author: Kellogg, J.

text:
    Utica Trust and Deposit Company, Appellant, v. Felix B. Decker, Respondent, Impleaded with Another.
    Mortgage — foreclosure — estoppel — validity of chattel mortgage — section 45 of Personal Property Law providing for posting of sign and filing notice of lien upon merchandise not applicable to chattel mortgage — mortgage valid if filed in accordance with sections 230, 232, of Lien Law — mortgagee not estopped from claiming title to automobiles left with dealer for exhibition purposes only but sold to innocent purchasers for value.
    1. Mortgages, or conveyances intended to operate as mortgages of goods and chattels, are not comprehended within the meaning of the words “ liens upon merchandise or the proceeds thereof created by agreement,” in relation to which section 45 of the Personal Property Law provides that they shall not be void as against creditors or otherwise by reason of lack of possession by the lienor if certain designated notices are posted and filed. Sections 230 and 232 of the Lien Law provide for the filing of chattel mortgages and as to them it is unnecessary to post the sign and file the notice required under the Personal Property Law.
    2. In an action, therefore, to foreclose a chattel mortgage upon two automobiles made to the plaintiff by dealers who were permitted to keep them in their warerooms for exhibition purposes but who sold one to each of the defendants for value, they having no knowledge of the mortgage, a contention that the mortgage was null and void because of the failure of the mortgagee to post the sign and file the notice specified in section 45 of the Personal Property Law cannot be sustained. The mortgage in question having been filed in accordance with the provisions of the Lien Law (§§ 230, 232) was valid.
    3. Nor is the plaintiff estopped by its conduct from claiming title to the mortgaged automobile?. An owner, by the mere delivery of possession of chattels to another, is not precluded from claiming title thereto. Neither is it sufficient to work an estoppel that the person to whose possession the owner intrusts chattels is a dealer in similar merchandise. Nor is it sufficient to make out an estoppel that the possessor of the chattel is authorized by the owner to exhibit the same for the purpose of obtaining offers of purchase. (Biggs v. Evans, 1894 (1 Q. B.), 88; Smith v. Clews, 114 N. Y. 190, followed.)

      Utica Trust & Deposit Co. v. Decker, 217 App. Div. 137, reversed.
    (Argued January 14, 1927;
    decided February 23, 1927.)

      Appeal from a judgment, entered May 20, 1926, upon an order of the Appellate Division of the Supreme Court in the fourth 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.

      James F. Hubbell for appellant.
    Unless it was necessary for the appellant to comply with section 45 of the Personal Property Law, then the chattel mortgage was valid as against this respondent. (Griswold v. Sheldon, 4 N. Y. 581; Edgell v. Hart, 9 N. Y. 213; Ford v. Williams, 13 N. Y. 577; Gardner v. McEwen, 19 N. Y. 123; Ford v. Williams, 24 N. Y. 359; Conkling v. Shelley, 28 N. Y. 360; Miller v. Lockwood, 32 N. Y. 293; Russell v. Winne, 37 N. Y. 591; Frost v. Warren, 42 N. Y. 204; Southard v. Benner, 72 N. Y. 424; Brackett v. Harvey, 91 N. Y. 214; Potts v. Hart, 99 N. Y. 168; Mandeville v. Avery, 124 N. Y. 376; Spaulding v. Keyes, 125 N. Y. 113; Skilton v. Codington, 185 N. Y. 80.) Section 45 of the Personal Property Law has no application to a mortgage upon specific chattels, filed pursuant to section 230 of the Lien Law. (Hollins v. Hubbard, 165 N. Y. 534; People ex rel. Fleming v. Dalton, 158 N. Y. 168.)

      Milton P. Kupfer and Leo Oppenheimer for General Motors Acceptance Corporation et al., amici curiae.

    Section 45 of the Personal Property Law was enacted in 1911 solely to protect the general liens of commission merchants. It has never been held to apply to instruments conferring specific liens on specific chattels, like chattel mortgages, and neither its history, nor its purpose, nor its language justifies — much less requires — such a holding. (Hollins v. Hubbard, 165 N. Y. 534; Boise v. Talcott, 212 Fed. Rep. 268; Ommen v. Talcott, 188 Fed. Rep. 401; People ex rel. Fleming v. Dalton, 158 N. Y. 175.)

      Henry W. Williams for First National Bank of Glens Falls, amicus curice.

    Section 45 of the Personal Property Law does not have the effect ascribed by the court below. (Apex Leasing Co. v. Litke, 173 App. Div. 323; 225 N. Y. 625; National Surety Co. v. Gotham Garage Co., 127 Misc. Rep. 422; Matter of Packard Press, 5 Fed. Rep. [2d] 633.)

      Francis T. Ropiecki, Duane R. Dills and H. C. Sholes for respondent.
    At common law the mortgage is void as .to creditors, and more so as to innocent purchasers whose equities are superior to those of creditors. (Benedict v. Ratner, 268 U. S. 353; Griswold v. Sheldon, 4 N. Y. 581; Edgell v. Hart, 9 N. Y. 213; Ford v. Williams, 13 N. Y. 577; 24 N. Y. 359; Gardner v. McEwen, 19 N. Y. 123; Conkling v. Shelley, 28 N. Y. 360; Miller v. Lockwood, 32 N. Y. 293; Russell v. Winne, 37 N. Y. 591; Frost v. Warren, 42 N. Y. 204; Southard v. Benner, 72 N. Y. 424; Brackett v. Harvey, 91 N. Y. 214; Potts v. Hart, 99 N. Y. 168; Reynolds v. Ellis, 103 N. Y. 115; Haugen v. Hochmeister, 114 N. Y. 566; Mandeville v. Avery, 124 N. Y. 376; Spaulding v. Keyes, 125 N. Y. 113; Shilton v. Codington, 185 N. Y. 80.) The appellant, under the doctrine of estoppel, is precluded from asserting any claim against the respondent. (Thompson v. Blanchard, 4 N. Y. 303; Moore v. Metropolitan Nat. Bank, 55 N. Y. 44; Dows v. Kidder, 84 N. Y. 128; Glass v. Continental Guaranty Corp., 81 Fla. 687; New England Auto Investment Co. v. St. Germaine, 121 Atl. Rep. 398; Gramm-Bernstein Motor Truck Co. v. Todd, 209 Pac. Rep. 3; Anglo-California Trust Co. v. Pacific Acceptance Corp., 70 Cal. App. 41; General Motors Acceptance Corp. v. Boddeker, 274 S. W. Rep. 1016; Forgan v. Bridges, 281 S. W. Rep. 134; Emerson-Brantingham Implement Co. v. Faulkner, 241 Pac. Rep. 431.) The mortgage is void because of the failure to comply with section 45 of the Personal Property Law, which provides the only method of creating a lien upon merchandise. (Howland v. Woodruff, 60 N. Y. 80; Rohrbach v. Germania Fire

      Insurance Co., 62 N. Y. 47; Crommelin v. Railroad Co., 10 Bosw. 80; Brooks v. Bryce, 21 Wend. 16; Wynne v. City of Eastman, 105 Ga. 614; Mitchell v. Town of Plover, 53 Wis. 548; Torres v. Shawano County, 79 Wis. 152; Emerson-Brantingham Implement Co. v. Faulkner, 241 Pac. Rep. 431.)
   Kellogg, J.

This action was brought to foreclose a chattel mortgage upon two automobiles, specifically described in the mortgage, one of which was sold by the mortgagors to the defendant Decker and one to the defendant Foote, each of whom was a purchaser for value, having no actual knowledge of the existence of the mortgage. The defendant Decker answered asserting (1) that the mortgage was null and void because of the failure of the mortgagee to post the sign and file the notice specified in section 45 of the Personal Property Law (Cons. Laws, ch. 41), and (2) that the plaintiff was estopped by its conduct from claiming title under the mortgage. After a trial of the issues at Special Term the court granted judgment for the foreclosure of the mortgage and the sale of the two automobiles to satisfy the mortgage debt remaining unpaid. The defendant Decker appealed to the Appellate Division, which, by a divided court, reversed the judgment, made certain additional findings of fact, and granted judgment dismissing the complaint as against the defendant Decker.

Certain persons, named O’Donoghue and Wetzel, under the firm name of Genesee Motor Car Company, conducted in the city of Utica, N. Y., the business of selling motor cars. For the purpose of raising money to pay for a consignment of four automobiles, O’Donoghue and Wetzel, on April 10, 1924, signed the firm name to a note payable to the firm on demand, indorsed the firm name thereupon, and delivered the same to the plaintiff, the Utica Trust and Deposit Company. They also executed and delivered to the plaintiff bank, as collateral security for the payment of such note, a chattel mortgage, transferring title in the four automobiles to such bank. The chattel mortgage described each of the four automobiles by motor and serial number and specified the value of each car. It named 1805 Genesee street, the place of business of the mortgagors, as the “ Place of Storage.” It required the mortgagors to take immediate possession of the automobiles and thereafter to keep them stored at its place of storage specified. The mortgagors, by the terms of the mortgage, agreed, in regard to the automobiles mortgaged, that they would neither sell, mortgage, rent, loan nor transfer any one of them, nor permit any one of them to go out of their possession, nor secrete any one of them, nor use any one of them for other than exhibition purposes, until the same has been released from this mortgage by the party of the second part as hereinafter provided.” The mortgagee, on its part, agreed that, upon payment to it of a sum equal to the value of any automobile, as specified by the mortgage, it would execute and deliver to the mortgagors a writing releasing such automobile from the mortgage. A copy of the mortgage was subsequently filed in the county clerk’s office, as required by sections 230 and 232 of the Lien Law (Cons. Laws, ch. 33). The mortgagors, O’Donoghue and Wetzel, received from the plaintiff the full amount of the note, paid the proceeds over to the consignor of the automobiles and, taking possession thereof, stored them in their building at 1805 Genesee street, where they conducted the business of selling motor cars. Thereafter they paid the plaintiff the stipulated value of two of the mortgaged cars, obtained releases therefor and sold the same to customers. The mortgage debt was, by the payment, reduced to one-half of the amount of the original note. Thereafter, without paying the plaintiff, or obtaining further releases, they sold one of the remaining automobiles to the defendant Decker and one to the defendant Foote. These purchasers paid full value and had no actual knowledge of the existence of the mortgage. It was conceded upon the trial that the plaintiff, when it made the loan, knew that O’Donoghue and Wetzel, under the firm name of Genesee Motor Car Company, were engaged at 1805 Genesee street, Utica, N. Y., in the sale of motor cars to users. It was also conceded that O’Donoghue and Wetzel, from some time in the year 1922 to April 10th, 1924, had given the plaintiff chattel mortgages, similar in terms to that sought to be foreclosed, to the number of fifty-eight, covering 244 separate motor cars. It was not conceded or proven that any cars so covered by mortgages had been sold by O’Donoghue and Wetzel without their first having obtained releases from the mortgagee, as provided in the mortgages.

