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Smith v. First Nat. Bank of Albany

Supreme Court of New York, Appellate Division

May 8, 1912

FRANK G. SMITH, Appellant,
v.
FIRST NATIONAL BANK OF ALBANY, NEW YORK, and HENRY PATTON, Respondents.

Page 318

APPEAL by the plaintiff, Frank G. Smith, from a judgment of the Supreme Court in favor of the defendants, entered in the office of the clerk of the county of Albany on the 2d day of October, 1911, upon the decision of the court, rendered after a trial before the court without a jury at the Albany Trial Term, dismissing the complaint upon the merits.

COUNSEL

Richard J. Donavan and Herbert D. Cohen, for the appellant.

James F. Tracey, for the respondent First National Bank.

George Lawyer, for the respondent Patton.

HOUGHTON, J.:

The action is in equity to compel the defendant bank to apply the proceeds of certain collateral pledged by the plaintiff and the defendant Patton to the satisfaction of certain notes to the exclusion of certain other notes, and for an accounting.

The defendant Patton was a lumber merchant in the city of Albany and a patron of the National Exchange Bank of that city, which subsequently became merged in defendant First National Bank. The plaintiff, who lived in the city of New York, and Patton were engaged in certain joint enterprises in timber lands in certain of the Canadian provinces. In the latter part of the year 1902 or the fore part of the year 1903 all that remained of these joint enterprises was what is known

Page 319

as the Gaspereaux lands in Nova Scotia in which the plaintiff and Patton held an equal interest.

The plaintiff concedes that during the years 1902 and 1903 one note of $15,000, and another of $11,856.06, signed by Patton and himself, or by himself and indorsed by Patton, were discounted by the defendant bank or its predecessor, and that for them or their renewals the Gaspereaux property was pledged as collateral, originally by deed and later it would seem by stock of the Gaspereaux Company, a corporation formed to take over the lands.

The plaintiff also concedes that such collateral is properly held for certain advances made by the defendant bank on account of and for the benefit of the Gaspereaux property which the defendant claims amounted to the sum of $3,872.03.

The defendant bank claims that the Gaspereaux property was pledged to secure the payment not only of the foregoing but also of notes then held by it of Patton and his wife aggregating something over $27,000.

The plaintiff's name does not appear on any of these latter notes and the bank held and still holds other security as collateral to them which Patton or his wife had furnished. Negotiations for the discounting of the $15,000 note and $11,000 note and the ...


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