Whitehead v. Heidenheimer

Ingraham, J.

(concurring) :

I concur with Mr. Justice Rumsey in his conclusion that the defense of usury was not sustained by the evidence, and also concur, though with some hesitation, in sustaining the exceptions to the direction of a verdict upon the ground that there was a question for the jury as to whether, by the acceptance of these drafts, the defendants became sureties for the drawers, and that, if the jury should so find, then the defendants would be entitled to credit for any securities that the plaintiffs’ testator had delivered up to the drawers of the draft as the principal debtors. It is undoubtedly true that under the agreement between Wilhelm Heidenheimer, the drawers of these drafts and the original plaintiff, the plaintiff was to give Wilhelm Heidenheimer a credit which was to be made available by the plaintiff’s purchasing drafts drawn by Wilhelm Heidenheimer upon the defendants in New York ; and it was under this arrangement that the drafts in question were delivered to the plaintiff, who paid to the drawers the amount called for by the drafts after deducting certain commissions and interest; the plaintiff then transmitted the drafts to New York to the defendants for acceptance. This transaction upon its face would be simply a sale of commercial paper, *600and, upon the acceptance,of the drafts, the defendants would become the principal debtors, the drawers occupying the relation of indorsers and liable only upon a failure of the acceptors to pay. I do not understand that the fact that the acceptor has no funds of the ■ drawer of the draft in his hands makes any difference in the legal obligation of the acceptor to pay ; it would not of itself make the . drawer of the draft the principal debtor and the' acceptor a surety. If the defendants accepted the drafts upon the credit of the drawers, or upon their promise to supply funds to pay the drafts at maturity, the liability of the acceptors would be the same as though . they had in their hands money0to pay the drafts at the time of the acceptance. Tó change the actual relations of the drawers and acceptors to the plaintiff, there must be evidence to show that, although the transaction was in form the transfer of these drafts, the substantial agreement between the parties, including the defendants, was a loan of money to the drawers of the drafts, to whom the plaintiff looked for repayment, and that it was understood, although the defendants in. form became the principal debtors by the acceptance of the drafts, that the real relation was that they were to be sureties and that their obligation to the plaintiff was conditional upon the failure of the drawers of the drafts to make provision for then-payment.

I am inclined to think that there was testimony which required the submission of this question to the jury, and that if the jury should find that the real agreement between these three parties was a loan of money to the drawers of the drafts, the drawers being the principal debtors, and that the plaintiff had knowledge' that' the acceptance was Without consideration and to carry into effect this agreement to give Wilhelm Heidénheim'er a credit, then the question ■ suggested by Mr. Justice Rumset as to the right of the defendants to have applied on account of these drafts the value of the securities held by the plaintiff would arise. I do not agree, however, that the mere fact' that they accepted these drafts without funds in their hands to pay them at maturity, would change the relation of the plaintiffs to the drafts so as to prevent a recovery. If the plaintiff in Germany had purchased these drafts before acceptance, he would have had a right to secure himself against a failure of the drawees to accept them,, and to hold any securities received for that purpose; *601and the defendants, the acceptors, would have no right to demand that such securities be applied to the payment of the drafts, for by the acceptance, whether made strictly for accommodation or not, the acceptors became the principal debtors, and they then by their contract .became bound to pay the drafts at maturity and liable to the holders of the drafts in case of non-payment.

Van Brunt, P. J., concurred.

Exceptions sustained and motion for new trial granted, with costs to defendants to abide event.