Joel S. Oatman v. John Taylor and others

Joel S. Oatman v. John Taylor and others. The defendants executed nine written instruments, variously dated from June 10, 1852, to Jan. 10, 1856, and all maturing July 10, 1856, by which they jointly and severally promised to pay to' the order of B. $700, with interest. Each of these instruments (except one) purported, on its face, to have been given for six months’ interest on a loan made by B. according to the conditions of a certain agreement made between the parties at the time of making the loan. On the trial, the plaintiff (who sued as indorsee) produced the instruments and proved the indorsements of B. The defendants moved to dismiss the complaint as to all the instruments except one, on the ground that the plaintiff .had given no proof that the conditions of the agreement mentioned therein had been complied with. The motion was denied. The defendants then proved that the instruments were given in pursuance of an agreement signed by B., and dated July 10, 1851. It recited that B. had received from the makers $60,000, par value of a certain stock, and the joint and several note of the defendants for $20,000, and interest, payable half-yearly; B. having paid the defendants $20,000, upon the agreement that at the expiration of five years B.- should have the election either to hold the stock and cancel the note and the interest notes, which it was agreed should be given for the interest on said $20,000, each six months, or he should be at liberty to enforce the payment of said note; and on payment of said note, and the several interest notes, the stock was to be re-transferred to the defendants; and it was agreed that joint and several notes for the interest, bearing interest, should be given as each semi-annual payment of interest fell due: Held, 1. That no question having been raised, on the trial, as to whether the plaintiff could obtain title to the instruments by the mere endorsement and delivery thereof by the payee, none could be raised on appeal. 2. That payment was a condition precedent to B.’s obligation to re-transfer the stock, and¿ to the defendants’ right to have it, should the notes be enforced. That his right to enforce the notes, or to cause them to be enforced, was absolute and unconditional, and he was in no respect bound either to give notice of his election, or to offer to re-transfer the stock, to enable himself to enforce the notes. 3. That evidence of the pledge of the stock by B. to a bank, as collateral, • before the maturity of the notes, and that it was still held in pledge, would not prove, or tend to prove, that he had elected to hold and.take the stock absolutely, so as to entitle the makers to have the notes cancelled according to the agreement. 4. That by transferring the notes, absolutely, to a third person; B. had necessarily elected to have them enforced, and would be bound to re-transfer the stock to the defendants as soon as they should have paid the notes. But that the notes were not cancelled, and nothing which was proved nor the offer to prove that B. had given no notice of his elec-, tian, under the contract, nor offered to re-transfer the stock, constituted any defense to the action. The action was brought upon nine several notes or instruments1 in writing, of which the following are copies: $700. Albany, Jan. 10, 1852. Four years and six months after date, we jointly and severally promise to payPhineas T. Barnum, or order, the sum of seven hundred dollars, with interest at the rate of seven per cent, per annum, for value received, it being six months’ interest on a loan of said Barnum, and payable at the American Museum, in the city of New York. {Signed.) John Tatlob, H. B. Hewett, [Endorsed.) William Beach, P. T. Baencm. John C. Beach. $700. Albany, July 10, 1852'. Four years after daje, we jointly and severally promise to pay to the order.of P. T. Barnum, seven hundred dollars, at the American Museum, in the city of New York, it being for interest on a loan made of said Barnum according to the conditions of a certain writing' dated July 10th, 1851. {Signed.) John Taylob, H. B. Hewett, {Endorsed.) William Beach, P. T. Babnum. John 0. Beach. $700. Abany, Jan. 10, 1853. Three years and six months after date, we jointly and severally promise to pay to the order of P. T. Barnum, at the American Museum, New York, seven hundred dollars, for value received, with interest.' This note is given for six months’ interest, according to the conditions of a certain agreement made between the subscribers and the said Barnum. . ■ • • (Signed.) John Tatlob,' ■ H. B. Hewett, {Endorsed.) William Beach, P. T. Babnhm. John C. Beach. $700. Three years after date, we jointly and severally promise to pay to the order of P. T. Barnum seven hundred dollars, with interest, at the American Museum, in the city of New York. This note is given for six months’ interest on money borrowed, according to the conditions of a certain writing made by and between all the parties.at the time of loaning. Albany, July 2d, 1853. (Signed.) John Taylor, John C. Beach, (.Endorsed.) H. B. Hewett, P. T. Barnum. William Beach. $700. ■ Albany, Jan. lsi, 1854. Two years and six months "after date, we jointly and severally promise to pay to the order of P. T. Barnum seven hundred dollars, at the American Museum, New York, with interest. This note is given for six months’ interest on a loan made