Conkling v. . Weatherwax , 181 N.Y. 258 ( 1905 )

I concur with Judge VANN in the view that the declarations of the mortgagor that the legacy had not been paid were incompetent as against the mortgagee. I also concur with my brother in the proposition that the lapse of time created a presumption that the legacies, which are the subject of the action, had been paid or, at least, that the trial court might so find. The admission of incompetent evidence (the only evidence on the question) to rebut this presumption was, therefore, a vital error for which the judgment of the Special Term was properly reversed by the Appellate Division.

I dissent, however, from the doctrine that the burden of proof rested upon the plaintiff to establish the non-payment of an obligation for the payment of money. While it is necessary that the complaint should allege the breach of such an obligation, to wit, a failure to pay the money owing thereon (Lent v. N.Y. Mass. Ry. Co., 130 N.Y. 504; Krower v. Reynolds, 99 N.Y. 245,249), it seems the settled law of the state that, except where the complaint declares generally on an indebtedness, a general denial does not put in issue the allegation of non-payment, but to admit proof of payment the defendant must plead payment. (McKyring v. Bull, 16 N.Y. 297; Quin v.Lloyd, 41 N.Y. 349.) It may be that the fact that payment must be affirmatively pleaded does not conclusively establish that the burden of proof is necessarily upon the defendant to establish his plea, though the general rule is that the issue is to be proved by the party who asserts the affirmative. (1 Phillips on Ev. [Cowen and Hill] sec. 810.) I frankly concede that it is somewhat illogical that the plaintiff should be obliged to allege non-payment and yet the defendant be required to affirmatively prove payment, but it is equally illogical to require the plaintiff to prove non-payment when a general denial does not put that allegation in issue, and the defendant is required to plead payment. I shall, therefore, refrain from attempting to deduce the answer to the question, on which party the burden of proof rests, from any rule as to pleading as such answer would be necessarily illogical. I shall confine myself to the decisions of the courts of this state on the exact point on which party the burden rests. In an action on a contract for the payment of money, where the issue was payment, I have never known the jury to be instructed other than that the burden of proof was on the party alleging payment to prove that fact, and I think such has been the almost universal view taken by the courts. In fact, the doctrine has been so generally accepted that usually it has been assumed without discussion. In McKyring v. Bull (supra) Judge SELDEN said that payment, like a release, accord and satisfaction, arbitration, etc., was new matter constituting a defense, thus classifying payment with a release, as to the proof of which, unquestionably, the burden rests on the party pleading it. Lerche v. Brasher (104 N.Y. 157) was an action against an administrator to recover for services rendered to the deceased in his lifetime. On the trial the plaintiff was permitted to testify that he had not been paid for his services by the deceased. It was held that the admission of this testimony was erroneous as the plaintiff was incompetent to testify to a personal transaction with the deceased, but it was further held to be harmless as the plaintiff was not required to prove the negative, and that payment was an affirmative defense the burden of establishing which rested upon the defendant, in support of which no evidence had been given. This seems the only case in this court in exact point. The decisions, however, in the lower courts are numerous. In Claflin v. New York Standard WatchCo. (7 Misc. Rep. 668), which was an action on a promissory note, defense payment, it was held by the General Term of the late Court of Common Pleas of the city of New York that the defendant was properly allowed to open and close the case because payment was an affirmative defense, the burden of proving which rested upon it. In this connection there may be noted the case ofMead v. Shea (92 N.Y. 122). The first cause of action was on two promissory notes, to which the defendant pleaded payment; the second for goods sold, to which the defendant pleaded a general denial. When the evidence was closed the trial court held that the cause of action for goods sold was not sufficiently established to warrant its submission to the jury, and the case went to the jury on the issue of payment of the notes. Prior to the close of the testimony the counsel for the defendant asked the court to rule that it had the affirmative of the issue, which the court denied. On appeal it was contended that the refusal of the trial court to award the defendant the closing address to the jury was error. This court overruled the claim, holding that the defendant's application should have been made at the close of the case; that when it was made there was an issue of fact on which the plaintiff held the affirmative, and, therefore, the defendant's request was properly denied. It