Case Name: Asa W. Parker, Resp't, v. Alexander McLean, Impl'ds App'lt
Court: New York Court of Appeals
Jurisdiction: New York
Decision Date: 1892-10-01
Citations: 48 N.Y. St. Rep. 151
Docket Number: 
Parties: Asa W. Parker, Resp’t, v. Alexander McLean, Impl’ds App’lt.
Judges: 
Reporter: New York State Reporter
Volume: 48
Pages: 151–156

Head Matter:
Asa W. Parker, Resp’t, v. Alexander McLean, Impl’ds App’lt.
(Court of Appeals, Second Division,
Filed October 1, 1892.)
Bills and notes—Diversion.
In an action upon a promissory note the evidence showed that E., the maker, agreed to exchange the lease and furniture of a hotel, upon which there was a chattel mortgage of $2,000, for certain real estate belonging toO., upon which there was a mortgage to plaintiff and unpaid taxes. E. gave her note for the difference in the trade, payable to herself, endorsed it, and then defendant endorsed it for the accommodation of E. and then delivered it to 0., who delivered it to plaintiff, who advanced $300 to O. to enable him to pay arrears in rent of hotel, and later $750 in cash, and the balance, $78.86, was applied to pay a debt of Mrs. O. to plaintiff. The father of E. and her agent was present when the $300 was paid. Defendant claimed his endorsement was for the accommodation of the maker, and so known to be by O. and plaintiff, for the purpose of paying the chattel mortgage, and was wrongfully diverted. Held, that the weight of evidence was so-greatly in favor of plaintiff that the restriction placed upon the use of the note was waived by E.’s father that the judgment should be sustained, as defendant has failed to point out any vital error by the trial court to which its attention was called.
(Bradley, Vann and Haight, JJ., dissent.)
Appeal from judgment entered on order of the general term of the city court of Brooklyn, affirming judgment entered upon a verdict in favor of the plaintiff.
The action was brought against the maker and endorsers of a. promissory note of date July 18, 1889, made by Evelyn P. Everett for $1,128.86, payable to her order four months after date-at Long Island Bank, and endorsed by her, Alexander McLean and Sampson B. Oulton. The defendant McLean alone defended,, and he did so on the alleged defense that the note was made- and by him endorsed for the accommodation of the maker, to be used for the special purpose of being applied in payment of a certain mortgage on personal property at the Hotel Everett in the-city of Hew York. The court directed a verdict for the plaintiff..
Horatio C. King, for app’lt; N. C. Moak, for resp’t.
Affirming 34 St. Rep., 790.

Opinion:
Follett, Ch. J.
In 1889, Sampson B. Oulton owned real estate in Brooklyn, subject to a mortgage held by Asa W. Parker. which was foreclosed, and on the sale the mortgagee purchased the property. Parker agreed with Oulton that the latter might exchange the property and have all he could realize out of it after paying the debt. Miss Evelyn P. Everett was the lessee of the Hotel Everett, in the city of New York, and owned the furniture and certain other property connected therewith. In July of that year Oulton and Miss Everett agreed to exchange their properties .free from all incumbrances. When they met to effect the exchange it appeared that there was a chattel mortgage on Miss Everett's property for $2,000, which did not become due until the following August, and could not, at the date of the exchange, be conveniently paid. It also appeared that the taxes in arrear ¡upon the Brooklyn real estate amounted to $871.14, which, deducted from $2,000, the amount of the chattel mortgage, left •$l,128.-86 difference, which Miss Everett was required to pay or ¡secure to be paid to Oulton. ' This being done, Miss Everett took ¡the Brooklyn real estate subject to $871.1.4 due for taxes, and 'Oulton the Everett House property subject to the chattel mortgage for $2,000. To secure the payment of $1,128.86, the differerence between the incumbrances, Miss Everett, on July 18,1889, gave her promissory note by which she promised to pay to her ¡own order $1,128.86 four months after date at Long Island Bank. Miss Everett endorsed the. note .and Alexander McLean also endorsed it for the accommodation of the maker, and it was then -delivered to Oulton, who, July 21st, endorsed and delivered it to ¡the plaintiff, who advanced $300 to enable Oulton to pay rent in arrear on the hotel property, and about September 1st advanced $750, making $1,050 paid in cash for the note. The remainder, $78.86, less the discount for the time the note had to run, was applied on an indebtedness of Mrs. Oulton to the plaintiff. The plaintiff testified, and in this he was uncontradicted, that the father of Miss Everett and her agent was present when the $300 was paid. This action was brought against the maker and both endorsers to recover the amount due upon the note. McLean alone defended upon the ground that his endorsement was for the accommodation of the maker, and was known to be by Oulton and the plaintiff; and that the note was made and endorsed for the purpose of paying the chattel mortgage for $2,000 given by Miss Everett, but was wrongfully diverted by Oulton and the plaintiff from that purpose.
It is conceded that $600 of the avails of the note were paid on the chattel mortgage. At the close of the evidence a verdict was directed for the plaintiff for $1,050, the amount which he advanced on the note, which was $111.13 less than the amount due thereon. 'The defendant excepted to the direction and to the refusal of the court to submit to the jury: (1) Whether it was agreed, to the plaintiff's knowledge, that the note or its avails was to be applied in payment of the chattel mortgage. (2) Whether the plaintiff was a bona fide holder of the note. These are the only exceptions discussed in behalf of the appellant. It is undisputed that $600 received from the plaintiff by Oulton were paid on the chattel mortgage. To that sum there was no defense. The defendant did not endorse the note in the presence of the plaintiff and the-condition upon which he says he endorsed it was not stated in the presence of the plaintiff or made known to him. The defendant endorsed the note which was presented to him by Wood, who alone was present when the condition was imposed, and it is not claimed that what the defendant said to Wood was brought to the knowledge of plaintiff. The evidence oh the part of the defendant does show that it was agreed between Miss Everett and her father on the one side, and Mr. and Mrs. Oulton on the other, that the avails of the note were to be used in payment of the mortgage. The restriction which the Everetts imposed upon the use of the note could be waived by them; and it appears, as above stated, that Mi'. Everett was present when the $300 was advanced by the plaintiff on the note. Had the question been raised that the plaintiff was not entitled to recover that sum, but only the sum which he subsequently advanced, he might have shown a consent that the $300 might be used for other purposes. The case was tried upon the theory that the plaintiff was not entitled to recover anything, and not that the defendant had established a partial defense. The defendant asked to go to the jury upon the theory that evidence had been given which if believed would sustain a verdict of no cause of action, but there was no such evidence. The learned counsel for the defendant does not urge in his brief that the judgment is erroneous in part and should be modified, but insists that it should be wholly reversed. The weight of the evidence is so greatly in favor of the plaintiff andi against the defendant that the judgment should be sustained, unless the appellant points out a vital error committed by the trial court to which its attention was called. This we think he has failed to do.
The judgment should be affirmed, with costs.