We think that the contention that the mortgage was null and void, in that the provisions of chapter 45 of the Personal Property Law were not complied with, is not sound. Section 45 was added to the Personal Property Law by chapter 326, Laws of 1911, which likewise amended section 230 of the Lien Law. The latter section, as amended, provides, in part, as follows: “ Every mortgage or conveyance intended to operate as a mortgage of goods and chattels * * * which is not accompanied by an immediate delivery, and followed by an actual and continued change of possession of the things mortgaged, is absolutely void as against the creditors of the mortgagor, and as against subsequent purchasers and mortgagees in good faith, unless the mortgage, or a true copy thereof, is filed as directed in this article.” Section 45 of the Personal Property Law provides that Liens upon merchandise or the proceeds thereof created by agreement for the purpose of securing the repayment of loans or advances made or to be made upon the security of said merchandise and the payment of commissions or other charges provided for by such agreement, shall not be void or presumed to be fraudulent or void as against creditors or otherwise, by reason of want of delivery to or possession on the part of the lienor,” provided there is placed and maintained at the entrance of every building containing such merchandise, a sign stating the name of the lienor and designating said lienor as “ lienor, factor or consignee ” and provided further that a notice, stating certain facts in relation to the lien, is filed. Thus section 230 of the Lien Law applies to every mortgage or conveyance intended to operate as a mortgage of goods and chattels; ” whereas, section 45 of the Personal Property Law relates to hens upon merchandise or the proceeds thereof created by agreement.” In the case of the former, the mortgage, or a true copy thereof, must be filed in the town or city where the mortgagor resides. (Lien Law, sec. 232.) In the case of the latter, in addition to posting a sign at the entrance of the building where the chattels are situated, a notice, naming the lienor and the creator of the lien, describing the general nature of the merchandise subject to the lien, the period of time during which advances may be made thereupon, and various other facts, must be filed in the town or city where the merchandise is situated and also in the town or city where the lienor has his place í¡f business. (Personal Property Law, sec. 45.) Thus, if the liens of section 45 are-inclusive of the chattel mortgages of section 230, we have two separate provisions requiring wholly different acts to be performed in order to give the mortgage validity. Yet, each section, either expressly or inferentially, declares that the acts specified by it will be sufficient to save the mortgage from invalidity. In order, therefore, that each section should be given full effect, it would seem necessary to draw a distinction between the liens of section 45 and the chattel mortgages of section 230. If we apply the common-law concept of a chattel mortgage we will have no difficulty in making the distinction. Thus, in Parshall v. Eggert (54 N. Y. 18, 23) the following definition is given: “A chattel mortgage is a present transfer of the title to the property mortgaged, subject to be defeated on payment of the sum or instrument it is given to secure.” (To the same effect are Rochester Distilling Company v. Rasey, 142 N. Y. 570; Barrett Manufacturing Company v. Van Ronk, 212 N. Y. 90; 11 C. J. 398; 5 Ruling Case Law, p. 383; Jones on Chattel Mortgages, p. 1.) Chattel mortgages are in no sense liens upon merchandise or the proceeds thereof ” for they are not liens at all. They are not “ created by agreement.” They are not given to secure “ the payment of commissions or other charges.” A mortgagee named therein could in no true sense be designated “ as lienor, factor or consignee ” in a sign to be posted as required by .section 45 of the Personal Property Law. It may well be that the provisions of that section were intended exclusively to afford hens to factors, not in possession of the goods of their principals, for advances made upon the goods. The debates which were had in the Legislature, at the time of the enactment of section 45, would indicate that such was the purpose of those who sponsored the enactment. However this may be, it would be sufficient, for the purpose of this case, to hold that hens upon merchandise or the proceeds thereof created by agreement,” in relation to which section 45 of the Personal Property Law makes provision, do not comprehend a mortgage or conveyance intended to operate as a mortgage of goods and chattels,” in relation to which section 230 of the Lien Law provides, and that in the case of such a mortgage it is unnecessary to post tha sign and file the notice required by section 45. The same result may be achieved by a different hne of reasoning. Section 230 of the Lien Law, in addition to the provision quoted, contains the following: This article shah not apply to agreements creating hens upon merchandise or the proceeds thereof for the purpose of securing the repayment of loans or advances made or to be made upon the security of said merchandise and the payment of commissions or other charges provided for by such agreement, where the conditions specified in section forty-five of the personal property law are complied with, * * *.” Inferentially, it is thus provided that, if the sign is not posted and the notice is not given, as provided by section 45 of the Personal Property Law, then the provisions of section 230 of the Lien Law shall apply, and a filing thereunder will be sufficient to save the chattel mortgage) Thus the same conclusion is reached that it is unnecessary to post and file, under section 45, in order to give a chattel mortgage validity. In our case the provisions of section 45 were not complied with, so that the provisions of section 230 took effect. Whichever path of reasoning we follow, therefore, the conclusion is necessarily reached that the, mortgage in question, having been filed in accordance with the provisions of section 230 of the Lien Law, was a valid mortgage.

In substantiation of his claim that the plaintiff is estopped by its conduct from claiming title to the mortgaged automobiles, the defendant cites the fact that possession of the automobiles was accorded to the mortgagors by the mortgagee; that the mortgagee knew that the mortgagors were dealers who sold automobiles at the very place where the mortgaged automobiles were required to be stored; that the mortgagee authorized the mortgagors to use the automobiles for exhibition purposes, presumably to the end that they might be sold. It is the universal rule that an owner, by the mere delivery of possession of chattels to another, is not thereby precluded from claiming title thereto. (Williston on Sales, sec. 313; 25 L. R. A. [N. S.] p. 760; note, Covill v. Hill, 4 Denio, 323; Ballard v. Burgett, 40 N. Y. 314; McNeil v. Tenth National Bank, 46 N. Y. 325; Smith v. Clews, 114 N. Y. 190.) Neither is it sufficient, to work an estoppel, that the person to whose possession the owner intrusts chattels is a dealer in similar merchandise. (Williston on Sales, sec. 314; Smith v. Clews, supra; Biggs v. Evans, [1894] 1 Q. B. 88; Forristal v. McDonald, 9 Can. S. C. 12.) In the last case the remark is made that if the true doctrine were otherwise than, as stated above no man could safely leave his watch with a watch maker who sells watches, or his carriage with a carriage maker who sells carriages, to be repaired.” Similarly, it might be said that if the doctrine were otherwise no automobile owner could safely leave his car in a garage, where the business of selling cars is conducted, for the purpose of storing the same or having it repaired. Again, it is not sufficient, to make out an estoppel, that the possessor of the chattel is authorized by the owner to exhibit the same for the purpose of obtaining offers of purchase. (Williston on Sales, sec. 315; Biggs v. Evans, supra; Smith v. Clews, supra.) The cases last cited are peculiarly pertinent upon this issue.

In Biggs v. Evans (supra) the owner of an article of a class dealt in by jewelers sent it to a dealer in jewelry who ordinarily sold such things for other people in his own name. He sent with it a letter which contained the following: I will intrust you with the sale of my opal table upon the following conditions. That the table shall not be sold to any person nor at any price without my authorization is first obtained that such sale shall be effected.” The tabletop was sold by the jeweler, without obtaining further authority, to a bona fide purchaser for value. The plaintiff succeeded in his suit to recover possession from the purchaser. Wills, J., remarked that if the plaintiff had given general authority to the jeweler to sell, any limitation imposed as to the terms on which, or the manner in which, the sale should be conducted, would have been unavailing, but that here was no such case since the jeweler was not to sell the tabletop at all until further authority was given. He said: The true test is, I take it, whether the authority given in fact is of such a nature as to cover a right to deal with the article at all.”

In Smith v. Clews (supra) plaintiffs, who were diamond merchants, delivered to a diamond broker, named Miers, a pair of diamond ear-knobs and took from him a receipt as follows: Received from Alfred H. Smith & Co. * * * a pair of single stone diamond ear-knobs * * * ' on approval ’ to show to my customers. Said knobs to be returned to said A. H. Smith & Co. on demand.” Miers had told the plaintiff that he thought he could sell the knobs to the defendant Clews. Miers did in fact sell the knobs to Clews, who paid value therefor and had no knowledge of the plaintiff’s title. An action was then brought by the plaintiffs to recover the knobs from Clews. Evidence was offered by the plaintiffs to show that in the diamond trade the words on approval ” were understood not to confer a power to sell, but authority merely to show diamonds to a customer and report to the owner. The complaint was dismissed. This court reversed on the ground that error was committed in excluding proof as to the meaning' of the expression “ on approval.” The decision is a direct authority, therefore, to the effect that an owner is entitled to recover chattels from a dealer to whom he has intrusted them, provided he can show that while authority was given to exhibit the chattels for sale, no authority to sell, without first reporting to the owner, was conferred. Brown, J., said: “ Clews’ title to the diamonds, therefore, depended wholly on Miers’ authority to sell, and he was bound by such limitation as the owner had placed upon Miers’ possession, and unless authority to sell existed Clews, although acting in entire good faith, obtained no title to the stones.”

