Case Name: Richard J. Levy, Appellant, v. Ledyard Avery and George L. Avery, Comprising the Firm of Ledyard Avery & Co., The Acme Metal Novelty Works, and Ralph W. Booth, Sr., Respondents
Court: New York Supreme Court, Appellate Term
Jurisdiction: New York
Decision Date: 1904-12
Citations: 45 Misc. 647
Docket Number: 
Parties: Richard J. Levy, Appellant, v. Ledyard Avery and George L. Avery, Comprising the Firm of Ledyard Avery & Co., The Acme Metal Novelty Works, and Ralph W. Booth, Sr., Respondents.
Judges: 
Reporter: New York Miscellaneous Reports
Volume: 45
Pages: 647–648

Head Matter:
Richard J. Levy, Appellant, v. Ledyard Avery and George L. Avery, Comprising the Firm of Ledyard Avery & Co., The Acme Metal Novelty Works, and Ralph W. Booth, Sr., Respondents.
(Supreme Court, Appellate Term,
December, 1904.)
Action on promissory note — Offsetting other note — When indorsee takes free from equities.
A maker of a promissory note may offset against the payee another note made to him by such payee; but such note cannot be offset against an indorsee for value before maturity without proof that the indorsement was made solely for the purpose of cutting off equities.
Appeal from a judgment of the Municipal Court of the city of New York, seventh district, borough of Manhattan, in favor of plaintiff for $240 damages and $22 costs.
E. G. Levy, for appellant.
W. F. Earp, for respondents.

Opinion:
Gildersleeve, J.
This action is brought upon a promissory note for $345.62, made by the defendants Avery to .the order of the defendant Acme Metal Novelty Works, indorsed by said payee and by the defendant Booth, and now owned by plaintiff. ' The defendants, Acme Metal Novelty Works and Ralph W. Booth, Sr., make no defense, and the defendants Avery admit their liability on the said note, but claim by way of counterclaim and offset $105 on a note made by said Acme Metal Novelty Works to the order of said defendants Avery. The justice gave judgment for plaintiff for the difference between the two notes. Plaintiff appeals.
There would be no question as to the right of the defendants Avery to set up this note for $105 as an offset, if the note for $345.62 had remained in the hands of the Acme Metal Novelty Works, and the said defendants Avery claim that plaintiff stands in no better position than would have stood the said Acme Metal ¡Novelty Works for the reason that, plaintiff is not a bona fide holder, and that the note for $345.62 was passed to plaintiff simply for the purpose of cutting off the equities of the said defendants Avery. We do not think the evidence sustained this contention.
The treasurer of the Acme Metal ¡Novelty Works testified that the note was sold before maturity to the defendant ¡Booth for its face value less the legal discount.' The witness Ralph W. Booth, Jr., testified that he got the note before maturity from the Acme Metal ¡Novelty Works and paid therefor the face value of the note, less six per cent, discount; that he got his father, Ralph W. Booth, Sr., to indorse the note, and then sold it before maturity to the plaintiff for the face value of the note. The plaintiff swore that he paid full value for the note, before maturity, to said Booth. To all this evidence there is no contradiction whatever on the part of the defendants. The only witness for defendants was Ledyard Avery who merely testified as to the making and delivery of the $105 note by the Acme Metal Novelty Works to his firm. It, therefore, appears from the undisputed evidence that plaintiff was a bona fide purchaser for value and before maturity of the said note. It was error, under these circumstances, to allow the $105 note, made by the Acme Metal ¡Novelty Works in favor of defendants Avery, as an offset to the note in suit.
As it definitely appears that defendants cannot contest their liability on the said note for $345.62, and a new trial is wholly unnecessary, the judgment in favor of the plaintiff should be modified by increasing the amount to $345.62 with interest and costs, and as thus modified affirmed, with costs.
Freedman, P. J., and Bischoff, J., concur.
Judgment modified by increasing amount to- $345.62 with interest and costs, and as modified affirmed, with costs.