Steele v. Lord

Hardin, J.: Appellant now insists that “the portion of the advances” made to the appellant under said contracts, to which the excluded drafts and notes in suit relate, are merged and extinguished in and by said [30] original judgment, and “tliat the original judgment is conclusive against the right of recovery of the excluded advances, and against a light of recovery upon the notes now in suit.” It affirmatively appears that the advances upon the accommodation acceptances of said two drafts, amounting to about the sum of one thousand dollars, have never been paid in fact. It clearly appears that the two notes involved in the actions now before us were delivered to the respondents as collateral security, and that the appellant is a party as an endorser to the notes, and that upon such endorsement the acceptances and advances were made. And it appears, that the plaintiffs, when they received the notes, did not know that the appellant sustained any other relation to the notes than that of endorser and surety. We are of the opinion that the learned' referee is correct in his conclusion, that the former judgment upon the contracts was not a bar to the right of recovery upon'the endorsement by the appellant of the promissory notes in these actions, and that the notes were collateral and independent securities in the hands of the plaintiffs, and valid at the time of their delivery, and subsisted and continued and remained as such, for the purpose of securing the payment of the advances made upon the faith of the notes and the several endorsements thereof. The notes in suit remain valid and subsisting obligations against the appellant, and remained unaffected by either of the former judgments. (Bank of Chenango v. Hyde, 4 Cow., 567; Butler v. Miller, 1 N. Y., 496-500 ; S. C., 1 Denio, 407.) The notes in suit were separate and distinct instruments, and the obligation of the respective parties thereto remained until the purpose for which the notes were delivered was accomplished, to wit, the securing of the right to a return of the money advanced by the plaintiffs upon the faith of the notes. (Nathans v. Hope, 77 N. Y., 420 ; Zimmerman v. Erhart (vol. II of the Reporter, Feb. 16, 1881), 220; Secor v. Sturgis, 16 N. Y., 554.) The learned referee before whom these actions were tried, has fortified the conclusions we have approved by an elaborate and careful opinion, which meets with our approval. We therefore affirm the judgments entered upon his report. Smith, P. J., and Haigiit, J"., concurred. The judgment in each action affirmed.