Garris v. Calechman

• Decision Date: 06 February 1934
• Citation: 118 Conn. 112,170 A. 789
• Court: Connecticut Supreme Court
• Parties: GARRIS v. CALECHMAN et al.

170 A. 789

118 Conn. 112

GARRIS v. CALECHMAN et al.

Supreme Court of Errors of Connecticut.

February 6, 1934

Appeal from Superior Court, New Haven County; Frederick M. Peasley Judge.

Action by Mary Garris against Joseph Calechman and another to recover on a promissory note. Judgment for plaintiff, and defendants appeal.

No error.

George W. Crawford, of New Haven, for appellants.

Louis Weinstein, of New Haven, for appellee.

Argued before MALTBIE, C.J., and HAINES, HINMAN, BANKS, and AVERY JJ.

HAINES, Judge.

The plaintiff is the sister of Rubin Gerbert who, prior to April 10, 1926, was in partnership with the two defendants in the real estate business. There were no written articles of copartnership, but each owned an undivided one-third interest in the assets of the firm. On the above date the partnership was dissolved by the mutual agreement of the parties, each accepting as his individual property, a designated portion of the firm's assets consisting of real estate and mortgages. As part of the agreement of dissolution, each partner guaranteed the other on a pro rata basis against losses, if any, which might later be sustained in the liquidation of his share, and likewise for partnership obligations paid by any one partner.

The first of these liquidation losses fell upon Rubin Gerbert in the sale of certain of the real estate which had been set to him upon the settlement. The two defendants' share, being two-thirds of this loss, amounted to $1,988.77. They stated they were without the cash to pay him and they therefore gave him the joint and several note in question, dated December 4 1928, payable in one year with interest at 6 per cent. payable quarterly. At the request of Rubin, they agreed to and did make his wife, Sonia, the payee of the note. Soon after, the note with Sonia's indorsement in blank was negotiated to the plaintiff by Rubin. At that time he owed her $2,000 for money she had advanced to him, and she accepted the note and $11.23 in cash which he also gave her, in full settlement of his debt to her. She knew at that time that the partnership had been dissolved, but knew nothing of any of the terms or conditions of the dissolution agreement. Neither Rubin nor the plaintiff ever indorsed the note. The makers paid her interest upon this note to April 9, 1932, and this action was brought eighteen days later. On several occasions in 1930 and at least once in 1932, the defendant Benjamin promised the plaintiff to pay her the principal, saying that though he then had no money, as soon as times improved he would pay the note. Prior to the filing of their answer in this action, no claim was ever made by these defendants against Rubin on account of the agreement to indemnify for losses suffered by them. It appears that Benjamin has now sustained losses on the properties apportioned to him and has been compelled to pay substantial obligations of the former partnership. The amount is not stated.

None of these findings of fact are attacked upon this appeal nor is any further finding requested by the appellants. The trial court reached the conclusion that at the time the note was given, the defendants were jointly and severally indebted to Rubin for $1,988.77 and gave the note therefor, and this conclusion is not contested upon this appeal. The court also held that the plaintiff took the note before maturity, in good faith and for value, and without notice of any infirmity or defect in the title thereto, of either Rubin or Sonia; that the plaintiff was the holder thereof in due course, free from defenses which might have been available to prior parties among themselves; that the debt of Rubin to the plaintiff constituted value given by her for the note and finally that the plaintiff had sustained the burden of proof of her complaint, but that the defendants had failed to sustain the controverted affirmative allegations of their second defense.

The present appeal is stated by the defendants to be based upon three main contentions: (1) that the plaintiff was not a bona fide holder in due course and the note in her hands was subject to defenses which could have been made against Sonia or Rubin; (2) that the defendants had a good defense as against the last named parties; and (3) that the court erred in a ruling as to the burden of proof.

The plaintiff alleged that she was the owner and holder of the note, and this was a sufficient allegation, prima facie, that she was a holder in due course with a right of recovery. General Statutes, § 4376; Donnelly v. Garvan, 111 Conn. 626, 630, 151 A. 168. The possession by the bearer of a note indorsed in blank imports prima facie that he acquired the note in good faith for value and in the course of business, before maturity and without notice of any circumstances impeaching its validity. The production of the note establishes his case prima facie against the makers and he may rest there. 2 Daniel, Negotiable Instruments (7th Ed.) p. 1017, § 945; Standard Cement Co. v. Windham National Bank, 71 Conn. 668, 684, 42 A. 1006; Arnold v. Lane, 71 Conn. 61, 63, 40 A. 921; It was for the defendants to set up and prove the facts which limit or change the plaintiff's rights. Mersick v. Alderman, 77 Conn. 634, 638, 60 A. 109, 2 Ann.Cas. 254; Kessler v. Valerio, 102 Conn. 620, 623, 624, 129 A. 788; Sacks v. Sheiman, 105 Conn. 73, 78, 134 A. 240; Brannan, Negotiable Instruments (5th Ed.) pp. 322, 653, 657. This burden was met if the defendants established that the title of any holder who had negotiated the note was defective; the burden would then be on the plaintiff to establish that she or some person under whom she acquired title, was a holder in due course. But that rule does not apply in favor of one who became bound on the instrument before the defective title was acquired. General Statutes, § 4376; Fllosi v. Crossman, 111 Conn. 178, 182, 149 A. 774; Parsons v. Utica Cement Mfg. Co., 80 Conn. 58, 60, 66 A. 1024; Id., 82 Conn. 333, 337, 73 A. 785. 135 Am.St.Rep. 278.

While we do not look upon the statement of the court, " I assume that Mr. Crawford would have the opening...