Healy v. Gilman — 14 N.Y. Super. Ct. 235

Majority

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A. Healy and J. Reddington, Executors of N. Gilman, deceased, v. W. W. Gilman.

Headnote

A bank check, in the hands of the drawer, paid by him, is not evidence, per se, of a debt due to him from the payee; but when it is shown that the Check was in fact lent to the payee, it may be read in evidence to prove the amount of the loan. A draft, in the hands of an acceptor, and paid by him, is not evidence of a debt due to him from the drawer; but on the contrary, the presumption of law is, that the draft was drawn against funds of the drawer, then in his hands. In order to charge the drawer of a bank check, it is not necessary to show presentment for payment and refusal, if it is proved that, at the time, he had no funds in the bank upon which the check was drawn. When an account has been rendered to a defendant which, on the trial, he refuses to produce, and which, it appears, was transcribed from the ledger of the plaintiffs, the account in the ledger is good secondary evidence. But when no reason is shown for not producing the ledger, a copy of the account taken from the ledger cannot be received, as it is plainly not the best secondary evidence which, the plaintiffs had it in their power, to give. The American eases have established that there are grades in secondary evidence, and the true rule deducible from them is, Undoubtedly, that laid down by Mr. GreenIieae; namely, “That, if from the nature of the case itself it is manifest that a more satisfactory kind of secondary evidence exists the parly will be required to produce it, but when the nature of the case does not disclose the existence of such better evidence, the objector must prove its existence, and must also prove that it was known to the other party in season to have been produced on the trial.”

The referee in this cause, overruling the objection of the counsel for the defendant, had admitted in evidence a copy of an account, taken from a ledger, admitted to be in the possession of the plaintiffs, as proof of the contents of an account which, it was alleged, had been rendered to the defendant.

&élct¡ that the evidence ought not to have been received, and that, for this error, the judgment upon the report of the referee must be reversed, and a new trial ordered. Costs to abide event.

(Before Düer, Bosworth, and Siossoir, J. J.)

Heard, March 9;

decided, May 16, 1857.

This action comes before the Court at General Term, on an

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appeal by the defendant from a Judgment at Special Term, entered upon the Report of a referee, in favor of the plaintiffs. The judgment, including costs, was for $24,709 78.

The following is the report of the referee:

To the Justices of the Superior Court of the City of New York:

In pursuance of an order of this Honorable Court, made in the above entitled action, bearing date on the 3d day of November, 1855, by which it was ordered that the issues joined in this action be referred to me, the subscriber, to hear and decide the same, and report thereon to this Court, I, James Maurice, Referee as aforesaid, respectfully report:

That I have been attended on the reference under the above recited order, at my office, No. 67 Wall Street, in the City of Hew York, by the counsel for the plaintiffs and defendant, respectively, and have heard and considered their proofs and allegations; I do further find and report the following facts:

That Nathaniel Gilman and Nathaniel Gilman, Junior, were copartners in business, under the firm of Nathaniel Gilman and Son.

That the partnership of Nathaniel Gilman and Son had various dealings and business transactions with the defendant, commencing on or about the tenth day of December, 1846, and continuing until on or about the thirtieth day of November, 1852.

That the first transaction was a loan of the sum of six hundred dollars, on December 10th, 1846, by the firm to the defendant, and that ah the subsequent transactions (except a sale of leather, August 28, 1848, amounting to $34 91, by the firm to the defendant,) were loans or advances of money by the firm to the defendant, or for his use, at his request, and credits of sums received in various amounts, at different times, from the defendant or from the avails of negotiable paper transferred by him to the firm, or collections by the firm of amounts due on sales made by defendant, of leather, belonging to him.

That the items composing these different credits are contained in the account current annexed to the complaint in this action, and that independently of the admissions in said complaint, no proof whatever in support of such credit items was produced to or made before me.

That the debit items in said account current, (except balances

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for interest,) were established by proof, and the credit items, by the said admissions in the plaintiffs’ complaint.

