Gregory v. Hart

By the Court, Cole, J. This was an action against the plaintiff in error and defendant below, upon a promissory note given by him to one A. J. Hart. The defendant, in his answer, substantially states that the note was transferred to the. plaintiff after maturity, and was taken with full knowledge of the failure of the consideration thereof; and that it was liable to be reduced in amount; that the note was made and delivered to the payee thereof in part consideration of a stock of goods bought of the payee, and of certain notes, books of account, &c., &c., belonging to the payee and another, and assigned to him ; and that it was the express understanding and agreement between him and such payee, that if any mistakes were discovered in the amounts due upon such notes, books of account, &e., that the same should be allowed [539] and endorsed, one-half upon this note, and one-half upon another note given at the same time, &c. There was a general denial filed to this answer. On the trial, the defendant among other things, offered to prove the truth of the facts set up, and relied on in his answer, which evidence was objected to on the ground that it was not competent to prove these matters by parol. The court sustained the objection and excluded the evidence. We suppose there can be no doubt about the correctness of the decision of the circuit court excluding the evidence. It was certainly not competent to show by oral testimony this agreement or understanding, made at the time the note was given, for the purpose of varying or controlling its legal effect, Erwin vs. Saunders, 1 Cowen, 249; Payne vs. Ladue, 1 Hill, 116; Brown vs. Hull, 1 Denio, 400. The note contained an absolute promise to pay a certain sum of money. The proof offered tended to show that there was some uncertainty about this engagement, and that in a certain event an endorsement was to be made upon it, and that the whole amount was not to be paid. This was in direct conflict with the well settled rules of evidence, and the testimony was properly rejected. The defendant further offered to show a partial and a total failure of consideration of the note, of which the plaintiff had knowledge before he obtained it; also that the note had been obtained by fraud; that there had been partial payment made upon it; and offered to prove a set off by way of counterclaim. All this testimony was objected to, as being inadmissible under the pleadings. Under the system introduced by the code, it is very obvious that the defendant could not give evidence of these matters, since they were not set up in his answer. It was necessary for him to plead his defence, in order to lay the foundation for his proof. This he did not do. The evidence, therefore, was very properly rejected. [540] It follows from these views that the judgment of the circuit court must be affirmed. CASE NO. 2. By the Court, Coee, J. The facts and circumstances of this case are much like the one just disposed of between the same parties, with this difference: In the present case the defendant below, (the plaintiff in error) made an application to the court for leave to file an amended answer before trial, which was refused. In the amended answer the defendant sets up in full his various defences to the note, one of which is fraud. He alleges that the payee of the note, A. J. Hart, produced his account books, and represented that the same contained correct charges of the indebtedness of various individuals, while the account book was not correct, but contained false and fraudulent entries of indebtedness, made by the payee for the purpose of cheating and defrauding him, and that the note was given in consideration of the sale and assignment of these pretended' items of indebtedness to him; that the plaintiff in the action had full knowledge of these facts before he became the owner of the note, and that he did not take the note until after maturity. Now according to the allegations of the answer, it is apparent that the plaintiff below stood in precisely the situation of the payee of the note, and is identified with him in equity, having taken the same, overdue, and with full knowledge that the instrument was void from fraud or failure of consideration. This defect or infirmity in the note at its creation, is therefore a good and proper defence between these parties. And we are therefore of the opinion that the circuit court ought to have permitted the plaintiff in error to file his amended answer, so as to enable him to avail himself of this de541 fence. Section 81 of the code provides, that the court may, before or after judgment, in furtherance of justice, and upon such terms as may be proper, amend any pleadings or proceedings by adding or striking out the name of any party, or a mistake in any other respect, or by inserting other allegations material to the case. In the liberal spirit of this enactment, and in furtherance of justice, there can be no doubt but it was competent and proper to file the amended answer, and we think there was an absence of discretion on the part of the circuit court, in not permitting it to be done. Upon this ground alone the judgment of the circuit court is reversed, and the cause is remanded for further proceedings in accordance with this decision.