Court Opinion

ID: 5303922
Source: CourtListenerOpinion
Date Created: 2022-01-08 03:20:44.635652+00
Date Added: 2024-06-11T08:29:06.978130
License: Public Domain

Davis, J.
(dissenting). It is difficult to discover and condense the theory of the defense contained in the ninety-six pages of affidavits by defendant’s officers and the one hundred page briefs of its counsel. We have heretofore in this same case expressed our opinion of such redundancy (223 App. Div. 194). The rule applies alike to motion papers and pleadings. (Allen v. Fink, 211 App. Div. 411, 413.) It is better to state simple facts in a plain and concise manner, rather than by long, turbid repetitions. It makes the work of the court more easy; and there is less likelihood that something of importance may be overlooked.
As I understand the defenses, the first, third and fourth are based on the claim that there was delivery of the original notes on the condition that the maker executed them solely for the *615accommodation of the promoters of a new corporation and to facilitate their purposes in capitalizing it; and that it was agreed that the maker should not under any circumstances be hable thereon. The promoters, consisting of John W. Guibord and his associates, not only obtained the notes and negotiated them, but several of them assumed habihty of some nature by becoming indorsers. The defendant is prepared to show that the obligation these men assumed was primary. It is, therefore, a good defense against the persons for whose accommodation the notes were made and so conditionally delivered, and also against any person who became a holder with notice of the conditions. (Smith v. Dotterweich, 200 N. Y. 299; Niblock v. Sprague, Id. 390; Higgins v. Ridgway, 153 id. 130; Garfield National Bank v. Colwell, 57 Hun, 169.) On the former appeal we held that it was possible to set up such valid defenses in the answer (223 App. Div. 194). I think they have now been stated.
Notice to the bank may be established not only by the fact that its vice-president and member of its discount committee, John W. Guibord, indorsed and negotiated the notes and was a party to the conditional delivery; but by other significant facts and circumstances from which the inference of notice may be drawn. (Title Guarantee & Trust Co. v. Pam, 232 N. Y. 441; Wittemann v. Sands, 238 id. 434.) The transaction between the defendant corporation and the promoters was an agreement to sell its business to a corporation to be formed. I do not regard the defendant as a coadventurer with the promoters — at least as a matter of law. The defendant apparently received the avails of the notes not on its own account, but as a holder for the promoters who, as it is claimed, became primarily hable thereon. No one here seriously denies that there was an agreement by the promoters to purchase the business of the defendant, and that the sum so raised on the notes was a contribution to the working capital of the projected new corporation — to be held temporarily by the defendant. Assuming a sale to the promoters of the new enterprise, and an agreement by them to become primarily hable on the notes, the theory that the avails were to be paid to defendant in its own interest although the promoters were to pay the notes, requires the exercise of a vivid constructive imagination and the recognition of unusually generous impulses on the part of experienced business men engaged in organizing a new corporation. Yet that highly charitable theory is necessary to hold that the defendant was' a coadventurer and the maker of the notes, and consequently hable because “ it had the money.” The only question here, as I see it, is that of notice to plaintiff.
*616The second defense is one of fraud in the inception of the notes with notice of such infirmity to plaintiff before it became a holder. The appellant’s theory in this respect seems fanciful; but as I favor reversal of the judgment on other grounds I think it would not be prejudicial to respondent to permit the defendant to develop its theory on the trial. It might produce results. (Title Guarantee & Trust Co. v. Pam, supra.)
I do not disagree with what is said in the opinion of Mr. Justice Hill on the subject of payment, but I favor reversal of the entire judgment.
Hasbrouck, J., concurs.
The judgment is modified by adjudging that the plaintiff shall recover of the defendant the sum of $25,000, with interest thereon from March 31, 1926, and the remainder of the judgment is reversed on the law, without costs, and a new trial granted.