Altoona Second National Bank v. Dunn

Opinion by

Mr. Justice Heydrick,

Conceding that the learned court below was justified by the evidence in the finding that “ there was no misrepresentation on the part of Gardner to obtain the notes,” it does not follow that the appellant can be held beyond the amount, if any, which the bank advanced upon her credit. The plaintiff does not claim to have advanced more than about four hundred dollars upon the appellant’s credit, and there is some doubt whether that sum was not advanced before the note in controversy was made and without the knowledge, or any promise upon the part of the appellant. While it is quite clear that two of the parties to the note, Edward T. Dunn and Ellen Dunn, were indebted to the bank in the sum of 110,000 for which it held the note of the latter indorsed by the former and that it was pressing for security for this indebtedness, it is not pretended that it accepted the note in suit in payment, or surrendered the note which it already held. The cashier says that when Edward handed it to him he told him that it was not what he had promised, and was not satisfactory, and insisted that he get the signatures of the other heirs of his father to it. And when Edward brought in three other judgment notes for f3,338.83 J- each, signed by three of his brothers and sisters, the appellants in three other cases argued herewith, it does not appear that all together were accepted in payment of the original debt. On the contrary, Mr. Gardner says: “ Some time after that (the delivery of the last three notes) Mr. Dunn came in with a receipt drawn up, I do not remember the amount of it exactly but substantially it was an acknowledgment on our part that both these three notes and the one given by him a few days before for $10,000 were to secure the note of his mother held by us, and not for $20,000 indebtedness as the face of them would show. It appeared to me to be fair and right, and I signed and delivered it to Mr. Ed. T. Dunn.”

The bank, then, upon its own showing, held these notes as collateral security for an antecedent debt, and it did not even give time upon the original debt because the notes were payable one day after date and the evidence shows that that time must have elapsed before they were accepted. It was not, therefore, a bona fide holder for value: Lord v. Ocean Bank, 20 Pa. 384; Lenheim v. Wilmarding, 55 Pa. 73; Pratt’s Appeal, 77 Pa. 378; Royer v. Keystone National Bank, 83 Pa. 248; Carpenter v. National Bank of Republic, 106 Pa. 170.

The next question is as to the character of the note. If it were an accommodation note, that is to say commercial paper given without value to enable the party to whom it was given to use it for his own benefit without restriction as to the manner in which it should be used, there is no question that it could have been pledged as collateral security for an antecedent debt. “He who chooses to put himself in the front of a negotiable instrument for the benefit of his friend must abide the consequence and has no more right to complain if his friend accommodates himself by pledging it for an old debt than if he had used it in any other way.” Lord v. Ocean Bank, supra. And since accommodation paper, strictly so-called, in the hands of a pledgee for an antecedent debt is open to any defence, except want of consideration, that could be made to it in the hands of an original party, Cummings v. Boyd, 83 Pa. 372; Carpenter v. National Bank of the Republic, supra, it might be difficult to show why a sealed bill given for accommodation and without restriction as to the manner of its use might not be pledged in like manner as a negotiable note. But it is not necessary to decide this point. .The note was not signed by the appellant without restriction as to the manner of its use if she can be believed, and if it had been negotiable the present defence would have been available: Royer v. Keystone National Bank, supra. She testified that she signed it to enable her brother to obtain a loan; and in this she was not contradicted, nor did the learned court below find that she was unworthy of belief. The expression of this one purpose was the exclusion of every other, and a restriction upon the manner in which the note should be used. Being under no obligation to either her brother or the bank she could withhold her signature or give it upon her own terms, and because she had the right to im pose terms arbitrarily there can be no inquiry as to whether the use that was made of the note was more disadvantageous to her than that stipulated would have been.

For these reasons the decree of the court below is reversed and a procedendo is awarded.

Gabdneb v. D. A. Dunn.

The facts in this case do not differ in any material respect from the facts in Second National Bank of Altoona against Maggie Dunn argued herewith. For the reasons given in the latter case the decree of the court below is reversed and a procedendo awarded.

Gabdneb v. Agnes Dunn.

For the reasons given in the case of Second National Bank of Altoona v. Dunn involving substantially the same questions that are at issue in this case the decree of the court below is reversed and a procedendo awarded.

Gabdneb v. Annie Dunn.

For the reasons given in the case of Second National Bank of Altoona v. Maggie Dunn involving substantially the same questions that are at issue in this case the decree of the court below is reversed and a procedendo awarded.