Middletown Bank v. Jerome

Ellsworth, J. One claim made by the defendant, is, that the note in suit is accommodation paper, — given without consideration, and fraudulently obtained by the payee. To prove those facts, the receipt of Merrills was offered in evidence, as a part of the res gesta, but without any proof of the time of its execution, except the date of the receipt. The plaintiffs denied that the receipt was a part of the res gesta, and claimed that its date, alone, was no evidence of the time of its execution, as it respects third persons. But the court allowed the receipt to be read to the jury, informing them, however, that if the plaintiffs received said note, hona fide, upon good consideration paid, in the usual course of business, and before the same became due, and without knowledge of fraud or want of consideration, then said receipt became unimportant. Whether the receipt was correctly admitted or not, we perceive no ground of complaint in the matter, since it became unimportant, under the charge given by the court, which is unexceptionable. The objection by the defendant [450] amounted only to this, that there was no consideration, or no consideration, between the original parties to the note, .... ... ,, . , P , . , , which is no objection at all against bonajide indorsees, as the N'T have found the plaintiffs to be. j A further objection is, that the note was usurious in its inception, and therefore void in the hands of the plaintiffs. To reach this result, the defendant claimed, that the giving of this note was a New-Yorh transaction, and to be governed by the law of New-York; and that by that law, an accommodation note, put off by the payee, to raise money, at a greater discount than seven per cent, per annum, even to a person ignorant of the character of the note, is obnoxious to the charge of usury : and further, that this note was an accommodation note, and purchased by Ketchum, Rogers & Bement, at a discount exceeding seven per cent. An answer to all this is, that the defendant gave a certificate, that this was not an accommodation note, but a business note ; a certificate executed and put forth by the defendant, to induce third persons to take the note as a business note ; and what is quite important, in the opinion of the court, that Ketchum, Rogers & Bement received and discounted said note, upon the “ faith and credit” of said certificate. This is in accordance with a well settled principle, that if a person, by his words or conduct, intentionally induces another to believe a fact, and upon its truth to commit his interests, he shall not afterwards deny the fact, in ‘ order to throw off responsibility. Had the defendant claimed, and had the jury found, that this certificate was a cover for usury, and that in truth the whole was a mere pretence, and Ketchum, Rogers & Bement did not take this note as a business note, upon the faith and credit of said certificate, a question of a serious character might have arisen ; but now, there is no room for a question. Several other questions have been discussed ; as, whether the law of New- York be, as it was held to be, by the judge; whether the note, on the facts conceded, was in truth an accommodation note, in the hands of the payee ; whether the date of a paper is, except as to the parties to it, prima facie evidence of the time of its execution ; and some allusion has been made to the matter of title; but these questions are not [451] material, in the view of the case taken by the court, and are, therefore, passed by. We advise that there be no new trial. In this opinion the other Judges concurred. New trial not to be granted.