In the case at bar the Genesee Motor Car Company, although given the power to exhibit the mortgaged automobiles to purchasers, was never authorized by the plaintiff to make any sales thereof. On the contrary, that firm was expressly bound not to “ sell, mortgage, rent, loan nor transfer any one of them.” It cannot well be said that the mortgagors were given the power to sell provided they applied and obtained releases from the mortgagee by paying the value of the cars to be sold. If such releases were obtained, the power of sale would not rest in any authorization from the mortgagee to sell for it; it would exist as an attribute of an unconditional title to the automobiles which the mortgagors had thus acquired. We think that the cases of Biggs v. Evans (supra) and Smith v. Clews (supra) are precise authority to the effect that the plaintiff was not estopped by its conduct from asserting title to the automobiles, under its mortgage, and to that proposition we adhere.

The judgment of the Appellate Division should be reversed and that of the Special Term affirmed, with costs in this court and in the Appellate Division.

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

Judgment accordingly.


source: Caselaw Access Project

author: Cardozo, Ch. J.

license: Public Domain

text:
    Wayne County Produce Company, Respondent, v. Duffy-Mott Company, Inc., Appellant.
    Contract — sale — merchandise bought and paid for at stated price plus war tax — refund by government to seller of amount paid for tax — purchaser entitled to recover from seller the amount thereof.
    A purchaser of merchandise, at a fixed price, subject to a stated discount, plus the manufacturer’s war tax, which was paid in full without discount, is entitled to recover from the seller the amount paid on account of the tax, where, after the same had been paid to the government, came a ruling of the courts that the merchandise sold was not subject to a tax and the seller demanded and obtained a refund of the taxes thus unlawfully collected. The promise of the buyer was to pay a stated price and put the seller in funds to pay a tax besides. In such a case the failure of the tax reduces to an equivalent extent the obligation of the promise.

      Wayne Co. Produce Co. v. Duffy-Mott Co., 217 App. Div. 781, affirmed.
    (Argued January 18, 1927;
    decided February 23, 1927.)
    Appeal from a judgment of the Appellate Division of the Supreme Court in the second judicial department, entered July 2, 1926, which affirmed a judgment in favor of plaintiff entered upon an order of Special Term, granting a motion by plaintiff for summary judgment under rule 113 of the Rules of Civil Practice.

      A. S. Gilbert and Godfrey Cohen for appellant.
    There is no basis legal or equitable on which to sustain the first cause of action, because the payment was voluntarily made, and if made by mistake then under a mistake of law. (Clark v. Butcher, 9 Cow. 674; Champlin v. Laytin, 18 Wend. 407; Lyon v. Richmond, 2 Johns. Ch. 51; Doll v. Earle, 59 N. Y. 638; Flynn v. Hurd, 118 N. Y. 19; Newburgh Sav. Bank v. Woodbury, 173 N. Y. 55; Knickerbocker Trust Co. v. Oneonta Ry. Co., 138 App. Div. 687; 201 N. Y. 379; Beloff v. Dime Sav. Bank, 118 App. Div. 20; 191 N. Y. 551; Kastner v. Duffy-Mott Co., Inc., 125 Misc. Rep. 886; Heckman & Co. v. Dawes & Son Co., 12 Fed. Rep. [2d] 154.)

      Edmond B. Butler and Francis X. Carmody for respondent.
    Since the tax was paid by the plaintiff to the defendant, the defendant “ received this refund to the plaintiff’s use. and ex cequo et bono should pay it over to the plaintiff.” (Friend v. Rosenwald, 124 App. Div. 226.)
   Cardozo, Ch. J.

Plaintiff bought from the defendant large quantities of sweet cider. The price was to be 14% cents per gallon subject to a stated discount, plus the manufacturer’s war tax of 10 per cent, which was to be paid in full without discount. For 157,210 gallons bought between November 8, 1920, and August 13, 1921, the payment was $27,514.55, of which $2,501.33 was for the tax. Defendant, the manufacturer, after collecting the amount of the tax from the plaintiff, paid it over to the Federal government. In 1922 came a ruling of the courts that sales of sweet cider were not subject to any tax whatever (Monroe Cider Vinegar & Fruit Co. v. Riordan, 280 Fed. Rep. 624; Casey v. Sterling Cider Co., 294 Fed. Rep. 426). The Treasury Department and manufacturers generally had misconstrued an act of Congress (Internal Revenue Act of February 4, 1919, § 628-A) whereby a tax of ten per cent was levied upon sales of unfermented grape juice and " other soft drinks.” Defendant demanded and obtained a refund of the taxes thus unlawfully collected. ■ The question is whether the money thus refunded by the government is held by the defendant to its own use or to the use of the plaintiff who is suing to get the money back.

We think the plaintiff must prevail. This is not a case where the item of the tax is absorbed in a total or composite price to be paid at all events. In such a ease the buyer is without remedy, though the annulment of the tax may increase the profit to the seller (Moore v. Des Arts, 1 N. Y. 359). This is a case where the promise of the buyer is to pay a stated price, and to put the seller in funds for the payment of a tax besides. In such a case the failure of the tax reduces to an equivalent extent the obligation of the promise. The form of the transaction was not thoughtless or accidental. It was deliberate and purposed. The end to be served is conceded in the briefs of counsel. If a sum equal to 10 per cent of the quoted price per gallon had been added to the price as something to be paid at all events, a tax would have been due upon the sum so added as well as upon the residue. A form was adopted whereby the manufacturer was in a position to account to the government at the quoted rate per gallon, and to pay the tax with the excess. The defendant had the benefit of the transaction as thus moulded in its dealings with the government. It is now attempting to set upon the transaction the impress of another quality in its dealings with the plaintiff. We find no evidence in the record to justify the change of front. The quality impressed at the beginning persists until the end.

The contract, therefore, in effect was this and nothing more, that whatever moneys were necessary for the payment of a tax would be furnished by the buyer. Annulment of the tax after the sale and the delivery of an invoice, but before the payment of the price, would have extinguished the seller’s right to exact payment from its customer of the added 10 per cent. Payment, if then exacted, would have been no longer payment for a tax, but payment for something else. By the same token, annulment at a later date, when followed by the refund of the tax and the undoing of the whole transaction between the seller and the government, leaves the money applicable to the same use as if the invalidity of the impost had been declared at the beginning.

The argument has been made that such a holding, if accepted, will lead by logical extension to an untenable conclusion. We are asked whether a like remedy would be thought to be available, if the tax were still enforcible and the seller had omitted to make payment to the government. But the situation thus supposed has only a remote analogy to the situation now at hand. The buyer has no interest, while the tax is an outstanding liability, in the application of the money. The controversy in such circumstances is solely between taxpayer and government. The buyer’s duty would remain to supply the promised funds whereby the seller could discharge a continuing obligation. Here there is no obligation, either actual or pretended.

We think the judgment for the plaintiff is well sustained by the decisions (Friend v. Rosenwald, 124 App. Div. 226; Solomon Tobacco Co. v. Cohen, 184 N. Y. 308, 311). There have been rulings to the contrary (Heckman & Co. v. Dawes & Son Co., Inc., Ct. of Appeals, D. C., 12 Fed. Rep. [2d] 154; Kaslner v. Duffy-Mott Co., App. Term, 125 Misc. Rep. 886). They have their origin, it would seem, in a misconception of the contract. The distinction is unimportant, at least for present purposes, between mistakes of fact and those of law. The quality of the mistake did not prevent the defendant from recovering the money from the government. It cannot absolve from the duty of disposing of the money thus recovered as good conscience shall dictate.

The documents and the course of dealing establish so clearly the nature of the transaction that there remains nothing to be tried (O’Meara Co. v. Nat. Park Bank of N. Y., 239 N. Y. 386).

The judgment should be affirmed with costs.

Pound, Crane, Andrews, Lehman and Kellogg, JJ., concur.

Judgment affirmed.


author: Lehman, J. Crane, J.

text:
    The People of the State of New York, Respondent, v. Edward A. Noblett, Appellant.
    Crimes — larceny — trial — courts may not create a new definition of a particular crime •— no common-law larceny where owner has parted with title as well as possession of property — proof that defendant received money as rent of property, possession of which he failed to deliver, insufficient to sustain conviction for common-law larceny where purpose was that defendant might have use of money immediately.
    1. It is the function of the Legislature to determine whether modern conditions dictate a wider definition of acts- which should subject the wrongdoer to criminal responsibility. Courts may not create a new definition of a particular crime because judges may believe that the limits previously fixed are too narrow.
    2. Where the owner has parted not only with possession but with title to property or money there can be no common-law larceny.
    3. Upon trial of an indictment charging common-law larceny, proof that defendant had received from the complaining witness a sum of money as rent for an apartment, possession of which he failed to deliver, is insufficient to warrant a conviction where it appears that the money was paid under a contract requiring payment of the rent in advance, the purpose of which was that the defendant might have the right to use the money immediately for his own purpose and it was not said that the delivery of the money was conditional upon the delivery of- possession of the apartment. Assuming that defendant obtained money by trick or deviee he is not guilty of larceny for the owner was induced to give not only possession but title. (People v. Miller, 169 N. Y. 339; Commonwealth v. Rubin, 165 Mass. 453, 455, distinguished.)

      People v. Noblett, 218 App. Div. 763, reversed.
    (Argued January 17, 1927;
    decided February 23, 1927.)
    Appeal, by permission, from a judgment of the Appellate Division of the Supreme Court in the first judicial department, entered November 19, 1926, unanimously affirming a judgment of the Court of General Sessions of the County of New York, rendered upon a verdict convicting the defendant of the crime of grand larceny in the first degree as a second offense.

