
    George Leask and Others, as Executors, etc., of Hudson Hoagland, Deceased, Respondents, v. Charles F. Hoagland and Others, Defendants, Impleaded with Ellen B. Hill and The Third National Bank of Buffalo, Appellants.
    First Department,
    April 7, 1911.
    Evidence — presumption as ¡to gift — checks drawn by decedent — memoranda made in ordinary course of business — inferences.
    It is presumed that unexplained payments not made to discharge an antecedent indebtedness are loans rather than gifts. ■ .
    Where, in an action by expeutors to determine the indebtedness óf a. legatee to the testator at the time of his death and to establish .their-right'to offset such indebtedness against the legacy, it appears that the legatee was an impecuniouL nephew of the testator who had loaned him money on a note, and the plaintiffs merely put in evidence the note and checks subsequently drawA by the testator to the nephew’s order and indorsed by the payee, and show that, prior to making the note, similar checks nearly equaling the amount had been drawn by the testator, and it is established that the cheeks in evidence were not given in payment of an antecedent indebtedness, the amount thereof should be . included with the amount of the nóte in determining the' debt of the legatee to the estate.
    Entries and memoranda made by persons since deceased in the ordinary course of professional and <j>ffieial employment are competent secondary evidence of the facts contained therein, where those making them had no interest to misrepresent Thus, entries upon the stubs the facts. • of the cheeks given by testator to his nephew
    entries upon the stubs of the cheeks given by testator to his nephew prior to the date of the noije, which were, made by' the testator’s confidential clerk, who has since died, are competent evidence, in the absence of the checks, to show that on the days .indicated testator drew cheeks for the specified-amounts to-the nephew’s order, from which follows the presumption that on thosje days he paid the amount stated to his nephew, and it maybe inferred that these sums of money were loans and not gifts. j
    Ingraham, P. J., and Laughlin, J., dissented, with opinion.
    ' Appeal by the defendants, Ellen. B. -Hill and another, from. a judgment of the Suprjeme Court in favor of the plaintiffs, entered in the office of the clerk of the county of New Yoik ón the 21st day of April, l9l|o, upon the decision of the court rendered after a trial át the ¡New York Special Term.
    
      
      W. C. Carroll, for the appellants.
    
      J. Hampden Dougherty, for the respondents.
   Scott, J.:

Appeal by certain defendants from a judgment in favor of plaintiffs' upon a second trial of the action, a former judgment, also in plaintiffs’ favor, having been reversed. (136 App. Div. 658.)

The plaintiffs are. the executors of the last will and testament of Hudson Hoagland, deceased, and the appellants are assignees of Charles F. Hoagland, who was a nephew and one of the residuary legatees mentioned and provided for in the residuary clause of the said will. The purpose of the action is to determine the amount of the indebtedness of said Charles F. Hoagland to said Hudson Hoagland on the date of the death of the latter, and to establish plaintiffs’ right to offset such indebtedness, when ascertained, against the share or interest of said Charles F. Hoagland in said residuary estate.

