De Zeng v. Fyfe.

was then rendered, and from the judgment entered thereon the defendant appealed to the General Term.

Wm. M. Allen, for appellant.

Geo. F. Chester, for respondents.

BY THE COURT. WOODRUFF, J.-The only point to which our attention was called, on the argument of this appeal, is the rejection of the evidence offered by the defendant. His counsel insists that the evidence should have been received. While, on the other hand, the plaintiffs insist, that had testimony been given, establishing the facts stated in the offer, no defence would have been made out, and no question would have been raised thereby, which it was proper to submit to the jury.

The facts proved, and the facts which the defendant offered to prove, raise this single question:

When a note is made by a defendant for the accommodation of a payee, and he delivers it to the payee for his use, without any qualification or restriction, and such payee passes it to the plaintiff as security for a pre-existing debt, can the plaintiff recover thereon against the maker?

It seems to us that there can be no doubt upon this subject. Indeed, we are somewhat at a loss to discover grounds upon which the maker in such case should hesitate to pay the note, or deem himself in any degree excused, if he refuse.

He lent his notes for the very purpose of enabling the payees to use his credit in any manner which the exigencies of their business required or made convenient to them. The notes were used accordingly. The payees had full authority to use them, and we know of no reason or principle upon which the notes might not as well be given out as security for a debt, as discounted to raise money to pay the debt. The result in each case is precisely the same to the maker. The notes serve a useful purpose to the payees, and, for aught that appears, a purpose within the intent for which they were made by the makers..

The cases to which we were referred by the counsel for the defendant, do not sustain the defence. They are instances of the fraudulent misappropriation of a note, or where there was

De Zeng v. Fyfe.

some fraud in procuring it, or where there existed some circumstance in the relation of the parties which would make its collection operate as a fraud upon the maker. (20 J. R. 637; 10 Wend. 85; 12 Ib. 593; 13 Ib. 605.) The case, which has become somewhat prominent in the history of this subject, Stalker v. McDonald (6 Hill. 93), was a case in which the transfer was a plain fraud upon the plaintiff, the owner of the note, for the recovery of which the suit was brought, and although in that as also in some of the other cases, dicta may be found general in their form and sufficiently broad to warrant the claim here made by the defendant, the cases themselves do not warrant any such defence. The case of Skilding et al. v. Warren (15 J. R. 270), in some of its particulars, resembles the present. That was an action upon an accommodation note, but it was fraudulently transferred, and the plaintiffs received it with knowledge of the fraud.

On the other hand, the very point was distinctly decided against the defendant in Grandin v. Le Roy (2 Paige, 509), where the Chancellor held, that where the endorsers of an accommodation note lent their names to the maker, without any restriction as to the manner in which the note should be used, he had a right to use it to pay or secure an antecedent debt.

In The Bank of Rutland v. Buck (5 Wend. 66), it was held, that a surety to a note for the accommodation of the principal, is liable upon it when passed away as collateral security for the payment of a judgment. (See also 4 Cow. 567; White v. Springfield Bank, 3 Sandf. S. C. R. 222.)

The decision of this Court in Lathrop v. Morris, in 5 Sandf. 7, is wholly inconsistent with the views insisted upon by the defendant's counsel. The principle of that case is, that one who receives a note, either in payment or as collateral security for a pre-existing debt, is entitled to recover against an accommodation maker, in cases exempt from fraud; and this principle is there treated as fully settled.

It is hardly necessary to add, that the judgment must be

affirmed.

Possibly some question might have been raised, whether, upon the facts testified by the payee, the plaintiff was entitled

Peacock v. The New York Life Ins. Co.

to recover for a greater sum than the debt for which the note was held as security. But no such question was raised on the trial, nor was it suggested on the argument of the appeal. Judgment affirmed.

EVELINE PEACOCK, Executrix of JOHN C. RYAN, deceased, and DAVID C. PEACOCK, Respondents, v. THE NEW YORK LIFE INSURANCE Co., Appellants, &c.

When a life policy of insurance is renewed, the policy itself, the representations made by the assured when the policy was effected, and the certificate of renewal are to be construed together, and to receive, if possible, a consistent interpretation. As the design and object of the parties is to renew a pre-existing contract, the terms employed will not be deemed inconsistent with the conditions of the policy, if they reasonably may be construed in harmony with them.

