Case Name: Frederick W. Coon, Respondent, v. James A. Miller, Jr., Appellant
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1912-06-28
Citations: 151 A.D. 631
Docket Number: 
Parties: Frederick W. Coon, Respondent, v. James A. Miller, Jr., Appellant.
Judges: 
Reporter: Appellate Division Reports
Volume: 151
Pages: 631–635

Head Matter:
Frederick W. Coon, Respondent, v. James A. Miller, Jr., Appellant.
First Department,
June 28, 1912.
Bills and notes—action by indorsee against maker—defense of want of consideration—evidence—res inter alios acta—charge.
Defendant made a note to the order of C. which, after C.’s indorsement, he procured his bank to discount, and with the proceeds purchased stock in a certain corporation and indorsed and delivered the certificates to C., who retained them. When the note became due C. gave defendant a check to meet it. Defendant then drew another note which C. indorsed. This note was discounted and the proceeds placed to defendant’s credit, who at once repaid the amount to C. When this second note became due the bank refused to renew it and C. gave defendant a check to meet it. Defendant thereupon made and delivered to C. the note in suit which was drawn to C.’s order and payable at C.’s bank of deposit. This note was indorsed to plaintiff who brought this action against the maker. The defense was that the note was made for the accommodation of 0. to enable him to purchase more stock, and that defendant received no consideration for making it, while 0. claimed that the note was executed to enable defendant to purchase stock.
Held, that it was error to admit evidence of the condition of C.’s account in his bank of deposit on the three dates that notes were made. Such evidence was of res inter alios aota, and had no connection with the real issue, which was, what was the agreement between the parties.'
It was also error for the court to refuse “to specifically charge the jury that if they find that the note was delivered to Mr. Miller; on condition that Mr. Coon as indorser would never hold Miller liable, and that Coon would pay the same at maturity, their verdict must be for the defendant.”
Appeal by the defendant, James A. Miller, Jr., from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of New York on the 23d day of November, 1911, upon the verdict of a jury, and also from an order entered in said clerk’s office on the 28th day of November, 1911, denying the defendant’s motion for a new trial made upon the minutes;
Emil Goldmark, for the appellant.
George H. Taylor, Jr., for the respondent.

Opinion:
Scott, J.:
The action is upon a promissory note made by the defendant to the order of Daniel W. Coon and indorsed to plaintiff. It is conceded that plaintiff is an indorsee, without consideration, and that any defense available against Daniel W. Coon is available against plaintiff. The defense is that the note was made for the accommodation of said Daniel W. Coon and that defendant received- no consideration for making it. The history of the note is not in dispute.
Prior to 1906 Daniel W. Coon was vice-president of the International Shift arid Collar Company, and Miller, the defendant, was the New York manager of its business. Coon had a large investment in the business, and was largely liable upon its Obligations. In 1906 this company became absorbed into the corporation of Curtis, Leggett & Co., which assumed the liabilities of the International Company, thus relieving Coon, who became the largest stockholder and vice-president of Curtis, Leggett & Co., for whom Miller continued to be the New York manager. In- August, 1906, Curtis, Leggett & Co. pro posed to issue $250,000 of preferred stock and Coon subscribed for $70,000 thereof. At this time Coon and Miller had a conversation regarding the purchase by Miller of some of the preferred stock. Coon says, in effect, that Miller expressed a desire to purchase some of the stock if he, Coon, would help him to do so.
