text:
    The National Cash Register Company, Appellant, v. Remington Arms Company, Inc., Respondent.
    Contract — master and servant — appeal — seal — covenant in contract of employment for assignment to employer of inventions made by employee within year following termination of employment —■ when plaintiff not deprived of remedy of specific performance merely because relief sought may be deemed inequitable — Court of Appeals has no power to review decision of Appellate Division on question of fact — • finding of Appellate Division, on evidence from which the inference was permissible, that by a new contract plaintiff relinquished its claim for inventions, conclusive ■— argument that old contract was under seal and could not be abrogated by parol not effective where new contract was acted upon by both parties.
    1. Where defendant has conceded that if a covenant in a contract between plaintiff and an employee, to the effect that the latter would assign and transfer to plaintiff any invention in cash registers which he might make during the period of one year following the termination of his employment, was effective at the time the employee left plaintiff’s employ, the latter is entitled to the relief claimed unless barred b3 laches, the trial court has so found and the Appellate Division has not disturbed the finding, and no finding of laches has been made, it follows, as matter of law, that plaintiff is not deprived of the remedy of specific performance merely because the relief sought may be deemed to be so inequitable that the Appellate Division might in its discretion refuse the drastic relief granted by the trial court.
    2. If, however, the question at issue is one of fact on which different minds might well reach different conclusions on the merits, this court has no power to review the decision of the Appellate Division. The jurisdiction of the Court of Appeals in civil cases is still limited by section 589 of the Civil Practice Act to the review of questions of law, and in this case it cannot be said as matter of law that the finding of the Appellate Division was unsupported by evidence.
    3. Where plaintiff to be entitled to the relief sought, which is an assignment of certain patents, was bound fairly to establish that its original contract with said employee was still in force and binding and there is evidence from which the inference is reasonable and permissible that by a new contract it was the intention of the parties that the employee should give up a definite term of employment for an employment at will and that plaintiff voluntarily relinquished its claim on him for inventions, made after leaving its emplosunent, and the Appellate Division has so found, its conclusion must be sustained.
    4. An argument that even if this were the intention of the parties it was not put into legal form; that the old contract was under seal and could not be abrogated by parol, does not affect the result. The new contract as to employment at will was acted upon by both parties; the employee was to that extent excused from performance of the original contract and it would be inequitable to hold him to its terms or to charge defendant with liability thereunder for inventions of the employee which he had assigned to it.

      National Cash Register Co. v. Remington Arms Co., 212 App. Div. 343, affirmed.
    (Argued December 17, 1925;
    decided February 24, 1926.)
    Appeal from a judgment, entered April 8, 1925, upon an order of the Appellate Division of the Supreme Court in the first judicial department, reversing a judgment in favor of plaintiff entered upon a decision of the court on trial at Special Term and directing a dismissal of the complaint.

      Charles E. Hughes, Edward H. Green and De Lano Andrews for appellant.
    If it is the true construction of the contract of February 17, 1909, that the provision relating to the assignment of inventions which Fuller might make within one year following the termination of his employment referred not simply to the period following the first year’s employment, but to the period following the actual cessation of his employment and the severance of his connection with the plaintiff, it is determinative of this case. (Lamborn v. National Park Bank, 240 N. Y. 520; Solomons v. United States, 137 U. S. 342; Annin v. Wren, 44 Hun, 352; Standard Parts Co. v. Peck, 264 U. S. 52; Hulse v. Bonsack Machine Co., 65 Fed. Rep. 864; Wege v. Safe Cabinet Co., 249 Fed. Rep. 696; Mississippi Glass Co. v. Franzen, 143 Fed. Rep. 501; McCall Co. v. Wright, 198 N. Y. 143; Mutual Milk & Cream Co. v. Heldt, 120 App. Div. 795; Wallach Laundry System, Inc., v. Fortcher, 116 Misc. Rep. 712.) Even if the agreement by its own terms was not effective when Fuller left, it was effective through renewal. (Adams v. Fitzpatrick, 125 N. Y. 124; Stern & Co. v. Avedon & Co., 194 App. Div. 433; 231 N. Y. 546.)

      John A. Garver, Drury W. Cooper, Frank M. Patterson, George Ramsey and Chauncey B. Garver for respondent.
    If the finding of the Appellate Division has any evidence to sustain it, it is decisive of the appeal, and the order and judgment must be affirmed, because this court is not at liberty to disregard it. (Ostrom v. Greene, 161 N. Y. 353; Costello v. Costello, 209 N. Y. 252; Ga Nun v. Palmer, 216 N. Y. 603; Villard v. Villard, 219 N. Y. 482.) The finding is amply supported by the evidence. (Watson v. Gugino, 204 N. Y. 535.) Where a sealed contract has been partially performed pursuant to the terms of a parol modification, such modification is effective and cannot afterwards be repudiated. (McKenzie v. Harrison, 120 N. Y. 260; Thomson v. Poor, 147 N. Y. 402; Harris v. Shorall, 230 N. Y. 343.) By the terms of the contract, before the plaintiff could enforce the one-year covenant against Fuller or his successor, or his assignee, it was bound to show that it was willing to continue Fuller’s employment at the rate of compensation he was then receiving. (5 Pom. Eq. Juris. [4th ed.] § 2227; Colson v. Thompson, 2 Wheat. [U. S.] 336.) A general or indefinite hiring'means a hiring at will, which can be terminated at any time by either party without previous notice to the other. This is so, even though the compensation is measured by the year or by a shorter period. (Martin v. N. Y. Life Ins. Co., 148 N. Y. 117; Watson v. Gugino, 204 N. Y. 535; Schuyler v. Smith, 51 N. Y. 309; U. M. Realty Co. v. Roth, 193 N. Y. 570.)
   Pound, J.

This is an action to compel assignment of patents. The material facts are briefly as follows: Plaintiff employed an experienced inventor named Fuller at a $5,000 salary for one year from February 17, 1909. Fuller agreed to transfer to plaintiff all- cash register mechanisms made by him during his employment, and if at the end of the contract he left plaintiff’s employ, plaintiff being willing to retain him on the then existing salary, not to enter the service of any other cash register company for the year immediately following the severance of his connection with plaintiff, and to assign to plaintiff any invention in cash registers which he might make during such one-year period. He continued in plaintiff’s employ until September, 1917, when he left and went into the employment of defendant, which was fully informed of Fuller’s contract with plaintiff. Within a year he perfected the invention of a new cash register which was assigned to defendant. Plaintiff asserts its right to such invention. Defendant asserts that the contract was no longer in effect. The Special Term granted judgment against defendant for the relief sought. The Appellate Division reversed, made new findings and dismissed the complaint.

Defendant made the concession that if the covenant in the contract between plaintiff and Fuller, dated February 17,1909, to the effect that Fuller would assign and transfer to plaintiff any invention in cash registers which he might make during the period of one year following the termination of his employment, was effective at the time Fuller left plaintiff’s employ, plaintiff is entitled to all the inventions claimed by it made by Fuller while in defendant’s employ unless plaintiff is barred by laches. The trial court so found and the Appellate Division did not disturb the finding. No finding of laches is made. It follows as matter of law that plaintiff is not deprived of the remedy of specific performance merely because the relief sought may be deemed to be so inequitable that the Appellate Division might in its discretion refuse the drastic relief granted by the trial court. (Dalzell v. Dueber Mfg. Co., 149 U. S. 315, 325.)

If the question as to whether the contract was effective when Fuller left plaintiff’s employment was one of fact on which different minds might well reach different conclusions on the merits, this court has no power to review the decision of the Appellate Division. The jurisdiction of the Court of Appeals in civil cases is still limited by the Civil Practice Act (§ 589) to the review of questions of law although under the new Judiciary Article of the Constitution (Art. VI, § 7) this restriction may be removed by the Legislature where the Appellate Division on reversal makes new findings of fact and renders final judgment thereon.

The law does not look with special favor on such covenants. (Kaumagraph Co. v. Stampagraph Co., 235 N. Y. 1.) Plaintiff, to be entitled to the relief sought, was bound fairly to establish that the original contract was still in force and binding upon Fuller. The Appellate Division has found:

IV. The plaintiff refused to renew or extend the said contract of February 17, 1909, or to give the said Fuller a contract for any duration of time; and subsequent to March 14, 1910, and prior to May 25, 1910, the plaintiff entered into a new contract with said Fuller, by the terms of which it was agreed that his employment should be at will, terminable by either party at any time without previous notice, and upon terms and conditions substantially the same as those contained in the said contract of February 17, 1909, but without any restriction upon the right of the said Fuller to enter the employment of another cash register company immediately upon the termination of his employment with the plaintiff, and without any obligation on his part to assign to the plaintiff any inventions made by him during the year following the termination of his employment with the plaintiff, unless such inventions constituted improvements depending for utility on inventions made by the said Fuller during his employment by the plaintiff.”

The question is whether there is any evidence to support-the finding that the continued employment was not subject to the restriction contained in the original contract and that such restriction was not in force when Fuller left the plaintiff.

Shortly after the expiration of the term of the original contract, Fuller applied to Muzzy, a representative of the plaintiff who was in charge of his employment, with the request for a new term contract. This request was refused. It is not questioned that Fuller was, when he left plaintiff, employed at will even though his employment for the second year might have been held to be under the old contract had the question then arisen. Nothing was said about the abrogation of the original contract except as to its term. Fuller was free to go when and where he pleased. Plaintiff was not bound to keep him for a definite term. In September, 1917, some six years after the new arrangement was made, Fuller was hired away from plaintiff by defendant by the allurement of an increased salary and a large bonus in the event of success, to invent a new cash register for it. This he succeeded in doing within the year. The inference that he was free to do this must be found, if at all, in one significant fact. After the new arrangement was made, Fuller was called upon to execute and did execute an assignment in a form annexed to the 1909 contract but not executed with it, presumably because not pertinent to its terms, of all cash register inventions made or to be made while in the employ of plaintiff. This instrument did not include inventions made by Fuller for the period of a year after leaving such employment. The inference is reasonable and permissible from all the circumstances that it was the intention of the parties that Fuller should give up his definite term of employment for an employment at will and that plaintiff voluntarily relinquished its claim on him for inventions, made after leaving the employment. The learned trial justice took the view that this was merely a confirmatory assignment. The Appellate Division took the contrary view of its effect. It is confirmatory only in part. The conclusion is sustained that the new employment was to supersede the old employment; that the old contract was to this extent, at least, no longer in effect, and that the assignment was thereafter the measure of Fuller’s duty to plaintiff.