The indebtedness which plaintiffs claim to be entitled to offset is evidenced, as they allege, by a promissory note for $10,000, dated March 1, 1901, made by Charles F. Hoagland to. the order of Hudson Hoagland, payable one day after date, and by certain checks drawn at different dates and for various amounts aggregating $5,108.45, drawn by Hudson Hoagland to the order of Charles F. Hoagland and indorsed by him: No objection is made, or could well be made, to the allowance as an offset of the indebtedness represented by the note of $10,000, with the appropriate interest :thereon, and the controversy turns upon the allowance, as of an indebtedness, of the sum represented by the checks given to Charles F. Hoagland after the day upon which the note is dated. There is but little evidence in the case, except that which is documentary, for Charles F. Hoagland’s mouth was closed respecting any personal transactions with his uncle. We are, therefore, compelled to fall back in the main upon the presumptions to be drawn from the documents. The appellants contend that, in the absence of any direct proof, the presumption is that the checks were given in payment of an antecedent debt from Hudson Hoagland to Charles F. Hoagland (Nay v. Curley, 113 N. Y. 575), or if not, that they were given as gifts to aid a needy relative.* The plaintiffs, on-the other hand, insist that the. circumstances of the parties necessarily rebut the presumption that Hudson Hoagland was indebted to his nephew,! and gave the checks in payment of such indebtedness, and ¡that all the circumstances rebut the presmnption that the checks represent gifts and point convincingly to the conclusion that they represent 'loans. They rely in . part upon the rule that jhe law will not presume a gift, if any other presumption is open (Grey v. Grey, 44 N. Y. 552), and also upon the course of titisiness between the uncle and nephew, which, as they say, establishes the fact that the uncle was in the habit of making loans to the nephew. The improbability that these checks were! given in payment of a debt is fully established.by the evidence, and was stated with much clearness and' force by the learned justice who presided at the first trial of this action (64 Misc. Rep 156), and the learned justice who presided at the second trial arrived at the same conclusion. It is not necessary to repeat the argument here. This.leaves open for’ discussion the question whether the checks are to be presumed to < have been given as a loan or as a gift. In support of their contention that they must bje taken as having been' given by way of loan, the plaintiffs, inj addition to insisting that the law will presume a loan rather than a gift when there is no evidence either way, undertake to show that the note for $10>000 was given to represent prior loans representing that sum or very near it, which Hudson Hoagland had made to his nephew, by .giving him checks from time to time and for various amounts. To sustain this theory they Undertake to show that from time to time, commencing on January 30, 1899, and ending.on March 1, 1901 (the date of the' note), Hudson Hoagland had given checks aggregating $9,900 to Charles F. ■ Hoagland, the last check, that of March 1, ¡1901, being for $6,109. They insist that in the absence of any other discoverable consideration for the note, the'se checks must be deemed to have constituted its consideration, and henJe they argue .that a course of dealing has been established between.Hudson Hoagland and. his nephew which indicates that whep. .the former gave checks to the latter they represented loans and not gifts. This, as they insist, strengthens the legal presumption upon which they also rely. In our opinion there is much force in this argument if it can be said that there was competent proof that Hudson Hoagland did give to his nephew the checks which are said to have constituted the consideration for the note. The checks themselves were not produced, but the plaintiffs did produce stubs or counterfoils stating the amount, date and name of the payee of each check. The question is whether these were legal evidence of the making of corresponding checks. We think that they were. All the stubs, as well as all of the checks representing later payments, were in the handwriting of one George A. Aitken, who was Hudson Hoagland’s bookkeeper and confidential clerk. He kept all of Hoagland’s books of account including his checkbook. He is dead but his handwriting was satisfactorily proven. It is a well-known custom of business men to inscribe upon the stub or counterfoil- of each check issued a note of its date, amount and the name of the payee, with, not infrequently, a memorandum of the propose for which it is issued. We think that the entries made* by Aitken upon the stubs or counterfoils were competent evidence that on the days indicated Hudson Hoagland drew checks for the amounts specified to the order of Charles F. Hoagland, from which would follow the presumption that on these days Hudson Hoagland paid Charles F. Hoagland these amounts. This is in pursuance of the well-established rule that entries and memoranda made by persons, since deceased,. in the ordinary course of professional and official employment are competent secondary evidence of the facts contained in them, where they had no interest to misrepresent or misstate them. (Livingston v. Arnoux, 56 N. Y. 518.) We think, therefore, that the inference may fairly be drawn that it had been the habit of Hudson Hoagland, prior to March 1, 1901, to pay to his nephew from time to time sums of money which weré given by way of loans, and not as gifts. This fact strengthens, or, at the least, does not weaken the presumption which the law would draw, that unexplained payments, not made upon- consideration of an antecedent debt, will be presumed to have been loans, rather than gifts.

It follows that the judgment appealed from must he . affirmed, with costs. I <-

•Clarke and Miller, JJ., concurred; Ingraham, P. J., and LahghlIn, J., dissented, j

Ingraham, P. J. (dissenting):

As stated hy Judge Andrews in Nay v. Curley (113 N. Y. 575), “ it is undoubtedly the general rule that, in the absence of explanation, the presumption ■ arising from , the delivery of a check is that'it was delivered in payment of a debt, and not as a loán. * * * But a check may represent a loan or a gift, or money of the drawer, to be applied by the drawee to the use of the former as his agent cjr otherwise. Starting from this generalrulé, I do not think that the evidence justified ah inference that the checks, in question represented loans for which the payee of the checks was j liable to the testator. In the first place, I think the stubs of the checks were not competent evidence to prove the intension of the testator when the checks • were given, or the character of the transaction represented by them. It was not shown that the person making the entries had any knowledge of the relations between the testator and his nephew, or that he did more than write out the checks; and his characterization of the intention of the testator, so far as appears, created no inference as to the nature of the transaction, and certainly was noj evidence as to the actual transaction between the testator and ¡his nephew. Eliminating this testimony, we have the fact ¡that on March 1, 1901,'the testator gave to his nephew one suijn of $6,100, and at the same time tvolc. from, him á note for $10,0p0, and as to the amount of that note the nephew has been held responsible. The testator subsequently paid to his nephew, by checks which were introduced in evidence, various sums of money representing the amount now, in controversy; but 'the case, it seems to me, is- entirely devoid of any evidence t'o show that these checks were hot giveh either as a gift or nkoney of the testator, to be applied by his nephew for the use ¡of the testator. The fact that -the nephew was impecunious! and that the testator had, prior to March" 1, 1901, assisted him by loaning, him money, does not justify an inference that the moneys subsequently advanced were loans, and the fact that the testator took a note for the money that represented loans, and did not ask for or receive a note for the subsequent payments, Would seem to justify an inference that they were not intended as loans or advancements.

I do not think, therefore, that the judgment was sustained by the evidence, and, therefore, it should be reversed.

Laugi-ilin, J., concurred.

. ‘ Judgment affirmed, with costs.  