
    The Eighth Ward Bank of Brooklyn, Appellant, v. Etta Ehrlich and Albert A. Ehrlich, Respondents.
    
      Rifts and notes — when evidence that collateral was given as specific security for the discount of a promissory note insufficient.
    
    Appeal by the plaintiff from a judgment of the Supreme Court, entered in the office of the clerk of the county of Kings on the 3d day of October, 1904, and also from an order, entered in the same office on the 39th day of September, 1904, denying the plaintiff’s motion for a new trial.—
   Rich, J.:

This action was brought to recover upon a promissory note made by the defendant Etta Ehrlich, indorsed by, Albert A. Ehrlich, and by him delivered to" the plaintiff for value before maturity. The defendant Etta Ehrlich alleges that she was an accommodation maker, having executed the note in suit as a renewal of several preceding notes, the first of which was given to renew a note held by plaintiff, made by one Celia Ehrlich, indorsed by the defendant Albert A. Ehrlich, and discounted by plaintiff; that the note in suit and all preceding notes were executed by her solely for the accommodation of her codefendant without consideration; that plaintiff had knowledge of this fact, and also that, at the time she executed the first note, the plaintiff received from one Johnson, for whose accommodation the Celia Ehrlich note was given, securities excéeding in value the amount due upon the note in suit, yet these securities have been disposed Of 'by plaintiff, who has refused to apply the same or the avails thereof to the payment of the note in suit.. At the close of the evidence, a verdict was directed against the defendant Albert A. Ehrlich, and the case submitted to- the jury as to the defendant Etta- Ehrlich. Two questions of fact were submitted, as follows; First, whether the security was given to the bank by Johnson as a specific security for the first- note executed by the defend- ' ant Etta Ehrlich, and, if so, second, whether the. plaintiff had converted the security to its own use. We think the plaintiff was entitled to a "verdict against the defendant Etta Ehrlich in some amount. Her counsel conceded that plaintiff was entitled -to recover $100, and yet a verdict was returned in her favor and against the plaintiff. There was due and unpaid on the note on the day of the trial $2,801, and the defendant Etta Ehrlich was not. entitled tinder any circumstances to a greater credit than $2,719.20. The verdict, there-; fore, was clearly erroneous, and plaintiff’s' motion for a new trial ought to have been granted. ■ There is another reason why this judgment cannot stand. The evidence, was not sufficient, in our opinion, to warrant the submission to the jury o'f the question whether the plaintiff held the deed of. May twenty-eighth as a specific security for.the note in suit-. Upon the theory of the case adopted by the trial justice the defendant Etta Ehrlich, conceding her to have been an accommodation maker, established no defense to the note in suit. May 8, 1900, Johnson Was indebted to the plaintiff on notes made and indorsed by him to the extent of several thousand dollars] and had, therefore, given the hank several securities as collateral to such indebtedness. He was not indebted or liable to the bank on the Ehrlich note. This note was made payable to the order of the defendant. Albeit A. Ehrlich, who had procured it to be discounted by plaintiff, and had loaned the avails to Johnson, who had given his note' for the amount of such loan to Albert A. Ehrlich. ■ This ■ latter note was never in plaintiff’s possession.. On the day the. Ehrlich note matured Albert, who did not wish to renew it, went to the bank in company with Johnson. Ehrlich testified that he there said to plaintiff’s cashier: “‘Here is Mr. Johdson. He wants to-straighten out this note. * * .* Mr. Johnson is perfectly willing to give you security for the renewal note.’. I don’t want.to renew the note, but if you will accept the security I will go on the note — * * * Mr. Johnson previous to this said:

- ‘ You have security in the hank enough to cover this note, but I will give you additional security because I want Ehrlich to renew this'note.’ *•'-’* * Mr. Johnson said the money was got for his benefit. ' * * * It was accommodation and he wanted Mr. Brown to renew the note because he had the benefit of the money, and if he didn’t have enough security he would give him additional. * * * With reference to anything further to be given, Mr. Johnson said if he finds later he was not satisfied — he says that they had enough security, hut would still give him further collateral, anything, he would call upon him.” Johnson, speaking of this interview with the • cashier, says: “ I told him he had plenty of security there for any of my indebtedness and that I would like ’ * * * to have him renew it, and wanted it fixed up. He had a great deal of my property, and] .if he wanted any moré I would give it to him. I could not pay the note then. * * ■ '* •I persuaded Mr. Brown to renew the note. I think I offered him some deeds — one deed,—one or two at that time, and told him if he wanted anything else I would give it to him any time he wanted it; hecotiid have'anything or all I. had.” This conversation is denied by plaintiff’s cashier so far as it relates to any security given or to be given for the Ehrlich note. It appears that, at the time of his conversation with the-cashier, Johnson supposed that the note he had given to Ehrlich had been discounted by the bank.. The bank was procuring all the collateral it could on his general indebtedness, because of the fear entertained of ' his inability to pay, which ¿seems to have been justified, as he went into bankruptcy May twenty-eighth following. A brother of the defendant Albert testified that in, the early part of May, before the fifteenth, he had a conversation with plaintiff’s cashier Brown, in which the latter told him that his brother and Johnson had been down there and fixed up their notes; that Johnson had left some security there and had promised him more, and he thought it would be well to have more, and asked the witness to get the security of-Johnson which he had promised. Witness then testified: “ I.callcd on Mr. Johnson; I afterwards went hack to-Mr. Brown; I brought him two deeds, two papers. I had received those papers from Mr. Johnson a day or two before he made the assienment. * "*■ * I took them down to Mr. Brown.” On the day the proper “ deed ”• was executed-Johnson delivered his promissory note to this witness, .who discounted it with plaintiff. It does not appear from the evidence of this witness that the security received from Johnson was for specific security for defendants’ note; neither does his evidence show that he even made a request of Johnson for such security, or that he said anything to Johnson upon that subject, and the deed itself is silent as to the purpose for which it was given. Plaintiff’s cashier testified that he_ never received any security for the specific note in suit. Mot only is there no evidence warranting the conclusion that the deed was given to" secure the Ehrlich note alone, but it all points to the conclusion that the deed was given by Johnson to secure all of his indebtedness’to plaintiff. The judgment and order must, therefore, be reversed and a new trial granted, costs to abide the event. Hirschberg, P. J., Woodward, Jenks and Miller, JJ., concurred. Judgment and order reversed and new trial granted, costs to abide the event.  