202 A.D. 504 | N.Y. App. Div. | 1922
The action is on a promissory note made by the defendant Geraldine E. Mitchell payable to the order of the defendant Howard E. Mitchell which it is admitted, by failure to deny, was before matur-. ity indorsed by said Howard E. Mitchell in blank and delivered, so indorsed, to one Cramp for value received. The complaint further alleges that Cramp before maturity transferred and delivered the note for value received to the Pennsylvania Company for Insurance on Lives and Granting Annuities (hereinafter designated the Insurance Company), and that the Insurance Company after maturity, for value, duly assigned, transferred and delivered said note to plaintiff, who became and now is the owner and holder thereof; that at maturity the said note was presented for payment at the time and place where payable and payment thereof duly demanded but payment was refused and the note was not paid and that the same was duly protested for non-payment and due notice thereof given to the defendant Howard E. Mitchell; that the cost
The defendants moved to be allowed to amend their answers: Geraldine E. Mitchell to allege as a separate defense that she made the note as an accommodation for Howard E. Mitchell and without receiving any value therefor, and for the purpose of loaning her name to the said Howard E. Mitchell, and on information and belief that said note was transferred to the Insurance Company and to the plaintiff without any value or consideration therefor and after maturity thereof, and that the Insurance Company and the plaintiff, at the time of receiving said note, each had knowledge of the fact that said note was an accommodation note and that she had received no consideration therefor; Howard E. Mitchell moved to amend his answer to include a counterclaim and setoff existing against Cramp. The plaintiff moved to strike out the existing answers and for a summary judgment for the relief demanded in the complaint.
The motions were heard together. Defendants’ motions were denied and plaintiff’s motion granted. Defendants appeal.
The defendants’ motions were properly denied. The defendants admit that the note was indorsed and delivered to Cramp before maturity and for value; therefore, the fact that Geraldine E. Mitchell may have made the note as an accommodation to Howard E. Mitchell would be no defense as against Cramp or one deriving title through him. (Neg. Inst. Law, §§ 3, 52, 55, 91, 97.) There was no diversion of the note or any other fact alleged that would make the title of a person who negotiated it defective.' (Id. § 94.) The facts sought to be alleged were insufficient to constitute a defense. (Horan v. Mason, Nos. 1, 2, 3, 141 App. Div. 89, 91.)
The counterclaim that Howard E. Mitchell seeks to set up would seem to be a cause of action in equity for an accounting between himself and Cramp, who it is alleged were copartners in business prior to May 4,1914, at which date the copartnership was dissolved: that no accounting has been had; upon information and belief that during the continuance of the partnership and prior to the dissolution Cramp had withdrawn and diverted to his own use large sums of money from the partnership assets greatly in excess of the proportion thereof to which he was entitled. An accounting is not demanded, for of course it could not be had in this action to which Cramp was not a party. The defendant Howard E. Mitchell
The appellants further contend that rule 113 of the Rules of Civil Practice is void. First. Because chapter 370 of the Laws of 1921,
We will consider these propositions in the order in which they are stated.
The first proposition assumes that the right to adopt rules regulating the practice in the Supreme Court is a legislative power which the Legislature cannot delegate to the justices of the Supreme Court. By chapter 4 of the Colonial Laws of the Colony of New York passed May 6, 1691 (1 Colonial 'Laws of New York [Comp. Stat. Rev. Comm.], 226, 229, 230), there was established among others the Supreme Court “ Impowered and Authorized to have Cognizance, of all pleas, Civill Criminall, and Mixt, as fully & amply to all Intents & purposes whatsoever, as the Courts of Kings Bench, Comon Pleas, & Exchequer within their Majestyes Kingdome of England, have or ought to have.” It was further provided in said act: “AND BE IT FURTHER ENACTED by the Authority aforesaid that all and every of the Justices or Judges of the severall Courts before-mentioned be and are hereby sufficiently Impowered, to make, order, and Establish, all such Rules and Orders for the more orderly practizeing & proceeding in their said Courts, as fully and amply to all intents and purposes whatsoever as all or any of the said Judges of the severall Courts of the Kings Bench, Comon Pleas & Exchequer in England Legally doe.” This act was con-
