On appeal from a judgment of the Atlantic County Court of Common Pleas.
For the appellant, William Charlton.
For the respondent, Morris Bloom.
Before Brogan, Chief Justice, and Justices Bodine and Heher.
The opinion of the court was delivered by
HEHER, J. Plaintiff sued upon a promissory note made by defendant to the order of her intestate under date of October 28th, 1932. The answer, admitting the execution of the instrument, pleaded (a) payment, and (b) illegality, in that "the purpose of the note" was the creation of a fund, through its discount, for the purchase by both parties of "stakes in a daily lottery known as 'The numbers,'" contrary to the provisions of the Gaming act. Comp. Stat. 1910, pp. 2623 et seq.; Rev. Stat. 1937, 2:57-1 et seq. These issues were submitted to a jury, and there was a verdict for plaintiff. Defendant appeals from the consequent judgment.
First: Error is assigned upon the denial of defendant's motion for a directed verdict at the close of the case. The point is not well made.
There was no evidence tending to establish the plea of payment. The original note (the note in suit was the last renewal) was in the sum of $2,000. Defendant was permitted to testify that this sum, less interest, was given to him by the deceased at the time of the making and delivery of the note, and that he repaid $930 on the principal, but questions designed to elicit evidence of a "talk" he had with the deceased "about the balance of the note" were overruled, and properly so, as within the prohibition of section 4 of the Evidence act. Comp. Stat. 1910, p. 2218, § 4; Rev. Stat. 1937, 2:97-2. The case was therefore barren of proof of payment of the balance of the debt, which defendant, by the renewal note, continued to acknowledge as his own.
In support of the defense of illegality of the contract, two witnesses called by defendant testified that the deceased, while employed as a chef in the Holmhurst Hotel, in the city of Atlantic City, admitted to them that he was a "partner" of defendant in "the number business," and that on "several occasions" they carried envelopes containing "number slips" from the deceased to defendant. One fixed the year 1928 as the time of the alleged admission of an unlawful combination; the other said it was made in 1933, subsequent to the making
of the note in suit. The time of the original transaction was not proved.
Plainly, this evidence, if accepted as verity, did not establish the claimed illegality of the contract. Even so, its quality and weight were for the determination of the triers of the facts. The element of the conclusiveness was lacking. The making of the admission by the deceased was not conceded; in fact, it was vigorously denied, although in the circumstances not the subject of direct refutation. That being so, the evidence presented an issue of fact. Schmidt v. Marconi Wireless Telegraph Co., 86 N.J.L. 183; Clark v. Public Service Electric Co., 86 Id. 144; McCormack v. Williams, 88 Id. 170.
Every negotiable instrument is deemed prima facie to have been issued for a valuable consideration (Comp. Stat. 1910, p. 3738, § 24; Rev. Stat. 1937, 7:2-24), and to be entirely free of the taint of illegality. Absence or failure of consideration is, by virtue of section 28 of the cited statute, matter of affirmative defense as against any person not a holder in due course; and this would seem to cast upon the defendant the burden of establishing such defense by a preponderance of the evidence. While the case of Gaddis v. Gaddis, 10 N.J. Mis. R. 521, seems to be to the contrary, section 28 of the Negotiable Instruments Act (Comp. Stat. 1910, p. 3738, § 28; Rev. Stat. 1937, 7:2-28) was not there considered. And the identity of the ...