      Oswald N. Jacoby for appellant.
    The defendant was unjustly convicted of common-law larceny. (People v. Dumar, 106 N. Y. 502; People v. Cohen, 148 App. Div. 205; People v. Ehrlich, 190 App. Div. 302; Zink v. People, 77 N. Y. 114.)

      Joab II. Banton, District Attorney (Felix C. Benvenga and Archibald Firestone of counsel), for respondent.
    The defendant was properly convicted of common-law larceny. (People v. Dumar, 106 N. Y. 502; People v. Katz, 209 N. Y. 311; People v. Miller, 169 N. Y. 339; People v. Neff, 191 N. Y. 210; Smith v. People, 53 N. Y. 111; Hildebrand v. People, 56 N. Y. 394; Loomis v. People, 67 N. Y. 322; Shipply v. People, 86 N. Y. 375; Justices v. People, 90 N. Y. 12; People v. Morse, 99 N. Y. 622.)
   Lehman, J.

In March, 1926, the defendant was the •tenant of an apartment on Riverside drive in the city of New York. The term of his lease had expired, but right of occupation and possession continued under the statutes known as the Rent Laws. He inserted an advertisement in the New York Times offering to “ subrent by month or year his furnished apartment. The complaining witness read the advertisement on March 12th. He communicated with the defendant and pursuant to appointment he met the defendant on the same day at his apartment. The complaining witness agreed to lease the apartment till June 1st; possession was to be given on March 20th. The rent of $550 was to be paid in advance. The complaining witness paid $40 on account and agreed to pay the balance of the rental in advance the following morning, March 13th. He received from the defendant a written receipt, signed by the defendant, for the $40 he paid on account. The terms of the agreement were embodied in it. On the following morning the complaining witness paid the defendant the sum of $510, the balance of the agreed rental, but he has not received possession, either on March 20th, or at any other time, of the apartment which the defendant agreed to rent to him.

The indictment against the defendant contains two counts. The first count charges in effect that the defendant obtained the sum of $510 from the possession of the complaining witness by false and fraudulent pretense and representation.” The only false representation which is alleged is that the defendant “ then and there owned a lease of Apartment 12C at premises 131 Riverside Drive, New York County, covering a period of eight years, which said lease then had still two years to run.” The second count charges in common-law form the larceny of the same moneys. At the close of the People’s case the trial justice dismissed the first count of the indictment. His ruling was not based upon any technical distinction between common-law larceny by trick and device, and obtaining money or property by false pretense. It was based upon a holding that the evidence showed beyond possibility of dispute that while the defendant did not have a lease of the apartment with two years to run, yet, if he continued to pay rent, he did have right to possession under the Rent Laws extending beyond the term for which he agreed to give a sublease and that, therefore, the alleged false representation, even if made, was not material. At the time the motion was made, the evidence was clearly insufficient to show that the complaining witness had parted only with possession of the moneys, reserving title thereto, and the trial judge was apparently not under any misapprehension that in such circumstance a. conviction for common-law larceny could be sustained. He did, however, permit the complaining witness to be recalled in an attempt to show that he gave the defendant the money only upon condition. After additional testimony was given, the trial judge denied the motion to dismiss the second count of the indictment. The jury convicted the defendant upon the second count, and the only question which requires serious consideration is whether the evidence is sufficient to show common-law larceny by trick and device. If the conviction must be reversed, it is not because of mistaken choice of which crime the evidence shows was committed.

The complaining witness parted with his money under a contract which required payment in advance for rental of an apartment. The receipt given by the defendant so recites. The complaining witness testified that he paid the money on condition that he should receive possession of the apartment. Of course the complaining witness paid the money with the expectation that he would in return receive the agreed consideration, but the evidence seems to show clearly that the complaining witness parted not only with temporary possession of the money but with his general property in it. The purpose of payment of the rent in advance was that the defendant might have the right to use the money immediately for his own purpose. He told the complaining witness in effect that he would use it to pay his rent to the landlord of the apartment which he was agreeing to sublease to the complaining witness. He did use it for the purpose of paying rent which was in arrears. Perhaps the defendant did not intend to give to the complaining witness possession of the apartment for which rent was payable in advance. He may have been guilty of conduct which Was morally reprehensible, but he is not guilty of larceny by trick and device if the complaining witness transferred to the defendant not merely possession but ownership of the money. We may not pass upon the defendant’s moral conduct, or even upon the question of whether he may have been guilty of some crime other than common-law larceny. The sole question before us is whether he has been properly convicted of that crime.

Narrow technical distinctions by which a wrongdoer may escape the consequences of a crime hinder the administration of justice. The courts which administer the law fail to function properly when the penalty which the law has placed upon the commission of a crime may be evaded by the proven criminal through subtle reasoning based on obsolete theory. These are truisms which should require no repetition, but they may not lead the court to create a new definition of a particular crime because judges may believe that the limits previously fixed are too narrow. It is the function of the Legislature to determine whether modern conditions dictate a wider definition of acts which should subject the wrongdoer to criminal responsibility. We may not assume that function even where the established definition of a crime may be based upon distinctions which seem to us at the present time inconsequential. We may not hold that acts come within such definition which under recognized authority have been hitherto excluded.

A long line of authorities in this and other jurisdictions have in the past laid down the limits which define the crime of larceny when possession of property is obtained by a trick or device. On the one hand, we have the cases where the possession of the money or goods said to have been stolen has been parted with, but the owner did not intend to part with the property in them, so that part of the transaction is incomplete and the parting with the possession has been obtained by fraud — that is larceny.” Per Lord Coleridge in the case of Queen v. Russett (1892, 2 Queen’s Bench Division, 312). On the other hand, we have the cases where the owner has parted not only with possession but with title to property or money — in such cases there can be no common-law larceny.

In some jurisdictions such distinctions have been obliterated by statute. (See 24 and 25 Victoria, chap. 96, sections 72 and 88; Stephen’s Digest of Criminal Law [7th edition], p. 483; Massachusetts Revised Laws, 1902, chap. 208, sections 26, 39, 40 and 67; Commonwealth v. McDonald, 187 Mass. 581; “Larceny, Embezzlement & Obtaining Property by False Pretenses,” 20 Columbia Law Review, 318.) In this State the distinction has been maintained, at least for some purposes, in the statute. True, the statute provides that not only a person who “takes ” property “ from the possession of the true owner, or of any other person ” but also a person who “obtains ” property “ from such possession by color or aid of fraudulent or false representation or pretence ” is guilty of larceny (Penal Law, section 1290), but a defendant may not be convicted upon the charge of “taking ” the property of another from the possession of the true owner where the owner parted not only with the possession but with the title. The section includes in the definition of larceny “ every act which was larceny at common law besides other offenses which were formerly indictable as false pretenses or embezzlement ” (People v. Miller, 169 N. Y. 339), but a defendant must be charged with the particular offense the People claim he has committed. (People v. Dumar, 106 N. Y. 502.) In this case the. dismissal upon failure of proof of the count of the indictment which charges the defendant with obtaining money by false pretenses leaves open only the question of whether the evidence sustains the charge contained in the indictment of common-law larceny by trick and device.

The cases where the courts have been Called upon to determine whether the evidence shows common-law larceny are so numerous that extended analysis, or even reference, must be limited to a few cases selected largely because the People maintain that they constitute authority to sustain the conviction. The fundamental distinction already pointed out between larceny and obtaining property by false pretenses has hardly been questioned. Where the owner has voluntarily and completely passed title there can be no common-law larceny by trick and device, though the owner was induced to part with title by fraud. Difficulty arises only in the determination of whether the title has passed completely. Here the money was delivered in return for the promise to deliver possession of the premises one week later under a lease to continue to June 1st. Nothing was said that the delivery of the money was conditional upon the delivery of possession of the apartment. On the contrary, it was expressly agreed that payment should be “ in advance,” and the defendant had the right immediately upon receipt of the money to use it for his own purpose. The money was received as the result of a contract, but the defendant did not by contract agree that he would use it for any specific purpose.

Distinction between delivery of money or property upon the credit of future promise, and delivery of money or property upon express or implied condition has been pointed out in the case of Regina v. Slowly (12 Cox Criminal Cases, 269). In that case the complaining witness unloaded onions at a place directed by the defendants, relying upon the defendants’ statement that you shall have your money directly the onions are unloaded.” The court there held that the defendants were guilty of larceny, for the passing of the title of the onions and payment for them were intended to be simultaneous, and until payment was made, delivery was incomplete. The court nevertheless stated: “If in this case it had been intended by the prosecutor to give credit for the price of the onions even for a single hour, it would not have been larceny.” To the same effect is the case of Queen v. Russett (1892, 2 Q. B. D. 312), where the complaining witness gave the defendant a sum of money as part of the purchase price of a horse upon an agreement that complete delivery of purchase price and delivery of the horse should be part of the same transaction and constitute concurrent conditions. In the case at bar, however, the complaining witness did intend to give credit to the defendant. The contract between the parties could not be completely performed till the defendant gave possession of the apartrqent, but nothing remained undone under the contract which constituted condition to the right of the defendant to use the money as his own. Even if he acquired that right by fraud, he has not by trespass taken the property of defendant, and is not guilty of larceny.

In this State the rule was stated in Smith v. People (53 N. Y. 111): “ If by trick or artifice the owner of property is induced to part with the custody or naked possession to one who receives the property animo furandi, the owner still meaning to retain the right of property, the taking will be larceny; but if the owner part with not only the possession, but the right of property also, the offense of the party obtaining them will not be larceny, but that of obtaining goods by false pretences.” In that case the statement of facts shows that the complaining witness gave the prisoner a watch, chain and locket or cross and two dollars in money, belonging to her husband, which property he was to pawn and give the ticket and money to her husband.” Clearly the prisoner did not obtain the right to treat the property as his own; possession was given to him only for a special purpose and until the purpose was carried out right of property remained, and was intended to remain, in the original owner and the prisoner was only the custodian. He might, therefore, be held guilty of larceny.