by us to said Barnum, according to the conditions of a certain stipulation made between the parties at the time of making the loan. (Signed.) John Taylor, H. B. Hewett, (Endorsed.) ' John C. Beach, P. T. Barnum. William Beach. $700. Albany, July 1st, 1854. Two years after date, we jointly and severally promise to pay to the order of P. T. Barnum, at the American Museum; in the city of New York, seven hundred dollars, this being for six months’ interest on a loan made according to the conditions of a contract between the said Barnum and the subscribers. This note to bear interest at the rate of seven per cent, per annum. (Signed.) John Taylor, H. B. Hewett, (Endorsed.)' William Beach, P. T. Barnum. Jno. C. Beach. $700. Albany, Jan. 10th, 1855. Eighteen months after date, We jointly and severally promise to pay to the order of P. T. Barnum seven hundred dollars, at the American Museum, in the city of New York, for value received, with interest, according to the conditions of a certain agreement in writing between the said Barnum and the makers of this note. {Signed.) John Taylor, H. B. Hewett, William Beach & Co. 700. Albany, July 10th, 1855. Twelve months after date, we jointly and severally promise to pay to the order of P. T. Barnum, seven hundred dollars,, at the American Museum, in the city of New York, for value received, with interest, according to the conditions of a certain agreement in writing between the said Barnum and the makers of this note. {Signed.) John Taylor, H. B. Hewett, {Endorsed.) William Beach & Co. P. T. Barnum. 700'. Albany, January 10th, 1856. Six months after date, we jointly and severally promise to pay to the order of P. T. Barnum, at the American Museum, in the city of New York, seven hundred dollars, for value received, with interest according to the conditions of a certain agreement in writing made between the said Barnum and the makers of this note. {Signed.) . John Taylor, ' H. B. Hewett, {Endorsed.) William Beach & Co. P. T. Barnum. The defense was a denial of the indebtedness, and an averment that the several notes were- given to Barnum, the payee, under a contract between the defendants and Barnum, of which the plaintiff had notice, and that by the terms of said contract and the acts of Barnum, the said notes had become and were cancelled. Upon the trial at the circuit the plaintiff proved the endorsement of Barnum upon each of the notes, and rested. The defendants, by their counsel, thereupon moved to dismiss the complaint as to all the notes except the first, on the ground: 1st. That as to said notes the.complaint did not contain facts sufficient to constitute a cause of action. 2d. That the plaintiff had not proved that the condition of the contract mentioned in said notes had Been complied with. The court overruled the motion and the defendants excepted. The defendants then proved that the notes in question were all given under and in pursuance of a contract in the words and figures following: “ Phineas T. Barnum hereby acknowledges to have received from the makers of the note hereinafter named, sixty thousand dollars (nominal par value) of the stock of the Deep Biver Mining and Transportation Company, and also the joint and several notes of John Taylor, William Beach, John C. Beach and Henry B. Hewett, for twenty thousand dollars, with interest at the rate of seven per cent, per annum from date, payable half-yearly; the said Barnum having paid the said drawers of the said note for said company said sum of twenty thousand dollars in cash, upon the agreement that at the expiration of said five years said Barnum shall have his election either to hold and take the said stock and cancel the said note and the interest notes which it is agreed shall be given for the interest on the said twenty thousand dollars, each six months, or he shall be at liberty to enforce the payment of said note, and on payment of the said note and the several interest notes, the said stoch shall be re-transferred to the said persons; joint and several notes for said interest, carrying interest, shall be given by the makers of said note as each semi-annual payment of interest falls due. “ Phineas T. Barnxjm. “New York, 10th July, 1851.” The defendants then offered to prove that Barnum did not notify them of his election under the contract, before the commencement of this action; and, also, that Barnum never offered to transfer back the stock mentioned in the contract. They also offered to prove that Barnum, prior to the maturity of the notes in question, pledged the said stock described in the contract to the Pequ'onock- Bank at Bridgeport, Conn., as collateral, and that said bank still held the stock in pledge. These offers were severally overruled, and the defendants by their counsel duly excepted. The evidence being closed a verdict was rendered by the jury for the amount of the several notes, principal and interest. A judgment was entered upon the verdict, and the defendants appealed to the general term of the first district. The judgment was affirmed by the general term and the defendants brought their appeal to this court. John H. Reynolds, for the appellants. I. The court erred in refusing to dismiss the complaint as to all the instruments upon which the suit was brought, except the one dated January 10, 1852, and first described therein. 