142 N.Y.S. 835 | N.Y. App. Div. | 1913
Lead Opinion
This is an action to recover on a promissory note made by the defendants on the 14th day of April, 1910, whereby they promised to pay to the order of the plaintiff one year from date the sum of $60,000, at the office of Stevens & Co., New York city, with interest at six per centum per annum. The defendants pleaded, among other things, that the note was given solely for the accommodation of the plaintiff and without con
The plaintiff had been a member of the New York Stock Exchange and had been suspended. About the end of May, 1909, before it had been determined whether or not he would obtain reinstatement on the Stock Exchange, he executed and delivered to one W. L. Stevens, a brother of the defendants, a memorandum agreement acknowledging indebtedness to him of $10,000 for money loaned on May 15, 1909, and reciting that if the plaintiff could obtain reinstatement within two months it was their desire to enter into partnership, and if he ’ could not obtain such reinstatement he would sell his membership in the Stock Exchange and loan the proceeds to Stevens to be employed “inhis stock exchange business on terms to be later agreed upon which will return Mr. Grannis not less than $10,000 a year.” The plaintiff did not succeed in obtaining reinstatement to membership in the Stock Exchange.
According to the testimony of W. L. Stevens, the plaintiff, on selling his seat on the Stock Exchange, returned the $10,000 he had borrowed and said that he would not put the balance into Stevens’ firm, which was then composed of one Henry Coolidge and himself, while Ooolidge was a member thereof, and they succeeded in finding one Henning, who was a member of the Stock Exchange, to join the firm in place of Ooolidge. The organization of the new firm was evidently contemplated at the time of the execution of the note, for the evidence shows that it was formed the next day and was composed of W. L. Stevens and Henning. The defendants were in the employ of their brother’s firm at salaries of $15 per week and had no interest in the firm.
The uncontroverted evidence is that they had no negotiations with the plaintiff with respect to the making of this note and that the loan was not made to them but to their brother, the check therefor for $60,000 having been drawn the day before and delivered to their brother’s attorney who, after the execution of the note, drew his check to their brother for the amount. The preponderance of the evidence also shows that after this
At the close of the evidence both parties moved for a direction of a verdict, and thus the facts were submitted to the court. It is perfectly plain, I think, from the evidence that this loan was not made to the defendants but to their brother
It follows that the judgment and order should be affirmed, with costs.
Ingraham, P. J., Clarke and Scott, JJ., concurred; McLaughlin, J., dissented.
Dissenting Opinion
I am unable to concur in the opinion of Mr. Justice Laughlin for the following reasons: First. There was sufficient consideration for the note. It was given for $60,000, actually loaned by the plaintiff to W. L. Stevens, a brother of the defendants. Prior to the time the loan was made, W. L. Stevens and the plaintiff were members of the New York Stock Exchange, but the latter had been suspended. His efforts to be reinstated having failed, he sold his seat, and out of the moneys received the loan was made. W. L. Stevens, for certain reasons, desired to conceal from the Exchange the fact that he was the borrower, and he thereupon, in pursuance of an arrangement with the defendants, gave to them his note for $60,000, and they gave to the plaintiff the note in suit. The defendants still hold the note of W. L. Stevens.. The transaction was thoroughly understood by the defendants. One of them testified: “Q. But you knew that note had to be signed by you before your brother Lewis would get the $60,000 j A. I did. Q. And you knew that the $60,000 was necessary to save his firm ? A. Yes. He did get this $60,000 and he gave
The case is distinguishable from Higgins v. Ridgway (153 N. Y. 130), cited in the prevailing opinion. There, the defendant made a note to his own order, indorsed it, and delivered it to a bank solely for its accommodation. It was held that a recovery could not be had since the note was made, without consideration, for the accommodation of the party who was trying to recover upon it.
The testimony of the defendants to the effect that they were informed by their brother that the giving of the note was a matter of form and they would not be called upon to pay it, does not prevent a recovery. Such testimony ought not to have been received. There are numerous authorities to the effect that parol evidence of an oral agreement made at the time of the making of a promissory note cannot be received for the purpose of varying, qualifying or contradicting its terms. (Jamestown Business College Association v. Allen, 172 N. Y. 291, and cases there cited.)
There is a line of authorities holding that parol evidence may be received to show a conditional delivery and that the note is not to take effect until the happening of some condition precedent. This was not a conditional delivery, but an absolute one. The contract became complete when the note was delivered in exchange for the money loaned. The note was given for a proper consideration. The defendants, by it, agreed to pay a given amount at a specified time. If an agreement had been made that the note should not be collected or that its payment should not be enforced, it would have amounted to nothing, because an action could, notwithstanding, have been maintained upon it when the same fell due. (Mead v. National Bank, 89 Hun, 102.)
Second. The evidence, as I read the record, does not establish that the loan was usurious. The note, upon its face, bears six per cent interest. It is true that about a year before the note was made the plaintiff signed a written statement in which he acknowledged that he was indebted to W. L. Stevens in the sum of $10,000; that he would endeavor to get reinstated on the Stock Exchange, and if he succeeded within two
The only evidence that the transaction was usurious is the statement contained in the agreement made in 1909 that the loan, if made, should yield Mr. Grannis not less than $10,000 a year, and that the interest on the note and the salary agreed to be paid would make that amount. This, I think, is insufficient to justify a finding that the loan was usurious.
The judgment and order appealed from, therefore, should be reversed and judgment directed for the plaintiff.
Judgment and order affirmed, with costs.