author: Fuld, J.

text:
    Nate L. Crabtree, Respondent, v. Elizabeth Arden Sales Corporation, Appellant.
    Submitted November 25, 1952;
    decided January 21, 1953.

      J. Howard Carter, John R. Schoemer, Jr., John J. Macchia and Arthur W. Knapp, Jr., for appellant.
    I. There is no written memorandum of plaintiff’s alleged contract of employment sufficient to satisfy the Statute of Frauds. (Carter, Macy Co. v. Matthews, 220 App. Div. 679; Brauer v. Oceanic Steam Navigation Co., 178 N. Y. 339; Friedman & Co. v. Newman, 255 N. Y., 340; Standard Oil Co. v. Koch, 260 N. Y. 150; United Press v. New York Press Co., 164 N. Y. 406; Culotta v. Banana Sales Corp., 142 Misc. 149; Watson v. Gugino, 204 N. Y. 535; Martin v. New York Life Ins. Co., 148 N. Y. 117; Miller v. Burlington Mills Ribbon Corp., 304 N. Y. 600; Mesibov, Glinert & Levy v. Cohen Bros. Mfg. Co., 245 N. Y. 305.) II. The court below adopted an erroneous measure of damages. (Toplitz v. Ullman, 2 Misc. 130; Griffin v. Oklahoma Nat. Gas Corp., 132 Kan. 843.)

      Frank A. Fritz, Frank H. Platt, George Q. Slocum and Anthony T. Antinozzi for respondent.
    I. Plaintiff’s employment was for a definite term and did not constitute an employment at will. (Braxton v. Mendelson, 233 N. Y. 122; Ferguson v. De Witt, 230 App. Div. 778; Fellows v. Fairbanks Co., 205 App. Div. 271; Aerated Products Co. v. Godfrey, 290 N. Y. 92; Matter of Aurelio [Cohen], 291 N. Y. 176; Drivas v. Lekas, 292 N. Y. 204; Gressing v. Musical Instrument Sales Co., 222 N. Y. 215; Mason v. New York Produce Exch., 127 App. Div. 282; Breakey v. Lake Placid Co., 271 App. Div. 586.) II. The contract of employment is evidenced by writings which together constitute a sufficient memorandum in compliance with the Statute of Frauds. (Marks v. Cowdin, 226 N. Y. 138; Spiegel v. Lowenstein, 162 App. Div. 443; Raubitschek v. Blank, 80 N. Y. 478; Webster v. Zielly, 52 Barb. 482; General Overseas Corp. v. Republic Pictures Int. Corp., 74 F. Supp. 698; Baxter v. Lustberg, 205 App. Div. 673; Doughty v. Manhattan Brass Co., 101 N. Y. 644; Coe v. Tough, 116 N. Y. 273; Delaware Mills v. Carpenter Bros., 200 App. Div. 324; Atlas Shoe Co. v. Lewis, 202 App. Div. 244.) III. Plaintiff exercised reasonable care to mitigate damages. There was no abandonment of the employment or waiver of defendant’s breach. (Whitmarsh v. Little-field, 46 Hun 418; Colloraff v. Hickson, Inc., 159 N. Y. S. 177; Milage v. Woodward, 186 N. Y. 252; Howard v. Daly, 61 N. Y. 362; Bassett v. French, 10 Misc. 672; Fuchs v. Koerner, 107 N. Y. 529; Briscoe v. Litt, 19 Misc. 5; McClelland v. Climax Hosiery Mills, 252 N. Y. 347; Toplitz v. Ullman, 2 Misc. 130; Richardson v. Hartmann, 68 Hun 9.) IV. Plaintiff is entitled prima facie to the amount of the unpaid salary for the unexpired term of the contract. (Karas v. H. R. Laboratories, 271 App. Div. 530, 297 N. Y. 494; Hollwedel v. Duffy-Mott Co., 263 N. Y. 95; Milage v. Woodward, 186 N. Y. 252; Sinclair v. Positype Corp. of America, 237 App. Div. 525; Howard v. Daly, 61 N. Y. 362; Van Wyck v. Mannino, 256 App. Div. 256; Preager v. Unity Shoemakers Corp., 257 App. Div. 632.)
   Fuld, J.

