Opinion
January, 1905.
James M. Gifford, for the appellants.
John J. Adams, for the respondent.
The plaintiffs are stockbrokers and the defendants are husband and wife. The action is upon a joint note made by the defendants to the order of the plaintiffs for $40,000, bearing date May 9, 1901, payable thirty days after date at the Astor National Bank, New York city. It recites that it is given for value received. At the close of all the evidence counsel for the defendants moved for the dismissal of the complaint as against the respondent, upon the ground that there was no evidence to show that there was any consideration for the note, and, further, that there was no evidence of any indebtedness on the part of her husband to the plaintiffs. The motion was granted and the complaint was dismissed upon the merits. Counsel for the plaintiffs duly excepted.
We observe that the practice of dismissing a complaint upon the merits at the close of the evidence in jury cases instead of directing a verdict has become quite common; but we think it is unauthorized. There is no authority for dismissing a complaint upon the merits on a motion for a nonsuit at the close of the plaintiff's case or at the close of the entire evidence in an action triable and tried before a jury. A verdict may be directed in favor of the defendant at the close of all the evidence, and this would undoubtedly be upon the merits. In any event, therefore, it would be necessary to strike out the provision dismissing the complaint upon the merits; but upon another ground we think the judgment must be reversed.
Through one Rogers, an employee of the plaintiffs, the respondent's husband employed the plaintiffs to buy and sell stocks for him. At the time the note in question was given it is conceded that Rogers, in behalf of the plaintiffs, informed Buchanan that his margins had been wiped out and that he was indebted to the plaintiffs in a large amount and they demanded security. According to the testimony of Buchanan and his wife Rogers stated the amount of the indebtedness to be $23,000 or $24,000; but according to the testimony of Rogers he stated it to be $40,000. However, the amount as stated by him was neither denied nor questioned by either of them at that time. According to the testimony of Rogers the note was given for the amount of the indebtedness and to satisfy the plaintiffs concerning the indebtedness during the period of one month, at the expiration of which Buchanan expected to be able to pay the same. According to the testimony of Buchanan and his wife it was given to cover the existing indebtedness as stated by Rogers, which, as they claim, was only $23,000 or $24,000, and to furnish margins upon which the plaintiffs could carry 1,600 shares of the Atchison, Topeka and Santa Fe railroad stock still held by them for him for a period of one month, or until such time as it should sufficiently increase in value to enable the realization of a profit sufficient to pay the indebtedness. Rogers denied that there was any agreement or understanding that the plaintiffs should continue to carry this stock. The stock was in fact sold within a few days. It is manifest that if the facts are as testified to by the defendants the consideration for the note failed and there could be no recovery thereon; but, on the other hand, if the jury believed the testimony of Rogers they would have been authorized in finding for the plaintiffs. Assuming his testimony to be true, it might fairly be inferred therefrom that this note was given to induce the plaintiffs to refrain from pressing the payment of the indebtedness owing by Mr. Buchanan to them. Of course that would afford a good consideration as against both defendants. The respondent, however, contends that there was in fact no consideration for the reason that it was not shown by any competent evidence that her husband owed the plaintiffs $40,000 or any other sum. As already stated, however, there was testimony from which the inference might fairly be drawn that Rogers' claim as to the indebtedness was acquiesced in; but it is sufficient that the note itself recites a consideration. The plaintiffs were not bound in these circumstances to show a consideration. If there was no consideration the burden was upon the respondent to show that fact. She offered no evidence tending to establish the fact or to overcome the presumption raised by the recital of consideration in the note itself. There was, therefore, a question of fact presented which should have been submitted to the jury and the court erred in dismissing the complaint, and the exception thereto was well taken.
It follows, therefore, that the judgment should be reversed and a new trial granted, with costs to appellants to abide the event.
VAN BRUNT, P.J., PATTERSON and McLAUGHLIN, JJ., concurred; INGRAHAM, J., dissented.
I agree with the court below that, upon the whole evidence, it appeared that there was no consideration for the promise of the respondent to pay to the plaintiffs the amount of the promissory note sued on. The obligation being in form a joint promissory note, there was a presumption of consideration, but as between the original parties the existence of a consideration was a question of fact. The respondent alleged as a defense that there was no consideration of a promise, and upon the conceded facts I think the absence of consideration was established. The only claim of a consideration was the agreement by the plaintiffs to forbear the enforcement of a claim against the respondent's husband. It is conceded that the respondent received nothing from the plaintiffs for the note and that the plaintiffs parted with nothing upon the faith of the note, unless it was the right to enforce their demand against the respondent's husband. I can find no evidence in the record to show that there was any existing indebtedness of the respondent's husband to the plaintiffs at the time of the execution of the note. There was evidence on behalf of the plaintiffs that their agent claimed an indebtedness of $40,000; and the evidence on behalf of the defendants is that the claim was for a much smaller amount. But to establish a consideration, I think it must appear that there was an existing indebtedness, and that by accepting the note the plaintiffs undertook not to enforce that indebtedness until the note became due. Proof that there was a claim of an indebtedness, without evidence of an actual existing indebtedness, is not, I think, sufficient.
I, therefore, dissent.
Judgment reversed, new trial ordered, costs to appellants to abide event.