Opinion
May Term, 1900.
Richard S. Harvey, for the appellants.
A.H.F. Seeger, for the respondent.
This action is upon promissory notes made by the defendant Banigan, indorsed by the defendant Brown and delivered to the plaintiff. The defendants admitted the making and the delivery, and by concessions at the trial confined the defenses to failure of consideration and to the nature of the indorsements.
In 1894, this plaintiff was maintaining actions in New York and New Hampshire against Banigan, based upon five promissory notes aggregating $14,500. When the action in New York was on the eve of trial, plaintiff, Banigan and Brown, who was of counsel for Banigan, agreed to settle plaintiff's claims against Banigan in consideration of notes of the defendant Banigan for $1,250, indorsed by Brown. The case upon call was answered "settled," and shortly thereafter plaintiff met Brown at the letter's office. The plaintiff and Brown in their testimony agree that the plaintiff then gave to Brown four of the five notes of the first series and that Brown delivered to plaintiff the notes in suit. Plaintiff also testifies that he signed a paper releasing all claims, and this is not absolutely disputed. But these two parties in their testimony differ over a material point, for Brown testifies that when the plaintiff put certain notes of the first series upon the table stating that "there were the notes," he took them without examination and thereupon delivered the notes in suit to the plaintiff, and that only after he gave the notes of the first series to Banigan was it discovered by Banigan that one of the notes was missing. The plaintiff testifies that he produced four notes and explained to Brown that he could not bring the fifth note as he had used it to raise money in a transaction with one Goldsmith in which the note had been secured; that the matter had been settled by payment but the note had disappeared, and if he ever found it he would then deliver it, and that after this explanation Brown received the four notes and delivered the notes in suit. The defendants insist that there was a breach of plaintiff's contract with Banigan on the failure to deliver this fifth note. The learned justice submitted this dispute over the incidents of the non-delivery of the one note to the jury, with instructions that if they believed Brown their verdict must be for the defendants. I may assume, then, from the verdict, that the jury believed the plaintiff, and I see no reason to disturb this finding.
I think that the conduct of Brown, with the other facts shown, was a waiver of any requirement that the missing note should then be delivered, and that he cannot now plead non-performance in that respect, for an equitable estoppel prevents him. ( Thomson v. Poor, 147 N.Y. 402, 409, 410. See, also, Grange v. Palmer, 56 Hun, 481; Veerhoff v. Miller, 30 App. Div. 355; Bracco v. Tighe, 75 Hun, 140; Pike v. Nash, 3 Abb. Dec. 610; Bish. Cont. § 795.) No new consideration was necessary. ( Clark v. Dales, 20 Barb. 42, 64; followed in Goodwin v. Mass. Mut. Life Ins. Co., 73 N.Y. 495; Veerhoff v. Miller, supra.) The time for the delivery of the missing note was extended until the plaintiff might find it, and in any event the burden was upon the defendants to show that the plaintiff had subsequently found it and had then failed to give it up. ( Work v. Beach, 35 N Y St. Repr. 22; affd., 37 id. 547.) In fact the plaintiff proved that he found the note shortly before this trial, and then produced it in court for delivery.
There is no force in the contention, raised here for the first time, that even if Brown did knowingly accept but four notes, his act was not binding upon Banigan. Brown was the agent of Banigan, and it appears that the latter accepted and retained the four notes, with Brown's explanation that plaintiff had failed to give up the fifth note, and has received and kept the benefits of the compromise or agreement. He acquiesced in and ratified this act of Brown, and is bound. ( Benedict v. Smith, 10 Paige, 126; Palmerton v. Huxford, 4 Den. 166; Myers v. Mut. Life Ins. Co., 32 Hun, 321; affd., 99 N.Y. 1.) He could not rescind and not fully restore. ( Francis v. N.Y. B.El.R.R. Co., 108 N.Y. 93, 98.)
The defendants further contend that the plaintiff was guilty of a breach of contract in that he failed to give the papers necessary to a formal discontinuance of the pending suits upon the first series of notes. No formal discontinuances thereof were had previous to this trial. The plaintiff himself testifies that it was understood that "all my claims against Banigan were to be given up;" and there was a delivery of the notes which were the basis of the claims and the execution of the paper of release. Naturally there was to be no further prosecution of the pending suits. But it is not asserted that the agreement required the plaintiff to prepare or to proffer any written consents for discontinuances or to procure the discontinuances. It is not asserted that at any time the defendants ever asked from the plaintiff a written consent, or ever presented one for his signature, or ever demanded action on his part, or ever suggested that they claimed default in any respect. There was some indefinite testimony of verbal requests upon plaintiff's former attorney, who died before this trial; but it was admitted that "he didn't say much. He said he was out of the case entirely." The plaintiff is a layman; the defendants are lawyers. Nothing shown stays a conclusion that plaintiff was always ready to do his part toward any formal discontinuance. The defendants made no sign. The cases remained undisturbed, possibly forgotten, for years, as dead issues on past calendars. Where no affirmative duty was cast upon the plaintiff under his contract, it was no more his duty to offer than it was that of the defendants to ask. The defendants cannot now make this omission of formalities a weapon to beat down the plaintiff, after they have taken and kept the benefit of the agreement and even the substance of discontinuances. If consents were essential to carry out the intentions of the parties within the terms of the contract, they were forthcoming thereunder ( Jugla v. Trouttet, 120 N.Y. 21, 27); and the defendants could have compelled the execution thereof at any time. ( Maas v. Chatfield, 12 Wkly. Dig. 268; affd., 90 N.Y. 303; Deen v. Milne, 113 id. 303.) But if it could be successfully contended that any obligation was upon the plaintiff in the first instance to tender written consents or stipulations, I think the conduct of the defendants was a waiver. (Authorities, supra.) The case differs from Gildersleeve v. Pelham Portchester R.R. Co. (11 Daly, 257), cited by the defendants, in that there the court say: "The agreement appears to have been that the plaintiff in that action would cause its discontinuance, not putting the defendant to the trouble of any motion in reference thereto."
The defendant Brown is liable. ( Traders' Nat. Bank v. Parker, 130 N.Y. 415; Nat. Bank of Gloversville v. Wells, 79 id. 498.) It is well settled that the plaintiff was a holder for value. (Daniel Neg. Inst. § 831c, citing many authorities in New York State; and see Wahl v. Barnum, 116 N.Y. 87; Russell v. Cook, 3 Hill, 504; Feeter v. Weber, 78 N.Y. 335; Meltzer v. Doll, 91 id. 365, and cases cited.)
The appellants also insist that the learned court erred in thus charging the jury: "It was known and understood at the time that there was one of the five notes for which the action had been pending in this county, which was not then in the control of the plaintiff," etc. It is said that the charge in this respect was "a misconception and misleading," inasmuch as though this was a statement of the testimony of the plaintiff, the defendant Brown at least had testified to the contrary. The context is a sufficient reply. The learned court said: "One note was not delivered; that note is now here before the court. The defendant claims that the five notes in suit were delivered upon condition that all notes should be delivered to them, returned to them at the same time. The plaintiff says no. It was known and understood at the time that there was one of the five notes for which the action had been pending in this county which was not then in the control of the plaintiff," etc. It is plain that the court was here stating the opposite versions. The point of the defendants rests upon a punctuation mark. The charge is not read in print by the jury. The learned court in the very next sentence said: "Now, gentlemen, it is for you to determine what was in contemplation at that time," whereupon he again detailed the conflicting statements of the witnesses. The transaction was an accord and satisfaction between the parties. ( Logan v. Davidson, 18 App. Div. 353; Jaffray v. Davis, 124 N.Y. 164.)
The judgment and order should be affirmed, with costs.
All concurred.
Judgment and order affirmed, with costs.