was undoubtedly assumed by the court that payment was an affirmative defense or otherwise it would have been entirely unnecessary to discuss and determine the proper time at which the defendant's application should have been made. In Hussey v. Culver (6 New York Supplement 466) it was held by the General Term of the first department that payment is an affirmative defense, the burden of establishing which rests upon the defendant. The same rule was held by the General Term of the fifth department in Taber v.Supervisors of Erie (14 N.Y. Supp. 211). In Wellington v.Continental C. I. Company (52 Hun, 408) the action was brought by a creditor against stockholders of an insolvent corporation to enforce their liability for unpaid subscriptions to stock under section 282 of the Laws of 1854 (General Railroad Act). It was held that in such an action it was necessary for the creditor to prove that the stockholder was in default, but said Judge BOCKES, writing for the third department: "If this were an action by the Boston, Hoosac Tunnel and Western Railroad against Ames to recover his unpaid subscriptions, of course it would be for Ames to prove payment as a defense, and not for the company to prove non-payment as a ground of action." Many other cases might be cited. It will be seen that in none of these cases is there any citation of authority for the proposition that payment must be affirmatively proved. It is assumed as settled law. Against this uniform current of authority there can be cited but a single case which is exactly in point; that is Cochran v.Reich (91 Hun, 440). Before dealing with it I will refer to the other cases cited by my associate. Witherhead v. Allen (4 Abb. Ct. App. Decisions, 628) arose on demurrer and involved merely a question of pleading. It was an action brought against the members of a joint-stock company after judgment and return of execution unsatisfied against the president of the company. It was held that the complaint must state a good cause of action against the members of the company on the original claim in the same manner as in the suit brought against the officer of the company, and, therefore, that a failure to pay for the goods sold must be alleged. This is simply the rule of pleading declared in the Krower and Lent cases.Knapp v. Roche (94 N.Y. 329) was an action against the officers of an insolvent savings bank for negligence and misconduct in making improper loans of the funds of the bank. It was held incumbent upon the plaintiff to prove that those loans had not been repaid. The case had no bearing on the principle under discussion. The loans created no obligation on the part of the defendants to repay the same; their liability arose from the fact that they should not have made the loans, and, of course, that liability was limited to the loss occasioned by their action. If the defendants had admitted their liability to the bank or its receiver and pleaded that they had paid the amount of such liability then the case would be in point. Krower v.Reynolds (supra) was an action brought on a deficiency judgment recovered against the defendant in New Jersey, on his assumption of a mortgage on certain real estate there situated. The defendant admitted the bond and mortgage and the deed containing his covenant to assume payment of the same, and denied the remaining allegations of the complaint. On the trial the plaintiffs proved their appointment as executors of the deceased mortgagee without proving the New Jersey judgment. A motion for a nonsuit was denied and judgment given against the defendant. On appeal it was sought to sustain this recovery on the theory that the cause of action was made out by the defendant's admission of his covenant to pay the mortgage. This court held that the action was on the New Jersey judgment, not on the covenant, saying that the complaint failed to state a good cause of action on the covenant because it did not allege any breach of the same. The case simply goes to the question of pleading. Lent v. N.Y. Massachusetts Railway Company (supra) is also an authority on the question of pleading. It arose on a demurrer to the complaint which alleged an award to the plaintiff in condemnation proceedings, but failed to allege non-payment of the award. There was nothing decided in the case that deals with the question now before us, and its sole application arises out of a single sentence excerpted from the opinion without reference to the general context. The distinguished judge who there wrote for the court said: "But no reason is apparent how it can justify the omission from the complaint of a fact material to the plaintiff's cause of action, and essential to be proved to entitle the plaintiff to a judgment." The statement that it was necessary to prove non-payment to entitle him to judgment was wholly obiter, for there was no question of the kind in the case. On this excerpt is based the decision of the General Term of the Supreme Court in Cochran v. Reich, already alluded to. To that decision must be accorded the merit of logic and entire consistency. The action was to recover for the breach of a covenant to pay rent reserved