Case ID: misc_79/html/0209-01.html
Source: Caselaw Access Project
Author: {"author": "Page, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Frank P. Mills, Respondent, v. Henry Gold, Appellant.
    (Supreme Court, Appellate Term, First Department,
    February, 1913.)
    City Court of city of New York — jurisdiction — actions in —evidence. Pleading — supplemental answer — judgment — appeal.
    Upon the trial of an action brought in the City Court of the city of New York to recover a loan of $5,000, it appeared that the parties, who contemplated a joint venture in chicken farming, purchased for $10,000 a farm, and defendant macfe it his home and undertook the management of the business which was soon •afterward incorporated. At the closing of the title each paid one-half of the purchase price, defendant using for that purpose a check drawn by plaintiff to defendant’s order for $5,000, prior to the purchase. Plaintiff claims that he gave the check to enable defendant to contribute equally in the business, while defendant, asserting that plaintiff agreed to furnish all necessary money for the enterprise and to allow defendant a one-half interest for his services in managing the business, explained that the check was given so as to make it appear to outsiders that plaintiff and defendant were equal contributors. Held, that evidence of the final disL tribution- of the stock of the corporation and how much plaintiff received for the money he invested was admissible to show the purpose and intention of the parties in regard to the check given to defendant, and the exclusion of such evidence was reversible error, particularly where the jury requested an instruction as to whether the $5,000 extra in stock was received by plaintiff as a result of giving said check, and the court replied in the negative.
    A denial of defendant’s motion for leave to serve a supplemental answer, pleading in bar a judgment in defendant’s favor rendered in an action brought by plaintiff to recover the amount of a subsequent loan, will be affirmed, where the proposed supplemental answer does not allege that the second cause of action was a part of the same transaction or a single course of dealings between the parties.
    A judgment in plaintiff’s favor for $5,000 will be reversed on the additional ground that the court .below had no jurisdiction to render a judgment for more than $2,000 and costs.
    Appeal by the defendant from a judgment of the City Court of the city of Hew York entered upon the verdict of a jury, and the appellant also brings up for review an intermediate order of Special Term denying the defendant’s motion for leave to serve a supplemental answer.
    Arthur L. Fullman, for appellant.
    Morgan & Breckinridge (George P. Breckinridge, of counsel), for respondent.
   Page, J.

The action was brought to recover $5,000 alleged to have been loaned by the plaintiff to the defendant. The answer is a general denial. At the trial it was undisputed that the parties had for some time been contemplating a joint venture in chicken farming. They finally purchased a farm for $10,000 and the defendant made it his home and undertook the active management of the business. After a short period they incorporated the business. The $10,000 which they paid for the farm was contributed in this way. Prior to the purchase the plaintiff drew a check to the defendant’s order for $5,000 and at the closing of title each paid $5,000 toward the purchase price, the defendant using for that purpose the check previously given to him by the plaintiff. The purpose of this transaction is the main issue in the case, the plaintiff claiming that tne check was given by him to the defendant to enable him to contribute equally in the business. The defendant asserts that the plaintiff agreed to furnish all the necessary money for the enterprise, and to allow the defendant a half interest for his services in taking entire charge of the business, and he explains that the check was given to him so that it would appear to outsiders that they were contributing equal money.

The defendant’s attorney attempted to give evidence of the final distribution of the stock of the corporation and how much stock the plaintiff received for the money he invested, as some proof of the purpose and intention of the parties in regard to the $5,000 check given to the defendant. The trial justice excluded the evidence on the ground, as stated, that payment was not pleaded. An exception was duly taken. After the jury had been out a short while they requested the court to instruct them if they could consider whether the plaintiff received $5,000 extra in stock as a result of his having given the check to the defendant. The court replied in the negative, whereupon a verdict was rendered for the plaintiff for $5,000.

The subsequent conduct of the parties in regard to the money advanced, especially when their arrangements crystalized and took final form in the distribution of the corporate stock, has a peculiar probative value as coloring the transaction and determining its meaning and its natural relevancy is strongly eyi'denced by the question which the jury addressed to the court. I am of the opinion that the exclusion of this evidence was reversible error.

As to the second question raised by the appeal, namely the refusal of the Special Term to permit the defendant to serve a supplemental answer, it need only be said in passing that the appellant has failed to bring himself within the rule which he cites. The judgment which he seeks to plead in bar was brought to recover a different sum of money claimed to have been loaned to the defendant at a date several months subsequent to the transaction which is the subject of this action, and the proposed supplemental answer does not allege that the second cause of action was a part of the same transaction or a single course of dealings between the parties.

The order of the Special. Term, denying the defendant’s motion for leave to serve a supplemental answer, is, therefore, affirmed, without prejudice however to a renewal of his motion upon papers properly setting forth his defense.

For the reasons above stated and on the additional ground that the City Court of the city of Hew York has no jurisdiction to render a judgment for more than $2,000 and costs, the judgment appealed from should be reversed, and a new trial ordered, with costs to appellant to abide the event.

Lehman, J., concurs; Hotchkiss, J., taking no part.

Judgment reversed and new trial ordered, with costs to appellant to abide event.