
    IRVING et al. v. IRVING.
    (Supreme Court, General Term, First Department.
    November 15, 1895.)
    Reverence—Long Account—Counterclaim.
    In an action on a note, the answer did not deny the making of the note, but denied that it was made for value, and alleged that it was without consideration, and that no sum was owing from defendant thereon, and recited facts showing certain stock transactions between the parties, out of which was created a ■ false account against defendant, for which he was induced to give the note sued on. Held that, though plaintiff’s cause of action was not referable without consent, it was not put in issue by the answer, and therefore a compulsory reference could be ordered, on the ground that the answer alleged matters requiring the examination of a long account. Steck v. Iron Co., .37 N. E. 1, 142 N. X. 236, distinguished.
    Appeal from special term, New York county.
    Action by Percival R. Irving and others against Walter Irving on a promissory note. A reference was ordered, and defendant appeals. Affirmed.
    Argued before VAN BRUNT, P. J., and O’BRIEN and PARKER, JJ.
    Edward Mitchell, for appellant.
    Benjamin N. Cardozo, for respondents.
   PARKER, J.

This action is on a promissory note, of which the plaintiffs are the payees, and the defendant the maker. The complaint, in addition to setting up a copy of the note, alleges that the note was made and delivered for value, and that the amount thereof is due from the defendant. The answer contains several separate defenses, the first of which reads: “This defendant denies that the promissory note mentioned in the second paragraph of the complaint was made for value. He alleges that it was without any consideration.” And this is followed with a denial that any sum “is due and owing from the defendant.” The second defense is of new matter, but does not allege a counterclaim or set-off. It contains a narrative statement of the facts, showing certain stock transactions of the parties, out of which was created a false account against the defendant, for which he was induced to give the note in suit. In addition to giving a statement of all the circumstances under which the note was made, it renewed the allegations in the first defense that the note was without any legal or valuable consideration, and that the defendant is not justly indebted to the plaintiffs in any sum whatever.

Undoubtedly, the appellant is right in his contention that the answer gainsaid the plaintiffs’ cause of action. Although the defendant does not deny the making of the note, he does not thereby admit the plaintiffs’ cause of action, for he specifically denies the allegation in the complaint that it was made for value, and alleges that it was wholly without consideration. And the plaintiffs have not a cause of action if such be the fact. The appellant, starting with the proposition to which we have given assent, insists that Steck v. Iron Co., 142 N. Y. 236, 37 N. E. 1, requires a reversal of the .order. In that case the cause of action stated in the complaint was not referable without consent, and it was put in issue by the answer, which also set up a counterclaim consisting of a long account; and it was held that the order of reference granted on motion of plaintiff, against objection of defendant, was error. This case is quite different. The long account which persuaded the learned judge at special term to grant the order of reference will be involved in the issue as to whether the note was given without consideration. But it was said in Steck’s Case that when the cause of action alleged in the complaint is not referable, and the same is put in issue, the account cannot be made referable by anything which the defendant may set up in his answer. The language employed by the court was broad enough, it will be seen, to fully sustain the appellant’s contention. But in Steck’s Case, as well as in the several cases cited by the court, the counterclaim was a distinct and independent cause of action, and the fact that it involved a long account did not make it an element in the proof of the plaintiff’s cause of action.

The question sharply presented to the court was whether the fact that the trial of the counterclaim might involve an examination of a long account would justify a compulsory reference of the issues, where the plaintiffs’ cause of action was controverted and nonreferable. Necessarily, therefore, the question involved in this case was not brought to the attention of the court, and the language employed by it was not chosen with reference to this situation. The ground of the decision was that as the constitution declared that trial by jury should remain inviolate forever in every instance where it had theretofore existed, and as at the date of the adoption of the constitution the law of pleading would not permit an assertion of a counterclaim, unless the defendant should admit the truth of the plaintiffs’ allegations, it followed, under the practice theretofore in vogue, that there could not have been a counterclaim when plaintiffs’ cause of action was gainsaid. Hence the necessity for the examination of an account, in connection with a counterclaim, could not support a compulsory reference of the issues, unless plaintiffs’ cause of action was admitted, or was itself referable in its nature. And, as such was the law at the time of the adoption of the constitution in 1777, it follows that in such cases its guaranty of trial by jury requires that the words “on- either side,” in the section of the Code referring to compulsory references, be construed: with this implied limitation. But, in reaching such conclusions, courts have from time to time used more comprehensive language than was required to assert that a cause cannot be compulsorily referred when a nonreferable cause of action is put in issue, by an answer which at the same time sets up a counterclaim involving a long account, and have said “that plaintiff’s right to a jury trial in such cases could not be taken away or destroyed by anything which the defendant may set up in his answer.” The courts have not said, nor have they intended to be understood as saying, that the answer could not be looked at in any case for the purpose of determining whether the action be referable. Of necessity, it must be examined for that purpose. The cause of action set up in a complaint may, upon its face, involve a long account, but it is not referable unless the items of the account are put in issue. And this can only be determined by an examination of the answer. So, we apprehend, if the cause of action set up in a complaint appears on its face to be nonreferable, yet, if the defense interposed to such cause of action shows that the trial of that issue will necessarily involve a long account, a compulsory reference may be ordered. It is true that, under these pleadings, all the plaintiffs will be required to do upon the trial will be to produce the note, and compute the interest, in order to establish a prima facie case. But that fact in no wise tends to prove that a long account is not involved. It relates to the order of proof solely. Upon the plaintiffs rests the burden of proving a valuable consideration. The production of the note, by presumption of-law, accomplishes that result in the first instance; yet, when the defendant has offered evidence in rebuttal of this presumption, the burden rests upon the plaintiff of sustaining, by further proof, the allegation of value. And, when the tribunal which is to pass upon the evidence approaches its consideration, it does so with the rule of law in mind, and controlling its action, that the burden of establishing the consideration rested upon the plaintiff throughout the trial, and that, from all the evidence, it must appear that he has met that burden in order to entitle him to recover. Trust Co. v. Siefke, 144 N. Y. 354-359, 39 N. E. 358.

The issues presented by these pleadings must be tried, in order that the plaintiffs may sustain the cause of action alleged in their complaint. It appears that, while the action is not brought upon an account, the trial of such issues will necessarily directly involve the examination of a long account; and, that being so, we think the cause is referable.

The order should be affirmed, with $10 costs and printing disbursements. All concur.  