Court Opinion

ID: 3588008
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:37:26.510151+00
Date Added: 2024-06-11T07:41:57.155721
License: Public Domain

Upon the facts disclosed, the plaintiff's intestate, Lintz, held the note in suit, without notice, and for a valuable consideration, and before maturity, so that he was entitled *Page 76 
to be protected against the equities of the defendant, Charles Howard. (Weaver v. Barden, 49 N.Y. 293.) Lintz had given his note to Ketchum for $2,180, which was payable to the order of Eneas as an accommodation to the latter, who was the real borrower, and received the entire proceeds of the loan, and acknowledged his liability therefor by giving his own note of the same date and for the same amount to Lintz. When the latter's note to Ketchum was about maturing, Eneas found himself unable to meet it promptly and in full, and out of that inability arose the new arrangement. He agreed to pay Lintz $1,180 in cash, and transfer to him the note in suit for $1,000, upon condition that Lintz should take up and pay the note to Ketchum, which was in reality the debt of Eneas. The agreement was accordingly executed. The check for $1,180 and the note in suit were delivered to Lintz, who paid the note to Ketchum, which, as the Special Term finds, was taken up and canceled. The discharge and cancellation of that note relieved Eneas from liability upon it as indorser, for its entire discharge was the obvious purpose of the agreement, and followed from the cancellation of the note.
It is further found that Lintz, at the same time, surrendered up and returned to Eneas the latter's note of $2,180 which was given as collateral to his liability, or as an acknowledgment thereof. These facts show that Lintz took the Howard note, not merely upon an antecedent debt, but upon the further consideration of the cancellation of one security, and the surrender of another, and materially changed his situation with reference to Eneas. Before the new arrangement, he stood liable to pay the debt of the latter, without having actually paid any part of it. Under the changed agreement he actually paid $1,000 of that debt, taking as his sole security therefor the Howard note, indorsed by Eneas, and which fell due nearly a year later. It follows that Lintz became an innocent purchaser for a valuable consideration of the Howard note, it further appearing that he had no knowledge or notice of the alleged equity of the maker. (Weaver v. Barden supra; Youngs v. Lee, 12 N.Y. 551.)
The fact, therefore, that $420 had been paid on the note in *Page 77 
suit before its transfer to Lintz was not available as a defense or to reduce the recovery.
The judgment should be affirmed, with costs.
All concur.
Judgment affirmed.