Harris v. Buchanan — 100 A.D. 403

Majority

p. 403

John F. Harris and Others, Copartners, Doing Business under the Firm Name of “J. F. Harris,” Appellants, v. Charles P. Buchanan, Defendant, Impleaded with Mignonette T. Buchanan, Respondent.

Headnote

Dismissal of a complaint on the merits on a jury trial — not proper on a motion for a nonsuit — direction of a verdict—question of fact as to the consideration for a note given to a stockbroker. v

A judge presiding at a jury trial has no power, upon a motion for a nonsuit made at the close of the evidence, to dismiss the complaint upon the merits. He may, however, at such a time, and in a proper case, direct a verdict in favor of the defendants.

Upon the trial of an action brought upon a joint promissory note made by the defendants, Charles P. Buchanan and Mignonette T. Buchanan, his wife, to the order of the plaintiffs, who were stockbrokers, payable thirty days after date, and which recited that it was given for value received, it appeared that Mr. Buchanan employed the plaintiffs to buy and sell stocks for him; that at the time the note was given one Rogers, an employee of the plaintiffs, informed Mr. Buchanan that his margins had been wiped out and that the plaintiffs demanded security for the amount of his indebtedness to them. Rogers testified that he stated the amount of such indebtedness to be §40,000, while Buchanan and his wife testified that Rogers stated the amount of the indebtedness to be §23,000 or §24,000. Buchanan and his wife also testified that the note was given to cover the existing indebtedness of §23,000 or §24,000 and to furnish margins upon which the plaintiffs could carry a number of shares of stock held by them for Buchanan for a period of one month or until such time as the stock should increase in value to an extent which would enable Buchanan to pay the indebtedness. Rogers denied that there was any agreement or understanding that the plaintiffs should carry the stock in question and testified that the note' was given for the amount of the indebtedness and to satisfy the plaintiffs concerning the indebtedness for the period of one month, at the expiration of which Mr. Buchanan expected to be able to pay the same. The stock in question was sold within a few days after the giving of the note.

Held, that it was improper for the court to dismiss the complaint as to Mrs. Buchanan at the close of all the evidence;

That if the facts .were as testified to by the defendants the consideration for the note had failed, but that if the jury believed the testimony of Rogers they would be justified in finding for the plaintiffs, and that the case should, therefore, have been- submitted to the jury;

That, assuming Rogers’ testimony to be true, it might fairly be inferred therefrom that the note was given to induce the plaintiffs to refrain from pressing the payment of the indebtedness due from Mr. Buchanah to them, and that this would afford a good consideration for the note as against both the defendants;

p. 404

That Mrs. Buchanan’s contention that it was not shown- that her husband owed' the plaintiff §40,000 or any other sum, and that, therefore, no consideration for' the note had been established, was untenable, for the -reasons, first, that there was testimony from which the inference might fairly be drawn that Rogers’ - claim as to the amount of the indebtedness was acquiesced in by the defendants, and, second, that the burden was upon Mrs. Buchanan to rebut the pre- "■ sumption arising from the recital of a consideration in the note itself, and that' she had not attempted to assume that burden. ■

Inurah-am, J., dissented.

Appeal by the plaintiffs, John F. Harris and others, copartners . doing business under, the firm name of “ J.- F. Harris,” from a judgment of the Supreme Ctiurt in favor of the'defendant Mignonette T. Buchanan, entered in the office of the cleric of the county of New York on the 13th, day of May, 1904,. upon the dismissal of the complaint by direction of the court as to said defendant after a trial at the New York Trial Term.

James M. Gifford, for the appellants.

John J. Adams, for the respondent.

The plaintiffs are stockbrokers and the. defendants are'husband and wife. The action is upon a joint note made by the defendants to the order of. the plaintiffs for $40,000, bearing date May 9, 1901, payable thirty days after date at the Astor National- Bank, New York city.1 It recites that it is- given for value received. At the close of all the evidence counsel for the defendants moved for the dismissal of the complaint as against the .respondent, upon the ground that there was no evidence to show that there was any consideration for the note,- and, further, that there was no evidence of any indebtedness on the part of her husband to the plaintiffs. The ' motion was granted and the complaint was dismissed upon the merits. Counsel fop the plaintiffs duly excepted.

