Reynolds v. Doyle

Bogenshutz, J.:

In addition to a general denial, defendant asserts a special property right — that the property was delivered to him as a pledge *779to secure plaintiff’s obligation as an accommodation indorser on a note made by her husband; James Reynolds, to defendant as payee. The note is dated in November, 1916, and is payable on demand. Plaintiff indorsed it for the accommodation of her husband. To secure the defendant payee on her obligation as indorser she deposited the article as a pledge.

. Plaintiff contends that she is entitled to its return, because on March 29, 1923, the date of the commencement of this action, her obligation as indorser on the note no longer existed. That the note was never presented is not disputed. In support of her contention she invokes the rule that a failure to present a demand note within a reasonable time after its issue and give notice of dishonor will release the indorser. (Neg. Inst. Law, §§ 114, 116, 131.) What is a reasonable time depends on the particular circumstances in each case. (Commercial Nat. Bank v. Zimmerman, 185 N. Y. 210; State of New York Nat. Bank v. Kennedy, 145 App. Div. 669; American Trust Co. v. Manley, 195 id. 811.) The circumstances attending the present transaction, the general attitude of all the parties to the instrument, the payment of interest, and the pledge of the property as security seem to indicate a general consent to extend the time for presentation.

Assuming, however, that plaintiff, because of time, was released of her obligation as indorser of the note, and could successfully resist any attempt of defendant to hold her thereon, I find no rule of law by which the pledged property is released. It was pledged by plaintiff to insure payment of the note. The note has not been paid. Under the circumstances disclosed by the proof, the condition under which plaintiff is entitled to a return of the property has not arisen. In the absence of any agreement to the contrary, defendant’s right to resort to the pledged property for reimbursement remained, even though his right to sue on the note was lost. (.Hancock v. Franklin Ins. Co., 114 Mass. 155; Shaw v. Silloway, 145 id. 503; Jones v. Merchants' Bank of Albany, 29 N. Y. Super. Ct. [6 Rob.] 162.)

The contention that a cause of action on the note is barred by the Statute of Limitations, and consequently the security given is released, is without merit. (Hulbert v. Clark, 128 N. Y. 295; 14 L. R. A. 59; Hutson v. Title Guarantee & Trust Co., 118 Misc. 795, 798; Civ. Prac. Act, § 53.)

There must be judgment for defendant.