First National Bank v. Goodsell

Colt, J.

The defendant Goodsell must show, as one step in his defence, want of consideration between the original parties to the acceptance. Upon its appearing that the bill was discounted in the usual manner at the plaintiff bank before maturity, it must further be made to appear that the plaintiffs and the prior indorsers took it in bad faith, and with notice, actual or constructive, of the original infirmity. If upon both these points he offered evidence sufficient in law to justify a finding in his favor, the case should have been submitted to the jury. If he failed in either, then at- the close of his evidence it was proper for the court, on the plaintiffs’ ’motion, or without motion, and without requiring the plaintiffs to say whether they proposed to put in any evidence'in reply, to take the case from the jury and direct a verdict for the plaintiffs. Goodman v. Simonds, 20 How. 343. Story on Promissory Notes, (4th ed.) §§ 190,197, and note.

Upon a careful examination of this record, we think there was evidence for the jury admitted, or offered and excluded, tending to establish both branches of the defendants’ case. The doubt is, as to the evidence offered to defeat the plaintiffs’ title as bond fide holders. This evidence comes wholly from the president of the bank. He was called as a witness by Goodsell only. He testified that, acting for the bank, he took the bill for discount, and, not knowing the parties, he asked Way, from whom he received it, to guarantee it; that he made no inquiries about it, or the parties, but took it on the guaranty of Way alone, whom he knew to be perfectly good. This was all the evidence, except what appears upon the face of the paper itself, relating to the circumstances under which this particular bill was discounted, It is true that under the provisions of the St. of 1869, <?. 425, the witness was asked if he had made statements at other times inconsistent with his testimony, and, upon his denial, evidence of such statements, made after the bill was discounted, was produced, to the effect that he knew when he took the bill that it was tainted. But these naked declarations at other times are admitted only as one mode, under the statutes, of discrediting the witness, to be considered by the jury only in weighing his testimony, and not as substantive evidence of the truth of the facts stated.

Goodsell claimed the right to show, by this witness, the course of dealing between the parties in other similar transactions, for the purpose of proving that there was an understanding and agreement between the president of the bank and Way, that the bank should take paper of Way, knowing that he was engaged in buying tainted and invalid notes and passing them to a third party so as to give a good title. The witness was asked what other notes he had taken of Way and what business he had done with him before taking this bill; but the court excluded the evidence, although stated to be offered as part only in a course of inquiry into the business relations of the parties. There is some color for the suggestion that the judge by this ruling did not in fact intend to exclude evidence properly presented of the general course of business between the parties in these respects, but only refused to allow Goodsell to attempt to establish a fact which must have been within the direct knowledge of a witness called by him, by a cross-examination of that witness. If this were so, then as the right of a party to put leading questions, or to cross-examine his own witness, is a matter resting in the discretion of the court, no exception would lie to the ruling. But upon the whole we think this is not the true construction of this record. The ruling of the court prevented Goodsell from proving by any evidence the previous course of dealing stated, without reference to the form in which the question was put.

It is well settled that such general course of dealing may be shown, as giving character to a particular transaction within its scope, and as affording an inference that a bill discounted within it was so discounted with constructive notice of any exist* ing infirmity. The evidence offered under this head should have been admitted. Merriam v. Granite Bank, 8 Gray, 254.

Many exceptions were taken to the exclusion of evidence offered to prove original want of consideration, but they need not now be considered, and may never again arise or become material.

Exceptions sustained.