Newell v. Salmons & Washburn

By the Court, C. L. Allen, P. J. There is nothing in the objection that the referee erred in receiving the note in evidence without further explanation of the erasure. That erasure was certainly not to the prejudice of the defendants, as its effect was to relieve them from the payment of interest for six months and until after the note became due. The note was drawn, at first, on interest from its date, but on the attention of the plaintiff being called to the fact that it was for the purchase of goods not on interest, and on its being insisted by one of the defendants that it ought not to draw interest until it was due, the plaintiff assented, and said that was right, and the words “ with use” were then probably stricken out for the benefit of the defendants, and, as the witness thought, before the note was signed. The explanation was full and satisfactory, and the referee so correctly found as a question of fact. The more serious objection, in my opinion, is, that the referee erred in refusing to receive the evidence of set-off, on the part of Salmons. It is contended, on the part of the plaintiff, that the statute (2 R. 8. 154, § 12, sub. 6) requires that the set-off shall be a demand in favor of all the defendants in the action, and due to them jointly, and so, undoubtedly, is that statute. But it has been insisted, and decided, that under sections 149, 150,136 and 274 of the code of 1852, this statute is so far modified as to admit of a set-off or counter-claim on behalf of one or more of several defendants, where a several judgment may be had in the action between the plaintiff and any one or more of the defendants, as upon a joint and several promissory [651] note. The case of Parsons and others v. Nash and others, (8 How. 454,) was one almost exactly like the present. Two out of the three defendants had signed the note as sureties for the third. The court allowed a set-off of a judgment in favor of the principal defendant, alone, against the plaintiffs, and judgment was rendered for the defendants. That was a decision at special term, it is true. But the supreme court, in the 6th judicial district, at general term, recognized and affirmed it as good law, in the case of Briggs v. Briggs, (20 Barb. 477.) The court say, the only restriction under the code is, that the set-off must be one existing in favor of a defendant against a plaintiff, between whom a several judgment might be had, in the action. The present action is one of that kind, as was held in the case of The People v. Cram, (8 How. 151.) If these cases are law, and present a true construction of those sections, then the referee should have admitted the evidence offered, of the counter-claim. He seems to have based his decision upon the several grounds urged by the plaintiff’s counsel; one of which was, that the counter-claim was inadmissible under the pleadings. If he had placed his exclusion on that ground alone, I think it would not have been sustained. It is true the defendants both claim the set-off as a defense. But it is virtually a claim on the part of the defendant Salmons, and is so set up in the answer, and the claim is there made that it shall ’operate as a defense for both defendants. That would be' a question to be determined by the court after the proof was in. The defense was sufficiently set up, and the plaintiff could not, and did not, pretend that he was taken by surprise by the offer. I think, within the cases cited, the evidence of set-off or counterclaim was proper, and should have been received. It is said there were no exceptions properly taken to the report, as to the decision of the referee on questions of law. For aught that appears in the case, it seems to have been regularly settled and the exceptions taken in the manner now required in reviewing the report of the referee. And I think we must so intend, for the purposes of this argument. The defendants were offered as witnesses for each other, and [652] it was offered to be proved by each that the time for payment of the note had been extended. Several objections were made to the offer; one of which was that no such defense was set up in the pleadings. This, I think, was a sufficient ground for excluding the evidence, and it is not now necessary to inquire whether it would have formed a good defense as to the surety, or not. [Clinton General Term, September 9, 1856. The other offer, to prove payment by each of the defendants on behalf of the other, was, I think, properly overruled. The testimony must necessarily have gone for the benefit of the witness, as well as of his co-defendant; as proof of payment would of course have discharged all right of action upon the note. But, for the reasons stated, the judgment must be reversed, and a new trial ordered; costs to abide the event. C. h. Allen, Paige, James and Rosekrans, Justices.]