178 A.D. 53 | N.Y. App. Div. | 1917
The recovery was on a non-negotiable promissory note made by the defendant, of which the following is a copy, to wit:
“New York, N. Y., Feb. 20th, 1908.
“For value received I promise to pay to David and Edith Rubel on demand Six Hundred and Ninety Eight & 34/100 Dollars, with interest from Jan. 1st, 1908. Said interest to be at the rate of 6% per annum, and payable January 1st and July
1st each year.
(Sgd) ERNEST HONIG-.”
The payees were infants of eight and seven years of age respectively, and the guardian ad litem by whom they bring the action is their father. The defendant pleaded as defenses (as the answer was construed and accepted on the trial) and offered evidence tending to show that a copartnership firm composed of the father of the payees and another was at the time the note was executed indebted to him in the sum of $1,000 for goods sold and delivered; that to secure the payment thereof and the payment of any moneys that might become due to the defendant, the father of the payees delivered to the defendant
In behalf of the plaintiffs their father testified that the money represented by the certificates of deposit belonged to them, and that the certificates were delivered to the defendant as a loan, and that the note was given therefor. The defendant denied that he was informed that the certificates represented moneys belonging to the children, and testified that when the certificates were originally delivered to him there was no agreement to give a note therefor; and that the note was subsequently given in the names of the children at the instance of their father in order to conceal from his partner the fact that he had this money, and in order to prevent its being reached by any creditors of the firm; and he offered evidence to show that it was agreed between him and the father of the payees that the note was not to be delivered to the payees but was to remain in the hands of their father; and that it was not to take effect as an obligation against the defendant until the payment of said indebtedness; and he offered to show the conversations between him and the father of the payees at and prior to the time the note was made and delivered, with a view to showing that it was understood and agreed that it was to be held by the father of the payees, and was not to be delivered to the payees until the said indebtedness was paid and was not to become a binding obligation until that time.
It was, therefore, entirely competent for the defendant to show, as he offered to show, that the note never had a valid inception, and that the delivery thereof to the father of the payees was conditional, and that the condition was that it was not to take effect or to be delivered to the payees until the payment of said indebtedness to the defendant. (Neg. Inst. Law [Consol. Laws, chap. 38; Laws of 1909, chap. 43], § 35; Smith v. Dotterweich, 200 N. Y. 299.)
It follows that the determination of the Appellate Term and the judgment and order of the City Court should he reversed and a new trial ordered, with costs to appellant in all courts to abide the event.
Clarke, P. J., Scott, Davis and Shearn, JJ., concurred.
Determination and order and judgment of City Court reversed and new trial ordered, costs to appellant to abide event.