1. All the instruments, except the one dated January 10th, 1852, bore upon their face, and as a part of the obligation, that they were made at the time or subsequent to another .contract between the same parties and mentioned therein, and that the obligation to pay was to be enforced according to the conditions of such other agreement, and not otherwise. 2. It was therefore incumbent upon the plaintiff to show what the conditions of the agreement referred to were, and that such conditions had not been performed, or in other-words, that the defendants had not performed their obligations according to the conditions of the contract referred to. 3. The instruments sued on and the contract referred to therein formed but one agreement, and the plaintiff could not recover except upon showing a breach of the whole contract taken together and as a whole. 4. "And it appearing by the agreement that the obligations sued on were not absolute and unconditional promises to pay, but subject to the conditions and contingency mentioned, they were not promissory notes. (Story on Notes, sections 1, 2, 22, 23; Bayley on Bills, ch. 1, sec. 6; Story on Bills, sections 42, 48; Chitty on Bills, ch. 5, p. 154; Curtiss v. Fancourt, 5 T. R. 482; Palmer v. Pratt, 2 Bing. R. 185; Van Wagner v. Terrett, 27 Barb. 181; Seacord v. Burling, 5 Denio, 444.) 5. They did not, therefore, pass to the plaintiff by delivery or endorsement, and he showed no title, as no proof that he had purchased these things in action of Barnum, was given on the trial. 6. And the rules applicable to bona fide holders of commercial paper cannot be invoked in aid of the plaintiff. II. By the contract of which the obligations mentioned in the complaint formed a part, Barnum had of the defendant stock in a mining company representing $60,000 of its capital, which lie was at liberty to retain for five years, and at the expiration of that period he was to have his election to retain the stock absolutely and .cancel the obligations given for the loan and the interest, or enforce the payment of the notes, in which case the stock was to be re-transferred to the defendants. 1. Upon the trial no proof was given by the plaintiff of any election by Barnum, but the defendants offered to prove that he had not given notice of any election, and that previous to the maturity of the notes he had transferred the stock to the Pequonock Bank, and that -it was held by it at the time of the trial, and this proof the court rejected. 2. Under this contract Barnum was bound to make his election immediately on the expiration of the five years, or he was bound to keep the stock and give up the notes, or the right of election is with the defendants. (Sage v. Hazard, 6 Barb. 179; Eno v. Woodworth, 4 Comst. 249; McNitt v. Clark, 7 J. R. 465.) 3. The stock having been transferred to him upon the condition that at the expiration of five years he might if he should so elect re-transfer it to the defendant and recover «the money paid for it, he was bound to promptly make his election at the appointed time, or lose his right to return the stock and recover the purchase money. (See cases supra.) ' 4. The commencement of a suit by Barnum upon the notes several months after the expiration of the five years would not be deemed such an election as would entitle him to recover on the notes, and the commencement of a suit by Oatman, does not, in the remotest degree, tend to prove any election by Barnum. As the case stands the law adjudges that Barnum determined to keep the stock. 5. By the very words of the agreement he was to be “ ai liberty to enforce the payment of the note,” only in case of his election to do so at the time named. 6. It appeared, or the defendant offered to prove, that Barnum could not control the stock himself at the time of trial as he had long before transferred it, and this furnishes the very best evidence of his election to retain it absolutely. Although the agreement is that he is to return the stock on payment of the notes, he was bound to tender the stools when payment of the notes was demanded, 7. Or the plaintiff was bound to show on the trial that Barnum was able to return the stock. The defendants were not under any circumstances bound to pay the notes when it appeared that the stock was beyond Barnum’s control. 8. It is submitted that under such a contract no court would compel, the defendants to pay these notes, unless as a part of its judgment, provision was made for the return of the stock by Barnum to the defendants; and when.it was offered to be shown that Barnum had put it out of his power to return the stock, the evidence should have been received and judgment given for the defendants. The judgment of the supreme court should be reversed and a new trial ordered. John K Porter, for the respondent. 1. The motion for a partial dismissal of the complaint was properly denied. 2. The plaintiff was a bona fide holder of the notes for value, by transfer before maturity. (Pratt v. Adams, 7 Paige, 616; James v. Chalmers, 2 Selden, 209, 216.) 2. The defendants admitted that the action was sustained on the first note, and they were, therefore, not entitled to a non-suit, even if there had been a defect of proof as to the other notes. II. The only distinction the defendants at any time suggested on the trial, was between the. first note and the other eight as a class; and they were equally, with the first, negotiable promissory notes. 