Dunning v. Pond

By the Court. AtwateR, J. Tbis action was brought by tbe Respondent in tbe District Court of Ramsey County, to recover tbe amount of three promissory notes, each for tbe sum of $227, and bearing date October 23,1857, due in two, three, and four months respectively, and payable to tbe order of W. L. Yates, assignee of W. L. Earwell & Co. Tbe complaint alleges tbat the notes were executed by Dunning, and at tbe time said notes were made, and for tbe consideration therein expressed, tbe Defendant, Stone, endorsed them, and delivered tbe same to tbe payee, Yates, by whom, for a valuable consideration, they were transferred to tbe Plaintiff. Tbe Defendants answered separately. Tbe Defendant Dunning admitted tbe execution of tbe notes, but alleged tbat be never received any consideration therefor. Tbat tbe notes were procured by the payee by fraud and deceit, to which also tbe Plaintiff was a party. [299] The answer farther alleged, that on and previous to the 23d of October, 1857, the Defendant Dunning was a merchant, doing business both by himself and in connection with other persons, as S. Dunning & Co., and Dunning & Eogers, and as Dunning & Ackerman, in the town of St. Peter, Minnesota. That J. L. Earwell & Co. were merchants doing business in the city of St. Paul, and that the Plaintiff was a member of the firm of J. L. Farwell & Co., and that during the years 1855-56-57, the Defendant purchased at divers times goods and merchandise of said firm of Farwell & Co., to the value and cost of several thousand dollars. That on the 2d of March, 1857, the said Farwell & Co. contended and insisted that this Defendant was indebted to them on book account in a sum exceeding $500. That the Defendant not then having the means of ascertaining the true condition of accounts between him and said firm, and then supposing himself indebted to them, relying on the honesty and fairness of said Farwell & Co., made and delivered to said firm a promissory note, dated on that day, for the sum of $531.50, due in sixty days from date. That on the 23d of October, 1857, the Plaintiff presented said note and demanded payment, and that thereupon the three notes described in the complaint were executed and delivered in substitution therefor, $100 having been paid on said note by the Defendant. The answer then goes on to state, that on the 24th day of July, 1857, upon a precisely similar state of facts, the Defendant executed and delivered another note to Farwell & Co. for the sum of $515.5u, due in thirty days, and that the last named note was paid in full, and alleges that at the time of giving these several notes he was not indebted to Farwell & Co. in any sum whatever, and received no consideration for the same. That after giving the note of the 2d of March, Farwell & Co. made an assignment to Yates, (the payee of the notes in suit,) for the benefit of their creditors, and that both he and the Plaintiff took the notes with full notice of all the facts aforesaid. The Defendant Stone admits the making and endorsement of the notes, but denies that he delivered them to the payee, and alleges that he endorsed them for the accommodation of [300] tbe maker, and received no consideration tberefor, of wbicb Plaintiff had notice at the date of said notes. That Dunning executed said notes as collateral security for a pretended precedent indebtedness of Dunning to Earwell & Co., which indebtedness had been assigned to Yates, and was. held by him at the date of the notes, and that said notes were executed and delivered for no sufficient consideration to charge the Defendant as endorser, and that neither Yates, Earwell & Co., nor the Plaintiff, did release or extinguish said pretended indebtedness. The answer further alleges that at the time of executing and delivering the said notes, the Defendant Dunning was not indebted to said Yates, nor to said Earwell & Co., nor to the Plaintiff, in any sum whatever, and that said Dunning received no sufficient consideration for the same, of all which the Plaintiff had notice. The cause was referred to S. M. Flint, Esq., who, upon motion of Plaintiff’s Attorney, gave judgment for the Plaintiff upon the pleadings. The Defendants appeal from that judgment. "We think the judgment below was correct. The allegations set up in the answer of Defendant, Dunning, with reference to the giving of the notes, certainly disclose a very singular state of facts, and would naturally create strong suspicions as to their truth. But however incredible they may appear, they are at least conceivable, as is proved by the fact of the answer itself, and we should therefore perhaps be hardly justified in pronouncing the answer false on its face, as claimed by Respondent’s counsel. But the Defendant has in fact admitted a sufficient consideration for the giving of the notes. He alleges that the notes were given for a pretended indebtedness on book account to Earwell & Co., which he says did not in fact exist at the date of the note, and that the claim was a fraudulent one on the part of that firm. And yet he admits that previous to the date of the notes he had purchased goods to the amount of several thousand dollars of Earwell & Co. and does not allege that he had paid for the same. The denial of any indebtedness therefore to Earwell & Co. is simply a denial of a legal conclusion and constitutes no defence. Had the Plaintiff alleged in his complaint that the [301] notes were given in payment for tbe purchase of goods, and simply denied that the Defendant was indebted on the notes, and averred that the notes were without consideration, it will scarcely be contended that the answer would have constituted a good defence. But in this case the Defendant himself has made the averment of purchase, and omitted to relieve himself from, the effect of it by alleging payment. The omission is fatal to the answer, and goes far towards characterizing the other averments as unworthy of credit. The answer of Stone is not less defective. He admits the making, endorsement and delivery of the notes as charged in the complaint, but alleges that he was an accommodation endorser. Of course, this of itself is no defence. He alleges that Dunning received no sufficient consideration to charge him as endorser. He does not anywhere assert that Dunning received no consideration for the notes, and so far as his . answer is concerned, it must be considered as admitted that Dunning did receive a consideration for making the notes. The allegation that the consideration was “insufficient,” is clearly bad, without alleging the facts showing how or wherein it was insufficient. He alleges, it is true, that Dunning was not indebted to Earwell & Co., or Yates, at the date of the notes, but that in nowise tends to show that he did not receive a consideration for the notes. Besides, we have seen that Dunning himself admits an indebtedness by failing to allege payment for the goods purchased of Farwell & Co. The judgment below is affirmed.