In September of 1947, Nate Crabtree entered into preliminary negotiations with Elizabeth Arden Sales Corporation, manufacturers and sellers of cosmetics, looking toward his employment as sales manager. Interviewed on September 26th, by Robert P. Johns, executive vice-president and general manager of the corporation, who had apprised him of the possible opening, Crabtree requested a three-year contract at $25,000 a year. Explaining that he would he giving up a secure well-paying job to take a position in an entirely new field of endeavor — which he believed would take him some years to master — he insisted upon an agreement for a definite term. And he repeated his desire for a contract for three years to Miss Elizabeth Arden, the corporation’s president. When Miss Arden finally indicated that she was prepared to offer a two-year contract, based on an annual salary of $20,000 for the first six months, $25,000 for the second six months and $30,000 for the second year, plus expenses of $5,000 a year for each of those years, Crabtree replied that that offer was 11 interesting ”. Miss Arden thereupon had her personal secretary make this memorandum on a telephone order blank that happened to be at hand:

‘ ‘ Employment Agreement with
Nate Cbabtbee Date Sept 26-1947
At 681 — 5th Ave 6: PM
* * #
Begin 20000.
6 months 25000.
6 “ 30000.
5000. — per year
Expense money
[ 2 years to make good]
Arrangement with Mr Crabtree
By Miss Arden
Present Miss Arden
Mr John
Mr Crabtree
Miss OLeary ”

A few days later, Crabtree ’phoned Mr. Johns and telegraphed Miss Arden; he accepted the invitation to join the Arden organization ”, and Miss Arden wired back her “ welcome ”. When he reported for work, a “ pay-roll change ” card was made up and initialed by Mr. Johns, and then forwarded to the payroll department. Reciting that it was prepared on September 30, 1947, and was to be effective as of October 22d, it specified the names of the parties, Crabtree’s “Job Classification ” and, in addition, contained the notation that “ This employee is to be paid as follows:

“ First six months of employment $20,000. per annum
Next six months of employment 25,000. “ “
After one year of employment 30,000. “ “
Approved by EPJ [initialed] ”

After six months of employment, Crabtree received the scheduled increase from $20,000 to $25,000, but the further specified increase at the end of the year was not paid. Both Mr. Johns and the comptroller of the corporation, Mr. Carstens, told Crab-tree that they would attempt to straighten out the matter with Miss Arden, and, with that in mind, the comptroller prepared another 11 pay-roll change ’ ’ card, to which his signature is appended, noting that there was to be a “ Salary increase ” from $25,000 to $30,000 a year, ‘ per contractual arrangements with Miss Arden The latter, however, refused to approve the increase and, after further fruitless discussion, plaintiff left defendant’s employ and commenced this action for breach of contract.

At the ensuing trial, defendant denied the existence of any agreement to employ plaintiff for two years, and further contended that, even if one had been made, the statute of frauds barred its enforcement. The trial court found against defendant on both issues and awarded plaintiff damages of about $14,000, and the Appellate Division, two justices dissenting, affirmed. Since the contract relied upon was not to be performed within a year, the primary question for decision is whether there was a memorandum of its terms, subscribed by defendant, to satisfy the statute of frauds (Personal Property Law, § 31).

Each of the two payroll cards — the one initialed by defendant’s general manager, the other signed by its comptroller — unquestionably constitutes a memorandum under the statute. That they were not prepared or- signed with the intention of evidencing the contract, or that they came into existence subsequent to its execution, is of no consequence (see Marks v. Cowdin, 226 N. Y. 138,145; Spiegel v. Lowenstein, 162 App. Div. 443, 448-449; see, also, Restatement, Contracts, §§ 209, 210,. 214); it is enough, to meet the statute’s demands, that they were signed with intent to authenticate the information contained therein and that such information does evidence the terms of the contract. (See Marks v. Cowdin, supra, 226 N. Y. 138; Bayles v. Strong, 185 N. Y. 582, affg. 104 App. Div. 153; Spiegel v. Lowenstein, supra, 162 App. Div. 443, 448; see, also, 2 Corbin on Contracts [1951], pp. 732-733, 763-764; 2 Williston on Contracts [Rev. ed., 1936], pp. 1682-1683.) Those two writings contain all of the essential terms of the contract — the parties to it, the position that plaintiff was to assume, the salary that he was to receive — except that relating to the duration of plaintiff’s employment. Accordingly, we must consider whether that item, the length of the contract, may be supplied by reference to the earlier unsigned office memorandum, and, if so, whether its notation, 11 2 years to make good ”, sufficiently designates a period of employment.

