Howard v. Bank of Metropolis

O’Brien, P. J.:

The case was before this court on a former appeal, wherein all the facts and questions involved were fully stated in the opinion, and need not be here repeated. (Howard v. Bank of Metropolis, 95 App. Div. 342.) The nature of the action, as therein shown, is one brought by Howard against the bank to recover the damages which he claimed to have sustained in consequence of the failure of *327the bank to give the indorser proper notice of protest, and upon proof which lias been again introduced upon the present trial, from which the appeal is taken, it was held by this court on the former , appeal that “ a cause of action in favor of the plaintiff was established by proof of the failure of the bank to perform the duty of giving notice to the indorsers, which it assumed when it undertook to collect the note.” After the plaintiff had made out a prima facie case the learned trial judge directed the attention of the jury to the various questions of fact involved, and, in effect, instructed them that if they found for the plaintiff, upon the subject of damages there were two elements which they should consider. As correctly stated by him : The measure of damage ordinarily which the holder of a note is entitled to recover from a bank, as here, in failing to give notice of protest is the actual loss suffered — the real loss occasioned by the default of the bank. * * * The plaintiff could have sustained no loss, of course, by any default of the bank except nominal damages if at the time the note matured the indorser * * * was actually insolvent.”

The trial judge also charged that if the plaintiff was induced to bring the action which he did — seeking to charge the indorser — by request of the bank or as the result of any misrepresentation upon its part, then the costs and expenses of that litigation could be recovered as part of the plaintiff’s damages. It was insisted by the defendant that upon the evidence the plaintiff was only entitled to recover nominal damages, the claim being that the evidence was overwhelming that the indorser was insolvent, and that there was not sufficient proof of a request from the bank or such misrepre-*' sentation of the facts as would render the bank liable for the expenses of the former suit.

Upon the close of the evidence the counsel for the defendant asked the court to hold that as matter of law the plaintiff had only shown himself entitled to recover, if anything, nominal damages. The court seemed inclined to take this view of the effect of the evidence, but counsel for the plaintiff suggested that he submit the question to the jury and take their verdict and if favorable to the plaintiff the court could then set it aside. This was the course finally pursued and the ease was submitted to the jury, which found a verdict in favor of the plaintiff for the face of the note and *328interest, and in addition the expenses pertaining to the litigation . against the indorser with interest. Upon a motion then made by the defendant to set aside the verdict as against the weight of evidence as contrary to law and upon the other grounds specified in section 999 of the Code of Civil Procedure the court reserved its decision, and subsequently made an order reducing the verdict to six-cents, and the principal question presented on this appeal is as to whether this order, on which the judgment appealed from is entered was right. - •

There can be ño doubt.but that it was within the power of’ the court, entertaining the View it did of the evidence upon disputed questions.of fact as to the amount of damages suffered, to set aside the verdict as against the weight of evidence and- direct a new trial, but we have found no sanction foi-a practice which will permit the court of its own' motion after the jury has refuméd a verdict to reduce it to a nominal amount.

It must be conceded that the question of the insolvency of the indorser,, as well as the question of whether the plaintiff was induced to bring the former action against the indorser either by request or misrepresentation off the bank, were questions of fact for the jury upon conflicting"evidence, and we are inclined upon the question of the insolvency of .the indorser, considering the presumptions of solvency which exist, to regard' this also as a question of, fact for the jury. If the verdict was favorable to plaintiff the trial judge had still the right, upon the ground of being against the weight of evidence, to have it set aside.

Upon the other question, as to "the right to recover expenses incurred by the plaintiff in a former action to charge the indorser, there is authority for the proposition that where a bank has been guilty of negligence in giving notice of protest to the indorser whereby the indorser is released and the owner of the note has knowledge of the negligent acts, his cause of action is complete, and if he seeks to recover from the indorser he cannot subsequently ' recover from the negligent collector the expenses of such prior action unless it: was induced by a. request or misrepresentation on , the part of the collector. (Hitchcock v. Bank of Suspension Bridge, 57 App. Div. 458; Downer v, Madison County Bank, 6 Hill, 648; Ayrault v. Pacific Bank, 1 Abb, Pr. [N. S,] 381.) *329The first of these cases is seeming authority also for the converse proposition that where there' has been either request or misrepresentation on the part of the officers of a bank which has led the owner of a note to seek to charge in an action the indorser, if unsuccessful because of the negligence of the bank, the expenses of such prior suit can be recovered. Here the evidence shows that the plaintiff received a letter from the defendant bank which read as follows : “ Our attorney claims that as the protest notice to Ira Van Grieson was not returned to him that it must have been delivered ; also that if the name is illegible that it is practically a waiver of notice-of protest.- He says see a lawyer in regard to collecting.” Plaintiff also testified that defendant’s noté collector told him the notice of protest had been sent to Ho. 1 Madison avenue. We have, on the other hand, the fact that the plaintiff learned from the notary before the case came on for trial that the notice had been sent to “ Waran Gilson ” in plaintiff’s care.

As to this element of damage, therefore, as correctly held by the learned trial judge, there was also a question of fact for the jury which, under the principle established by McDonald v. Met. St. D. Co. (167 N. Y. 66) and the cases which have since followed that decision, the trial court was bound in the first instance to submit to the jury, and if of the opinion that the verdict when rendered was against the weight of evidence the court had the power to set aside the verdict and direct a new trial. We find no sanction for the practice that where the jury has rendered a verdict in favor of the plaintiff the court in disposing of a motion to set aside the verdict and grant a new- trial under section 999 of the Code of Civil Procedure can instead enter an order reducing the verdict to nominal damages and then direct a judgment to be entered for such amount.

As the relief to which the appellant would have been entitled had the court entered the proper order would be a new trial, it follows that the disposition to be made upon this appeal is to reverse the judgment and order, with costs to the appellant to abide the event, and to direct a new trial of the action. Judgment accordingly.

Patterson, Ingraham, Laughlin and Clarke, JJ., concurred.

Judgment and order reversed and new trial ordered, with costs to appellant to abide event.