In Hildebrand v. People (56 N. Y. 394) the prosecutor handed the prisoner, who was a bartender in a saloon, a fifty dollar (greenback) to take ten cents out of it in payment for a glass of soda.” The court held that under these circumstances “ the prosecutor retained the control and legally the possession and property.” “ It was an incomplete transaction, to be consummated in the presence and under the personal control of the prosecutor. There was no trust or confidence reposed in the prisoner, and none intended to be. The delivery of the bill and the giving change were to be simultaneous acts, and until the latter was paid, the delivery was not complete.”

In Loomis v. People (67 N. Y. 322) the complaining witness delivered money as a stake upon the throw of dice. The court there held that the delivery of the stake was understood and intended to be complete only if and when the complaining witness lost the throw. Obviously title to money staked upon a chance is intended to pass only when the chance has ended; and delivery of money or property as a stake becomes complete only when the contingency upon which title is intended to pass has eventuated. To the same effect is the case of Queen v. Buckmaster (1888, 20 Q. B. D. 182).

In Shipply v. People (86 N. Y. 375) the defendant obtained possession of goods without paying for them, though the goods were sent to him C. O. D. By contract between the parties, delivery of the goods and payment therefor were to be simultaneous. Delivery was incomplete till payment was made and no title could pass till that time.

In all these cases the owner of the goods or moneys made delivery to the defendant upon an implied or express understanding and condition that delivery should not be ' complete and title should not pass until the defendant did a stipulated act or other stipulated contingency arose. Until that time the defendant was the bare custodian. Here the complaining witess reposed confidence and trust in the defendant. He made delivery to him in reliance upon promise to give him possession of the apartment a week thereafter. Delivery of the money by the owner and performance by the defendant of the promise were not intended to be simultaneous. The owner gave, the defendant the right to deal as he wished with the money, even before stipulated performance on his part. These circumstances differentiate the case under review from the earlier cases so completely that under the reasoning of these cases opposite conclusion seems dictated in this case, and that conclusion is fortified by other decisions of this court. (Zink v. People, 77 N. Y. 114; People v. Dumar, supra.)

It is said that the decision of this court of People v. Miller (169 N. Y. 339) presents an analogous situation and supports the judgment of conviction in this case. The defendant there duped a large number of people and induced them to deposit money with him to be used in speculation by a representation or promise that he would pay a “ dividend of ten per cent weekly until the deposit was withdrawn.” The court held that a depositor ” intended to part only with the manual custody of money delivered to the defendant. The defendant acquired no right to use it as he saw fit, but might use it only for speculation through a “ syndicate ” in which each depositor should have an interest. Unless or until the money was used for the purpose for which it was delivered, delivery was not complete and title did not pass. The court pointed out that in that case the defendant obtained the property by false promise, but it was a false promise “ as to future operations with the property.” In the present case if there was false promise by the defendant it did not concern “ future operations with the property.” In the Miller case the owner parted with possession of property only for the purpose of enabling the defendant to carry out his promise to use it for the owner’s benefit, •and to the extent necessary to effectuate that purpose. In the present case the owner parted absolutely with all control of the money and vested in the defendant full and complete right to use it for his own purpose and benefit, relying upon the defendant’s promise to transfer in the future the stipulated consideration for the money. In such case, under all authorities, there is no trespass and no larceny.

Some reliance is placed upon the statement in the opinion by Mr. Justice Holmes in Commonwealth v. Rubin (165 Mass. 453 at p. 455) that: It may be assumed that acceptance of a chattel upon a contract or promise, with intent not to carry out the promise but to convert the chattel ” may constitute larceny; citing Commonwealth v. Barry (124 Mass. 325); Bishop on Criminal Law (8th edition, section 813). Read in its context and in the light of the authorities cited it is evident that the words “ contract or promise ” refer to a contract or promise in regard to future operations with the property and not to a contract where the owner parted with title to property upon faith in a promise given by other party. Indeed, Mr. Justice Holmes in the previous sentence has stated the rule that there may be larceny when the possession of a chattel, but not the title, is gained by a trick or fraud with intent to convert it” (italics are ours). In this case even if we assume that the defendant did obtain money by trick or device, he is not guilty of larceny for the owner was induced to give not only possession but title.

Judgment of the Appellate Division and that of the trial court should be reversed and the indictment dismissed.

Crane, J.

(dissenting). This appeal has to do with a question of practice and pleading. The guilt of the defendant does not enter into it at all.

On the 12th day of March, 1926, Edward A. Noblett advertised in the New York daily papers that he would rent his apartment, 131 Riverside drive, by the month or year, furnished. The complainant, Stephen Bourne, answered the advertisement in person, and was told by the defendant that he had a two-year lease; that he would give him possession March 20 until June 1 for $510. The statements were false, as the defendant was a holdover tenant, with proceedings pending to dispossess him. The jury have found on competent evidence that his advertising was a mere trick and device for obtaining money; that he never intended to give possession of his apartment to Bourne; but at the time he took Bourne’s money, he intended to steal it. After getting the money, the defendant refused to deliver possession of the apartment, and was found inserting like advertisements in the papers to catch other victims. We start the consideration of this case, therefore, with these facts: The defendant put a false advertisement in a newspaper, indicating that he would rent and deliver possession of his apartment; Bourne answered it, and paid $510 for possession from March 20; the defendant never intended to give possession of his apartment; he had no right to give possession of it, but he intended by this trick and by this device to get and steal the money. All these matters were fairly submitted to the jury on a charge of the court covering these points. None of the elements going to make up the crime of larceny were omitted in the trial of the case. The jury found against the defendant, and as there is evidence to support their conclusion, we in this court are bound by it. Therefore, I say we start with the crime of larceny, as defined by section 1290 of the Penal Law, proved against this defendant. The question is: “ Did the indictment state the crime of which the-defendant was convicted.’

All that we have in the Code of Criminal Procedure (Sect. 275) regarding the indictment is:

“ The indictment must contain:

“ 1. The title of the action, specifying the name of the court to which the indictment is presented, and the names of the parties;

“2. A plain and concise statement of the act constituting the crime, without unnecessary repetition.”

All this the indictment in this case contained. The plea in this court is that the defendant, although guilty, was tried on the wrong count. In brief, the indictment consisted of two counts. The first accused the defendant of grand larceny in the second degree as a second offense, in that on the 13th of March, 1926, he obtained money from Stephen Bourne by means of false and fraudulent representations, in that he represented that he owned a lease of apartment 12C at premises 121 Riverside drive, New York county, with two years to run; all of which was false, and by means of which he got $510 from Bourne. The second count accuses the defendant of grand larceny as a second offender, in that on the day aforesaid, he did steal, take and carry away from Stephen Bourne personal property of the value of $510. The defendant was indicted as a second offender because he has been twice before convicted of larceny.

The first count is commonly known as obtaining money by false pretenses; the second is known as common-law larceny. Both are now included in the one provision of section 1290 of the Penal Law, defining larceny. No distinction whatever is now made in the definition of larceny between the common-law larceny and larceny by false pretenses and representations. There is a distinction which has grown up out of the cases, purely artificial, regarding the pleading. If a man is to be prosecuted for obtaining money by false pretenses, the pretenses must be set forth in the indictment provided, and provided only, that title has passed to him accompanying possession. If, on the other hand, he obtains by the same false pretenses merely the possession of the property, title remaining in the owner, it is a common-law larceny, and the false pretenses and representations need not be alleged in the indictment. That is, the same false representations may constitute larceny at common law, or the obtaining of property by false pretenses; in the first case the representations need not be alleged in the indictment; in the second, they must be. The determining factor on this question of pleading is the passing of title, not the representations.

Here we have inserted into our criminal practice upon a mere question of pleading all the uncertainties of the Uniform Sales Act, regarding the right to bring action for price, or an action for damage upon breach of contract. And this is no exaggeration, for the very situation confronted the trial judge and district attorney in this case. After a colloquy lasting over many pages in the record, the judge dismissed the first count and forced the district attorney to proceed on the second count, saying:

“ The case will be submitted to the jury on the theory of common law larceny by trick and device * * * the testimony has been to the effect that he (Bourne) gave this money intending that he get possession of the premises. The jury may determine whether or not when he gave him the money he parted with title and possession, or whether he parted only with possession.”

This ruling came at the end of the People’s case; all the evidence was in. Surely it cannot be said that there was no evidence to sustain a finding that a larceny of some kind had been committed, either larceny by false representations or else common-law larceny. All the evidence for the People was before the court and jury. Which was it? The indictment covered both, and was broad enough and full enough to sustain a verdict upon one theory or the other. All the evidence going to show false representations need not be alleged in the indictment.

The same false statements proved either larceny by false representations or else larceny at common law by trick and device. The deciding point, as heretofore stated, would be the passing of title. To sustain the second count, it would be necessary to show that title did not pass with possession. The trial proceeded upon this second count. And now in the judgment of some of my associates this was fatal; title had passed and there was no common-law larceny. To me, this is a highly technical, rule of pleading which need not be applied to this case. It serves here no use whatever. It is not an answer to say that the defendant should be informed of the false pretenses charged against him; he is not so informed when the false pretenses obtain possession but no title. The passing of title is not something which we can see and handle; it exists merely in the intention of the parties.

