Coghlin v. May
Before: Baldwin
Synopsis
Where defendant made and delivered to K. & Co. her note, to be used by them only as collateral security to raise money or get credit, and they so used it, and afterwards took it up from the pledgees : Held, that K. & Co. could not then sue on the note, as it had answered its purpose; and that plaintiff having taken the note after maturity, and upon no new consideration, took it subject to the same defense.
Baldwin, J. delivered the opinion of the Court Cope, J. concurring.
We understand from the evidence of the witness Kendrick— which proof seems to be uncontradicted—that the note was not given by Mrs. May as evidence of indebtedness by her, or with the understanding that it was to be held or enforced against her ; but that it was given only to be used as collateral security by Kendrick & Co., for the purpose of their raising money or getting credit on it. It seems they did use it for this purpose, and after-wards took it up from the pledgees. This being so, it had answered its purpose, and Kendrick & Co. having only got it to use in this way, could not sue on it; for it was not, for any such purpose, the property of these payees, or the liability of the payor. It was a mere accommodation paper, which the nominal payees could not use against the person lending her signature for their benefit. This was a good defense to the note in the hands of Kendrick & Co., and the note having been transferred after maturity, and upon no new consideration, the assignee took it subject to the same defenses.
Judgment reversed, and the cause remanded.'
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