Rosenbaum v. Roth (164 A.D. 617, 1914)

Clarke, J.:

The complaint alleges that on or about July 29, 1913, the defendant Paul Roth executed his promissory note in writing to the order of Gilbert Metals Selling Company for $636.18 for value received, payable four months after date with interest, and delivered the same to the payee therein named.

That thereafter and before maturity the said defendant Gilbert Metals Selling Company and the defendant Joseph M. Gilbert indorsed said note, and thereafter and before maturity said note so indorsed was delivered by the said Gilbert Metals Selling Company and Joseph M. Gilbert to the Acme Gas and Electric Fixture Company.

That thereafter, at the maturity of said note, the same was duly presented for payment by the Acme Gas and Electric Fixture Company above referred to, which said company was then the last indorsee and the holder thereof, and payment demanded, but payment was refused, whereupon said note was duly protested for the non-payment thereof at the expense of one and thirty-five one-hundredths dollars, of all of which due and timely notice was given to all and each of the above-named defendants.

That no part of said note nor the protest fees thereof has been paid.

That after said note was protested, but before the commencement of this action, the aforementioned Acme Gas and Electric Fixture Company, the last payee of said promissory note, sold, assigned and transferred unto this plaintiff its claim on said promissory note against the above-named defendants.

That the above-named plaintiff is now in the possession of said promissory note and is the true holder thereof.

The only defendant served with process was Paul Roth.

At the opening of the case plaintiff’s counsel said: “We claim one-half of the face amount of the note.”

The defendant admitted the making of the note, and the note, its indorsements, notice of protest and assignment were all' admitted in evidence.

Reduced to its ultimate analysis and accepting the defendant’s story at its face value, the transaction is this:

That Roth, needing money, gave Gilbert a note under Gilbert’s promise to him to have" it discounted and give him the proceeds for his use; that Gilbert gave him no proceeds of this note, but diverted it to his own use.

The plaintiff’s assignor’s story is that Gilbert represented to Weill that this was a merchandise note and that Gilbert was unable to discount it himself and requested Weill to do it for him and let him have the money; that Weill finally agreed to do so upon the representation that he could hold fifty per cent thereof as security until the note was paid; that Weill thereupon had the note discounted and gave Gilbert fifty per cent thereof; that all these transactions were before maturity, and Weill, therefore, now claims a recovery of the amount actually advanced, the value actually given in good faith, and before maturity, without the knowledge of the transaction between Gilbert and Roth, and without knowledge of the diversion by Gilbert.

. The court let in much testimony about a previous transaction with a third party under a promise to connect which was not kept, under objection and exception, and denied a motion to strike it out. He also refused to strike out the testimony