Springer v. Dwyer

Geo. G. Barnard, J. This was an action brought by the plaintiff, against the defendants, to recover the amount of a promissory note made by the defendant Dwyer, indorsed by the defendant Mossman, and delivered to one Dreyfous. The case was tried at the circuit, and a verdict rendered for the plaintiff, upon which judgment was perfected. The facts seem to be these: The defendant Dwyer, and Dreyfous, the payee of the note, were partners in business, and on the day the note bears date dissolved that relation, by an agreement in writing, by which, in consideration of the sum of $500, Dreyfous sold and transferred all his right, title, interest and property in and to the assets, fixtures and effects of the late copartnership, to Dwyer, the latter assuming and agreeing to pay all debts, &c., owing or payable by the said copartnership on the 8th day of September, 1866. In this agreement Dreyfous covenants that he has not created any debt, contract or liability, by which the late copartnership, or Dwyer, could or might be held liable. The note in question was given for the purchase money mentioned in the agreement, the defendant Mossman indorsing it at Dwyer’s request. The making and indorsement of the note is admitted; but it is alleged that it was delivered upon the representations of Dreyfous that he had not created any debt or liability for. which Dwyer could be made liable, and which representation was knowingly false. And it is further alleged, that the plaintiff" purchased the note, if at all, after its maturity. On the trial of the cause the plaintiff produced the note in suit, and after showing for what it was given, and the indorsement, rested. The defendant sought to prove that Dreyfous made false and fraudulent representations as to the partnership assets, at the time of the making and delivery of the note; and this .evidence the court below ruled out. We see no error in this ruling, and feel entirely clear that the court decided rightly in refusing to. allow oral evidence or a verbal understanding between the [193] parties to the contract, at the time it was entered into, and at the time of the making and delivery of the note, to add to or vary the written instrument. (Thompson v. Hall, 45 Barb. 214.) We are also of the opinion that the court ruled correctly in refusing to allow the defendants to prove that Dwyer took, by the assignment from Dreyfous, less in value than was anticipated or expected. The representations of Dreyfous, in this respect, may have furnished a good cause of action against him at the suit of Dwyer; or the agreement of dissolution might have been rescinded, and Dreyfous restored to his original position as a member of the firm. The agreement therefore stands, and Dwyer still retains all the copartnership assets, and now, while retaining the property transferred, seeks to avoid the payment of his note, on the ground that the consideration passing to him was not as saleable as represented. This he cannot do. (Curtis v. Havill, 39 N. Y. 24.) The only other point presented by the appellant is as to whether or not the plaintiff is the bona fide holder of the note before maturity. On this point we have only to say, that he produced the note on the trial, and it is to be presumed that he was the holder of it in good faith, and that he received it before maturity. The defendant ought to prove that he became the holder after maturity. Ho proof to sustain this allegation was offered, on the trial, except " that the defendant Dwyer testified that the plaintiff denied ownership of the note a few days after its maturity. He was not morally or legally bound to answer this question, and we do not think that his answer, thus made, concludes him, or rebuts the presumption already adverted to. Ho effort was made to show that Dreyfous or any person, other than the plaintiff, was the owner, or in any way interested in it. The judgment should be affirmed. [194] [First Department, General Term, at New York, November 1, 1870. Ingraham, P. J. This action is brought to recover the amount of a promissory note given by the defendants on the settlement of a partnership and a transfer of all the assets to the maker of the • note. The defense is, that the party receiving the note and executing the transfer of the assets of the firm falsely represented the condition of the books of the firm and the accounts due the firm. Upon the trial, this evidence was excluded, and the defendants excepted. That the false representations were good ground for an action for the deceit, there can be no doubt; but I do not see how they are admissible in this action. Dwyer received from Dreyfous an agreement dissolving the partnership and transferring to him all the assets of the firm. There can be no hesitation in holding that this formed a good consideration. Whether the defendants were induced to enter into this agreement by fraud or not, could not form a defense to the note, unless the defendant Dwyer had previously offered a reassignment of the interest of Dreyfous in the firm, and demanded a return of the note. So long as he held that assignment he held a good consideration for the note, and was bound to pay it. Dwyer might maintain an action for the fraud, but Mossman could not; and so long as the agreement remained in force, the parties remained liable on the note. Dwyer might have set up the fraud as a counter-claim on his part, but he did not. The evidence was properly excluded. The judgment - should be affirmed. Cardozo, J., concurred. Judgment affirmed. Ingraham, P. J., and Geo. G. Barnard and Cardozo, Justices.]