Court Opinion

ID: 6143464
Source: CourtListenerOpinion
Date Created: 2022-02-05 14:47:04.950499+00
Date Added: 2024-06-11T08:54:45.210846
License: Public Domain

INGRAHAM, First Judge.
Three grounds of appeal are presented to us in this case:
1st. That tbe note was void because it was made in pursuance of an illegal agreement to circulate tbe bills of tbe City 3Gbpk of Cape May, in New Jersey, in violation of tbe statute.
2d. That the note was discounted by tbe Meriden Agency Company of Connecticut, in violation of tbe restraining act.
And, 3d, That tbe note rvas diverted from tbe purpose for which it was endorsed by tbe defendant.
I think it is a sufficient answer to tbe first objection, that, although such was tbe original agreement, it was never carried out. The notes never were delivered in pursuance of it, but, when tbe money was advanced, it urns New York funds. Whatever agreement was afterwards made, as to the payment of those drafts, would not affect tbe right to recover tbe money advanced upon the notes as a loan.
That amount was' a debt due to tbe company, and tbe transfer of tbe notes by tbe Meriden Agency Company to tbe plaintiff entitled them to receive the amount so loaned. Tbe referee has found that the agreement originally made never was carried out by tbe parties, but that tbe full amount of tbe notes was paid in New York funds.
There was no discount of this paper at all. The Meriden Company advanced upon tbe notes a sum equal to tbe whole face of the notes, although they bad some time to run before pa}''ment. In fact, they advanced more than tbe notes were worth, inasmuch as they must have lost the accruing interest from the *102time of the loan to the day of payment. The statute does not prohibit the loan of money; it only applies to discounts of notes or evidences of debt. An advance upon a note cf a sum of money equal to the face of it, without deducting any interest, or receiving ánjr payment of interest, is not a discount of a note within the meaning of the statute.
The third objection is, I think, equally unavailing. Admitting that the defendant had endorsed the note under the agreement for circulating the bills, as stated, and that the passing of ■ the notes to North, as security for a loan of $6,000 upon them, Was a diversion of the note that might relieve the defendant from liability, still, there is no evidence to show that North, to advancing the money for the Meriden Company upon the notes, had any knowledge that Cornell’s endorsement was an accommodation endorsement, or that it was madé on any such condition. So far as Cornell was concerned, the Meriden Gompany were Iona fide holders for value, and as such they could transfer to the plaintiff all the rights they had, which entitled him to recover whether he was a bona fide holder or not.
I think, also, the questions put to the witnesses, as to the business of the Meriden Company in this city, were properly excluded. Inasmuch as there was no discount of the paper, the object of the evidence so offered became immaterial. Even if the evidence was admissible to show that the company were in the habit of discounting notes in New York, that evidence could not affect a note in their possession which had never been discounted by them.' Before such evidence could, under any cir-cumstatices, be available to the defendant as a defence, it should appear that the note had been discounted by the company.
Judgment affirmed.