1. The parties, for their own convenience, earmarked the notes, by stating that they were given for interest, according to the conditions of an antecedent contract; but the legal effect of a note is in .no manner varied or impaired by stating a lawful inducement to its execution. 2. Thus it was held, in the case of Fairchild v. Ogdensburgh R. R. Co., that an order of the president of a company, on its treasurer, for the payment of a specific sum to the plaintiffs—“being the amount due them for work on section number eighteen, according to the engineer’s estimate for January, 1855, thereto prefixed,”—was in effect a promissory note, 'and could be declared on and enforced as such. (15 N. Y. R. 337.) 3. There is a trifling variation in the form of expression m the different notes, but they all refer to one contract, and are to be read together; and their obvious import is, that they are given by the defendants according to the conditions of an independent contract, and not that they are themselves conditional, 4. But if read with the contract, to which the plaintiff was a stranger, and to which he was not referred as affecting the terms of the promise, we, find that the notes for the interest were to be, as they were in fact, absolute and unconditional. 5. It is true that under the collateral contract the payee had a right, at his election, “ at the expiration ” of five years, to acquire the defendants’ title to certain stock, by a surrender of all the notes; but the defendants had no such option, and their promise in respect, to each $700 was absolute. 6. “An instrument by which a railroad corporation promises to pay, in Boston, to W. S. or order, $1,000, with' interest semi-annually, as per interest warrants hereto attached, as the same shall become due; or, upon the sur render of this note, together with the interest warrants not due, to the treasurer, at any time until six months of its maturity, to issue stock in exchange therefor, is a negotiable promissory note.” (Hodges v. Shuler, 22 N. Y. 114.) Judge Wright, in delivering the unanimous opinion of the court on this point, said: “We are of the opinion that the instrument wants none of the essential requisites of a negotiable promissory note. It was an absolute and unconditional engagement to pay money on a day fixed; and although an election was given to the promisees, upon a surrender of .the instrument six months before its maturity, to exchange it for stock, this did not alter its character, or make the promise in-the alternative, in the sense in which that word is used respecting promises to pay.” (22 New York, 118.) 7. “A written promise to pay a sum certain, absolutely and unconditionally, is a good promissory note, although a memorandum at the foot of it states a different mode in which it may be discharged.” . (Pool v. McCrary, 1 Kelly, 319; U. S. Digest, 1847, 409, § 1.) 8. “A statement in the written warrant of a municipal corporation, for "the payment of a sum certain at a fixed time to E. S. or order, that the same is payable out of any funds belonging to the city not before specially appropriated, and chargeable to general city fund, does not deprive the instrument of the character of a negotiable promissory note.” (Bull v. Sims, 23 N. Y. 570.) 9. But the question whether these were negotiable promissory notes was not raised at the circuit; and, on the contrary, it was assumed by the defendants that they were, not only in the answer but on the trial. III. The offer to prove that, before this suit was brought, Barnum, the original payee, had not notified the defendants of his election under the antecedent contract, was properly overruled. 1. It was an offer to prove precisely what the law would presume in the absence of proof. 2. It was immaterial to the issue, and in harmony with the plaintiff’s right to recover. IV. The proposition to prove that Barnum never offered to re-transfer the stock, was properly over-ruled. - 1. As there was'no proof that he did, the presumption •was that he did not. 2. The fact that he did not, was wholly irrelevant to the issue; 3. Even as between the defendants and Barnum, it was only on payment of all the notes that they would become entitled to a re-transfer of the stock they had pledged. V. The answer stated no facts “ constituting a defense,” and no affirmative defense was therefore admissible under it. 1. At the end of a denial of indebtedness, the defendants append the allegation that the notes were given “under a contract ” with Barnum, “the terms of which these defendants are informed and believe the plaintiff well knew; and by the terms of said contract, and the acts of said Barnum, these defendants allege that said notes became and were cancelled.” 2. The allegation is merely of the defendants’ conclusion • fiom acts of a third party, which they do not state, and a contract with a third party, the terms of which they do not disclose. 3. It is settled that even under the code, facts proved but not pleaded are not available to the party proving them; and it clearly is not error to exclude proof of facts not pleaded, and relating to transactions inter.alios. (Field v. Mayor of New York, 2 Seld. 179; Brazill v. Isham, 2 Kern. 9.) 