
    AARON B. COHU, as Executor, etc., Appellant, v. JOSEPH HUSSON, Respondent.
    Payment, evidence of when inadmissible—Exchange notes not accommodation notes.
    
    When the issue is as to whether a note was an accommodation note, made without consideration and of no legal inception, evidence of payment is inadmissible.
    Exchange notes are not accommodation notes, each constitutes a consideration for the other, and each has a legal inception for a valuable consideration.
    Before Sedgwick, Ch. J., and Freedman, J.
    
      Decided August 19, 1889.
    Appeal by plaintiff from judgment dismissing the complaint upon the merits, upon a direction of the court at trial term, that the jury find a verdict for defendant.
    This action is brought on a promissory note made by Joseph Husson, the defendant, dated December 11, 1878, for $750, and payable to the order of Henry S: Cohu five months after date.
    By transfers made subsequent to the maturity of the note, the title to it became vested in Joseph S. Cohu, and he having died, Aaron B. Cohu, as executor of his will, was substituted as plaintiff.
    The answer set up, byway of counterclaim and set off, a promissory note made by Henry S. Cohu, dated June 1, 1878, for $1,000, payable to the order of Joseph Husson (the defendant) six months after date.
    The reply denied that the note set forth in the counterclaim had any legal inception, and alleged that it was one of a series of notes given to the defendant without consideration and purely for the purpose of accommodating defendant.
    
      Plaintiff read in evidence the note sued on, proved his title thereto and rested. Defendant then read in evidence the note set forth in the counterclaim, also a note made by defendant to Henry S. Cohu, bearing even date with the note set forth in the counterclaim, for a like sum and payable at the expiration of a like period, and proved that defendant • had paid it, and rested.
    The plaintiff then read in evidence a note made by Henry S. Cohu, dated December 11, 1878, for $750, payable to the order of defendant four months after date, and offered in evidence three notes made by defendant to Henry S. Cohu, one dated November 12, 1877, for $1,000 at three months, one dated June 17, 1878, for $400, at four months, and one dated November 14, 1878, for $1,000, at six months, all of which were excluded. He then offered to prove that defendant had promised to pay the last above three notes, and that he had subsequently settled with regard to them ; also, that he never claimed any indebtedness in his favor from Henry 8. Cohu or his estate ; also, that he never proved any claim against the estate of Henry 8. Cohuall of which was excluded. Plaintiff also offered in evidence two notes made by Henry S. Cohu to the defendant, and dated December 11, 1878, for $750, at five months, the other dated February 21, 1879, for $700, at four •months, also a note by defendant to Henry S. Cohu, dated February 15,1878, for $500, at four months, all of which were excluded. Plaintiff then offered to show that defendant had acknowledged his indebtedness upon the notes sued on, and promised to pay it, which was excluded. Plaintiff then offered in evidence two judgment rolls, one .of a judgment recovered in the city court by Joseph Cohu and others, as administrators, against this defendant, upon a note for $700, dated February 21,1879, made by this defendant to Henry S. Cohu; the other of a judgment recovered in the court of common pleas by Joseph S. Cohu and others, as adminstrators, against this defendant, upon a note made by this defendant to Henry S. Cohu, for $750, dated December 11, 1878, payable five months after date, both of which were excluded. Exceptions to these various exclusions were duly taken. Plaintiff proved that Henry S. Cohu and the defendant were in the habit of exchanging notes.
    Plaintiff moved that he be allowed to go to the jury on the question as to whether the notes set forth in the answer was given for the accommodation of. defendant or otherwise. The motion was denied and an exception taken.
    The court directed a verdict for defendant, and plaintiff excepted.
    Judgment was entered on this direction whereby it was “ ordered, adjudged and determined, that plaintiff take nothing by his claim, but that his 'complaint be, and the same is, hereby dismissed on the merits thereof; and further ordered and adjudged, that the defendant, Joseph Husson, do recover from the plaintiff, as executor of the last will and testament of Joseph S. Cohu, deceased, the sum of $111.85, costs of this action, and have execution therefor.”
    From this judgment plaintiff appeals.
    
