Case Name: LAKE against THE ARTISANS' BANK
Court: New York Supreme Court
Jurisdiction: New York
Decision Date: 1867-01
Citations: 3 Abb. Pr. 209
Docket Number: 
Parties: LAKE against THE ARTISANS’ BANK.
Judges: 
Reporter: Abbott's Practice Reports
Volume: 3
Pages: 209–212

Head Matter:
LAKE against THE ARTISANS’ BANK.
Court of Appeals;
January, 1867.
When, upon trial of a cause at circuit and before a jury, the court, on motion of defendant when the plaintiff rests, dismisses the complaint, and the plaintiff excepts, it is competent for the judge to order the exception to be heard, in the first instance, at general term.
Where, on an appeal founded on such an exception, it clearly appeared - that the court had decided the cause upon a wrong issue, and had ■ omitted to notice a fact material to the plaintiff’s case,—Held, that the exception ought to be regarded as sufficient to warrant the appellate court in reviewing the decision.
An indorser who pays the amount of a note to a holder, under a mistaken belief, founded on statements of the holder, that he, the indorser, has been duly charged, or that a prior indorser has been, may, on discovering that he was not so charged, maintain an action to recover back the amount paid.
To constitute a voluntary payment within the rule that a voluntary payment cannot be recovered back, it must be made with a full knowledge of all material facts.
Appeal from a judgment.
This action was brought by James W. Lake against the Artisans’ Bank. The object of the action was, to recover an amount which the plaintiff, as indorser of' a note held by the bank, had paid, under circumstances which are indicated in the opinion of the court.

Opinion:
Parker, J.
This action was tried at the circuit, before the court and a jury; and upon the plaintiff's resting his cause, the court, upon the defendant's motion, dismissed the complaint, to which the counsel for the plaintiff excepted, and the judge ordered the exception to be heard, in the first instance, at the general term.
I think the general term of the Supreme Court was right in regarding the case as properly before it for decision. The exception was one taken upon the trial, and is, I think, within the class of exceptions mentioned in section 265 of the Code, which the judge may order to be heard, in the first instance, at the general term. The dismissal of the complaint, in this case, was only equivalent to a nonsuit, and raises the same questions (Coit v. Beard, 33 Barb., 357; Lomer v. Meeker, 24 N. Y., 363). The action (subd. 1) is as follows: " A motion for a new trial on a case, or exceptions, or otherwise, and an application for a judgment on a special verdict, or a case reserved for argument or further consideration, must, in the first instance, be heard and decided at the circuit, or special term, except that where exceptions are taken, the judge trying the cause may, at the trial, direct them to be heard, in the first instance, at the general term, etc."
Now, if a motion for a new trial on exceptions, where a nonsuit is granted, the only exception being to the nonsuit, is within the provisions of this section (and it cannot, I think, be doubted that it is), it is equally clear, that an exception taken to a nonsuit may be ordered to be heard, in the first instance, at the general term.
What, then, is the effect of the exception taken ? Does it bring up for review the question whether there was any thing for the jury to decide, or only the question whether the legal conclusion drawn from the facts which the evidence tended to prove, was the correct one ?
In regard to any fact which may be drawn from the evidence bearing upon the ground of the nonsuit, no doubt the plaintiff is concluded, and such fact is deemed to have been assumed by the judge with the consent of the plaintiff. The nonsuit was upon the ground that the defendant was the owner of the note, and under no obligation to the plaintiff to charge his prior indorser. All the facts which the evidence tends to prove bearing upon this question, we must deem assumed by the judge with the plaintiff's consent. But assuming the court correct in holding that the plaintiff had no cause of action against the defendant for negligence in omitting to charge the prior indorser, still there is another question raised by the pleadings and the evidence; and that is, whether the plaintiff did not pay the note to the defendant under such a mistake, of facts as to entitle him to recover back the money paid. This question was entirely ignored by the court at the circuit, although it is a prominent issue in the case. The evidence is by no means so slight in favor of the plaintiff, upon this issue, that we can reasonably conclude it was assumed and conceded to be against him ; it is, on the contrary, very strongly in his favor. It would be carrying the rule too far, I think, to hold in such a case, that the court did assume and the plaintiff concede the facts bearing upon this issue, which was not all considered by the court to be against the plaintiff. The case was so evidently decided by the court upon a wrong issue, that I think the exception to such decision should be deemed sufficient upon a review to enable the appellate court to afford an opportunity for the correction of the error.
The plaintiff clearly ought not to have been nonsuited in the case. He was not on the 27th of July, when he paid the note, under any legal liability to pay it, for he had not been charged .as indorser, and it was then past due.
It is said he waived want of notice by the act of payment. True, he did, if he paid with knowledge that he had not been charged. (Tibbetts v. Dowel, 23 Wend., 379). But it is very questionable whether he did pay with such knowledge. The cashier told him that the note had been protested, and that he had charged overt-lie amount to him. This was equivalent to an assertion that he, the plaintiff, had been legally charged as indorser, as he might have been without his knowledge, having been absent from his residence and place of business when the note matured and several days after (Coddington v. Davis, 1 Comst., 186). True, the note and two notices of protest from the notary, one directed to him and one to Bates, the prior indorser, were, at the time he was so informed by the cashier, delivered to him with the note. But tins was entirely consistent with the fact which he understood from the cashier. The bank being the owner of the note might have preferred to send its own notices.
But even if he did pay, knowing he had not been charged as indorser, still, did he not, as he swears he did, pay under the belief induced by the statement of the cashier, that Bates had been charged ? The evidence that he did so pay it, is so strong that the fact is almost undeniable. There is nothing to contradict it, but the delivery to him of the notices, as above stated. It is not credible that he paid the note to the defendant, which there was no obligation on him whatever to pay, knowing that he was not liable, and that his prior indorser, the only other solvent party to the paper, was also discharged by the neglect of the defendant to charge him.
If, then, he paid it under the mistake above mentioned, in respect either to his or Bates having been charged as indorser, there can be no doubt that he was entitled to recover (Waite v. Leggett, 8 Cow., 195; Wheadon v. Olds, 20 Wend., 174; Chester v. Bank of Kingston, 16 N. Y., 336).
That would not have constituted a " voluntary payment," for the payment, if so made, was not made with full knowledge of all the material facts.
The supreme court at general term should have set aside the nonsuit, and ordered a new trial. The judgment must therefore be reversed, and a new trial ordered, costs to abide the result.
All the judges concurred.
Judgment reversed.