Court Opinion

ID: 8068138
Source: CourtListenerOpinion
Date Created: 2022-09-09 11:09:22.565408+00
Date Added: 2024-06-11T16:38:13.263569
License: Public Domain

JENKS, J.
I dissent. The opinion of the learned trial court shows that it did not pass upon testimony which was material. Sheer, the payee of the note, testified that he gave the note to the plaintiff as security for debt. A letter from the plaintiff to Sheer was read in evidence, wherein the plaintiff acknowledged the receipt of the note “as security for the rent you owe for November and December, when said note is paid to refund you the difference between the rent for the two months, viz., $90, leaving it four hundred and two dollars.” It appeared that in a prior action against the defendant on the same note the plaintiff, in pleading, stated to the court that his cause of action was on collateral; also saying: “It is on a note for $500. I took it as security. There is a balance of $205. I have the figures here.” Sheer testified that the plaintiff told him that he would sue for $500, and that he would give him the rest of what he would collect. I fail to find any contradiction of- any of this testimony.
So far the plaintiff might answer that, even though he were but pledgee of the note, yet he could sue the defendant, as maker, for all of the money. Moody v. Andrews, 7 Jones & S. 302, affirmed 64 N. Y. 641, and authorities cited. But beyond this, Sheer and the defendant testified that the note was made only for Sheer’s accommodation, and there is nothing in the record in contradiction. If the note was made but for the accommodation of Sheer, and then was pledged by Sheer with the plaintiff as security, then the rule stated in Bank v. Bell, 125 N. Y. 38, 42, 25 N. E. 1070, would apply, and the plaintiff “could not enforce it against the accommodation maker for any amount beyond that for which it was pledged, nor for a debt *788for which it was not pledged.” “In respect to any excess” he stands in the shoes of Sheer, “who clearly could not enforce payment.” The rule is also well stated in 4 Am. & Eng. Enc. Law (2d Ed.) p. 347:
“The pledgee of negotiable paper is, unless it is subject to equitable defenses, entitled to recover the full face value thereof, without regard to the amount of the debt secured, holding the surplus as a trustee; but when there is no other person entitled to receive the surplus the pledgee can recover only the amount of the debt secured.”
The judgment should be reversed, and a new trial ordered'; costs to abide the event.