Case Name: BECKER v. HART et al.
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1909-12-30
Citations: 120 N.Y.S. 270
Docket Number: 
Parties: BECKER v. HART et al.
Judges: 
Reporter: West's New York Supplement
Volume: 120
Pages: 270–276

Head Matter:
BECKER v. HART et al.
(Supreme Court, Appellate Division, Second Department.
December 30, 1909.)
1. Bills and Notes (§ 537 )—Bona Fide Purchasers—Question for Jury.
Evidence alone that plaintiff purchased the note in suit, made by unquestionably responsible persons, when it had less than six weeks to run, for but a little more than one-half its face value, raised for the jury the question of plaintiff’s bona fides.
[Ed. Note.—For other cases, see Bills and Notes, Dec. Dig. § 537. ]
2. Bills and Notes (§ 537 )—Bona Fide Purchasers—Question for Jury.
Evidence held to raise for the jury the question whether plaintiff was a bona fide owner of the note in suit.
[Ed. Note.—For other cases, see Bills and Notes, Dec. Dig. § 537. ]
Burr and Jenks, JJ„ dissenting.
On reargument. Judgment and order reversed.
For former report, see 139 App. Div: 511, 113 N. Y. Supp. 1053. For report on order of reargument, see 131 App. Div. 916, 115 N. Y. Supp. 1111.
Argued before HIRSCHBERG, P. J., and JENICS, BURR, RICH, and MILLER, JJ.
John R. Dos Passos, for appellants.
Abraham A. Silberberg, for respondent.
For other cases see same topic & § number in Dec. & Am. Digs. 1907 to date, & Rep’r Indexes

Opinion:
HIRSCHBERG, P. J.
The previous decision made in this case was based upon the principle that a party vouches for the general credibility of the witnesses called by him. The plaintiff and her son were called and examined by the defendants as witnesses in their behalf, and it was held that no issue was raised for the determination of the jury on the mere ground of their credibility as interested witnesses. See Becker v. Hart, 129 App. Div. 511, 113 N. Y. Supp. 1053. A reargument was ordered on the question whether the circumstances disclosed by the evidence did not create sufficient doubt and suspicion as to the integrity and good faith of the plaintiff's ownership of the promissory note in suit as to require a submission of the case to the jury. I am clearly of the opinion that a proper case was presented for submission to the jury, and that the trial court had no power to direct the entry of a judgment in conflict with the verdict rendered.
The promissory note on which the plaintiff sues was made and delivered by the defendants to one C. C. Murphy, and by the "latter delivered, three or four weeks after its date, to David Levy. It was dated October 5, 1903, and was payable in the sum of $1,825, on December 5, 1903, at the Twelfth Ward Bank. It is conceded that the makers, the defendants, were then, and at all times since have been, abundantly responsible; but Murphy demanded and received an indorsement by a person named Harlam, also presumably responsible. The defendants made payment to Levy on the note at different times until they paid it off. Some, if not all, of these payments were made after the maturity of the note. The note was not produced when these payments were made ; Levy claiming that the plaintiff's son, Charles H. Becker, who was in his employ, had lost or mislaid the note and it could not be found. The statement that the note had been lost or mislaid was made in Charles H. Becker's presence. Levy died in the month of April or May, 1904, and about two years thereafter the plaintiff first made claim to be owner of the note, asserting that she had bought it from Levy through the agency of her son, Charles H., and she then instituted- this action for the recovery of the amount for- which it was given. The note was never protested, and it does not appear that the plaintiff even required Levy to indorse it at the time she claims to have bought it from him. The learned trial court submitted three questions to the, jury: First, did the plaintiff become the holder of the note before maturity? To this question the jury answered, "No." Second, did the plaintiff pay anything for the note? To which the jury answered, "No." Third, did the plaintiff, at or before she became the holder, have any notice of any infirmity or defect in the title of the prior holder, Charles Becker, or knowledge of such facts that her acts in taking the instrument amounted to bad faith ? To which question the jury answered, "Yes." The jury further found that the note was in fact paid in full by the defendants, and the learned court thereupon directed a verdict and judgment for the plaintiff.
