Bird v. Faulkner

Headnote

Promissory note—oral evidence to show read consideration—Evidence admitted to show that note payable on certain date was as between parties, mere memorandum note and without consideration and unenforceable until final settlement of partnership affairs between the maker and payee.

Appeal from, judgment entered in favor of the defendant upon the verdict of a jury, and from order denying plaintiff’s right to have the verdict changed into a verdict for plaintiff (the court, having by stipulation, between the parties, reserved the right so to do if so advised), and denying plaintiff’s motion for a new trial.

This action was brought upon a promissory note given by defendant Faulkner to plaintiff Bird for the sum of $6,170.34, bearing date June 2, 1884, payable one year after date. The defendant admitted giving the note, but claimed that it was a memorandum note, and was not to be enforced until after a final settlement of the affairs of Bird, Faulkner & Co.; and that the affairs of the partnership of Bird, Faulkner & Co., which ended on June 2, 1885, not having been settled at the time of the commencement of this action, it was prematurely brought.

It appeared that the note in suit was made for an

amount which, by the balance sheet made by the firm of Faulkner & Bird (limited) composed of the parties to this action and one Theodore L. Bird, on the second of June, 1884, when that firm was terminated by mutual consent, upon certain estimates of the value of the firm assets, appeared- chargeable to the defendant’s account as a partner on the partnership books; that contemporaneously with the termination of said firm, a new firm was formed by the same parties under the firm name of Bird, Faulkner & Co., to which the whole of the assets of the former firm were turned over bodily, and which assumed its liabilities and continued in business for another year up to June 2, 1885; that the note in suit was not given until after the old firm was terminated and the new firm begun, and it was then given by the defendant to the plaintiff, the defendant objecting at the time to giving it, and the plaintiff assuring him that it was only a memorandum, and would not be enforced by him, and the matter would be settled at the end of the co-partnership, that is, the final settlement ; that it would be made up then, and if anything was coming to the defendant at that settlement, it would be credited to him upon the note.

The written agreement under which the new partnership was formed, contained the following provision : “ Inventory of stock to be taken on January 1, 1885, and if it- shall then be found that the business has not to that date paid for its running expenses, together with the cash that has been withdrawn by the said members of the firm, then in that case Wm. Edgar Bird to have the option whether he will continue the business to June 2,1885, or wind it up on January 1, 1885. When the true assets of the aforementioned firm of Faulkner & Bird shall be ascertained on June 2, 1884, then what the books show as due to Wm. Edgar Bird shall be credited to him on the books of Bird, Faulkner & Co., and will draw interest at six per cent, per annum from that date—furthermore, the indebtedness of Frank G.

Faulkner and Theodore Lyell Bird as it may in each case appear on the books of Faulkner & Bird, shall remain an indebtedness to Wm. Edgar Bird, but without interest during the term of this copartnership.”

The following is the opinion of the court denying motion for direction of verdict for plaintiff and for a new trial

“ The contract of a promissory note cannot be varied by parol. The real consideration of it can be proved by parol. The evidence that, at the time of giving it, the payee said he would not enforce it until, etc., can be used as a piece of testimony to show, with other facts, for what the note was given. There was no other consideration for the present note than the individual indebtedness of defendant to plaintiff growing out of the partnership (limited) affairs. No such indebtedness was, in fact due. The apparent indebtedness was subject to the result of the liquidation of the affairs of the limited partnership. The mode of that liquidation was agreed upon by the subsequent partnership agreement, and until that liquidation is made it cannot be determined that the face of the note is due by the maker. I think the defendant should have judgment on this verdict.”