
    The National Park Bank of New York, Respondent, v. Philip S. Saitta, Appellant.
    First Department,
    July 8, 1908.
    Bills and notes — drafts — consideration for acceptance—defense against bona fide holder.
    Action against the acceptor of a bill who defended on the ground that his acceptance was conditioned on the delivery of certain bills of lading by the plaintiff as security, which -delivery was never made. Evidence examined, and held, to sustain a finding against such contention.
    An acceptor of a bill cannot, as against a bona fide holder for value, defend on the ground that the acceptance was without consideration or for accommodation.
    Appeal by the defendant, Philip S. Saitta, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the cleric of the county of New York on the 22d day of October, 1907, upon the verdict of a jury, and also from an order .entered in said clerk’s office on the 30th day of October, 1907, denying the defendant’s motion for a new trial made upon the minutes.
    
      Albert A. Wray of counsel [Carl L. Thiele, attorney], for the appellant.
    
      Louis F. Doyle, for the respondent.
   Clarke, J.:

The complaint alleges that on or about the 1st day of August, 1905, at the city of New York, one Mauro drew his draft or hill of exchange directed to the defendant at Genoa, Italy, and thereby required the defendant to pay to the order of said Mauro 13,750 lire sixty days after the date of said bill of exchange; that thereafter on or about the 29th day of August, 1905, the defendant accepted the said bill of exchange; that thereafter, before maturity, the said Mauro duly indorsed and delivered the same and before maturity the said draft came into the possession of said plaintiff for value and the plaintiff still is the owner and holder thereof; that said bill of exchange was duly presented to the defendant, payment thereof was duly demanded, but was refused, and no part has been paid. Wherefore plaintiff demands judgment for $2,581.25.

The answer alleges that on or about the 1st day of August,1905, at the city of New York, one Mauro di-ew his certain bill of exchange in writing dated on that day, directed to this defendant at Genoa, Italy, and thereby requested this defendant to pay to the order of Mauro the sum of 13,750 lire sixty days after date of said bill of exchange; that thereupon said bill of exchange was presented to the plaintiff for discount and annexed to said bill of exchange were the documents or bills of lading for certain goods, wares and merchandise which were to be delivered to this defendant upon acceptance of said bill of exchange ; that thereupon plaintiff took into its possession and retained in its possession until the time thereinafter mentioned, the said bill of exchange, together with said bills of lading, and on the security of such delivery of such documents plaintiff discounted said bill of exchange and paid to said Mauro the sum of $2,641.06, which was equivalent to the amount of said draft, less interest, commissions and charges of said plaintiff for discounting the said bill of exchange; that at said time it was agreed and understood between the plaintiff and this defendant that upon defendant’s acceptance of said draft the plaintiff would deliver, or cause to be delivered, to defendant the bills of lading so delivered to the plaintiff at said time ; that on or about the 22d day of August, 1905, this defendant did accept said bill of exchange and requested of the Banca Commerciale, the agent or representative of the plaintiff at Genoa, the bills of lading for said goods, wares and merchandise; that after such acceptance of said bill said Banca Commerciale refused to deliver to this defendant said bills of lading; that the plaintiff, or its agent aforesaid, failed and refused to deliver to this defendant the documents or bills of lading for the goods, wares and merchandise, in consideration of the delivery of which, which delivery was to be made at the time of acceptance of said bill of exchange, this defendant accepted said bill of exchange, and in consequence thereof there was an entire failure of consideration for the acceptance by this defendant of said bill of exchange and no consideration ever passed to this defendant, either from said Mauro, the drawer of said bill of exchange, or from the plaintiff herein, who discounted said bill of exchange prior to its acceptance by this defendant as aforesaid.

It will be seen that by his pleading the defendant admits the making of the bill of exchange drawn upon him, its delivery to and discount by the plaintiff for value, its presentation to him before maturity, and acceptance by him, and that the defense set up is want of consideration flowing to him for that acceptance.

The defendant attempted to establish that at the time of the discount of the bill, the plaintiff agreed that the bills of lading attached should be delivered to him upon acceptance of the bill of exchange. Testimony controverting this was introduced by the plaintiff. This question was submitted to the jury, who found in favor of the plaintiff.

The defendant also attempted to establish that he had accepted the draft in reliance upon the promise that the bills of lading would be delivered upon such acceptance, and that at the time of acceptance he informed the plaintiff’s agent that he was only accepting the draft on the understanding that the bills of lading would be delivered to him. This testimony was also controverted by testimony for the plaintiff. Although the answer did not squarely present that defense the court charged: “ That if you find that at the time the defendant wrote his acceptance across the face of the draft, he demanded that the plaintiff’s agent deliver to him the bill of lading accompanying the same, and that he informed the plaintiff’s agent at such time that he was only accepting the draft on the understanding that such bill of lading would be delivered to him, and then and there demanded that his said acceptance be stricken from the said draft unless the said bill of lading should be delivered to him, and that the plaintiff and its agent refused to deliver the said bill of lading and refused to strike said acceptance from said draft, yon may find that the writing of the word ‘Accepted ’ across the face of said draft, followed by the signature of the defendant, was not intended to be and was not in fact an acceptance of said draft, and .you may treat the same as if it had not been written by the defendant, and may find a verdict for the defendant.” This was a far more favorable charge than the defendant was entitled to upon his pleadings. The jury resolved this question in favor of the plaintiff.

