Hodgens v. Jennings

Dowling, J.: The plaintiff appeals from an order denying his motion for judgment upon the pleadings. . The complaint sets forth the making of a promissory note in writing by the Manhattan Securities Company, a corporation; to the order of the defendant and three others; its indorsement by defendant and the other payees, and its delivery, so indorsed before maturity, to plaintiff for value; its presentation and demand for payment and refusal thereof; its protest for non-payment; and that no' part thereof' has been paid, except the sum of $500. The amended answer undertakes to set up certain separate' defenses, upon the invalidity and insufficiency of which the motion was based. We find that all these defenses are insufficient in law, and the motion should, therefore, have been granted. ' At the outset it may be noted that the amended answer sets up no adequate' denial of the allegations of the complaint, and such claimed [881] denials as it sets up are embraced in the fourth defense alone, and their phraseology is such that they are not denials of any allegation contained in the complaint, but simply denials of assumed facts nowhere claimed by plaintiff and forming no part of his cause of action. There is no general or specific denial of the facts actually set forth in the complaint. The first defense, as stated in paragraphs 1 to 6 inclusive of the answer (though not separately numbered), is insufficient, because under the law of this ease as laid down upon the decision of the motion for judgment on. the original answer, “ the indorsement by the defendant of the note constitutes a written contract of warranty, that on due presentment the note shall be paid, and that if it be dishonored he will pay the amount thereof to the holder. * * * In any event the defense would have no validity, for the written contract of indorsement - cannot be varied by any implied agreement not in writing.” (See, also, Bird v. Kay, 40 App. Div. 537.) The second subdivision of the first defense is also insufficient in law, for the reason that while it undertakes to set up false representations made by plaintiff to induce defendant to purchase the receiver’s certificates for which the note in suit was given, there is no allegation that these representations were false to the knowledge ■ of plaintiff when made' and scienter is one of the necessary elements of fraud. (Kountze v. Kennedy, 147 N. Y. 124.) The second defense set up is insufficient in law, because there is no allegation that there was any valid agreement, supported by consideration, for the extension of the time of payment of the .note. (National Citizens’ Bank v. Toplitz, 178 N. Y. 464.) The third defense is insufficient in law because it contains nothing save conclusions of law, without any allegations or denials constituting a defense. ' The fourth defense is insufficient in law because under the law of the case as heretofore declared the parol agreement whereby it is claimed the indorsers became liable as guarantors only cannot be proved, and further because under the Negotiable Instruments Law (Consol. Laws, chap. 38 [Laws of 1909, chap. 43], § 118) joint payees or joint indorsees who indorse are deemed to do so jointly ' [882] and severally, wherefore an action lies, against any one of them individually. The order appealed from must, therefore, be reversed, with ten dollars costs and disbursements, and the motion for judgment granted, with ten dollars costs, but with leave to defendant to serve an amended answer within twenty days upon payment of the costs, entry of judgment in the meantime to be suspended. . ■ ■ Ingraham, P. J., McLaughlin, Laughlin and Miller, Jj., concurred. . . . Order reversed, with ten dollars costs ¡and disbursements, ' and motion for judgment granted, with ten dollars costs, but' with leave to defendant to amend answer On payment of costs.