Under the powers conferred by article 6, section 24, the Legislature appoinj'ted a Commission which drafted and reported, and the Legislature adopted the Code of Procedure. . The first report of this Commission recommended the adoption of “ § 389. The present rules and practice of the courts, .in civil actions, inconsistent, with this act, are abrogated;, but where consistent with this act, they shall continue, until the further action of the Legislature.” This became section 389 of the Code of Procedure (Laws of 1848, chap. 379) as follows: “ The present rules and practice of the courts in civil actions, .inconsistent with this act, are abrogated; but where consistent with this act, they shall continue in force subject to the powers over the same, of the respective courts, as they now exist. ” When, however, the final jiraft of the Code of Proced-. ure was passed by the Legislature (Laws of 1849, chap. 438) we find that section 389 had become section 469 which read: “ The present rules and practice of the courts, in civil actions, inconsistent with this act, are abrogated; but where consistent with this act, they shall continue in force subject to the power of the respective — courts to relax, modify, or alter the same.” Section 470 of the Code of 1849, so far as applicable to this consideration, read: “ The judges of the Supreme Court shall meet in general session at the Capitol, in the city of Albany, on the first Wednesday of August, 1849, and at such session make general rules to carry into effect the provisions of this act, and such other rules as they deem proper not inconsistent with this act. The rules so made shall govern — the Superior Court of the City of New-York, the Court of Common Pleas of the City and County of New-York, and the County Courts, so far as the same may be applicable.” Thus it would appear that although the Commissioners at first recommended that -• the making of the rules be reserved to the Legislature, when final action was taken the Legislature merely passed a Code which laid down broad general principles of practice and procedure, and the power to make rules of practice and procedure not inconsistent — with the Code was left where it had always resided, with the justices of the Supreme Court. By chapter 479 of Laws of 1851 said section was amended so as to provide for a similar meeting on the first Wednesday in August, 1852, and every two years/ thereafter. By chapter 392 of the Laws of 1852 this section whs amended to include the judges of the Superior Court of the City of New
In 1870 the Legislature passed an act relating to the Supreme Court and to the election of a judge of the Court of Common Pleas in and for the City and County of New York (Laws of 1870, chap. 408), section 13 of which reads as follows: “All rules of the Supreme Court now in force not inconsistent with the Constitution or any statute of the State shall remain in force until abolished or altered by the General Term justices, the chief judges of the Superior Courts of cities, the chief judge of the Court of Common Pleas of the City of New York and of the City Court of Brooklyn in convention assembled at the Capitol in the city of Albany. A convention of such justices and chief judges shall be held at the place aforesaid, on the first Wednesday in August, eighteen hundred andfseventy, and every two years thereafter; and such convention shall revise, alter, abolish and make rules, which shall be binding upon all courts of record so far as they may be applicable to the practice thereof. A majority of said justices shall constitute a quorum, to do business in the premises, whether said chief judges shall be present or absent * * *.” In the Code of Remedial Justice and in the Code of Civil Procedure (Laws of 1876, chaps. 448, 449, as amd. by Laws of 1877, chap. 416) section 4 provided: “Each of those courts [among which is the Supreme Court] shall continue to exercise the jurisdiction and powers now vested in it by law, according to the course and practice of the court, except as otherwise prescribed in this
The judiciary article, or article .6 of the Constitution, was very materially changed by the Constitution adopted in 1864. The Superior Court of the City of New York, the Court of Common Pleas for the City and County of New York, the Superior Court of Buffalo and the City Court of Brooklyn were abolished and the jurisdiction theretofore exercised by those courts was vested in the Supreme Court on January 1, 1896. The General Terms of the Supreme Court and of the other courts hereinabove mentioned were also done away with, and an Appellate Division of the Supreme Court was erected in each judicial department. To meet this new condition the Legislature amended section 17 of the Code of Civil Procedure by inserting in place of the said justices and chief judges the justices assigned to the Appellate' Division of the Supreme Court, and directing them to meet on the fourth Tuesday in October, 1895, otherwise the section so far as here material was unchanged. (Laws of 1895, chap. 946.) In 1909 this section was transferred to the Judiciary Law. (Consol. Laws, chap. 30 [Laws of 1909, chap. 35], §§ 93, 94.)
The number of justices of the Supreme Court had increased from 5 in 1691 to 107 in 1920. As we have seen, from 1691 to 1848 the justices of the Supreme Court made and established the rules governing the practice and procedure in that court, and since 1848 there have been various conventions differing in membership; as the court increased the duty of formulating rules was restricted to the justices of the General Term, associated with the chief judges of other courts of record, and finally to the justices of the Appellate Division. The convention held pursuant to the act of 1920 more nearly approximated the first assembly to formulate rules, for the entire body of the justices were represented by their chosen delegates.
