Court Opinion

ID: 5649186
Source: CourtListenerOpinion
Date Created: 2022-01-11 21:53:57.877186+00
Date Added: 2024-06-11T08:38:30.106811
License: Public Domain

Miller, J.
It is manifest, from the testimony in this case, that, at the time of the settlement between the plaintiff and the defendants and Elkin Hyman, on the 20th day of July, 1861, the note on which the plaintiff was liable as indorser belonged to Hyman. It had been protested prior to that time, and was then in Hyman’s possession. Such being the fact, on the same day, and as a part of the settlement then made between the parties, Hyman executed, under seal, a release to the plaintiff of all claims and demands then existing against him, which necessarily embraced the note in question, and which exonerated the plaintiff from any liability to pay it. The note thereby became discharged and canceled, and no one could acquire any title to it as against the plaintiff. If we assume that the note belonged to, or was in the possession of, the defendants, then the answer is, that it was not a valid security, and was extinguished by the release before referred to, which was also executed by the defendants. There is no evidence which tends to establish that the note in question, at the time of the settlement, belonged, or had been assigned or transferred, to any one else; but it is uncontradicted, that, after it became due, it was returned to Hyman and afterward transferred to one Hack, who prosecuted the plaintiff, and recovered a judgment against him for the amount remaining unpaid upon it. The suit, being brought after the-note became due, and after it was paid, was open to any defense which then existed against it in the hands of Hyman, or of the defendants. It could not be lawfully collected of the plaintiff, and,—independent of the fact that judgment was obtained upon it, and that the amount is alleged to have been collected by Hack *323of the plaintiff,—there is no difficulty in determining what disposition should be made of this case. •
The question then arises, whether the circumstances existing, really change the aspect of the case or alter the rights of the parties. I think that they cannot be thus regarded. The note was paid and of no value, and it adds not one particle to its validity, that a judgment was obtained, provided this was done without any fault on the part of the defendants. They cannot be held responsible for a- judgment procured against the plaintiff by default, or by his negligence, without their knowledge or consent. The fact that such a judgment was obtained would not of itself, render the defendants liable, if they were previously exonerated. In order to make them responsible, the defendants should have been notified of the commencement of the action, and have been permitted to defend it, had they chosen to do so. They" had no such notice, and were not called, or furnished with an opportunity to interpose any defense. Although one of them was called as a witness, yet no offer was made to permit the defendants to control the defense, or to allow them to testify to, or to furnish evidence to establish, — as the case shows, could easily have been done, ■—that Hyman was the owner of the note at the time of the negotiation and when the release was executed.
Such evidence would have established a successful defense to the note, and have prevented a recovery. Even if the facts proved had not sufficiently disclosed that Mack had no title to the note, by reason of the release discharging the plaintiff before its transfer, it is enough, I think, that this could have been proved, by calling upon Hyman or either of the defendants for that purpose. But, I think, even as the evidence stood, the history of the trial between Mack and the plaintiff shows that the case was erroneously decided, and that a different result should have ensued. This should not have been acquiesced in by the plaintiff here, but it was his duty to appeal from the decision to a higher tribunal. The recovery by Mack, against the plaintiff, was caused by the neglect of the plaintiff to call witnesses who could have7 established a complete defense, and in not taking the proper *324steps to review the erroneous decisions of the court where the action was tried. As, then, the plaintiff suffered a judgment to be obtained against him by his own negligence, and took no proper steps to make the defendants responsible for the result, it would be manifestly unjust that the defendants should reap the consequences of his acts.
If we assume that the plaintiff could have maintained an action upon the breach of contract arising from the failure of the defendants to send back the note which was released and discharged, then how stands the case ? He could not recover the amount of a note which had been paid, and was ¡therefore valueless, but merely nominal damages for the ■detention of a note against which there was a good and law■ful'defense. The recovery of the judgment did not flow as a -direct consequence of the neglect of the defendants to return the note, but was the immediate result of an imperfect (defense and of an erroneous decision of the justice who tried the cause, from which no appeal was taken. Those are not damages arising directly from the breach of the contract itself, but are remote and contingent, and even if the action was maintainable upon the facts presented, a recovery for the tfull amount of the note was clearly wrong.
There is no ground for any recovery for the goods left with Altman, and I do not understand that the plaintiff claims ¡any thing more than the note.
The judgment of the General Term should be affirmed, and judgment absolute be rendered in favor of the defendants.
