Wiener v. Mayer

Wiener is the brother of Mrs. Traubner. Prior to her marriage to Traubner she had been in business on her own account for ten years under the name of Martha Wiener & Co., when, in January, 1904, the business was taken over by a corporation under the same name. The stockholders of the corporation were Mrs. Traubner, who owned about 148 shares of the stock out of a total issue of 200 shares; her husband, who owned 1 share; and Edgar Arnold, who owned the remaining shares. Wiener says that in 1903 his sister, because she was no longer able to attend personally to her business, asked him to take her part in the management of the corporation of Martha Wiener & Co., about to be formed, and for these services agreed to pay him 40 per cent, of her profits realized from her stock in the corporation. This agreement is claimed to have been made in the presence of Traubner, who agreed to guarantee the payment. It is claimed by Wiener that he asked for some money from Traubner in the latter part of 1905 or the beginning of 1906, when the latter requested him to wait, as he could not pay, and inquired if he would take the assignment of some mortgages coming due shortly, to which Wiener agreed. Traubner’s testimony upon this point is limited to the statement that he consulted Wiener several times at undisclosed dates, and asked him if he would accept the assignment of the mortgages in payment of the debt due from his wife and himself, to which Wiener consented.

No effort was made to explain why, if such an agreement had been made, Traubner had gone to the mortgagee, looking for an extension of the mortgage, instead of' paying it off at once, and not preparing to pay it until he found he could not get any extension; nor was any explanation given as to why, if there was such an agreement, the assignment should have been taken in blank, instead of having Wiener’s name filled in at once. It furthermore appears that, when the assignment was delivered to Wiener, he executed no receipt or release of his claim against Traubner and his wife, nor does it appear what the amount was to which he would have been entitled under his alleged contract. It did appear that Wiener had not received any payments under this alleged agreement with his sister, as would naturally have been done each year if this agreement was as claimed, and it is sought to avoid the force of this by a claim that he owed his sister certain undisclosed amounts which he had borrowed from her in 1897 and 1898, and that this was the reason why he had not received any payments before the delivery of the assignments of these mortgages.

Of course, the defendants were obliged to call Traubner and Wiener as witnesses, for that was the only method they had of endeavoring to show what the real relationship of the parties was. The plaintiff in-

[T2] We are of the opinion that a question of fact was presented for- the consideration of the jury as to whether upon all the testimony the-intention of Traubner, at the time he paid oyer his own money to the mortgagee, was to keep the mortgages alive or to assign them to Wiener in satisfaction in whole or in part of a bona' fide existing indebtedness. Concededly, Traubner was not liable upon either the bonds or the mortgages, nor. under any obligation to pay the same; but, while no duty devolved upon him to discharge the indebtedness, he had an interest in relieving his property from foreclosure, in view- of' its possible loss under a sale, and with it. the loss of whatever investment he had made, in the property. There can be no doubt that, being himself a stranger to any direct liability to pay, he could have exercised his option of either paying off the indebtedness or keeping the same alive for his own protection and benefit. The question here is: What was his real intention?

[3, 4] We do- not think the defendants were bound by the testimony of Wiener and Traubner, even though they had called them as witnesses, for they were concededly hostile and adverse ones, and the only ones who could have been called of whom inquiry could have been made as to what transpired between the Traubners and Wiener. The general rule that a party vouches for the credibility of the witnesses whom he produces does not apply to its full extent in such a case. In Becker v. Koch, 104 N. Y. 394 , 402, 404, 10 N. E. 701 , 703 ( 58 Am. Rep. 515 ), Judge Peckham called attention to the rule that with regard to adverse witnesses it was well settled that all rules applicable to the examination, of other witnesses do not in their strictness apply, saying :

“An adverse witness may be cross-examined, and leading questions may be put to Mm by the party calling Mm, for the very sensible and sufficient reason that he is adverse, and that the danger arising from such a mode of examination by the party calling a friendly or unbiased witness does not exist. What favorable facts the party calling him obtained from such a witness may be* justly regarded as wrung from a reluctant and unwilling man, while those which are unfavorable may be treated by the jury with just that degree of belief which they may think is deserved, considering their nature and the other circumstances of the case.” 104 N. Y. 401 , 10 N. E. 704 " ( 58 Am. Rep. 515 ).

’ “The defendant calls the very man he accuses of the fraud as a witness to prove it, and says, in effect, to the jury, that such evidence as the witness gives- which tends to show the perpetration of the fraud alleged is forced from him by the exigencies of the case and the surrounding facts, which cannot be denied, while that wMch he gives that looks towards an. explanation of the.

fraud the jury shall give such faith to as under all the facts in the case they may think it entitled to.” 104 jST. Y. 402, 10 N. E. 705 ( 58 Am. Rep. 515 ).