in the lease. The complaint alleged default in such payments. The answer was a general denial. On the trial the plaintiff introduced no evidence of non-payment and, no evidence of payment having been given by the defendant, recovered judgment. The learned trial court, while conceding that the plaintiff's contention was not without "comfort" to be found in the opinions in the Lent and McKyring cases, held, first, that as it was necessary to allege non-payment a general denial put that in issue; and, second, that it was necessary to prove what it was necessary to allege. However logical this decision may be it plainly conflicts with the settled law of this state, that payment, when the plaintiff declares on a specific obligation, must be pleaded, for that was expressly held in theMcKyring case, and Judge BROWN in the Lent case concedes the binding authority of the earlier decision. From this review of the cases there appears to be no confusion in the law of this state on the question before us, save that raised by Cochran v. Reich which was expressly retracted by the Appellate Division of the first department inHicks-Alixanian v. Walton (14 App. Div. 199), the learned judge who wrote the opinion in the earlier case concurring in the decision in the later one. Nor is the rule different in an action in equity. Coulter v. Bower (11 Daly 203) is also merely an authority on the question of pleading. The complaint for the foreclosure of mortgage was held bad on demurrer for failure to allege a breach of its conditions. Davies v. N.Y. ConcertCompany (41 Hun, 492) was likewise an action to foreclose a mortgage. That mortgage, however, was given by a corporation and contained special provisions not found in ordinary mortgages given by individuals, though not uncommon in those given by corporations. As pointed out by Judge DANIELS, writing for the General Term of the first department, it was not every default in the payment of the coupons or bonds secured by that mortgage that authorized a foreclosure. How far that case is aside from any question now before us appears from the fact that the complaint, which was held insufficient, expressly alleged "and that said coupons were not paid at maturity, nor was any of them paid, or any part thereof." I may also suggest that if the obiter dictum in the Lent case is to be considered an authority it is at least neutralized by the very recent declaration of this court inHeilbronn v. Herzog (165 N.Y. 98). The action was to recover the price of goods sold and delivered; the defense that the sale was on credit which had not expired. It was held that the defense was an affirmative one entitling the defendant to the opening and closing of the case, and Judge WERNER, writing for the court, said: "Like the defense of payment, it must not only be pleaded, but proved." I am not certain that this declaration was obiter, but conceding it to be such there is a fair set-off, obiter against obiter.

As to the law in other states, it is said in the American and English Encyclopædia of Law (Vol. 22, p. 587): "The general rule is well settled that payment is an affirmative defense and will not, in the first instance, be presumed, but after the antecedent existence of the indebtedness has been proved by the creditor, the burden of proving its discharge by payment is upon the debtor or person alleging the payment." It would be impossible, within the limits of an opinion, to review all the authorities cited to support the text. It will be sufficient to refer to a few which are found in the leading states. In Massachusetts, in an action on a contract for the payment of money or to perform some duty, the plaintiff is not bound to give evidence of non-payment, but it is incumbent on the defendant to prove payment or performance, the court saying: "The objection that the plaintiff gave no evidence of non-performance is against first principles." (McGregory v. Prescott, 59 Mass. 67; Jewett v. Draper,88 Mass. 434.) In Vermont the burden of proof is on the defendant to establish payment and this burden is not shifted by any evidence he may offer. (Terryberry v. Woods, 69 Vt. 94.) In New Jersey, in an action to foreclose a mortgage, where the defense is payment, the burden of proof is on the plaintiff, showing the rule is the same in equity to enforce a lien as at law on a contract to pay. (McKinney v. Slack, 19 N.J. Eq. 164; Smith v. Burnet, 17 id. 40.) Such is also the rule in Pennsylvania (Shrader v. U.S. Glass Co., 179 Pa. St. 623) and in Illinois (Graham v. Anderson, 42 Ill. 514; Chapin v. Billings,91 Ill. 539). The authorities last cited also present the rule as applied to the cases of liens. Nor do I think that the cases referred to by my associate cast any doubt on the general rule or present any conflict of authority. State ex rel. Spaulding v.Peterson (142 Mo. 526) and Wheeler Wilson Mfg. Co. v.Tinsley (75 Mo. 458) were not mere obligations or contracts for the payment of money in the ordinary sense of those terms, but indemnity bonds conditioned for the faithful discharge of his duties, in the one case by a public officer and in the other case by a private agent. Of course, in