The contention is made that even if this were the intention of the parties it was not put into legal form; that the contract of 1909 was under seal and could not be abrogated by parol. (Cammach v. Slattery & Bro., 241 N. Y. 39.) But the new contract as to employment at will was acted upon by both parties; Fuller was to that extent excused from performance of the original contract and it would be inequitable to hold him to its terms (Harris v. Shorall, 230 N. Y. 343) or to charge defendant with liability thereunder.

The point is whether from the facts and circumstances of the case the existence of the particular fact found may be legitimately deduced or inferred. We cannot say as matter of law that the finding of the Appellate Division was unsupported by the evidence.

The judgment should be affirmed, with costs.

His cock, Ch. J., McLaughlin, Crane, Andrews and Lehman, JJ., concur; Cardozo, J., not voting.

Judgment affirmed.


source: Caselaw Access Project

author: Crane, J.

license: Public Domain

text:
    Joseph Dobbins, Appellant, v. The Pratt Chuck Company, Respondent.
    Contract — sale — contract, evidenced by letters, for sale of scrap steel —• department of defendant separately incorporated a few days before contract was made — acts indicating that defendant intended to contract as to scrap from all departments including the one separately incorporated — oral testimony competent to show what scrap the contract referred to — complaint construed to refer to output as contracted for and understood by parties — situation not affected by fact that plaintiff received bills for scrap from subsidiary corporation ■ — ■ situation not affected by claim of cancellation for non-payment by plaintiff where defense is based solely on claim that it was never under obligation to deliver.
    1. Where under the terms of a contract evidenced by two letters, • the first from defendant, a corporation with many departments engaged in the manufacture of steel products, offering to sell to plaintiff, who had been its customer for several years, its “ heavy scrap and light scrap, f. o. b. ears Frankfort,” and the second from plaintiff reading, “ We accept your offer on all your steel scrap,” the defendant for a time, as in former years,' delivered to the plaintiff the scrap steel from all of its departments including a department from which came ninety per cent of the heavy scrap but which, unknown to plaintiff, had been separately incorporated a few days before the contract was made, the defendant owning all the stock and managing and controlling the new corporation, such delivery indicated that the defendant considered the heavy steel scrap of its subsidiary as its own and that the words quoted from the two letters referred to all the scrap coming from defendant’s factories including the separately incorporated department.

      2. In this action, therefore, to recover for failure to deliver a portion of the heavy scrap originating in the subsidiary corporation, defended on the ground that the contract did not call for any scrap from that corporation and that the defendant did not contract regarding its output, oral testimony was competent to show what scrap the contract referred to. What may appear to be quite clear upon the face of the letters becomes ambiguous when defendant’s acts and conduct are considered and we have a ease within the purpose and object of the rule permitting parol evidence to explain a contract.
    3. The plaintiff properly sued the defendant for the breach of its contract. Under the evidence in this case, the plaintiff was justified in alleging that the defendant treated the scrap steel of the subsidiary corporation as its own, which it absolutely controlled, could sell, and did sell to the plaintiff. In alleging that the plaintiff agreed to purchase the entire output of heavy and light scrap steel of the defendant corporation for one year, the plaintiff was dealing with the output of the defendant as controlled by it and within its power of disposal. The complaint had reference to the output as contracted for and understood by the parties.
    4. That the plaintiff received bills for scrap delivered from the subsidiary corporation does not change the situation. After the making of his contract, the plaintiff was informed that the defendant controlled the subsidiary corporation, and the evidence is conclusive that the scrap delivered was under his contract with the defendant. He had no contract with the subsidiary corporation. How the defendant desired to keep its books or make deliveries under its contracts might very well have been a matter of indifference to the plaintiff.
    5. Nor is the situation affected by a claim that the contract was canceled by failure of the plaintiff to make payments where in fact it was not canceled, but carried out by the defendant as agreed, with the exception of the amount of scrap here sued for. The defense is under the original contract. There is no claim that any new arrangement relieved the defendant from its obligation to deliver such scrap. Its claim is that it was never under any obligation to deliver it.

      Dobbins v. Pratt Chuch Co., 210 App. Div. 278, reversed.
    (Argued December 17, 1925;
    decided February 24, 1926.)
    Appeal from a judgment, entered November 6, 1924, upon an order of the Appellate Division of the Supreme Court in the third judicial department, reversing a judgment in favor of plaintiff entered upon a verdict and directing a dismissal of the complaint.

      Clayton R. Lusk and James F. Dougherty for appellant.
    The rule that oral evidence cannot be given to vary, modify or alter a contract plain on its face has no application to this contract in the light of the admissions of defendant itself. (Murdock v. Gould, 193 N. Y. 369; Thomas v. Scutt, 127 N. Y. 141; Petrie v. Trustees of Hamilton College, 158 N. Y. 458; Orois v. Elmira, C. & N. R. Co., 17 App. Div. 187; 172 N. Y. 656; Reed v. Ins. Co., 95 U. S. 23.) Having demonstrated there was a latent ambiguity in the contract warranting resort to oral evidence to explain it, the argument of _ defendant’s liability is further amplified by the practical construction put upon the contract by the parties. (Nicoll v. Sands, 131 N. Y. 19; Seymour v. Warren, 179 N. Y. 1.) Plaintiff is not asserting there was no distinction between the defendant and the Pratt Fork and Hoe Corporation, but does insist that the distinct legal entity of the subsidiary has no application to this case. (Erkenbrecher v. Grant, 187 Cal. 7; So. Pac. Terminal Co. v. Int. Comm. Comm., 219 U. S. 498; The William Van Driel, Sr., 252 Fed. Rep. 35.) Waiver of a breach — ■ even retraction of a written notice of cancellation — does not amount to a modification of the contract. The contract under such circumstances stands as though there never was a cancellation. (Nilson v. Morse, 52 Wis. 240; Cobb v. Hatfield, 46 N. Y. 533; McNaught v. Eg. Life A. Soc., 136 App. Div. 774; Genet v. D. & H. C. Co., 28 App. Div. 328; Canda v. Wick, 100 N. Y. 121; Mich. S. S. Co. v. Amer. Bonding Co., 104 App. Div. 347; Loftis v. Pac. Mut. Life Ins. Co., 38 Utah, 532.)

      Arthur L. Evans for respondent.
    The original contract of July 6 and 7, 1916, did not entitle the plaintiff to the Pratt Fork and Hoe Corporation’s output of steel scrap. The evidence of a conversation between the plaintiff and the defendant’s former president, Mr. Pratt, and an employee, Mr. Buckley, claimed to have occurred several days before this written contract was made was inadmissible. (Murdock v. Gould, 193 N. Y. 369; While’s Bank of Buffalo v. Myles, 73 N. Y. 340; Petrie v. Trustees of Hamilton College, 158 N. Y. 458.) The original contract of July 6 and 7 was terminated on November 18, 1916, by the defendant because of the plaintiff’s defaults thereunder; and the alleged breach thereof occurred after said termination. (Ferguson v. Chuck, 236 N. Y. 149; Heller & Bro. v. Continental Mills, 196 App. Div. 7; 233 N. Y. 641; Belnap v. Bender, 75 N. Y. 446.)
   Crane, J.

The Pratt Chuck Company is a corporation engaged in manufacturing and selling drill chucks and other steel products at Frankfort, New York, and produces steel scrap as a waste, or a by-product. Steel scrap is classed in the trade as light ” and heavy ” steel scrap according to its thickness; that which is one-quarter of an inch or more in thickness being known as heavy scrap. The company had many departments — a cap department, a chaplet department, the cable department, and a fork and hoe department. All the factory buildings, including that of the fork and hoe department, were right alongside of each other with only a railroad switch between them. They were about 100 feet apart. Most, if not all of the heavy scrap came from the fork and hoe department.

For years the plaintiff, who was in the steel scrap business at Homer, New York, doing business under the name of Dobbins Bros., had been a customer of the defendant. He had been buying steel scrap, both light and heavy, from the corporation for several years. The scrap thus purchased from and through the defendant came from all the departments; the heavy scrap coming from the fork and hoe department.

On July 6, 1916, the plaintiff placed another order with the defendant for steel scrap, evidenced by two letters constituting the contract of sale. They are as follows:

“ The Pratt Chuck Co.
“ Frankfort, N. Y.
Dobbins Brothers, July 6th, 1916.
“ Homer, N. Y.:
“ Gentlemen.— Referring to your recent -visit relative to Scrap, are pleased to advise that we will accept your contract for year ending June 30th, 1917, as per offer which we now make as follows:
“ Heavy Scrap — $12.40 per G. T.— F. O. B. cars Frankfort.
“ Light Scrap — $10.10 per G. T.— F. O. B. cars Frankfort.
“ 30 days net.
“ Kindly advise by return mail if you wish the Scrap at above prices as we are withholding acceptance from other parties. Very truly yours,
“ THE PRATT CHUCK CO.
C. H. Buckley.”
“ Joseph Dobbins Maurice Dobbins
“ Homer, N. Y., July 7, 1916.
“ The Pratt Chuck Co.,
“ Frankfort, N. Y.
“ To Dobbins Brothers, Dr.
“ Cabbage
“ Largest Cabbage Dealers in the United States. Storehouses in all the Leading Cabbage Sections of New York State. Storage capacity, 6,000 tons.
“Annual shipments, 1,500 cars. Wire or write us your wants. We sell on track. No commission stock. Get in touch with us.
“ Gentlemen. — Your letter of July 6th at hand. We accept your offer on all your steel scrap for one year to July 1, 1917, at prices as below.
“ Heavy steel scrap $12.40 G. T. Frank.
“ Light steel scrap $10.10 G. T. Frank.
“ This is a high price but will take the gamble.
“ Respect, yours,
“ DOBBINS BROS.”

With the facts and relationships in mind, as just stated by me, there would be no question in anybody’s mind that the scrap referred to covered the output of the defendant’s factory, including all its departments, and especially that of the fork and hoe department from which came ninety per cent, if not all, of the heavy scrap. No distinctions had ever been made regarding the source of the output among the departments. This was an internal matter with which the purchaser had nothing to do.

At the time of these letters the plaintiff knew nothing about any change in the defendant’s business. It appeared later that on July 1, 1916, five days before the order, the defendant had incorporated the fork and hoe department under the name of the Pratt Fork & Hoe Corporation, of which it owned all the stock. Outside of a change in the names of the officers, the business of the Fork & Hoe Corporation was run under the same management, and under the absolute" control of the defendant. Being the sole stockholder, the Pratt Chuck Company as a fact ran and operated after July 1, 1916, the Pratt Fork & Hoe Corporation as it did its other departments, under its absolute power and control. As subsequently stated to the plaintiff: They told me that they owned the control, the whole thing.”

