34 A.D. 423 | N.Y. App. Div. | 1898
The court below having granted the defendant in. this action a new trial, we are asked to reverse that order. The-record is very voluminous, and a statement of a few of , the salient facts will be sufficient to show the reason for our decision of this appeal. The action was brought to recover upon four certain promissory notes "made Joy the defendant to the plaintiff. These notes were secured by a deposit as collateral security of 125 bonds of the Hoffman House. . Subsequent to the deposit of these bonds as security, and-on the 18th of August, 1891, an agreement between the plaintiff and the defendant was made, and as -security for the performance' of that agreement by the defendant, and for the obligation incurred by him thereunder, , 150 bonds of the Hoffman House were to be delivered to the plaintiff by the defendant. These 150 bonds were to consist of the 125 already in' the plaintiff’s hands as security for the four notes in suit, and 25 - others which the defendant was to add. It . also appears to have been settled by an adjudication in an action brought in this court, and which has been affirmed by the Court of Appeals, that this August agreement between the parties was never in fact performed by the plaintiff and'that it could not be enforced against the defendant. When the notes became due, the defendant tendered to the plaintiff the amount thereof and demanded the
The action coming on for trial and the defendant having admitted his liability upon the notes, he claimed, and was allowed the affirmative, and offered evidence tending to show the tender of the amount due and the demand for the return of the bonds; the refusal and the value of the bonds, and also the record of the judgment entered in the action in this court, by which it was determined that, the August agreement, under which the plaintiff claimed to hold the bonds, could not be enforced against him. This August agreement, however, recited the existence of the two notes known as the “ Bead notes,” which the defendant liad guaranteed. The result of the trial was that a verdict was directed for the plaintiff against the defendant for the full amount of the notes, and a judgment entered upon that verdict was affirmed by the General Term of the Superior Court (the court in which the action was then pénding) and by the ■Court of Appeals. The learned judge of the Court of Appeals, upon whose casting vote the judgment was affirmed, qdaced his concurrence upon the ground that, the burden of proof being upon the defendant to show that the 125 bonds in question were not held by the plaintiff as collateral security for any-other obligation except the notes in suit, and there being evidence tending to show the existence of- these Bead notes, which were guaranteed by the defendant, he had not affirmatively sustained that burden. The learned judge consequently concluded that the defendant had failed to establish the conversion alleged, and was not, therefore, entitled to a verdict
This motion was made after .the decision of the appeal by the Court of Appeals, upon two grounds: First, that the defendant was surprised by the evidence given upon the trial as to the Read notes and the construction placed by the Court of Appeals upon his testimony, and, second, upon' the ground of newly-discovered evidence. It is only.necessary for us to consider the latter ground in disposing of this appeal. ■
These two notes which were guaranteed by the defendant were given by. Read to .the plaintiff for money paid to Read for his personal use and for the purpose of satisfying his obligations to the corporation known as the Hoffman House, in which both the plaintiff and defendant were interested. Read, upon this motion, testified that about the time the notes, or one of them, became due,'he made an agreement with the plaintiff whereby he sold to the plaintiff 33,000 acres of land owned by Read in the State of "West Virginia, and-that part-of the consideration of that conveyance was the discharge of the indebtedness from Read to the plaintiff evidenced by the notes in question which had been guaranteed by the defendant. ■ Read swears positively that .the plaintiff promised him that if lie would thus convey the tract of land, the plaintiff would, as part consideration for the conveyance, release and discharge the said notes and all the other indebtedness of Read to him. There is also produced a deed from Read to the plaintiff, dated December 19, 1891, by which Read, the party of the first part, “in consideration, of seven thousand dollars and other good and‘valuable considerations, lawful money of the Halted States, paid by the party of the second part, doth hereby grant and release unto the said party of the second part, his heirs. and assigns forever, all the thirty-three thousand four hundred and ninety and 20/100 acres of land, undivided,” in the State of West Virginia, with a certificate of record of this deed in December, 1891, and January and February, 1892. There was also- presented an agreement bearing the same date as the deed, reciting the deed and the consideration, therein expressed of
Upon this motion the defendant presented his affidavit^ in which he deposed that, at the time of the trial of this action, he did not know and had no means of proving the nature of the transaction
An affidavit of Bead’s is also presented in which he swears that at the time the demands for the amount of these notes were made upon him it was stated to him that such demand was for the purpose of reaching the defendant and for use by the plaintiff in connection with possible proceedings against the defendant and should not in any way affect deponent’s rights under the agreement with the plaintiff' set forth in Bead’s prior affidavit. The plaintiff admits the conveyance of the land from Bead to himself and admits the execution of the agreement between himself and Bead, but denies the making of the agreement whereby these notes are discharged as part consideration for the conveyance-of the property.
