Burley v. German-American Bank
111 U.S. 216 (1884)

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U.S. Supreme Court

Burley v. German-American Bank, 111 U.S. 216 (1884)

Burley v. German-American Bank

Argued March 28, 1884

Decided April 7, 1884

111 U.S. 216

Syllabus

In New York, under § 500 of the Code of Civil Procedure, an answer which makes certain statements and then denies every allegation of the complaint "except as hereinafter stated or admitted," amounts to a sufficient general denial of all allegations of the complaint not admitted to authorize evidence to be given to show any of such allegations to be untrue.

An objection that such denial is indefinite or uncertain must be taken by a motion made, before trial, to make the answer definite and certain, by amendment, and cannot be availed of by excluding evidence at the trial.

If it is intended to raise on a writ of error the point that a cross-examination was not responsive to anything elicited on the direct, an objection must have been taken on that ground at the trial.

Entries in the books of one party to a transaction, not contemporaneous or made in the due course of the business as a part of the res gestae, but made after the rights of the other party had become fixed, are not competent evidence.

Where the issue was as to whether A or B owned a note, and A, having testified that he owned it, afterwards testified that B owned it, and gave as a reason that he had never directed the proceeds of the note to be applied to any purpose, it is competent to prove by C that A gave directions to C as to how to apply such proceeds.

This was a suit brought in a court of the New York in June, 1877, and removed by the defendant into the Circuit Court of the United States for the Southern District of New York after answer. The plaintiff is the receiver of the Cook County National Bank, of Chicago, Illinois, and the defendant is a corporation of New York. The complaint alleged that on the 20th February, 1875, the defendant held three promissory notes, maturing on that day, for $10,000 each, made by the Charter Oak Life Insurance Company, as collateral security for a loan of $25,000; that the notes were paid to the defendant at maturity, and there was a surplus, beyond what was due to it on the loan, of $5,000; that the notes were at the time the property of the plaintiff, as receiver; that the defendant received notice of such ownership prior to the payment;

Page 111 U. S. 217

and that the plaintiff is entitled to a judgment for such surplus, with interest.

The answer avers that on October 20, 1874, one Bowen borrowed of the defendant $25,000, and delivered the three notes to it as collateral security; that they were negotiable and not due, and were duly transferred by Bowen to the defendant, he then having the legal title to them and then claiming, and the defendant believing him, to be their owner; that the notes were paid February 20, 1875, when due, and the proceeds were applied to pay the loan, leaving in the hands of the defendant a surplus, due to Bowen; that on April 14th following, the defendant, then believing, with good reason, that that surplus belonged to Bowen, applied it, on his direction, toward paying other notes then held by the defendant, endorsed by Bowen, which notes it gave up on such payment. The answer then says:

"Except as hereinbefore stated or admitted, these defendants, on information and belief, deny each and every allegation in the said complaint contained."

The answer then sets up as a second defense that in August, 1871, Bowen agreed in writing with the defendant that all securities which he might thereafter deposit with it should be regarded as security for any money it might loan to him; that when the three notes were so deposited, the agreement was a continuing one under which it received and held the notes as security not only for the loan of $25,000, but for indebtedness which thereafter arose from Bowen to it, as endorser on notes, and existed on February 20, 1875, to a larger amount than said surplus; that on the direction of Bowen it applied that surplus toward paying the last-mentioned liability of Bowen, and that at all times it believed, with good reason and without notice to the contrary from the plaintiff, that the three notes were the property of Bowen, and that he had good right to dispose of them and of their proceeds. The answer then says.

"And, as a part of this second and separate defense, these defendants, on information and belief, reiterate their denials, hereinbefore contained, of each and every allegation in said complaint not herein stated or admitted."

The case was tried by a jury. The proof at the trial

Page 111 U. S. 218

showed that the surplus was applied on a note made by one Benjamin F. Allen and endorsed by Bowen. Bowen was a director in the Cook County Bank, and its agent, and the agent of Allen in New York, and also a director in the defendant bank. Allen was president of the Cook County Bank and, with one Stephens and one Blennerhasset, composed the firm of Allen Stephens & Co., of New York. He was also a private banker in Iowa. In October, 1874, Allen Stephens & Co. had the three notes, which they had received from the makers in part payment of a debt. They put the notes into the hands of Bowen, and he pledged them to the defendant as a security for a loan of $25,000 and placed the proceeds of the loan to the credit of the Cook County Bank in a bank in New York City. On the day the three notes matured and before they were paid, Allen Stephens & Co. notified the defendant that Bowen never owned the notes and that the surplus, after paying the loan, should be credited to the Cook County Bank. The plaintiff had been appointed receiver of that bank of February 1, 1875. The main question in dispute at the trial was as to whether the notes belonged to the Cook County Bank, having been advanced by Allen Stephens & Co. to that bank and delivered to Bowen to raise money on, or whether they belonged to Allen individually, and the proceeds of the loan were placed to the credit of the Cook County Bank in accordance with a custom of Bowen to place to the credit of that bank all moneys belonging to Allen individually. The case went to the jury on the single question of fact as to whether the three notes belonged to the Cook County Bank or to Allen individually. There was no exception to the charge of the court, but the plaintiff took exceptions to the admission of evidence.

In the course of the trial, the defendant offered evidence to show that Allen owned the notes. The plaintiff objected to such evidence on the ground that under the answer, the defendant could only prove that Bowen owned them. The defendant contended that under the general denial in the answer, it could prove ownership of the notes in Allen or in anyone else, because the answer raised the issue of title in the plaintiff. The court admitted the evidence, and the plaintiff excepted.

Page 111 U. S. 219

The verdict and judgment were for the defendant. The plaintiff brought this writ of error.

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