Mahoney v. Minsky

• Decision Date: 04 February 1963
• Docket Number: No. A--56,A--56
• Citation: 39 N.J. 208,188 A.2d 161
• Parties: Thomas MAHONEY, Plaintiff-Respondent, v. Morris MINSKY, Robert W. Caverly, and Morris Minsky and Robert W. Caverly, partners, trading as Bellevue Surgical Supply Co., Defendants-Appellants.
• Court: New Jersey Supreme Court

Page 208

39 N.J. 208

188 A.2d 161

Thomas MAHONEY, Plaintiff-Respondent, v. Morris MINSKY, Robert W. Caverly, and Morris Minsky and Robert W. Caverly, partners, trading as Bellevue Surgical Supply Co., Defendants-Appellants.

No. A--56.

Supreme Court of New Jersey.

Argued Dec. 17, 1962.

Decided Feb. 4, 1963.

James A. Major, Hackensack, for defendants-appellants (James A. Major, II, Hackensack, on the brief, Major & Major, Hackensack, attorneys).

Martin J. Brady, Newark, for plaintiff-respondent (James M. Barry, Newton, attorney).

The opinion of the court was delivered by

FRANCIS, J.

Plaintiff Dr. Thomas Mahoney sued defendants Morris Minsky and Robert W. Caverly, individually and as partners trading as Bellevue Surgical Supply Co. on the following note:

Oct. 1, 1954.

'$7,000

Two months after date we promise to pay to the order of Dr. Mahoney seven thousand dollars.

Bellevue Surgical Supply Co.

Morris Minsky

Robert W. Caverly.'

The making of the note was admitted; the defense was payment. After trial a jury returned a verdict for plaintiff plus interest in an uncomputed amount. Although the question of allowance of interest had been submitted to the jury, the trial court exscinded that portion of the verdict, saying equity demanded a denial of interest. Defendants appealed from the adverse judgment; plaintiff cross-appealed from the disallowance of interest. The Appellate Division affirmed the recovery on the note. It held also that plaintiff was entitled to interest from the due date of the note, and remanded the cause to the trial court for entry of an appropriate judgment. We granted defendants' petition for certification. 38 N.J. 316, 184 A.2d 425 (1962).

The Appellate Division was correct in declaring the plaintiff's award should include interest. In the absence of express provision to the contrary, a liquidated obligation of the type involved here carries conventional interest from the due date, as a matter of course. It is compensation for the use of, or hire of, money. Knight v. Barnwell, 130 A. 736, 3 N.J.Misc. 1128 (Sup.Ct.1925); 1 Restatement, Contracts, § 337, p. 542 (1932); McCormick, Damages, § 54, p. 213 (1935); and see, Uniform Commercial Code, L.1961, c. 120, § 3--122(4); N.J.S. 12A:3--122(4), N.J.S.A.

The circumstances attending the giving of the $7,000 note and its alleged payment are in sharp dispute. Plaintiff said that at various times between 1944 and 1948 he had made loans to defendants in $500 amounts, taking an individual note on each occasion. By 1948 he held 10 such notes which (he asserted) were consolidated into one note for $5,000, payable in one year. In 1951 he accepted a substitutionary three-year note for $6,000, which included $1,000 for past due interest. On October 1, 1954, in lieu of payment, the obligation was replaced by a note for $7,000 payable in two months. The new instrument, the subject of this suit, represented an additional $1,000 agreed upon as interest.

Defendants denied the claim of a series of notes culminating in the $7,000 obligation. They acknowledged borrowing $7,000 from plaintiff on October 1, 1954 but insisted they received it in cash on that day. In support of their position, they produced their bank statement for October 1954 which shows a deposit of $7,000 on October 1. It was marked for identification but was declared inadmissible by the trial court. We agree with defendants that the ruling was erroneous. The statement issued by the County Bank & Trust Company, Passaic, and captioned in defendants' trade name, Bellevue Surgical Supply Co., appears perfectly regular on its face and as having been issued in the regular course of business prior to the inception of any controversy between the parties. In a case where the issue of credibility was crucial, this Ante litem motam instrument obviously furnished competent and relevant corroboratory evidence for defendants and should have been received.