The defendant performed its contract and delivered to the plaintiff the scrap steel bargained for, with the exception of about 200 tons of the output of the fork and hoe department or corporation. All of the heavy scrap steel, with this exception coming from the Pratt Fork & Hoe Corporation, was delivered under the contract to the plaintiff. The plaintiff had no contract with the Pratt Fork & Hoe Corporation; no dealings with them whatsoever. His only contract was the letters above referred to passing between him and the Pratt Chuck Company. Under this contract, and in performance of it, the Pratt Chuck Company delivered to the plaintiff the heavy steel scrap from the Pratt Fork & Hoe Corporation. These acts indicated that the defendant considered the heavy steel scrap of its subsidiary as its own, and that the words in the two letters " heavy scrap and light scrap, f. o. b. cars Frankfort,” and We accept your offer on all your steel scrap,” referred to all the scrap coming from the defendant’s factories, including the fork and hoe department, or corporation. Why should the courts strain to give' an interpretation to a contract contrary to that which the parties themselves have acted upon?

For a failure to deliver the 200 tons of heavy steel scrap, the plaintiff brought this action. The defense has been that the contract did not call for any scrap from the Pratt Fork & Hoe Corporation; that this was a separate and distinct corporation; and that the defendant did not contract regarding its output. The Appellate Division in reversing a judgment recovered by the plaintiff has held that it was incompetent to introduce oral testimony to show what scrap the contract referred to. In this respect we cannot follow the Appellate Division.

What may appear to be quite clear upon the face of the letters becomes ambiguous when defendant’s acts and conduct are understood. The contract to deliver all of its scrap steel may have two meanings when it appears that five days before the making of the contract the defendant divided itself into two parts, and that from one of the parts came ninety per cent of the subject of the contract. What these words “ scrap f. o. b. cars, Frankfort, as per your offer ” in the letter of the Pratt Chuck Company to the plaintiff mean and refer to, and what the words “ all your steel scrap for one year to July 1, 1917,” mean in Dobbins’ letter to the defendant is dependent upon the relationship, the acts and conduct of the parties, the representations, and all the surrounding circumstances.

When we consider that the defendant and the plaintiff had theretofore dealt with the scrap from the fork and hoe department; that this department was merely one of the defendant’s factory buildings, part of its plant; that the department was incorporated only a few days before the contract, and controlled absolutely by the defendant; and that under the contract with the plaintiff the defendant thereafter delivered the steel scrap from the Fork & Hoe Corporation to the plaintiff; we have a case within the purpose and object of the rule permitting parol evidence to explain a contract. Such evidence does not contradict the words of the contract; it merely shows — and that quite clearly and almost beyond dispute — to what particular scrap the words apply. Concededly, the defendant controlled and could sell two artificially distinct classes of scrap; that of the Pratt Chuck Company as it existed after July 1, 1916, and that of the Pratt Fork & Hoe Corporation, its subsidiary, after that date. Did it contract to sell and deliver one or both? The contract did not specify. The previous conduct and relations of the parties, and the deliveries made under the contract by the defendant leave no doubt that it sold both.

If authority is needed for this proposition, so in accord with reason, we may refer to Murdock v. Gould (193 N. Y. 369, 374); Petrie v. Trustees of Hamilton College (158 N. Y. 458); Orvis v. Elmira, C. & N. R. R. Co. (17 App. Div. 187; affd., 172 N. Y. 656); Reed v. Insurance Co. (95 U. S. 23, 30); Macdonald v. Longbottom (29 L. J. Q. B. 256; 1 El. & El. 977); Beach on Contracts (sect. 742); Nicoll v. Sands (131 N. Y. 19, 24); Seymour v. Warren (179 N. Y. 1).

The plaintiff properly sued the defendant for the breach of its contract. Under the evidence in this case, as above outlined by me, the plaintiff was justified in alleging that the defendant treated the scrap steel of the Fork & Hoe Corporation as its own, which it absolutely controlled, could sell, and did sell to the plaintiff. In alleging that the plaintiff agreed to purchase the entire output of heavy and light scrap steel of the defendant corporation for one year, the plaintiff was dealing with the output of the defendant as controlled by it and within its power of disposal. The complaint had reference to the output as contracted for and understood by the parties. The United States Supreme Court in a recent decision has held a railroad corporation liable in an action at law for negligence, where the accident happened on a branch of its system operated under the name of another railroad corporation. This other corporate entity did not prevent liability, where under the circumstances of the case the absolute control and management was with the defendant. (Davis v. Alexander, 269 U. S. 114.) We do not need to go so far in this case, as it is not the point under discussion. I merely cite this authority as showing that We should be liberal in construing this pleading referring to the defendant’s output, as in this case covering its subsidiary. However, no point is made that the pleadings do not conform to the proof.

It is said that the plaintiff received bills for scrap delivered from the Pratt Fork & Hoe Corporation. I do not see how this changes the situation. After the making of his contract, the plaintiff was informed, as I have above stated, that the defendant controlled the Fork & Hoe Corporation, and the evidence is conclusive that the scrap delivered was under his contract with the defendant.- He had no contract with the Fork & Hoe Corporation. How the defendant desired to keep its books or make deliveries under its contracts might very well have been a matter of indifference to the plaintiff.

Some point has been made of the fact that the contract was canceled in November of 1916 by the failure of the plaintiff to make payments. Whatever was said in order to get money out of the plaintiff raises no new points of law, as the contract was not in fact canceled, but carried out by the defendant as agreed, with the exception of the amount of scrap here sued for. The defense is under the original contract. There is no claim that any new arrangement relieved the defendant from its obligation to deliver these 200 tons. Its claim is that it was never under any obligation to deliver them.

For the reasons here stated, the judgment of the Appellate Division should be reversed, and as it was based entirely upon the law, that of the Trial Term affirmed, with costs in this court and in the Appellate Division.

His cock, Ch. J., Cardozo, Pound and Lehman, JJ., concur; McLaughlin and Andrews, JJ., dissent.

Judgment accordingly.


author: Pound, J.

text:
    In the Matter of the Claim of Kate Lynch, Appellant, against The City of New York, Respondent. The State Industrial Board, Respondent.
    Workmen’s compensation — master and servant — New York city — municipal corporations — helper in city hospital located on island owned and occupied by city entitled to compensation for injuries received from fall on sidewalk while on her way to leave island — employment did not cease when she left hospital but exposed her to hazards of way off and onto island — rule not applicable to all sidewalks of city over which city employees may pass to and from their work.
    A helper in a city hospital, situated on an island owned by the city and occupied entirely by city institutions, who, after completing her work for the day prepared to leave the island to go to the city and while on her way from the nurses’ home, on a sidewalk which was the proper passageway for her to take, fell and received injuries, the accident being due to the fact that snow had not been cleared off the walk, is entitled to compensation under the Workmen’s Compensation Law. Her place of employment was the island on which was located the hospital and nurses’ home, not merely the hospital itself. Employment did not cease when she left the hospital but continued while she was on the island leaving and .returning thereto over the route provided by the employer for such purposes, the customary and practical way of ingress and egress. Her employment exposed her to the hazards of the way in and out. The rule stated, however, does not apply to all the sidewalks of a city over which city employees might pass on -their way to and from their work. {Matter of Kowalek v. N. Y. Cons. B. B. Co., 229 N. Y. 489; Matter of Littler v. Fuller Co., 223 N. Y. 369, followed; Matter of Mclnerney v. B. & S. B. B. Corp., 225 N. Y. 130; Matter of Lampert v. Siemons, 235 N. Y. 311; Matter of Daly v. Bates & Boberts, 224 N. Y. 126, distinguished.)

      Lynch v. City of New York, 214 App. Div. 841, reversed.
    (Argued January 11, 1926;
    decided February 24, 1926.)
    Appeal from an order of the Appellate Division of the Supreme Court in the third judicial department, entered December 8, 1925, reversing an award of the State Industrial Board made under the Workmen’s Compensation Law and dismissing the claim for compensation.

      Jeremiah F. Connor for appellant.
    The location of claimant’s employment, an island in the East river, exposed her to an unusual hazard, and the injuries which occurred while claimant was leaving the island by the customary route furnished by the employer, arose out of and in the course of her employment. (Cudahy Packing Co. v. Paramour, 263 U. S. 418; North Carolina R. R. Co. v. Zachary, 232 U. S. 248; Martin v. Metropolitan Life Ins. Co., 197 App. Div. 382; 233 N. Y. 653; Carter v. Gardner & Waring Co., 194 App. Div. 925; 230 N. Y. 597; Di Paolo v. Crimmins Contracting Co., 5 St. Dept. Rep. 428; 173 App. Div. 988; 219 N. Y. 580; Matter of McInerney, 225 N. Y. 130; Matter of Littler v. Fuller & Co., 223 N. Y. 369; Olsen v. Andrews, 168 Mass. 261; White v. Slattery Co., 236 Mass. 28; Matter of Employers’ Liability Assurance Corp., 215 Mass. 497.)

      George P. Nicholson, Corporation Counsel (John F. O’Brien, Morris L. Strauss and Frank E. Smith of counsel), for respondent.
    Appellant’s injury did not arise out of and during the course of her employment. (Matter of Daly, 224 N. Y. 126; Matter of McInerney, 225 N. Y. 130; Matter of Di Salvio, 225 N. Y. 123; Matter of

      Kowalek, 229 N. Y. 489; Matter of Schultz, 230 N. Y. 309; Matter of Clark, 231 N. Y. 14; Tallon v. Int. R. T. Co., 232 N. Y. 410; Matter of Lampert, 235 N. Y. 311; Matter of Demuth, 210 App. Div. 505; Matter of Kane, 210 App. Div. 558.)
   Pound, J.

The facts herein are as follows: Claimant was employed as a helper in the Metropolitan Hospital on Welfare Island in the East river, which is owned by the city of New York and occupied entirely by city institutions. No one is permitted on the island unless one has business there and obtains permission from the city. The public are admitted only on passes. Two methods of reaching or-leaving the island are provided; one by means of the Eighty-sixth street boat, which is maintained by the city, and the other by trolley part way across the Fifty-ninth street bridge and then by elevator down upon the island. Claimant’s regular hours of duty were from seven o’clock in the morning to five o’clock in the afternoon. She received wages of forty dollars per month and board and lodging at the Nurses’ Home which was located on the island. On February 21, 1924, after completing her work for the day, she went to the Nurses’ Home, which is about 500 feet from the hospital, and prepared to leave the island to go to New York city to visit a sick sister. While she was on her way from the Nurses’ Home, on a sidewalk which was the proper passageway for her to take, she fell and received injuries. The accident was due to the fact that the snow had not been cleared off the walk.