Miller says that he positively refused to purchase any stock, and that Coon then asked his help in purchasing $5,000 additional to that for which he had already subscribed. The whole case turns upon which of these versions is the true one. The subsequent acts of the parties would fit either version. On January 14, 1907, Miller, who was a depositor in the Fifth Avenue Bank, made a six months' note to Coon's order for $5,000, which Coon indorsed. The Fifth Avenue Bank discounted it, placing the proceeds to Miller's ciedit, who thereupon drew a check for $5,000 to the order of Curtis, Leggett & Co., which he sent to that company, and in due course received a certificate, made out in his name, for fifty shares of the preferred stock. He indorsed the certificate and delivered it to Coon, who retained it. When this first note became due, in July, 1907, Coon gave Miller a check for $5,000, which the latter deposited in the Fifth Avenue Bank to meet the note. Miller then drew another six months' note for $5,000, which Coon indorsed, and which was again discounted by the Fifth Avenue Bank and the proceeds placed to Miller's credit, who at once repaid the $5,000 to Coon. When this second note became due, in January, 1908, the Fifth Avenue Bank refused to renew it and Coon gave Miller a check for $5,000 to meet it. Miller thereupon made and delivered to Coon the promissory note in suit which was drawn to Coon's order, dated January 14, 1908, and payable six months after date at the Bank of the Metropolis, which was Coon's bank of deposit, but in which Miller had no account. Miller testifies that Coon said that he would have the note discounted by the Bank of the Metropolis. Coon denies this. At all events, he did not have it discounted. We have, then, two diametrically opposite stories of the transaction, each story supported by the oath of the party telling it, with little aid from the uncontroverted facts. Coon's evidence was taken by commission. He gave his version of several con versations between' himself and Miller, saying as to each one, or nearly every one, that a Miss Waldron, the bookkeeper, was present. She was called as a witness and testified that she had not been present at any of the interviews. A witness named Ballingall, a certified public accountant, apparently quite indifferent between the' parties, was called by defendant. He had been employed by the receiver of Curtis, Leggett & Co. after its failure to examine into the condition of the company. . He thus became acquainted with Daniel W. Coon and with the plaintiff. He testified that Daniel W. Coon told him that "he had put up $70,000 for preferred stock of Curtis, Leggett & Company, and in addition there was $5,000 worth of stock standing in Miller's name, which was his, and unfortunately it had not been paid for at that time." He also testified that' plaintiff had said to him, speaking of Miller's stock: "Well, my father owns that stock; it was simply put in Miller's name." This witness was not cross-examined. With this testimony uncontradicted in the record, it is difficult to say that the plaintiff's story of the transaction was supported by a preponderance of the evidence. At least the defendant's version was so well supported that errors adversely affecting him assume an importance that might not, under other circumstances, attach to them. The court admitted evidence of the condition of Coon's account in the Bank of the Metropolis on the three dates that notes were made, the object of the evidence being to show the improbability that on those dates Coon would have found it necessary to invoke Miller's aid to raise $5,000. This is assigned as error, and I think that it was. The evidence standing alone proves nothing except that on each occasion Coon had on deposit more than $5,000. What obligations he had to meet or what uses he had' for money did not appear, and in the nature of things could not be shown by defendant.. Not only was the evidence that of res inter alios acta, but it had no connection with or probative force concerning the-real issue in the case, which was, what was the agreement between the parties. Its probable effect was to draw away the minds of the jury from, the real issue in the case and to encourage them to speculate as to- the fact. It may have been what is sometimes called moral evidence, but it was not legal evidence.
At the close of the case the defendant asked the court " to specifically charge the jury that if they find that the note was delivered by Mr. Miller on condition that Mr. Coon as indorser would never hold Miller hable, and that Coon would pay the same at maturity, then the verdict must be for the defendant." To which the court replied: " I will charge them no differently on that subject than I have charged," to which defendant excepted.
I think that the defendant was clearly entitled to the charge requested, and a reference to the colloquial charge shows that the court had nowhere charged in plain language the proposition involved in the requést. It may be that that was the general purport of the charge, but it was not plainly put so as to impress it upon the jury, and the manner in which the request was refused may well have led the jury to believe that the requested charge was one to which the defendant was not entitled. The request is criticised because it contained the words " on condition," but the whole course of the trial shows that defendant had never claimed that he had made the note conditionally. What was plainly meant and what the jury would have understood was that the note was made upon the agreement that Coon would take care of it. In other words, that it was for Coon's accommodation.
In my opinion the judgment and order should be reversed and a new trial granted, with costs to appellant to abide the event.
Ingraham, P. J., McLaughlin, Miller and Dowling, JJ., concurred.
Judgment and order reversed and new trial ordered, with costs to appellant to abide event.