The situation presented is that the defendant has been defeated in the prosecution of his counterclaim upon the sole ground that he failed to show affirmatively upon the trial that the plaintiff was not entitled to retain these Hoffman House bonds, which were the basis of his counterclaim, as security for these two Bead notes of which the defendant was the indorser. He now presents evidence tending to show that long before the trial of the action or the tender made to the plaintiff of the amount due upon the notes in suit, the Bead notes, of which he was guarantor,, had been discharged as the consideration for the conveyance of . the land in West Virginia; that the knowledge of such discharge was kept from him in pursuance of an agreement between the plaintiff and Bead so as to enable the plaintiff to use these notes against him, although in fact they had been discharged as between the plaintiff and Bead; and that, until shortly before the making of the motion, this scheme of the plaintiff and Bead had been successful and the defendant had been kept
The plaintiff has tried to show that the defendant had knowledge of this conveyance of land and of the agreement between Read and the plaintiff. A careful consideration of all the facts presented by the plaintiff satisfies us, however, that the defendant did not have knowledge of the terms of this agreement. It is most suggestive in this aspect of the case to notice the reply of the plaintiff to this claim of the defendant which was the basis of his counterclaim. That reply refrains-from alleging that the plaintiff was entitled, independent of the August agreement, to retain the Hoffman House bonds as security for the payment of the Read notes. He justifies refusal of the tender solely upon the ground that he was entitled to retain them under the August agreement. In the equity action between the plaintiff and the defendant, however,, it had been- adjudged that the plaintiff was not entitled to enforce the August agreement as against the defendant; and it is, therefore, difficult to understand why, .if the Read notes were then existing obligations of Read, or if the liability of the defendant upon them was then an existing liability, the plaintiff refrained from alleging that, even if the August agreement could not be enforced against the defendant, he was still entitled to hold these Hoffman House bonds as security for the payment of the Read notes. The failure to attempt to enforce these notes against Read or to realize upon the securities which the plaintiff held as collateral is also suggestive. The plaintiff’s acts thus tend to corroborate Read’s statement that, at the time of the conveyance of this land, there was •a complete understanding that these notes of his were thereby discharged. An examination of the conveyance itself, read in the light of the cotemporaneous written agreement executed between the plaintiff and Read, also corroborates Read’s claim that as part consideration for this conveyance these notes were to be discharged. The conveyance in terms is in consideration of $7,000 and other good and valuable consideration. By the cotemporaneous written agreement the parties stipulated as to what that “ other good and valuable consideration ” was. The consideration for 2,000 acres of the land conveyed was the $7,000. in cash that was to be paid to Williams. The consideration for the conveyance
We are not unmindful of the rules which have been established regulating the granting of motions for a new trial upon the ground of newly-discovered evidence, but we think in this case that the defendant presented to the court below a case which justified the court in granting a new trial. The evidence tended pointedly to show that the Read notes had' been discharged. The continued existence of the Read notes and the right of the plaintiff to hold the Hoffman House bonds as security for their repayment are the grounds upon which the Court of Appeals refused the defendant a new trial, and this is the one important question left in the case. The evidence now produced tends, as we have seen, to show that the Read notes Were discharged in consequence of a secret agreement between the plaintiff and Read, and Read deposes for the purpose of endeavoring to enforce the notes against him after they had been repaid by the conveyance of this land, and thus discharged as against Read, the principal debtor. This evidence could not have been discovered by .the defendant prior to or at the former trial, because of the secret agreement between Read and the plaintiff that the nature of the agreement between them should be concealed from the defendant, and the defendant seems to have proceeded with due diligence after he had knowledge of the existence of such agreement.
We have considered the objections made by the plaintiff to this application, but do not consider any of them substantial. The fact that Read was in court at the time of the trial and might have been called as a witness to prove this agreement, had the defendant had. knowledge of it, is not an objection to the granting of a new trial.. (Bonynge v. Waterbury, 12 Hun, 534.)
Van Brunt, P. J., Barrett, Rumsey and McLaughlin, JJ., concurred.
Order affirmed, with costs.