Klein v. Katz

200 A.D. 473 | N.Y. App. Div. | 1922

Greenbaum, J.:

The action was brought on a trade acceptance for $2,004.37, dated January 26, 1920, and payable October 5, 1920, accepted by defendants and payable to the order of Finn & Simmons Co. After the delivery of the acceptance to the payees, it was indorsed by them to one B. Kaufman and by him subsequently indorsed and transferred to one Edward Roth, who in turn indorsed and delivered it to the plaintiffs who claim to be holders for value, before maturity.

The defenses were that plaintiffs were not holders and owners for value in due course; that the receiver in bankruptcy of the payee, Finn & Simmons Co., had title to the instrument, and finally that defendants were entitled to a credit of $854.49 thereon.

The defendants called one Max Brooks as a witness, who testified that he prepared the trade acceptance in suit and that an agreement was subsequently entered into between defendants and the payee that there was to be a credit allowance of $854.49 made upon the payment of the draft by reason of an adjustment arising out of another transaction between the parties. The witness also testified that on October tenth, five days after the maturity of the draft, he had an interview with Mr. Simmons, a member of the firm of Finn & Simmons Co., who originally held the draft, and with Edward Roth, the last indorser thereon, at which Roth and Simmons offered an allowance of $200 on the draft if the defendants would pay it, and that when the offer was declined it was increased by a proposed allowance of $500. This testimony was, of course, wholly incompetent and not binding upon the plaintiffs and indeed not inconsistent with the fact that the plaintiffs were innocent holders for value. There was, however, no objection to this testimony and it was only after the defendants ‘had rested that plaintiffs moved to strike it out. The court did not pass upon the motion. After both sides rested, the plaintiffs’ counsel stated that he renewed his motion to strike out, to which the court answered: “No, I will let it stand.” Plaintiffs’ counsel seemingly acquiesced in the court’s action and thereupon moved for a direction of a verdict in favor of the plaintiffs for the full amount claimed. The court, however, did not pass upon that motion and submitted the case to the jury upon the question whether plaintiffs had knowledge of the facts upon which the defense rested. The jury rendered a verdict for the defendants, whereupon plaintiffs moved to set it aside and renewed the motion for a direction of a verdict in favor of the plaintiffs for the full amount. The court thereupon set aside the verdict as “ against the weight of the evidence ” and granted a motion directing a verdict for the plaintiffs for the full amount claimed.

Under the circumstances above outlined the plaintiffs in effect conceded that there was a question of fact for the jury to pass upon as to whether or not the plaintiffs were holders for value in due course without knowledge of the alleged infirmities. Besides, the practice adopted upon the trial setting aside a general verdict and thereafter directing a verdict for the plaintiffs was unauthorized under the Code. The court had not reserved its decision on the motion for nonsuit nor did it direct the jury to find a special verdict as it might have done under section 1187 of the Code of Civil Procedure. (Levy v. Grove Mills Paper Co., 80 App. Div. 384.)

We are constrained to reverse the judgment.

Clarke, P. J., Laughlin, Smith and Merrell, JJ., concur.

Judgment reversed and new trial ordered, with costs to appellants to abide the event.