The State Industrial Board made an award but the Appellate Division reversed and dismissed the claim on the ground that the injury did not arise out of and during the course of the employment.

The situation here presented is somewhat unusual as it deals with a city employee but the principles applicable . thereto have been well defined. Broadly speaking, the place of employment was Welfare Island on which was located the Metropolitan Hospital and the Nurses’ Home. It was not merely the hospital itself. Claimant came to and remained on the island solely by reason of her employment. She did not make her home there except as an employee. When she was off duty she did not at once leave the place of her employment on her own affairs. She remained in the interest of her employer.' The place was like a hospital with grounds over which the employees have to pass when their own affairs call them away. Employment did not cease when she left the hospital. It was continuous and continued while she was on the island leaving and returning thereto over the route provided by the employer for such purposes, the customary and practical way of ingress and egress. Her employment exposed her to the hazards of the way in and out.

The rule to be applied is stated in Matter of Kowalek v. N. Y. Cons. R. R. Co. (229 N. Y. 489) as follows: “ It is a general rule that if an employee is injured on the premises of the employer in going, with reasonable dispatch and method, to or from actual performance of the specific duties of the employment by a way provided by the employer or reasonably used by the employee, compensation must be awarded. The going to and from the actual work and the risk involved in it are reasonably incidental to the employment.”

Claimant when she sustained the injury was leaving the precincts of the hospital by the usual and customary way provided by her employer. She was not, as in Matter of McInerney v. B. & S. R. R. Corp. (225 N. Y. 130), leaving the safe path provided, for a short cut of her own choosing. Neither was she, as in Matter of Lampert v. Siemons (235 N. Y. 311), merely going to or from her work on the city streets or in a conveyance not furnished by the employer for the purpose. Of course, she might have while on the island sustained an injury not arising out of her employment if. she bad turned to her own affairs, as in Matter of Daly v. Bates & Roberts (224 N. Y. 126) and had been injured while doing her own work, washing her clothes or dressing herself. Such cases are clearly distinguishable from those which involve the right of a safe way to and from the actual place of work. A nurse does her own work in her own room, dresses herself, sews and attends to her own needs without reference to the place of work. Injuries there sustained do not arise out of her employment. They might happen to any one anywhere. But going to and coming from work becomes an incident of the employment when the employee is within the precincts of the employer. It has been so held in a long line of cases. (Cudahy Packing Co. v. Parramore, 263 U. S. 418; Matter of Devoe v. N. Y. State Rys., 218 N. Y. 318, 320; Martin v. Met. Life Ins. Co., 197 App. Div. 382; affd., 233 N. Y. 653; Matter of Redner v. Faber & Son, 223 N. Y. 379.) In Matter of Littler v. Fuller & Co. (223 N. Y. 369) it was held that the employment began when claimant entered an automobile truck furnished by the employer to carry him to and from his work at the railroad station two miles from the plant and ended when he left it in the evening. The court said: “The place of injury was brought within the scope of the employment because Littler, when he was injured, was on his way * * * from his duty within the precincts of the company.’ ”

The city is the employer in this case. The rule here stated would be pushed to an illogical and absurd extreme if it were applied to all the sidewalks of New York over which city employees might pass on their way to and from their work. But the city maintains a plant on Welfare Island and within that plant the employee is exposed to the hazards peculiar to the employment as well as the hazards of life in general. The hazards of the employment are analogous to those of an employee in a manufacturing plant or railroad shop. The location of the hospital was such as to make the boat the customary and practical way of ingress and egress. The walk to the boat landing was as much a part of the plant as the hospital itself. Although claimant was not at work when the accident happened, the employment necessarily contemplated that claimant should from time to time leave the island and return as much as it contemplated that she should work there. A reasonable interval of time for the purpose was, therefore, wdthin the necessary scope of the employment.

The order of the Appellate Division should be reversed and the award of the State Industrial Board affirmed, with costs against the city of New York in this court and in the Appellate Division.

Cardozo, McLaughlin and Crane, JJ., concur; His cock, Ch. J., Andrews and Lehman, JJ., dissent.

Ordered accordingly.


author: Cbane, J.

text:
    Second United Cities Realty Corporation, Respondent, v. Price & Schumacher Co., Inc., Appellant.
    Landlord and tenant — lease — provisions in lease that tenant shall make interior repairs and comply with requirements of building department — not required to pay for excavating cellar and building foundation and cellar walls as directed by building department after collapse of floor — liable to pay for restoring floor if it collapsed from negligent overloading — statement of cause of collapse in notice of superintendent of building not evidence of negligence.
    1. Provisions in a lease of a store that “ all repairs made necessary to the interior of the premises hereby demised are to be made by the tenant ” and “ the said tenant further covenants and agrees that it will comply with all the requirements of the * * * building department,” do not sustain a claim by the landlord that the tenant should pay for excavating a cellar and constructing foundation and cellar walls, the same having been required by the city building department after collapse of the store floor. The repairs were not to the interior of the leased premises but pertained to a part of the building not leased by the tenant and were of a structural nature requiring the owner to meet -the cost thereof.

      2. If the floor, reasonably safe, collapsed because of the tenant’s negligence in overloading it, he is bound to repay the cost of restoring it to its original condition. A statement in the notice of the superintendent of buildings to the owner that the floor collapsed under excessive weight is not evidence of negligence; at best it is a mere conclusion. Such negligence may be proved, if possible, at a new trial.

      Second United Cities Realty Corp. v. Price & Schumacher Co., 214 App. Div. 806, reversed.
    (Argued January 13, 1926;
    decided February 24, 1926.)
    Appeal from a judgment of the Appellate Division of the Supreme Court in the second judicial department, entered June 30, 1925, affirming a judgment in favor of plaintiff entered upon a verdict directed by the court.

      John M. O’Neill and Robert P. Orr for appellant.
    Defendant was not obligated to do the work in question under the terms of the lease. (Herald Square Realty Co. v. Saks & Co., 215 N. Y. 427; Holden v. O’Brien, 209 App. Div. 266; 240 N. Y. 14; May v. Gillis, 169 N. Y. 330; Cohen v. Margolies, 192 App. Div. 217; 232 N. Y. 584; Warren v. Haverty, 159 App. Div. 840; Younger v. Campbell, 177 App. Div. 403.)

      Sidney A. Clarkson for respondent.
    The defendant was/ required to do the work charged for. (Markham v. Stevenson Brewing Co., 104 App. Div. 420; 111 App. Div. 178; 188 N. Y. 593; Harder R. & C. Co. v. Lee 74 Misc. Rep. 436; Jacobs v. McGuire, 77 Misc. Rep. 119; Bushwick Realty Co. v. Sanitary F. P. & C. Co. 129 App. Div. 533; Deutsch v. Hoe Estate Co., Inc., 174 App. Div. 685.)
   Cbane, J.

On January 3, 1922, the respon/* leased to the appellant a certain store, No. 1421 Rilton street in the borough of Brooklyn for three years fr, December 15, 1921, at a yearly rent of $600 and “ flat proportion of any increase in the taxes on the build’hg of which the premises herein described form a part, q^er those assessed for the year 1921, which the annual ?ent of said tenant bears to the total annual rent of the entire building.” The leased premises consisted of the store floor in a two-story frame building. The upper floor was occupied as a residence with which the lessee had nothing to do. The store was about twenty-five feet wide, thirty feet deep, with an extension about thirty feet in depth. There was no cellar under any part of the building. Under the store proper was a space between the ground and the floor. In some places this depth was four or five feet, and at other places the dirt came within about a foot of the floor. Wooden girders, resting on wooden posts, supported the cross beams on which the store floor was placed. There was no supporting wall on the sides or in the rear. The appellant rented the store for a tinsmith business.

On August 11, 1922, the floor of the store collapsed, and the building department prohibited further use thereof until the building was reconstructed in accordance with its directions. The superintendent of buildings, in his notification to the owner, specifying the defects of construction, also stated that the floor had collapsed under excessive weight. Whether the weight was excessive for a properly constructed floor, or was excessive merely for this particular floor, is not stated. No facts are given to how what weight the floor could or should have sus^ned. There was some evidence that the flooi beam rotten.

plans of the building department required the owne. £0 reconstruct its house. To be specific, they called .,r:

mstijation of concrete footings 20" x 12", under front, rear and \esterly walls, and under six new Tally columns each 18 x 18" x 12"; excavation of earth in cellar to uniform depq 0f five feet; new 12" brick walls on front, rear and weserly side; installation of three 6" Tally columns in cen-er of buildings; three 6" Tally columns under easterly ujper wall; two iron I beams, one in center and one under easterly upper wall, cross beams 3" x 12"' 16" over centers, and new flooring.”

Where there was no cellar the owner was required to construct one. This called for excavation —■ the digging of a cellar, also the construction of cellar walls, and the installation of iron girders. Brick walls were to be constructed on the front, rear and westerly side.

This work being done by the owner at the cost of $1,733.91, it has sued the tenant in this action to recover the amount, claiming that by the terms of the lease the tenant was required to do this work.

The lease stated: “All repairs made necessary to the interior of the premises hereby demised are to be made by the Tenant.” It also contained the following general provision:

“And the said Tenant further covenants and agrees that it will comply with all the requirements of the Board of Health, Tenement House Department, Building Department, Department of Water Supply, Gas and Electricity, Police and Fire Departments, and Department of Fire Prevention, and other municipal authorities, and also of the Department of Labor of the State of New York, and that it will not create nor permit any nuisance in the premises hereby rented to the annoyance of neigh-/ boring occupants, and shall also promptly comply wit and execute all rules, orders and regulations of the N/ York Bo&rd of Fire Underwriters.” /

Neither of these clauses sustain the plaintiff’s r' The repairs were not to the interior of the leased pr.’ that is, the store. The requirements of the/ department pertained not to the store or theileased by the tenant to carry on the tinsmit’ business, but to the cellar and foundation walls not l/*- hy * tenant. After the reconstruction, the own' had a su - stantially new building in part. The foundations were entirely changed, strengthened and nade new. 1 frame superstructure remained the sar-> hut the cellar and side walls formed a new and substantial part of the building. Why should the tenant pay for this? The clauses of its lease did not require the tenant to make structural changes or to pay for rebuilding. The rent of the store was only $600 for a term of three years. The cost of these repairs or reconstruction equals within a few dollars the amount of the three years’ rent. That such a liability was to be cast upon the tenant by this lease could hardly have been within the contemplation of the parties.