The statute of frauds does not require the memorandum * * * to be in one document. It may be pieced together out of separate writings, connected with one another either expressly or by the internal evidence of subject matter and occasion ”. (Marks v. Cowdin, supra, 226 N. Y. 138,145; see, also, 2 Williston, op. cit., p. 1671; Restatement, Contracts, § 208, subd. [a].) Where each of the separate writings has been subscribed by the party to be charged, little if any difficulty is encountered. (See, e.g., Marks v. Cowdin, supra, 226 N. Y. 138, 144-145.) Where, however, some writings have been signed, and others have not — as in the case before us — there is basic disagreement as to what constitutes a sufficient connection permitting the unsigned papers to be considered as part of the statutory memorandum. The courts of some jurisdictions insist that there be a reference, of varying degrees of specificity, in the signed writing to that unsigned, and, if there is no such reference, they refuse to permit consideration of the latter in determining whether the memorandum satisfies the statute. (See, e.g., Osborn v. Phelps, 19 Conn. 63; Hewitt Grain & Provision Co. v. Spear, 222 Mich. 608.) That conclusion is based upon a construetian of the statute which requires that the connection between the writings and defendant’s acknowledgment of the one not subscribed, appear from examination of the papers alone, without the aid of paroi evidence. The other position — which has gained increasing support over the years — is that a sufficient connection between the papers is established simply by a reference in them to the same subject matter or transaction. (See, e.g., Frost v. Alward, 176 Cal. 691; Lerned v. Wannemacher, 91 Mass. 412.) The statute is not pressed “ to the extreme of a literal and rigid logic ” (Marks v. Cowdin, supra, 226 N. Y. 138, 144), and oral testimony is admitted to show the connection between the documents and to establish the acquiescence, of the party to be charged, to the contents of the one unsigned. (See Beckwith v. Talbot, 95 U. S. 289; Oliver v. Hunting, 44 Ch. D. 205, 208-209; see, also, 2 Corbin, op. cit., §§ 512-518; cf. Restatement, Contracts, § 208, subd. [b], par. [iii].)

The view last expressed impresses us as the more sound, and, indeed — although several of our cases appear to have gone the other way (see, e.g., Newbery v. Wall, 65 N. Y. 484; Wilson v. Lewiston Mill Co., 150 N. Y. 314) — this court has on a number of occasions approved the rule, and we now definitively adopt it, permitting the signed and unsigned writings „ to be read together, provided that they clearly refer to the same subject matter or transaction. (See, e.g., Peabody v. Speyers, 56 N. Y. 230; Raubitschek v. Blank, 80 N. Y. 478; Peck v. Vandemark, 99 N. Y. 29; Coe v. Tough, 116 N. Y. 273; Delaware Mills v. Carpenter Bros., 235 N. Y. 537, affg. 200 App. Div. 324.)

The language of the statute — ‘ ‘ Every agreement * ® * is void, unless =": * * some note or memorandum thereof be in writing, and subscribed by the party to be charged (Personal Property Law, § 31) — does not impose the requirement that the signed acknowledgment of the contract must appear from the writings alone, unaided by oral testimony. The danger of fraud and perjury, generally attendant upon the admission of paroi evidence, is at a minimum in a case such as this. None of the terms of the contract are supplied by paroi. All of them must be set out in the varipus writings presented to the court, and at least one writing, the one establishing a contractual relationship between the parties, must bear the signature of the party to be charged, while the unsigned document must on its face refer to the same transaction as that set forth in the one that was signed. Parol evidence — to portray the circumstances surrounding the making of the memorandum — serves only to connect the separate documents and to show that there was assent, by the party to be charged, to the contents of the one unsigned. If that testimony does not convincingly connect the papers, or does not show assent to the unsigned paper, it is within the province of the judge to conclude, as a matter of law, that the statute has not been satisfied. True, the possibility still remains that, by fraud or perjury, an agreement never in fact made may occasionally be enforced under the subject matter or transaction test. It is better to run that risk, though, than to deny enforcement to all agreements, merely because the signed document made no specific mention of the unsigned writing. As the United States Supreme Court declared, in sanctioning the admission of paroi evidence to establish the connection between the signed and unsigned writings. There may be cases in which it would be a violation of reason and common sense to ignore a reference which derives its significance from such [paroi] proof. If there is ground for any doubt in the matter, the general rule should be enforced. But where there is no ground for doubt, its enforcement would aid, instead of discouraging, fraud.” (Beckwith, v. Talbot, supra, 95 U. S. 289, 292; see, also, Raubitschek v. Blank, supra, 80 N. Y. 478; Freeland v. Rits, 154 Mass. 257, 259; Gall v. Brashier, 169 F. 2d 704, 708-709; 2 Corbin, op. cit., § 512, and cases there cited.)

