Gildersleeve v. Mahony — 12 N.Y. Super. Ct. 383

Majority

p. 383

Gildersleeve v. Mahony, impleaded.

Headnote

When a plaintiff, In an action against a firm, in order to prove that the endorsement of its name was written by one of its members, reads a portion- of one of the firm’s answer, which states such to be the fact, but also alleges other facts, which, .if true, would be a defence to the partner whose answer is so read, the latter is entitled to have the other parts of the answer, which present such defence, read as evidence in his own behalf.

But although the Judge, at the trial, rules the contrary, a new trial will not be granted for, that reason, if the plaintiff subsequently proves, by clear and uncontradicted evidence, facts which would render such defence wholly unavailing.

In such a case, the court can see that the error could not, possibly, have prejudiced the defendant.

(Before Oakley, Oh. J., and Doer and Bosworth, J.J.)

February, 1856.

This action came before the court on an appeal, by Mahony, from a judgment on a verdict rendered against Mm, in favor of the plaintiff. It was tried before Mr. Justice Slosson and a jury, on the 24th of May, 1855.

p. 384

It was brought upon a note dated the 2d of August, 1854, made by defendant Patón, payable four months after its date, to the order of the defendants, Carpenter & Jaques, and endorsed in blank by that firm, and by defendant Yancleve, and the defendants Auliffe & Mahony, and transferred to the plaintiff so endorsed. It was for $1,000. Defendant Mahony was one of the firm of Auliffe & Mahony.

The complaint was in the same form, substantially, as the one in the case of Burrall v. De Groot. Ante, 379.

The answer of Mahony stated, that Auliffe endorsed the note, in his firm’s name, without a consideration, for the accommodation of Carpenter & Jaques, and without the knowledge or assent of Mahony, and that Patou also signed it, as maker, for the like accommodation.

For a further and separate defence, it states the accommodation, making and endorsement of the note, and that, when first negotiated, Carpenter & Jaques transferred it to Charles' Burrall, on a discount of it at the rate of three-and-one-quarter per cent per month, Burrall knowing, when he took it, that it was accommodation paper.

It farther alleges that Burrall is the real party in interest in this action, and that plaintiff received it from Burrall, for the purpose of suing it in his own name for the benefit of Burrall. The complaint concludes thus :

Wherefore, and by means of the premises aforesaid, the said plaintiff became, and was, and is, an unlawful holder of said note, and of the endorsement of the firm of this defendant thereon. And this, defendant is entitled to have his name, and the firm name of this defendant, and his and the liability of his firm discharged; and he demands judgment that the complaint be dismissed as against him and his firm, and-that his name and that of his firm, be cancelled and discharged from said note.

The counsel for the plaintiff was proceeding to open the case, when Mr. Sanxay, of counsel for the defendant, moved that the complaint be dismissed, on the ground that it does not contain facts sufficient to constitute a cause of action against this defendant.

Which motion being denied, said counsel excepted.

Said-counsel then moved for judgment on the record, that the complaint be dismissed, on the ground that the answer contains a

p. 385

counter claim, and a demand for affirmative relief, and sets forth, affirmatively, the substantive facts of a complaint, to vacate a promissory note for usury, and prays the same judgment that would be proper in an action brought for that purpose, and that the same is not replied to.

Which motion being denied, said counsel excepted.

The counsel for the plaintiff then offered the note mentioned in the complaint in evidence.

To which the said counsel for the defendant objected, on the ground that the answer denies, and puts in issue, the endorsement of the firm name of McAuliffe & Mahony, and the fact that said parties were a firm at all, in so far as said endorsement is .concerned.

But the said Justice ruled, that the endorsement is sufficiently admitted by the answer.

To which ruling said counsel excepted.

Said counsel for defendant then moved, that, inasmuch as the admission of the defendant in the answer, if said answer contains one, must be taken together as a whole, the contemporaneous assertion by the defendant, in the answer, which goes to his discharge, or to show that he is not liable, must-be received with and as part of the admission, and as evidence of his discharge, and he again moved to dismiss'the complaint.

But the said Justice ruled, that the defendant must make out his discharge, or show that he is not liable as endorser, by affirmative proof, and he denied said motion.

To all which said counsel excepted.

Said counsel for defendant then moved, that said defendant have the affirmative of the issue, and that he be considered as opening, and be permitted to close the case.

But the said Justice ruled, that, as to the opening and closing the case, it is a matter of discretion with the court, and he will allow such motion if defendant admit plaintiff’s case; otherwise, not.

The counsel for the plaintiff then read said note, and the same of McAuliffe & Mahony endorsed thereon, to the jury, under the exception of the defendant’s counsel, and then, proving the interest on the note, rested his case.

The said counsel for the defendant then moved for a dismissal

p. 386

of the complaint, or a nonsuit, on the ground that the plaintiff had failed to make out a case against the defendant by competent proof.

But the said Justice denied said motion.

Whereupon said counsel excepted.