The construction of the cellar and the reconstruction of the foundations of this building were of a structural nature requiring the owner to meet the cost thereof. (Herald Square Realty Co. v. Saks & Co., 215 N. Y. 427; Holden v. O’Brien, 209 App. Div. 266; affd., 240 N. Y. 560; Cohen v. Margolies, 192 App. Div. 217; affd., 232 N. Y. 584.)

If it were a fact that the floor, reasonably safe, collapsed because of the tenant’s negligence in overloading it, he would be bound to repay the cost of restoring it to its original condition. The defendant gave some evidence that this cost would amount to about $470; the plaintiff gave no evidence on this point. The inspector’s report is not evidence of negligence; at best it is a mere conclusion. However, the plaintiff should have a new trial •> prove this negligence, if possible.

The judgments heretofore entered in the plaintiff’s should, therefore, be reversed, and a new trial giaivj, ^th costs to abide the event.

His^ck, Oh. H., Cabdozo, Pound, McLaughlin, ndbev anc[ Lehman, JJ., concur.

Judgma^g reVersed, etc.


text:
    John M. Brainard et al., Respondents, v. The New York Central Railroad Company et al., Appellants.
    Contract — lease — provision that lessee will pay all taxes assessed against property or lessor “ by reason of its ownership thereof” does not require payment of income tax — practical construction not a basis for changing terms of unambiguous contract — rights under contract not affected by former payments of income taxes through inadvertence or error of construction — unanimous affirmance of facts found tending to alter effect of unambiguous contract no part of decision.
    1. In actions based on leases and working agreements, where the lessee agrees to pay all taxes levied and assessed on or in respect to the property, a tax on the rents or income of real property is not considered a tax on the property itself, and where by such an agreement the lessee agreed to pay all taxes assessed upon the leased property or on the lessor “ by reason of its ownership thereof ” the words “ by reason of its ownership ” do not differ so essentially from the words “ on ” or “ for ” or “ in respect of ” leased premises as to call for another interpretation. Unless the lease expressly provides for payment of taxes on the income from rentals received under the lease, the imposition of such a burden on the lessee is not justified. (III. Cent. R. Co. v. Ind. Union Ry. Co., 6 Fed. Rep. [2d S.] 830, 837, followed.)
    2. Nor is the result affected by the fact that, in this action by stockholders to recover on behalf of their company, under such a provision in a lease made by it, from a successor lessee, an installment of income taxes assessed against and paid by their company, the triers of fact have conclusively fixed another sense in which the words were used in the contract as based on the intention of the parties and the practical construction given by them to the language of the lease. The construction of a plain contract is for the court and the intention of the parties is found in the language used to express such intention. Their conduct may fix a meaning to words of doubtful import, it may not change the terms of a contract.
    3. Former payments of $ueh taxes by the lessee, either through inadvertence or by reason of failure properly to construe the language of the contract, do not alter the position of the parties. When the instrument is clear in the eye of the law the error of the parties cannot control its effect. The court stands on the written agreement and facts found and unanimously affirmed which tend to alter its effect are no part of the decision.

      Brainard v. N. Y. C. B. B. Co., 214 App. Div. 705, reversed.
    (Argued January 18, 1926;
    decided February 24, 1926.)
    Appeal, by permission, from a judgment of the Appellate Division of the Supreme Court in the first judicial department, entered May 23, 1925, unanimously affirming a judgment in favor of plaintiff entered upon a decision of the court on trial at Special Term.

      Nathan L. Miller, Frederick L. Wheeler, Crosby J. Beakes, Alexander S. Lyman and Charles C. Paulding for appellants.
    The tax clause is clear and definite in its meaning and is so limited as to negative the intent that the operating company should pay the personal income taxes of the owning company. " (Creps v. Baird, 3 Ohio St. 280; Cincinnati College v. Yeatman, 30 Ohio St. 276; State v. Wisconsin Tax Commission, 166 Wis. 287; Park Building Co. v. Yost Fur Co., 208 Mich. 349; Matter of Hazard, 228 N. Y. 29; Pennsylvania Cement Co. v. Bradley Cont. Co., 274 Fed. Rep. 1003; Young v. Illinois Athletic Club, 310 Ill. 75.) The tax clause being clear and definite, there is no ground for applying the rule of practical construction. (Young v. Athletic Club, 310 Ill. 75; Elliott v. Winn, [Mo.] 264 S. W. Rep. 391; Gans v. Ætna Life Ins. Co., 214 N. Y. 330; Railroad Co. v. Trimble, 10 Wall. 377; Sharp v. Behr, 117 Fed. Rep. 864; Elefante v. Pizitz, 182 App. Div. 822; 230 N. Y. 567.) The proper construction of the contract presents only a question of law. (Braxton v. Mendelson, 233 N. Y. 122; Hartigan v. Casualty Company of America, 227 N. Y. 175; Matter of Thompson, 217 N. Y. 111; Smyth v. Brooklyn Union El. R. R. Co., 193 N. Y. 335; People v. Most, 171 N. Y. 423; Sattler v. Hallock, 160 N. Y. 291; Gould v. Equitable Life Assur. Society, 231 N. Y. 208; Ticonderoga R. R. Co. v. Delaware & Hudson R. R. Co., 204 N. Y. 588.)

      Charles I. Taylor and Thomas H. Beardsley for respondents.
    Taxes on revenues from property, including gross earnings, taxes and income and excess profits taxes are a burden on the property whether direct or excise taxes and are, therefore, a burden on ownership. (Pollock v. Farmers’ Loan & Trust Co., 157 U. S. 429; Suter v. Jordan Marsh Co., 225 Mass. 34.) The changes made by the 1884 agreement evidence an intention to require the operating company to pay all taxes. (Consolidated Gas Co. v. Newton, 267 Fed. Rep. 231; 258 U. S. 165; Galveston Electric Co. v. Galveston, 258 U. S. 388.) The acts of the Lake Shore and the Central under the similar^ worded tax covenants of the subsidiary operating agreements of October 1, 1889, in paying taxes on gross earnings establish the intent of the parties that the words “ by reason of ownership ” were to include taxes in respect of the revenues. (Kimball v. Cutting, 229 Mass. 541; Suter v. Marsh, 225 Mass. 34.) The tax covenant of the 1884 agreement is ambiguous. (Utica City National Bank v. Gunn, 222 N. Y. 204; Salant v. Fox, 271 Fed. Rep. 447; Park Building Co. v. Yost, 208 Mich. 349; Fish v. Hubbard’s Administrators, 21 Wend. 651; Petrie v. Trustees of Hamilton College, 158 N. Y. 458; Tidswell v. Whitworth, L. R. 2 C. P. 326; 15 L. T. Rep. [N. S.] 574; Thompson v. Lapworth, L. R. 3 C. P. 149; 17 L. T. Rep. [N. S.] 507.) The defendant New York Central and its predecessor, the Lake Shore, in paying these income and excess profits taxes assessed against the Mahoning Company, uniformly and continuously for many years placed a practical construction upon the terms of the agreement which is determinative and conclusive as to its meaning and intent. (Woolsey v. Funke, 121 N. Y. 87; Carthage T. P. Mills v. Village of Carthage, 200 N. Y. 1; City of New York v. New. York City Ry. Co., 193 N. Y. 543; Story v. Craig, 231 N. Y. 33; Geneva Mineral Spring Co. v. Coursey, 45 App. Div. 268; Dworsky v. Herstein, 207 App. Div. 333; Clausen v.
      Title Guaranty & Surety Co., 168 App. Div. 569; New York Trust Co. v. Portland Railway Co., 197 App. Div. 422; Topliff v. Topliff, 122 U. S. 137; Huntting Elevator Co. v. Bosworth, 179 U. S. 415.) The findings of the trial court as to the meaning and intent of the tax covenant, being based on the relation and acts of the parties, the surrounding circumstances, and the language of the agreement, determined conflicting inferences sought to be drawn from the established evidence and were, therefore, findings of fact. These findings of fact were unanimously affirmed by the Appellate Division and are binding and conclusive. (Matter of Totten, 179 N. Y. 112; Utica City Nat. Bank v. Gunn, 222 N. Y. 208; Kenyon v. K. T. M. M. A. Assn., 122 N. Y. 247; White v. Hoyt, 73 N. Y. 505; Trustees of East Hampton v. Vail, 151 N. Y. 463; Golden v. Shaw & Co., 204 App. Div. 404; Lamb v. Norcross Bros. Co., 208 N. Y. 427; U. S. Rubber Co. v. Silverstein, 229 N. Y. 168; Bradburn v. Solvay Process Co., 18 App. Div. 542; Commercial Bank v. Sherwood, 162 N. Y. 316.)
   Pound, J.

Minority stockholders of the Mahoning Coal Bailroad Company bring this derivative action to recover on behalf of their company from the New York Central Bailroad Company as successor of the Lake Shore Company an installment of Federal income and excess profits taxes assessed against and paid by Mahoning Company for the year 1920, amounting to $480,425.20.

The Mahoning. Company is a railroad corporation of Ohio with an outstanding capital stock of $2,161,367, consisting of $1,500,000 par value of common, and $661,367 par value of preferred, of which capital stock the Central Company is the owner of $894,650 par value of the common, and $419,150 par value of the preferred.

On December 4, 1871, the Mahoning Company being about to construct its road, entered into a traffic agreement with the Lake Shore Company providing for track-age rights by the Mahoning Company over the Ashtabula branch of the Lake Shore Company, for fair treatment by each road in handling the traffic to or from the road of the other, for the divisions between the parties as to the joint traffic and for the assistance by the Lake Shore Company in the marketing of the bonds of the Mahoning Company by annual application of forty per cent of the revenues of the Lake Shore Company from the joint traffic to the purchase of such bonds if obtainable at par or less.

On May 1, 1873, the Mahoning Company having completed its road and being without equipment to operate it, entered into a supplemental agreement with the Lake Shore Company under which the Lake Shore Company was to manage, maintain and operate the road of the Mahoning Company for twenty-five years (subject to the right of the Mahoning Company to terminate after five years) and share the gross earnings with the Mahoning Company on the basis of forty per cent to the Mahoning Company and sixty per cent to the Lake Shore Company.

