First National Bank v. Dorvall

The opinion of the court was delivered by Bergen, J. The plaintiff brought his action in the District Court of the city of Elizabeth to recover the principal and interest of a promissory note made by the defendant to his own order for $450 and interest, payable at the banking house of the plaintiff. The defendant endorsed the note which was delivered to the plaintiff. The consideration for this note was a check drawn by the cashier of the plaintiff against the funds of the plaintiff to the order of the defendant, which the latter endorsed to the sheriff of the county of Union on account of a bid for the property of one L. A. Deitz at a [299] foreclosure sale thereof. The sale was not consummated and the sheriff was required to again offer it for sale, and on the re-sale the property did not realize enough to pay the indebtedness, and the $150 paid at the first sale was forfeited. The defence set up at the trial was, that the cashier of the plaintiff, acting on its behalf, induced the defendant to sign the note as an accommodation for the bank upon a promise that defendant would never he asked to pay it; that the cashier represented to defendant that the bank desired to buy the property of Deitz in order to save it from loss on obligations of Deitz held by it, and as the hank did not wish to take the title in its name, the defendant was requested to act for the hank and hold the title for it, and that the note was given as a mere memorandum of the amount which the hank had advanced towards the hid, and that defendant was to hold the property until the hank could dispose of it, or until the note was paid. There was evidence lending to show that the making of the note and its endorsement to the hank was for the accommodation of Deitz and not for the hank. The District Court determined that the note was made for the accommodation of Doitz and not, as the defendant claims, for the hank. There is evidence to sustain this finding and therefore the defence set up by the defendant, if available, depended upon a question of fact, and the trial court having found adversely to the defendant on the controverted question, this court will not review the conclusion of the trial court on the question of fact; where there is some evidence to sustain it. The Supreme Court on appeal from the District Court affirmed the judgment. This result, we are of opinion, is justified by the record, but we do not approve the reason upon which the Supreme Court rested its judgment, which was, “that the rights and obligations of the endorser of a negotiable promissory nolo cannot be varied hv parol testimony of his oral agreement made before or at the time of his endorsing the note.” We do not question the legal rule stated, but it is not applicable to the facts in this case where the defendant is the maker of the note, and his defence is want of con [300] sideration. If it be true that the bank, assuming that the cashier had authority to bind it, induced the plaintiff to give the note as an accommodation for it, and the cashier’s check was used to pay the indebtedness of the bank on account of a bid for the 'property which in fact it was purchasing in the ■ name of the defendant, no consideration passed from the bank to the maker of the note, and if these facts were undisputed, the plaintiff could not recover on the note. The Supreme Court relied upon Foley v. Emerald Brewing Co., 61 N. J. L. 428. In that case the endorser defended upon the ground that plaintiff, the holder of the note, had agreed with the endorser that he would accept a partial payment weekly from the maker until'the note was paid, and it was there held that proof of the extension of the time for payment, contrary to the tenor of the note, was not admissible, but this is not applicable 'to a case between the maker and the holder where the note is made for the accommodation of the holder. The judgment will be affirmed upon the ground that there was evidence supporting the finding that the note was made for the accommodation of Deitz, a friend of the maker, who had been at that time adjudged a bankrupt, and was trying to save his property. The judgment will be affirmed, with costs. For affirmance—Ti-ie Chancellor, Chief Justice, Garrison, Swayze, Trenchard, Bergen, Black, White, Ter-HUNE, HEPPENHEIMER, WILLIAMS, TAYLOR, GARDNER, JJ. 13. For reversal—Rone.