereof was then due from the indorser to the bank. The indorser could have waived a defense of want of demand and notice, but it is plainly to be inferred that the note was protested, the statement that it was not paid at maturity and thereupon duly discounted, being evidently intended for " duly protested."
The order should be affirmed, with ten dollars costs and disbursements.
Hardin, P. J., and Adams, J., concurred; McLennan and; Spring, JJ., dissented.