That Nathaniel Gilman, Junior, died on or about the 17th day of February, 1853, leaving a last will and testament, whereby he appointed the plaintiffs (and another person who did not qualify,) his executors; and that letters testamentary were granted to the plaintiffs on or about the 10th day of March, 1853.

That an account current was rendered to the defendant by the said Nathaniel Gilman, as such surviving partner, in the' month of March or April, 1853; that the account so rendered, corresponded with the said account annexed to the plaintiffs’ complaint, except in one credit item in defendant’s favor, amounting to $672 71, due November 4,1852, which item was not contained in the account then rendered to said defendant; that the defendant afterwards, on the same day the account was rendered, and on two other occasions shortly thereafter, disputed the correctness of such account in general terms, but did not at any time specify or point out any particular item or items which he thought wrong, except once, when he made a specific objection to a single item; that the defendant was mistaken in respect to the item objected to by him, and the account in this particular was correct; and that no objection was made by the defendant at any time to the mode in which the interest is reckoned and computed in such account.

That the account rendered (including the credit item omitted from it) exhibited a balance due from the defendant on the 28th day of February, 1853, to the firm of N. Gilman and Son, of nineteen thousand four hundred and thirteen dollars and ninety-one cents.

That Nathaniel Gilman, surviving partner of such firm, on or about the ninth day of July, 1855, duly sold, assigned, transferred, and set over unto the plaintiffs the demand in controversy in this action, and that the said plaintiffs are now the lawful owners thereof.

Upon these facts, I am of opinion and do find and report that the plaintiffs are entitled to judgment against the defendant for the said sum of nineteen thousand four hundred and thirty-one dollars and ninety-one cents, with lawful interest thereon, from

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the twenty-eighth day of February, 1853, and which amounts in the aggregate at the date of this report to the sum of twenty-three thousand seven hundred and ninety-two dollars and twenty-one cents, and are also entitled to their costs in this action, including a suitable allowance.

All which is respectfully submitted.

Dated New York, May 12th, 1856.

James Maurice,

Sole Referee.

To this report and decision, the counsel for the defendant duly excepted, It is not necessary to state at large the evidence before the referee. It will be sufficient to state the exceptions that were taken by the defendant’s counsel, in the course of the trial, and which were argued and decided upon this appeal.

The plaintiffs having called upon the defendant to produce an account rendered to him, and the same not being produced, a witness for the plaintiffs testified as follows. “ I have drawn off a copy of the account, as it now appears in the books of N. Gilman & Son, this is it : (witness produced a paper writing.) It is a true copy from the books of N. Gilman & Son. I believe it to be an exact copy of the account defendant received, and had in his hands, with the exception of one item; both accounts were made from the same account in the ledger; that item is a credit item of net sales of 397 sides of leather, amounting to $672.71, due Nov. 4th, 1852. It is not dated; that item was omitted, on account of its not being posted in the ledger at that time. I have not a doubt that this account is a copy of the one rendered.” Thereupon plaintiffs’ counsel offered in evidence the paper writing so produced by the witness. The counsel for the defendant objected to the admission of the same, on the ground that it was not the best secondary evidence, which it was in the power of the plaintiffs to produce.

The referee decided that the said paper writing was admissible, to which decision the defendants’ counsel duly excepted. When the plaintiffs rested, the defendants’ counsel made the following motions, each of which was denied by the referee, and to each decision the defendants’ counsel duly excepted.

1. A motion to strike out, as not supported by evidence, all

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the items, to prove which, checks of Nathaniel Gilman & Son had been produced without explanation,

2. A motion to strike out, as not supported by evidence, all the items, to prove which, checks of the defendant had been produced.

3. A motion to strike out, as not supported by evidence, all the items, to prove which, drafts drawn by defendant on N. Gilman & Son had been produced.

