Court Opinion

ID: 5496880
Source: CourtListenerOpinion
Date Created: 2022-01-10 02:53:37.952937+00
Date Added: 2024-06-11T08:33:50.196217
License: Public Domain

Brady, J.,
(concurring.) The note on which the action was predicated was indorsed by the appellant for the accommodation of the maker and for the purpose of procuring money. The co-defendant, the maker, gave a certificate that it was a business note, and, submitting to the judgment properly rendered, therefore, against him, does not appeal. The appellant gave no certificate and made no statement personally in regard to the note. He merely set it on its way by indorsement. The person, however, to whom the note was confided for sale or discount, stated to the broker employed that the note was a business note, and was informed by the broker that if he could sell it he would pay him the check, but only to the order of the indorser. The reason for this method was not stated by the broker, but it may well be presumed that it was because the indorser had neither written nor spoken of the validity of the note. The check given in payment of the sum accepted for it was made by the broker, payable to the order of the indorser, and by him indorsed payable to the order of the maker, and again for deposit by the indorser. It is as follows: “New York, April lSth, 1886. Leather Manufacturers’ National Bank. Pay to the order of J. T. Pryer, fourteen hundred dollars. $1,400. Theo. B. Taylor.” Indorsed: “Pay to the order of Charles It. Braine. John T. Pryer. Chas. It. Braine. For Deposit in Tradesmen’s National Bank. John. T. Pryhr.”
It is not necessary to consider whether the note was discounted at a usurious rate, and would be invalid under ordinary circumstances, inasmuch as the indorser must be held responsible for the statement made that it was a business note. The sale was evidently made on the credit of the indorser, and he was advised of that by the form of the check. He was also thus advised that he was regarded as the first or chief person in the transaction, and notified that he would be sought for payment of it if any default was made by the maker. And-it will readily occur to whoever examines this case-that it was through his instrumentality that the-maker received the money, the check having been made payable to his order, and indorsed by him over to the maker. This incident was sufficient to put him upon inquiry if he desired to avoid liability to ascertain whether any representations liad been made affecting him, and why it was that the check was made payable to him, and not *211to the maker. He cannot assert, under such circumstances, that degree of ignorance which might, under other circumstances, relieve him from an unauthorized act done by his agent, and that some one was acting as such was apparent from the form of the check. These facts and circumstances demanded the application of the just rule clearly stated in Smith v. Tracy, 36 N. Y. 79, that when a party takes the benefit of a loan or purchase obtained on his credit he will not be permitted to retain the fruits of a transaction infected with fraud, whether the deceit which he seeks to turn to his profit was practiced by him or his accredited agent. See, also, Elwell v. Chamberlin, 31 N. Y. 611; Crans v. Hunter, 28 N. Y. 389. And the rule is the same when the person assumes to act for another, and without any authority, if the money be received for the act done, which is thus ratified, and the means adopted by which the money was obtained. This disposes of the only question in the appeal involved which requires consideration. The case of Lewis v. Barton, 106 N. Y. 70, 12 N. E. Rep. 437, on which it is said by the respondent the appellant relied on the motion to dismiss, has no analogy to this. There the certificate was held not to be an estoppel, because the holder knew that the note was an accommodation, and therefore that the certificate was false. The judgment should be affirmed, with costs.