Defendants further testified that the $7,000 received from plaintiff on October 1, 1954, after being deposited, was used to pay off an outstanding note of theirs in that amount held by the same bank. In support of the testimony, a check dated October 1, 1954 for $6,994.17 to the County Bank & Trust Company, drawn on the Bellevue Surgical Supply Co. account there, was produced, as well as the $7,000 note stamped 'Paid, October 1, 1954.' Both documents were rejected as evidence. They should have been admitted for the very reason which supplied competent probative force to the bank statement. On their face they were natural and routine incidents of the $7,000 transaction with plaintiff as described by defendants. Their virtue as evidence lies in the fact that they, too, antedated this litigation by about five and one-half years and represented conduct occurring when the parties were close friends and their relations were harmonious. The weight to be given to all three of the described documents was for the jury to determine.

Plaintiff testified that in July 1959 he spoke to defendant Minsky about paying the note, and was told that the partners would get together and make an adjustment. Thereafter he became ill and was hospitalized, as a result of which nothing was done until early in 1960. When he again communicated with Minsky and pressed for payment, he was told that the note had been paid. Suit was then instituted.

In his testimony Minsky insisted that in January 1955 he made a part payment to Dr. Mahoney of $2,500 in cash but received no receipt therefor. The balance of $4,500, he said, was satisfied in July 1955 by setting it off against a balance Dr. Mahoney owed defendants' firm for supplies and equipment furnished for his office. This aspect of the case presented the sharpest issue of veracity at the trial. It appeared that Minsky's deposition had been taken previously. At that time he swore that two payments, one $2,500 in January 1955 and the other $4,500 on April 25, 1955, were made in cash, the money to do so having been withdrawn from defendants' bank account. He testified the $4,500 was brought to the doctor's home, given to him in the upstairs living room, and that Mahoney counted it in his presence. Mahoney then told him that the note was lost but he gave him a written receipt showing payment in full. The receipt was not produced. Minsky said it was lost and probably destroyed in a serious fire which occurred on the Surgical Supply Co. premises in March 1960.

Minsky's explanation at the trial of the flagrant conflict in his testimony was that his earlier statement was mistaken. Subsequent to the deposition he had discussed the matter with his accountant and, after going over the company books, he discovered the fact to be that the $4,500 balance on the note had been satisfied by the cancellation of plaintiff's indebtedness for merchandise.

It was undisputed that Dr. Mahoney had been a customer of defendants for many years and had bought equipment and supplies from them. There was agreement also that there were loans from him to defendants represented by notes other than the note in suit. And Minsky admitted that the doctor always paid his bills for supplies by check, independently of any outstanding loans, and would never accept a credit on his professional account as a payment of, or offset on, an existing note. The transactions were always kept separate and apart except in this one instance involving the $4,500 payment, alleged by Minsky and denied by the doctor.

The record shows, again without dispute, that in July 1954 Dr. Mahoney engaged in a substantial refitting and re-equipping of his office. Defendants did the work and furnished the equipment, the cost of which was $9,296.09. The full sum, less a down payment of $1,000, was borrowed by the doctor from the County Bank & Trust Company on a conditional sales contract, calling for 24 monthly payments of $380.24 each. The conditional sales agreement, and the payment coupon book, both showing payment in full to the bank as of August 15, 1956, were put in evidence. Minsky insisted, however, that at the same time additional rooms in the doctor's office were provided with equipment to the value of $4,500, which was not included in the conditional sales contract. These extras were carried on Mahoney's account with defendants, although no testimony was given as to the manner in which he was to pay the indebtedness. And as will be more fully noted hereafter, no invoices, bills or original account books showing or detailing the obligation were produced. The suggestion is that such records were lost in the fire. Plaintiff denied the existence of any such $4,500 debt or that he ever agreed to have it offset against a balance of that sum remaining unpaid on the $7,000 note.

Defendants offered certain alleged documentary proof of the January 1955 $2,500 cash payment and the April 1955 $4,500 credit against the note. Minsky testified that when he made the $2,500 payment it was in cash because the doctor wanted it that way. In order to comply with the request, he drew a check in that amount to cash on January 13, 1955, cashed it at the County Bank & Trust Company and delivered the currency to the plaintiff. The check was produced and offered in evidence but plaintiff's objection was sustained. It was error to do so. The reasons set out above as qualifying the other documents for admissibility apply as well in this situation. The $2,500 check, issued, as it was when the relations between the parties were friendly and normal and prior to any controversy over the $7,000 note, possesses some evidentiary value as corroboration of Minsky's testimony. It should not have been refused admission because considered in isolation it would seem to be self-serving. Its self-serving nature may well detract from its persuasive force in the minds of the jurors but in association with the factual and chronological framework of the case, it cannot be classified as incompetent.

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