The said counsel for the defendant then called Charles Burrall, Jr., who, being sworn, testified: I know the plaintiff; he was formerly engaged in the business of discounting paper; he has failed; he now has charge of the Empire Iron Works; I believe he has made a general assignment of his property, but I don’t know when; I don’t recollect when he made his assignment. The note in suit being shown to witness, he said: I have seen this note before; it came to me about the second of August last; I received it from George R. Jaques, one of the firm of Carpenter & Jaques, the payees of the note.

Being cross-examined, he said: I afterwards sold the note to Gildersleeve, the plaintiff; I sold it to him about thirty days before it became due; he gave me his check on the Irving Bank for it,' less interest seven per cent.

Redirect.—He has never retransferred the note.

Robert Patón, being sworn, testified: I know the parties to the note; I am the maker of the note; I made it for the accommodation of Carpenter & Jaques; I delivered it to Mr. Jaques; I never received any value for it from any one; I know McAuliffe & Mahony ; they are stone-cutters; I never passed it to them.

George W. Stevens sworn: I am acquainted with McAuliffe & Mahony; they are, and were at the time of the making of the note, stone-cutters.

The defendant here rested.

The counsel for defendant asked the court to charge the jury, that the defendant was entitled to a verdict, on the grounds stated in his opening, and that it was incumbent on the plaintiff to show an assent of both of the members of the firm to the endorsement, or that the note was passed in the regular course of business, or within the scope of the business of the firm; that the note was shown to be an accommodation note, for the benefit of the payees, Carpenter & Jaques, who negotiated it, and that it never was shown to be in possession of defendant; and that the plaintiff’s title coming from Carpenter & Jaques, the payees, he was chargeable with knowledge that the endorsers of the note were accommodation endorsers, and

p. 387

was sufficient to put him upon his inquiry, in regard to the parties subsequent to the payees, and, if he neglected to make inquiry, he took no better title than the payees had; and, moreover, that the endorsers, under the circumstances, must be regarded only as guarantees, and that their guaranty is void.

But the said Justice refused so to charge, and directed the jury to find a verdict for the full amount of the note, with interest.

To all which said counsel for defendant excepted.

Judgment having been entered on the verdict, the defendant, Mahony, appealed to the General Term.

S. Sanxay, for appellant.

J. E. Burrell, Jr., for respondent.

The complaint states facts sufficient to constitute a cause of action, and judgment should not have been ordered for the defendant, on the pleadings, for the reasons stated in the opinion of the court, in the action of Burrall v. De Groot, impleaded with Paton. Ante 379.

Whether there was error in holding that the plaintiff, by reading a part of the answer setting up a separate defence, as an admission of the endorsement of the note by defendant’s firm, did not make the other allegations, of that part of the answer, evidence in favor of the defendant, of the facts alleged, it is unnecessary to decide.

For, assuming that the defendant had a right to read the whole of 'that part of the answer, as evidence of the truth of the facts it affirmed, the exception to the decision, refusing permission to read it, is obviated, by proof, subsequently given, that the plaintiff bought the note, and paid full value for it, before its maturity. There being no pretence that he had notice, at the time, that it had been endorsed and negotiated by one of the partners, for purposes foreign to the partnership, the plaintiff was entitled to recover.

If the plaintiff had given evidence of that fact in the first instance, and which was wholly uncontradicted, the court would have been justified in excluding evidence tending to prove the facts set up in that part of the answer. It was agreed, on the argument, that the only part of the answer, which defendant claimed the right to read, is comprised between folios ten and twelve of the case,

p. 388

inclusive. Those allegations present the defence first set up in the answer.

It would have been proper, in the case supposed, to have excluded such evidence, unless the defendant proposed to go further, and prove notice to the plaintiff of the misappropriation of the endorsement.

If the defendant is right, in his position, that the plaintiff, by reading that part of the answer containing the first defence, as evidence that the note was endorsed by'the firm, made the other allegations evidence of their truth, then it was clearly necessary for the plaintiff to giv^ further evidence, before he would be entitled to recover. In that view, he held the affirmative of the issue. So, too, if the endorsement, by the firm, was, as he contends, denied by the answer, the plaintiff was bound to prove it.

In either way of viewing it, the plaintiff held the affirmative of the issue. And supposing the plaintiff to have read the whole of the answer setting up the first defence, and thus, while proving that the name of defendant’s firm was written by one of its members, also gave evidence tending to show that the note was endorsed and negotiated out of the firm’s business, without the knowledge of the defendant Mahony, still the plaintiff would be entitled to recover, on proving that he became the holder of it, before maturity, for value, and without notice of the fraud practised on the defendant by his copartner.

An erroneous ruling, when the plaintiff rested, that the defendant was bound to prove the matters averred, in the part of the answer read, in discharge of his liability, is not one for which the judgment should be reversed, as evidence was afterwards given, which was wholly uncontradicted, and which entitled the plaintiff to a verdict, admitting all the matters alleged, in such part of the answer, to be truej as therein stated.

The judgment, in this action, should also be affirmed.