James M. Elliott, Jr., Respondent v. James B. Brady, Appellants

Summary

The New York Court of Appeals affirmed the judgment against the appellants, holding that as non‑parties to the sealed contract between the plaintiff and Paine, the appellants could not assert a fraud defense arising from that contract. Their indorsement of renewal notes after knowledge of the alleged fraud constituted an affirmance of the contract, barring the defense. A concurrence noted that a fraud defense might be viable only if the indorsement were obtained before such knowledge and would require an equitable action.