Rochester v. Taylor , 1856 N.Y. App. Div. LEXIS 104 ( 1856 )

Welles, J.

The answer shows that the note on which the action is brought was indorsed for the purpose of renewing a previous one of the same amount, made by the defendant Taylor, then due or nearly due, on which the defendant Davis was security as indorser, and that this was done by the defendant Davis at the request and for the accommodation of the defendant Taylor, and under an agreement by the latter to use and apply it for that purpose and no other. The answer also shows a diversion of the note to another and totally different purpose ; and that when the plaintiff received it he had notice of the object and purpose of the indorsement.

[Monroe adjourned Special Term, June 10, 1856,

The plaintiff, however, insists that the answer fails to show that the defendant has been injured by the diversion. This was not necessary to be stated in the answer. If the note has accomplished, substantially, the purpose for which the defendant indorsed it, that would be a good answer to the alleged diversion. Here, as the pleadings show, was a clear diversion, which was prima facie a defense to the indorser. The defendant Davis did not, by indorsing the note, intend to increase his liability. If, instead of renewing the old note, as was contemplated, Taylor procured the one in question to be discounted, and applied the proceeds to the payment of the old one, that would have been a substantial compliance with the agreement, and not a diversion. But it was incumbent upon the plaintiff to show it, or set up some facts, either in a reply or at the trial, which would relieve the case of the objection that there had been a diversion. Non constat that the first note is not still in existence, and the defendant liable upon it. The diversion is clearly shown; and the answer to it, namely, that the indorser has not been prejudiced by it, should be as clearly shown.

There must be judgment for the defendant Davis, on the demurrer, with leave to the plaintiff to reply or go to trial upon the complaint and answer, upon payment of costs of the demurrer.

Welles, Justice.]