Kelly v. Burroughs

Where a second indorser of a promissory note has paid and taken it up, he becomes a holder for value and may maintain an action to recover the amount thereof of the first indorser although both are accommodation indorsers. The plaintiff in such an action is not precluded-by thfe death of the maker of the note from testifying as a witness in his own behalf, as to the" circumstances of the indorsement; the defendant is not of the class of persons protected by the provision of the Code of Civil Procedure (§ 829), prohibiting a party from testifying in certain cases as to personal transactions with a deceased person. The mere fact that the sole evidence as to a material fact in issue in an action is the testimony of a party, when there is no conflict in the evidence or circumstances from which an inference against the fact so testified to can be drawn, does not require the submission of the question to the jury.

Appeal from judgment of the General Term of the Supreme Court, in the second judicial department, entered upon an order made September 10, 1884, which affirmed a judgment in favor of plaintiff, entered upon a verdict. (Reported below, 33 Hun, 349.) The complaint states that on the 30th of November, 1881, one Evans made and executed 'his promissory note, payable four months after date to the order of the defendant for $600; that the defendant indorsed the note; that so indorsed, and before maturity, the note was transferred to the plaintiff for value. It alleges presentment for payment, protest and notice of non-payment, and that plaintiff is the owner of, the note. The defendant answered, but denied none of the allegations of the complaint. He set up, however, that his indorsement was without consideration, and for accommodation; and upon information and belief that it had no legal validity until it was discounted at the plaintiff’s .request, at the Commercial Bank, and the proceeds paid to him. For a second defense the defendant alleges that the note was paid. Upon the trial the plaintiff put in evidence the note, signed by Evans as maker, indorsed first by the defendant, and second by the plaintiff. But- he also proved that the Commercial Bank had recovered a judgment against the maker and himself upon the same note ; that he paid its amount to the bank and had the judgment satisfied as to himself. It was proven also that the note was the property of the bank at the time suit was brought against Evans and Kelly. The defendant then testified that' he indorsed the note at the request and- for the accommodation of Evans, the maker, and returned it to him; that the plaintiff procured the note to be discounted, had the money placed to his own credit, and on the same day drew the money. The plaintiff then testified that he indorsed the note and procured it to be discounted at the request of the maker, and gave the proceeds to him. Other evidence was given to the same effect. The defendant’s counsel asked to go to the jury upon the testimony. The plaintiff’s counsel requested the court to direct a verdict in favor of the plaintiff. The court refused the defendant’s request, and directed a verdict in favor of the plaintiff for the amount'claimed. The defendant afterward made a motion for a new trial, which was denied. From that order and from judgment upon the verdict an appeal was taken to the General Term. A verdict cannot be directed where the only testimony to sustain it is that of the person asking the verdict, testifying on his own behalf. ( Wohlfahrt v. Bickert, 92 N. Y. 490; Ellwood v. W. U. Tel. Co., 45 id. 553 ; Kavanagh v. Wilson, 70 id. 177 ; Guildersleeve v. Landon, 73 id. 609.) The defendant was not competent, under section 829 of the Code, to give evidence as to his transactions with the deceased on which this verdict was finally directed. (People, ex rel. Twenty-third Street R. R. Co., v. Commissioners of Taxes, 95 N. Y. 557.) Defendant being a prior indorser to the plaintiff, on production of the note by plaintiff and proof of the payment by him of the judgment recovered by the bank against him, was entitled to judgment. The fact that plaintiff and defendant were both accommodation indorsers was immaterial. (Daniels on ISTeg. Inst. [3d ed.] 631, § 703.) Any testimony by the defendant or in his behalf, concerning the making, indorsement or discount of the note, was evidence concerning the transaction or communication with the deceased maker, and under section 829 of the Code would have justified the testimony by the plaintiff on rebuttal as to the same transaction. (Sweet v. Eddy, 28 Hun, 432; Markell v. Benson, 55 How. 300, 363; Lewis v. Merritt, 98 N. Y. 206; Pinney v. Orth, 88 id. 447; Wadsworth v. Hermans, 85 id. 639.)