The attention of the Court of Appeals was not called to the act of the Colonial Legislature of 1691, or they would not have stated that “ the power to make general rules was given to the Supreme Court by the Revised Statutes.” (2 R. S. 199, § 19; Rice v. Ehele, 55 N. Y. 518, 522.) The power to make rules was - inherent in the Courts of Kings Bench, Common Pleas and Exchequer of England, and would have been conferred on the Supreme Court without the express grant of such power contained in the act. As we have shown, the common law of England and the acts of the Colonial Legislature became the law of this State by virtue of the provisions of the Constitution above quoted. This power was exercised by the Supreme Court for 86 years before there was a Legislature of the State of New York, and for 137
The Federal Constitution (Art. 3, §§ 1, 2) seems to give greater power to Congress over the proceedings in the Federal courts than is given by the State Constitution to the Legislature, and yet the Supreme Court of the United States said: “ Congress might regulate the whole practice of the courts if it was deemed expedient so to do; but this power is vested in the courts; and it never has occurred to any one that it was a delegation of legislative power.” (United States Bank v. Halstead, 10 Wheat. 51, 61.) Presiding Justice Van Brunt wrote: “ One of the powers which has always been recognized as inherent in courts, which are protected in their existence, their powers and jurisdiction by constitutional provisions, has been the right to control its order of business and to so conduct the same that the rights of all suitors before them may be safeguarded. This power has been recognized as judicial in its nature, and as being a necessary appendage to a court organized to enforce rights and redress wrongs. * * * The courts are not the puppets of the Legislature. They are an independent branch of the government, as necessary and powerful in their sphere as either of the other great divisions. And while the Legislature has the power to alter and regulate the proceedings in law and equity, it can only exercise such power in that respect as it has heretofore exercised.” (Riglander v. Star Co., 98 App. Div. 101, 104, 105; affd., 181 N. Y. 531.) We conclude that the power to make rules of practice is a judicial power inherent in, and expressly conferred upon the Supreme Court; that the act creating the convention to adopt rules of civil practice merely provided a method and means whereby the court could conveniently and expeditiously exercise its judicial duty, and was in no sense a delegation of legislative power by the Legislature.
The second objection raised is that rule 113 denies to the defendant the right to a trial by jury.
The theory of the defendants is that inasmuch as section 261 of the Civil Practice Act (Code Civ. Proc. § 500; Code Proc. § 149) authorizes an answer containing a general or specific denial of each material allegation of the complaint controverted by the defendant, or of any knowledge or information thereof sufficient to form a belief, he has a constitutional right to compel the plaintiff to produce his proof before a jury of twelve men, and although the plaintiff produce his proof before a judge, and the defendant cannot show any fact to controvert the plaintiff’s proof, or show that he even has an arguable defense, nevertheless, he is entitled to have the cause put upon the calendar, called for trial, a jury impaneled, plaintiff’s proof offered, and a verdict directed by the judge, because the plaintiff’s evidence being uncontroverted, there would be nothing to submit to the jury and the case would be disposed of as a question of law. This is exalting form over substance. A judge can determine whether in fact there would be anything to submit to a jury, as well sitting alone as he could with an audience of twelve men sitting in a jury box. The rule applies to a limited class of cases, viz., “ an action to recover a debt or liquidated demand arising, 1. on a contract, express or implied, sealed or not sealed; or 2. on a judgment for a stated sum.” In construing this rule we have said: “ The power is given to the court, but it is needless to say that it must be exercised with care and not extended beyond its just limits. The court is not authorized to try the issue, but is to determine whether there is an issue to be tried. If there is, it must be tried by a jury. Plaintiff’s affidavit must state such facts as are necessary to establish a good cause of action. It will not be sufficient if it verifies only a portion of the cause of action, leaving out some essential part thereof. It must state the amount claimed, and his belief that there is no defense to the action. The defendant must show that he has a bona fide defense to the action, one which he may be able to establish. It must be a plausible ground of defense, something fairly arguable and of a substantial character. This he must show by affidavits or other proof. He cannot shelter himself behind general or specific denials, or denials of knowledge or information sufficient to form a belief. He must show that his denial or his defense is not false and sham, but interposed in good faith and not for delay.” (Dwan v. Massarene, supra, 879.) ,
