Wyckoff v. Degraff

J. F. Daly, J. [After stating the facts as above.]—It is contended by the plaintiff that in advancing his money to take up the six notes in question at the request of the maker and indorser, to save their credit, he stood in the position of a stranger, notwithstanding the fact that he had been the holder and owner of the notes, and was himself indorser for the purpose of getting them discounted at the banks which had discounted them for him, and that he had originally discounted them for the maker. This position cannot, I think, be maintained. The plaintiff, in taking up the notes at the banks where they had been previously discounted for him, upon his indorsement, was discharging an obligation he had incurred to the holders of the paper, and which obligation he had incurred previous to, and wholly independent of, any request by the maker and indorser that he would save their credit by paying the notes. He was repaying to the holders the moneys he had already received from them when they negotiated the paper for him. His contract as indorser bound him to pay the notes to the holders in default of payment by the other parties, and there is no distinction between his paying the notes at maturity, but before they were protested, because he knew that the other parties would not be able to meet their obligations, and his paying at maturity on their default. The true consideration for his advancing the money to take up the notes when they-matured, was that he was bound to take them up if the maker did not. Notice from Degraaf that he could not take up the paper, and a request to plaintiff: to do so, was no more than a notification to plaintiff that his liability to the holders would [325] mature and must be met; the request to plaintiff to meet his own obligation to the holder was not the same as a request to a stranger, and formed no consideration as of a new contract for the money so advanced. That plaintiff, when requested before the notes matured to take them up as they fell due, was requested in effect to pay his own debts due to the banks at the time of the request, see Leggett v. The Bank of Sing Sing (24 N. Y. 283). But in - no case has a subsequent indorser, who has taken up the paper, and holds it with a right of action against the parties, an independent cause of action against them for the money paid to take it up. It is only where the subsequent indorser has no right to enforce the whole note, and no interest in or control of the whole note, that he may recover against a prior indorser in assumpsit sums paid towards the note in the hands of the holder (Butler v. Wright, 6 Wend. 284 ; Baker v. Cassidy, 16 Barb. 177). The plaintiff here took up the notes, and held them with the right to enforce them as last indorser against the prior indorser and the maker. He has no independent action upon the request made to him by these parties that he should take up the notes. The payment by the last indorser of the whole or a part of the note is assumed to be upon the request of the parties liable to him. The cases above cited permitting a recovery by the last indorser against the prior indorser for part payments made to the holder, were sustained upon an implied request that such payments should be made. An express request, such as is set up in this action, does not alter the position of the parties, nor impose any other liability upon the parties already bound upon the note. There is of course no necessity for the plaintiff to bring this action in this form, except to avoid the defenses which the prior indorser might be able to maintain against the notes set forth in the complaint if an action were brought against him upon them. As a device for recovering the amount of the notes, .in spite of any defenses which may [326] exist to them in his hands, I think it ingenious but unauthorized. The complaint sets forth a cause of action for the notes by the holder against the maker and indorser, and the allegations of an express request by the indorser to him to take them up are mere surplusage. The defendant Degraaf is entitled to maintain, if he can, the defenses he has pleaded. The defendant’s exceptions ought to be sustained, ana the verdict should be set aside and a new trial ordered, with costs of the former trial to defendant Degraaf to abide event. Van Bbttnt and Van Hoesen, JJ., concurred. Exceptions sustained and new trial ordered, with costs to defendant to abide event.