Case ID: ad_3/html/0129-01.html
Source: Caselaw Access Project
Author: {"author": "Follett, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Edmond W. Granger and C. Townsend Wilson, Appellants, v. Walter Brooks and Others, Respondents.
    
      Evidence — a witness cannot testify to whom, she game the credit in malting a loan — when the evidence is harmless.
    
    Upon the trial of an action to recover money paid to the defendant Elizabeth Steele by the firm of Brooks & Steele, on the ground that it was fraudulent as to the plaintiffs, who were judgment creditors of the firm, it appeared that Elizabeth Steele at the time of the formation of the firm agreed to loan to , it §3,000 to be used in its business, and gave that sum to her son Robert J. Steele, one of the partners, and took his note for it. She afterwards demanded payment of the note, and being unable to get the money took the note of the firm, the payment of which latter note was the one complained of.
    
      Eeld, that there was no evidence of fraud in the transaction.
    Upon the trial Elizabeth Steele was called by the plaintiffs, who attempted to prove by her that she made the loan on the credit of her son Robert J. Steele- and not on the credit of the firm, and upon cross-examination the defendants were allowed to ask the witness and to prove by her that she gave the credit ■ to the firm. It appeared that all three of the defendants had been examined in . proceedings supplementary to execution; that the plaintiffs introduced this testimony upon the trial, and that it appeared from it that Elizabeth Steele had testified that she made the loan to the firm.
    
      Held, that although it was not competent for Elizabeth Steele to testify to her undisclosed intent as to the person to whom she gave credit when she made the loan, yet as the plaintiffs were not injured by the evidence, and as the action was an equitable one, the court would not reverse the judgment because of its admission.
    Appeal by the plaintiffs, Edmond W. Granger and another, from a judgment of the Supreme Court in favor of the defendants, entered in the office of the clerk of the county of' Erie on the 26th day of May, 1894, upon the decision of the court rendered after a trial- at the Erie Special Term dismissing the plaintiffs’ complaint upon the merits, with costs.
    This, action was begun May 17, 1892, to recover from the defend-' ant Elizabeth Steele $2,000, paid to her April 4, 1892, by Brooks & Steele, which payment it ■ is alleged was fraudulent as against these plaintiffs. Between. December 27, 1887,. and April 4,1892, the defendants Walter Brooks and Robert J. Steele were equal partners, under the firm name of Brooks & Steele, and engaged in business as retailers of groceries at Buffalo, N. T. Between January 1, 1892, and April 1, 1892, this firm became-indebted to the plaintiffs in the sum of $2,312.60 for goods purchased, on account of which the latter recovered April' 26, 1892,- a judgment against Walter., Brooks- and Robert J: Steele for $2,343.10,. damages and. costs, on which an execution was. duly issued. April 27, 1892, to the sheriff of Erie county, where the defendants then resided, winch execution, was duly returned wholly unsatisfied. May. 6,.1892.,
    
      Jkugust Becker, for the appellants.
    
      James L. Quackeribush, for the respondents.
   Follett, J.:

There is no doubt about the genuineness of Mrs. Steele’s demand, for the undisputed evidence shows that she raised the sum loaned' by a-mortgage on her house. The court found that shortly prior to the formation of the firm, and on the 20th of December,-1887, Mr. Brooks and Mrs. Steele had a conversation iii reference to his entering into partnership with Robert J. Steele, her son, and that she then “ agreed to advance and loan to said firm.the sum of $2,000 to be used in said business,” and that December 20, 1887, she delivered that sum to her son which he placed to the credit of Brooks & Steele in the bank where the firm kept its account, and thereafter the money was used in its business. It was also found' that on the delivery of the money to Robert J. Steele, he gave his individual promissory note to his mother, by which he promised to pay her $2,000 on demand, and that afterwards on several occasions prior to December 21,1891, she demanded that her note be paid,but failing.to obtain payment she, on the date last mentioned, took the note of-the firm for $2,000, payable on demand, and surrendered the note first given to her. Both partners were present when this was- done and assented. The court found that the note Avas given and received' without intent on the part, of: the makers or of the payee to hinder,: delay or defraud the creditors of Brooks & Steele, and without notice on the part of the payee that the firm was then insolvent or embarrassed. These findings are amply- sustained by the evidence.-. Mrs. Steele then became the owner of a legal and meritorious demand against the firm, given upon a valuable consideration, which she had the right to enforce, and the payment thereof to her by the firm was not a fraud on its creditors. This is-simply a race between two equally meritorious creditors of the firm, one of Avhom has succeeded, and the unsuccessful one has no legal or equitable claim against the successful competitor.

Elizabeth Steele was called and sworn on the trial as a Avitness for the plaintiffs, Avho attempted to prove by her that she made the loan on the credit of her son, and not on the credit of the. firm. On her cross-examination the defendants were permitted to ask, over the plaintiffs’ objection and exception: “To Avhom did yo.u make this loan? * * * A. I gave it to the firm of Brooks & Steele. Q. Did you give the credit to Brooks & Steele, or to Robert J. Steele ? ■ * * * A. I gave it to the firm, of course.” It is undoubtedly true that evidence of her secret and undisclosed intent as to Avhom she gave credit was not admissible to vary the presumptions arising from the acts- of the parties. As before stated, no Avitness. was called-in behalf of the defendants, the case being rested wholly on the plaintiffs’ evidence. Previous to the trial the plaintiffs had' examined all three of the defendants in proceedings supplementary to their execution, and the evidence so taken was introduced on this trial by the plaintiffs. On the examination.in supplementary proceedings Mrs. Steele testified that she loaned the $2,000 to the firm, which testimony the plaintiffs read in evidence on the trial. Thus they proved substantially the same fact which they now allege Avas error for the defendants to prove on cross-examination. The three • defendants were • also examined in proceedings supplementary to an execution, issued on a judgment obtained by another creditor, and the evidence given by the defendants on that examination was introduced on this trial by the plaintiffs. Every fact, and all the phases of the facts, have been fully developed by three independent examinations and ..crass-examinations of these three • defendants, and there seems to be no real inconsistency in their evidence given on these several examinations. This is an equitable action, was tried as such, and in such cases the appellate court is not required to reverse a judgment and grant a new trial for errors in the admission of evidence, if it is apparent that the appellant- has 'not: been harmed by the error and that substantial justice has been done.

• Believing that the judgment is right, and that a new trial would be of no advantage to the plaintiffs, it should be affirmed, with costs.

All concurred.

Judgment affirmed, with costs.