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38 240 r167a194
FIRST DEPARTMENT, MARCH TERM, 1899. [Vol. 38. for one party or the other, when such conduct results, or may result, in a plain exhibition to the jury of his own opinions in respect to the case.
Necessarily, the cases upon this subject are not numerous, but yet there are such cases in the books, and whenever the question has been presented to an appellate tribunal, it has held that if, upon a fair consideration of the case, it appears that the action of the judge at the trial was such as to unduly influence the jury in behalf of one party or another, by assuming the duty of counsel and conducting the trial of the case, it was a sufficient ground for reversal. (Wheeler v. Wallace, 53 Mich. 355; Dunn v. The People, 172 Ill. 582.)
In this case we are of opinion that an injustice probably resulted to the defendant from the peculiar conduct of the trial, and for that reason the judgment and order should be reversed and a new trial granted, with costs to the appellant to abide the event.
VAN BRUNT, P. J., BARRETT and O'BRIEN, JJ., concurred.
I concur in the result on the ground that some of the questions put by the court and objected to by the defendant's counsel were such as had they been asked by the plaintiff's counsel and allowed, the exceptions would have been good.
Judgment and order reversed, new trial granted, costs to appellant to abide event.
TRADESMEN'S NATIONAL BANK, Appellant, v. GROVE D. CURTIS and
Acceptance of a draft — a statement by the bank discounting it, that if certain goods were not delivered by the maker it would not be enforced, is admissible to defeat it.
Drafts accepted under an agreement between the drawer and acceptors, that they were not to be enforcible unless merchandise to the amount of the drafts was delivered to the acceptors by the drawer, cannot, in the event of a breach of such condition, be enforced against the acceptors by a bank which discounted them, the cashier of which was present at the time the acceptors agreed to accept the drafts, and who was a party to the agreement between the drawer and acceptors, and stated that the bank would discount the acceptances, and
FIRST DEPARTMENT, MARCH TERM, 1899.
upon being asked by whom the acceptances would be taken up if the merchandise was not delivered, replied that the drawer or the bank would do so. Parol evidence of the conditions upon which the drafts were accepted is admissible not only as between the original parties, but as to all others having notice. Semble, that, except under special circumstances, knowledge by a person discounting a draft, of an agreement between the maker and the acceptor that the draft was not to be enforced until certain merchandise was delivered by the drawer to the acceptor, does not, in the event of a breach of the agreement, constitute a defense to the acceptor, unless the acceptance was discounted with knowledge of the breach.
INGRAHAM and MCLAUGHLIN, JJ., dissented upon the facts.
APPEAL by the plaintiff, the Tradesmen's National Bank, from a judgment of the Supreme Court in favor of the defendants, entered in the office of the clerk of the county of New York on the 8th day of December, 1898, upon the verdict of a jury, and also from an order entered in said clerk's office on the 8th day of December, 1898, denying the plaintiff's motion for a new trial made upon the minutes.
Arthur J. Baldwin, for the appellant.
Rufus L. Scott, for the respondents.
The defendants are sued as the acceptors of two drafts drawn upon them by the Natalie Anthracite Coal Company. Those drafts were payable to the drawer's order, were accepted by the defendants and were discounted by the plaintiff. The answer set up the affirmative defense that the acceptances were, by agreement with the drawer, conditioned upon the delivery by the drawer of coal to the full amount of both drafts; that such drafts were to be paid by the acceptors only after the delivery to them of such coal; that the coal never was delivered, and that, therefore, the acceptances were without consideration; that all of the facts mentioned constituting the affirmative defense were within the knowledge of the plaintiff, and that having taken such acceptances with that knowledge, the plaintiff is not a bona fide holder, but took the drafts subject to the equities existing between the acceptors and the drawer. Upon the trial testimony was given of the circumstances under which the drafts were drawn and accepted, and further evidence was introduced to show knowledge by the plaintiff's cashier of the conditions APP. DIV.- VOL. XXXVIII. 31
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[Vol. 38. under which it is alleged the acceptances were given, and actual participation was shown of such cashier in the negotiations as the result of which the acceptances were made by the defendants. Upon conflicting testimony the jury found a verdict in favor of the defendants, and from the judgment entered upon that verdict and from an order denying a motion for a new trial the plaintiff appeals.
