Manning v. Lyon — 77 N.Y. Sup. Ct. 345

Majority

p. 345

James S. Manning, as Surviving Partner of the Firm of A. C. MANNING & Co., Appellant, v. James W. Lyon, Respondent.

Headnote

Compulsory election between consistent causes of aetion — note of a third pa/rty given for property — failure to notify an indorser of non-payment.

Compelling a plaintiff to elect between consistent causes of action, suchas a cause of action upon an original indebtedness for property sold, and a cause of action upon the indorsement of the note of a third party taken in exchange for the property sold, is harmless, and affords no ground for reversing a judgment dismissing the complaint, where it appears that none of the plaintiff’s evidence to establish the excluded cause of action was rejected, and that under all the evidence he was not entitled to recover thereon.

When a note made by a third party is exchanged for property, the presumption is that it was received in payment of the price of the property.

The mere failure of the maker to pay similar notes, affords no sufficient excuse to the holder of a note for omitting to present it for payment, and to notify the indorsers of its dishonor, so'as to prevent the discharge of the indorsers.

Appeal by tbe plaintiff, James S. Manning, as surviving partner of tbe firm'of A. O. Manning & Co., from a judgment of tbe Supreme Court, in favor of tbe defendant, entered in tbe office of tbe cleric of tbe city and county of New York on tbe 25tb day of February, 1893, upon a dismissal of the complaint by tbe court, after a trial, at tbe New York Circuit.

On the 20th day of January, 1890, A. C. Manning & Go. and James W. Lyon entered into a written contract by which tbe former agreed to sell, and tbe latter to purchase, an Otto gas engine for $1,250, to be paid for when set up and in running order, as follows: “$350.81 cash on completion of tbe work, and tbe balance in a promissory note made by tbe Salmon Eiver Paper Co., for tbe sum of $899.19, and interest at tbe rate of five per cent, dated tbe 2d day of December, 1889, and payable to the order of Clark, Neergaard & Co., twelve months after its date, indorsed by tbe said Clark, Neergaard

p. 346

& Co., also by J. W. Lyon & Go., and James W. Lyon, whose indorsement for the payment of the note is to be secured by a chattel mortgage on said Otto gas engine and fixtures.”

On January 27, 1890, the engine was delivered in running order, and on that day the defendant paid $350.81 in cash, and indorsed and delivered the promissory note described in the contract, which was payable at the American Exchange National Bank. On the date last mentioned the defendant executed and delivered to the plaintiff a mortgage on the gas engine as provided by the contract “ for securing the payment of the money hereinafter mentioned.” This mortgage contained the following condition: “ Upon condition that if I, the said party of the first part shall and do well and truly pay unto the parties of the second part, their executors, administrators or assigns, and discharge all my liability as endorser of and upon a certain promissory note,” describing the note mentioned in the contract of sale. The note was not presented for payment at the time when and place where payable, nor was it protested.

JoTm J. Oormelly, for the appellant.

Geo. W. Yam, Slyok, for the respondent.

In the complaint the sale of the engine and the indorsement of the note were set out, and the plaintiff sought to recover on the original indebtedness, and also on the contract' of indorsement. Before the case was opened the defendant moved that the court compel the plaintiff to elect whether he would seek to recover on the original indebtedness or on the indorsement. This motion was granted, the plaintiff excepted, and then elected to recover on the contract of sale. After the case had been opened, but before any evidence was offered, the plaintiff, with leave of the court, reconsidered his election and elected to seek to recover on the defendant’s indorsement.

Assuming that the court erred in compelling the plaintiff to elect between these consistent causes of action (Abb. Tr. Brief, § 704 and cases there cited), we think it was an error without prejudice, causing no harm to the plaintiff. The contract of sale and the chattel mortgage were received in evidence without objection, and no evi

p. 347

dence offered by the plaintiff to establish the allegations was rejected. If under all tlie evidence the plaintiff was not entitled to a recovery on the original indebtedness, he was not harmed by the election he was compelled to make. Whether the defendant was liable upon the original indebtedness was a question which arose upon the original contract, chattel mortgage, and the testimony given on the trial, which was wholly undisputed, and was a question of law for the court. It is expressly provided in the contract that $899.19 of the purchase price of the engine should be paid by this note indorsed by the Clark, Neergaard Co., by J. "W. Lyon & Co., and J ames W. Lyon. It is recited in the chattel mortgage that it was given for securing the payment of the money thereinafter mentioned. There is no provision in the mortgage acknowledging an indebtedness of the mortgagor to the mortgagee, nor does it contain a promise to pay any sum. The condition is that the party of the first part shall pay to the parties of the second part and discharge all his liability as indorser upon the note described.

When a note made by a third party is exchanged for property, the presumption is that it was received in payment of the price of the property. (Whitbeck v. Van Ness, 11 Johns. 409 ; Noel v. Murray, 13 N. Y. 167 .) There is nothing in the evidence which tends to rebut this presumption, and upon the entire record we think the plaintiff was not entitled to recover on the original indebtedness.

Is the defendant liable on his indorsement ? The note was not presented for payment when due, and no notice of non-payment was given to either indorser, nor is there any evidence that either indorser waived presentation of the note for payment or notice of its dishonor. The only excuse for not presenting it alleged in the complaint is the averment that before the maturity of the note the maker and first indorser became and ever since have remained insolvent. This fact was not proved. The only evidence bearing on this question was, that several notes of the same character as the one described in the complaint, were payable at the American Exchange Bank, that no funds were provided for their payment, and that they were not paid. It was not shown, nor was it attempted to be shown, that the maker or first indorser had no property out of which the sum due on the note, or some part of it, could not have been collected. Such a state of facts affords no legal excuse for the

p. 348

plaintiff’s failure to present the note for payment, and bis neglect to notify tbe defendant of its dishonor. In tbis State tbe mere proof of tbe insolvency of tbe maker of a promissory note is not a sufficient excuse for faibng to present the note for payment, and to no'tify tbe indorser of its dishonor. (Smith v. Miller, 52 N. Y. 545 .)

Plaintiff did not ask to have any' question of fact submitted to tbe jury, nor did be except to tbe dmection of a verdict for defendant.

Of course tbis court has power to grant a new trial, even though no exception has been taken, in case tbe court below has beard or decided tbe issue on a wrong theory and it appears that injustice has been done tbe defeated party. But the case at bar does not call for the exercise of tbis power.

The-judgment should be affirmed, with costs.

O’BeieN and Paijkeb, JJ., concurred.

Judgment affirmed, with costs.

Cases cited

Whitbeck v. Van Ness 11 Johns. 409 N.Y. Sup. Ct. p. 347
Noel v. Murray 13 N. Y. 167 N.Y. p. 347
Smith v. Miller 52 N. Y. 545 N.Y. 1873-05-06 p. 348