Lenheim v. Wilmarding ( 1867 )

The opinion of the court was delivered, March 30th 1867, by

Agnew, J.

— The court below directed a verdict for the plaintiff upon the evidence in the case if believed. We have, therefore, to look at the evidence to see whether the instruction was correct. It is argued that this direction was proper because the note was accommodation paper. But this was not accommodation paper in the strict sense of that term, to wit, a loan of the maker’s credit without instruction as to the manner of its use: Lord v. Ocean Bank, 8 Harris 384; Moore v. Baird, 6 Casey 138. The evidence is distinct and clear that the note never was delivered to the maker for any purpose, but that it was one of four blank notes left by L. S. Lenheim, the endorser and defendant in this suit, with a brother of the maker and himself, for the sole purpose of being filled up by him and given to Hunt, Tillinghast & Co., of New York. It was put by the brother into the safe, and was missed by him, and he afterwards ascertained the maker had taken it from the safe, filled it up and given it to the plaintiff. This was clearly not a general loan of the endorser’s credit, but an unfinished and imperfect note, deposited with a third party for a special purpose, and purloined and used by one to whom it was not delivered, for a different and unauthorized purpose. Clearly this was a fraud upon the rights of L. S. Lenheim. He had not agreed to put his name on the back of this note for the benefit of the maker at all events. He had restricted his liability, and placed the paper in the hands of a disinterested person to carry the special purpose into effect, and the paper was surreptitiously taken out of his friendly custody. The endorser may have had good reason for this. He might be'willing to guarantee the payment to Hunt, Tillinghast & Co., and yet unwilling to send his name abroad into the market.

This brings us to the next question, whether the evidence disclosed such a possession oh the part of Wilmarding & Co., the plaintiffs, as would protect them. Here again the plaintiffs utterly failed to sustain their case. Charles Yannier, the only witness who spoke on this point, says, H. S. Lenheim, the maker of the note, was indebted to the plaintiffs in the sum of $2800, for which they held his notes, and that, being unable to pay them at maturity, he gave the plaintiffs a note of George Asher for $2250, and this note for the balance. The witness does not say that the latter notes were given in payment or as collateral, or whether the two notes were surrendered. In the first proposition made by H. S. Lenheim to the plaintiff, he asked for an extension of time on payment of one-half of the .first note in cash. This failed, and when the note in suit was delivered to the plaintiffs, whether they gave time, or surrendered the paper they held, or accepted the new paper in payment, the witness does not testify, and a jury could scarcely infer. As the evidence presents the case, the plaintiffs were not the holders in the usual course of business for a new and valuable consideration, but took the note from the maker himself, without sacrificing any right or parting with anything of value. Their position did not protect them from the fraud of the maker in his surreptitious possession and use of the note:' Lord v. Ocean Bank, 8 Wright. 386; Petrie v. Clark, 11 S. & R. 388 ; Depeau v. Waddington, 6 Whart. 232; Garrard v. P. & C. Railroad Co., 5 Casey 154; Struthers v. Kendall, 5 Wright 227. The court was therefore in error in their binding instruction to the jury on such evidence.

There is nothing in the bill of exceptions to the evidence which needs notice.

Judgment reversed, and a venire facias de novo awarded.