Court Opinion

ID: 5460678
Source: CourtListenerOpinion
Date Created: 2022-01-09 19:35:23.45984+00
Date Added: 2024-06-11T08:32:52.183635
License: Public Domain

Baenaed, J.
The company were authorized to receive notes for advanced premiums to be written against and allow certain interest thereon; but were not authorized to allow as they undertook to do in the case of the note in suit, five per cent on the whole amount without deduction for such sums as might be written against. This agreement was illegal. (2 Kernan, 569.) Consequently none of the notes the giving of which formed a part of the agreement could be recovered on by the company. As however the statute does not make the note void, the plaintiffs, if they received it before it became due, for a valuable consideration, without notice of the illegal agreement, would be entitled to recover. (Willmarth v. Crawford, 10 Wend. 341. Rockwell v. Charles, 2 Hill, 499.) In this case, however, the plaintiffs are not bona fide holders for value. It is found and the case shows that they merely received the note in part payment of a precedent debt. That this does not constitute a parting with value has been expressly held by the general term of this district in Spear v. Myers, (6 Barb. 445.) I am not aware that that case has been overruled. It is true it has been held that one who receives a note indorsed without restriction for the accommodation of the maker, in payment of a precedent debt, may recover on it; but this was so held on the ground that the maker had a right to appropriate it to any purpose he should deem most for his interest, and such appropriation, when made, rendered it valid in the hands of the holder. This view of the case renders it unnecessary to consider the other points raised. Judgment affirmed, with costs.