Now this old rule of pleading has been repeatedly criticised, and the courts have endeavored to get away from it. Under the old Revised Statutes (2 Rev. Stat. part 4, chap. 1, art. 4th [year 1828]), cheats, or obtaining property by false pretenses was made a crime in a separate article (Sect. 53) for which a distinct punishment was enacted. Article 5th provided for another crime, which was larceny and embezzlement, and different punishment. Section 63 thereof enacted that feloniously taking and carrying away the personal property of another was larceny. This was the old common-law larceny. From these separate divisions of crime, grew up the practice of pleading the false representations in the first case, and omitting them in the second. This division was continued in the Revised Statutes of 1875. (See art. 4th and art. 5th of part IV, chap. 1 of the Rev. St. vol. 3, 6th ed,) The Penal Code, in section 528, and now the Penal Law, in section 1290, combined both offenses into one with one punishment, to be known as larceny. For myself, I can see no reason why there should be any distinction in pleading; but the courts have made this distinction, calling attention to the fact that the crimes frequently merge into one; that the same false pretenses may make the crime of obtaining money by false pretenses or the common-law larceny; that the distinction between them is often shadowy. Thus, in People v. Dumar (106 N. Y. 502), Danforth, J., said:

In either case the property may have been obtained by artifice or fraud; but if in one the owner intended to part with his property absolutely and to convey it to the defendant, but in the other intended only to part with the temporary possession for a limited and specific, purpose, retaining the ownership in himself, the latter case would be larceny, but the former would not. It was, therefore, uniformly held that if a person, through the fraudulent representations of another, delivered to him a chattel intending to pass the property in it, the latter could not be indicted for larceny but only for obtaining the chattel under false pretenses.”

And the judge added:

“ The distinction was adhered to, although with reluctance, and in deference only to earlier cases.”

This Dumar case also held that if the crime be that of obtaining property by false pretenses, the false pretenses must be set forth in the indictment. So too, People v. Blanchard (90 N. Y. 314). In Loomis v. People (67 N. Y. 322, 329) this court said:

“ There is, to be sure, a narrow margin between a case of larceny and one where the property has been obtained by false pretences. The distinction is a very nice one, but still very important. The character of the crime depends upon the intention of the parties, and that intention determines the nature of the offence. In the former case, where by fraud, conspiracy or artifice, the possession is obtained with a felonious design, and the title still remains in the owner, larceny is established. While in the latter, where title, as well as possession, is absolutely parted with, the crime is false pretences. It will be observed that the intention of the owner to part with his property is the gist and essence of the offence of larceny, and the vital point upon which the crime hinges, and is to be determined.” And the court further said that the intention was a question for the jury. See, also, Bassett v. Spofford, regarding intention (45 N. Y. 387, 392); Thorne v. Turck, again calling attention to this nice distinction ” (94 N. Y. 90); Smith v. People (53 N. Y. 111), where it was said: “ Here the jury have found the intent to steal at the time of taking, which is all that is required to constitute larceny, where the mere possession is obtained by fraud or trick.”

In Commonwealth v. Rubin (164 Mass. 453) it was held that a chattel accepted upon a contract or promise with intent not to carry out the promise, but to convert the chattel, amounts to larceny as it existed at common law. Mr. Justice Holmes said: There is the less cause for anxiety upon the point, in view of the merely technical distinction between larceny and embezzlement.” And in this court in People v. Miller (169 N. Y. 339) it was held that obtaining possession of property upon a promise to do something did not constitute obtaining it under false pretenses, but did constitute larceny at common law; that such promise was a mere trick and device to get possession of property. This was the case of 500 per cent Miller, who got money on representations that he would pay enormous rates of interest. The money given to him was not to be held in kind; the title to the particular bills or specie invested passed to Miller. He promised to pay big interest for the money, or the use of the money. The money was used by him; it was stolen, and this court held it to be common-law larceny. Judge O’Brien said:

“ It would be difficult to show that the defendant in this case made any material false statement concerning any existing fact. His statements were all promissory in nature and character. He represented to the public very little if anything concerning any fact existing at the time. His statements consisted in persuading the depositors that he could and would obtain for the use of their money large profits in the form of dividends.”

Miller in this case was convicted under the same form of indictment as the second count of the indictment upon which the defendant has been convicted here. Continuing, the opinion stated:

But the jury could have found that he did obtain the money by means of a fraudulent device, with the intent on his part at the time he received it to convert it to his own use; and also that the complainant intended to part with her possession merely and not with the title, and so the verdict convicting the defendant of larceny was warranted by the evidence.”

The case against this defendant in my judgment comes within these rulings. The jury have found that Bourne did not intend to part with his money except upon a condition unfulfilled. When Stephen Bourne gave $510 to the defendant, it was with the understanding that he should receive possession of the apartment March 20. The defendant obtained the money by promising to give possession March 20. It was a false promise, made with intent to cheat. The jury have found that he never intended to keep the promise; that it was a mere device to obtain the money, and that Bourne did not intend to part with the title to his property, that is, give it to the defendant so as to make it his, except upon condition that he received the apartment. Under a fair charge explaining all these differences, of which we have been speaking, the jury have found the fact of intent, both of Bourne and of the defendant. Suppose that the defendant had held in his hand a diamond, and said to Bourne: Give me $510 and I will give you this diamond.” Upon getting the money, he runs away and refuses to give the diamond. Would there be any question as to larceny; that it was common-law larceny, obtaining money by trick, device and false pretense? Why then should there be any difference because the promise is made to take effect a day or a week after the receipt of the money instead of instantly, provided that at the time the promise is made, and the money obtained, there is the intent to steal, no intent to keep the promise, no intent to part with the money, except upon fulfillment of the condition. To my mind, we are refining this matter of pleading beyond all usefulness. The defendant well knew what he was being tried for; no claim whatever was made that he was surprised or deceived; he himself testified and produced evidence to meet the charge and no assertion is even made by his counsel that he has any other proof to offer. At most, he pleads a technical rule of law as to a pleading which in his case has no merit. He obtained $510 by a trick advertisement, and a promise to give that which he did not have. This in my opinion constitutes a common-law larceny.

For these reasons, I believe the judgment of conviction should be affirmed.

Cardozo, Ch. J., Pound and Kellogg, JJ., concur with Lehman, J.; Crane, J., dissents in opinion in which Andrews, J., concurs.

Judgment accordingly.


author: Crane, J.

text:
    In the Matter of Elliot S. Benedict et al., Appellants, against George R. Lunn et al., Commissioners of the Land Office of the State of New York, Respondents.
    State — grant — real property — title — stare decisis — decisions of appellate courts interpreting public records must bo followed —• application for repayment of purchase money for lands under water granted by State, on ground of failure of title — erroneous exclusion of record of decision of courts as to Colonial grants of lands in question — section 6 of Public Lands Law providing for repayment on failure of title to lands granted by State applicable to land under water — grant subject to be divested by entry of State for failure of conditions conveys fee which remains in grantee until divested — nothing lost by patentee by failure to exercise right which never existed — rights not affected by conveyance of uplands with reservation of claim against State.
    1. A decision of the Appellate Division interpreting public records affirmed by the Court of Appeals, even though the State was not a party thereto, cannot be ignored by this court and should not be ignored by the Commissioners of the Land Office upon an application by a patentee of lands under water, under section 6 of the1 Public Lands Law (Cons. Laws, ch. 46), for repayment of the purchase money on the ground that title thereto had failed.

      2. The exclusion, therefore, on the hearing, of all reference to the case, in so far as it applied to findings as to Colonial grants of the lands in question, was error, no objection having been made by the State to the record as being an improper way to prove such grants. The State is not bound by the decision in question and may prove any claim it may have, but until it does so the decision is an authority which must be followed in the interpretation and construction of the Colonial grants. e
    3. A contention that section 6 of- the Public Lands Law, which provides for repayment of the purchase money with interest upon failure of title to lands granted by the State, does not relate or apply to lands under water, cannot be sustained. The act, in its various sections, refers to all lands owned by the State, both uplands and lands under water, unless the lands under water are expressly excepted.
    4. Nor can a contention that the letters patent did not purport to grant anything more than a license or franchise and not a fee title be sustained, where by its terms the lands under water were given and granted to the patentee, his heirs and assigns for the purpose of filling in such lands, reserving to the State the right to enter on and use such parts not actually occupied by substantial structures or which have not been actually filled in and providing the grant shall become void unless the improvements are made within five years. By such a grant the fee title was conveyed subject to be divested by the entry of the State for non-performance of the condition. The fee title, however, remained in the grantee until divested by action of the State. (People v. Wainwright, 237 N. Y. 407; Appleby v. City of New York, 271 ü. S. 364, followed.)
    5. Assuming that title of the city of New York to the lands under water is at most a mere naked ownership of the underlying soil, it was this land which the State granted by its patent and-which it assumed to control and own so as to permit others to fill in. Claimants’ rights are based upon the failure of the State to have any title to grant. Nothing could be lost, therefore, by the patentees, by.failure to exercise a right which never existed.
    6. Nor were their rights affected by conveyance of the uplands. If they had no rights in the land under water, they could convey none. All they had was the right to claim their money back and this they reserved in their deeds of conveyance.

      Matter of Benedict v. Lunn, 214 App. Div. 741, reversed.
    (Argued January 18, 1927;
    decided February 23, 1927.)
    Appeal, by permission, from an order of the Appellate Division of the Supreme ^ Court in the third, judicial department, entered December 12, 1925, which unanimously confirmed, on certiorari, a determination of the Commissioners of the Land Office, denying an application under section 6 of the Public Lands Act, for refund of moneys paid to the State.

