Burrall v. De Groot — 12 N.Y. Super. Ct. 379

Majority

p. 379

Burrall v. De Groot, impleaded with Paton.

Headnote

A complaint, that a party “ made” Ms promissory note in writing, that the other-defendants “ endorsed it in blank, and the same, so endorsed, was delivered to the plaintiff, who now holds and owns the same,” imports, that the maker delivered it to the payees, and the last endorser to the plaintiff.

The fact, that a defendant’s answer denies the receipt of notice of protest, does not make a notary’s certificate of the fact of service inadmissible as evidence.

When, to an action on a note, usury is set up in the answer, without its being stated whether it is set up as a defence or counter claim, it will be deemed to be set up as a strict defence, and that only, and the answer will not be taken to be true, merely because it is not replied to.

When a party purchases accommodation paper, at less than its face, on representations, made by the parties to it, that it is business paper, and on which he relies, he is entitled to recover the whole sum payable, by its terms, although it exceed the amount paid for it, with the legal interest thereon.

(Before Oaklet, Ch. J., Duer and Bosworth, J.J.)

February 23, 1856.

This action comes before the court, on an appeal by De Groot, from a judgment entered upon a verdict recovered against him, by the plaintiff.

It was tried before Mr. Justice Slosson and a jury, the 30th of March, 1855. The pleadings were as follows:

Plaintiff avers that the defendant, Patón, heretofore, for value received, made his promissory note in writing, dated July 10,1854, whereby, four months after date thereof, he promised to pay to the order of the defendants, Joseph Carpenter and George R. Jaques, under their firm name of Carpenter & Jaques, one thousand dollars; that said firm of Carpenter & Jaques, and the defendant, De Groot, severally endorsed said note, in blank, and the same, so endorsed, was delivered to plaintiff, who now holds- and owns the same; that, at the maturity thereof, the said note was presented to the maker thereof, for payment, and payment thereof refused, of which the defendants, Carpenter, Jaques and De Groot, had due notice; that said note remains due and unpaid. Wherefore plaintiff demands judgment against the defendants, for the sum of one thousand dollars, with interest from November 13, 1854, besides protest, fees and costs of suit.

p. 380

The defendant, answering the complaint herein, by Skeffington Sanxay, his attorney, denies that the promissory note, in said complaint mentioned, was made for value received. And he denies, for want of knowledge, or information sufficient to form a belief, that said note was presented for payment, and payment refused, as alleged in said complaint, and he denies that he had due notice thereof.

This defendant further saith, that said note was made without any consideration, and for the accommodation of Carpenter & Jaques, and lent to them; that this defendant endorsed the same for their accommodation, and without any consideration ever being received therefor; that Carpenter & Jaques passed the same to the plaintiff, and he received the same, in contravention of the laws of the state of Hew York against usury, and upon a corrupt and unlawful reservation, and agreement to reserve, a sum greater than seven per cent., for the loan, use, or forbearance of money: to wit, the sum of three-and-one-quarter per cent, per month. Wherefore, and by means of the premises, said plaintiff became, and was, and is, an unlawful holder of said note, and of the endorsement of this defendant thereon, and this defendant is entitled to have his name cancelled therefrom, and his liability discharged; and he demands judgment that the complaint be dismissed, as against him, and that his name be cancelled and discharged from said note.

When the jury was empanelled, defendant’s counsel moved to dismiss the complaint, on the ground that it did not state facts sufficient to constitute a cause of action, which motion was denied.

He then moved for judgment, on the ground that his answer contained counter claims not replied to, which motion was denied To each decision he excepted.

The making and endorsement of the note in suit were then ad mitted. The plaintiff then read, in evidence, a notary’s certificate of presentment, demand of payment of the note, and of notice of protest to the endorser.

Its reception and admissibility were objected to, “ on the ground that the defendant having denied, (in his answer,) the service of notice of protest, the notary’s certificate was not evidence of such ■service.” The objection was overruled, and the decision excepted to.

p. 381

Evidence was then given as to the question of usury, and tending to show that the note was bought by the plaintiff, relying on the truth of representations made by the parties, that the making and endorsement of the notes were business transactions.

