Mechanics' & Traders' Bank v. Crow

Robinson, J. Defendants are sued as maker and indorser of a promissory note, dated New York, July 16, 1872, for $2,500, payable to the order of and indorsed by Dusenbury & Nelson. The testimony of the defendant Crow was, that this was an exchange note which he gave Dusenbury & Nelson, the payees, on their agreement to give him their note with the indorsement of A. D. Nelson, father of one of that firm, and on their promise to give him $1,800 out of it when discounted. He first testified they had given him the father’s note, and then that they had not, and the jury, if the fact were material, had the right to find it upon his first statement. [193] The defendant Riceman simply states he was an accommodation indorser for Duseubury & Nelson, and became such on their representation that they owed Crow, the maker, some $1,800, and wanted to pay him, and would have the note discounted at the bank. It was so discounted by plaintiff, August 10, 1872, without notice of any of the special circumstances, and the amount of the discount placed to the credit of the account of Duseubury & Nelson, and subjected to their control, to be drawn out as they chose. It was so drawn out, $1,672 of it being applied to pay a note of theirs (or Nelson’s), or of some third party indorsed by them (or Nelson), which was due, and which was delivered up. The plaintiffs thus became the bona fide holders of the note for full value (Brown v. Leavitt, 31 N. Y. 114, and cases cited; Weaver v. Barden, 45 N. Y. 294; Day v. Saunders, 1 Abb. Ct. App. Dec. 495; s. c. 3 Keyes, 345), even if the defendants had any defense to the note for fraud upon the part of the payees in procuring it. The surrender of the original note, and the extension of credit on the substituted security, constituted them holders for a present valuable consideration (Cary v. White, 52 N. Y. 138). They, however, had no such defense. As to Crow, he gave the note, as he says, as an exchange on an executory promise that the payees would give in security another note, and from the discount of the one in suit would pay him $l,S0o. The non-compliance with such promise in no way impaired the rights of the plaintiff who discounted it without notice of any such promise, before it matured, and for its full value (McSpedon v. Troy City Bank, 33 Barb. 81; s. c. 3 Abb. Ct. App. Dec. 133). As to Riceman, he was simply an accommodation indorser, without limitation as to the use of the note or interest in the proceeds when discounted, and he has no cause for complaint (Purchase v. Mattison, 2 Rob. 76, and cases cited). The notice of demand and non-payment given Riceman through the mail by deposit in a United States lamp-post box, instead of the general post office, postage being prepaid, was a sufficient deposit in the post office. Such post office box was one of the immediate agencies of the post office of this city for the [194] reception of mailed matter, and constitutes a part thereof (U. S. v. Marselis, 2 Blatch. C. C. R. 108; 1 Pars, on Bills &c. 481).The judgment should he affirmed. Daly, Ch. J., and Larremore, J., concurred. Judgment affirmed.