United States Nat. Bank Of N.Y. v. Mcnair

• Decision Date: 10 April 1894
• Court: North Carolina Supreme Court
• Parties: UNITED STATES NAT. BANK OF NEW YORK v. McNAIR et al.

19 S.E. 361

114 N.C. 335

UNITED STATES NAT. BANK OF NEW YORK

v.McNAIR et al.

Supreme Court of North Carolina.

April 10, 1894.

Negotiable Note—Bona Fide Purchaser—What constitctes.

Where plaintiff rediscounted for a bank, along with other paper, a note of defendants, against which they claimed an equity, placing the proceeds to its credit, and, before notice of the equity, paid, on the checks of the bank half the amount of such proceeds, plaintiff was a purchaser for value, though, between the rediscount and the notice, plaintiff had credited other items to the bank, so that on the day of notice it owed the bank more than the proceeds of the rediscount.

Appeal from superior court, New Hanover county; Brown, Judge.

Action by the United States National Bank of New York against McNair & Pearsall on a promissory note. From the judgment, plaintiff appeals. Reversed.

The note sued on was for $5,000, which defendants, McNair & Pearsall, under date of November 19, 1891, had executed to the First National Bank of Wilmington, N. C, payable 30 days after date, and which said note the First National Bank of Wilmington had indorsed to plaintiff for value, and before maturity, as plaintiff alleges. Defendants, McNair & Pearsall, admitted that the note had been indorsed before maturity to the plaintiff, but denied that plaintiff was a purchaser, for value, of the note in controversy, and further alleged as a defense a set-off and counterclaim. Seventeen thousand dollars worth of notes, including the note in controversy, was sent on November 21, 1891, to plaintiff for rediscount Plaintiff was the New York correspondent of the First National Bank, and its bank of deposit in New York. The notes left the night of the 21st, by mail, and reached New York on the morning of November 23d, and were discounted, and placed to the credit of the First National Bank, on that day. The bank of Wilmington closed its doors on the 24th, of which plaintiff was notified the next day, but not of the equities claimed by defendants until several days later.

Ricaud & Weill, for appellant

George Rountree, for appellees.

CLARK, J. As between the defendants and the First National Bank of Wilmington, the deposit of $4,199.80 would have been a good set-off In an action by said bank on the defendant's note for $5,000. 1 Morse, Banks, § 338, and cases there cited. But it would not be a set-off to an action by the plaintiff, if said note was assigned before maturity, for value, and without notice. The presumption Is that it was. It is, Indeed, conceded that the assignment was before maturity, and without notice of any equity, but it; is denied that the assignment was for value. It is not controverted that the note was sent by the...