Proof of actual service of the notice of protest on De Groot, was given by the person who served it.

Some other exceptions, of minor importance, were taken.

Hone were taken to the charge of the court.

The jury found a general verdict for $1,029.71, and found, specially, that the sum paid for the note when first negotiated, was $900.

A judgment was entered for the larger sum. All the defendants appealed. But the appeal was prosecuted by De Groot only.

S. Sanxay, for appellant.

J. E. Burrell, for respondent.

complaint states facts sufficient to constitute a cause of action. The averment that Patón made the note, is equivalent to saying that he signed it and delivered it to the payees.

The allegations that the payees andDe Groot “severallyendorsed said note, in blank, and that the same, so endorsed, was delivered to plaintiff, who now holds and owns the same,” would, on a liberal construction of language, be understood to mean, that the payees endorsed it to De Groot, and that he endorsed it to the plaintiff. (Code, § 467 and § 159.)

This language of the complaint should be most liberally construed, inasmuch as the answer avers that the note was, in fact, delivered to the plaintiff by a party to it. The word endorse imports a delivery, and the averment that the plaintiff has the possession of, and owns the note, in connection with those that precede it, is equivalent to saying that it was delivered by the payees to De Groot, and by De Groot to the plaintiff. Griswold v. Laverty, (12 L. Ob. 316,) is conclusive upon this point, so far as the judgment of this court is concerned.

Ho objection was made, at.the time, that the notary’s certificate of presentment and protest, did not conform,to the statute, or was

p. 382

not proper or sufficient evidence to prove those facts. That objection cannot be taken now. If taken at the trial, non constat, but other evidence would have been given. The objection taken was, that the fact of “service of notice of protest” could not be proved by the notary’s certificate, on the ground, that such service had been denied by a sworn answer. Service of it was subsequently proved by the person who made it. The objection actually taken is untenable. (Arnold v. Rock River Valley R. R. Co., decided January term, 1856.) Ante p.

The allegations of usury contained matter of defence, and, if true, constituted, at law, a flat bar to the action. If true, they showed that the plaintiff never had a right of action.

The answer does not, in terms, state that these facts are pleaded as a counter claim. If they are a counter claim, within the meaning of that word, as used in § 150 of the Code, it follows that they were admitted, by the plaintiff’s failure to controvert them, by a reply, and the defendant might have moved, on notice, for such judgment as the facts stated entitled him to. (Code, § 154.)

If they are to be viewed as a defence, and not a counter claim, they were put at issue by the Code, as upon a direct denial, or were avoided, as if new matter had been alleged sufficient to avoid them. (Code, § 168.)

When the facts, alleged in an answer, may possibly constitute a counter claim, but are such as always constituted a flat bar, at law, to the plaintiff’s right to recover, by showing, if true, that he never had any cause of action, they should be deemed to be set up as a defence merely, unless the answer expressly states that they are set up by way of counter claim. A verdict and judgment upon it, in favor of the defendant, would fully protect him against a future action. To preclude a plaintiff from a recovery, on the idea that he has admitted the allegations of such an answer to be true, by omitting to reply to it, when the same allegations, viewed as a full defence, and that only, would be put at issue by the Code, would operate as a surprise in all actions in which the defence of usury is interposed.

Hone of the exceptions taken to the admission or rejection of evidence are tenable.

The Judge, at the trial, could not withdraw the case from the consideration of the jury. There was evidence, on which it was

p. 383

necessary they should determine what the truth was, in relation to the facts controverted. There was, therefore, no error in refusing to direct a verdict to be found for the defendant.

It was expressly conceded, on the argument, that the charge itself was unexceptionable. No exception was, in fact, taken to any part of it. The case is before us upon an appeal from the judgment only, and not from any order denying a new trial, on the ground that the verdict is not contrary to evidence. Such an appeal presents only questions of law, and no others have been raised on the argument before us.

The jury having found that all the parties to this paper represented it to be business paper, that the plaintiff bought relying on the truth of these representations, and that the transaction was not a device to evade the laws against usury, the rights of the parties are the same as if it were, in fact, business paper.

The verdict, on such a state of facts, was, properly, given for the face of the note. The judgment must be affirmed.