• Turning to the writings in the case before us — the unsigned office memo, the payroll change form initialed by the general manager Johns, and the paper signed by the comptroller Carstens — it is apparent, and most patently, that all three refer on their face to the same transaction. The parties, the position to be filled by plaintiff, the salary to be paid him, are all identically set forth; it is hardly possible that such detailed information could refer to another or a different agreement. Even more, the card signed by Carstens notes that it was prepared for the purpose of a “ Salary increase per contractual arrangements with Miss Arden ”. That certainly constitutes a reference of sorts to a more comprehensive “ arrangement,” and paroi is permissible to furnish the explanation.

The corroborative evidence of defendant’s assent to the contents of the unsigned office memorandum is also convincing. Prepared by defendant’s agent, Miss Arden’s personal secretary, there is little likelihood that that paper was fraudulently manufactured or that defendant had not assented to its contents. Furthermore, the evidence as to the conduct of the parties at the time it was prepared persuasively demonstrates defendant’s assent to its terms. Under such circumstances, the courts below were fully justified in finding that the three papers constituted the memorandum ” of their agreement within the meaning of the statute.

Nor can there be any doubt that the memorandum contains all of the essential terms of the contract. (See N. E. D. Holding Co. v. McKinley, 246 N. Y. 40; Friedman & Co. v. Newman, 255 N. Y. 340.) Only one term, the length of the employment, is in dispute. The September 26th office memorandum contains the notation, “ 2 years to make good What purpose, other than to denote the length of the contract term, such a notation could have, is hard to imagine. Without it, the employment would be at will (see Martin v. New York Life Ins. Co., 148 N. Y. 117, 121), and its inclusion may not be treated as meaningless or purposeless. Quite obviously, as the courts below decided, the phrase signifies that the parties agreed to a term, a certain and definite term, of two years, after which, if plaintiff did not “ make good ”, he would be subject to discharge. And examination of other parts of the memorandum supports that construction. Throughout the writings, a scale of wages, increasing plaintiff’s salary periodically, is set out; that type of arrangement is hardly consistent with the hypothesis that the employment was meant to be at will. The most that may be argued from defendant’s standpoint is that “ 2 years to make good ”, is a cryptic and ambiguous statement. But, in such a case, paroi evidence is admissible to explain its meaning. (See Martocci v. Greater New York Brewery, 301 N. Y. 57, 63; Marks v. Cowdin, supra, 226 N. Y. 138, 143-144; 2 Williston, op. cit., § 576; 2 Corbin, op. cit., § 527.) Having in mind the relations of the parties, the course of the negotiations and plaintiff’s insistence upon security of employment, the purpose of the phrase — or so the trier of the facts was warranted in finding — was to. grant plaintiff the tenure he desired.

The judgment should be affirmed, with costs.

Loughran, Ch. J., Lewis, Conway, Desmond, Dye and Froessel, JJ., concur.

Judgment affirmed.

      . While our opinion is limited to treatment of that question, we have, of course, considered the other points argued.


source: Caselaw Access Project

author: Froessel, J.

license: Public Domain

text:
    Standard Electric Equipment Corp., Appellant, v. Jerry Laszkowski et al., Individually and Doing Business as Associates Trading Co., Respondents. Lucyna Imilkowski, Respondent.
    Argued January 6, 1953;
    decided January 21, 1953.

      Mendel Zucker and Sol Deutsch for appellant.
    I. If money is deposited in lieu of bail and remains on deposit when final judgment is rendered for plaintiff, it must be applied in satisfaction of the judgment. (Lichter v. Raff, 149 Misc. 53; United States v. Davis, 47 F. Supp. 176; Wesenberg v. McCormack,
      119 Misc. 775; Hull v. Cohen, 140 Misc. 846; Alexander v. Creamer, 46 App. Div. 211; Salter v. Weiner, 6 Abb. Prac. 191; Hermann v. Aaronson, 3 Abb. Prac. [N. S.] 389; People ex rel. Gilbert v. Laidlaw, 102 N. Y. 588; 7 Carmody on New York Practice [2d ed.], § 174, p. 193; Rallings v. McDonald, 76 App. Div. 112.) II. The present appeal involves “ a deposit in lieu of bail ”. It does not involve u bail ”. (Carlson v. Landon, 342 U. S. 524.)

