Second National Bank of Wilkes-Barre v. Breitung , 197 N.Y.S. 375 ( 1922 )

Finch, J.:

The action is upon the written acceptance by the defendants of a trade acceptance. Plaintiff sues as the holder for value before maturity. The answer of the defendants denies knowledge or information sufficient to form a belief as to the incorporation of the plaintiff, which raises no triable issue (Rules of Civil Practice, rule 93). It likewise denies that the plaintiff is a holder for value without notice. It sets forth as a separate defense that the defendants were induced by the drawer of the trade acceptance to sign the same upon the agreement that the drawer would deliver certain coal to the defendants; that the drawer failed to do so and that plaintiff knew of these facts when it discounted the instrument. The affidavits submitted by the defendants purporting to set forth facts in order to show that their defenses are not sham and are not mere words but have facts to support them, contain hearsay statements that one Ott, the president of the company which drew the draft and promised to deliver the coal, told the affiant that he, Ott, had said to the cashier of the plaintiff at the time of the discount of the draft that the goods had not been delivered and further said that the draft was without consideration.

The Special Term was right in the result reached for the following reasons: The separate defense is not good because it does not there appear that there was any breach of an agreement to deliver coal, either at the time of the discount of the draft or at the present time. It is not alleged in said separate defense that the coal was to be delivered at any particular time but it was merely alleged that the defendant had failed to deliver up to that particular time. Non constat but that it might be delivered later and still be on time. In addition everything that Ott said might be true and there still might not be any notice to the plaintiff of any infirmity in the draft. Ott said that the draft had been given by the defendants to him for coal which had not been delivered and alleged that there was no consideration or value given to the defendants for the trade acceptance. The latter so far as the allegation goes may be only Ott’s conclusion, in the absence of knowledge on Ott’s part that a promise to deliver was a good consideration. It is well settled that a promise to deliver merchandise is a sufficient consideration to accept a draft drawn against future delivery and the validity or consideration for the draft in the hands of an innocent holder is not affected by a subsequent failure to deliver the merchandise. (Tradesmen’s Nat. Bank v. Curtis, 167 N. Y. 194.) It appears that the proceeds of the instrument in question were credited by the plaintiff to the account of the drawer and duly checked out by it, with the exception of a small amount, prior to the time the instrument was dishonored. It is well established that as to the amount so withdrawn, the bank becomes a holder for value. (Merchants Nat. Bank v. Santa Maria Sugar Co., 162 App. Div. 248.) In the case at bar the plaintiff was awarded judgment to the extent of the said withdrawals.

It follows that the order and judgment appealed from should be affirmed, with costs.

Clarke, P. J., Smith, Page and Greenbaum, JJ., concur.

.Judgment and order affirmed, with costs.