So that both of the foregoing questions upon which the evidence was conflicting were submitted to the jury in a charge favorable to the defendant, and having been found against him by the jury, we cannot say that that finding was contrary to the evidence or against the weight thereof.

The final point to be considered is the defense of failure of consideration. The. Negotiable Instruments Law (Laws of 1897, chap. 612) provides in section 60: “ Every negotiable instrument is deemed prima facie to have been issued for a valuable consideration, and every person whose signature appears thereon to have become a party thereto for value.” When this defendant accepted this bill he, therefore, was presumed to have accepted it for a valuable consideration. Section 221 provides that “the holder of a bill, presenting the same for acceptance, may require that the acceptance be written on the bill, and if such request is refused may treat the bill as dishonored.” This provision is not confined to sight bills, but seems to be applicable to all bills of exchange. Consequently, if the bank in Genoa had presented the bill to the defendant for acceptance, although the date of payment was fixed, and the drawee had refused to accept it, the plaintiff would have been entitled to treat the bill as dishonored, and would have acquired the immediate right to call on the other parties to the bill.

Section 246 of the act provides: “ A bill is dishonored by nonacceptance * * * when it is duly presented for acceptance, and such an acceptance as is prescribed by this act is refused or can not be obtained.” Section 247: “ Where a bill is duly presented for acceptance and is not accepted within the prescribed time, the person presenting it must treat the bill as dishonored by non-acceptance or he loses the right of recourse against the drawer and indorsers.” Section 248: “ When a bill is dishonored by non-acceptance, an immediate right of recourse against the drawers and indorsers accrues to the holder, and no presentment for payment is necessary.”

Although when such a bill is made payable at a day certain at a fixed time after its date, presentment for acceptance before that time is not necessary in order to charge the drawer or indorsers, it is to the owner’s interest that the bill should be so accepted, as only by accepting it does the drawee become bound to pay it, and until such acceptance the owner has for his debtor only the drawer, and the step is one which a prudent man of business, ordinarily careful of his own interests, would take for his protection. (Allen v. Suydam, 17 Wend. 368.) A bill payable at a fixed period from its date may be presented for acceptance at any time. (Bachellor v. Priest, 12 Pick. 399; Oxford Bank v. Davis, 4 Cush. 188.)

It is settled that as between remote parties to a bill of exchange, as the payee or indorsee and the acceptor, in order to sustain the defense of no consideration, two considerations at least must come in question : First, that which the defendant received for his liability; and secondly, that which the plaintiff gave for his title. “An action between remote parties will not fail unless there be absence or failure of both of these considerations. * * * It is immaterial when an acceptance is made; it may be made at any time and the rights of the payee and of endorsees are the same after it is made whether they were acquired in anticipation of it or subsequent to it. * * "x" Where, as in the case at bar, there is an acceptance upon the bill it makes no difference in the rights of payees or endorsees whether they became such before or after the acceptance. * * * The instrument is negotiable before acceptance and the acceptance is an acknowledgment of the debt it represents, and an absolute promise to pay it to the person who is or shall become the holder of the bill; and to allow a want of consideration for the acceptance to defeat the right of a Iona fide holder, whether he became such before or after the acceptance, would be contrary to the nature and purpose of bills of exchange and to the uniform usage in regard to them.” (Arpin v. Owens, 140 Mass. 144; Daniels Neg. Inst. [5th ed.] 174a.)

In Heuertematte v. Morris (101 N. Y. 63) the action was brought upon defendant’s acceptance of a bill of exchange drawn upon him at ninety days. Defendant offered to show that the acceptance was made without consideration and was induced by fraudulent representations on the part of the drawer. This was objected to and excluded. Huger, Ch. J., said : “ If a party becomes a bona fide holder for value of a bill before its acceptance, it is not essential to his right to enforce it against a subsequent acceptor that an additional consideration should proceed from him to the drawee. The bill itself implies a representation by the drawer that the drawee is already in receipt of funds to pay and his contract is that the drawee shall accept and pay according to the terms of the draft, -x- * -x By such acceptance the drawee admits the truth of the representation, and having obtained a suspension of the holder’s remedies against the drawer and an extension of credit by his admission, is not afterward at liberty to controvert the fact as against a bona fide holder for value of the bill. The payment to the drawer of the purchase price furnishes a good consideration for the acceptance which he then undertakes shall be made, and its subsequent performance by the drawee is only the fulfillment of the contract which the drawer represents he is authorized by the drawee to make. The rule that it is not competent for an acceptor to allege as a defence to an action on a bill that it was done without consideration or for accommodation, as against a bona fide holder for value of such paper, flows logically from the conclusive force given to his admission of funds and is elementary.”

As it is conceded that the plaintiff was the bona fide holder for value of the bill in question, the foregoing statutory provisions and authorities conclusively establish that the defendant failed in his defense of want of consideration flowing to him for his acceptance.

As we have discovered no error in this record which requires interference with the judgment the judgment and order appealed from should be affirmed, with costs to the respondent..

Ingraham, Lahghlin, Houghton and Scott, JJ., concurred.

Judgment and order affirmed, with costs.  