Court Opinion

ID: 5419545
Source: CourtListenerOpinion
Date Created: 2022-01-08 16:25:16.096026+00
Date Added: 2024-06-11T08:31:10.471093
License: Public Domain

Bijur, J.
(concurring). I concur for affirmance at least on the ground that defendant’s counterclaim should have been submitted to the jury. Assuming that the defendant bank, contrary to plaintiff’s instructions, had “ paid ” one of plaintiff’s notes, the transaction resulted either in a purchase by the bank from the holder of the note (Riverside Bank v. First National Bank, 74 Fed. 276) or the bank became subrogated to the rights of the former holder against the plaintiff as evidenced by the note. (Pittsburgh-Westmoreland Coal Co. v. Kerr, 220 N. Y. 137.)
As I read it, there is nothing in American Defense Society v. Sherman Nat. Bank (225 N. Y. 506) to the contrary. In that case *32the bank neither pleaded nor suggested a counterclaim, nor does the opinion mention any such contention. The distinction between a defense to the claim of the depositor for the full amount of his deposit and a counterclaim on the instrument acquired by the bank is referred to in Schneider v. Irving Bank (1 Daly, 500, 502) in the case of a check, and in Egerton v. Fulton Nat. Bank (43 How. Pr. 216, 218) in the case of a note.
Some confusion is apt to occur by reason of the use of the term “ payment ” in connection with the transaction. Ordinarily an obligation cannot be “ paid ” in the sense of being discharged except by the debtor or his duly authorized agent. (Neg. Inst. Law, § 200, subd. 1.) It is quite natural, however, that the payee should not care about the legal effect of the payment made to him under the instrument itself, as he would have received his entire interest therein. As between debtor and payor, however, the relation is somewhat different.
In Burr v. Smith (21 Barb. 262) the question seems to have been whether the payor was the representative of the maker of the note or not and he was not produced as a witness at all by plaintiff, who had the burden of proof. The court decided merely that it would under the facts of that case regard the note as paid or discharged as against all parties. How far each transaction must be judged according to its own peculiar circumstances is illustrated in Coykendall v. Constable (99 N. Y. 309, 314 et seq.).
In the case before us, since the maker had forbidden the bank to pay the note, its acquisition thereof from the holder is not a discharge. (Neg. Inst. Law, § 200, subd. 1.) But in the language of the Court of Appeals in the Coykendall Case (supra) the title to the note must be in someone. It is evidently not in the former payee who has parted With the instrument on receipt of the full amount due thereunder. I see no reason in law or equity why the defendant bank is not the owner, entitled to counterclaim the amount thereof, subject, of course, to any defenses thereto which the defendant may have.