Schultze v. Cohen

SHEARN, J. [1,2] The complaint alleges that defendant made and delivered a check for $50 to' one Polsky, who subsequently and for value indorsed and delivered it to plaintiff. The answer admits the making of the check, but denies that it was delivered to plaintiff for value, and sets up two defenses, namely, that neither defendant nor Polsky received any consideration for the check, and that it was given as a deposit under an agreement between plaintiff and Polsky, whereby Polsky agreed to buy from plaintiff his cigar and stationery store, if upon trial it proved to have a daily income of $10 a day, and that upon trial the store did not produce $10 a day, whereupon Polsky refused to purchase the store and demanded the return of the check. Plaintiff was his only witness. He testified that Polsky agreed to buy his store at about 11 o’clock on March 24th, and delivered the check of defendant in dispute “as a deposit”; that no bill of sale was made, as it was too late to go to a notary; that Polsky promised to pay the balance of the purchase price of $400 the next morning, when he was to give Polsky a bill of sale; that the next morning Polsky said, “We will go over to the landlord; if the landlord will be satisfied, 1 shall pay the balance, and it will be my store;” that they went to the landlord, and plaintiff introduced Polsky to the-landlord, saying, “Here is the new tenant;” that the landlord was satisfied with Polsky; and that on returning to the store Polsky’s wife said “she did not know if she take the store.” Asked as to the consideration for the check, plaintiff replied: “I gave him the store; bargained for $400. That is value.” Plaintiff could have put the check in evidence and rested on the presumption of consideration, but instead of doing so undertook to prove that it was given for value, and in so doing brought out that it was delivered as a deposit on an unconsummated transaction for the purchase of a store. It is true that the plaintiff appeared to be an illiterate man, and the case should not be decided merely upon his use of the word “deposit.” But the evidence shows that, although illiterate, plaintiff used the word correctly and described the transaction according to the facts. Plaintiff may have had a good cause of action for damages for breach of contract to purchase the store, but upon the record in this case he has no cause of action upon the check, there being, nothing to show that it was given as liquidated damages in the event of a refusal to consummate the purchase, or that the plaintiff had sustained any damage. It was held in Weber v. Williams, 144 N. Y. Supp. 619, that, in an action on a check given by a prospective lessee before signing a lease, the check being presumptively valid, the burden was on the lessee to show that there was no consideration therefor, but this burden was met by showing that the check was given only as a deposit to secure the fulfillment of the lessee’s agreement to take the lease, [612] and the burden was then on the lessor to show that it was given as liquidated damages, or that actual damage has been sustained. [3] The check cannot be said to be part payment for the store. “A check is not a ‘payment’ until it is paid.” Daniel on Neg. Instruments, § 1623. In this case the check merely evidences an agreement to pay $50. Disregarding plaintiff’s characterization of the transaction as “a deposit,”' and treating it as a promise to make a payment of $50 on account of the purchase price of the store, there was a total failure of consideration shown when it appeared that the sale was not consummated, irrespective of whose was the fault. If the sum of $50. had been turned over in cash as part payment, it could have been rightfully retained by the plaintiff unless, when sued therefor, it was established against him that it had been deposited as security. But to allow the plaintiff to recover upon the mere promise to pay either part or the whole of the purchase price of an unconsummated sale, in the absence of an- agreement that it should constitute liquidated damages, and in the absence of proof of actual damage, would in effect be tantamount to holding that the agreed price upon an unconsummated sale is the measure of damage. Judgment affirmed, with costs. PAGE, J., concurs.