      Joseph S. Meadow and Murray K. Josephson for Lucyna Imilkowski, respondent.
    The question certified by the Appellate Division should be answered in the negative. Money deposited by a third person in lieu of bail must be repaid to such person in the absence of escape of the prisoner from jail liberties. (Kennerly v. Tompkins, 23 Abb. N. C. 296; Steinberg v. Frankel, 154 Misc. 179; Selig v. Summerville, 46 N. Y. S. 2d 740; Lichter v. Raff, 149 Misc. 53.)
   Froessel, J.

In this action for misappropriation of moneys entrusted to defendants as fiduciaries, Jerry Laszkowski (hereinafter called defendant) was arrested under a judge’s order, as a provisional remedy, pursuant to the provisions of subdivision 7 of section 826 of the Civil Practice Act. On review of an order denying defendant’s motion to vacate the arrest order, the Appellate Division modified said order by reducing the amount of bail from $9,302 to $1,000 (see 278 App. Div. 826). A deposit of $1,000 was then made in lieu of bail, as provided in section 856 of the Civil Practice Act. It appears that such deposit was of funds actually belonging to a third party herein, Lucyna Imilkowski. Defendant duly executed an assignment of such deposit to said third party, directing, as provided by statute (Civ. Prac. Act, § 860), that it be paid over to her 11 in the event that I become entitled to a return thereof ” — a contingency which has never occurred. ■

Plaintiff had judgment in the sum of $5,000. Subsequent thereto, the third party intervened in the action and moved for payment over to her of the money, which had been duly deposited in court by the' sheriff. There seems to be no question but what the defendant remained amenable to process. Plaintiff cross-moved for payment of said deposit to it in partial satisfaction of the judgment, contending that it was entitled thereto in any event, and that the third party was not the true owner thereof. The latter issue has been disposed of by the lower courts.

Special Term ordered that the fund be turned over to the third party, and the Appellate Division, First Department, unanimously affirmed. The appeal is here by permission of the Appellate Division upon a certified question, as the order is nonfinal (see Robinson v. Zak, 262 N. Y. 516; Rudiger v. Coleman, 206 N. Y. 412). The question is overly burdened with factual detail, but is not fatally defective, since it can be answered “ yes ” or “ no ”, the operative part thereof being the last three lines: “is the plaintiff entitled to have the deposited money applied to the satisfaction of its judgment as against the claim of the third party? ”

The applicable statutes seem clear beyond peradventure, and require that such question be answered in the affirmative. At the outset it should be noted that we are in nowise concerned here with the giving of bail, which is governed by sections 847, 849-855 of the Civil Practice Act, nor with the giving of a bond for the liberties of the jail, which is covered by sections 848 and 856 of the Civil Practice Act, and sections 515-520 of the Correction Law. Nor are there involved any claims of creditors of defendant, as are provided for in section 860 of the Civil Practice Act. Had an undertaking of bail been given in this case, the condition thereof would have been only that defendant remain amenable to any mandate issued to enforce the judgment against him (Civ. Prac. Act, § 849, subd. 3). Where a deposit is made in lieu of bail, however, the liability is more extensive than that of the bail, even though the fund was provided by a third party (Commercial Warehouse Co. v. Graber, 45 N. Y. 393; Lichter v. Raff, 149 Misc. 53; 7 Carmody on New York Practice, § 174, p. 193). Section 856 of the Civil Practice Act provides that such deposit may be made by “ a defendant, or other person arrested or attached on civil process compliance with the statute requires that such deposit be deemed the property of the defendant for purposes of the action (see People ex rel. Gilbert v. Laidlaw, 102 N. Y. 588). Such deposits may be released by the giving of bail within the usual time limitations (Civ. Prac. Act, § 858). If this is not done, in a case such as this, and ‘ if it remains on deposit when final judgment is rendered for the plaintiff, it must be applied under the direction of the court in satisfaction of the judgment, and the surplus, if any, must be refunded to the defendant or his representative. If the final judgment is for the defendant, or the action abates or is discontinued, the sum deposited and remaining unapplied must be refunded to the defendant or his representative.” (Civ. Prac. Act, § 859.)