      Ellery 0. Anderson, F. K. Pendleton and Milton G. Baldridge for appellants.
    There was a failure of title in the State to the lands granted by the letters patent dated February 10, 1908. (People ex rel. Hall v. Woodruff, 57 App. Div. 342; Wheeler v. State of New York, 190 N. Y. 406; City of Buffalo v. Erie R. R. Co., 83 Misc. Rep. 144; Starke-Belknap v. New York Central R. R. Co., 197 App. Div. 249.) Section 6 of the Public Lands Law applies to lands under water. (People v. Steeplechase Park Co., 218 N. Y. 459; People v. Wainwright, 237 N. Y. 407; Village of Hudson Falls v. State of New York, 111 Misc. Rep. 304.) The letters patent in question purported to grant a fee, subject to a right of re-entry for breach of a condition subsequent, and not merely a license or franchise. (Appleby v. City of New York, 235 N. Y. 351; Coxe v. State, 144 N. Y. 396; Matter of Long Sault Development Co., 212 N. Y. 1; Illinois Central Railroad Co. v. Illinois, 146 U. S. 387.) The failure to fill in lands under water does not affect petitioners’ claim. (Tiffany v. Oyster Bay, 234 N. Y. 15; Nicoll v. R. R., 12 N. Y. 121.)

      Albert Ottinger, Attorney-General (Anson Getman and Eugene L. Brisach of counsel), for respondents.
    The letters patent issued to the predecessors of petitioners did not purport to grant anything more than a license or franchise and not a fee title. (Coxe v. State, 144 N. Y. 396; Matter of Long Sault Development Co., 212 N. Y. 1; Illinois v. Illinois Central R. R. Co., 146 U. S. 387; City of New York v. Appleby, 235 N. Y. 351; Matter of City of New York [Harlem River Speedway], 168 N. Y. 134; Hinckley v. State, 202 App. Div. 570; People
      v. Baldwin, 197 App. Div. 285; First Construction Co. v. State, 221 N. Y. 295; People v. Traktman, 201 App. Div. 864; 235 N. Y. 541; Parmelee v. O. & S. R. R. Co., 7 Barb. 599; 6 N. Y. 74; Towle v. Remsen, 70 N. Y. 303; Allegany Oil Co. v. Bradford, 21 Hun, 26; Wells v. Smith, 7 Paige, 22; Newcomb v. Newcomb, 12 N. Y. 603; Archibald v. N. Y. Cent. R. R. Co., 157 N. Y. 574.) There has been no adjudication, binding upon the State, that its title has failed. (Mecox Bay Co. v. Huntington, 116 N. Y. 1; Loundes v. Huntington, 153 U. S. 1; Howell v. Jessup, 160 N. Y. 249; Grace v. Hempstead, 166 App. Div. 844; Tiffany v. Oyster Bay, 209 N. Y. 1; Harway Impt. Co. v. Partridge, 203 App. Div. 174; People ex rel. Palmer v. Travis, 223 N. Y. 150; Waddell v. Peters, 16 Pet. 367.)
   Crane, J.

The claimants or their predecessor received letters patent from the State of New York, dated February 10, 1908, conveying certain lands under the waters of Westchester creek, in front of and adjacent to their upland, in the borough of The Bronx, in the city of New York. Alleging that the title to this land had failed, they made application under section 6 of the Public Lands Law (Cons. Laws, ch. 46) to the Commissioners of the Land Office for a direction to repay to them the purchase moneys.' The principal facts were stipulated. The application was denied, and the Appellate Division in certiorari proceedings has affirmed the determination of the Commissioners of the Land Office.

The lands in question were the subject of litigation in Bliss v. Benedict (202 App. Div. 115; affd., 234 N. Y. 596). That was an action brought to partition the uplands and the lands granted under this patent by the State. The city of New York having been made a party to the action, claimed the land under water, through patents to the town of Westchester, from Governor Nicolls, dated February 15, 1667, and from Governor . Dongan, dated January 6, 1686. The city claimed this title as successor to all the rights of the town of Westchester. If it were a fact that these Colonial grants had given to the town of Westchester this land under water, then of course when the State of New York came into existence, it had no rights in these lands as successor to the Crown which it could subsequently convey to James H. Benedict by its letters patent, February 10, 1908. The Supreme Court had before it in the trial of Bliss v. Benedict these Colonial grants, and so far as the parties there in litigation were concerned, was called upon to determine the boundaries of the lands and lands under water which had been granted. It determined that these Colonial grants included all the rivers, bays and creeks north of the line of the sound, for the reason that the patent said: Southward they are bounded by ye Sound or East River.” What was the line of the sound at this place, to which these patents referred? The Supreme Court by its decision drew a straight line between the two headlines known as Clason’s point and Old Ferry point. North of this line was included in the Colonial grants to the town of Westchester. South of this line was the sound. The property in question in this proceeding is north of this boundary line.

The stipulation of facts, as prepared for this proceeding, contained a statement regarding this Bliss case and the findings of the Appellate Division to the effect that the city of New York owned the land under water here in question, and not the State of New York; and that these claimants had no title thereto. On the hearing before the Land Commissioners these facts stipulated about the Bliss case were excluded, as well as the record of the Bliss case containing all the exhibits. It was excluded, no doubt, under the opinion of the Attorney-General to the effect that the State of New York had rights in the waters, even if it had no rights to the land under water. Exactly what this claim is I have been unable for myself to determine. I take it, however, that there has been no misunderstanding about the Bliss case, and that the Supreme Court has determined the limitations and boundaries of the Colonial grants involved. While the State of New York was not a party to that litigation and, therefore, not bound by the decision, yet the Bliss case is an authority to be followed on the same facts until something appears to justify á different conclusion. We cannot ignore, neither should the Commissioners of the Land Office, a decision interpreting public records.

If we consider the exclusion on the hearing of all references to the Bliss case as leaving out of the record any evidence of the title of the city of New York, and so any proof of failure of title in the claimants, the exclusion was error in so far as it applied to the Colonial grants. There was no objection made by the State to the record in the Bliss case as being an improper way to prove the Colonial grants. Seldom, if ever, are certified copies of these records required. The objection made was that these were irrelevant and immaterial, not that they were incompetent. The Colonial grants, through which the city of New York claimed its title, should have been received in evidence, and their exclusion, to which an éxception was taken, presents reversible error. I take it, however, from the brief of the State, that this case turns upon no such technical point; that the Attorney-General recognizes the force and effect of the Bliss case so far as the facts therein stated are applicable; and that his only point is that the State, conceding the correctness of that decision, is not bound by it, and may present any other claims it may have to these lands under water.

We agree with the Attorney-General that the State was not bound by the decision in Bliss v. Benedict, and that it is open to the State to prove any claim it may have. But until it does so, the decision in that case is an authority which must be followed in the interpretation and construction of these Colonial grants. We affirmed the decision of the Bliss Case (234 N. Y. 596), and we must hold by it until the State produces some evidence, or presents some reason to show that its conclusion was wrong.

The Attorney-General in his argument in this case, as well as the Commissioners of the Land Office, have ruled out the claimants on points of law, and not upon title in the State. I will consider these points as made.

First. It is said that section 6 of the Public Lands Law does not relate or apply to lands under water. With this we cannot agree. Section 6 reads:

Whenever the title of the state to lands granted under its authority fails, and a legal claim for compensation on account of such failure is preferred by any person entitled thereto, the commissioners of the land office shall direct the payment of the original purchase-moneys which may have been paid to the state by such person, with interest at the rate of six per centum from the time of such payment, to be paid out of the treasury on the warrant of the comptroller.”

The Attorney-General says that the lands referred to are uplands and not lands .under water. The act, however, in its various sections refers to all lands owned by the State, both uplands and lands under water, unless the lands under water are expressly excepted. Thus, in section 12, we find a reference to all patents of lands issued before July 11, 1881, except lands under water in the bay or harbor of New York or adjacent thereto.” These lands,” therefore, include lands under water with the exception applying only to New York bay and harbor. Section 30, dealing with unappropriated State lands, specifically excepts lands under water, the disposition of which is governed by another article. I see no reason for the distinction attempted by the Attorney-General. The act clearly includes lands under water unless an exception is made thereof, or the context shows that they should not be included.

Second. The State claims that the letters patent of February 10, 1908, did not purport to grant anything more than a license or franchise, and not a fee title. The letters patent read as follows:

“ Know Ye, that pursuant to a resolution of the Commissioners of our Land Office, dated the fourteenth day of November, 1907, and for the purpose of granting and conveying a restricted beneficial enjoyment in and to the lands under water and between high and low water mark hereinafter described, to James H. Benedict the owner of the adjacent uplands, and for no other object or purpose whatsoever, and with the reservations and upon the conditions hereinafter expressed, we have given and granted, and by these presents, do give and grant unto James H. Benedict, his heirs and assigns the land under water, and between high and low water mark described as follows, * * *

“ These letters-patent are issued pursuant to a resolution of the Commissioners of the Land Office for the following purposes, to wit: To fill in the lands' under water herein granted.

“ Excepting and reserving to ah and every the said people, the full and free right, liberty and privilege of entering upon and using all and every part of the above-described premises in as ample a manner as they might have done had this power and authority not been given, always excepting such parts thereof as are actually occupied and covered by structures, docks or buildings of a substantial character, and such parts of said premises as have been actually filled in and reclaimed from low or marsh land; provided that unless the improvements above named are completed within five years from the date of these presents this grant shall cease and determine and become null and void.”

Under similar grants, with like reservations, it has been held that fee title was conveyed which might be divested by the entry of the State for non-performance of the condition. The fee title, however, remained in the grantee until divested by action of the State. (People v. Wainwright, 237 N. Y. 407; Appleby v. City of New York, 271 U. S. 364.)

Third. The State further says that any title or right of the city of New York in and to the lands under water, the subject of' this proceeding, is at the most a mere naked ownership of the underlying soil. Granting that this be so, it was this land under water which the State granted by its patent, and which it assumed to control and own so as to permit others to fill it in. The claimant’s rights are based upon the failure of the State to have any title to grant either a fee or privileges based on a fee.