It would be no defense to these acceptances that they were given upon an executory contract for the sale of merchandise, even if the plaintiff knew that an agreement existed between the makers and the acceptors that the drafts were not to be enforced until the merchandise was delivered, unless the acceptances were discounted with knowledge of the breach. (Davis v. McCready, 17 N. Y. 230.) But under the proofs that is not the rule of law applicable to this The evidence introduced by the defendants showed that the plaintiff's cashier was present at the time the defendants agreed to accept the drafts, and that the whole subject of the acceptances and the conditional liability of the defendants thereupon was discussed at an interview in which a Mr. Taylor, the president of the Natalie Coal Company, Mr. Blaisdell, one of the acceptors, and Mr. Wardrop, the plaintiff's cashier, took part. Blaisdell testified that there was produced at that interview a memorandum showing the state of an account between the Natalie Coal Company and the acceptors; that he was reluctant to give the acceptances; that Wardrop took the memorandum in his hand, and, finally, he (Wardrop) said it would be all right, that they would discount the paper, the acceptance. The witness then testified that Mr. Taylor added, if the coal is not delivered the acceptances will be taken up. He was then asked : "By whom?" to which he answered, "By the Natalie Coal Company or the Tradesmen's National Bank." This testimony goes to the establishment of the fact that, in the very inception of these acceptances, it was in contemplation that they should be discounted by the Tradesmen's National Bank, and that the cashier of that bank was a party to the agreement, by which the defendants gave their acceptances, not to be enforcible unless the Natalie Coal Company delivered coal to the full amount of such acceptances, and no coal was delivered.
It was for the jury to say whether they would believe that testimony, and as they did believe it, their finding establishes that the
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acceptances were discounted, not only with full knowledge by the plaintiff that they were made on the conditional agreement, but also with the understanding of the plaintiff's cashier that the bank would not enforce the paper against the acceptors if the makers did not deliver the coal. The cashier was willing to take the paper on that condition, as the jury must have found. The case, therefore, falls within Garfield Nat. Bank v. Colwell (57 Hun, 169), Benton v. Martin (52 N. Y. 570), and Higgins v. Ridgway (153 id. 130, 132), which hold that an instrument not under seal may be delivered upon conditions, the observance of which as between the parties is essential to its validity; that the operation of the instrument may be limited by the conditions upon which the delivery was made; that parol evidence of such conditions is not open to the objection of varying or contradicting a written contract, and that the rule applies to the enforcement of negotiable paper, not only as between the original parties, but as to others having notice.
The judgment and order appealed from should be affirmed, with
VAN BRUNT, P. J., and O'BRIEN, J., concurred; INGRAHAM and MCLAUGHLIN, JJ., dissented.
INGRAHAM, J. (dissenting):
I cannot concur in the affirmance of this judgment. The evidence in the case is uncontradicted that the bill sued on was accepted by the defendants for the accommodation of the drawer, the Natalie Anthracite Coal Company. It appeared that, at the time the bills in suit were drawn and accepted, the defendants and the corporation had entered into a contract by which the corporation was to deliver to the defendants anthracite coal at an agreed price, and these bills were accepted by the defendants for coal to be delivered under this contract, the corporation agreeing that, if the coal was not delivered, the acceptances would be renewed. One of the defendants, testifying as to the arrangements under which these particular drafts in suit were accepted, said that he objected to accepting by asking, Why is it necessary for me to give drafts to the Natalie Coal Company, when I can buy coal, all I want, on 60 days' time, without giving any paper?" To that the president of the corporation replied: "This was an accommodation to them. That is what Tay
FIRST DEPARTMENT, MARCH TERM, 1899. [Vol. 38. lor told me at that time; it was a great accommodation to them." The witness further testified that nothing was said about the acceptances being discounted, or what the corporation would do with them. He simply knew that the corporation had had acceptances of the same kind that had been given before and discounted. Mr. Taylor, the president of the corporation, testified that at this meeting he had stated to the defendants, before the notes were given, that if the corporation did not deliver the coal before the bills fell due it would renew the bills; that all that was said was that if the coal was not delivered prior to the notes falling due the notes would have to be renewed until the coal was delivered; that previous to these transactions the plaintiff had discounted other paper on the same terms for the defendants. It is not disputed by the defendants that these bills were accepted at the request and for the accommodation of the coal company with the expectation that they were to be discounted for the benefit of the coal company. The testimony of the defendant, that the Natalie Coal Company or the Tradesmen's National Bank was to take care of those bills if coal was not delivered, was evidently the conclusion of the witness and not an agreement of any one on behalf of the Tradesmen's National Bank that plaintiff was to take care of the notes, for the witness further testified that he had no knowledge as to what disposition should be made of the bills after they were accepted, and merely assumed that they were to be discounted in the same way that other bills had been discounted by the corporation. It is not alleged that the bank made any agreement at this time either to discount the bills or to renew them after they were discounted. The meeting at which this conversation was held was at the office of the coal company, and was between the defendants and the coal company's representative. The cashier of the plaintiff was present at that meeting, not as cashier of the bank, but as a director of the coal company. The bills were not then discounted by the bank, nor was there any agreement for such discount. There was here merely an understanding between the drawer of the bills and the acceptor, not that there should be a conditional delivery of the bills, or that the bills should not be existing obligations unless some act was done by some of the parties subsequent to the delivery, but that the defendants accepted the bills for the accommodation of the coal company, relying on its