4. “The requirement contained in section one hundred and forty-nine of the code, that an answer must contain a statement of any new matter constituting a defense, is imperative. Hence, if new matter is not set up in the answer, proof of it should be rejected, although such matter would constitute a full defense to the action.” (Button v. McCauley, 38 Barb. 413; Boyce v. Brown, 7 Barb. 85; Cruger v. Hudson River Railroad Company, 2 Kern. 201; Palmer v. Smedley, 18 How. Prac. Rep. 321; Carter v. Koezley, 14 Abbott, 147, 150; Van Schaick v. Winne, 16 Barb. 95.) VI. The offer to show that Barnum pledged the stock before the note matured was properly over-ruled. 1. If any defense was alleged in the answer, it was that the notes had been cancelled under the contract by Barnum’s electing “at the expiration of the said five years” to take the stock and surrender the notes; not that before that time, and in defiance of the contract, he converted the stock, and gave the defendants a cause of action in trover. 2. If such a defense would be available to them in any form in this action, it would be as a payment, and that is a defense unavailing under the code unless expressly pleaded. (McKyring v. Bull, 16 New York, 297, 309; Grosvenor v. Atlantic Insurance Company, 1 Bosw. 479.) 3. Amendments in an appellate tribunal are authorized for the purpose of upholding judgments, but not for the purpose of reversing them. (Williams v. Birch, 6 Bosw. 674; Englis v. Furniss, 3 Abbott, 82.) 4. Every intendment of law as well as fact, is as matter of legal right, to be made in support of judgments on appeal. (Carman v. Pultz, 21 N. Y. 547; Viele v. Troy & Boston Railroad Co., 20 N. Y. 184.) 5. The defendants did not offer to show that the stock was pledged before the transfer of the notes to the plaintiff and his rights could be impaired by no subsequent wrong of Barnum. 6. They did not even offer to show that the pledge was without their consent. 7. They did not offer to show that the plaintiff took the notes with notice of any such pledge by Barnum; and even if he were chargeable with constructive knowledge of the agreement, that would only notify him that Barnum could not acquire under it a right to the stock, before the expiration Of the five years, and that by parting with the notes, he disabled himself from acquiring it at all by their surrender. 8. If Barnum converted the stock, then* remedy against him is ample for the wrong. , 9. Unless they clothed him with false indicia of absolute ownership, their remedy is perfect against the bank; as title could not be acquired from a mere pledgee. 10. But the defendants, until they comply with the contract by payment of the notes, are in no position to demand the stock, and the intendment is that the pledgee will be ready to re-transfer whenever they fulfill their engagement. The judgment should be affirmed, with costs, and damages for delay. [MAJORITY — Johnson, J. Davies, J.] Johnson, J. The defendants’ motion to dismiss the complaint as to all the notes except the first, was altogether inappropriate, and the exception to. the refusal to dismiss is unavailing. It is conceded, on the part of the defendants, that a good cause of action was made out upon the first note. It is contended, however, in respect to the residue of the notes, that they are not negotiable promissory notes, but that they are part and parcel of the contract-between the defendants and the payee, and are subject to the terms and conditions of that contract in the hands of the plaintiff. It is not material, in my judgment, to determine whether these instruments are strictly negotiable promissory notes, unless it shall be found upon examination that the agreement proved and read by the defendants upon the trial, and the other matters offered to be proved by them, would constitute a defense in case the notes should be held to be not negotiable. Because no question was raised upon the trial as to whether the plaintiff could obtain title to the instruments by the mere endorsement and delivery of the same by the payee; and it cannot be raised here. , Had it been raised upon the trial, the plaintiff might, peradventure, have given other proof of his title. Regarding the plaintiff, therefore, as having the legal title to the notes, and as the proper party to the action, let us see whether the matters proved, and offered to be proved, conceding the instruments not to be negotiable, would constitute any defense. By the contract it was stipulated that Barnum should have his election either to hold and take the stock and cancel the principal note and these interest notes, or to enforce the payment of said principal note and the interest notes. And in case he enforced the notes, and upon payment thereof, by the defendants, he was to re-transfer said stock to them, and.not otherwise. He could do either, at his option, at the expiration of the stipulated time, without any preliminary act, determination or notice. If he chose to enforce the notes, or cause them to be enforced, then he was bound to return the stock when the notes were all fully paid, find not before. Payment was most clearly a condition precedent to Barnum's obligation to re-transfer the stock, and to their right to have it, should the notes be enforced. His right to enforce the notes, or to cause them to be enforced, is absolute and unconditional, He was in' no respect bound either to give notice of his election, or to offer to transfer back the stock to enable himself to enforce the notes. This is very clear. The question then arises whether the evidence) had the defendants been allowed to give it, of the pledge of