4. A motion to strike out, as not supported by proof, all the items of interest.

5. A motion to strike out, all evidence, as to the account alleged to have been rendered to defendant.

6. A motion to strike out, as not supported by evidence, all items, as to which, no evidence had been adduced, other than the alleged rendering of said account.

E. West, for the defendant, appellant,

contended that the finding of the referee upon the facts, was not supported by the evidence, and that all the exceptions taken on the trial, ought to have been allowed.

E. H. Owen, for the plaintiff, respondent,

insisted that the report and decision of the referee, were in all respects correct, and that the judgment below, ought to be affirmed with costs.

The action is brought to recover a balance of account alleged to be due from the defendant, to the late firm of N. Gilman & Son, which was dissolved by the death of N. Gilman, Jr., to whose executors, the present plaintiffs, the claim was assigned by the surviving partner of the house.

The referee to whom the case was referred, has reported a balance, including interest to the date of his report, of $23,792 21.

The transactions between the parties extend over a period, from December, 1846, to February, 1853, at which time N. Gilman, Jr., died. These consisted of loans made by the firm to the defendant, of sales of leather consigned by him to them, and of the discount, by the firm, of notes held by him. Such discounts appear to have been made by checks. No loans appear to have been made by the defendant to the firm.

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Soon after the dissolution of the firm, an account was rendered, by the surviving partner to the defendant, setting out the entire transactions between the parties, from December, 1846, to February, 1853, and it was claimed, at the trial, that this account had been acquiesced in, and that it had the effect of an account stated.

The plaintiffs do not seem to have relied upon this as wholly sufficient to establish the case, for, in addition to the evidence of the rendering of the account, they attempted to establish a great portion of the debit items of it, by independent proof.

The witness, to prove these items, was a Mr. M'Clellan, who had been a book-keeper in the firm up to 1850, and then, after an absence of nearly three years, returned to its employ, where he continued to the period of its dissolution.

To a large number of the items proved by him, no objection is made, but in respect to others the evidence is objected to, as incompetent or insufficient. The evidence in respect to these latter items consists, first, of the checks of the firm to the order of, and endorsed by the defendant, covering nearly $9,000, in amount, and extending over a period, from December 20, 1850, to September 27, 1851; second, two drafts drawn by the defendant on the firm, amounting together, to $1,000; and third, two checks of the defendant, amounting together, to $2,320. There is then a series of charges, of over $2,000 in amount, of which the only, or principal evidence, is the account rendered.

In respect to the checks of the firm, it is objected that they are, in themselves, no evidence of money loaned, but only of money paid, and that the presumption is, that they were paid in discharge of a debt. A check is certainly not evidence in itself of a loan, but under certain circumstances it may be good evidence for that purpose, and we should be disposed to think, were there no other question in the case, that the referee, under the evidence, was justified in considering them proof to this point.

In respect to the second objection, that of the admissibility of the defendant’s drafts on the firm, as evidence of a debt on his part, we are clear, that it is well taken. Apart from the account rendered, these drafts furnish no evidence of an indebtedness.

The presumption is, that they were drawn on funds, in the hands of the firm, belonging to the defendant.

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It would appear from the account, that the firm had received leather for sale, from the defendant, at different times, as there are credits on account of such sales. In the account, if properly made up, these drafts would be proper debits; but standing by themselves, they furnish no evidence of debt against the defendant.

In respect to the two checks drawn by the defendant, it is objected, that there is no proof that they had been presented for payment and that payment was refused. We think it a sufficient answer to this, that the defendant kept no bank account at the period when these checks were drawn.

The principal piece of evidence on the part of the plaintiffs, however, and on which they chiefly rely to sustain their case, is the fact, that an account was rendered to the defendant in the spring of 1853, immediately after the dissolution of the firm, by the death of N. Gilman, Jr., in which, as is claimed, the defendant acquiesced.

It appears that the firm had been in the habit of rendering yearly accounts to their customers, and as I should infer from the evidence, to the defendant, in which interest was included.

