Central National Bank of the New York v. Valentine

Ingalls, J.: The firm of Macy & Co. made the notes in suit, each for the-sum of $2,300. One dated June 20, 1876, another July 1, 1876, and the other February 12, 1876, payable to the order of Macy, Valentino & Co. The notes were indorsed in the name of the* last mentioned firm, by Frederick A. Macy, who had been a, member of such firm. Prior to the execution of the notes, the* firm of Macy, Valentine & Co. had been dissolved. The plaintiff' having had dealings with said firm previous to its dissolution was entitled to actual notice thereof previous to receiving the notes, in order to be affected by such dissolution. (Austin v. Holland, 69 N. Y., 572.) No such notice was established upon the trial, and we are, [418] therefore, to inquire whether the plaintiff became a bona fide holder of the notes for value ? The plaintiff, by Its president, discounted the notes and gave the makers credit on the books of the bank for the amount, no money ivas actually paid, or thing of value parted with by the plaintiff, upon the strength of the indorsement or the discount. Under such circumstances the plaintiff cannot be regarded the bona fide holder of said notes for value, as we understand the law as -settled by the adjudications upon that subject. The mere giving of credit by entering the amount on the books, and not actually parting with a dollar upon the strength of the indorsement, cannot be regarded parting with value in the sense which the law contemplates. The parties in whose favor the credit was given might never draw or appropriate any portion of the fund. (Fulton Bank v. Phœnix Bank, 1 Hall, 562; Clark v. Ely, 2 Sandf. Ch. Rep., 166; West v. Exchange Bank, 44 Barb., 175; Platt v. Chapin, 49 How., 318; Garland v. Salem Bank, 9 Mass., 408; McBride v. Farmers Bank, 26 N. Y., 454; The A. Exchange Bank v. Corliss, 46 Barb., 19.) The judgment must be reversed and a new trial ordered, with costs to abide the event of the action. Beady, P. J., concurred. Present — Beady, P. J., and ING-alls, J. Judgment reversed and new trial ordered, with costs to abide the event.