As to third parties, it is provided: “ At any time before the deposit is paid into court, the defendant may deliver to the sheriff a written direction to pay it to a third person therein specified, in the event that the defendant becomes entitled to a return thereof, but without expressing any other contingency. * * * The money thus deposited is deemed the property of the third person, subject to the plaintiff’s interest therein, and subject to the rights of a creditor of the defendant, where the direction was given for the purpose of hindering, delaying or defrauding creditors. The money or the residue thereof must be paid to the third person where, by the provisions of the last two sections, it is required to be refunded to the defendant or his representative.” (Civ. Prac. Act, § 860.)

The scheme so established by the Legislature is plain. By making a cash deposit, a defendant can avoid the limitations of bail, under which his bail are his captors and can always return him to prison in their own exoneration (Civ. Prac. Act, §§ 865-867). In consideration of such privilege, it has been deemed appropriate that the plaintiff be protected. Accordingly, when a third party, such as the applicant herein, furnishes such deposit, she does so with full appreciation that the law regards it as the property of defendant, so far as plaintiff in the action is concerned. As expressly provided in the statute and defendant’s direction pursuant thereto, she is entitled to the return of the deposit only if defendant is.

We can see no valid reason for disregarding the plain language of these statutes. Cases in the lower courts relied upon by the third party (e.g., Steinberg v. Frankel, 154 Misc. 179) have been decided principally upon the authority of Finelite v. Sonberg (75 App. Div. 455). That case, however, is not authority for the third party’s position, and has been misapplied in the case cited and others. It was an action by the receiver for a stranger to the original action, a creditor of the original defendant, against the defendant and the third-party claimant to the fund. In the opinion (p. 457), it will be noted that said defendant had subsequently given bail ” (after executing the assignment to the third party), and that an order had been made under section 858 of the Civil Practice Act, that the money be refunded to the third party (since bail had been substituted, which was not done in the case before us). Thus the only issue was whether or not the assignment had been intended to defeat the rights of defendant’s creditors. If so, then the creditor was entitled to claim the deposit; if not, then the third party was entitled to the refund. The rights of the original plaintiff were not even remotely involved in that decision.

The orders appealed from should be reversed, applicant’s motion denied, and plaintiff’s cross motion granted, with costs in all courts, and the question certified answered in the affirmative.

Loughban, Ch. J., Lewis, Conway, Desmond, Dye and Fuld, JJ., concur.

Orders reversed, etc.


author: Loughran, Ch. J.

text:
    The People of the State of New York, Respondent, v. Paul F. Costello, Appellant.
    Argued November 25, 1952;
    decided February 26, 1953.

      Thomas F. Hyland for appellant.
    I. The Legislature never intended to make criminal every little thing a man might do. All that the record discloses is a little private wrong or civil injury to complainant, not a wrong to the public, not a crime. II. There was no proof of facts that would confer jurisdiction on the District Court. (People v. Freer, 171 Misc. 478.) III. The trial was unfair. (People v. Sanacory, 234 App. Div. 628; People v. Al Hatem, 194 Misc. 97.)

      Frank A. Gulotta, District Attorney (Henry P. De Vine of counsel), for respondent.
    I. The evidence is sufficient to establish the guilt of defendant as a matter of law. (People v. Stein, 277 App. Div. 996; People v. Horie, 258 App. Div. 246; People v. Orlando, 288 N. Y. 624.) II. The District Court had jurisdiction of the crime. (People v. Freer, 171 Misc. 478; People v. White, 1 N. Y. Grim. Rep. 466; People v. Olah, 300 N. Y. 96.)
   Loughran, Ch. J.

The defendant was tried in the District Court of Nassau County upon an information whereby he was accused of violating subdivision 2 of section 1433 of the Penal Law by wilfully and unlawfully deflating one of the- tires of an automobile of the complainant. The jury’s verdict was “ guilty.” The District Court sentenced the defendant to imprisonment for thirty days, but execution of the sentence was suspended. The judgment of the District Court was affirmed by the County Court of Nassau County and the defendant then brought the case here by permission of a Judge of this court (see Code Crim. Pro., § 520, subd. 3).