those cases, in order to establish a breach of the bond it was necessary for the plaintiff to prove not only the receipt of the money by the agent or officer, but his failure to account for it. Doubtless the same would be the law in this state. But "when a debt is once shown to have existed it is presumed to remain unpaid until the contrary is shown or until the presumption is rebutted by the Statute of Limitations or by the lapse of time. (Carder v. Primm, 47 Mo. App. 301.) McElwee v. Hutchinson (10 S.C. 436) presented merely the question of pleading, not that of burden of proof, and enunciates substantially the same doctrine as that declared by this court inWhite v. Smith (supra). Hubler v. Pullen (9 Ind. 273) again presented a question of pleading, and the court declared that while the complaint may aver non-payment the plaintiff need not prove it, but the defendant must plead and prove payment, a general denial not being sufficient to raise the issue. InGodfrey v. Crisler (121 Ind. 203) it was expressly decided that the burden of proof is upon the party who alleges payment.Powesheik County v. Mickel (10 Iowa 76) and Stacy v.Stichton Co. (9 Iowa 399) involved only a question of pleading and it was held that a replication was not necessary to a plea of payment. The court, however, conceded that the defendant could not prove payment under the general issue. InGarretson v. Bitzer (57 Iowa 469) the plea of the defendant was not payment, but he alleged that the contract between the parties differed from that declared on by the plaintiff. The general rule in Iowa is the same as that which prevails in other states. In Junge v. Bowman (72 Iowa 648) it was held that where the execution of the note and mortgage is admitted it is incumbent upon the defendant, if he relies on payment, to aver and prove it. I have been unable to find a single case (I do not say there is none) in which it has been held or suggested that the burden of proof is upon a plaintiff to prove non-payment of a contract or obligation for the payment of money. I do not see that there is any confusion in the law in other states on this question, and the only confusion that exists in this state is caused by the solitary discordant note sounded in Cochran v.Reich (supra).

The suggestion is made in the Encyclopædia of Pleading and Practice (Vol. 16, p. 179) that the true rule is "that the plaintiff should prove not non-payment generally, but non-payment when due or at maturity, or in other words a breach of the contract called on," leaving it to the defendant to allege his new matter, payment after the breach, and this suggestion seems to meet with the approval of my associate. I cannot find any authority for such a rule. The text writer refers to Douglass v. Central Land Company (12 W. Va. 508) in support of his suggestion. I find nothing in the case to sustain it. The case itself principally involved the question of pleading and the court held that a plea of payment should conclude "to the country." In the discussion of the opinion the court enunciates substantially four propositions: 1, that the complaint must allege non-payment; 2, that the defendant must affirmatively plead payment; 3, that though it is necessary for the plaintiff to allege non-payment and that allegation is put in issue by the defendant's plea of payment, it is not necessary for the plaintiff to prove that which it is necessary to allege, to wit, non-payment, but, 4, the burden is upon the defendant to prove payment. From this it would appear that the law in West Virginia presents the same paradox that is found in the law in this state. I imagine, however, that the paradox is not confined to either that state or our own, but exists to a greater or less degree is most jurisdictions which follow the common law. A legal paradox is not to be commended and if we were about to develop a new system of jurisprudence, should be carefully avoided. It does not, however, necessarily create a confusion in the law if courts will only stand by their decisions. This is especially true where the questions involved relate merely to pleadings or procedure and not to substantial rights. In the present discussion the only question of substantial right is that as to the party on whom lies the burden of proof. The question of pleading is of very slight importance. It is of little consequence how it is settled provided it stays settled. If there is to be any attempt to make the law on the question of pleading and proof of payment consistent (which at this late day I think unwise), pleading should be subordinated to proof, not proof to pleading. It may also be suggested that the existing rule as to pleading and proving payment is not anomalous in the law of evidence. In an action to recover a penalty for selling liquor without a license it is necessary to allege the want of a license but it is not necessary to prove it. On the contrary, the defendant must prove his license if he has one. (Potter v.Deyo, 19 Wend. 361.) The same rule prevails in most of the states, even in criminal prosecutions for that offense. (See cases cited in note, Bishop on Statutory Crimes, § 1052.)