Case Name: ENOS RICHARDSON, Plaintiff and Respondent, v. GEORGE CARPENTER, Defendant and Appellant
Court: New York Superior Court
Jurisdiction: New York
Decision Date: 1870-04-30
Citations: 2 Sweeny 360
Docket Number: 
Parties: ENOS RICHARDSON, Plaintiff and Respondent, v. GEORGE CARPENTER, Defendant and Appellant.
Judges: 
Reporter: Reports of cases argued and determined in the Superior Court of the city of New York
Volume: 32
Pages: 360–377

Head Matter:
ENOS RICHARDSON, Plaintiff and Respondent, v. GEORGE CARPENTER, Defendant and Appellant.
[Decided April 30, 1870.]
An acceptor of an order drawn on him for the payment of a sum of money (said order not being a draft nor any species of negotiable mercantile paper) cannot be held liable upon his acceptance unless there was a consideration for it. The acceptance does not of itself import a consideration. A consideration must therefore be proved aliunde to exist by the plaintiff.
Where a question of fact is presented which is essential to warrant a referee’s conclusion of law, and there is a conflict of evidence on that question, the report must contain a finding thereon, either expressly or by necessary implication, otherwise a judgment entered on the report will be reversed on appeal. Thus, if in an action against the acceptor of such an instrument he by his answer raises an issue of fact as to whether there was any consideration for the acceptance or not, and there is a conflict of evidence on that issue, a report of a referee in favor of the plaintiff which does not contain a finding of fact finding that issue in plaintiff’s favor cannot be sustained; and a judgment entered in plaintiff’s favor on such a report will be reversed on appeal
Before Monell, Jones, and Spencer, JJ.
This action was brought on an instrument of which the following is a copy:
“ New York, February 14,1868.
“ Mr. G. Carpenter, 13 Chambers street.
“ Please pay E. Richardson, Esq., or order, five hundred dollars for value received, besides the amount stipulated to pay Mr. R. out of the proceeds of the claim against the Peabody estate, now in your hands to collect, when the same shall have been collected by you.
“ Respectfully yours,
“H. B. Melville.
[Written across the face:]
“Accepted February 24, 1868.
“ Geo. Carpenter.”
• The complaint sets out the substance of the above instrument according to its tenor and effect, and avers that it was made and delivered for a good and valuable consideration; that it was accepted by the defendant for a good and valuable consideration by his written acceptance thereon; that the plaintiff loaned and advanced the sum mentioned in the instrument on the faith of the acceptance, and is now the owner and holder thereof; that defendant had collected the sums mentioned in said instrument but had not paid the same or any part thereof to the plaintiff.
The answer denied that the instrument was made or accepted for a good and valuable consideration or for any consideration whatever; also denied that plaintiff loaned or advanced the sum mentioned in the instrument, on the faith of the acceptance, or any sum whatever.
It then sets up as an affirmative defense that plaintiff held a judgment against Melville & Co., of which firm H. B. Melville was a partner; that said H. B. Melville, acting as the agent of plaintiff, represented to him (the defendant) that the amount of said judgment, with the interest, was between $3,000 and $4,000, and that it could be collected out of the proceeds of a claim wliich Melville & Co. had against the estate of Mr. Peabody in Texas, which proceeds amounted to about $3,800, and was in the hands of parties in Texas, and proposed to the defendant to give to him, if he would proceed in the matter and collect the judgment without any charges or expenses being chargeable against the plaintiff in case of failure, one half of the amount to be collected, to which proposition defendant consented; that, in pursuance of the proposition thus consented "to, the plaintiff assigned said judgment to the defendant on an agreement that defendant should pay to him one half the amount collected thereon; that while-proceedings were pending to collect said judgment, and before defendant knew what amount was collected from the Peabody estate, said Melville again represented to defendant that the amount to be recovered therefrom was at least $3,800, and. requested defendant to accept a draft drawn by him in favor of the plaintiff, payable out of said proceeds; and defendant, relying on such statement made by Melville, and believing the amount collectable from the Peabody estate was as stated by him, accepted said draft, being the instrument sued on; that said representations, as to the amount which could be collected from said Peabody estate, were false and untrue, and were by said Melville falsely and fraudulently made, with full knowledge of their falsity, and for the purpose of cheating and defrauding defendant into accepting said draft; that the amount collected from said Peabody estate was $1,072, $22 deducted for disbursements, and $525 paid to plaintiff under the agreement between him and defendant.
