
    Continental National Bank, etc., Resp’t, v. Hermann Koehler, Appl’t.
    
      (Supreme Court, General Term, First Department,
    
    
      Filed June 19, 1888.)
    
    1. Evidence—Fraud—Character of proof required.
    The evidence of fraud must be established by a preponderance of evidence. Fraud cannot be presumed nor found upon doubtful evidence.
    
      2. Witness—Examination op.
    A party has a right upon examination of a "witness contradicting another in regard to the language used by him, to use the language which has. been before testified to, or the substance thereof, in the putting of the question in answer to which the contradiction is expected.
    Appeal from judgment entered in favor of the plaintiff upon the verdict of a jury, and from an order denying motion for new trial.
    
      Benno Loewy, for appl’t; J. L. Cadwalader, for resp’t.
   Van Brunt, P. J.

This action was brought to recover upon two certain promissory notes made by one David M. Koehler, and endorsed by the defendant. The answer of the defendant denies that the note was delivered to the plaintiff for value, or that it is the lawful owner and holder thereof, and alleges that the maker thereof, David M. Koehler, and one Bernard Kupfer, were copartners under the firm name of Koehler & Kupfer, and that as such copartners they were indebted on the 15th of January, 1870, to various persons, amongst others the plaintiff, and that being unable to pay all their debts in full, all of the persons, including the plaintiff, made and entered into a compromise agreement whereby they agreed to take fifty cents on the dollar in full satisfaction and discharge of their several debts.

The defendant further alleged that prior to the execution of the aforesaid agreement by the plaintiff, a secret and fraudulent arrangement and agreement was entered into between the plaintiff and said Koehler and Kupfer for the purpose of inducing the plaintiff to sign the agreement whereby they agreed to make and deliver one or more promissory notes for the balance of their claim beyond the amount secured to all of the other creditors of said firm by said compromise, and that the notes mentioned in the complaint are notes made and delivered to the plaintiff in pursuance of the aforesaid secret and fraudulent arrangement and agreement, and that no other consideration whatever passed between the parties for said notes.

The reply made upon the trial to this new matter set up by the defendant was a denial of the secret agreement or understanding, and an allegation that the composition deed had been abandoned, and that these notes were given to secure the original debt upon a new contract, whereby the bank extended certain additional accommodations in the shape of discounts.

There was a direct conflict of testimony between the witnesses upon the part of the plaintiff and the witness upon the part of the defendant, in respect to the matter of this secret arrangement or agreement, and also as to the circumstances under which the notes in question were called into-being, and the jury declined to find, under the instructions of the court, that in the negotiation for this compromise agreement, the plaintiffs had been attempting to perpetrate a fraud upon the other creditors of the firm and they further found that the compromise agreement had been_ abandoned, and that these notes were given under the circumstances claimed on the part of the plaintiff.

There was no such preponderance of evidence, even if there was any, as to justify the court in interfering with the verdict of the jury. The conflict between the evidence of the alleged parties to this agreement was sharp and decisive. The jury had the evidence before them; they understood the circumstances surrounding each, and if they chose to believe the witnesses upon the part of the plaintiff that forms no ground for the interference of this court.

Considerable has been said in regard to the form of this composition deed, and the rights of the parties thereunder. As to whether this would have been a binding instrument upon the plaintiff if carried out, no question remains to be considered, as that had been passed upon by the court upon the previous appeal herein.

Keither can the point made upon the part of the appellant prevail, that it was the duty of the plaintiff to have made a demand for the securities called for by the composition agreement before the other parties to the agreement, namely, Koehler & Kupfer, could be said to be in default, because the evidence on the part of the plaintiff would go to establish that the defendant Koehler understood and believed and represented that the compromise agreement had been abandoned, and could not be carried into effect, and, to support this allegation and this claim upon the part of the plaintiff, evidence was introduced to show that, in respect to another creditor, a different arrangement had been made subsequent to the time of the composition agreement.

It is true that this evidence was objected to upon the ground that it was immaterial and collateral to the issue, but it was pertinent to the question as to whether Koehler himself considered the agreement to be binding and in force at the time the notes in question were given, and the jury had a right to infer, unless the notes were given in pursuance of the secret agreement, from the fact of the subsequent negotiations and transactions between the president of the plaintiff and the defendant Koehler that this compromise agreement had been abandoned, because, unless the secret agreement existed, and unless these notes were given in pursuance thereof, there is no reason whatever for their existence unless the compromise agreement had been abandoned, and Koehler was endeavoring to settle up his affairs independent of the scheme contained in such compromise agreement.

The jury having found, upon a conflict of evidence, that there was no such secret and fraudulent agreement as was claimed by the defendant, naturally came to the conclusion that credit was to be placed upon the evidence of the witnesses for the plaintiff, rather than upon the witness for the defendant, who had already been discredited in reference to the existence of this secret and fraudulent agreement. It was necessary for the defendant to establish, by a preponderance of evidence, the existence of this fraud. It was not to be presumed, nor to be found upon doubtful evidence.

The exceptions taken to the admissibility of evidence, and also to the refusals to charge, and to the charge itself, present no questions that need any extended discussion. The questions involved were presented with distinctness to the jury, and there was no opportunity for their going astray as to the issues involved.

The exception to the question put by the plaintiff’s counsel to the witness Charles Bard, is not well taken. The fact that the words “secret agreement” did not enter into the conversation which was then being inquired into was not at all material because it was an agreement which the defendant, in his pleadings, had characterized as secret and fraudulent, and which, in its very nature, is secret, and was so understood to be by the witnesses, and when it was referred to as a secret agreement in the question, although perhaps the word secret may not have been used before, it still conveyed no erroneous impression either to the jury or to the witnesses. A party has a right upon examination of a witness contradicting another in regard to the language used by him to use the language which has been before testified to or the substance thereof in the putting of the question in answer to which the contradiction is expected.

The criticism that the witness could not give the details of the‘conversation,, and that therefore he should not be allowed to testify that' no such conversation took place, does not seem to be well founded, because a man may very well fail to remember in detail what transpired at a particular conversation, have a distinct recollection as to whether or not he had entered into a fraudulent combination with his debtor at that time to defraud his other creditors.

There do not seem to have been any errors committed in the trial of this action which call for a reversal of this judgment, and it should, therefore be affirmed with costs.

Bartlett and Daniels, JJ., concur.  