On July 1, 1884, a further agreement (the one here involved) was entered into between the Mahoning Company and the Lake Shore Company under which the prior agreements were canceled and the Lake Shore Company was to continue to work, maintain and operate the road and property of the Mahoning Company, of which it was in possession under the prior agreement in perpetuity and share the gross earnings with the Mahoning Company on the basis of forty per cent to the Mahoning Company and sixty per cent to the Lake Shore Company. The Central took over the agreement as a part of the consolidation agreement with the Lake Shore in 1914.

The question is as to the construction of the covenant as to taxes contained in this agreement of July 1, 1884, which reads as follows: “ That it [Lake Shore Company] will in due season pay all taxes and assessments which may be levied or become chargeable on the said road or property, or upon the said Mahoning Company, by reason of its ownership thereof.” Prior to the tax in suit the New York Central had been paying these taxes.

As under the agreement of 1884 the Central Company bears the cost of maintenance and operation and of taxes on the road and property, the forty per cent share of the gross income received by the Mahoning Company is free of all such charges, and the plaintiffs now contend that in addition to the charges so paid, the Central Company should also so pay the personal income taxes of the Mahoning Company both on its shares of the gross income so received and on its other income as well.

The Appellate Division, first department, affirmed the judgment of the Special Term without opinion. The court at Special Term was of the. opinion that it was the intent of the parties to the agreement of 1884 that the lessee ” should pay every tax of every name and description and that as the “ lessor ” derives its entire income from the forty per cent of the gross earnings of its road and from certain interest returns- upon such earnings and the investment thereof, all its taxes result directly or indirectly by reason of its ownership of its road, and whether or not as an original question the Federal income tax would be technically chargeable upon the lessor ” company by reason of its ownership of its road and property that every doubt as to the intent and meaning of the parties had been entirely dispelled and the proper interpretation of the “ lease ” conclusively established by the practical, uniform and continuous construction placed upon the lease ” by the parties themselves.

The defendant Central Company contends that the court at Special Term was in error in its conclusions for the reason that:

The tax clause in question does not admit of the construction placed upon it by the lower courts; but on the contrary, it is clear and definite in its meaning and is so limited as to negative the intent that the operating company should pay the personal income taxes of the owning company.

The tax clause being clear and definite, there is no ground for applying the rule of practical construction.

In actions based on leases and working agreements like the one in question (which for convenience may be called á lease), where the lessee agrees to pay all taxes levied and assessed on or in respect to the property, the distinction between taxes on the income of property and taxes on the property itself has been repeatedly pointed out. With monotonous frequency the courts have held in this connection that a tax on the rents or income of real property is not considered a tax on the property itself. When the lessee is to pay all taxes, ordinary and extraordinary which shall be imposed on the demised premises or “in respect thereof,” the tax on rents is a tax not in relation to the property demised but in relation to the income thereof. (Woodruff v. Oswego Starch Factory, 177 N. Y. 23.)

The literal words used in the contract before us have not been the subject of judicial construction and it is urged that they have some weighty and special significance indicative of the foresight of the parties in 1884 when income taxes were not in their direct contemplation. What is meant by taxes assessed upon the Mahoning Company “ by reason of its ownership.” of the leased property? Do these words differ so essentially from the words “ on ” or “ for ” or “ in respect of ” leased premises as to call for another interpretation? The words chosen by the parties should not be unnaturally forced beyond their ordinary meaning. (Codman v. American Piano Co., 229 Mass. 285.) The operating company pays the taxes incidental to operation. It turns over forty per cent of the gross earnings to the Mahoning Company. Doubtless the Mahoning Company would have no income tax to pay if it did not own the property but ownership taxes and income taxes have been so clearly separated that the rule has been recently formulated in these Words: Unless the lease expressly provides for the payment of taxes on the income from rentals received under the lease, the imposition of such a burden on the lessee is not justified.” (Ills. Cent. R. Co. v. Ind. Union Ry. Co., and cases cited, 6 Fed. Rep. [2d S.] 830, 837.) The rule has the merit of reasonableness and certainty and we do not hesitate to adopt it. If more is desired, the language may easily be made sufficiently comprehensive. In Suter v. Jordan Marsh Co. (225 Mass. 34) the lessee agreed to pay all taxes levied “ upon or in respect of ” the rent. This covered the income tax. The words taxes by reason of ownership ” have a special significance and do not suggest income taxes. In Thomas v. Cincinnati, etc., Ry. Co. (93 Fed. Rep. 587) the question was as to a franchise tax. It was held that a franchise tax was a tax imposed “ by reason of the ownership ” of the leased railroad. The lease specifically covered taxes on income.

The Canadian case of New Brunswick & Canada R. R. Co. v. N. B. Ry. Co. (4 D. L. R. [1924] 962) suggests the force to be given to the words “ by reason of the ownership.” Anglin, J., speaking of taxes assessed upon the owner railroad said that the burden included all charges in the nature of taxation levied upon the demised property itself, and possibly, in addition, such as may be assessed upon the lessor qua owner of the property ” and did not include income taxes. What was there left to inference is here made plain. It should not escape notice that in Ohio taxes due upon land are a personal debt of him in whose name the lands stand listed, as well as a lien upon the lands. In the words of Hiscock, J., in the Appellate Division in the Woodruff Case (supra) (70 App. Div. 481, at p. 485): “ The tax here indicated is one which is directed specifically against the property which is demised or against the lessors in respect of, or on account of, such property."

We are construing an agreement; not determining the constitutionality of a taxing statute. In Pollock v. Farmers L. & T. Co. (157 U. S. 429) it was held that a tax on rents or income received from real estate was a tax on real estate. Obviously this was no ruling on the distinct question whether a tax on rent Was a tax assessed on land or by reason of the ownership thereof. The distinction is pointed out in the Woodruff Case (supra) (177 N. Y. at p. 29) where the court said: “A tax upon rents may, doubtless, be regarded, in legal theory, as a tax upon the land; but, while as a general proposition that may be true, it has no influence upon the question here,” i. e., the question of the liability of the lessee to pay the taxes on the rents. It follows that the language of the agreement is not sufficiently broad to cover taxes upon the payments to be made thereunder; that it is broad enough to cover the personal liability of the Mahoning Company for taxes on the tangible property; and that income taxes are not, in the legal significance of the words used, imposed upon the Mahoning Company by reason of ownership ” of the property.

But it is urged that the triers of fact have conclusively fixed another sense in which the words were used in the contract before us as based on the intention of the parties and the practical construction given by them to the language of the lease. The construction of a plain contract is for the court. The intention of the parties is found in the language used to express such intention. (Hartigan v. Casualty Co., 227 N. Y. 175.) If the court finds as matter of law that the contract is unambiguous, evidence of the intention and acts of the parties plays no part in the decision of the case. Plain and unambiguous words, undisputed facts, leave'no question of construction except for the court. The conduct of the parties may fix a meaning to words of doubtful import. It may not change the terms of a contract.

The payments made by the Central were made either through inadvertence or by reason of failure properly to construe the language of the contract. The Mahoning Company has not been led to act to its disadvantage in any regard. The position of the parties has not been altered. When the instrument is clear in the eye of the law the error of the parties cannot control its effect. The mere fact that the landlord chooses to relieve a tenant of a duty tends in no way to create a duty not imposed by the contract. (Elefante v. Pizitz, 182 App. Div. 819, 822; affd., 230 N. Y. 567.) The court stands on the written agreement. Facts found and unanimously affirmed which tend to alter its effect are no part of the decision.

The judgments should be reversed and the complaint dismissed, with costs in all courts.

Hiscock, Ch. J., McLaughlin, Crane, Andrews and Lehman, JJ., concur; Cardozo, J., absent.

Judgments reversed, etc.


text:
    Alfred H. Newburger et al., Appellants, v. American Surety Company, Respondent.
    Appeal — landlord and tenant — contract —• evidence —■ specific performance — Frauds (Statute of) — Court of Appeals still precluded on appeal from unanimous affirmance from examining record to determine whether evidence supports findings of fact — parol evidence not admissible to vary unambiguous terms of written agreement — action for specific performance of agreement to lease —• where writings absolute on their face, evidence that plaintiffs, several weeks before they were made, were willing to take an option, should have been excluded —■ sufficiency of writings consisting of two letters to constitute a contract enforcible as an agreement to lease — not necessary that both parties should sign — acceptance and action upon written agreement sufficient to bind •— rights and duties of parties under agreement not affected by subsequent disputes.
    1. Although the amended Judiciary Article of the Constitution, in effect January 1, 1926, withdraws the constitutional limitation precluding the Court of Appeals, on appeal from an unanimous affirmance, from examining the record to determine whether there is evidence tending to support the findings of fact, it remains in the Civil Practice Act (§ 589) until repealed, as a proper exercise of the constitutional power of the Legislature further to restrict the jurisdiction of the Court of Appeals. But the court has power, notwithstanding the unanimous affirmance, to examine the record in order understanding^ to review the rulings of the court on the admission of evidence and the exceptions taken thereto and the construction of writings uncontradicted except by incompetent evidence is a question of law which survives the unanimous affirmance.
    2. Parol evidence may not be received to vary the clear and unambiguous terms of a solemn written agreement as between the parties although matters may be proved which tend to show fraud, mistake, illegality, want of consideration, lack of capacity or any other matter affecting the validity of the writing or to establish the existence of any separate oral agreement as to any matter on which the document is silent, and which is not inconsistent with its terms, where from the circumstances of the ease the court infers that the parties did not intend the document to be a complete and final statement of the whole of the transaction between them; or to establish a condition precedent to the attaching of an obligation under the contract.
    3. Where, therefore, in an action for specific performance of an agreement to lease, the writings on which plaintiffs rely are absolute, on their face, with no suggestion of an option, evidence that, several weeks before their making, plaintiffs were willing to take an option, should have been excluded as not connected with or competent to vary the subsequent writings in any way.
    4. The writings, consisting of two letters signed by defendant’s vice-president, the first accepting plaintiffs’ offer of rental “for a new lease, in our usual form ” for a period of five years and the second definitely providing as to the space to be allotted them, location, expense of moving, fittings and service, constitute a contract definite and complete, which by its terms is enforcible as an agreement for a lease. It was not necessary that both parties should sign to make it an agreement in writing. Plaintiffs performed on their part by vacating their old offices and taking the space assigned to them and having accepted the written agreement and acted upon it are bound thereby.' Disputes which have arisen subsequent to the making of the agreement have no effect on the rights and duties of the parties under the contract.

      Newburger v. American Surety Co., 214 App. Div. 714, reversed.
    (Argued January 19, 1926;
    decided February 24, 1926.)

