
    Charles A. Hess, as Assignee for the Benefit of Creditors of Solomon Sayles, Respondent, v. W. & J. Sloane, Appellant.
    
      New trial — newly-discovered evidence justifying it — laches excused — that such evidence impeaches a witness or is cumulative is not an objection.
    
    In an action prosecuted by an assignee for creditors to recover the amount which his assignor had paid upon a note indorsed by him, on the ground that the indorsement was made in reliance upon an agreement made by the defendant’s manager that the defendant would take care of the note, the principal issues were whether the makers of the note were carrying on a certain hotel as agents of the defendant; whether the defendant’s manager agreed to pay the note if the plaintiff’s assignor indorsed it, and whether the indorsement was made in reliance upon that agreement.
    Evidence in support of the affirmative of these issues was given on behalf of the plaintiff’s assignor, which evidence was contradicted generally but not specifically in the deposition of the defendant’s managef taken before the trial because of his intended departure for Europe. The jury found a verdict in favor of the plaintiff. ' •
    Subsequently, the defendant made a motion for a new trial upon the ground of newly-discovered evidence based upon the affidavit of its manager who had returned from Europe and who therein denied categorically the statements made by the plaintiff’s assignor and the makers of the note, and also upon affidavits of the officers of the bank at which the note in question was discounted, tending to impeach the statements of the plaintiff’s witnesses concerning the inception of the note and the financial condition of the makers of the note when it was given, and the necessity of their obtaining its discount, and to show that the defendant had no interest in the discount of the note being procured, and that the plaintiff’s assignor said to one of the officers of the bank that he had no occasion to worry about the note because he had a bill of sale of the liquors in the hotel as security.
    
      Held, that the affidavits presented a state of facts which, if presented to the jury, would have been more than likely tc have produced a different result, and that the motion should be granted ;
    
      That, under the circumstances of the case, the defendant was not guilty of laches in failing to make the motion until six months after the trial or in not procuring the evidence for use upon the trial.
    
      It seems, that newly-discoveiied evidence, the only purpose of which is to impeach a witness, by showing that his character for truth' and veracity is bad, is not a basis for a new trial; but it is otherwise when the main object of the evidence is to contradict the testimony of a witness upon a material issue, although it may also impeach him.
    
      It seems, that the fact that the newly-discovered evidence is cumulative, is not, of itself, a sufficient reason for denying a new trial.
    Appeal by the defendant, W. & J. Sloane, from an order of the Supreme Court, made at the New York Special Term aud entered in the.office of the clerk of the county of New York on. the 22d day of November, 1899, denying its motion to set aside the verdict and judgment in the action and. for a new trial on the ground of newly-discovered evidence.
    
      Selden Bacon, for the appellant.
    
      Louis Marshall, for the respondent.
   Rumsey, J. :

This action was tried in April, 1899, a verdict rendered for the plaintiff, and a motion for a new trial on the minutes was denied by the justice who heard the case. In the month of October, 1899, the motion for a new trial upon the ground of newly-discovered evidence was made before another judge and was denied. . This' appeal is taken from the order denying that motion.

The action was brought originally by -one Sayles and was continued in the. name of his assignee for the benefit of his creditors, who is the present plaintiff. The defendant is a corporation. The action was brought to recover the amount of a promissory note for $3,500 made by Foster Bros, on the 20th of June, 1893, and indorsed by Sayles, the original plaintiff. When that note fell due it was protested for non-payment, and was subsequently paid by the indorser, who brought this- action to recover the amount paid, upon an allegation that he indorsed it in reliance upon an agreement made by the managing agent of the defendant that if he would do so the' defendant would take care of it, and that he need, not worry about it.

The undisputed facts in the case -were that Foster Bros., the makers of the note, having rented the New Amsterdam Hotel, had applied to W. & J. Sloane, the defendant, to furnish it, so that they could carry on the business of hotelkeeping, and a contract was made between the corporation and the firm of Foster Bros, as a result of which the defendant bought all the furnishings necessary to, carry on the hotel, and the Fosters undertook the management of it. It was claimed by the plaintiff that Foster Bros, in managing the hotel acted as the agents of W. & J. Sloane, but this was denied by the latter, the defendant insisting, on the contrary, that the Foster Bros, had purchased of it all the furniture which had been put into the hotel, agreeing to pay it $3,000 a month until the whole amount was paid, and that until that was done the defendant was to remain the owner of the furniture, and specifically denying that the relationship of principal and agent existed between it and Foster Bros. The issue between the parties at the trial, therefore, was whether Foster Bros, were carrying on the New Amsterdam Hotel as agents of the defendant, and also whether the manager of the defendant had' agreed to pay this note if Mr. Sayles indorsed it, and whether Sayles did do so relying upon that agreement. These two questions were submitted to the jury in the judge’s charge, and were decided in the plaintiff’s favor.