We observe that the practice of dismissing a complaint upon the merits at the close of the evidence in jury cases instead of directing a verdict lias become quite common ; but we think it is unauthorized. There is no authority for dismissing a complaint upon the merits on a motion for a nonsuit at the close of the plaintiff’s case or at-the close of the entire evidence in an action triable and tried

p. 405

before a jury. A verdict may be directed in favor of the defendant at the close of all the evidence, and this would undoubtedly be upon the merits. In any event, therefore, it would be necessary to strike out the provision dismissing the complaint upon the merits; but upon another ground we think the judgment must be reversed.

Through one Rogers, an employee of the plaintiffs, the respondent’s husband employed the plaintiffs to buy,and sell stocks for him. At the time the note in question was given it is conceded that Rogers, in behalf of the plaintiffs, informed Buchanan that his margins had been wiped out and that he was indebted to the plaintiffs in a large amount and they demanded security. According to the testimony of Buchanan and his wife Rogers stated the amount of the indebtedness to be $23,000 or $24,000; but according to the testimony of Rogers he stated it to be $40,000. However, the amount as stated by him was neither denied nor questioned by either of them at that time. According to the testimony of Rogers the note was given for the amount of the indebtedness and to satisfy the plaintiffs concerning the indebtedness during the period of one month, at the expiration of which Buchanan expected to be able to pay the same. According to the.testimony of Buchanan and his wife it was given to cover the existing indebtedness as stated by Rogers, which, as they claim, was only $2.3,000 or $24,000, and to furnish margins upon which the plaintiffs could carry 1,600 shares of the Atchison, Topeka and Santa Fe railroad stock still held by them for him for a period of one month, or until such time as it should sufficiently increase in value to enable the realization of a profit sufficient to pay the indebtedness. Rogers denied that there was any agreement or understanding that the plaintiffs should continue to carry this stock. The stock was in fact sold within a few days. It is manifest that if the facts are as testified to by the defendants the consideration for the note failed and there could be no recovery thereon ; but, on the other hand, if the jury believed the testimony of Rogers they would have been authorized in finding for the plaintiffs. Assuming his testimony to be true, it might fairly be inferred therefrom that this note was given to induce the plaintiffs to refrain from pressing the payment of the indebtedness owing by Mr. Buchanan' to them. Of course that would afford a good consideration as against both defendants. The respondent, however, contends

Dissent

p. 406

that there was in fact no consideration for the,reason that it was not shown by aúy competent evidence that her husband owed the plaintiffs $40,000 or any other sum. As already stated, however, there . was testimony from which the inference might fairly be drawn that Rogers’ claim, as to the indebtedness was acquiesced'in; but it is sufficient that the note itself recites a consideration. The plaintiffs were not bound in these circumstances to show a consideration! If there was no consideration the' burden was upon the respondent to show that fact. She offered no evidence tending to establish the fact or to overcome the presumption raised by the recital of' consideration in the note itself. There was, .therefore, a question of fact presented which should have been submitted to the jury and the court erred in dismissing the complaint, and the exception thereto was well taken.

It follows, therefore, that the judgment should be reversed and a new trial granted, with costs to appellants to ábide the event.

■ Van Brunt, P. J., Patterson and McLaughlin, JJ., concurred; Ingraham, J., dissented.

(dissenting): I agree with the court below that, upon the whole evidence, it -appeared that there was no consideration for the promise of the respondent to pay to the plaintiffs the amount of the promissory note sued on. The obligation being in form a joint promissory note, there was a presumption of consideration, but as between the original parties the existence of a consideration was a question of fact. The respondent alleged as a defense that there was no con- > sideration of a promise, and upon" the conceded facts I think the absence of consideration was established. The only claim of a consideration was the agreement by the plaintiffs to forbear the enforcement of a claim against the respondent’s husband. It is conceded that tlie respondent, received nothing from the plaintiffs for the note and that the plaintiffs parted with nothing upon the faith' of the note, unless it was the right to enforce their demand against the respondent’s, husband. I can find no evidence in the record to show that there was any existing indebtedness.of the respondent’s husband to the plaintiffs at the time of the execution of the noté. There was evidence on behalf "of the plaintiffs' that their agent claimed an

p. 407

indebtedness of $40,000; and the evidence on behalf of the defendants is that the claim was for a much smaller amount. But to •establish a consideration, I think it must appear that there was an existing indebtedness, and that by accepting the note the plaintiffs ■ undertook not to enforce that indebtedness until the note became ■due. Proof that there was a claim of an indebtedness, without evidence of an actual existing indebtedness, is not, I think, sufficient.

I, therefore, dissent.

Judgment reversed, new trial ordered, costs to appellants to abide ■event.