      Abram Kling, attorney and of counsel, for appellant, argued.
    I. It has been determined that a party is entitled to show a state of facts inconsistent with the indebtedness claimed by the defendant, and the improbability that the note represented an actual bona fide claim against the plaintiff. Cohu v. Husson, 13 Daly, 334 ; Sawyer v. Warner, 15 Barb. 285 ; Nicholls v. Von Valkenberg, 15 Hun. 230 ; Bean v. Tonnelle, 94 N. Y., 381. Under these authorities the fact that Joseph Husson continued to remain the debtor of Henry S. Cohu for large sums of money, both before and after the giving of the note set forth in the answer as a counterclaim, coupled with the exchange of notes, which was shown by the proof, made it a question of fact for the jury as to whether from these circumstance's there was a bona fide indebtedness against the estate of Henry S. Cohu; and which the court should have allowed the jury to determine.
    II. The plaintiff established that Joseph Husson was the debtor of Henry S. Cohu at the time the alleged note set forth in the counterclaim was given and subsequent thereto, and which is a state of facts inconsistent with a valid obligation against the plaintiff’s intestate ; and the execution of the note dated Nov. 14, 1878, for $1,000, made after the note set forth in the counterclaim was delivered, was evidence that Husson was the debtor of Henry S. Cohu at' the time he sought to recover on said note set forth in his answer. Lake v. Tyson, 6 N. Y. 461 ; Duchess v. Porter, 63 Barb. 15 ; DeFreest v. Bloomingdale, 5 Den. 304; Sherman v. McIntyre, 7 Hun, 592; Treadwell v. Abrams, 15 How. 219; Fairchild v. Dennison, 4 Watts, 258. As the note which the court refused to allow in evidence was dated November 14, 1878, for $1,000, which was after the note set forth in the answer as a counterclaim, it was presumptive evidence that Henry S. Cohu was not, on the 14th day of November, 1878, the- debtor of Joseph Husson.
    III. The court erred in its rulings in the exclusion of evidence as follows :
    The plaintiff sought to show that the only indebtedness existing between the plaintiff and the defendant was upon the note set forth in the complaint, and that Joseph Husson never at any time made any claim of any indebtedness upon the note set forth in his answer as a counterclaim. Plaintiff further offered to show that the defendant admitted his indebtedness upon the note mentioned in the complaint; and all of which the court excluded. In Stimson v. Vroman, 99 N. Y. 75, the court held that the silence of a party as to whether he had a claim when a demand was made upon him was admissible as a circumstance for the consideration of the jury.
    In Bean v. Tonnelle, 94 N. Y. 381, the court held that the fact that a party makes no claim for an indebtedness which he seeks to recover during any period of time in which he claims to be the holder thereof, is a circumstance showing that the demand has been satisfied. Under these circumstances, if Mr. Husson made no claim against the estate of Henry S. Cohn upon the note on which he now seeks to recover,, and never claimed a set-off when the indebtedness which he admits to be due was being pressed, it was properly admissible in connection with the other evidence for the consideration of the jury, and its exclusion was error.
    
      Edward P. Wilder, attorney and of counsel, for respondent.
   By the Court.—Sedgwick, Ch. J.

The principal question of the appeal relates to a defence by way of counterclaim, and whether, on the whole evidence, it was incontrovertibly sustained.

The defence was, what in its nature is set-off, and this under the Code is pleaded as a counter-claim. The set-off as claimed, by the answer, was that one Henry S. Cohn had delivered to defendant, for valuable consideration, his promissory note for $1,000, but had neglected to pay it. This defence was to be sustained if it was proved, and unless the defence of the reply was sustained on the part of the plaintiff. The reply was. that the note in the answer did not have a legal inception, and that the note was one of a series of notes given to the defendant without consideration and purely for the purpose of accommodating defendant.

The defendant produced the note specified in his answer, and proved it was made by Henry S. Cohu.

The law attached to this a presumption that it had been given for valuable consideration, and the defendant unnecessarily made specific the consideration on which he relied to sustain the note, by proving that the defendant had made his note to Henry S. Cohu of the same date and amount as the note of the answer.

On the pleadings, the only defence open to the plaintiff was want of consideration. There was no defence of payment or of anything equivalent. He produced, and offered to give as testimony, earlier ■ notes made by Henry S. Cohu to the order of the defendant; which, after being delivered to the defendant had matured and been paid by Henry S. Cohu. These were properly rejected, because, ' without other evidence the presumption would be, that they represented debts due by Cohu, the maker, to Husson, the defendant. There was offered by the plaintiff no other evidence on this subject, excepting it was proved by one of their witnesses that Cohu and Husson, the defendant, were in the habit of exchanging notes. These notes, and among them those that the court did not permit to go in evidence, if they were a part, were not accommodation notes, and they had an inception for valuable consideration, that is, the notes given in exchange were reciprocal considerations, as a promise for a promise is a mutual consideration. At the most the various notes, on the one part, would furnish grounds of actions against those who made them, but would not tend to show that a subsequently exchanged note was without consideration.

There was no evidence offered on the trial which, if believed by the jury, would justifying it in be- . lieving that there was no consideration for the note set up in the answer.

The judgment must be affirmed, with costs.

Freedman J,, concurred.  