Byron H. Sykes, Resp't, v. Abram Temple, App'lt.
(Supreme Court, General Term, Third Department,
Filed May 9, 1893.)
1. Bills and notes—Agreement to become principal.
Plaintiff "was an accommodation indorser on a note signed by one F., as agent, and was obliged to take up the same. In an action thereon plaintiff testified that at the time of the indorsement defendant said he was the principal thereon. It appeared that the note was made to raise money to enable F. to purchase the interest of his partner in a business; that defendant was trying to assist him, and to secure it against F.’s creditors agreed to become principal in the business, with F. as agent, and the bill of sale was made to him. Held, that a finding that defendant was also the principal on the note was correct.
3. Same—Evidence.
The admission in such case of evidence that defendant paid similar notes made by F. as agent subsequently, is proper for the purpose of showing that defendant carried on the business, and that the transfer was not colorable.
Appeal from judgment in favor of plaintiff, entered upon the report óf a referee.
Action to recover moneys which plaintiff was compelled to pay as indorser of a note signed by F. W. Fogg in the name of “ A. *780L. Fogg, agent,” and as to which plaintiff claimed that defendant was the principal or maker.
The following is the opinion of the referee:
J. W. Houghton, Referee.—The plaintiff sues defendant for the amount paid by him as accommodation indorser of a note of $3,600, signed “A. L. Fogg, Agt.”
The issue is, whether defendant was the maker or principal of said note. It is undisputed that F. W. Fogg, the husband of A. L. Fogg, had for a number of years done business either in his own name as agent or in that of A. L. Fogg, and that at the time of the making of the note in question he was a sharer in the profits with one Getty, who, however, owned the entire stock of goods. Fogg was desirous of making some different arrangement and of obtaining some person to buy Getty out or indorse a note for that purpose. Overtures were made by him to a number of his customers and friends to indorse a note to the amount of $4,-000 to make such purchase and give him some surplus to start anew. Fogg seems to have had a remarkable faculty of getting help and the scheme was on the point of being perfected, when, as it is claimed by plaintiff, the plan was changed because of feared embarrassment from old debts of Fogg, and the defendant became principal in the purchase and business.
It is conceded that the defendant did take a bill of sale from Getty of the goods valued at $3,400, and executed to Fogg a power of attorney to transact the business, which was conducted for two years or more, at which time defendant found himself indebted for purchases by Fogg to the amount of several thousand dollars, whereupon he sold the remaining stock and paid the business creditors.
Defendant was one of the nine or ten men who had consented to indorse the note in question, but instead of indorsing, lie put into the bank to the credit of “A. L. Fogg, Agent,” his own note for $400, and eight others, including plaintiff, indorsed the note signed “A. L. Fogg, Agent.” As the witnesses and evidence were produced upon the trial I was impressed with the idea that defendant in fact became principal of the note in suit,, and a careful perusal of the evidence, after an unusually long interval, has confirmed me in'that view.
The reasons why he did- that are more difficult to conjecture, unless he imagined he would have greater control over the business and thus be in better position to protect himself from loss. He seems to have failed to carry out these intentions if that was his reason, for the reckless manner, to use a mild term, of Fogg’s conduct of the business received no check from him until matters became ruinously involved.
The assuming of the position of principal occurred in the midst of negotiations of Fogg for raising the $4,000, and defendant's own evidence in some respects corroborates the plaintiff’s contention.
I cannot come to any other conclusion than that the note was indorsed by some, at least, of the indorsers before it was signed upon its face.
*781The evidence of some of the indorsers shows them to have beeon unaccustomed to lending their names in that manner, and the occurrence was one which impressed it upon their minds.
They are positive that no maker’s name appeared upon the face of the note when they indorsed, and in this respect corroborate Fogg, who does not commend himself by the management of his trust, but who, nevertheless, may tell the truth.
Defendant, at the time of the signing of the note, took title to the stock of goods, and §3,400 of the proceeds went to pay Getty for it, and $200, together with his own $400, went to the credit in the bank of “A. L. Fogg, Agent,” whom he concedes was his duly accredited agent.
The deposit belonged to defendant as well as the stock of goods. If his contention is true, the day after the transfer he •could have stopped the business and presumably sold at the price paid for the stock, and been at least $3,600 ahead, not counting his own note of $400.
I think the circumstances all show that defendant assumed the position that plaintiff claims he did, and that he became principal of the note as well as of the business.
I have reached this conclusion with reluctance, because of the hardship which it imposes upon defendant, who has already suffered great loss by his attempted accommodation of Fogg. It is an unfortunate position, which defendant might, however, have saved himself from by greater diligence.
Potter & Lillie (J. Sanford Potter, of counsel), for app’lt; Jurden E. Seeley, for resp’t.
Per Curiam.
We are satisfied, after a careful examination of the evidence, that the conclusion reached by the referee on the question of fact presented to him cannot be disturbed.
Plaintiff testified that before indorsing the note described in the complaint defendant said he was the principal on the note and the rest were to indorse it. The referee believed this statement, as he had the right to do. The conceded facts of the case tend to show -the truth of plaintiff’s testimony. The note was given for the purchase price of a stock of goods transferred by Getty to defendant, and which goods were used in the business that defendant concedes he afterwards carried on as principal.
It was, therefore, probable that the note made to pay for the goods so transferred to defendant was made by him. It follows , that the judgment should be affirmed on the opinion of the referee unless some exception taken on the trial requires a reversal.
It is claimed that the referee erred in receiving testimony showing that defendant subsequent to the giving of the note in question paid other notes similarly signed “ A. L. Fogg, Agent” That •evidence of such similar transactions, they being subsequent to said note, should not have been received.
The question in the case was whether the note signed “ A. L. Fogg, .Agent,” on which defendant was sought to be charged, was or was not defendant’s note. As bearing on that disputed question it was not improper to receive evidence showing that the *782consideration of the note was a stock of goods sold to defendant, and that such transfer was actual and not colorable. To that end it was competent to show that defendant after his purchase of said stock of goods, through Fogg, conducted the business and paid debts contracted by the latter.
The payment by defendant of notes and accounts contracted by “A. L. Fogg, agent," tended to show that defendant carried on the business, and hence that his purchase of the goods was actual and not colorable, and this fact rendered it probable that the note given for the purchase price of the goods was his. But the fact of the payment of subsequent notes made by “A. L. Fogg, agent, and defendant’s liability thereon, was conceded on the trial. The defendant testified, omitting such portions of his testimony as were objected to, as follows, viz.: “ I consented to become the principal in the business, and from that time until I sold out the store I was principal. * * * Fogg carried on the business, I being the principal, for about two years, and during that time Fogg incurred liabilities for gopds. * * * In the name of A. L. Fogg, agent * * * * I supposed I was liable for them. These liabilities were part in notes signed A. L. Fogg, agent,’ and part in accounts that he had incurred in that time.’’ Thus the fact of the liability of the defendant upon subsequent notes was conceded on the trial, and the reception of the evidence objected to by defendant could produce no injury to him.
It is also claimed that the referee erred in overruling objections to testimony of the witness Baker as to conversations with Temple and Goodman. We think the testimony of the witness - as to conversations with Temple properly received as tending to impeach Temple. The conversation with Goodman detailed by the witness only related to the undisputed fact of the agreement that defendant should be principal of the store, and as to the bill of sale being made- to him. Hence, the error, if any, was not material and is not a ground for reversal. Wright v. Reusens, 133 N. Y., 306; 45 St. Rep., 183.
The judgment should be affirmed, with costs.
Herrick, J., concurs.