Hunter v. Batterson , 59 N.Y.S. 501 ( 1899 )

MacLean, J. (concurring).

The plaintiffs brought this, their action, to recover the amount of a check drawn to the order of one Schmidt by the defendant, in Concord, N. H., upon the Mechanics’ National Bank, presumably of that place and State, and which check the plaintiffs, who were partners and bankers, acquired in the not unusual course of indorsing the check for an acquaintance of a member of the firm and procuring it to be cashed at the bank where they kept their own account. The check was not paid because payment was stopped by the defendant, and it came back with a protest. The partner, who testified for the plaintiffs, said that he had known Schmidt for ten or twelve years, that he had cashed checks for him, considered him perfectly good, but had not been able to find him since the day of the transaction; that he was not at all acquainted with the defendant, and had no knowledge whether his check was good or bad. In his answer, the defendant alleged that the check was obtained from him by said Schmidt by means of false and fraudulent representations. As if to prove this defense, he was asked by his counsel to state the circumstances under which he made a delivery to Mr. Schmidt of the check, to which question it was objected that, whether the allegation above quoted from the answer was true ox not, it was immaterial unless it was shown that value had not been paid for the paper, or that it had been taken in bad faith, and that the latter defense was shut out because not pleaded, and then, after the statement by defendant’s counsel that he wished to ask Mr. Batterson under what circumstances this check was drawn and given to Mr. Schmidt, an objection to which as immaterial was sustained, the defendant’s counsel asked: “ Were you induced to give this check by representations which you have since ascertained to be false and fraudulent? ” T'o this plaintiffs’ counsel simply interposed an objection, without stating any grounds therefor, and the court sustained it, “ unless knowledge is brought home to the other side,” to which ruling the defendant duly excepted. This ruling was erroneous, and for it the judgment, which was entered upon a verdict directed by the court, was properly reversed by the General Term.

The plaintiffs went to trial without ashing any change in the pleadings, and so were in a poor position to oppose the introduction of evidence pertinent to the defense set up in the answer. As they did not object at the trial that the proposed evidence was unwarranted by the pleadings, they may not avail themselves of it now and here. They could not have proper evidence of the alleged fraud excluded unless they had conclusively established that they were purchasers of the check tona fide. This requirement was not met by showing that they had paid value for the check. They had to go further and show that they had no knowledge or notice of the fraud, if any, with which, as claimed, the check was tainted from its origin. Vosburgh v. Diefendorf, 119 N. Y. 357. Whether or not such showing could be made effectively before the defendant had given his evidence of the alleged fraud, the plaintiffs failed to fulfil their task. Their only evidence was the testimony of an interested party, who did not repeat the statements of Schmidt, the payee, or testify that he" had neither knowledge or notice of the circumstances attending the utterance of the check. The reversal of the judgment at Trial Term was right, and the order of the General Term entered thereon should be affirmed, with judgment absolute to be entered against the appellants upon the stipulation contained in their notice of appeal.

Order and judgment affirmed, with judgment absolute for respondent.