Cumming v. Roderick

PATTERSON, J. This action was brought to recover the amount of a promissory note made by the defendant Carpenter, and indorsed by the defendant Roderick. The case came to trial upon the complaint and answer of the defendant Roderick. The complaint was dismissed on the ground of the failure of proof "sufficient to charge the indorser with liability, and from that judgment this appeal is taken. The facts, as they appeared on the trial, were: That Carpenter and Roderick had been partners in business prior to the date of the note in suit. That they had made during their co-partnership a note in their firm name, which was held by the plaintiff, and which became due in September, 1892. Before the maturity of that note their co-partnership was dissolved, and Mr. Carpenter assumed the indebtedness of the firm. On or about the 26th day of September, Carpenter offered to the plaintiff his (Carpenter’s) individual note in renewal of the co-partnership note, which the plaintiff declined to take “unless it were indorsed by the defendant Roderick. Carpenter thereupon procured the note to be indorsed by Roderick, and the plaintiff accepted it and surrendered the co-partnership note. The answer of the defendant Roderick admits that he indorsed the note for the accommodation of the defendant Carpenter, but alleges that his indorsement was without other consideration, and that the [1034] plaintiff knew that the indorsement was of the character stated. The defendant Roderick also admits in his answer that before maturity the note, with his indorsement on it, was delivered to the plaintiff for value. The complaint was dismissed on the ground that there was no evidence to show that Roderick made his indorsement of the note with the specific intention that it should be used by Carpenter to procure credit with the payee, and that, therefore, there was no proof that Roderick intended to be put in any other position than that of a second indorser of the paper. It is the recognized rule of law in this state that, where a person indorses a promissory note in blank before delivery to the payee, there is a presumption that he intends to become simply a second indorser; but that presumption may be overcome by parol proof showing that the indorsement was actually made in order that the maker might obtain credit from the payee. Coulter v. Richmond, 59 N. Y. 478. There was sufficient evidence in this case to go to the jury, establishing prima facie that Roderick did indorse this note to enable his former co-partner, Carpenter, to get four months’ credit on the obligation of the firm to Gumming, which obligation, as between Carpenter and Roderick, the former had assumed. The answer admits the accommodation character of the indorsement, and therefore admits that it was to enable Carpenter to get credit with somebody. The answer also admits that Carpenter did get that credit from the plaintiff, and the only question, therefore, left open, would be as to whether, at the time the indorsement was made, Roderick knew that the credit was to be procured from the particular person named as the payee in the note. There would scarcely seem to be a question as to the fair inference to be drawn from all the facts as to that; for, the indorsement being admittedly for the accommodation of Carpenter, it appeared upon the face of the note that ■ Carpenter made the promise to pay to Gumming, who, to the knowledge of Roderick, held the firm note, for Roderick was present when that firm note was given originally to the plaintiff. In addition to that Roderick was liable on the previous note held by Gumming, and in substitution for which the note in suit was given. The proof shows that the plaintiff would not take Carpenter’s individual note without the indorsement of Roderick, and that thereupon Carpenter went to Roderick, procured his indorsement, came back, delivered the note thus indorsed to the plaintiff, and took up the firm obligation. These circumstances were sufficient to allow the inference that Roderick intended to give his indorsement to enable credit to be obtained from this plaintiff, and prima facie, at least, to rebut the presumption that Roderick was to be liable only as a second indorser. The complaint was improperly dismissed in the court below, and the judgment should be reversed, and a new trial ordered, with costs to the appellant to abide the event. RUMSEY, J., concurs.