Produce Bank v. Bache

The action was brought to recover tbe amount due upon a draft for $8,700 drawn by tbe defendant Andrew J. Bacbe upon James L. Baldwin, dated on tbe lltb of November, 1878, and payable sixty days thereafter to tbe order of tbe drawer. It was indorsed by tbe defendant, and by the terms of her indorsement she declared it to be a ben on her real and personal estate; and as the facts were set out in tbe answer under which tbe indorsement was abeged to have been made, tbe chief defense consisted of tbe want of consideration. The indebtedness for which tbe draft was given bad originated in discounts made by tbe bank, but for the payment of which tbe respondent was 'not liable. Tbe indebtedness was carried along by renewals until tbe draft in controversy was given, and the evidence tended very directly to show that tbe language in terms charging tbe real and personal property of tbe defendant by tbe indorsement was placed upon tbe draft at tbe instance and request of the president of tbe bank for tbe sole purpose of having tbe paper in tbe bank appear in form to be a proper and legal evidence of an existing indebtedness. She received no consideration for the indorsement, and appeared to have made it solely and wholly at tbe instance and request of the president of the bank in order to give tbe paper tbe appearance of regular business paper. Whether *353she did give it in that manner was the main point in controversy upon the trial; and further evidence in support of this theory was given to the effect that she was not expected to pay the paper, but that her indorsement in this form was desired to render it satisfactory to the bank examiner. The contract of indorsement, like all others, requires a consideration to render it legal and binding upon the indorser; and if it was true that she indorsed the draft in this form at the instance of the president of the bank merely to give it the appearance of available paper, then as the debt was not her’s there was no consideration which, in legal contemplation, would sustain her liability as a married woman upon the indorsement. The evidence as to this fact was not very conflicting, certainly sufficient was shown in favor of the defendant to warrant the jury in. concluding her theory to be the true one in the case, and for that reason they could very well find, as they did, a verdict in her favor.

The bank was not a bona, fide holder of this paper for value, even if they did surrender, upon receiving it, preceding obligations held for the same indebtedness, for the reasons that the knowledge of the president of the bank of the manner in which the indorsement was obtained, and the fact that it *had no consideration to support it, was notice to the bank of this infirmity in the indorsement. In these respects the case differed from that of The Grocers' Bank v. Penfield (69 N. Y., 502), and the other authorities cited in support . of the appeal, for in them the liability was incurred at the instance of the debtor himself to enable him to obtain further time for the payment of the debt. And as the paper was made to be so used, the forbearance obtained by means of it formed a legal consideration for the extension of the credit, and the' indorser consequently became legally liable to pay the debt.

The evidence which was given upon the trial was properly received, for it is always competent against the party receiving such paper, in the manner in which this was received by the bank, to prove as a matter of fact that it was made without consideration, and that the party who would be otherwise chargeable never became legally liable upon it, and the evidence taken upon the trial was all pertinent proof for these purposes.

A further defense was made that the defendant was not charged as indorser by a proper protest of the paper, but under the evidence *354that point likewise became a question of fact for the jury, and it was submitted to them in as favorable a manner as the plaintiff had any reason to claim it should be. If that had been the only difficulty in the case the plaintiff would probably have encountered no obstacle in the way of recovering a verdict against this defendant. The serious trouble in the case arose under the evidence tending to show a want of consideration for this indorsement and charge on the part of this defendant; that was very properly as well as carefully submitted to the jury; and as there are no'exceptions in the case upon which the verdict can be set aside, the court cannot interfere with the result on this appeal. The points to be decided were matters of fact upon which siifficient evidence was given to warrant the result reached by the jury. The judgment and order, therefore, should be affirmed.

Judgment and order affirmed.