Hanna v. Mitchell

202 A.D. 504, 196 N.Y.S. 43, 1922 N.Y. App. Div. LEXIS 4925
CourtAppellate Division of the Supreme Court of the State of New York
DecidedJuly 14, 1922
StatusPublished
Cited by51 cases

This text of 202 A.D. 504 (Hanna v. Mitchell) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hanna v. Mitchell, 202 A.D. 504, 196 N.Y.S. 43, 1922 N.Y. App. Div. LEXIS 4925 (N.Y. Ct. App. 1922).

Opinion

Page,- J.:

The action is on a promissory note made by the defendant Geraldine E. Mitchell payable to the order of the defendant Howard E. Mitchell which it is admitted, by failure to deny, was before matur-. ity indorsed by said Howard E. Mitchell in blank and delivered, so indorsed, to one Cramp for value received. The complaint further alleges that Cramp before maturity transferred and delivered the note for value received to the Pennsylvania Company for Insurance on Lives and Granting Annuities (hereinafter designated the Insurance Company), and that the Insurance Company after maturity, for value, duly assigned, transferred and delivered said note to plaintiff, who became and now is the owner and holder thereof; that at maturity the said note was presented for payment at the time and place where payable and payment thereof duly demanded but payment was refused and the note was not paid and that the same was duly protested for non-payment and due notice thereof given to the defendant Howard E. Mitchell; that the cost [506]*506of said presentment, protest and notice was one dollar and thirty-three cents, whichl said Insurance Company paid; that no part of said note or protest fees has been paid. The only denials in the answer thatwould raise a triable issue are the denial on information and belief of the transfer of the note by Cramp to the Insurance Company and the denial of any knowledge or information sufficient to form a belief of the cost of protest and the assigmnient of the note to the plaintiff.

The defendants moved to be allowed to amend their answers: Geraldine E. Mitchell to allege as a separate defense that she made the note as an accommodation for Howard E. Mitchell and without receiving any value therefor, and for the purpose of loaning her name to the said Howard E. Mitchell, and on information and belief that said note was transferred to the Insurance Company and to the plaintiff without any value or consideration therefor and after maturity thereof, and that the Insurance Company and the plaintiff, at the time of receiving said note, each had knowledge of the fact that said note was an accommodation note and that she had received no consideration therefor; Howard E. Mitchell moved to amend his answer to include a counterclaim and setoff existing against Cramp. The plaintiff moved to strike out the existing answers and for a summary judgment for the relief demanded in the complaint.

The motions were heard together. Defendants’ motions were denied and plaintiff’s motion granted. Defendants appeal.

The defendants’ motions were properly denied. The defendants admit that the note was indorsed and delivered to Cramp before maturity and for value; therefore, the fact that Geraldine E. Mitchell may have made the note as an accommodation to Howard E. Mitchell would be no defense as against Cramp or one deriving title through him. (Neg. Inst. Law, §§ 3, 52, 55, 91, 97.) There was no diversion of the note or any other fact alleged that would make the title of a person who negotiated it defective.' (Id. § 94.) The facts sought to be alleged were insufficient to constitute a defense. (Horan v. Mason, Nos. 1, 2, 3, 141 App. Div. 89, 91.)

The counterclaim that Howard E. Mitchell seeks to set up would seem to be a cause of action in equity for an accounting between himself and Cramp, who it is alleged were copartners in business prior to May 4,1914, at which date the copartnership was dissolved: that no accounting has been had; upon information and belief that during the continuance of the partnership and prior to the dissolution Cramp had withdrawn and diverted to his own use large sums of money from the partnership assets greatly in excess of the proportion thereof to which he was entitled. An accounting is not demanded, for of course it could not be had in this action to which Cramp was not a party. The defendant Howard E. Mitchell [507]*507could not sue Cramp at law on this statement of facts in the counterclaim, for there had been no accounting, balance struck and promise to pay such amount. (Cummings v. Morris, 25 N. Y. 625, 629.) The note clearly did not arise out of partnership transactions, for it is alleged that the partnership was dissolved in May, 19Í4, and the note was made April 27, 1920. While it is true that on a motion to amend a pleading the court will not, as a rule, look into the merits, but will allow the party to put his pleadings in such shape as will enable him to raise and have determined at the trial any question affecting his interest, this rule is qualified by the requirement that the application to be allowed to amend is made in good faith, and that injustice will not be done' to the adverse party. (Muller v. City of Philadelphia, 113 App. Div. 92, 96; Kursheedt Manufacturing Co. v. Rosenzweig, 189 id. 217, 220.) Where it is apparent that there is no merit in the proposed amendment and it is sought for the purpose of delaying a cause to which there is no defense, the application should be denied.

The appellants further contend that rule 113 of the Rules of Civil Practice is void. First. Because chapter 370 of the Laws of 1921,

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Bluebook (online)
202 A.D. 504, 196 N.Y.S. 43, 1922 N.Y. App. Div. LEXIS 4925, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hanna-v-mitchell-nyappdiv-1922.