      Appeal, by permission, from a judgment of the Appellate Division of the Supreme Court in the first judicial department, entered May 21, 1925, unanimously affirming a judgment in favor of defendant entered upon a dismissal of the complaint by the court at a Trial Term.

      Samson Lachman, Osmond K. Fraenkel, Theodore Baumeister and Louis Werner for appellants.
    The court erred in destroying the contract by receiving evidence of prior negotiations. (Edison Electric Illuminating Co. v. Thacher, 229 N. Y. 172; King v. Hudson River Realty Co., 210 N. Y. 467; Dobbins v. Pratt Chuck Co., 210 App. Div. 278; Long v. New York Central R. R. Co., 50 N. Y. 76; Thomas v. Scutt, 127 N. Y. 133; Bank of Albion v. Smith, 27 Barb. 489; Dent v. North America S. S. Co., 49 N. Y. 390; Manchester Paper Co. v. Moore, 104 N. Y. 680; White’s Bank v. Myles, 73 N. Y. 335; U. S. Printing & Lithograph Co. v. Powers, 233 N. Y. 143.) The court erred in deciding that the agreement was insufficient under the Statute of Frauds. (Lamkin v. Palmer, 164 N. Y. 201; Matter of Madura v. City of New York, 238 N. Y. 214; Davin v. Isman, 228 N. Y. 1; Worrall v. Munn, 5 N. Y. 229; Epstein v. Gluckin, 233 N. Y. 490; Langstroth v. Turner Cypress Lumber Co., 162 App. Div. 818; 220 N. Y. 706; Strauss v. Katz, 210 App. Div. 405; 1 Williston on Cont. § 48; Tobias v. Lynch, 192 App. Div. 54; 233 N. Y. 515; Berman Stores Co. v. Hirsch, 240 N. Y. 209.) The court erred in construing the uncontradicted writings to be an agreement for an option and not an agreement for a lease. (People ex rel. Sesselman v. Bingham, 189 N. Y. 104; Poel v. Brunswick-Balke-Collander Co., 216 N. Y. 310; Hartigan v. Casualty Co. of America, 227 N. Y. 175; Matter of Loew’s Buffalo Theatres, Inc., 233 N. Y. 495; Cream of Wheat Co. v. Crist Co., 222 N. Y. 487; Moran
      v. Standard Oil Co., 211 N. Y. 187; Broadway Realty Co. v. Lawyers Title & Trust Co., 226 N. Y. 335.)

      Mark W. Norman for respondent.
    The plaintiffs failed to vitalize the agreement, even assuming one existed, by exercising their option within the prescribed time. (Edison El. Ill. Co. v. Thacher, 229 N. Y. 172; Emmett v. Penoyer, 151 N. Y. 564; Cooper v. Payne, 186 N. Y. 334; King v. Hudson River Realty Co., 210 N. Y. 467; Thomas v. Scutt, 127 N. Y. 133.) The Statute of Frauds is a defense to this action. (Imperator Realty Co. v. Tull, 228 N. Y. 447; Polucek v. Jahoda, 203 App. Div. 39; Hubbell v. Von Schoening, 49 N. Y. 326; Holmes v. Evans, 129 N. Y. 140; De Beerski v. Paige, 47 Barb. 172; 36 N. Y. 537; Page v. Shainwald, 169 N. Y. 246; Schaefer v. Thompson, 237 N. Y. 55.) The evidence objected to was competent. (Heller v. Cohen, 154 N. Y. 306; Wadick v. Mace, 191 N. Y. 1; Levin v. Dietz, 194 N. Y. 377; Young v. Dake, 5 N. Y. 463; Becar v. Flues, 64 N. Y. 518; Ward v. Hasbrouck, 169 N. Y. 407; Zorkowski v. Astor, 156 N. Y. 393; Smith v. Dotterweich, 200 N. Y. 299; Di Menna v. Cooper, 220 N. Y. 391; Briggs v. Hilton, 99 N. Y. 517; Rutledge v. Worthington, 119 N. Y. 592; Benton v. Martin, 52 N. Y. 570; Grierson v. Mason, 60 N. Y. 394.)
   Pound, J.

The action is for the specific performance of an agreement for a lease. Plaintiffs are stockbrokers and members of the New York Stock Exchange. Defendant owns an office building at 100 Broadway. Plaintiffs had occupied offices on the fifth floor therein since the year 1907 under a lease which expired on May 1, 1922. In the year 1920 defendant undertook certain rebuilding operations which made it necessary to interfere with the quiet possession of plaintiffs’ offices. Plaintiffs were not disposed to have their possession interfered with unless they could make satisfactory arrangements for a new lease. Negotiations resulted in two letters to plaintiffs from defendant which are relied on as an agreement for a lease. They read as follows:

“ American Surety Company.
“ August 10th, 1920.
“ Messrs. Newburger, Henderson & Loeb,
100 Broadway,
“ New York City:
Attention of Mr. Loeb.
“ Gentlemen.— I am directed by our Real Estate Committee to advise you that this Company accepts your offer made to Mr. R. A. Smith of $2.75 per square foot per annum for a new lease, in our usual form, from May 1st, 1922, for a period of five years, space to be allotted you on the 6th floor of our reconstructed building equivalent to that you now occupy on the 5th floor, it being ■understood that as soon as our new building is erected you will move to the new quarters on the 6th floor for the unexpired portion of your present lease, expiring May 1st, 1922.
“ In consideration of this you are to permit this Company to enter, at any time, the premises you occupy, for the purpose of removing the south and east walls of the Surety Building, and to do any other work found necessary in connection with the improvements which We are making, and to erect such temporary partitions for the removal of the column on the southwest corner of the building, and for the removal of the south and east Walls, as may be by us deemed necessary.
During the time that any of your floor space is partitioned off, for the removal of the walls, we will furnish you an equivalent of the space so taken, if desired, on the 6th floor.
Very truly yours,
“ RICHARD DEMING,
“ Vice-President
American Surety Company.
“ August 12th, 1920.
“ Messrs. Newburger, Henderson & Loeb,
“ 100 Broadway,
“ New York City:
“ Attention of Mr. Loeb.
“ Gentlemen.— Referring to my letter of August 10th, and to my further interview with your Mr. Loeb this afternoon, I write simply to say that it is understood:
“ 1. That the space to be allotted to you on the 6th floor of our reconstructed building shall include seven Broadway windows, the same as in your present offices, and extending east on the Pine Street side of the building.
“ 2. That the floor area of such space shall be approximately one-half the rental area of the 6th floor, not exceeding 5,500 square feet.
3. That at the time of moving you to the new quarters on the 6th floor, same will be done by us at our expense.
4. That the space allotted on the 6th floor shall be fitted up in similar manner to your present offices.
5. That the new lease shall include janitor service, and electricity for lights and fan service.
Very truly yours,
“ RICHARD DEMING,
Vice-President.”

Operations were thereupon begun. Plaintiffs permitted the defendant to enter their offices on the fifth floor to make the improvements. In July, 1921, plaintiffs removed to the sixth floor to offices furnished them by defendant. Some difference of opinion arose. The space allotted to plaintiffs on the .sixth floor was larger than the space they had occupied on the fifth floor. A dispute arose over the correct measurement of the excess space. This was adjusted at 5,894 square feet. The question of rent for the unexpired term was not agreed on. On February 1,1922, defendant demanded possession of the premises on May 1, 1922, and thereafter refused to execute the new lease which plaintiffs demanded under the letters above set forth. This»action was begun.

Defendant took the position that the letters were an agreement for an option to be exercised in writing before January 1, 1922, which plaintiffs had failed to exercise. To sustain this contention it was permitted to give evidence of a conversation in April, 1920. Mr. Deming, defendant’s vice-president, testified over objection and exception that Mr. Loeb, representing plaintiffs, then suggested “ an option for a new lease and more space ” on some terms they could agree on. June 15, 1920, Mr. Deming left a paper with Mr. Loeb, signed by him, in the form of a report to defendant, in which he says, “ the tenant has asked for an option for a renewal of present lease expiring May 1st, 1922, for a period of five years. Under the circumstances, and desiring to retain the firm as tenants, we could give such an option for space in the new building for such period of five years, or less, at the low figure of $17,000 per annum, which shall include the fitting up of space in keeping with the present offices, and including electricity for light and fan service.”

This letter was received in evidence over objection and exception. Plaintiffs under date of June 23, 1920, replied. They said among other things:

“We appreciate your desire -to retain us as tenants and are willing to take an option for a period of five years from May 1st, 1922, if the rental for such period can be agreed upon between us, but we do not want you to labor under the impression that the proposed option gives you the right, in the absence of a written consent on our part, to interfere with our possession of the 5th floor in its entirety.”

This letter was also received over objection and exception.

After this vague and inconclusive discussion, the evidence jumps from June 23 to August. The option was never mentioned again. Defendant writes under date of August 10 that it accepts plaintiffs’ offer for a new lease referring to such offer as having been made to R. A. Smith ” with whom Mr. Loeb testifies lie had a conference about the 8th or 9th of August, 1920. No evidence was given of the negotiations between Mr. Loeb and Mr. Smith. This is the contract on which plaintiffs rely. It is absolute on its face. It breathes no suggestion of an option. The evidence received contains no offer from plaintiffs either to accept an option or to accept a lease and contains no suggestion that the letter of August 10 was delivered to take effect only on a contingency. Hiscock, Ch. J., said in U. S. Printing & Litho. Co. v. Powers (233 N. Y. 143): We find no case which goes so far as to hold that a statement made by a party that he will execute a certain contract may be given in evidence, as indicating that a contract long thereafter executed by him did have the meaning contained in his prior promise.” Six weeks between statement and contract was there held to be too long an interval to permit the proof. On this evidence the trial court has found and the Appellate Division has unanimously affirmed the finding that the agreement of the parties was for an option only and that plaintiffs were not entitled to the relief demanded.

We are not unmindful of the fact that the unanimous affirmance precludes us from examining the record to determine whether there is evidence tending to support the findings of fact. (Const, of 1895, art. VI, § 9.) Although the amended Judiciary Article, in effect January 1, 1926, withdraws this constitutional limitation, it remains in the Civil Practice Act (§ 589) until repealed, as a proper exercise of the constitutional power of the Legislature further to restrict the jurisdiction of the Court of Appeals.

