Block v. Stevens — 72 A.D. 246

Majority

p. 246

J. Block and L. Franck, Appellants, v. William H. Stevens, Respondent.

Headnote

Action on pi'omissory notes —defense of failure of consideration—proof that an. oral agreement was made that they were to he paid when certain merchandise was delivered.

The complaint in an action brought upon three promissory notes, given by the defendant to the plaintiffs in payment for a quantity of whisky sold by the plaintiffs to the defendant, alleged the plaintiffs’ ownership of the notes and the defendant’s default in payment and demanded judgment for the amount due upon the notes. The defendant interposed an answer admitting the making and delivery of the notes and alleged a failure of consideration by reason of the plaintiffs’' neglect and refusal to deliver the whisky to the defendant.

Held, that the court properly denied the plaintiffs’ motion for judgment upon the pleadings.

In such an action, evidence that at the time the notes, which specified the exact time of payment, were given, the parties orally agreed that payment should be made when the whisky was delivered, is incompetent as the effect thereof would be to vary the. terms of the notes. In any event, evidence of such an oral understanding would not be admissible unless it was pleaded. -

Appeal by the plaintiffs, J. Block and another, from a judgment of the Supreme Court in favor of the defendant, entered in the office of the clerk of the county of Rensselaer on the 29 th. day of October, 1901, upon the verdict of a jury, and also from an order entered in said clerk’s office on the 18th day of October, 1901, denying the plaintiffs’ motion for a new trial made upon the minutes.

The.plaintiffs were whisky dealers at Louisville, Ky. The defendant is a retail liquor dealer in the city of Troy. Upon the 25th day of October, 1900, the defendant made three promissory notes, each in the sum of forty-eight and thirty-one one-hundredths dollars and payable to the plaintiffs respectively in two, three and five months after date for value received. These' notes were given in consideration of the sale of five barrels of whisky which were in bond, and upon the delivery of the notes plaintiffs gave to the defendant what is called a certificate, which is. in fact a contract, whereby, upon the delivery of the certificate at any time, the plaintiffs should send the whisky, or so much thereof as was demanded, together with a draft for the government tax thereupon, which plaintiffs were first to.

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pay. That certificate was shortly thereafter sent to the plaintiffs and a barrel of whisky demanded. This barrel of whisky was delivered and therewith a draft upon the defendant was sent for the tax which the plaintiffs had paid upon the whisky. This draft was paid by the defendant, No other whisky was sent or demanded. Further facts appear in the opinion.

Warren MoGonihe and John T. Norton, for the appellants.

Benjamin E. De Groot and Thomas F. Powers, for the respondent.

In plaintiffs’ complaint the three notes made by the defendant are set out. The plaintiffs’ ownership is alleged and defendant’s default and judgment' demanded for the amount due thereupon. The answer of the defendant admits the making and delivery of the notes and alleges a failure of consideration by reason of plaintiffs’ neglect and refusal to deliver to the defendant the whisky for which the notes were given. Plaintiffs’ first claim upon this appeal is that the answer is inadequate, and that the court should have granted their motion for judgment upon the pleadings. This claim, however, is clearly without merit. The answer properly admitted the making and delivery of the notes and alleged a failure of consideration, which, if found, would have been a complete defense thereto. If at any time the defendant had made due demand for the balance of the whisky, in accordance with the terms of the contract, and that demand had been refused, the verdict would have been right, as the defendant might properly plead in his defense this refusal to comply with the contract as a partial failure of consideration for the making of the notes.

The defendant claims to have shown that this certificate was lost by the plaintiffs, and that further delivery of whisky was declined, except upon the giving of a bond, which could not be lawfully exacted of him. Upon the evidence, however, this could not be held, as matter of law, and no such issue was presented to the jury. But, whatever may be the rights of the defendant upon a lost certificate, the plaintiffs have, we think, a valid exception to the charge of the learned court. The defendant proved, against the plaintiffs’ objection, that at the time the notes were given there was a verbal

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agreement that the notes should he paid when the whisky was delivered. Whether or not such agreement was made seems to. have been the only question submitted to the jury, and the learned court charged the jury that, if such an agreement did exist, their verdict must be for the defendant, otherwise their verdict should be for the plaintiffs for the full amount. But no such issue was presented by the answer. Moreover, evidence of such an oral agreement would be clearly inadmissible both under the pleadings and as varying the terms of a written instrument. The notes provide for a specific date of payment and that provision could not be varied by an oral understanding at the time that payment should only be required when the whisky was delivered. For this error we think the judgment should be reversed and a new trial ordered.

All concurred.

Judgment and order reversed and new trial granted,' with costs to appellant to abide event.