There was evidence that air was escaping from the valve of the automobile tire when the defendant ran away from the vehicle. At the request of his counsel, the Trial Judge directed the jury to acquit him if they found there was no injury or damage to the tire. In that state of the record, we cannot assume the absence of such injury or damage.

At the close of the case for the People, counsel for the defendant moved for dismissal of the information upon the ground that it should have alleged a violation of subdivision 11-a of section 1425 of the Penal Law. The trial court denied that motion. In our opinion, that motion should have been granted.

Section 1433 of the Penal Law reads in part as follows: “A person who unlawfully and wilfully destroys or injures any real or personal property of another * * * in a case where the punishment is not specially prescribed by statute, is punishable as follows: 1. If the value of the property destroyed, or the diminution in the value of the property by the injury is more than two hundred and fifty dollars, by imprisonment for not more than four years. 2. In any other case, by imprisonment for not more than six months, or by a fine of not more than two hundred and fifty dollars, or by both such fine and imprisonment.” The words we have just quoted from section 1433 of the Penal Law" were manifestly intended to cover cases not provided for by any other law. If then another statutory provision prescribed punishment for the offense of injuring motor vehicles, this case did not fall within section 1433. (People v. Knatt, 156 N. Y. 302, 304-305; Hazak, Inc., v. Robertson Goetz Bldg. Co., 289 N. Y. 478, 480.)

At the time in question, subdivision 11-a of section 1425 of the Penal Law provided and now provides that a person who wilfully damages in any manner an automobile or other motor vehicle shall be deemed guilty of a misdemeanor. Thus the present criminal prosecution was one in respect of which punishment for the act of the defendant was specially prescribed by statute and, that being so, the above provisions of subdivision 2 of section 1433 of the Penal Law (under which the defendant was convicted) had here no application.

The judgments should be reversed and the information dismissed.

Lewis, Conway, Desmond, Dye, Fuld and Froessel, JJ., concur.


author: Conway, J.

text:
    H. Gordon Smith, Appellant, v. William S. Kirkpatrick, Respondent.
    Argued October 22, 1952;
    decided February 26, 1953.

      Samuel D. Smoleff and Martin H. Selman for appellant.
    I. There has concededly been no adjudication on the merits of the present claim. (Franken-Karch Corp. v. Castriotis, 195 App. Div. 529; Barnes v. Alexander, 232 U. S. 117.) II. There has been no election of remedies. (Schenck v. State Line Tel. Co., 238 N. Y. 308; Matter of Tate v. Estate of Dickens, 276 App. Div. 94.)

      Frank O. Fredericks and Richard Kulze for respondent.
    I. There has been a binding election of remedies. (Matter of Tate v. Estate of Dickens, 276 App. Div. 94; United States v. Oregon Lumber Co., 260 U. S. 290.) II. The final dismissal of the complaint in the prior action is res judicata. (Eissing Chemical Co. v. People’s Nat. Bank of Brooklyn, 205 App. Div. 89; Lipkind v. Ward, 256 App. Div. 74; Frost v. Bankers Commercial Corp., 194 F. 2d 505.)
   Conway, J.

Plaintiff originally instituted an action against defendant seeking recovery of moneys allegedly due Mm under a contract of employment. The complaint (hereinafter referred to as the first complaint) alleged that the contract required plaintiff to devote his full time and attention to defendant’s business; to solicit export accounts for defendant ‘ ‘ with a view to defendant acting as export manager for American manufacturers and purchasing agent for foreign clients ’ ’; that plaintiff’s remuneration was to be 50% of the income derived from business procured by plaintiff; that over a period of ten months and in compliance with the contract plaintiff solicited for defendant accounts from which an income of $26,000 was or would be derived and that, with the exception of certain payments, defendant failed to compensate plaintiff as agreed.

Defendant denied the existence of the agreement and upon motion made by him for summary judgment, the complaint was dismissed for the reason that the agreement pleaded therein did not comply with the Statute of Frauds. Thereupon plaintiff submitted a proposed order to Special Term granting him leave to serve an amended complaint so that he might sue for the value of his services.

