Plant v. Schuyler — 4 Abb. Pr. 146

Majority

p. 146

PLANT against SCHUYLER.

New York Superior Court; Special Term,

December, 1867.

Headnote

Answer—Sufficiency of Defenses to Note.

An answer to a complaint on a promissory note, which sets up as a defense that the note was made as a memorandum note, and was not to be negotiated, is frivolous.

A denial, in an answer to a complaint upon a promissory note, that the plaintiff is a bona fide holder of the note, or that he received the same in course of business, or that he advanced any new consideration therefor, is insufficient.

Application for judgment on the pleadings.

This action was brought by Edwin E. Plant against Spencer D. Schuyler and James Plant, to recover upon a promissory note, made by defendant Schuyler, dated March 16, 1867, to the order of James Plant, for $500, payable July 15, 1867, and alleged to have been after-wards, and before the same became due, indorsed by James Plant and transferred to the plaintiff, who claimed to be the lawful owner and holder thereof.

Demand and notice, &c., were also averred in the complaint.

The answer of the defendant Schuyler was as follows:

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“The said, defendant, Spencer D. Schuyler, for answer to the complaint in this action, says—First. That the said James Plant, the payee of said note, at the time of the making of the said note was justly indebted to one Greorge S. Stringfield, in the sum of $300, and being justly indebted therefor, promised to pay the same on request; and that, though often requested, the said James Plant never paid the same, nor any part thereof; and that before the commencement of this action the said Stringfield duly sold, assigned and transferred the said claim or demand to this defendant, and that he is the owner and holder thereof; and defendant alleges upon his information and belief, that the plaintiff is not a bona fide holder of said note; that he did not receive the same in the usual course of business, nor advance any new or full consideration therefor, and received the same with full knowledge of the defendant’s set-off to the same, and for the purpose of depriving defendant thereof; and that he is not the real party in interest in said matter, but prosecutes the same for the benefit of the said James Plant.

Second. The said defendant, further answering the complaint, alleges that at the time of the making of said note, the said payee, James Plant, and this defendant, were stockholders in the American Bolt & Rivet Company, a corporation organized under the laws of the State of New York, and the said James Plant at the date of said note executed to this defendant a nominal transfer of his said stock, for the purpose of enabling this defendant to exercise a greater control and influence in the said corporation for the use and benefit of this defendant and the said James Plant, stockholder, as aforesaid; and the said note mentioned and described in the complaint was executed and delivered to the said James Plant as a memorandum note, and not for the purpose of negotiating the same, by the said James Plant, and it was expressly understood and agreed that the defendant was to have the right and privilege of returning the said stock to the said James Plant, and which he is ready and willing to do, upon the return of the said note, pursuant to the said

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agreement and understanding; and defendant alleges, upon Ms information and "belief, that the plaintiff is not a bona fide holder of the said note; that he did not take the same in the ordinary course of "business, nor advance any new or full consideration therefor, and that he received the'same with knowledge of the circumstances under which the same was made as aforesaid; and that he is not in fact the owner of said note, but is prosecuting the same for the benefit-of the said James Plant; and defendant denies each and every allegation contained in the said complaint, inconsistent with the foregoing answer, and demands judgment that the said complaint be dismissed, with costs.”

The answer does not deny the making of the note for value, its terms, its indorsement and delivery to the plaintiff before it became due, &c.

In the second part of the answer, for the purpose, as is supposed, of showing a want of consideration, the defendant has pleaded a number of “ understandings ” about stock, &c., but what connection they had with the making and delivery of the note does not appear.

Indeed, if anything can be inferred from the pleaded matter, it is that the note was given for the assignment of stock which was beneficial to defendant Schuyler, and which therefore constituted a consideration sufficient to hold the note.

The allegations in the answer that the note was not to be negotiated, and that defendant should have the right of returning said stock, &c., are frivolous, because the terms of the note are admitted in the answer, from which the court can see it was negotiable; and no agreement that James Plant should take a reassignment of the stock in payment of the note, is alleged. Moreover, the pleadings show that the note was- payable in money, and it is clear that all such agreements or understandings, if made, would be void (Edw. on B., 147).

Again, there was no tender or offer to pay the note by a reassignment of the stock or otherwise ; on the contrary,

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it appears that the defendant refused to pay the same in any manner. The allegations in the answer, on information and belief, “that the plaintiff is not the bona fide owner and holder of said note; that he did not receive the same in the usual course of business, nor advance any new or full consideration therefor; that James Plant is the party in interest,” &c., are all frivolous. The answer does not deny the facts constituting ownership in the plaintiff. The conclusions only of the defendant are pleaded. This is bad pleading (Russell v. Clapp, 4 How. Pr., 347 .

The allegation that the plaintiff is not the owner and “holder of the note, and that A. B. is, creates no issue, and amounts to a mere traverse not recognized by our practice” (Brown v. Ryckman, 12 How. Pr., 313 ; Adams v. Holley, Id., 326 ; Seeley v. Engell, 17 Barb., 530 ). And it is not denied in the answ-er that the plaintiff advanced consideration for the note; therefore these denials or allegation of conclusions are frivolous (Witherspoon v. Dolan, 15 How. Pr., 266 ; Hollister v. Rice, Id., 1; Tompkins v. Acer, 10 Id., 309).

It seems to me that the denial following such allegations in the answer “of all matters inconsistent with the answer,” is merely a reaffirmance, or repetition of the matters previously pleaded.

I hold, therefore, that the matters pleaded are entirely insufficient to constitute a set-off to the note.

There is not a single fact pleaded, showing that James Plant ever became indebted to String-field. The mere statement of the conclusion that Plant so became indebted is insufficient (Van Schaick v. Winne, 16 Barb., 95 ; Myers v. Machado, 14 How. Pr., 149 ).

Again, it does not appear that the assignment to Schuyler was made before the note to plaintiff, and therefore it cannot be allowed as a set-off to the note (2 Rev, Stat., 450, 451, 3 ed.).

Judgment must be ordered on the pleadings for the plaintiff.