Cozens v. Middleton

Opinion, Mr. Justice Sterrett: The note in suit after being indorsed by the payee, defendant below, was returned to the maker, who afterwards and before maturity transferred it to the plaintiff below for an antecedent debt, but whether in payment thereof or merely as collateral security was a disputed question. In taking the note directly from the maker with the words “credit the drawer” written on the lower left corner, and signed by the payee, plaintiff below is presumed to have known it was an accommodation indorsement, and therefore without consideration as between the maker and payee; but that fact without more would be no defence: Appleton v. Donaldson, 3 Pa. 381; Lord v. Ocean Bank, 20 Pa. 384; Twining v. Hunt, 7 W. N. 223; Carpenter v. N. B. of the Republic, 106 Pa. 170, and cases there cited. The doctrine of these and other cases is, that an accommodation indorser of negotiable paper pledged by the maker for an antecedent debt cannot defend on the ground that his indorsement was without consideration, because that would defeat the purpose for which he loaned his credit; but he may successfully defend by proving to the satisfaction of the jury that his indorsement was fraudulently procured, or, that instead of being a general and unrestricted loan of credit, the indorsement was made for a specific purpose, and that without his knowledge or consent, the note was fraudulently used for another and entirely different purpose and the like; but as against a bona fide holder for value, without notice, no such defence is available. In Lord v. Ocean Bank, supra, which was the case of an accommodation maker, it is said: “ He who chooses to put himself in the front of a negotiable instrument, for the benefit of his friend, must abide the consequence, and has no more right to complain if his friend accommodates himself by pledging it for an old debt than if he had used it any other way.” An accommodation indorsement is, prima facie, a loan of the indorser’s credit without restriction, but it may be shown to have been otherwise understood by the parties. In this case defendant below denied that the indorsement in question was [633] an unrestricted loan of his credit, and undertook to prove by his own testimony and that of the maker that the note was indorsed for the specific purpose of being used by the latter in the settlement of a certain claim, and for no other purpose whatever; that after it ceased to be available for that purpose, the maker wrongfully and without defendant’s knowledge and consent transferred it to plaintiff below as collateral security for an antecedent debt, etc. In view of this evidence, the court was requested to charge: “ If the jury find that the defendant loaned the note in suit to Fulmer for the specific purpose to use it in settlement of E. P. Allis & Co.’s claim, and for no other purpose, then when that purpose failed it was dead in law and belonged absolutely to defendant, and any subsequent use by Fulmer of said note without the knowledge, consent, and concurrence of the defendant, was a fraud upon the rights of the defendant.” The answer of the learned judge was as follows: “ This is true, if the jury find that when the defendant gave the note to Fulmer it was expressly restricted to the settlement with E. P. Allis & Co.” It is contended that this answer, with the exception of the ■first three words, is erroneous; but we are unable to see wherein it is so. It is a mistake to call it a qualification of the affirmance or to claim that it was prejudicial to defendant below. The legal conclusion, stated in the point, necessarily depended on the facts the jury was asked to find, and it was certainly not improper, in affirming the point, to call their attention to the principal question of fact upon which it was necessary for them to pass. That question, as well as others presented by the evidence, was exclusively for their consideration and determination under all the evidence in. the case, including the rebutting testimony offered for the purpose of showing a different state of facts. If the jury made a mistake in not finding according to the weight of the evidence before them, the error is one which we are powerless to correct. The only remedy was an appeal to the discretionary power of the court to set aside the verdict and order a new trial. The court refused to exercise that discretion, presumably for the reason that, on all the questions of fact involved in the case, the verdict was fully warranted by the evidence. The first specification of error is not sustained. [634] The second specification is not according to rule, but, waiving that, the answer to the point referred to was entirely proper. What was said by the learned judge in those portions of his charge which constitute the third, sixth, and seventh specifications, respectively, was clearly warranted by the evidence. Special reference has already been made to the questions of fact upon which defendant below mainly relied, but there were others upon which it might become necessary for the jury to pass in making up their verdict. Those questions were all properly presented and fairly submitted to the jury. The fourth and fifth specifications are not according to rule, and therefore not entitled to further notice. There appears to be no error in the record. Judgment affirmed.