Court Opinion

ID: 5267355
Source: CourtListenerOpinion
Date Created: 2022-01-06 19:03:06.219548+00
Date Added: 2024-06-11T08:28:10.231488
License: Public Domain

Hinman, J. (dissenting):
The bank had good title to a valid and enforcible paper for which it paid full value but that paper was only a part of the agreement of its maker and the bank knew it. As I understand the cases of Davis v. McCready (17 N. Y. 230) and Tradesmen’s Nat. Bank v. Curtis (167 id. 194) they simply lay down the rule that the maker of negotiable paper, issued in consideration of a promise of the payee to do something for the former’s benefit in the future, will not be permitted to raise the question of lack of consideration against a holder for value in the course of business if the payee fails to perform.
There is no infirmity in the hands of the bank in the absence of a breach by the payee prior to discount and to the knowledge of the bank prior thereto. But I do not find that these authorities so change the usual rules of contract that one having knowledge of the full agreement of a party as represented by two papers *394prepared simultaneously as parts of a complete contract can hold the obligor to the performance of something set forth in one of the papers with total disregard of the other. In other words, it may be established as the law of this State that the defense of failure of consideration may not be raised, but that does not cut off all the rights of the maker. He may be compelled to perform even though the payee has not performed, but is there any rule of business or conscience which should require the maker to do something he never agreed to do on his part even if the payee performed and where the holder of the paper knew the facts at the time of discount? Surely that is a perversion of the doctrine of Davis v. McCready (supra) and Tradesmen’s Nat. Bank v. Curtis (supra) which would create a liability to pay $7,500 at maturity when in truth and fact the bank at the time of discount knew that only a partial payment at maturity, with the right to renew and to make continued renewals at stated periods was the extent of the promise of the maker.
I agree that the defendant Martin cannot raise the defense of lack of consideration but I hold that the utmost that can be adjudged against him is a liability to carry out his contract according to the tenor of his own agreement as though he had received his boat in conformity with the contract.
The only question remaining is as to whether the defendant Martin tendered performance in accordance with his agreement.
It seems to me that the pleadings and the stipulation are too meagre in statement to permit us to say as a matter of law that he failed. Martin never had anything to do with the bank and never knew of the bank’s having discounted the note and taken the assignment as collateral security, until he received notice of protest. He tendered timely performance to Matton and payment and renewal note were refused. It must be presumed that he was not informed at that time of the true situation as the stipulation so indicates. The stipulation gives us no facts as to what the defendant may have done in the way of tender of performance to the bank after receiving notice of protest. The bank may have insisted upon payment of the full $7,500.
I believe that justice requires a new trial to clarify the facts bearing on this question of tender and waiver of right to tender performance by Martin in accordance with his obligations.
H. T. Kellogg, Acting P. J., concurs.
Judgment modified so as to increase the recovery to $7,500, with interest from May 10, 1921, and as modified affirmed, with costs to the appellant.