At the period referred to, a statement of the entire account was transcribed from the ledger, covering the whole period of the parties’ transactions with each other, and rendered to the defendant.

Three questions are raised in respect to this account. First, as to the proof of the account itself; second, as to the defendant’s acquiescence in it; and third, as to the liability of the defendant for interest, charged in it.

The first is the material question, in the view we take of the case.

The defendant being called upon, on the trial, to produce the original account rendered, declined to do so, and the clerk who made out the original account from the ledger, of which it was a mere transcript, then produced another transcript from the ledger, of the same account, which he appears to have drawn off for the purposes of the trial; and the same was offered as evidence of the contents of the account which had been rendered. The witness swore it was a true copy from the books, and he had not a doubt that it was a correct copy of the one rendered, with

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the exception of one item of credit, which did not appear in the account rendered; because the item had not been then posted in the ledger. The ledger was not in court, nor was any offer made to produce it in lieu of the copy, nor was the copy read, on the ground of convenience, with an offer to produce the book for the purpose of comparison, or as a substitute for the copy, with an offer to produce that, if required. But the new transcript was offered as, in itself, competent evidence of the contents of the original account, after the refusal of the defendant to produce the latter.

It was objected to, on the ground, that it was not the best secondary evidence which it was in the party’s power to produce ; but it was admitted under an exception to the ruling.

I do not mean to contend that' there are any arbitrary or inflexible degrees of secondary evidence, rendering it necessary for a party, who is driven to that description of proof, to show affirmatively, in every instance, that there is no higher degree within his power, than the one he offers; but I think it may be safely said, that where it appears in the very offer, or from the nature of the case itself,,or from the circumstances attending the offer, that the party has better and more reliable evidence at hand, and equally within his power, he shall not be permitted to resort to the inferior degree first. As a general principle, the law requires the best evidence within the party’s power to produce; and I see no reason why this rule should not equally apply to secondary as to primary proof. There is this difference, it is true, between the two classes of proof: primary proof is necessarily single in its character, while all below it, admits of a wider range, and the fact may be established by a variety of evidence, as, for example, the contents of a lost paper may be established by a sworn copy made at the time, or by a rough draft, or by mere recollection; but it does not follow that all distinction between these kinds of proof is to be disregarded, and that they are all on a level, and it will hardly be contended, I think, that a witness would be allowed to prove the contents of a lost paper by recollection, when he had in his pocket a sworn, or even an unsworn copy made by him at the time the paper in question was written. In the U. S. v. Britton (2 Mason, 464), where the contents of a bank check—for the alter

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ation of which the defendant had been indicted for forgery—was proved. by the recollection of a witness, the original check having been destroyed by the defendant, Judge Story held, that the rule was universal, both in criminal and civil proceedings, that the best evidence was to be produced which the nature of the case admitted of, and that if an original instrument was lost, or in the possession of the adverse party, and he refused to produce it, an examined copy, if such existed and could be found, was the next best evidence, and must be produced; but if no such copy existed, then the contents of the paper might be proved by witnesses who had seen and read it, and could speak pointedly and clearly to its tenor and contents.

In Hilts v. Colvin (14 J. R. 182) a witness for the plaintiff was objected to as incompetent, on the ground that he had been convicted of a felony, and the proof of the conviction was by the parol testimony of a witness, after it had been shown that the office of the clerk, in which the record of conviction would have been found on file, had been burned down and its contents destroyed. It was objected to the admission of the proof, that by statute, the District-Attorney was required to certify a transcript of every conviction to the Court of Exchequer at the next term, there to remain on record, and that this transcript should be produced, as better evidence than the mere parol testimony of the witness. The Judge admitted the evidence and excluded the plaintiff’s witness, in consequence of which he was non-suited. The Court above reversed the judgment, on the ground that the transcript, which must be intended to be remaining in the Court of Exchequer, was “ higher proof, in the power of the party, than that given in the Court below.”