There were other allegations in the answer on which there is no evidence.
The issues formed by this complaint and answer were sent to a referee for trial.
On the trial the plaintiff read in evidence the instrument sued on (a copy of which is given above) and rested.
The defendant moved for a dismissal of the complaint on various grounds, one of which was “ That there was no evidence of consideration for the draft, but on the contrary it appears there was no consideration.”
The motion was denied and an exception taken.
The defendant then introduced evidence tending to sustain the above allegations in the answer; also tending to prove that neither the plaintiff nor Melville had any interest whatever in the balance in his hands of the collection from the Peabody estate; that he accepted the draft as a mere gift to Melville which he was willing to make out of the sum of $2,000, which, from the representations made by Melville, he anticipated to receive for his own use, and that he did not receive any money from the Peabody estate until long after the acceptance.
On the other hand, plaintiff introduced evidence tending to show that Carpenter was acting for the benefit of Melville, and took the assignment in trust as to one half of the proceeds of collection for Melville, and proceeded to collect the judgment for joint benefit of the plaintiff and Melville upon an agreement made between, him and Melville that he should take out of the collection a reasonable fee for the work he did 3 that this arrangement was made because Melville could not himself appear in the transaction as being interested in the claim, and therefore it was necessary that some person should nominally represent him.
The referee found as follows :
First.—That on the 14th day of February, 1868, H. B. Melville drew an order on the defendant, whereby he requested the said defendant to pay the plaintiff herein the sum of five hundred dollars, as soon as and when funds should come into the possession of such defendant, from the proceeds of the Peabody estate in Texas, sufficient to pay said order or draft; that on the 24th day of February, 1868, the said defendant accepted the said draft or order, and that the plaintiff herein thereafter became bona fide purchaser of the same, for a good and valuable consideration, and is now the lawful owner and possessor thereof.
Second.—That afterwards the defendant came into the possession of funds from the Peabody estate in Texas, sufficient to pay the said draft, and that the date when he first became possessor of such funds was on or about the 19th day of September, 1868.
Thvrd.—That the defendant has never paid the said draft so accepted as aforesaid.
And I do further report, as conclusion of law, upon the facts found:
That the defendant is indebted to the said plaintiff on the said, draft, and that the plaintiff is entitled to recover against the said defendant the sum of five hundred dollars, with interest thereon from the 19th day of September, 1868, and amounting to the sum of five hundred and thirty-six dollars and ninety-four cents.
Upon these findings judgment was entered for plaintiff against defendant. From which judgment the present appeal is taken.
Mr. D. T. Walden for appellant.
The draft being payable out of a particular fund, was not a bill of exchange, nor equivalent to a bill of exchange (Atkinson v. Manks, 1 Cow. R., 692, 707; Cook v. Satterlee, 6 ib., 108; Worden v. Dodge, 4 Denio R., 159; Lowery v. Stevens, 3 Bosw., 505).
The acceptance of the draft was a simple contract to pay Richardson so much money from such a fund when received; to make it obligatory, there must have been a consideration for the promise, and that consideration must be as to the defendant. His obligation cannot be sustained by a consideration between Melville and Richardson (Atkinson v. Manks, 1 Cow., 692, 706).
To sustain an action on this agreement, and to charge the defendant, it is necessary to show that the defendant has received money belonging to the drawer—money from the Peabody estate belonging to Melville—for until that was done, neither was a consideration proved, or a breach of the contract (per Sutherland J., ib., 707).
When the plaintiff rested, there was nothing to sustain his case; ■the plaintiff had mistaken his legal position, supposing the action to be upon a bill of exchange, and the motion to dismiss should have been granted.
The referee’s findings of fact do not sustain his conclusion of law; the facts found do not show any indebtedness by the defendant to the plaintiff, or that the plaintiff is entitled to recover.
The referee has not found that there was any consideration for the defendant’s promise, or that Melville had any interest in the fund; these were necessary facts, and attempted to be proved, and the referee’s failure to find them shows that they were not established to his satisfaction; if they or either had been, he would have so found (Nelson v. Ingersoll, 27 How., 1).
This report is like the special findings of facts by a jury—if inconsistent with the general verdict, the former shall control, and the court shall give judgment accordingly (Code, § 262).
Mr. George W. Parsons for respondent.
