Simers v. Halpern

BISCHOFF, J. To an action by the indorsee of a demand note the maker interposed the defense that the note was made and delivered without consideration, and that the plaintiff knew of the absence of consideration and himself parted with no value. Upon the trial the proof offered by the defendant was to the effect that the note was given by him to a trade union as earnest for his observance of an agreement with the union, and that he was not in default of that agreement in such wise as to have justified the union in negotiating the note. This did not establish the defense pleaded; and, since the judgment appealed from was rendered despite the plaintiff’s objection to the reception of evidence not relevant to the issues, there must be a new trial of the cause. Consideration for the note, at its inception, was afforded by the conditions assumed in the agreement on the part of the party to whom it was delivered—that is, the union (Jacobs v. Cohen, 183 N. Y. 207, 76 N. E. 5, 2 L. R. A. [N. S.] 292,. 111 Am. St. Rep. 730) ; and while the defendant might resist the plaintiff’s demand upon the theory of a diversion, and litigate the equities thus arising upon proof that the plaintiff was not a bona fide holder (Mitchell v. Baldwin, 88 App. Div. 265, 84 N. Y. Supp. 1043)’, the defense pleaded did not serve to apprise the plaintiff that these issues were tendered. The judgment must therefore be reversed, and a new trial ordered, with costs to appellant to abide the event. All concur.