24 N.Y.S. 202 | N.Y. Sup. Ct. | 1893
This action was brought against the executor and executrices of Phoebe Smith, deceased, to recover the price of a certain business which the plaintiff alleges that he sold to the decedent (who was his mother) in the month of December, 1884. The defendants, in their answer, deny the sale, but admit that the business was turned over to the decedent. Prior to the transfer, the decedent had advanced large sums of money to the plaintiff (and his partners) for the purposes of the business, and at the time of the transfer he was indebted to her in the amount of these advances; and the defendants claim that the transfer was to the decedent as a creditor, but not as a purchaser. The answer then ■sets up by way of counterclaim the promissory notes given by the
“Sixth. To my son, William F. Smith, I have given him during my lifetime all I ever intended to give him, so by the conditions of this will he inherits no further portion than that which he has already enjoyed.”
Upon the trial the defendants permitted the plaintiff to testify without objection to the transaction with his mother. He accordingly narrated all the facts which he recalled with regard to the agreement. His testimony abundantly supported the averments of the complaint upon that head, and he was corroborated in several particulars by other witnesses. There was clearly enough to go to the jury and to support their verdict on the issue with regard to the sale.
The real question is whether such agreement included the forgiveness and cancellation of the plaintiff’s indebtedness upon the notes set up in the counterclaim. The amount of this indebtedness was nearly $100,000. The plaintiff testified that his mother agreed ■ to pay for the business whatever was realized after the accounts were collected, and the obligations owing to different merchants paid, but that her account representing the indebtedness in question was to be excluded from consideration. The net amount ultimately realized from the business was $28,956.23, while the actual amount realized by Mrs. Smith was but about $22,000; for it seems that, after taking the business, and receiving therefrom less than $2,000 in cash, she in a short time turned it over to another son, but the consideration given by this other son was his own note for $20,000, which has never been paid. The verdict was for $22,000 and interest, so that the jury treated this latter sum as what Mrs. Smith “realized,” within the meaning of the agreement.
The defendants’ contention is that the plaintiff’s existing indebtedness remained in full force notwithstanding the sale, and that it still exists, subject only to a credit for the $22,000 so realized. On the other hand, the plaintiff contends that in excluding the existing indebtedness from consideration at the time of the sale the intention was to wipe it out as an obligation. These varying contentions present an interesting question, but, upon the whole, we think the circumstances were such as to justify its presentation to the jury. The defendants rely upon the consideration that there is no direct evidence that the indebtedness was forgiven; that, as matter of fact, the notes were not given up or physically canceled; and that, some six months prior to the sale, Mrs. Smith agreed verbally not to sue her son upon these same notes for 10 years. But, while there was no direct evidence of cancellation, there were strong circumstances from which forgiveness of the
But, even, if these notes were not forgiven or canceled, we do not think the defendants have established their counterclaim thereon. It may be true that the plea of the statute of limitations cannot avail as against the notes that were payable “one day after demand.” The statute runs immediately against notes payable on demand. In that case the word “demand” is not treated as part of the'contract, but is used to show that the debt is due. McMullen v. Rafferty, 89 N. Y. 459. But, if payable at any period of time after demand, the weight of authority would seem to favor the doctrine that an actual demand must be made to fix the period of maturity when the statute commences. Wenman v. Insurance Co., 13 Wend. 267; Little v. Blunt, 9 Pick. 488; Codman v. Rogers, 10 Pick. 113; Richman v. Richman, 10 N. J. Law, 114; Daniel, Neg. Inst. § 1215. And see Brehm v. Mayor, 104 N. Y. 192, 10 N. E. Rep. 158. The basis of the latter rule is given by Nelson, J., in Wenman v. Insurance Co., supra. “It is obvious,” said that learned judge, “from the terms of the contract, an actual demand
“Whether it be equitable or not, the power of a court might well be doubted to absolutely change a contract entered into by the parties, without the consent of the one who was to make the payment at the time and in the manner prescribed by the contract.”
See, also, Bradley v. Angel, 3 N. Y. 475.
This doubt, however, is solved in the present case by the defendants’ own attitude. Their whole case rests upon the contention that these notes have not matured. It is by holding the plaintiff strictly to that view of his obligation that they seek to avoid the running of the statute. How, then, can they assert for one purpose that the demand was necessary, and for another that it was not? To save themselves from the effect of the statute, they say that the notes had not matured. That is a claim of strict law. Then, to effect the set-off, they say that the notes had matured; that is, that they were to be treated as though they had. That is a claim of equity. In one case they insist upon the period of maturity; in the other they insist upon abridging it. This latter, it is quite clear, cannot, under the circumstances, be done. The contract to which they have held the plaintiff for one purpose should not, without his consent, be changed for another purpose.
But this is not the only difficulty with the defendants’ case. Their sole equity is the plaintiff’s inability to pay these notes. That inability is what they pleaded and proved. There was no other or general insolvency. But this inability to pay these particular notes has existed throughout. Mrs. Smith knew it when she agreed to pay for the business. A bill for an equitable set-off on this ground could, therefore, have been filed at any time after the consideration for the business had become due and payable. But no such set-off was sought during all these years. And then,
Our conclusions upon the whole case are: First, that the plaintiff has established the sale averred in his complaint; second, that the indebtedness represented by the notes sought to be counterclaimed or set off was, as a matter of fact, forgiven by the decedent, and the notes canceled; third, that, even if these notes were not canceled, they are either outlawed or unmatured, and a legal counterclaim cannot be maintained upon them; fourth, that an equitable set-off upon these notes has not been pleaded, nor, upon the facts, has a case of equitable set-off been made out. There was no error in the admission or rejection of evidence which could.have prejudiced the defendants, and the judgment should therefore be affirmed.
FOLLETT, J., concurs in result YAH BBTJUT, P. J., concurs on first and second grounds mentioned in opinion: