Case Name: Youngs and another against Lee, impleaded, &c.
Court: New York Court of Appeals
Jurisdiction: New York
Decision Date: 1855-06
Citations: 12 N.Y. 551
Docket Number: 
Parties: Youngs and another against Lee, impleaded, &c.
Judges: 
Reporter: New York Reports
Volume: 12
Pages: 551–556

Head Matter:
Youngs and another against Lee, impleaded, &c.
A notice of protest to an endorser, dated the day a note is payable and which states its amount and the names of the maker and endorser, is a sufficient description of the note in the absence of proof that any other note existed to which the notice might refer.
A statement in such notice, that the note is protested for non-payment, is sufficient notice of a presentment and demand of payment at the time and place for payment.
Where the owners of a note due in a few days, which was deposited for collection with the bank where it was payable, withdrew it from the bank and surrendered it to the maker on receiving from him his note payable in three months endorsed by a third person; Held, that they were holders of the note last named, for value to the amount of the note surrendered, and that they were entitled to recover this amount against the endorser, notwithstand ing the delivery of the note to them was a diversion of it by the maker from the purpose for which it had been endorsed, they having received it without notice of such diversion.
Action upon a note made by Bell & Goodman, dated at Rochester, July 4th, 1851, whereby three months after date they promised to pay to the order of the defendant Lee one thousand dollars, at the American Exchange Bank, in the city of New-York. Lee, the endorser, defended.
The action was tried at the Monroe county circuit, before Mr. Justice Welles. The plaintiffs proved the making, and endorsement of the note; that it was presented for and payment demanded at the American Exchange Bank on the 7th of October, 1851; that payment was refused; and that the notary who made the presentment and demand on the next day, being the 8th of October, deposited in the post-office in New-York, enclosed and addressed to the defendant Lee, at Rochester, where he resided, a notice of which the following is a copy:
“ New-York, October, 7 1851. Mr. Charles M. Lee, Rochester, N. Y. Sir : Please to take notice, that a promissory note, drawn by Bell & Goodman for $1000, endorsed by you, is protested for non-payment, and that the holders look to you for payment thereof. Your obedient servant,
“ (Signed,) A. R. Rogers, Notary Public.”
When the plaintiffs rested, the counsel for Lee moved that they be nonsuited or the complaint dismissed as to him, on the ground that the notice served on him was not a sufficient notice of presentment, demand of payment and non-payment of the note in suit. The motion was denied and the counsel for the defendant excepted. The defendant’s counsel then gave evidence tending to prove that the note in suit was endorsed by Lee, at the request and for the accommodation of Bell & Goodman, and under and in pursuance of an agreement between them and Lee, that they should procure the same to be discounted and obtain the money thereon at any bank they might choose, or at which they might be able to procure it to be discounted, and apply such money to the payment of another note of the same amount, previously made by Bell & Goodman, and endorsed for their accommodation by Lee and negotiated by them, and then about to become due. He also proved that Bell & Goodman were indebted to the plaintiffs on a promissory note for $943.31, executed by them to the plaintiffs for merchandise sold them by the latter; that this note was payable on the 4th of July, 1851, at the Commercial Bank of Rochester, and prior to the first of that month had been transmitted by the plaintiffs, who resided in New-York, to that bank for collection, and was then in its possession for that purpose ; that on the first day of July, Bell & Goodman, who resided at Rochester, transmitted the note in suit to the plaintiffs, requesting them to receive it, and withdraw the note of $943.31 from the Commercial Bank and surrender it to them, the balance of the note in suit over the amount of the other to be afterwards adjusted between them; the plaintiffs, on receipt of the note in suit, and on the 2d of July, transmitted to Bell & Goodman an order for the note in Bank, in the following terms : “ Cashier Commercial Bank. Please deliver to Messrs. Bell & Goodman their note, payable to our credit 4 July, $943.31; same having been settled.
“ Yours, &c., Youngs & Howell.”
That on the 3d of July, 1851, Bell & Goodman, by virtue of this order, received the note mentioned therein from the bank, delivering the order to the bank. The evidence being closed, the justice holding the circuit ruled and decided that, conceding that Bell & Goodman had improperly diverted the note in suit from the purpose for which it was endorsed by the defendant, the plaintiffs upon the foregoing facts were bona fide holders of the same for value to the amount of the note for $943.31, which was surrendered, and interest; and he ordered a verdict against defendant Lee for this amount. The defendant duly excepted, and applied to the supreme court at a general term, in the 7th district, for a new trial upon‘a bill of exceptions. The motion was denied, and judgment rendered on the verdict. (See 18 Barb., 187.) The defendant appealed to this court.
C. M. Lee, for the appellant.
J. B. Bennett, for the respondents.

Opinion:
Johnson, J.
The first question in this case arises upon the sufficiency of the notice of non-payment in point of form. The notice does not contain so many descriptive particulars as it might, but is entirely accurate in all those which it does contain. That it relates to a promissory note appears; and the makers' names, the amount and the endorser's name are all correctly designated; and these sufficiently designate the note upon which the suit is brought, as being that referred to in the notice. We cannot infer that other notes existed which might render this notice uncertain as to its applicability to the note in suit. The maxim is an old one, that de non apparentibus et de non existentibns eadem est ratio. A waiver of protest was held in Coddington v. Davis (1 Comst., 186,) to include demand and all other acts in law necessary to charge an endorser. Upon the same principle, the statement in this notice, dated on the day when the note was payable, that it had been protested for non-payment, must be intended to mean that it had been demanded and payment refused upon the day when it became due. A statement that a note had been protested on the day it became due, though the day was not stated, nor could be collected from the terms of the notice, was held to be sufficient in Litchfield v. Cook, (MS. Dec., 1853), in this court.
The remaining question in the cause is, whether the plaintiffs were holders in good faith for value of the note in suit. Bell & Goodman had purchased merchandise of them, for which they had given them their promissory note, to become due July 4. The plaintiffs had deposited this note in bank for collection. On the 1st of July Bell & Goodman, by letter, sent the note in suit to the plaintiffs, asking them to receive it, and withdraw from the bank and surrender to them their note about to mature upon the 4th; the difference between the amounts of the two notes to be afterwards adjusted. The plaintiffs assented to this proposition, and sent to Bell & Goodman an order upon the bank, directing the surrender to them of their note, upon which the bank, on the 3d of July, delivered up the note to Bell & Goodman.
The general question as to what constitutes a holding of a note or bill in good faith, and for value, has so often been discussed that argument upon it is needless. Stalker v. McDonald (6 Hill, 93), The Bank of Salina v. Babcock (21 Wend., 499), Bank of Sandusky v. Scoville (24 Wend., 115), Mohawk Bank v. Corey (1 Hill, 513), and White v. Springfield Bank (3 Sandf. S. C., 222) discuss all the cases, and present all the views which belong to the subject. Stalker v. McDonald determines that one is not a holder for value in good faith, who receives paper as security for a precedent debt, upon no new consideration passing at the time ; but does not decide that a receipt in extinguishment of a precedent demand not at the time over due, does not constitute the receiver a holder for value in good faith. In the case before us, the note was received in extinguishment of a demand upon a note not yet due, and the note was delivered up. The surrender, upon a consideration of a security not due, extinguishes the security. The plaintiffs therefore became holders for value, and are entitled to recover.
The judgment should be affirmed.
Gardiner, Ch. J., Denio, Ruggles and Crippen, Js., were also in favor of affirmance.
Marvin and Dean, Js., delivered opinions for reversal, on the ground that the plaintiffs were not holders for value within the rule established by the cases in this state. Hand J., concurred with them.
Judgment affirmed