People's National Bank v. Rice

Scott, J.: Plaintiff appeals from a judgment in favor of defendants entered upon a nonsuit. The action is upon a promissory note made hy defendants to the order of Oliver Brothers’ Purchasing Company, by whom it was indorsed and transferred to plaintiff for value and as alleged before maturity. Upon the trial plaintiff produced the note and proved, that it had discounted it on October 10, 1907, paying full value therefor, and that the amount paid was credited to the account of the copartnership of Oliver Brothers, because the purchasing company, the payee named in the note, had no account with plaintiff. The note matured on March 9, 1908, and was not paid, whereupon, at the request of one of the firm of Oliver Brothers, plaintiff agreed to sue the makers, on condition that the indorser would deposit collateral, and would pay or guarantee the costs and expenses of the action. Said member of the firm of Oliver Brothers thereupon gave plaintiff a check for the amount due on the note as collateral security for its collection. This check was accepted and collected by plaintiff which holds the proceeds. Upon the trial, upon this state of facts, the complaint was dismissed upon the ground that plaintiff was not the real party in interest, the court being of the opinion that the deposit of the cash collateral amounted to a payment of the note so far as concerned plaintiff. This was clear error. The plaintiff still remained the holder of the note, and as such is entitled to collect it from the makers. Whether as between the indorser and the holder, the latter has been secured or paid is no concern of the maker beyond the inquiry whether he may become liable to different persons for the same debt, and encounter the danger of paying it twice. There is no such peril here present for a judgment in favor of the holder, the plaintiff, would he a bar. to any other suit on the same note, and payment to the holder would discharge the note utterly. (Madison Square Bank v. Pierce, 137 N. Y. 444; Twelfth Ward [20] Bank v. Brooks, 63 App. Div. 220; Hays v. Hathorn, 74 N.Y. 486.) The judgment must he reversed and a new trial granted, with costs to appellant to abide the event. Ingraham, P. J., McLaughlin, Laugiilin and Clarke, JJ , concurred. Judgment and order reversed, new trial ordered, costs to appellant to abide event.