Bernhard v. Brunner — 17 N.Y. Super. Ct. 528

Majority

p. 528

Bernhard et al., Plaintiffs and Appellants, v. Brunner et al., Defendants and Respondents.

Headnote

1. In an action by the payees of a check against the drawers, the defendants may show the transaction in which it originated; that its delivery was not absolute but conditional, and that according to such condition it was the plaintiffs' duty to return it to the defendants, and that they had refused, before suit brought, to do so. ¡

2. When there is conflicting evidence in respect to the allegations of fact stated in an answer as a defense, it is the duty of the Judge to submit the evidence to the jury, and consequently an exception to his refusal to charge that it established the facts, as either party claimed them to be, is manifestly untenable.

(Before Bosworth, Ch. J., and Hoffman and Moncrief, J. J.)

Heard, April 7;

decided, April 30, 1859.

This is an appeal by the plaintiffs from a judgment against them, entered on a verdict rendered at a trial before Mr. Justice Woodruff and a jury, on the 21st of June, 1858.

Isidor Bernhard and Seigel Bernhard, composing the firm of . Isidor Bernhard & Son, are the plaintiffs, and William Brunner, Samuel Brunner and Jacob Brunner, composing the firm of ■ William Brunner & Co., are the defendants. The action is upon a check in these words, viz.:

“No. 8874. New York, Sept. 14,1857.

“ Bank of the State of New York:

“ Pay to the order of Messrs. Isidor Bernhard & Son, twenty-four hundred and thirty-five TW dollars.

William Brunner & Co.”

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The defense set up in the answer, and attempted to be proved at the trial is, that the check was a memorandum check; that the defendants applied to the plaintiffs, on the 7th of September, 1857, to borrow money; the latter said they had none they could lend, but had a note for $2,435.50, made by Coffin & Haydock, having about 18 days to run, which the plaintiffs had no doubt, as they said, the defendants could get discounted at their Bank as the note was so near its maturity, and the makers were perfectly responsible; that the defendants took the note to see if they could get it discounted, the next day being discount day, and gave the check as a memorandum, and the agreement was that the note was to be returned if the bank would not discount it, and the check given up. That on the 8th the bank refused to discount the note, oh the ground that the makers had failed, whereupon the defendants returned it, and the plaintiffs refused to accept it, or surrender the check in suit. '

The defendants gave evidence tending to' prove the truth of the facts stated in their answer. The plaintiffs, on their part, gave evidence tending to show a sale of the note, or an exchange of it for the defendants’ check.

The plaintiffs objected and excepted to the admission of evidence to prove the defense stated in the answer, on the ground that the check was, in terms and legal effect, payable absolute^, " and could not be shown by parol to be payable- on a contingency.

The evidence also disclosed, that on the same 7th of September, the defendants received from the plaintiffs a note for $4,500, made by Van Wyck, Townsend & Warren, and gave their check to the plaintiffs for the same amount, dated subsequently, but a few days before such note matured; that the defendants procured such note to be discounted on the 8th, and paid their check ou the day of its date. The plaintiffs gave evidence tending to show that the transfer of both of said notes was a single transaction, and was in pursuance of one contract, and the defendants gave evidence tending to show that the- transactions were separate, but that the one, in its substance, was the same as the other.

The plaintiffs requested the Court to charge,

1. That the evidence established a sale of the Coffin & Hay-dock note, and that the plaintiffs are entitled to recover.

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2. That the contract being for the two notes, taken for the two checks, the defendants cannot rescind without returning both notes, they cannot divide the transaction, keeping one note and returning the other. The Judge refused to charge according to cither request, and the plaintiffs excepted.

The Judge charged, {inter alia,) thus: “ The question is, therefore, what was the real transaction between the parties, as understood by them, and agreed to at the time ? If the note was taken, and the check was given, as a purchase; or if the note was taken as an exchange of the check for the note—the note to be used by the defendants as their own, the defendants are liable; but if the note was taken on the understanding, that the defendants could get it discounted at their bank, and should try to get it discounted there, and the check was given only as a security to the plaintiffs in that event, then, the defendants are not liable, as they returned the note on the discount being refused. (To this last portion of the Judge’s charge, the plaintiffs’ counsel excepted.)

The jury rendered a verdict in favor of the defendants. The plaintiffs moved, on a case, for a new trial, and the motion was denied. From the order denying it, and from the judgment entered on the verdict the plaintiffs appealed to the General Term.

James W. Gerard, for the appellants,

Insisted that the evidence entitled the plaintiffs to the instructions which they requested the Court to give to the jury; that the exceptions to the refusal to charge as requested were, therefore, well taken; and contended that, a check on a bank, absolute and unconditional on its face, cannot be shown, by parol, to be payable only on a contingency, which would destroy, qualify or limit-its legal effect; or only out of a particular fund, and cited Edwards on Prom. Notes, pp. 147, 148; Chitty, 162, ed. of 1836; Johnson v. Titus et al., ( 2 Hill, 606 ,) Thompson v. Ketcham, (8 John. R., 192,) Barnum v. Barnum. ( 8 Conn., 409 .)

S. Sanxay, for the respondents.

The consideration of a check or note may be inquired into: that nothing was given for it, or what was given for it, is open to proof. This involves the whole

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examination of the facts and circumstances attending the transaction, so far as the point of consideration is concerned. (Chitty on Bills, 69, and notes; Edwards on Bills, 311, et seq.)

If, then, the allegation is, that one security or evidence of debt was given for another of a similar nature, the inquiry is open; was there a mutual, unconditional sale or exchange of one for the other; or was there any other condition or purpose for which the interchange was made ?

We think it clear that the Judge was right in admitting testimony to show on what agreement the check was given, upon the delivery of the note of Coffin & Haydock. The testimony was directed to the original consideration of the check.

The Judge would have erred, in our opinion, had he taken the question of the fact of a sale or no sale of the note from the jury, or expressly directed them to find a sale, as he was requested to do. There was evidence enough to go to the jury upon this question—indeed, evidence enough to sustain the conclusion they arrived at.

We consider, also, that his refusal to charge, as requested, that they could mot rescind the contract as tó this check and note without doing so as to the other, a proper refusal. There was nothing in the case, so connecting the one with the-other, as to make an indivisible contract.

The charge of the Court was, in our opinion, correct. The inquiry upon the testimony was legally open, whether the note was sold and the check given as its price—the defendants taking the note to use it as their own absolutely; or whether the note was delivered for the special purpose of trying to get it discounted, and the check given as a security to the plaintiffs in case the defendants succeeded in getting the money upon it, and to enable them to have the price a few days earlier than the note matured.

The case, then, went to the jury upon the point of the true-original consideration of the check. There was evidence requiring the Judge to submit this question to them. They have found that the delivery was made for the special purpose mentioned.' Their verdict is warranted by the testimony; and we conclude that no error was committed by the Court or jury.

The judgment must be affirmed, with costs.

Judgment accordingly.