the stock as collateral) by Barnum, before the maturity of the notes, and that they were still held in pledge, would have proved, or tended to prove, that he had elected to hold and take the stock absolutely, so as to entitle the defendants to have the notes cancelled according to the agreement. Most, certainly not. Even if it was pledged, it was in a situation to be redeemed, and the law will presume that the party will do whatever is necessary to be done to fulfil his contract, so long as it can be plainly seen that performance is within his power. He had not, according to the offer, put it out of his power to perform, when the defendants should be entitled to demand it. He was not, therefore, either in default, or in such a situation that a default on his part would necessarily happen, when the-notes should be paid. By transferring the notes absolutely to a third party, Barnum has necessarily elected to have them enforced, and will be bound to re-transfer the stocks to the defendants as soon as they shall have paid the notes. If he does not they will have their remedy upon the agreement. But manifestly the notes are not cancelled, and nothing which was proved, or offered to be proved, would constitute any defense to the action. If it were necessary, to determine the question whether these several instruments, with the exception of the first, were negotiable, so as to protect the holder, taking them before maturity, from the provisions of the contract without any other notice than what appears upon their face I should incline most, decidedly to the opinion, that they were not, but would be affected and controlled by the contract, in the hands of any holder. They are provided for in the contract, and the contingency upon which they are to be cancelled without payment, specified. In the three last, in the order of date, it will be seen that the promise is in express terms, to pay according to the conditions of this contract. And in all the others, except the first, while the promise to pay seems to be absolute and unconditional, there is yet in the body of eqch, incorporated as part of the instrument, a statement in substance that it is given in accordance with the conditions of this contract. To be in. accordance with the conditions of the contract they would of course be subject to be given up, or cancelled, without payment, in case Barnum should elect to hold and take the stock at the period of their maturity. And any one, would, I think, on taking them, be bound to take notice of the con ' ditions of the contract referred to. The statement, I think, is something more than a mere earmark by way of identification of the transaction in which the notes had their inception. It is a general principle that a cotemporaneoua contract in wilting may vary the face of a note where the two instruments are connected by cross reference, as they are here. (2 Parsons on Motes and Bills, 536.) See alsft the same volume, pages 534 to 544, inclusive, where the whole subject of the effect of collateral written contracta, npon notes, is treated of, and the authorities cited. I have not thought it necessary, however, that this question should be passed upon here. My cdnclusion is that the judgment should be affirmed. Davies, J. The motion for a non-suit was properly overruled. It was conceded that the plaintiff was entitled to recover upon one of the notes mentioned and described in the complaint, and the request should have been, in form, to have the judge instruct the jury that the plaintiff was only entitled to recover on that note, and upon refusal, to have taken an exception. The notes mentioned and set out were promissory notes, within the rules laid down by this court in the cases of Fairchild v. Ogdensburgh Railroad Company (15 N. Y. 337); Hodges v. Shuler (22 N. Y. 114); Bull v. Sims (23 N. Y. 570.) The possession of the notes by the plaintiff furnishes príma facie evidence that the endorsement of Barnum was made upon a good consideration before maturity. (Pratt v. Adams, 7 Paige, 639.) The plaintiff, as the owner and holder of these notes, was entitled to recover the amount specified therein, unless the defendants established a valid and legal defense. By the terms of the agreement referred to in the notes, Barnum, the payee, at the maturity of the $20,000 note, was to have the election either to take said stock and cancel all of said notes, or enforce payment thereof. And upon payment of all of said notes, the defendants were entitled to a re-tranfer of said stock. The transfer of the interest notes, and the commencement of this action to recover the amount thereof, conclusively indicate that Barnum made the election to enforce payment of the notes. The defendants engagement to pay the same was absolute and unconditional, and they were not entitled to a return of the stock until they made payment of said notes. If they, therefore, wished such return, they should have made such payment or tender thereof, and demanded the stock; but not having done so, their liability on the notes remains; The judgment should be affirmed, with costs. Weight, Mullbst and Ingraham, JJ.,'were in favor of affirmance. Selden and Hogeboom, JJ., and Denio, Ch. J., were for reversal, the latter thinking, however, that the instruments were promissory notes, but that the holder took them with notice of the agreement and the concurrent conditions. Judgment affirmed.