The defendant has no equities as against the plaintiff. He gave his acceptance with a full knowledge of all the facts, or at least with the best possible means of obtaining such knowledge. If he had paid his acceptance he would still have received $72.75 or $75.75 for a trifling disbursement and service. On the other hand, the plaintiff parted with five hundred dollars, on the faith of the defendant’s promise to pay that amount.
The strongest position that the defendant can possibly take is, that he accepted without any valuable consideration, and for the accommodation of Melville, and that, as the instrument is not technically a draft, the payee was put upon his inquiry as to any defenses. But this position would not be a defense to the action.
The acceptance of the instrument was in law an equitable appropriation of the fundón which it was drawn (Edwards on Bills, 144; Vreeland v. Blunt, 6 Barb., 182).
The instrument purports, on its face, to be for value received. The acceptor is the party primarily liable, and is estopped to set up want of consideration as against the plaintiff, who has parted with value on the faith of the instrument accepted (Edwards on Bills, 420; Kemble v. Lull, 3 McLean, 272).
The instrument was used for the purpose intended by the parties. The defendant accepted it for the very purpose of giving Melville credit, and enabling him to raise money. "Under such circumstances the defendant is bound, though he was a mere accommodation acceptor (Edwards on Bills, p. 323, and cases there cited; Parsons on Notes and Bills, vol. 2, p. 27).
The defendant’s exceptions are bad in law.
The plaintiff and Melville both testify that the former paid the full amount of five hundred dollars for the draft. This evidence is wholly uncontradicted.
The facts found are sufficient to support the conclusion of law.
Possession of the draft is prima faoie proof of ownership. The defendant admitted in his answer that there were funds in his hands, applicable to the payment of the draft. It is not necessary (though sufficiently evident) that the funds should belong to Melville. The instrument was not drawn upon a fund specified as belongi/ng to the drawer, and the case thus differs from that of Atkinson v. Manks (1 Cowen, 691). It was not necessary to prove consideration. The instrument shows it on its face. The defendant was bound by his acceptance, and had no right to set up want of consideration (Edwards on Bills, pp. 420, 421; Jerome v. Whiting, 7 Johns., 321; Walrad v. Petrie, 4 Wend., 575; Lilly v. Hays, 5 Ad. & El., 548; Kemble v. Lull, 3 McLean, 272).
The defendant was not an accommodation acceptor.

Opinion:
By the Court:
Jones, J.
It is perfectly clear that the instrument in question is not a draft, nor any description of negotiable mercantile paper.
It was, therefore, necessary to prove a consideration for the acceptance before the defendant could be held liable.
Ho such proof had been offered at the time the plaintiff rested" his case. The motion to dismiss the complaint should, therefore, have been granted.
If, however, it was perfectly clear from conceded facts subsequently appearing that there was a consideration for the acceptance, the judgment might be sustained.
So, also, if the referee had found as matter of fact upon conflict of testimony that there was consideration for the acceptance, the judgment would be sustained.
The difficulty is that there was conflict of evidence on the subj ect of consideration for the acceptance, upon which the referee might well have found either that there was a consideration or that there was not; but he has not found either way on this disputed question of fact.
It is evident, from his denial of the motion to dismiss and his findings, that his judgment is based on the ground that the instrument imported a consideration, and it was unnecessary for the plaintiff to prove one aliunde. This is an incorrect view; and it results that his findings of fact do not support his conclusion of law.
It is not the office of the General Term to determine, in the first instance, disputed questions of facts. Those must be determined in the court below. We cannot here, for the first time, pass on the conflict of testimony and decide this important question of fact. Our sole authority over questions of fact is to set aside a finding of fact when the evidence is such that the tribunal below should, as matter of law, have held there was not evidence to warrant it.
There is a marked difference between a general verdict and the findings of a referee. A general verdict finds all disputed questions of fact in favor of the party for whom the verdict is given, except such as the judge at the trial may have expressly withdrawn from the jury. The findings of a referee, on the contrary, determine only those disputed questions on which he expressly finds, or which are, by necessary implication, included in some one of his findings of fact.
It being then necessary, to support this judgment, that the plaintiff should aver and establish a consideration for its acceptance, and the question whether there was a consideration or not being a disputed question of fact on which there was a conflict of testimony which would sustain a finding either way, and the referee not having found, either expressly or by necessary implication, on this disputed question of fact, it follows that an essential element in the plaintiff's cause of action is wanting.
Judgment reversed, with costs to the appellant to abide the event, order of reference vacated, and new trial ordered.