Court Opinion

ID: 3632826
Source: CourtListenerOpinion
Date Created: 2016-07-06 00:11:52.775648+00
Date Added: 2024-06-11T07:45:36.341514
License: Public Domain

The note in question was made and indorsed for a special purpose. It was, as the fact was found upon the trial, "to take up the three notes, then under protest, and was to be delivered to the plaintiff for that purpose." The three protested notes were held by the Oneida Bank, and have not been paid. The plaintiff was liable for the payment of those notes, although the maker testified on the trial that when the note in controversy was made he was ignorant of that fact. The fact is found that the plaintiff had indorsed the notes at the request and for the accommodation of the payees for whom they had been discounted.
The note being made for a special purpose it was placed in the hands of the plaintiff. It was to be used to take up the three protested notes. The plaintiff received it as an agent to perform that duty. It is true that, being an indorser upon the notes to be taken up, he had an interest in having this done, but he did not thereby acquire any other or greater interest in the new note than any other person would to whom it might have been delivered for the same purpose. If the note had been received by the bank, or if it had been negotiated elsewhere, and money raised upon it to take up the protested notes, it would then have become a valid security in the hands of the holder. But this was never done. The plaintiff, by merely having the note placed in his hands, acquired no legal interest in it. The note never took inception as a legal instrument. It never had existence as a valid security.
The case cannot, in my judgment, be distinguished from that ofKasson v. Smith (8 Wend., 437). If there is any *Page 335 
difference between the two cases it is not in favor of the plaintiff in the present action, for in Kasson v. Smith the plaintiff was the accommodation indorser of the maker of the notes. In this case he was not. In that case the maker of the note, upon which the plaintiff was such accommodation indorser, had made a new note and procured it to be indorsed by Smith, the defendant in the action, and placed it in the hands of the plaintiff for the purpose of raising money upon it to pay the first note. Having failed to get it discounted, he retained it until it was due, when he had it protested and then brought his action against the indorser, claiming that he held the note as security for his indorsement. He failed in the action.
The learned judge who delivered the prevailing opinion in the Supreme Court, assenting to the soundness of the principle upon which the case of Kasson v. Smith was decided, has sought to subject this case to a different rule of law by introducing a fact which was not established upon the trial. The plaintiff, he says, "holds the note as an indemnity to himself against his liability as accommodation indorser on the three notes." If this were so, I should have no hesitation in pronouncing in favor of the plaintiff But in the statement of the facts, as they have been found by the judge who tried the action, no such fact appears. We learn there that the plaintiff was an accommodation indorser, but not for any of the parties to this note; that this note was made and was to be delivered to the plaintiff for the express purpose of taking up the other notes, and that the plaintiff, when he received the note, was informed for what purpose it was made. Not a word is to be found in support of the position upon which the case has been made to turn in the court below — that "the plaintiff was to hold the note as indemnity to himself."
It is true that Tallman, whose relation to this case is very peculiar, after stating that he was to deliver the note to the plaintiff to take up the protested notes, adds that "if the *Page 336 
note was not discounted, the plaintiff was to hold it until it was due, for the purpose of taking up the other notes." The fact that the maker of the note did not know that the plaintiff was an indorser upon the protested notes has already been noticed. It is worthy of remark, too, that the plaintiff himself, who was a witness upon the trial, does not pretend that there was any agreement that the note in question was to be held for his indemnity. All he says on the subject is, that the note was left with him to take up the protested notes. Under these circumstances, it is not surprising that the judge who tried the case has omitted to find the important fact, that the plaintiff "held this note as an indemnity to himself against his liability as accommodation indorser upon the three protested notes." And yet the whole scope of the argument upon which the recovery has been sustained embraces this element. Throughout the entire opinion of Mr. Justice HUBBARD it is assumed that the plaintiff was the accommodation indorser of the maker of the notes, and that "to provide for the payment of the indorsed notes, and to indemnify the plaintiff against his liability thereon," this note was made. As we have seen, no such fact has been found, nor do I think the testimony would have warranted the judge at the trial in finding such fact. The note wholly failed to accomplish the end for which it was made. It was never negotiated or transferred for any valuable consideration. In short, it never received an existence as a note.
I am therefore of opinion that the judgment should be reversed.
DENIO, J., also dissented; SELDEN, J., was absent.
Judgment affirmed *Page 337