Case Name: Second National Bank of the City of Elmira, N. Y., Plaintiff, v. Abijah Weston, Defendant, Impleaded with Others
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1898
Citations: 31 A.D. 403
Docket Number: 
Parties: Second National Bank of the City of Elmira, N. Y., Plaintiff, v. Abijah Weston, Defendant, Impleaded with Others.
Judges: 
Reporter: Appellate Division Reports
Volume: 31
Pages: 403–406

Head Matter:
Second National Bank of the City of Elmira, N. Y., Plaintiff, v. Abijah Weston, Defendant, Impleaded with Others.
Bills and notes — notice to a bank that a note was signed in a firm, name for the accommodation of the payee.
A bank which, at the time that it received a promissory note for discount, had brought to its attention the long time that the note had run, and was informed that a deal had taken place between the firm by which the note was made and the payee, “by which this paper was secured to them, and it was given to him to use in his matters, and he had it for that purpose,” has notice that the note was not given in the usual course of business for the benefit of the firm whose name is signed to it, and that it is accommodation paper.
Motion by tlie plaintiff, the Second National Bank of the City of Elmira, N. Y.„ for a new trial upon a case containing exceptions, ordered to be heard at the Appellate Division in the first instance, upon the verdict of a jury in favor of the defendant, rendered by direction of the court after a trial at the Cattaraugus Trial Term.
O liarles 8. Gary, for the plaintiff.
J. II. Waring, for the defendant

Opinion:
Adams, J.:
This is an action upon a promissory note, of which the following is a copy, viz.:
" $3,925.71. Oleak, N. Y., Dee. 30, 1891.
" Eighteen months after date we promise to pay to the order of G-. E. Ramsey, thirty-nine hundred, twenty-five & 71 /100 dollars at the First National Bank, Olean, N. Y., with interest, value received.
"No.-. WESTON BROTHERS."
Prior to its maturity, this note was discounted by the plaintiff, at which time it bore the indorsement of the defendants Q. E. Ramsey, D. 0. Conklin, W. H. & D. 0. Conklin, and also of the " Sole Leather Pad Co., per G. E. Ramsey."
The material facts of the case are uncontroverted and, briefly stated, are as follows :
The firm of " Weston Brothers," consisting of the defendants William W., Abijah and Orren Weston, was engaged in the manufacture of lumber at Weston's Mills, N. Y., and its financial standing was of the very highest. For a period of years prior to the transactions out of which this action arose, William W. Weston had been in the habit of signing the firm name, either as maker or indorser,' for the accommodation of his friends. This was done at first without the knowledge of his copartners, but it finally came to the ears of the defendant Abijah Weston, who was apparently the financial manager of the firm, and he thereupon remonstrated with his brother, and informed him that if he continued to use the firm name for such purposes he, Abijah, would take steps to terminate the firm's existence. These remonstrances proving of no avail, the firm was dissolved on the 3d day of January, 1892, and was succeeded by the "A. Weston Lumber Co."
The note in suit was signed by William W. Weston in the firm name, and although it bears date the 30tli day of December, 1891, it was not, in fact, executed until some time in March, 1893, and was obviously antedated so that it might appear to have had its inception prior to the dissolution of the firm. Immediately after its execution it was discounted by the plaintiff at the instance and for the benefit of the defendant Bamsey, the proceeds being applied towards the payment of another note which the bank had discounted for this same defendant, which was also executed by Weston Brothers, as makers, and was then due.
The facts above detailed make it very clear that not only was the making of the note in suit not within the scope of the partnership business, but that its execution by William W. Weston, after the dissolution of the firm, was a gross fraud upon his copartners; and, consequently, as ive have held in two other cases growing out of similar transactions, as soon as these facts were developed on the trial, the burden was cast upon the plaintiff of showing that it purchased the note for full value and without notice of the circumstances under which it was executed. (First Nat. Bank v. Weston, 24 App. Div. 230 ; First Nat. Bank v. Weston, 25 id. 414.)
Fortunately, as respects this feature of the case, there is quite as little controversy as there is regarding the facts already narrated ; for we are informed by the plaintiff's president that when the note in suit was brought to him his attention was called to the long time it had to run ; that he thereupon inqtfired of Bamsey what it meant, and was informed by him that a deal had taken place between Weston Brothers and himself (Bamsey), 6< by which this paper was secured to them, and it was given to him to use in his matters, and he had it for that purpose."
This, we think, was a pretty strong intimation that the note had not been given in the usual course of business for the benefit of the firm whose name was signed thereto, but that it was just what the slightest inquiry would have shown to be the fact, an accommodation note, from which the firm derived no benefit "whatever.
It is, doubtless, true that a purchaser of commercial paper " is not bound, at his peril, to be on the alert for circumstances which might possibly excite the suspicion of wary vigilance." (Cheever v. Pittsburgh, Shenango & L. E. R. R. Co., 150 N. Y. 59.) In this particular instance, however, the plaintiff's chief fiscal officer was not only an experienced .financier, but he was also a lawyer, and he, of course, knew that, in the absence of express authority, one member of the firm of Weston Brothers had no right to sign the firm name to notes for the accommodation of third parties. When, therefore, he was told by Ramsey that this note had been given to him to use in his matters, and that it had been " secured " to the makers, he was in effect informed that it was an accommodation note; and if, notwithstanding this information, he saw fit to purchase the same, we think that the trial court was correct in holding that he did so at his peril. (Fielden v. Lahens, 6 Abb. [N. S.] 341.)
At the close of the proofs it was insisted by counsel for each of the parties that there was no question of fact in the case, and that a verdict ought to be directed by the court.
Subsequently, when the views of the court had been indicated, the plaintiff's counsel did, as a matter of form, ask to goto the jury upon the whole case, but he did not specify any particular question which lie desired to have submitted, and we think that, in these circumstances, he cannot now be heard to complain that the question of the plaintiff's bonafides was improperly disposed of at the trial. (Muller v. McKesson, 73 N. Y. 195 ; Mayer v. Dean, 115 id. 556.)
Our conclusion, therefore, is that the plaintiff's motion should be denied.
All concurred.
Exceptions overruled, with costs, and motion for a new trial denied, with costs, and judgment ordered for the defendant on the verdict as of April 29, 1898.