Fourth. It is further said that the patentees under the letters patent in question received a valuable right which has lapsed, not because of failure of title, but through their own failure to perform the stated conditions. Naturally, if the State had no rights to grant, and no title justifying its grantee in using the property to fill in, nothing could be lost for failure to exercise a right which never existed.

And lastly, it is said that the claimants, in granting away the upland, could not reserve their rights in the land under water. This would be true if they had any rights in the land under water. This proceeding is based upon the fact that they had no such rights to convey, but that all they had was the right to claim their money back under section 6 of the Public Lands Act, and this they reserved in their deeds of conveyance.

For the reasons here stated the order of the Appellate Division should be reversed and the determination of the Commissioners of the Land Office annulled and a rehearing ordered, with costs in the Appellate Division and in this court. *

Cardozo, Ch. J., Pound, Andrews and Lehman, JJ., concur; Kellogg, J., not sitting.

Ordered accordingly.


author: Lehman, J.

text:
    Roosevelt L. Clark, Appellant, v. J. & C. Auditore, Inc., Respondent.
    Contract •— trial —• execution of written agreement whereby plaintiff’s assignor granted to defendant use of pier for fixed period at fixed compensation — failure to exchange signed copies — retention by defendant of only signed copy and use of pier in accordance with terms for five months — action to recover payments due under contract for entire term — inference of acceptance of contract may be drawn by jury from conduct of parties.
    In an action to recover upon a written contract whereby plaintiff’s assignor granted to defendant the right to use a certain pier for a certain term at a fixed compensation, where it appeared that the written contract was intended to take the place of an informal agreement and, after being signed by both parties, defendant’s president took it away saying he wished to show it to his counsel, whereupon he would exchange copies, but copies were never in fact exchanged, the act of defendant’s president must be viewed in the light of the testimony in regard to events that preceded the signing,- and where it appears therefrom that defendant acted as stevedore for a steamship line, the agents of which were demanding that defendant obtain more definite rights to the pier, and that defendant’s secretary advised the president not to sign the contract until he had shown it to his lawyer, to which he replied, “ I have got to have it and I am going to sign it,” an inference is permitted that the parties intended that the act of signing by both parties should not be entirely without effect until subsequent delivery or interchange of signed copies. And where, thereafter, for five months, defendant retained the contract and nsed the pier in accordance with its terms, and though its counsel indicated doubt of the legal right of plaintiff's assignor to make the contract, the defendant apparently never rejected it, or asked for change in its terms, in the absence of explanation a jury might find that the conduct of the parties shows acceptance of the formal contract in place of the original informal agreement.

      Clark v. Auditore, Inc., 216 App. Div. 842, reversed.
    (Argued January 18, 1927;
    decided February 23, 1927.)
    Appeal from a judgment of the Appellate Division of the Supreme Court in the second judicial department, entered June 25, 1926, modifying and affirming as modified a judgment in favor of defendant entered upon a dismissal of the complaint by the court at a Trial Term.

      Edward H. Wilson and John J. Kean for appellant.
    The defendant validly executed the agreement of January 21, 1924. (Newburger v. American Surety Co., 242 N. Y. 134.) The defendant by unequivocal acts, after the execution of the contract acquiesced in and ratified it and led the Auditore Contracting Co., Inc., into the belief that the defendant was acting under the contract and intended to be bound by it, and it is bound. (Phillip v. Gallant, 62 N. Y. 256; Smith v. Hughes, L. R. [6 Q. B.] 597; Clark on New York Law of Contracts, 11; Mactier v. Frith, 6 Wend. 103.) The defendant received and accepted the benefits of the contract for six months and may not repudiate it. (Seymour v. S. F. C. Assn., 144 N. Y. 333.)

      John B. Johnston for respondent.
    The alleged written lease set forth in the complaint was never executed or delivered by the defendant. Dietz v. Farish, 79 N. Y. 520; United Surety Co. v. Meenan, 211 N. Y. 46; Greene v. Barrett Nephews & Company, 238 N. Y. 207; Bailey v. Walker & Co., 290 Fed. Rep. 282; Marion Machine Foundry Co. v. Girand, 285 Fed. Rep. 160; U. S. v. Kingsley, 12 Pet. 476; Rosenthal P. Co. v. National Folding Box Co., 226 N. Y. 322; Bailey v. Walker & Co., 290 Fed. Rep.. 282; Koltonski v. Electric Goods Manufacturing Co., 182 Fed. Rep. 208; Gordon v. Anderson, 200 App. Div. 619; Talcott v. Greenstein, 210 App. Div. 633; Hamlin v. Sears, 82 N. Y. 331.)
   Lehman, J.

In November, 1923, the Auditore Contracting Company was the lessee, or at least had a right of possession or control, of a certain pier in Brooklyn. The defendant obtained a right to the limited use of this pier by an informal agreement arranged through interchange of letters between the Auditore- Co., Inc., and itself. The Auditore Co., Inc., was closely connected in some manner with the Auditore Contracting Co., but the exact relationship is not very clearly disclosed. For the purpose of this appeal we may regard the two companies as identical. There is no claim that the Auditore Co., Inc., did not have authority to make the informal agreement with the defendant. It is quite unimportant whether or not we call this agreement a lease. Under its terms the defendant secured at least the right to use the pier for the berthing of a steamer once a month, at the rate of Twenty Thousand Dollars ($20,000) a year to be paid steamer or no steamer.” In January, 1924, the officers of the Auditore Contracting Company and of the defendant met, and after discussion agreed upon the terms of a formal instrument which was intended to take the place of the original agreement. The defendant’s president read the instrument and it was signed by both parties. After the defendant’s president had signed it, he put his copy in his pocket and according to the testimony produced by the plaintiff he said he wanted to show it to his counsel and that as soon as his counsel had seen it he would send it to us to exchange copies.” Copies were in fact never exchanged, and the copy signed by the defendant was never delivered to the Auditore Contracting Company.

The formal instrument so signed by the defendant but not delivered contained provisions not included in the original agreement. It substituted a definite term of one year for the original indefinite term. It gave the defendant the right to use the dock to berth an additional vessel each month upon payment of additional stipulated compensation. It fixed definitely rights of the defendant to which no reference was made in the original letters or which had been left indefinite. Though the defendant never delivered the only copy of the agreement signed by it, it continued to use the pier till June and berthed at the dock more than one vessel in one month. In June, 1924, it notified the Auditore Contracting Company that it had leased another dock and would have no further use for pier 22. The plaintiff as assignee of the Auditore Contracting Company has brought this action to recover the payments which the defendant bound itself to make during the period of one year if the formal instrument of 1924 constitutes a binding contract. The complaint was dismissed at the close of the plaintiff’s case for failure of proof that the defendant accepted this contract or agreed to its terms.

The defendant does not contend that exchange of signed copies of the written instrument or. delivery by the defendant of the copy signed by it is the only method by which a binding contract between the parties could arise. The question we must review is whether the evidence is sufficient to permit a trier of the facts to draw the inference that both parties agreed that a complete contract upon the terms embodied in the written instrument should arise without such exchange or delivery. The evidence that the defendant’s president retained the copy of the contract signed by him with the statement that he would exchange copies after his counsel had seen it ” leads to the inference that until such exchange was made or at least until its counsel had expressed approval, the defendant did not intend that the agreement should be complete and irrevocable. Not only was there never an exchange of signed contracts thereafter, but the evidence shows that the defendant’s counsel did thereafter express disapproval of the-contract, or at least doubt as to the right of the plaintiff’s assignor to enter into it, though he did not expressly state that he would advise the defendant to reject its terms. Nevertheless we find in the record some evidence which in our opinion raises a question of fact as to whether the defendant did not indicate intention to be bound by the terms of the contract.

The act of the defendant’s president in retaining the contract after signing it must be viewed in the light of the testimony in regard to the events that preceded the signing. The act of signing may itself acquire new significance from these events. The defendant corporation acted as stevedore for a steamship fine. The agents of the fine demanded that the defendant should obtain more definite rights to the pier, or at least a more complete contract in regard to the pier than the defendant had under the exchange of letters. Subsequent discussion resulted in agreement as to the terms to be embodied in the formal contract. The evidence permits, if indeed it does not require, the inference that the parties intended that the act of signing the formal contract by both parties should not be entirely without effect until subsequent delivery or interchange of signed copies. The defendant’s secretary advised the defendant’s president in the presence of the representatives of plaintiff’s assignor not to sign the contract until he had shown it to his lawyer. The defendant’s president then answered: “ I have got to have it and I am going to sign it.” Both parties then signed. Thereafter the defendant asked for no other agreement and continued to use the pier, and used it in manner not expressly authorized by the original informal letters.

The defendant’s conduct might well be held to indicate that having obtained a signed contract from the plaintiff, it was satisfied with it. At least the jury could so find. Though perhaps continued occupation of the pier might, standing alone, be regarded as equivocal, since the defendant had some indefinite right of occupation even without the formal agreement, still if other evidence indicates that in the minds of both parties that occupation was attributed to rights derived from the formal agreement, it becomes a circumstance of some weight. There is testimony which seems to show that defendant’s rights were measured by the parties under the terms of the formal contract.

For five months the defendant has retained a contract signed by both parties. During that time it had every benefit or advantage it might gain from complete agreement binding on both parties. Though its counsel indicated doubt of the legal right of plaintiff’s assignor to make the contract, the defendant apparently never rejected it or asked for change in its terms, or even discussed it with plaintiff’s assignor. All these circumstances together might indicate assent to the contract and intent to regard it as binding upon both parties, though no separate circumstance might be unequivocal or in itself sufficient to sustain such inference. The defendant may be able to explain these circumstances but in the absence of explanation the jury might find that the conduct of the parties shows acceptance of the formal contract in place of the original informal agreement.

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

Cabdozo, Ch. J., Pound, Cbane, Andeews and Kellogg, JJ., concur.

Judgment accordingly.