Kaiser v. Fendrick ( 1881 )

Mr. Justice Sterrett

delivered the opinion of the court

The subject of complaint in the first specification is that certain material averments of fact contained in the affidavit of claim were erroneously received in evidence, and treated as admitted facts, under the rule of court which provides, “ That in' all actions on notes . . . and in all actions founded on contract express or implied, . . . where the debt or damages can be liquidated without the aid of a jury, the plaintiff shall file with or before his declaration, a specification of the items of claim together with a statement of facts necessazy to support it, verified by affidavit, to which the defendant shall . . . file an answer, verified by affidavit; and such items of claim and material averments of fact as are not directly and specifically traversed and denied by the answer shall be taken as admitted Rule 1, § 1. Under this rule the plaintiffs below filed a full affidavit of claim, in which, after averring that the defendant is justly indebted to them in a certain sum, they proceed to state the facts out of which that indebtedness arose. These averments of fact, constituting the body of the affidavit, were received in evidence under the rule above quoted; and assuming them, to be true, it must be conceded they disclose a good cause of action. The most essential of these averments is that Miller, who, with plaintiffs below, composed the firm of Miller, Fendrick & Co., made a note, in the firm name, to the order of defendant below, and delivered the same to him “without the knowledge or consent of the said plaintiffs, and not in any manner for, on account of, or in the course of the business of the firm ; but the same was so made and delivered for a debt of the said Miller and others (not the said plaintiffs) formerly copartners in the name and style of Bardoe, Fried & Miller, to the said defendant,, for the price of a home sold by him to them, for which he held the note of the said Bardoe, Fried & Miller, and for which neither the said firm of Miller, Fendrick & Co. nor the said plaintiffs or either of them ever became or was liable; ‘that the said defendant indorsed and delivered the said note as and for the note of the said firm of Miller, Fendrick & Co. to one John Enrick.”

The substance of the remaining averments is that by the indorsement to Enrick he became a bona fide holder of the note without notice of the fraud committed by Miller against his co-partners, the plaintiffs below, and that after the note was duly protested for non-payment they paid the amount thereof to Enrick and he transferred tire note to them.

It will be observed that the essential allegations of fact, upon which the case of the plaintiffs below hinges, are that the note in question was given by their partner, Miller, in fraud of their rights as members of the firm, and without any consideration therefor passing either to them or to the firm of which he and they were the members. If the averments of which this is the substance were eliminated from the affidavit there would be nothing left out of which to construct a valid claim against the defendant below. His contention is that these essential averments of fact were traversed and denied as required by the rule of court, and therefore they should not have been taken as admitted facts against him without competent proof. In his answer or affidavit of defence, after averring that he has a full just and legal defence to the whole of the plaintiff’s claim, he says: “The note referred to in plaintiff’s affidavit of claim . . . was given to the said defendant by the makers thereof and by the said defendant indorsed to John Enrick before maturity and in the usual course of business, without notice or knowledge that tbe same was not made or given for, on account of, or in the course of the business of the said firm of Miller, Fendrick & Co., and that for said note a full and valuable consideration was given by said defendant to the said makers, which consideration was received by said firm of Miller, Fendrick & Co. and *became assets of said firm.” He further avers “ he is not indebted to said plaintiffs or either of them, or to the firm of Miller, Fendrick & Co. in any sum or form whatsoever.”

While the affidavit of defence, in some of its averments, is lacking in clearness and precision, and may even be regarded as evasive, it contains a positive averment that the defendant below gave the makers, Miller, Fendrick & Co. a full and valuable consideration for the note in question, which consideration was received by them and became assets of their firm. This is substantially a traverse and denial of the most essential allegations of fact contained in the affidavit of claim, and is sufficiently direct and specific to answer the requirements of the rule. It is not necessary that the denial should be in the words of the affidavit of claim. The averment of the defendant below that the makers, Miller, Fendrick & Co. received from him a full and valuable consideration for the note in question is surely a denial of the plaintiffs’ averment that it was given by their partner Miller in fraud of their rights and without any consideration either to the linn or to themselves individually. Some of the material averments were traversed and denied,. and there was therefore error in admitting them as evidence under the rule.

If competent testimony, tending to prove the material allegations of fact upon which the plaintiffs’ case hinged, had been first introduced, there could have been no question as to the admissibility of the note and certificate of protest; but, as we have seen, in considering the first assignment, portions at least of the affidavit of claim were improperly received as evidence of the allegations therein contained, and hence ¡there was no legal ground laid for the introduction of the evidence complained of in the second assignment of error.

The third assignment of error is not sustained. The proposition contains no offer to prove that plaintiffs below, as members of the firm, or in any other capacity, assented to the assumption or payment of the debt originally contracted by Bar-doe, Fried & Miller. Neither the fact that defendant below was informed of their consent by Miller, nor the further fact that the horse was taken and used by the plaintiffs’ firm in their business, would be evidence of their consent. Nor was it a matter of any consequence that the defendant 'below received the note of the firm “from Miller, without knowledge that any objection was raised thereto by the remaining members of the partnership.” He had no.right-to take the note from Miller for the debt of another firm, with which plaintiffs below had no .connection, without first ascertaining that it was given with their consent, lie knew, or ought to have known, that Miller had no right to thus use the name of his firm without the express consent of his partners. It is no answer for him to say he was ignorant of the fact that they had not assented to such use of the firm name, or that he was informed by Miller that they had assented. It was his duty to refuse the note until he knew affirmatively that their consent had been given. If, by his neglect of duty, he assisted Miller in committing a fraud on his partners, he has no just reason to complain if he is compelled to make good their loss.

The subject of complaint in the fourth assignment is the refusal of the court to permit the defendant below to prove the sale of a horse to Miller, Fendrick & Co., and the receipt of the note in controversy, in payment therefor. This state of facts is inconsistent with the offer covered by the third assignment, but that did not justify the rejection of the testimony. It must be presumed that the defendant made the offer in good faith, and that he was prepared to prove the facts therein contained. As we have already seen, he had alleged in his affidavit of defence that Miller, Fendrick & Co., received from him “ a full and valuable consideration ” for their note. The facts which he. offered to prove were therefore strictly in the line of the defence thus disclosed. If the testimony had been received and submitted to the jury and they had found that the note Was given by the firm for a horse purchased by them in the course of their business, the defendant below would have been clearly entitled to their verdict. There was, therefore, error in excluding the testimony embraced in the offer.

The instructions complained of in the fifth and sixth assignments legitimately resulted from the admission of the affidavit of claim in evidence, and the rejection of the testimony referred to in the last preceding specification, and were consistent with the ruling of the court on these questions of evidence.

Judgment reversed, and a venire facias de novo awarded.