“We think that the whole evidence of Exstein in this case should have been submitted to the jury, for them to pass upon its credibility, and that 'they were at liberty to believe that portion which tended to show the debts to-be fictitious and to disbelieve the explanation, * * * just as in their judgment, intelligently and honestly exercised, they might determine.” 104 Ñ. Y. 404 , 10 N. E. 705 ( 58 Am. Rep. 515 ).

In President and Directors of the Manhattan Company v. Phillips, 109 N. Y. 383 , 17 N. E. 129 , the doctrine laid down in Becker v. Koch was cited with approval, and it was held that where one of the parties to an action called his opponent as a witness, and proved by him facts tending to show bad faith upon his part in a transaction—

“the fact that such witness, in his own behalf, gives an explanation of the circumstances, which, if true, repels the presumption of bad faith, and that such explanation is not disputed by other evidence, does not authorize the court to take the case from the jury. It is for them to determine what degree of faith is to be given to the explanatory testimony.”

In McLean v. Clark (C. C.) 31 Fed. 504 , the court said: .

“It is insisted, however, that, as McLean was called as a witness by the defendants, they are bound by his statements that the transaction was bona fide, and that Shaw had no interest in this suit. We do not so understand the law. While it is undoubtedly true, as a general rule, that a party offering a witness in support of his case represents him as worthy of belief, and will not be permitted to impeach his general reputation for truth, or impugn his credibility by general evidence, he has never been considered as bound by his general statements as to motives or intention, or his bona fides in a particular transaction, but may draw any inference from his testimony which the facts stated by the witness seem to justify. Particularly is this true where, the party is compelled to prove his case from the mouth of the opposite party, who may be presumed to be hostile to him. In a similar case (Chandler v. Town of Attica [C. C.] 22 Fed. 625 ) Judge Wallace held, in passing upon a similar issue, that the court was ‘at liberty to disregard the testimony of the parties, so far as it1 is incredible, and to interpret the transaction in a way consistent with the ordinary conduct and motives of business men.' If the story of the witness be consistent in itself, the party calling him is to a certain extent bound by his testimony; but if his recital of facts is inconsistent with his theory, the court is at liberty to draw its own inference from .them. If there be anything to the contrary in the case of Tarsney v. Turner (C. C.) 2 Flip. 735 , 48 Fed. 818 , decided by the late Circuit Judge, we are compelled to enter our respectful dissent. Kavanagh v. Wilson, 70 N. Y. 177 ; Koehler v. Adler, 78 N. Y. 288 ; In re May (D. O.) 1 Fed. 737 ."

After the close of the plaintiff’s prima facie case, the defendants established that no part of the moneys concededly used to satisfy the mortgagee’s claim, whether in payment or for an assignment, had come from Wiener, t.he plaintiff herein, but all had come directly from Traubner. This would have left the transaction in the position that Wiener had paid no consideration of any .kind for the assignment, and was not really the owner thereof, but was simply holding it for Traubner, and that Wiener had no real interest therein. Both Traubner and Wiener sought to show that there was a valuable consideration for the transfer to Wiener in the form of an existing indebtedness from Traubner and his wife, and sought as well to show that the assignment to Wiener was not an afterthought, which had its origin after the money had been paid to the mortgagee by Traubner, but the result of a plan

In view of the testimony heretofore referred to, and of other circumstances appearing in the record not necessary now to be detailed, we are of the opinion that, as the defendants were not bound by the explanations sought to be given by Traubner and Wiener of the existence of an indebtedness due by the former to the latter, a question of fact existed for the determination of the jury as to the good faith of the whole transaction. The question turned upon whether, at the time that Traubner paid his own money to Jackson, he intended to pay and discharge the mortgages, or whether, on the other hand, he intended to keep them alive by taking an assignment thereof for the benefit of Wiener, to whom it was to be subsequently transferred in payment of a valid indebtedness. We believe, therefore, that the request to go to the jury upon this question was erroneously denied.

The judgment appealed from will therefore be reversed, with costs to the appellants to abide the event, and a new trial ordered, that there may be submitted for the determination of a jury the following questions :

1. Did Traubner, at the time he paid the amount of these mortgages, with interest, to Jackson, intend to pay and discharge said mortgages?

2. Did Traubner, at the time he paid the amount of these mortgages, •with interest, to Jackson, being then indebted primarily or secondarily to Wiener, make the payment and take the assignment of the mortgages with the then intention that the mortgages should be kept alive and assigned to Wiener in satisfaction of an indebtedness in his favor ?

All concur.