The plaintiff’s evidence tending to show the relationship between the parties was principally given by Augustus C. Foster, one of the Foster brothers, who gave his version of the transactions between himself, representing Foster Bros., and Mr. Allen, the secretary of the corporation, representing it. His testimony was substantially that his firm having arranged for a lease for the building then being erected which became the New Amsterdam Hotel, applied to Mr. Alien, the manager of the. defendant, to fit up the hotel so that the firm would be in a situation .to carry on the business. He testified at length' tó the conversation had between himself and Allen which resulted in the proposition by the defendant to supply all the' furniture necessary to put the hotel in running condition. In the course of that testimony he said that the arrangement between the parties was that he and his brother were to carry on the hotel in the interest of the defendant corporation, each receiving a certain sum per month for their services, accounting to the defendant for the balance, and that this was to continue until the furnishings had been paid for, and that when this had been done, and not before, the goods so sold by the defendants were to become the property of Foster Bros, and'the mortgage covering them was to be at an end. In the course of this testimony he said that there was no written agreement between the parties to this end, and when he was confronted with what purported to bé a written agreement he admitted that it had been made by the firm but that it did not contain a full statement of the arrangements between the parties. In' this matter he was contradicted by .Allen, the manager of the defendant corporation, whose deposition had been taken before the trial because of his intended departure for Europebut in the nature of things it could not precisely meet the evidence given by Foster, and its contradictions of his testimony were of the most general nature, and. did not deny each specific statement of Foster as to what was said . and done between them. . .

As to the inception of the $3,500 note, Foster testified that when he and his brother took possession of the Hew Amsterdam Hotel in 1892, they had borrowed from the Sherman Bank $2,000 on their note, which became due on the 20th of February, 1895, and that when it became due they could not pay it because they had no money in the bankj having paid it all to the defendant, and that he applied to Allen to aid him; that Allen told him to go to the tradespeople who supplied them with goods and get some one of them to indorse a note for an amount large enough so that they could pay off the $2,000 note and have a little over ; and that he thus went to Sayles and induced him to indorse the note, which he then discounted, and out of the proceeds paid the $2,000 note then due, and paid. one-half of the balance, $750, to the defendant at its request. He testified further that when this note came due he insisted upon paying a portion of it, but that Allen declined to let him do so, and upon Sayles showing a disinclination to indorse a renewal note, Allen told him to tell. Sayles that if he would indorse the note he, Allen, would see that it was paid when it came due, and that thereupon he went to Sayles, who, Upon hearing what Allen had said, indorsed the note and it was renewed. Sayles testified that he went to Allen before the note was first made, and was told by Allen that if he would indorse the note Allen would see that it would be all right, and that Allen gave him a reason why the defendant'did not wish to indorse the note. He said that it struck him that Allen wanted the Fosters to make a payment to W. & J. Sloane.

As has been said, Allen’s deposition did not precisely meet this testimony, for the reason that it had been taken before the trial. The new testimony presented by the defendant is that of Allen, who has returned from Europe and who in liis affidavit denies categorically the statements of Sayles and the Fosters as to what occurred at the different conversations. There are in addition affidavits by various officers of the Sherman Bank from which it appears that the bank was in liquidation at the time of the trial, and that its books could not be procured b)r the defendant to be used on the trial of the action; and it is quite evident from the affidavits that until the trial of the action it could not be known that the testimony of the officers of the bank and the contents of its boobs would be material, because so far as the pleadings showed it would only be necessary on the trial to meet the question whether Allen had made the agreement upon which Sayles indorsed the note. The affidavits of the officers of the bank and the contents of its -books show that the Foster Bros, never had a-note for $2,000 in the Sherman Bank, nor any other note which fell due on the 20th of February, 1893. It appears that they did have a note for $3,500 at the bank discounted on the 29th of September, 1892, indorsed by themselves, which fell due on the 1st of February, 1893. It appears further that on the 1st of February, 1893, when that note fell due, the Foster Bros., instead of having no money in the bank, had somewhat over $7,885.80, and that they deposited on that day in addition $800, and that the $3,500 which fell due that day were paid out of their account, leaving a balance, after deducting cheeks drawn against it, of $4,385.80. It appears also that no other note was discounted for Foster Bros, between the first day and the twentieth of February, and that on the twentieth of February the amount of the credit of Foster Bros, was something over $3,100, and that the proceeds of the note for $3,500, amounting to $3,428.25,- were put to their credit, so that they had in the bank after the note was discounted about $6,600. It is clear, therefore, that the check for $750, paid to W. & J. Sloane on February twentieth, might have been drawn against the balance at the bank to the credit of Foster Bros., and that there was no reason why W. & J. Sloane should have desired this discount to have been made. Indeed, no reason is apparent why the Foster Bros, should have needed this discount, because their subsequent deposits seem to have kept the account large enough to meet all drafts against it for a considerable time after the twentieth of"February, so that there was no necessity of using the proceeds of this note.

