Opinion
The note in suit was given in connection with the purchase from the payee of thirty-two storm windows and a storm door. Twenty-one of the windows failed to fit and the door was never delivered. In defense to the action on the note, brought by a bank as holder, the makers pleaded fraud in the execution and negotiation of the instrument in that they had signed it in blank on the representation of the payee that it would be used solely to determine their credit. In an independent action against the payee, the makers claimed damages, not for breach of the contract of sale, but for the wrongful completion and negotiation of the note and for failure to carry out a subsequent agreement concerning rectification of the omissions in the performance of the contract. Held: 1. Since the court found that there was no fraud in the execution of the note, and since it could properly find, as it did in effect, that the bank was a holder in due course, there was no error in allowing recovery on the note. 2. There having been no showing of agency, the statements of alleged agents of the payee connecting him with the agreement to rectify were properly excluded from evidence. 3. As it was not shown that the payee was a party to the agreement to rectify, the conclusion that the makers failed to prove a case against him under the allegations of their complaint was warranted.
Argued December 3, 1958
Decided January 27, 1959
Actions, in the first case to recover upon a promissory note and in the second to recover damages for wrongfully completing and negotiating the note and for breach of an agreement to rectify errors and omissions in the performance of a contract of sale, brought to the Court of Common Pleas in New Haven County and tried to the court, Sidor, J.; judgment for the plaintiff in the first case and for the defendant in the second, and appeal by Herbert C. Roehl, Sr., et al. in each case. No error.
Charles G. Albom, with whom, on the brief, was Joseph R. Apter, for the appellants (defendants in the first case and plaintiffs in the second).
Elliott R. Katz, for the appellee (defendant in the second case).
Frederick L. Greenberg, for the appellee (plaintiff in the first case).
In March, 1955, the First National Bank and Trust Company of New Haven, herein-after referred to as the bank, brought suit against Herbert C. Roehl, Sr., and his wife, Mae F. Roehl, to recover the face amount of a note for $825.48 dated December 27, 1954, plus attorney's fees as provided in the note. In November, 1956, the Roehls instituted an action against Paul Ambeltsiotis, the payee of the note upon which the bank had sued. From the manner in which this complaint has been drafted, it is extremely difficult to determine the nature of the cause of action. We will consider it, as the court below apparently did, as an attempt to allege wrongful completion and negotiation of the note and failure by Ambeltsiotis to carry Put an agreement entered into when the action upon the note was originally reached for trial on November 22, 1955. The trial court rendered judgment against the Roehls in both cases and they have appealed.
The facts in these cases are these: On November 21, 1954, Ambeltsiotis was a distributor of aluminum windows and doors in New Haven, doing business as the Stormaster Window Company. Two of his employees were John A. Frederick, an installer, and William Merico, a salesman. Frederick was then a prospective son-in-law of the Roehls. He has since married their daughter. Mr. Roehl was the owner of the family home at 279 Lenox Street, New Haven. At his request, Frederick had arranged to purchase, for him, thirty-two storm windows and a door with a grille from Ambeltsiotis at dealers' prices, the installation to be made by Frederick. Merico demonstrated the windows to the Roehls and made the necessary measurements as a favor to Frederick. On November 21, Merico filled out, and Roehl signed, a contract to purchase the windows and door for $697.83. Roehl also filled out and signed an application to the bank for a property improvement loan. It contained pertinent information concerning his financial condition. Subsequently, the windows were delivered and Mrs. Roehl signed a borrower's completion certificate which recited that all of the articles had been furnished and installed and that the work had been satisfactorily completed. On December 27, 1954, the bank discounted a note for $825.48 made payable to Ambeltsiotis in monthly instalments of $22.93 on the tenth of each month starting February 10, 1955. The note bore the admitted signatures of Mr. and Mrs. Roehl as makers. It was indorsed on the reverse side by Ambeltsiotis, who received the $697.83 purchase price from the bank. The $127.65 difference between the amount of the note and the purchase price represents interest on the loan and insurance on the life of Mr. Roehl. On December 28, 1954, the bank mailed to the Roehls a notice, which they received, of the amount owed, together with a coupon book for the payment of the instalments. The Roehls made no payments on the note because they claimed, and the court has found, that twenty-one of the windows do not fit and the door has never been delivered.
In the suit by the bank on the note, the Roehls alleged by way of defense that the note had been signed by them in blank on representation that it, together with another paper, would be used solely to determine their credit, and that Ambeltsiotis had fraudulently obtained their signatures and negotiated the note. The defendants not only had to allege but also to prove these facts before the plaintiff had the burden of going forward to prove that it was a holder in due course and not subject to these defenses. Rev. 1949, 6351 (Rev. 1958, 39-60); Garris v. Calechman, 118 Conn. 112, 115, 170 A. 789; Filosi v. Crossman, 111 Conn. 178, 182, 149 A. 774. An issue of fact was presented for determination by the trier. Hartford National Bank Trust Co. v. Credenza, 119 Conn. 368, 372, 177 A. 132. That the Roehls failed to prove their allegations is apparent from the court's conclusion that there was no fraud practiced in the execution of the note. The court did not find, as it should have, that the bank was a holder in due course under the provisions of 6344 of the 1949 Revision (Rev. 1958, 39-53). It did conclude that the bank was the owner of the promissory note signed by the defendants. We construe this as meaning that the bank was a holder in due course. Garris v. Calechman, supra.
In the second case, the Roehls did not sue Ambeltsiotis for breach of the contract of sale. They relied upon an alleged stipulation entered into by the bank and the Roehls when the first case was reached for trial on November 22, 1955. Ambeltsiotis was not a party to that suit, was not in court at that time and did not enter into the stipulation. Under the facts and the pleadings, there was no error in excluding the statements of alleged agents of Ambeltsiotis in the absence of proof of their agency Bailey v. Bobecki, 117 Conn. 653, 654, 166 A. 677; Metropolitan Cleaners Dyers, Inc. v. Tondola, 114 Conn. 244, 246, 158 A. 240. The conclusion that the Roehls had failed to prove a case against Ambeltsiotis under the allegations of the complaint was fully warranted.