In a note to § 84 of 1 Grreenleaf on Ev., the author says, that the result of the American cases seems to establish the rule to be, that “ if, from the nature of the case itself, it is manifest that a more satisfactory kind of secondary evidence exists, the party will be required to produce it; but where the nature of the case does not, of itself, disclose the existence of such better evidence, the objector must not only prove its existence, but must also prove that it was known to the other party, in season to have been produced at the trial.”

There are several admitted grades of proof in respect to the

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contents of a lost'deed, as first, a counterpart, if there be one; if no counterpart, then a compared copy.;' and if no copy, then ah abstract or parole evidence; and it seems that evidence of a mere copy:would not be admitted, until it had been shown that the counterpart could not be produced,: . (Starkie Ev., Part 2, 354-5; 2 Atk. 71.).

Where the proof offered is of the same grade, the distinction of degrees ceases, as where the contents of a lost letter, of which no copy exists, is to be. proved by the mere recollection of witnesses, the testimony of one who had read and remembered the contents, is as good as that of one who wrote the letter. (Ditto, ditto, 357.)

In England, the rule as to. secondary proof, seems. of late years to have been much relaxed. .In Brown v. Woodman, 6 C. & P. 206, it was ruled at Nisi Prius, by Parke, Justice, that there were no degrees of secondary evidence, and he allowed the contents of a letter, which the defendant had written to the plaintiff, .and which the plaintiff declined to produce under a notice, to be proved by the oral testimony of a witness, though the defendant had kept a copy of the letter-; but, he said, if there had been a duplicate original, it might have been different.

■ ■ In the case at bar, the evidence offered, is not a compared copy of the account rendered, or a duplicate of that account (in either of which respects, the book from .which it was taken may well be regarded, and which would be the" next best evidence to the original itself); but it is a copy of such copy. In swearing to such last transcript,, therefore, as a correct copy of the account rendered, the witness is, in reality, swearing only to the . accuracy of it, as a transcript from the book, or, argumentatively, as a copy of the account rendered, because the latter was also taken from the book. ' . ■

We think it would be dangerous to hold such evidence admissible. If in the case, of a lost deed the party should attempt to prove its contents by producing a copy of a counterpart, or of an examined copy of the deed," and'which copy so offered he had made for the purposes of the trial, while the examined copy, or counterpart itself was admitted to be in his possession, and could be produced, would he be allowed to do it? Clearly not. Is there any difference in principle in the case of a party refusing to

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produce, on notice, an original paper, of less solemnity than a deed ? Does such refusal justify a looser land of secondary evidence, on the part of the party calling for its production, than in the case of a lost instrument ? Is it difficult to perceive why. It is said the party who refuses to produce the original, cannot complain that the other resorts to evidence of an inferior nature to that which he has it in his power to produce, because, having the original in his possession, he has the means of correcting any defect in the proof—but this will not always hold good; for it often happens that the original is not produced, because the party called on to produce it, may not have the actual possession or control of it at the time, or may have good and proper reasons for not producing it. The law can look only to the end to be attained, and that is, the truth, by the best and most reliable testimony.

However satisfactory the evidence may have been to the referee, we think in face of the admitted fact that better evidence was present, and might have been resorted to, the transcript from, the ledger, should not have been admitted as evidence of the contents of the account rendered.

This will render a new trial necessary.

It is unnecessary to express any opinion upon the question; how far the evidence sustains the finding of the referee, that the defendant acquiesced in the account as rendered—but it may be proper to say, on the question of interest, that it appearing to have been the practice of the firm to make up annual accounts, charging interest, and this custom known to the defendant during his dealings with them, and it farther appearing, though not, I admit, very clearly, that annual accounts, made up in this manner, were rendered to the defendant, and there being no evidence of his ever having objected to the charge of interest, it is a reasonable presumption that he dealt with the firm, on the understanding that he was to pay interest, and assented to it. (Esterly v. Cole, 3 Com. 502.)

There should be a new trial, costs to abide event.