Rule 113 is substantially the same as rules 80 and 81 of the Supreme Court of New Jersey, which were held not an infringement of the right to a trial by jury. (Eisele & King v. Raphael, 90 N. J. L. 219, 223; Coykendall v. Robinson, 39 id. 98.) Rule 73 of the General Rules of Practice of the Supreme Court of the District of Columbia provides: “In any action arising ex contractu, if the plaintiff or his agent shall have filed, at the time of bringing his action, an affidavit setting out distinctly his cause of action, and the sum he claims to be due, exclusive of all set-offs and just grounds of
The effect of this rule is the same as rules 113 and 114 of our Rules of Civil Practice. The Supreme Court of the United States, on writ of error upon a judgment granted under this rule, said: “ There is but one element in this contention — the right of a jury trial. * * * If it were true that the rule deprived the plaintiff in error of the right of trial by jury, we should pronounce it void without reference to cases. But it does not do so. It prescribes the means of making an issue. The issue made as prescribed, the right of trial by jury accrues. The purpose of the rule is to preserve the court from frivolous defenses and to defeat attempts to use formal pleading as means to delay the recovery of just demands. Certainly a salutary purpose and hardly less essential to justice than the ultimate means of trial. * * * It would seem a logical result of the argument of plaintiff in error that there was a constitutional right to old forms of procedure, and yet it seems to be conceded that Congress has power to change them, even to the enactment of rule 73. The concession of that power destroys the argument based on the Constitution, and whether Congress exercised the power directly or delegated it to the Supreme Court of the District of Columbia can make no difference.” (Fidelity & Deposit Co. v. United States, 187 U. S. 315, 319-321.) And again that court said: “ The command of the Seventh Amendment that ‘ the right of trial by jury shall be preserved ’ does not require that old forms of practice and. procedure be retained. * * * It does not prohibit the introduction of new methods for determining what facts are actually in issue, nor does it prohibit the introduction of new rules of evidence. * * * No one is entitled in a civil case to trial by jury unless and except so far as there are issues of fact to be determined. It does not infringe the constitutional right to a trial by jury, to require, with a view to formulating the issues, an oath by each party to the facts relied upon.” (Ex parte Peterson, 253 U. S. 300,309,310. See, also, Hunt v. Lucas, 99 Mass. 404.)
It is not the object of this rule to deprive any one who has a right to a jury trial of an issue of fact, but to require a defendant, when it is claimed that in fact he has no honest defense and no bona fide issue, to show that he has at least an arguable defense, that he has not merely taken advantage of a technicality in the form of pleading for the purpose of delaying the enforcement of an honest claim to which in fact he has no colorable defense. The court does not try the issues but ascertains whether in fact there is an issue. The courts of this State have held that a sham affirmative defense may be stricken out on motion, that a denial of any knowledge or information sufficient to form a belief of facts presumptively within the defendant’s knowledge, or being a public record of which he was charged with notice, could be so stricken out. A corporation cannot defend an action on a promissory note or other evidence of debt for the payment of money, unless with the answer was served an order of a judge directing the issue to be tried. (Code Civ. Proc. § 1778.)
What we have said thus far answers the third point of appellants’ attack, that rule 113 is inconsistent with the Civil Practice Act, their argument being that section 422 of the Civil Practice Act defines an issue of fact and sections 423 and 425 provide that such an issue must be tried by a jury.
As we have already stated, the requirement that an issue of fact in the actions enumerated in section 425, must be tried by a jury does not deprive the court of the power to ascertain whether there is in truth an issue of fact to be tried. To say that a false denial, which defendants are unable to justify, must nevertheless put the plaintiff to his common-law proof before a jury, although the result would be a directed verdict in plaintiff’s favor as a matter of law, is to exalt the shadow above the substance.
That this rule has worked a substantial reform in practice and greatly relieved an overburdened trial calendar has been demonstrated by experience.
The orders should be affirmed, with ten dollars costs and disbursements.
Clarke, P. J., Dowling, Smith and Greenbaum, JJ., concur.
Orders affirmed, with ten dollars costs and disbursements.
Amdg. Laws of 1920, chap. 902. — [Rep.
Since amd. by Laws of 1921, chap. 302.— [Rep.
See Laws of 1922, chap. 249.— [Rep.
These provisions have been repealed. (See Civ. Prac. Act, §§ 252,1577.)— [Rep.