Opinion
December, 1907.
Mandelbaum Brothers (B.F. Einstein, of counsel), for appellants
Max D. Steuer, for respondent.
The defendants were indorsers upon and had procured the discount, by the German Exchange Bank, of a promissory note of one Aronowsky, their brother-in-law. When the note became due, Aronowsky gave the defendants his check upon the plaintiff bank, where he kept an account under the name of the Empire Belt Purse Company, for $1,000, to take up the note. The defendants indorsed this check and delivered it to the German Exchange Bank. It reached the plaintiff bank through the clearing house on March 10, 1903, at about eleven thirty A.M. Devlin, plaintiff's cashier, finding that Aronowsky did not have sufficient funds to meet the check, sent word to Aronowsky's place of business of the receipt of the check and the condition of his account. Devlin testified that, shortly afterward, one Liebowitz, a bookkeeper of the defendants, came to the bank and stated that the defendants were very anxious to have the check paid "because they did not wish it to come back to their bank" and promised that, if the plaintiff would honor the check, the defendants would within a day or two procure the assignment to the plaintiff of certain outstanding accounts due Aronowsky, the payment of which the defendants would guarantee. Devlin, after consulting with Radt, the vice-president of the plaintiff, told Liebowitz that, if he would bring, before two P.M., what the plaintiff considered satisfactory accounts, it would pay the check. He returned before two P.M. with a number of "bills and shipping receipts" which he delivered to the cashier and, after they had been examined, the check was paid. Liebowitz stated that Aronowsky was ill and that they could not then get his signature to make the proper assignment of the accounts, but that the plaintiff need not worry as the defendants were behind it and that, as soon as Aronowsky was better, they would procure "his signature to the accounts." This was never done. Aronowsky, later, repudiated the whole transaction, and said that he had never authorized it; that it was all the work of the defendants and that the plaintiff bank must look to them. He collected the accounts and, later, went into bankruptcy. He continued his account with the plaintiff until April 1, 1903. After March tenth it was continuously overdrawn. On the sixteenth the overdraft was reduced to $181.99, but when the account was closed on April first it amounted to $908, for which amount the plaintiff obtained judgment below. The plaintiff subsequently brought suit against Aronowsky to recover the balance, but Aronowsky went into bankruptcy and the action was abandoned. Devlin, the cashier, was corroborated by Radt, the vice-president. Liebowitz, however, contradicted both as to what occurred at the time the check was paid.
The principal defense relied upon by the defendants was that the "agreement, promise or undertaking" of the defendants, if there was any, "is a special promise to answer for the debt, default or miscarriage of another person" and, therefore, void under the Statute of Frauds. The trial justice decided that this was an original undertaking of the defendants, and I think his decision was correct. Aronowsky received no benefit from the honoring of the check except a substitution of creditors. If the check had not been honored, he would have been indebted to these defendants; by the honoring of the check he became indebted to the plaintiff. All the benefit of the transaction accrued to the defendants. Furthermore, the undertaking of the defendants was not to make good the $1,000 if Aronowsky did not, but was to procure the assignment to the plaintiff of certain accounts due to Aronowsky, and to guarantee these accounts and, in the event that they failed to do this, to pay the amount of the check. Aronowsky was not obligated to assign the accounts, even if the bank did honor his check. In that event, his obligation was to pay $1,000, an entirely different thing. "It is well settled that promises which are in form collateral are in reality original when founded upon a new and independent consideration, and when the promisor receives the benefit, and will be so construed." Wysong v. Meyer, 58 A.D. 422, 426; Raabe v. Squier, 148 N.Y. 81; Clark v. Howard, 150 id. 232.
The court submitted to the jury the question whether or not Liebowitz was the duly authorized agent of the defendants in the transaction, and also whether or not this money was advanced by the plaintiff upon the undertaking of the defendants that these accounts would be assigned to the bank by Aronowsky within a few days. The jury determined each of these questions in the affirmative. The appellants urge that the delivery of the accounts constituted an assignment thereof. There is, however, no evidence tending to show that Aronowsky, at the time, either authorized or had knowledge of their delivery; on the other hand, he later told to the plaintiff's cashier that the transaction was wholly without his knowledge and was altogether that of the defendants.
GILDERSLEEVE and GUY, JJ., concur.
Judgment affirmed, with costs.