There are many facts and circumstances connected with the plaintiff's alleged ownership of the note which tend to make such ownership a proper consideration for the determination of a jury, and the court could not dispose of the case as involving only a question of law. While the transaction to which the plaintiff and her son testify might, perhaps, possibly be true, it nevertheless differs from the usual and ordinary commercial transactions in so many particulars as to present an issue of fact, aside from any question as to the credibility of witnesses. The purchase of the note was the only transaction- of the kind in which the plaintiff had ever engaged. She claims to have bought the note at the solicitation of her son in the middle or latter part of October, 1903, and to have paid for it only the sum of. $1,000. The claim is made that Levy needed money at the time and was willing to suffer the enormous loss suggested for the sake of getting ready cash. There is nothing in the case to, indicate why he should not have applied to the makers for the payment of the note at a satisfactory discount, or why he could not have procured a discount at the bank at the usual rate. The plaintiff claims that the payment for the note was made with bank bills which she had kept for 15 or 20 years in a tin box in her house. It appeared, however, that during that same time she had an account in the Brooklyn Savings Bank in her own name, which was opened in 1891 with a deposit of $800, and from which she had drawn small sums from time to time until she had reduced the account at the time of the trial to the sum of $75.48. When confronted with this account at the trial, she volunteered the statement that it represented money for her children; but it appeared that on examination before trial she testified to the existence of the account without this qualification. The note was not protested against the indorser, although the complaint alleges that it was, and no explanation was made why it was not protested, nor can any good reason be suggested, unless it be becahse Levy was still living at the time of the maturity of the note.
Were there no other unusual or suspicious circumstances in the case than a claim to the purchase of an unquestionably good note, having less than six weeks to run, for but a little more than one-half its face value, that fact alone would have required a submission, of the case to the jury. While if is undoubtedly true that a valid purchase of a note may be made for less than its fyalue, the discrepancy may be large enough to indicate falsity and bad faith. "As a general proposition it may be said that the. amount paid is otherwise unimportant than as evidence to be considered by the jury upon the question of bona fides." American & English Encyclopedia of Law, vol. 4 (2d Ed.) p. 283. In Canajoharie National Bank v. Diefendorf, 123 N. Y. 191, 25 N. E. 402, 10 L. R. A. 676, it was held that the holders of negotiable paper are only entitled to the benefit of the rule of the commercial law which forbids its validity being questioned, when they have purchased such paper in good faith, in the usual course of business, before mat-urity, and for full value. In Second National Bank v. Weston, 172 N. Y. 250, 257, 64 N. E. 949, 951, the court said:
"The discount taken may be so great as to impeach the good faith of the purchaser, the same as a chattel may be bought at so much under its true value as to justify the inference that the purchaser knew or suspected that it had been dishonestly acquired by his vendor. Hall v. Wilson [16 Barb. 548] has been cited in several later cases, but an examination of those cases will show that there the rate, of discount was so excessive as to warrant the inference of bad faith. In Canajoharie Nat. Bank v. Diefendorf, supra, the notes of a perfectly responsible maker were purchased at a discount of from 15 to 18 per cent, from their face value. In Vosburgh v. Diefendorf, 119 N. Y. 357 [23 N. E. 801, 16 Am. St. Rep. 836], the notes of the same maker were purchased for 50 per cent, of their face value."
In the case then under consideration by the Court of Appeals, the rate of discount was only 8 per cent., and the court held that it was not sufficiently great to predicate upon it any inference of bad faith. The rule, however, was not doubted that a discount might be large enough to predicate such inference upon; and it seems to me that in this case the discount of over 45 per cent, was of itself sufficient to take the case to the jury. When to this great deduction in the price of the alleged purchase is added the further facts that the purchase was made as an isolated transaction, that the sum of money alleged to have been paid for the purchase had been kept uninvested by a woman of scanty means for a period of IB or 20 years, notwithstanding that during those years she kept a savings bank account, that parties responsible for the debt were released by lack of protest for no reason which can be assigned, and the purchase was concealed until after the death of the only individual who could successfully challenge its validity, the transaction must certainly be regarded as sufficiently' unusual and suspicious, and at least so far inherently improbable, as to raise an issue of fact for the decision of a jury. The judgment and order should be reversed.
Judgment and order reversed on reargument, and new trial granted; costs to abide the event.
RICH and MILLER, JJ., concur.