Neither do we overlook the fact that the findings do not set forth the writings as in Poel v. Brunswick-Balke-Collender Co. (216 N. Y. 310), so the question is not presented whether the findings of fact support the conclusions of law. But the court has power, notwithstanding the unanhnous affirmance, to examine the record in order understandingly to review the rulings of the court on the admission of evidence and the exceptions taken thereto.. The trial court is held to the proper theory of legal liability and we may look at the evidence as a whole to determine the correctness of its rulings. (Barnevo v. Munson Steamship Line, 239 N. Y. 486.) The construction of writings uncontradicted except by incompetent evidence is a question of law which survives the unanimous affirmance. (Hartigan v. Casualty Co., 227 N. Y. 175.) The question is thus properly before us on the exceptions taken by plaintiffs.

Parol evidence may not be received to vary the clear and unambiguous terms of a solemn written agreement as between the parties although matters may be proved which tend to show fraud, mistake, illegality, want of consideration, lack of capacity or any other matter affecting the validity of the wri ting or to establish the existence of any separate oral agreement as to any matter on which the document is silent, and which is not inconsistent with its terms, where from the circumstances of the case the court infers that the parties did not intend the document to be a complete and final statement of the whole of the transaction between them; or to establish a condition precedent to the attaching of an obligation under the .contract. Other exceptions to and qualifications of the parol evidence rule, not applicable here,, need not be considered. (Stephen’s Digest of the Law of Evidence, § 90; Thomas v. Scutt, 127 N. Y. 133; Eighmie v. Taylor, 98 N. Y. 288; Emmett v. Penoyer, 151 N. Y. 564; Grannis v. Stevens, 216 N. Y. 583, 588.) The objectionable evidence received .shows that on June 23 plaintiffs were willing to take an option, But it is mere speculation to conclude that because on June 23 they were willing to take an option, the formal document of August 10 is to be read as an acceptance only of an offer to take an option. This is not a case of insufficien' proof but of no proof competent on the question. (Matter of Case, 214 N. Y. 199.) The evidence should have beer, excluded as not connected with or competent to vary tlr subsequent writing in any way. (Thomas v. Scutt, supra; St. Regis Paper Co. v. Hubbs, etc., Co., 235 N. Y. 30, 35.)

The question remains whether the contract was by it.-; terms enforcible as an agreement for a lease. It was not necessary that both parties should sign the contract to make it an agreement in writing. If a person has accepted a written agreement and has acted upon it he is bound by it although he may not have set his hand to the document. The bill of sale in Thomas v. Scutt (supra) was unilateral and the parol evidence rule was applied. (Mason v. Decker, 72 N. Y. 595.)

The contract was acted upon. The plaintiffs performed on their part. They vacated their offices on the fifth floor so that defendant might make the alterations it desired. They took the space assigned to them on the sixth floor.

Disputes arose. They have no effect on the rights and duties of the parties under the contract. The space to be allotted was not to exceed 5,500 feet. The space actually allotted was more. It was claimed by plaintiffs that space occupied by toilets and shower baths should not be included. The adjustment of these difficulties arising subsequent to the making of the agreement to lease does not affect the validity of the completed agreement.

The finding that the contract is void under the Statute of Frauds is presented as a conclusion of law. If it is sustained only by facts found on incompetent evidence (Lamkin v. Palmer, 164 N. Y. 201), it is brutem fulmén. The differences of the parties as to the rent due under the old lease may be adjusted elsewhere.

The contract is definite and complete; it states the consideration and is properly signed by the party to be charged thereby. It is definite because the subject-matter of the contract is indicated, not only by the writing itself, but also by the acts of the parties. It is complete because it covers the whole subject. No reference is made to the toilet space and it follows that it is not excepted. The measurement of the excess space, including the toilets, has been covered by agreement of parties. The defendant cannot be heard to say that because it allotted plaintiffs more space than the contract calls for, they may have no space. The agreement is not vague and uncertain in any material respect. (Spiritusfabriek Astra v. Sugar Products Co., 176 App. Div. 829; affd., 221 N. Y. 581; Williston on Contracts, § 48.)

The effort of the defendant to deprive the plaintiffs of the benefit of a fair bargain cannot be sustained by evidence of minor differences which have arisen as to the proper construction of the written agreement after its execution. If this were the rule, any contract might be vitiated for indefiniteness if the parties refused to-agree as to its meaning. This contract is definite and certain in law, whatever the parties may say about the meaning they attach to it.

The judgments should be reversed and a new trial granted, with costs to abide the event.

Hiscock, Ch. J., McLaughlin, Crane, Andrews and Lehman, JJ., concur; Cardozo, J., absent.

Judgments reversed, etc.


author: McLaughlin, J.

text:
    Sylvia Lake Co., Inc., et al., Appellants, v. Northern Ore Company et al., Respondents.
    Courts — judges —• legality of office of justice of Supreme Court open to attack by State alone — third parties may not inquire into title to office — judgment rendered by de facto justice valid.
    1. A de facto judge assumes the exercise of a part of the prerogatives of sovereignty and the legality of that assumption is open to attack by the sovereign power alone. Private parties are not permitted to inquire into the title of persons clothed with the evidence of such offices and in apparent possession of their powers and functions.
    2. A claim that a judgment is invalid because rendered by a justice of the Supreme Court after he became seventy years of age, cannot be sustained, since he was at least, so far as third parties are concerned, a de facto justice so long as' the State allowed a certificate giving information required by law as to his age to remain on file in the office of the Secretary of State.

      Sylvia Lake Co. v. Northern Ore Co., 214 App. Div. 751, affirmed.
    (Argued January 21, 1926;
    decided February 24, 1926.)
    Appeal, by permission, from a judgment of the Appellate Division of the Supreme Court in the third judicial department, entered July 22, 1925, unanimously affirming a judgment in favor of defendants entered upon an order of Special Term granting motions for judgment on the pleadings.

      Alfred G. Reeves, Alton B. Parker and James C. Dolan for appellants.
    The interlocutory judgments signed by Justice Borst in the case of McLear v. Balmat, after the conceded expiration of his term, are void and in violation of the Constitution, and enforcement of those judgments and all proceedings under them should be enjoined. (Settle v. Van Evrea, 49 N. Y. 280; People ex rel. Joyce v. Brundage, 78 N. Y. 403; People v. Gardner, 45 N. Y. 816; People v. Bork, 96 N. Y. 188; Matter of Mayor, 139 N. Y. 140; Gordon v. Trainor, 46 Misc. Rep. 439; Rodding v. Kane, 14 Daly, 535; Matter of Rodding, 14 Civ. Pro. Rep. 47; Orvis v. Curtiss, 28 N. Y. Supp. 728; People v. Bott, 121 Misc. Rep. 380.) The interlocutory judgments are void because of the fraud and misconduct of Justice Borst in misrepresenting his age. (Roosa v. Saugerlies, 12 How. Pr. 297; Livermore v. Bainbridge, 14 Abb. Pr. [N. S.] 227; Reynolds v. Moore, 1 App. Div. 105; Fortunato v. Mayor, 31 App. Div. 371; Topia Mining Co. v. Warfield, 145 App. Div. 422; Smith v. Dunn, 94 App. Div. 429; Redpath v. Walker, 13 Col. 109; Leeds v. Atlantic City, 52 N. J. 332.)

      Francis E. Cullen for respondents.
    The order and judgment dismissing the complaint and the order and judgment of affirmance are sound, because it appears from the face of the complaint that the late Justice Borst was, at least, a justice de facto of the Supreme Court at all times from December 31, 1920, to March 10, 1925, when he resigned. His official acts as such justice were valid as between third parties and cannot, therefore, be the basis of fraud as alleged in the complaint. The validity of such acts cannot be attacked in a collateral action such as this. (Potter v. Luther, 3 Johns. 431; Mac Kinnon v. Barnes, 66 Barb. 91; City of New York v. Vanderverr, 91 App. Div. 303; Mayor v. Sands, 105 N. Y. 210; State v. Carroll, 38 Conn. 449; McGraw v. Williams, 74 Va. 510; Dredia v. Baache, 60 Neb. 655; People v. Cooke, 8 N. Y. 67; Wilcox v. Smith, 5 Wend. 231; Dolan v. Mayor, 68 N. Y. 274; People v. Collins, 7 Johns. 549; M’ Kinstry v. Tanner, 9 Johns. 135; Nelson v. Page, 23 N. Y. 293.)
   McLaughlin, J.

We are of the opinion that the judgments and orders appealed from should be affirmed, notwithstanding the claim of the appellants that they are invalid if they were rendered by Justice Borst after he became seventy years of age. Whatever may be said of his assuming to act after he became seventy years of age, he was, at least so far as third parties are concerned, a de facto justice. He was elected at the general election held in November, 1913, for a term of fourteen years or until the 31st day of December next succeeding the time when he became seventy years of age. Within ten days after the first day of January immediately following his election he, as appears from the record and from the appellants’ brief, in pursuance of section 23 of the Judiciary Law, filed in the office of the Secretary of State a certificate stating that he had accepted the office of justice of the Supreme Court and taken the oath as required by the Constitution and laws of the State, and certifying that he was fifty-six years of age on the 6th of July, 1913, and that his official term would expire by the completion of a full term prescribed in the Constitution on the 31st of December, 1927. This certificate was on file in the office of Secretary of State at the time each of the interlocutory judgments and orders referred to in the complaint was rendered. It was a public document and third parties, so long as the same remained on file, had a right to rely upon the truth of the statements therein contained. It was a well-known fact that Justice Borst had been elected to the office of justice of the Supreme Court. He assumed to act and to discharge the duties pertaining to such office. Litigants had a right to rely upon the fact that he was qualified to discharge the duties pertaining to the office and that his acts in that respect were valid.

A de facto judge assumes the exercise of a. part of the prerogatives of sovereignty and the legality of that assumption is open to attack by the sovereign power alone. This rule is founded upon the considerations of policy and necessity. It has for its object the protection of the public and individuals whose interests may be affected. Offices are created for the benefit of the public. Private parties are not permitted to inquire into the title of persons clothed with the evidence of such offices and in apparent possession of their powers and functions.

The supremacy of the law could not be maintained or its execution enforced if the acts of a judge having a colorable but not a legal title were to be deemed invalid. It is a well-established principle, recognized in all jurisdictions that, so far as the public and third persons are concerned, the official acts of a de facto judge are just as valid as those of a de jure judge. This is especially true when the State requires a judge to file in the office of the Secretary of State a certificate containing certain information. No third party can be permitted, so long as the State allows such certificate to remain on file, to question the truth of the statements therein contained.

The judgments and orders appealed from should be affirmed, with costs.

Hiscock, Ch. J., Pound, Crane, Andrews and Lehman, JJ., concur; Cardozo, J., absent.

Judgments affirmed.