Woodruff, J.
The order granting a new trial was, beyond all question, proper in this case. The action was brought for a breach of the defendants’ alleged agreement to take up and return to the defendant a promissory note, made by Henry Barmon, for $698.11, dated March 15th, 1861, payable four months after date, to the order of the plaintiff, and by him indorsed and transferred to Elkin Hyman, which note, ¡though made by Henry Barmon, was made, indorsed and ■delivered for goods which the plaintiff bought of Hyman, *325ostensibly as agent for his brother, but in reality for himself, his brother’s name being only used as “ a cover.”
This agreement is alleged to have been made on the 20th of July, 1861, which was two days after the note became due.
The plaintiff, on his own behalf, testified distinctly that $200 had been paid thereon when or before the agreement was made; that at that time Hyman had the note, and that it had • been protested. And he also produced and proved a release, under seal, executed by the defendants, and by Hyman, bearing date on the day of the alleged agreement, July 20th, 1861, by which the defendants and Hyman released him from all claim and demand they or either of them had, for or by reason of any matter, cause or thing, to the day of the date thereof.
The plaintiff then gave evidence to show that afterward, one Mack sued him upon the note, and recovered judgment against him for $578.68, including costs ; and that one of the defendants was called and examined as a witness in his favor. But, otherwise, it did not appear that the defendants were notified or called upon to defend the action. Hyman was not called as a witness, when it was palpable that if the facts wrere as testified on this trial, his evidence must have prevented a recovery in that suit.
' The case, then, made by the plaintiff, taking every disputed question in his favor, is this: One Hyman held a note, which was indorsed by the defendants, which was past due and protested. The holder (Hyman) executed a release thereof to the plaintiff, and the defendants agreed to return it to him. The note was of no value whatever in the plaintiff’s hands, because it was made and delivered to the holder for goods purchased by the plaintiff for himself. The agreement was not performed, but, on the contrary, an action was brought upon the note by another party. The plaintiff did not call upon the defendants to protect him against the suit, and did not call the witnesses who could have testified to the facts to which he now swears, when, obviously, it was quite easy to do so. (Indeed, I quite agree that but for an erroneous view of the subject, taken on the trial of that action, the *326court would have nonsuited the plaintiff, and that, on appeal, the judgment must have been reversed.)
Upon these facts, the plaintiff has a verdict in this cause, and judgment for the whole amount of the recovery against him in that action, including the costs.
I think, that upon the proofs, there was nothing to warrant such a judgment. The damages for a breach of an agreement to return a paid_ or released note, already past due, cannot be the amount of the note, unless it be shown, that in consequence of the breach, the plaintiff has been, by force of the prima facie import of the paper, and its apparent negotiability, compelled to pay it to some subsequent holder, in spite of a diligent endeavor to prove the facts, which, if proved, constitute a complete defense, or unless he calls upon the party to the agreement, notifies him of the suit, and permits him to take such charge thereof as will protect them both.
It may be possible to suppose a case in which, by reason of the death of the only witnesses who can testify to the facts, a party who has once paid or been released from a note, may be compelled to pay it to one, who, in truth, received it after its maturity; but, prima facie, a paid note is worthless paper.
Where, as in this case, the note was in the hands, not of the promisor, but of another, and was in itself of no value to the plaintiff, the largest latitude of construction which the plaintiff could claim for the agreement, would be to treat it as tantamount to an agreemerit to keep him safe from liability upon his indorsement, according to the legal effect of the release. The liability which was established against him in the present case was due to his own negligence, and not to any actual liability.
I am not, however, prepared to assent to the proposition, insisted upon in the court below, that the plaintiff could, notwithstanding he was sued on the note, in no case recover more than nominal damages. If he had notified the defendants, and called on them to protect him, had himself used due diligence, and had been successful in defeating the *327suit brought against him, he would, nevertheless, have sustained actual damages by the neglect of the defendant to take up and return to him the note. Presumptively, the agreement was made for the purpose of preventing the passing of "the note by Hyman, the then holder, to other hands, and the possible necessity which the plaintiff in such case would be under of defending an action, employing counsel, and devoting time, labor, etc., to the establishment of a defense, which, had the defendant performed his agreement, would not be necessary, and against which that agreement was intended to protect him.
But the present verdict and judgment were not rendered upon any such theory, nor for such expenses. I think the new trial was properly ordered.
Order affirmed.