Case ID: ny-super-ct_35/html/0014-01.html
Source: Caselaw Access Project
Author: {"author": "By the Court.—Monell, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

ADELIA SICKLES and Another, Plaintiffs and Respondents, v. WRIGHT GILLIES and Another, Defendants and Appellants.
    Written tosTRUMENTS. —Promissory Notes.
    I. Contradicting or varying by pa/rol evidence, exceptions to general rule. 1. Total failure of consideration may be shown by parol.
    3. Payee of promissory note may, as between the original parties, be shown to be merely agent for another by parol evidence.
    3. Payment to, or according to the direction of, the principal, will discharge the maker from all obligation or liability to the payee of the note.
    II. Application of above p'inciples, holding that certain facts may be proved by parol evidence in support of, and that such facts would be prima facie sufficient to establish that the payee named in a promissory note is the agent of another, payment of the note to such principal, as total failure of consideration.
    Before Monell, Curtis, and Sedgwick, .JJ.
    
      Decided June 29, 1872.
    Appeal from a judgment and order.
    The action was upon a promissory note for three hundred and twenty dollars, made by the defendants and payable to the plaintiffs.
    The defendants, after alleging payment, further alleged that the note was signed and delivered for the purposes following, as a mere memorandum and not otherwise, to wit: one John Sickles, about the date of said memorandum, then being in the employ of the defendants, deposited with the defendants the sum of three hundred and twenty dollars therein mentioned, to be paid to the plaintiffs if they should require and demand the same during his expected absence from the city of Hew York, and if not required and demanded, to he returned to said John Bieldes. That during his said absence from the city of Hew York, the plaintiffs never asked, claimed, or demanded from the defendants any further sum than the sum of one hundred dollars, which was duly paid to them ; that soon thereafter, and upon the return of said John Sickles to the city of Hew York, and after the expiration of the time for which said money had been deposited as aforesaid, said John Sickles demanded from the defendants the return of the balance of two hundred and twenty dollars, so as aforesaid deposited, which was duly paid by the defendants, and defendants allege that no other or further consideration was had or received for the said promissory note.
    On the trial before Mr. Justice Freedman and a jury, the defendants offered to prove the facts alleged in their answer, but the evidence was excluded by the court, and the defendants excepted. Ho further evidence being offered by the defendants, the court directed a verdict for the plaintiffs.
    A motion was made for a new trial upon the judge’s minutes, and denied.
    The defendants appealed from the order and judgment.
    
      
      8. B. Brague, attorney, and of counsel for appellants, urged : ¡Notes may he explained.
    A note was given, 1 ‘ because plaintiff did not receive as much of her father’s estate as her brother, the maker.” The defendant was allowed to prove this, and held to be no. consideration (Hill v. Buckminster, 5 Piole. 391).
    “ It may be shown that an instrument, though it has the form of a promissory note, was never given or taken and received as such. That it was put in the hands of a third person to be delivered upon a contingency which has not taken place; that although it was suffered to go into the hands of the payee, it was to have no validity until after the happening of a certain event” (G-oddard t>. Cutts, 2 Fairfield)s JR. 440).
    The circumstances here were allowed to be given in evidence. Defendant was accused of burning plaintiff’s barn; the parties met, and a note was drawn and handed to witness ; a verdict was ordered for plaintiff, and, on appeal, a new trial was ordered. The competency of the evidence to avoid the note is passed upon, by deciding on this evidence that the note was void for. want of consideration (Pearson v. Pearson, 7 Johns. JR. 26).
    The consideration of any negotiable paper is examinable as between the original parties to that paper (Kent, Oh. J., in People v. Howell, 4 Johns. 301).
    A father gave his son a note, expressing that it was for value received; evidence of the fact that it was a gift allowed, and note held void (Spencer, Oh. J. [citing Pearson •». Pearson, and Schoonmaker v. ¡Roosa], Fink v. Cox, 18 Johns. 146).
    Fraud alleged in the sale of hats, for which note was given, but held in this case that it could not be proved under the general issue without notice, as it only went to part of the consideration (The People v. Niagara G. P., 12 Wend. 246).
    
      A note was given for land, and afterwards the land was sold under a judgment against the grantor. Held, that plaintiff could not recover. (Numerous cases are cited in note, some above cited, showing that all the circumstances can be inquired into; Frisbee v. Hoffnagle, 11 Johns. 51).
    A note at sixty days for'value received was made and delivered.
    Defendants were allowed to prove that the note was made for discount, to be payable at three different times, different from the time expressed upon its face, and how the proceeds were to be applied. In fact, the whole circumstances of the transaction (Denniston v. Bacon, 10 Johns. 198).
    Point II.—The money deposited was the money of John Sickles, or it was the money of the plaintiffs.
    If it was the money of John Sickles, deposited, as defendants offered to prove, for a specified purpose and object, then, after that was accomplished, defendants were bound to pay to the depositor.
    1. The justice erred in excluding the question asked of one of the plaintiffs, “If this was her money,” for if it was not, there was no consideration for the note.
    
      2. If the money belonged to the plaintiffs, and it was delivered to John Sickles, their brother, to deposit, he was their agent for that purpose, and it wás within the scope of his authority to make a special deposit. The custody of the money was the strongest evidence
    of authority, and plaintiffs trusted him. If he attempted to cheat one party or the other, the party trusting him should be at the loss, and not an innocent party (.Dunlap's Paley's Agency, p. 271, and cases cited. Fairlie v. Hastings, 10 Vesey, Jun. 123; North River Bank v. Aymar, 3 Hill, 262).
    
