Grocers' Bank v. Buffalo & Penfield
Cases that cite this one
41 later published cases cite this decision. The 25 that cite it most often are listed here.
- In re Hopper-Morgan Co. (District Court, N.D. New York 1907)
- Treadwell v. Lincoln (New York Supreme Court 1889)
- Anderson v. Market National Bank (New York Supreme Court 1888)
- Pitts v. Foglesong (Ohio 1882)
- Franklin National Bank v. Eurez Construction Corp. (New York Supreme Court 1969)
- Martin L. Hall Co. v. Todd (Appellate Terms of the Supreme Court of New York 1912)
- Lehrenkrauss v. . Bonnell (N.Y. 1910)
- Macaulay v. Holsten (New York Supreme Court 1909)
- Milius v. Kauffmann (Appellate Division of the Supreme Court of New York 1905)
- Birket v. Elward (Kan. 1904)
- Tradesmen's National Bank v. Curtis (Appellate Division of the Supreme Court of New York 1899)
- McCammon v. Shantz (New York Supreme Court 1899)
- Citizens' National Bank v. Lilienthal (Appellate Division of the Supreme Court of New York 1899)
- Western Nat. Bank v. Flannagan (New York Court of Common Pleas 1895)
- Yale v. Dart (New York Court of Common Pleas 1892)
- Benjamin v. . Rogers (N.Y. 1891)
- United States National Bank v. Ewing (New York Supreme Court 1891)
- Sistare v. Heckscher (New York Supreme Court 1891)
- Auerbach v. Peetsch (City of New York Municipal Court 1891)
- Roberts v. . Tobias (N.Y. 1890)
- Continental National Bank v. Bell (N.Y. 1890)
- Traders' National Bank v. Parker (New York Supreme Court 1890)
- Benjamin v. Rogers (New York Supreme Court 1890)
- State of New York National Bank v. Coykendall (New York Supreme Court 1890)
- First National Bank v. Wolf (New York Supreme Court 1889)
This list shows which later cases cite this one. It does not say how they treated it, and no review of that has been done. Not a substitute for Shepard’s or KeyCite — verify before relying.
Opinion of the Court
We think that the order in this case must be affirmed on the ground stated by Brady, J., in his opinion delivered at General Term. Whatever confusion may have existed upon the point, we think that we may now safely say, in the language of Professor Parsons (1 Parsons on Notes and Bills, 296), that it is universally conceded that the holder of an accommodation note, without restriction as to the mode of using it, may transfer it either in payment or as collateral security for an antecedent debt, and the maker will have no *505 defence. (See, also, Story on Bills, § 192, note m, and Story on Notes, § 195, and authorities cited.) The existing debt is a sufficient consideration for the transfer, and no new consideration need be shown. It is only where the note has been diverted from the purpose for which it was entrusted to the payee, or some other equity exists in favor of the maker, that it is necessary that the holder should have parted with value on the faith of the note, in order to cut off such equity of the maker. (Cole v. Saulpaugh, 48 Barb., 104; Bank of Rutland v. Buck, 5 Wend., 66; Lathrop v. Morris, 3 Sandf., 7.) It has been held by high authority that an antecedent debt is sufficient even in the case of a note fraudulently diverted to constitute the holder a bona fide holder for value without any extension of time or surrender of securities or other new consideration. (Swift v. Tyson, 16 Peters, 1.) But in this State that doctrine does not prevail. (Stalker v. McDonald, 6 Hill, 93.) The leading authorities upon the subject are reviewed in the case of Maitland v. Citizens' Bank (40 Maryland, 540.) Whatever difference of opinion may have existed, as to the case of a note diverted or fraudulently put in circulation, it must be regarded as settled that an indorsee of a negotiable note made for the accommodation of the indorser, but without restriction as to its use, taking the note in good faith as collateral security for an antecedent debt, and without other consideration, is entitled to the position of a holder for value, and not affected by the defence of want of consideration to the maker. We should not have deemed it necessary to discuss the point so much at length, but for the reason that it does not appear ever to have been previously expressly adjudicated in this court.
The order should be affirmed, and judgment absolute, etc.
All concur.
Order affirmed and judgment accordingly.
Case-law data current through December 31, 2025. Source: CourtListener bulk data.