147 N.Y.S. 4 | N.Y. App. Div. | 1914
The action was brought to recover the amount due and unpaid on a promissory note for £2,050, drawn by Alfred J. Nicholson to the order of Tichenor-G-rand Co. By a separate writing dated Chicago, 111., September 30, 1909, the plaintiff was requested to discount for said Tichenor-Grand Co. five promissory notes for £2,050 each, made by Nicholson. Said writing contained the following: “We do hereby promise and agree to pay said notes at maturity, according to the tenor thereof, and we do hereby waive notice of the acceptance of this guaranty.” This was signed by M. H. Tichenor, W. D. Grand and the defendant Louis M. Newgass.
It was conceded that under the law of Illinois all joint obligations and covenants shall be taken and held to be joint and several obligations and covenants. It was proved that the balance due was $5,428.48. The court held that the paper in question was an original undertaking. In his answer the defendant pleaded, inter alia, a release and discharge from all claims and demands by the plaintiff. The learned court has found: “That the defendant on or about February 11, 1911, transferred by conveyance absolute in form to William A. Tilden, the President of the plaintiff bank at Chicago, Illinois, for the benefit of the plaintiff, all the property which he owned, consisting of various parcels of real estate situated in the State of Illinois, worth more than the total amount of his indebtedness to the plaintiff, and that said bank accepted said conveyances of said real estate from defendant in full payment, satisfaction and discharge of all
The defense set up was affirmative and the burden was upon the defendant of establishing it by a fair preponderance of evidence. The finding of fact quoted supra is erroneous in stating that the conveyance referred to on or about February 11, 1911, was to William A. Tilden, president of the plaintiff bank. He had been the president of said bank down to June 2, 1908. The evidence is undisputed that since that time he has not acted for the bank in any capacity except as a director, and was such director on said February 11, 1911.
Assuming all the other facts to be true, a serious question would be presented whether a mere director of a bank would have the power to release rights and claims of his bank based upon written notes and guaranties. That question has not been argued, but, nevertheless, it is in the case. We proceed to consider the record as presented.
The defendant testified that he had known Mr. William A. Tilden and had done business with him for more than twenty years, and that they were very friendly; that he had a business of his own in Chicago which had nothing to do with the Tichenor-Grand Co., and “we did our business with the Drovers Bank and, of course, when the Tichenor-Grand Company went into the hands of a receiver, it did' not help my business any. I owed Mr. Tilden’s bank, the plaintiff in this action, about $38,000. I went to Chicago and we had &■ meeting, and he asked me what I was going to do. ‘Well,’ I says, ‘you know me; you know what I have always done — always made good in every way, shape and form.’ He says, ‘Tes, you have.’ ‘Well,’ I says, ‘I am going to make good now.’ I says, ‘ I have got so many shares of bank stock in your bank; I own this property on Oakwood Boulevard,’ my home it was, where I lived. That property was free and clear. It cost me $45,000. It was a very, very pretty place. * * * Well, I
The paper about which he was asked is as follows:
“Mr. L. M. Newgass,
“Chicago, 111.:
“Dear Sir.—If you pay and discharge all of the indebtedness of yourself and of M. Newgass & Son to the Drovers Deposit National Bank within one year from the date hereof, T will convey to you the property that you have conveyed to me, described as follows [then follows the description of five lots]; otherwise the property to be sold and applied on said indebtedness.”
Mr. Adams, an attorney practicing in Chicago and representing the bank, testified that he had an interview with Mr. Newgass after February, 1912, and prior to April 30, 1912, in his office in New York. “ Mr. Newgass told me that Mr. Til-den had always been his friend, and proceeded to relate how
Mr. Tilden’s deposition was received by consent. He testified: “That it is correct, as stated by the defendant, that he owed the plaintiff the Drovers Deposit National Bank, upwards of $38,000 on account of his personal indebtedness and the indebtedness of M. Newgass & Son, of which firm he was a member, such indebtedness being over and above the amount of the liability of the defendant as a guarantor of the notes of Alfred J. Nicholson. That on or about the 13th day of January, 1911, defendant conveyed to deponent certain real property belonging to him in the State of Illinois, which property is described in plaintiff’s Exhibit 2 of February 19, 1913; that on or about said 13th day of January, 1911, deponent signed the letter, plaintiff’s Exhibit 2, at the request of the defendant Newgass, and had the original sent in to the defendant Newgass, who was at that time ill and stopping at the Annex Hotel in the city of Chicago. Deponent further says that the only understanding of any kind or character he ever had with the defendant Newgass with respect to the receipt of the property described in plaintiff’s Exhibit 2 is set forth in the writing, plaintiff’s Exhibit 2, and that he never had any other or different agreement with respect thereto. That when the defendant deeded this property to deponent, deponent did not say, directly or indirectly, that this cleaned up all the indebtedness of every kind which the plaintiff bank had against the defendant, nor was anything to that effect said by deponent directly or indirectly. * * * That deponent still has title to the property described in plaintiff’s Exhibit 2 and is holding the same pur
There was also in evidence two letters from the defendant to Mr. Tilden dated May 3, 1912, and June 24, 1912, in reference to the institution of this suit against him containing personal appeals, but in no way claiming release or payment or referring to any such matter.
I am of the opinion that the alleged verbal release and discharge being an affirmative defense, the defendant did not sustain the burden. His story is in the highest degree improbable. It was positively contradicted by Mr. Tilden, who was corroborated by Mr. Adams as to the interview with the defendant. Mr. Tilden’s account is supported by his contemporaneous letter which described the lots with care and particularity and 'stated the conditions upon which they were held. Said paper is really a declaration in trust.
In Hutchins v. Van Vechten (140 N. Y. 115) the court said: “ By chapter 322 of the Laws of 1860
Section 242 of the Beal Property Law (Oonsol. Laws, chap. 50; Laws of 1909, chap. 52), providing for conveyances and deeds in writing, provides: “But this section does not * * * prevent any trust from arising or being extinguished by implication or operation of law, nor any declaration of trust from being proved by a writing subscribed by the person declaring the same.”
The conveyances were of the nature of mortgages as security for the debt. The creditor may sue upon the debt irrespective of the security. The defense has not been made out by a preponderance of the evidence and the judgment appealed from should be reversed and a new trial ordered, with costs and disbursements to the appellant to abide the event.
Ingraham, P. J., McLaughlin, Laughlin and Scott, JJ., concurred.
Judgment reversed and new trial ordered, with costs to appellant to abide event. Order to be settled on notice.
Amdg. 2 R, S. 135, § 7.—[Rep.