The affidavits also show that the check for $750 on the twentieth of February was given to W. & J. Sloane as a final payment upon anote for $3,000, which became due some time before that date, and all but $750 of which had been paid before. The affidavits further show that Sayles, before this note became due, spoké of it to one of the officers of the bank, and said that he had no occasion to worry about it because he had a bill of sale on the liquors in the New Amsterdam .Hotel as security, which evidence tends strongly to contradict his testimony that he had an agreement with W. & J". Sloane to take up this note and that he relied upon it.

Without going over the ’facts shown by the affidavits it is sufficient to say that they presented a state. of facts which, if it had been presented to the jury, would have been more than likely to have produced a different result, because it would have shown that what Foster stated as the occasion for the indorsement of this note .was not true, and that tjiere was no reason why Allen should have been interested in the slightest degree in the raising of that- money, or why it was necessary to pledge the credit of W. & J„ Sloane to secure the discount of that note, and it would undoubtedly have tended to show that Sayles relied as security for his .indorsement, not upon the agreement of Allen, but upon his pledge of the liquors in the New Amsterdam Hotel. The defendant, therefore, made a good case for a new trial, which should have been granted unless some of the objections were well taken.

The most serious objection was that the defendant was not only negligent because the testimony could have been procured for use at the trial, but was guilty of laohes in the long delay before this motion was made. A careful examination of the testimony satisfies us that these objections are: not well taken. As has been already .said, there was no reason to suppose that the books of the bank would have been material on the trial of the action. There was no doubt that the note for $3,500 had been discounted, and the liability of the defendant rested upon facts which wer.e extrinsic to the note, and there was no reason to suppose that' light could be thrown on that part of the case by the books of the bank or by anything that was known by its officers. It is apparent from the testimony of the counsel for the defendant that it found considerable difficulty, not only in ascertaining the whereabouts of the officers of the bank who had left its employ and gone into other business, but also in securing the books and learning their contents, and it does not seem to us that laches was shown in getting testimony which could only be secured with so much difficulty.

It is said that the testimony of the cashier as to the conversation with Sayles, in which Sayles stated that he had as security for his indorsement the pledge of the liquor, is only important as impeaching the testimony of a witness, and that a new trial will not be granted solely to impeach a witness.. Undoubtedly, when the only purpose of testimony is to impeach a witness by showing that his character for truth and veracity is bad, it will not be considered as a basis for a new trial, but' when the main object of the testimony is to contradict the evidence of a witness upon a material issue, it will afford ground for a new trial, although it may also impeach him. But Avithout regard to the evidence tending to contradict Sayles, there • is sufficient in the books and in the affidavits of .the officers of the bank to show a state of facts which materially differs from that testified to by ■Foster, and which, if true, Avould practically overthrow his evidence; and although this may be regarded as impeachment of the witness, it is only such impeachment as always follows when the testimony of a witness has been broken down. This testimony is not cumulative, and if it were, that of itself affords no reason why a new trial should be denied. In view of all the facts, we conclude that, in the interest of justice, the defendant should have a new trial, that it may present this disputed evidence to the jury and. get their .decision as to the result, and the order is, therefore, reversed, with ten dollars costs and disbursements to the appellant, and a new trial granted upon payment of the costs of the former trial.

Van Brunt, P. J., Barrett, Ingraham and McLaughlin, JJ., concurred.

■Order reversed, with ten dollars costs and disbursements, and new trial granted on payment of costs of former trial.  