
    Henry Frederick Colborn, Appellant, v. B. L. Arbecam, Respondent.
    (Supreme Court, Appellate Term,
    June, 1907.)
    Negotiable instruments — Actions: Evidence —r Sufficiency; Presumptions and burden of proof — As to consideration and-title.
    Where allegations of a complaint, in- an action .by the assignee of a negotiable promissory note against the maker, that before maturity the payee endorsed and delivered the note for value and that after maturity the endorsee assigned and delivered it for value to the plaintiff, are denied by the answer, and a witness for plaintiff testifies that the signatures to the note are those of the maker, payee and endorsee, and also testifies that a written assignment under seal was executed and acknowledged by the endorsee and delivered to the plaintiff in the presence of the witness, such proof, coupled with the presumptions of law arising under the Negotiable Instruments Law (L. 1897, ch. 712), entitles the plaintiff, in the absence of evidence to the contrary, to recover.
    A dismissal of the action on the merits for failure of proof was error, as there was no such failure as would preclude a recovery as matter of law, and it is only where a prima facie case is made and proof offered to rebut it that the merits are involved.
    
      Appeal by the plaintiff from a judgment of the City Court of the city of New York dismissing the complaint.
    James T. Crane (Myles A. Walsh, of counsel), for appellant.
    Oscar B. Thomas, for respondent.
   Goff, J.

The action was brought by an assignee of a promissory note against the maker. It was alleged in the complaint that defendant made the note; that, before maturity, the payee indorsed and delivered it for value and that after maturity the indorsee assigned and delivered it for value to plaintiff. Defendant in his answer denied the indorsement and delivery for value and also denied the assignment and delivery for value. On the trial, plaintiff’s witness, on being handed a note, testified that he was familiar with all the signatures; that it contained those of the maker, payee and indorsee. He also testified that a paper handed him was signed and sealed by the indorsee, acknowledged by him to the witness (a notary public) and delivered to plaintiff in his presence. The note and the paper were admitted in evidence. The note on its face is a negotiable promissory note; and the paper is an assignment of the note signed, sealed and" acknowledged, transferring for a valuable consideration the note to plaintiff. Plaintiff rested without further proof. Defendant moved to dismiss the complaint for failure of proof, and judgment was rendered dismissing the action upon its merits. The appellant raises two questions: First, that he had proved a prima facie case and, secondly, that, even if he had not done so, there should have been a nonsuit instead of a dismissal upon the merits. Respondent contends that, in view of the denials in the answer, there was a failure of proof and the judgment was proper. Plaintiff’s case rested on two classes of proof, fact and presumption. The facts were, (1) the note; (2) the signing by the maker; (3) the .indorsement by the payee, and (4) the assignment by the payee to the plaintiff. The presumptions were, (1) the note was a negotiable promissory note (Neg. Inst. Law, § 320); (2) it was deemed prima facie to have heen issued for a valuable consideration (Id., § 30) ; (3) the maker, payee and indorsee whose signatures appeared on the note were deemed prima facie to be parties thereto for value (Id.) ; (4) the payee and indorsee were deemed prima facie to be holders in due course (Id., § 98) ; (5) the negotiation from the payee to the indorsee was deemed prima facie to have heen effected before the note was overdue (Id., § 75) ; (6) the liability of the maker and indorser to the indorsee was conclusively presumed (Id., § 35) ; (7) a valid and intentional delivery by the indorsee to the plaintiff was presumed (Id.); and (8) the assignment under seal from the indorser to plaintiff imported consideration and presumably vested the title to the note in plaintiff. Sheridan v. Mayor, 68 N. Y. 30; Hays v. Hathorn, 74 id. 486. The defendant claimed there was failure of proof because in his answer he denied indorsement and delivery of the note and also its assignment to plaintiff for value. Sehnitzer v. Gordon, 28 App. Div. 344, is cited as conclusive of this question. An examination of the case on appeal as well as of the opinion convinces me that the ruling there was based on the pleadings and evidence and its scope should accordingly be so limited. In that case there was no evidence of indorsement or of value in relation to the particular note, for many notes were in controversy; and it was held that plaintiff, having gone to trial on the pleadings, was bound to give testimony on the issues raised. But here plaintiff did give testimony proving the signature of the maker, indorser and indorsee (the latter’s name being on the note); and the law presumed liability, negotiability and value. Likewise evidence was given of the execution and delivery of the assignment to plaintiff, and the law presumed consideration and title. It may be observed here that the action in the Schnitzer case was commenced and litigated before the negotiable Instruments Law went into effect, and if its concise definitions and precision of language had been before the court it is not at all improbable but that the decision would have been seriously affected. The plaintiff’s proof, coupled with the presumptions of law, entitled him, in the absence of any evidence to the contrary, to a recovery. It was error to dismiss the action on the merits; even if there was failure it was not such a failure of proof as would clearly show as matter of law the plaintiff could not recover. The lacking proof was of a character that could he supplied on another trial, or plaintiff might have tested the validity of a conjunctive denial or of a negative pregnant in the answer. In Martin v. Cook, 14 N. Y. Supp. 329; affd., 142 N. Y. 654, it was said: “Where a complaint is' dismissed because of failure of proof, the dismissal is not upon the merits, because the merits are not involved, the complaint being dismissed because of the want of merit in the proof. It is only where a prima facie case is made and proof offered to rebut it, that the merits are involved.”

On each of those two grounds the judgment should he reversed and a new trial ordered, with costs to appellant to abide the event.

Gildersleeve and Fitzgerald, JJ., concur.

Judgment reversed and new trial ordered, with costs to appellant to abide event.  