Hence, when the policy is renewed, upon the condition that the assured is then in "good health," the words, "good health," in the certificate of renewal, will be construed in the same sense as the same words in the representations made by the assured, when the policy was effected, and which were declared to be "the basis of the contract."

If, therefore, the health of the assured, when the policy was renewed, was substantially the same as when it was effected, and he was then subject to no other complaints than those he had before specified, the insurers, in the event of his death, will not be excused from the payment of the sum insured, upon the ground that his health, when the insurance was renewed, was not positively and absolutely good.

When the preliminary proofs, furnished in good faith, to an Insurance Company, are defective, the Company is bound, in common fairness, to suggest the defect, and not hold it in reserve, in order to delay the payment of a loss, or compel a new suit for its recovery.

(Before DUER, SLOSSON, and Woodruff, J.J.)

Heard, April 16; decided, June 13, 1857.

THIS action comes before the Court, at General Term, on a motion, by the defendants, for a new trial, on questions of law, arising upon exceptions taken at the trial, and there ordered to be heard in the first instance at the General Term, and the entry of judgment to be, in the mean time, suspended; (the plaintiff having recovered a verdict for $5 865 28). The action was

Peacock v. The New York Life Ins. Co.

brought to recover the sum of $5,000 (with interest), insured by the defendants upon the life of John C. Ryan, deceased.

The policy is dated the 8th day of March, 1853; premium $160 per annum, payable in advance on the 28th day of February in each year.

The policy was conditioned, among other things, that if the premium was not paid as prescribed, the defendants were not to be bound by the policy. The assured, before obtaining the policy, made certain declarations in regard to his habits and health. The assured did not pay the premium, which fell due the 28th of February, 1854, when due. The defendants accepted the premium on the 7th of March, 1854, and renewed the policy upon this condition, "that he (the insured) is now in good health; proof of which, in case of death, to be furnished the Company." The assured died 22d May, 1854. May 29th, the defendants were served with affidavits of Caleb Barstow and Henry E. Blossom, stating the death of the assured, and the disease to which they attributed his death.

The declarations made by the assured when the policy was effected, are stated in the points of the defendants' counsel, and in the opinion of the Court. When the policy was renewed, the assured stated, in a letter to the President of the defendants' Company, "that, as to his health, he was better off than when he got the policy."

The defence was, that the defendant was not in good health when the policy was renewed, and that no preliminary proofs had been furnished.

The issues raised by the pleadings were tried before Mr. JUSTICE BOSWORTH and a.jury, in January, 1857.

A number of witnesses were examined to show the actual state of the health of the assured, when the policy was renewed, and it was proved that the renewal was on the condition that he was then "in good health."

When both parties rested, the defendants moved for a dismissal of the complaint, on the ground that the plaintiff was obliged to produce to the defendants preliminary proof of the health of the assured, at or before the time of claim made for the amount insured by the policy, and that it did not appear that such proof had been furnished.

Peacock v. The New York Life Ins. Co.

The Judge denied the motion, and the counsel for the defendants excepted.

His Honor, the Judge, then charged the jury, and among other things charged:

That the policy on which the suit was brought had a condition by which it was forfeited if the premium was not paid on the 28th February; that the premium was not paid on that day; that the Company had a right to insist on the forfeiture, or to accept the premium and waive it, and that on such conditions as they saw fit.

That they did in fact receive it, and on the terms expressed in the receipt of March 7th; on the condition that John C. Ryan was in good health, &c. That the only question was, whether he was in good health when the parties finally agreed, the one to leave, and the other to retain the premium.

That in determining what was good health, in the understanding of the parties to the contract, they must take into view the declaration on which the policy was made. That declaration showed his condition as to health, and that was adopted as the basis of the contract; so that the question was, whether, at the time of the premium being paid and retained in March, the said Ryan was in good health, within the meaning of those words, as used by the parties to this contract.

If you shall find, that on the seventh of March, he was not affected with any diseases, other than those mentioned in the declaration on which the policy was issued, which, in the judg ment of those conversant with such subjects, would tend to shorten human life, or increase the risk, and that those diseases had not become aggravated so as to make his condition substantially different from what it was when the policy was effected, then he was in good health, within the meaning of those words, as used by the parties, and the plaintiff was entitled to recover.

If you shall find otherwise, your verdict must be for the defendants..

The defendants' counsel, before the jury retired from the Court, excepted to the judge's charge in the following parti

culars: