Moore v. . Ryder , 65 N.Y. 438 ( 1875 )

The defendant Ryder was an accommodation acceptor of the draft in question, which was by Landen diverted from the purposes for which it was made and accepted; and although the plaintiff received it in ignorance of that fact and before its maturity, the equities of Ryder as against him are the same as if he had received it with notice of all the facts in relation to the object for which it was made and accepted, unless he paid for it a valuable consideration, consisting of something other than an antecedent indebtedness of the iron company to the plaintiff, or the firms of which he was a member and for which a note or other security had never been given. See Weaver v. Barden (49 N.Y., 286, 291 to 295), where the authorities on this subject are cited and considered. Assuming, therefore (without deciding), that the plaintiff, as a part of the consideration to be paid by him for the draft, agreed unconditionally to pay to Burnham, his share of the demand due him and the plaintiff, and to Kingsbury his share of the demand due to him and the plaintiff from the iron company, whatever those shares should be ascertained to be, and that he thereby became immediately upon demand and refusal to pay, liable to an action in favor of each of them for his share of the demand, and that he was to the extent of his liability thus incurred a purchaser for value, yet, as he neither gave nor surrendered a note or security of any description for the demand due him individually, he did not, within the rule stated, acquire (at least to the extent of that demand) any equity in the draft superior to that of Ryder, and to that extent the action was defended upon the principle that he is only to be considered a bona fide purchaser to the extent to which he has paid value. (Edwards v. Jones, 7 Carr and Payne, 633; Williams v. Smith, 2 Hill, 301, 302; Stalker v.McDonald, 6 id., 93, 96; Huff v. Wagner, 63 Barb., 215, 229 to 236; Weaver v. Barden, supra, 295.)

The judgment rendered at Circuit and the judgment appealed from should be reversed and a new trial ordered.

All concur with EARL, C., GRAY, C., expressing no opinion upon the first point discussed by EARL, C.

Judgment reversed.