Schepp v. . Carpenter

Johnson, C. The note in suit was made by the defendant for the accommodation of one Church, and for his general benefit. He being indebted to the plaintiff transferred to him the note, and the jury were instructed that if Schepp received the note in payment of Church’s debt to him, or as security for the payment of it, he was entitled to recover. The defendant’s counsel made several requests to charge, which, though variant in form, all presented in different aspects the proposition that, in order to recover, the plaintiff must show himself a holder for value in some other sense than that involved in the proposition charged by the judge, that it was sufficient to enable the plaintiff to recover if he took the note in payment, or as security for payment of Church’s debt. The existence of the debt from Church to the plaintiff was a sufficient consideration between them to sustain a promise to pay it or a transfer of property to secure its payment, and according to the doctrine which has prevailed in this State for many years, to sustain the transfer of a note made for the debtor’s accommodation and general *604 benefit. When, however, an accommodation note is made for a specific purpose and has been diverted to some other purpose the rule is different, and the party asserting a title to it must show himself to be a bona fide holder. (The Bank of Rutland v. Buck, 5 Wend., 66 ; Spencer v. Ballou, 18 N. Y., 331.) The cases of Duncan v. Grosche (21 How. Pr. R., 353), and Traders’ Bank v. Bradner (43 Barb., 379) do not conflict with this doctrine. The first was a case of fraudulent diversion or procurement of the notes in question, and the other was a case in which a recovery could only be had by a holder for value in good faith. The questions on the exclusion of evidence present no difficulty. At what time the plaintiff foreclosed the mortgage received at the same time with this note, or whether he told Church that he would not trouble him with the mortgage, are questions which have no bearing on the only material inquiry in the case which was in dispute. The judgment should be affirmed. All concur. Judgment affirmed.