McCulloch v. Hoffman , 17 N.Y. Sup. Ct. 133 ( 1877 )

Davis, P. J.:

This action is brought upon a bill of exchange in the words and figures following:

£585.11.11. London, July 11, 1873.

On demand please pay to the order of Messrs. Jay Cooke, McOulloch & Co. (duplicate unpaid), five hundred and eighty-five pounds eleven shillings and eleven pence, value received, which place to account of

Or. J. HOFFMAN.

George Hoeeman, Esq. O. 0. HOFFMAN.

Pres. Irvmg National Bcmk, New York.

The defendant George J. Hoffman interposed no defense. The defendant Orrin 0. Hoffman put in an answer admitting his signar ture to the bill of exchange, and alleging as a defense, in substance, that the bill was given by the defendant George J. Hoffman to the plaintiffs for advances theretofore made by them to George; that after the bill had been made by George it was presented to him by one of the plaintiffs, who represented to him that it had been drawn for advances made to George by the plaintiffs; that the drawee, who was the father of both the defendants, had refused to make pecuniary advances to his son George J. Hoffman, owing to his alleged excesses and improprieties, and would probably not accept the draft, but would be more likely to do so should the defendant Orrin 0. Hoffman also sign his name; and that if his father did not accept it, it should never trouble the said Orrin 0. Hoffman personally, and that the defendant did so subscribe his name at the request of the plaintiffs, without any consideration whatever, and that the bill of exchange was altogether without consideration in respect to him.

On the trial of the action the plaintiff produced and read in evidence the bill of exchange, and proved, in substance, that the drawing thereof was unauthorized, and that the defendants had no funds in the hands of the drawee against which to draw, and rested.

On the part of the defense it was proved that the bill was given for the balance of an account of George J. Hoffman with the plaintiffs, and was executed by said George J. Hoffman a day or two before it was signed by the defendant Orrin 0. Hoffman, and that it had no consideration whatever except the indebtedness of said George J. Hoffman upon the balance of his account.

The defendant’s counsel then offered, in various forms, to prove the circumstances connected with the affixing of Orrin 0. Hoffman’s signature to the bill, and tbe giving of it by him, substantially as alleged in bis answer to tbe complaint. Tbis was excluded by tbe court on tbe ground tbat tbe defendant could not in tbat way contradict tbe bill of exchange; and exceptions were taken.

After proving tbat tbe bill of exchange was given for tbe balance of tbe account of George J. Hoffman, tbe following question was put to Orrin 0. Hoffman: “ What connection bad you, if any, with tbat account, in anyway?” This question was objected to; tbe objection was sustained, and an exception duly taken. Amongst other questions, also, tbe following were put to tbe defendant Orrin C. Hoffman: “ Will you state precisely what occurred and what was said at tbe time your signature was affixed to tbat draft, prior to tbe time and at tbe time your signatore was affixed ? ” “ What was said by Mr. Inlestonto you immediately prior to your affixing your signature to this draft, in consequence of which you signed it, if any thing ? ” “ Have you received any consideration for tbis draft, and were you a party to tbe transaction referred to in tbis account, for tbe balance of which it was given ? ” “ Where did you sign it ? ” “Was there any agreement made between tbe payees of tbat draft and yourself, in accordance with which agreement you signed tbe draft ? ” All these questions were objected to; tbe objections were sustained, and exceptions duly taken. In respect to tbe question first above quoted, tbe exception seems to have been well taken. Tbe defendant bad tbe right to show distinctly tbat be bad no connection with tbat account, although it appeared clearly tbat tbe bill was given for tbe balance of such account of bis brother. In respect to tbe other questions, tbe evidence seems to have been rejected upon tbe ground tbat tbe agreement sought to be proved was not in writing, and tbat they were an attempt to contradict by oral evidence tbe terms of a written instrument.

At tbe close of tbe evidence tbe defendant’s counsel asked tbe court to charge tbe jury, tbat if they found as matter of fact tbat no consideration passed to Orrin 0. Hoffman from tbe plaintiffs in tbis case, or from tbe person in whose favor tbe draft was drawn, tbat tbe verdict should be for tbe defendant Orrin 0. Hoffman, and not for tbe plaintiffs. Tbe court declined so to charge, and tbe counsel excepted. It is well-established law tbat a party may always show want of consideration to invalidate a contract. To tbis rule there is but a single exception, which is the case of a negotiable promissory note or bill of exchange, which has passed into the hands of a Iona fide holder for value before maturity. In such a case the want of consideration is no defense; but in every other case a total want of consideration is a perfect defense to an action upon any contract, whether verbal or written, and under our statutes sealed contracts are no exception to the rule.

For the purpose of establishing the defense of want of consideration, set up in the answer of Orrin 0. Hoffman, it was competent to prove the facts and circumstances under which his signature was put to the bill of exchange. This action is between the original parties to the instrument. The consideration was, therefore, open to inquiry, and the facts and circumstances, even if they make out an oral agreement, were admissible for the purpose of establishing a total want of consideration. It was not sought thereby to vary the terms of the agreement, except in respect to its statement of a consideration for the making of the paper; but it was sought to be shown that no consideration whatever passed or existed as between the defendant Orrin 0. Hoffman and the plaintiff, amounting to a sufficient consideration to uphold the bill.

In Benton v. Martin (52 N. Y., 570) it was said: “ Instruments not under seal may be delivered to the one to whom upon their face they are made payable, or who by their terms is entitled to some interest or benefit under them, upon conditions the observance of which is essential to their validity, and the annexing of such conditions to the delivery is not an oral contradiction of the written obligation, though negotiable, as between parties to it and others having notice. It needs a delivery to make the obligation operative at all, and the effect of the delivery and the extent of the operation of the instrument may be limited by the conditions with which delivery is made. And so, also, as between the original parties and others having notice, a want of consideration may be shown.”

There is no difficulty in the proper application of this rule, and its restriction to the subject under investigation, to wit, a total want of consideration and what transpired, at the time of making the paper, though it may not have been competent for the purpose of limiting the effect, or changing the character of the instrument itself, was, we think, certainly competent, as between the parties to the original paper, for the purpose of showing the absence of consideration, and the knowledge of the plaintiff that the paper was made wholly without consideration. We think the court was in error in excluding the several questions, and that such error was not cured by the fact that the evidence sought to be called out by the questions was obviously the same as that stated in the offers of the defendant’s counsel, which embraced in part the unwritten agreement that the bill, if not accepted by the drawee, should not be enforced against the defendant.

It is not necessary to pass upon the question arising upon the refusal of the court to charge as requested.

The judgment must be reversed and a new trial ordered, with costs to abide event.

Brady and Daniels, JJ., concurred.

Judgment reversed, new trial ordered, costs to abide event.