Court Opinion

ID: 8634261
Source: CourtListenerOpinion
Date Created: 2022-11-24 19:42:36.046474+00
Date Added: 2024-06-11T16:55:52.650735
License: Public Domain

BLATCHFORD, District Judge.
I am of opinion, on the evidence, that the five notes made to the order of the Trenton Lock Company were business paper in the hands of the payees, and not accommodation paper. If they or any of them were given for an excess over the value of goods consigned, it is for the assignee in bankruptcy to show that clearly, and this is not done.
In addition, as to those five notes, I think the evidence shows that Mr. Clark purchased them on the representation by Many that they were business paper, and not accommodation paper.
In so representing, Many must be held to have acted for his firm. If his representation was untrue, he was committing a fraud on Mr. Clark.
His representation bound his firm. Story, Fartn. § 108, and cases cited in note 2; Griswold v. Haven, 25 N. Y. 595.
It having been represented by the firm that the five notes were business paper, and not accommodation paper, and Mr. Clark having parted with his money on the faith of such representation, the assignee in bankruptcy of the firm cannot now deny the truth of such representation, so as to work an injury to Mr. Clark.
I therefore decide that Mr. Clark is entitled to prove on the notes A, D, M, N, and P. As to notes C and F, it is for the assignee to show that they were accommodation notes in the hands of Many & Marshall. This has not been done. Mr. Clark is therefore entitled to prove on those notes. As to note E, I think the evidence shows that it was purchased by Mr. Clark on the representation by Mr. Many that it was business paper, and that Mr. Clark is entitled to prove.on it It is contended that Mr. Clark cannot-prove upon notes C, E, and F, above ihentloned, or upon notes B, G, H, I, J, K, L, and 0, all being notes on which Many & Marshall as a firm, if liable, are liable only as endorsers, for mere than the amount he actually paid for the notes respectively, he having taken more than lawful interest in each instance. I think that is the law. Cram v. Hendricks, 7 Wend. 569; Judd v. Seaver, 8 Paige, 548.