      Clark Bell, attorney, and Edward J. Bartlett, of counsel for respondents,
    urged: Point First. To constitute a payment, the money or other value delivered by the debtor to the creditor to extinguish the debt, must be accepted by the creditor for that purpose. Unless the creditor consents to receive it in payment, there is no payment (Kingston Bank v. Gay, 19 Barb. 459).
    A payment of a bank, to one of several persons who have jointly made a deposit, will not discharge the bank from the claim of the other depositors, unless they authorized the payment (Stone v. March, Ryan & Moody, 370; Innes v. Stephenson, 1 Moody & Robinson, 145).
    Payment to a creditor’s wife will not be a good payment, unless she was his agent, either by express authority, or the usual course of business (Offly v. Clay, 2 Manning & Grangers, 172; Spencer v. Tissue, Addison's [Penn.] 316; Seaborne v. Blackston, 2 Freeman's, 178; Thrasher v. Tuttle, 33 Maine, 335).
    Point Second. There is no allegation in the complaint that John Sickles was the agent of the plaintiffs, nor any attempt on the trial to show he acted as their agent in receiving payment as alleged.
    
    To justify a jury in finding a person an agent, the evidence must show, if not a succession of cases, at least several in which the agent had done acts similar to those for which authority is claimed, and the subsequent acquiescence of the principal therein, upon their coming to his knowledge (Bunten v. Orient Mutual Ins. Co., 4 Bosw. 354).
    Point Third. The matter contained in the third subdivision of the answer is clearly no defence, as it contradicts a written instrument by oral evidence.
    
    A note which has been executed and delivered, cannot be contradicted, nor can its legal effect be controlled by oral evidence (Erwin v. Saunders, 1 Cowen, 249 ; Payne v. Ladue, 1 Hill, 116; Stackpole v. Arnold, 11 Mass. 37; Hunt v. Adams, 7 Mass. 518; Thompson v. Ketchum, 8 Johns. 189; Wells v. Baldwin, 18 Johns. 45).
    
      For example, parol evidence has been held inadmissible in the following cases, viz.:
    
      1st. To show that there was a mistake in the time of payment mentioned in a note (Fitzhugh v. Runyon, 8 Johns. 292).
    In the above case, the action was on the note, and not to reform the instrument.
    
      2d. To show that another man, and not the maker, was to pay it (Shoe & Leather Bank v. Camp, 21 How. 443).
    
      3d. To show that an absolute agreement for the payment of money was to be performed only in a certain event (Wells v. Baldwin, 18 Johns. 45; Adams v. Wilson, 12 Met. 138-275).
    
      4th. To show payment at a different place from that specified (Potter v. Tallman, 35 Barb. 182).
    
      5th. To show that a party endorsing a note, did so on condition that it should be renewed (Hoare v. Graham, 3 Campbell, 57).
    
      Qth. To vary the terms of an acceptance (Mason v,. Graff, 35 Penn. 448; Clark v. Flint, 22 Pick. 231).
    It is perfectly clear that a note when given must.be regarded as expressing the contract of the parties (Pratt v. Gulick, 13 Barb. 297; Bank of Albion v. Smith, 27 Barb. 489 ; Kelley v. Brown, 5 Gray, 108).
    The defence proposed to be established under the pleadings of this action, was not fraud, or want of, or entire failure of, consideration, but an effort to show that the note was to be paid only in a certain event, and to parties other than those named in the note.
    
    The matter alleged in the third subdivision of the defendants’ answer, contradicts the note, and is entirely inconsistent with it.
    The ruling of the learned justice, that it was inadmissible, is fully sustained by the foregoing authorities.
   By the Court.—Monell, J.

It is understood that the evidence offered "by the defendants was excluded on the ground, that, as it tended to contradict or vary the legal effect of the written contract, it was incompetent; and the respondents’ counsel seeks to sustain the judgment on that ground alone.

The general principle that parol evidence is incompetent to alter a written contract, has, however, a few exceptions ; and among the exceptions, is the right of a party to the contract to inquire into its consideration. Hence it may always "be shown, as between the parties, that there was no original consideration, or that the original consideration has since wholly failed. This exception more especially embraces promissory notes and other commercial paper.

The facts alleged in the answer, therefore, may be regarded as averring a total failure of the consideration of the note, and the evidence offered to establish such facts was competent.

But I think the evidence was also competent to sustain the defence of payment.

The transaction seems to have been this: Sickles deposited the money with the defendants, with directions to pay it to the plaintiffs, if they required and demanded it; and if not by them demanded, to pay the same to him, Sickles, on his return from a contemplated absence. Only a small portion of the money was demanded by the plaintiffs, and the balance was paid to Sickles, upon his return.

This arrangement, at most, constituted the plaintiffs the authorized receivers of the money, and as such, the agents of the depositor, Sickles. But such agency was revocable at pleasure. The taking of the defendants’ note as a voucher for the loan, and having it drawn payable to the plaintiffs, did not change the legal effect of the transaction, or confer upon them any other or further right to the money than to receive it as the agents of Sickles. Had they received it, the defendants would have "been discharged from their obligation ; but not having received it, it was competent for Sickles to revoke the authority, and payment to him was payment of the note.

It does not now appear that the plaintiffs sustained any other relation to the note, than that of mere agents. No cpnsideration whatever moved from them, and unless either as a gift inter vivor, or in some other way, they got a title to the note, so as not to be affected by the prior agreement of Sickles, they cannot avoid the payment to him.

For these reasons we think the evidence should have been let in. There must, therefore, be a new trial.

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