Thereafter, plaintiff served his amended complaint (hereinafter referred to as the second complaint) setting forth two causes of action, neither of which sought recovery in “ quantum meruit ”. For a first cause of action, it was alleged that “ plaintiff and defendant had an informal oral arrangement [terminable at will] whereby plaintiff conducted some of his business through defendant’s office, paying to defendant, as compensation for such use of Ms office, fifty (50%) percent of the gross profits of any of plaintiff’s business handled through defendant’s office ”; that the business so handled was to be conducted under the name of W. S. Kirkpatrick & Co. but would remain the property of plaintiff; that W. S. Kirkpatrick & Co. earned commissions and profits from accounts obtained by plaintiff but defendant failed to account therefor and appropriated to himself business belonging to plaintiff. As a second cause of action, plaintiff alleged an oral agreement of joint venture the substance of which is essentially the same as that of the agreement alleged in the first cause of action. The relief sought was an accounting, judgment for such sums as were found due, and an order directing defendant to assign to plaintiff such contracts, agreements and arrangements as had been entered into with persons whose accounts had been procured by plaintiff.

A trial was had without a jury and proofs were submitted by both parties. The Justice Presiding directed judgment for defendant and dismissed plaintiff’s second complaint upon the merits for the reason that ‘1 plaintiff has failed to establish his causes of action by a fair preponderance of the credible evidence. ’ ’ The Justice wrote: “ It is clear to the court that the original position taken by the plaintiff correctly represented the relationship between the parties but, unfortunately for the plaintiff, that action was barred by the statute of frauds. * * * It ought to be stated, however, in fairness to the plaintiff, that the defendant was clearly guilty of overreaching the plaintiff, but the bar of the statute of frauds and the failure on the part of the plaintiff to proceed on the theory of quantum meruit have given to the defendant a windfall which in business morals and good conscience he is not entitled to.”

Plaintiff took no appeal and subsequently commenced the present action seeking to recover the reasonable value of services rendered by him to defendant at defendant’s request. Before answering, defendant moved under rule 107 of the Buies of Civil Practice to dismiss the complaint on the ground of res judicata and, in the alternative, moved under rule 103 to strike irrelevant, unnecessary and prejudicial matter from the complaint. Upon appeal from the denial of that motion by Special Term, the Appellate Division reversed and dismissed the complaint.

There are two questions presented for our consideration (1) whether the present action is barred by the rule of res judicata and, if not so barred, (2) whether by proceeding to judgment on the theories embodied in his second complaint, plaintiff lost what right he had to maintain an action in quantum meruit. We have reached the conclusion that the present action must be permitted to continue. It seems to us that had plaintiff in his first complaint pleaded three causes of action: the first on a contract of employment, the second to establish a partnership and to obtain an accounting, and the third to establish that plaintiff and defendant were joint venturers, and on the trial the first had been dismissed because within the Statute of Frauds, and judgment entered against the plaintiff on the other two because he had failed to establish the existence of the agreements alleged, it would be more readily seen that an action for quantum meruit would still lie. If that be so, the fact that the same position was reached after two actions had been brought by plaintiff should not affect the result.

It is familiar law that where a cause of action has been prosecuted to a final adjudication on the merits, the same cause of action may not be again litigated. It is said that the prior adjudication is conclusive as to all things which might have been litigated as well as those actually litigated but that where a subsequent proceeding is had upon a different cause of action between the same parties or their privies only such things as were actually and necessarily determined in the prior proceeding are-held to be concluded (Cromwell v. County of Sac, 94 U. S. 351; 2 Freeman on Judgments [5th ed.], p. 1453; Collateral Estoppel by Judgment, 56 Harv. L. Rev. 1, 2-3).

The determination of what constitutes the “ same ” or 6 ‘ different ’ ’ causes of action is not a matter free from difficulty. The definition of the term ‘ ‘ cause of action ” is a variable one and depends upon the context in which it appears. (Abrams v. Maryland Cas. Co., 300 N. Y. 80, 86.) The test for determining whether or not causes of action ” are the same ” for purposes of res judicata has been variously expressed. In De Coss v. Turner & Blanchard (267 N. Y. 207, 211), where an employee twice sought recovery against his employer for the same injury, alleging first that injury was caused by the employer’s failure to provide a safe place to work and alleging next that it resulted from the carelessness of a fellow employee, we held that the matter was res judicata, Judge Lehman quoting with approval the following definition‘ A cause of action does not consist of facts, but the unlawful violation of a right which the facts show.' The number and variety of the facts alleged do not establish more than one cause of action so long as their result, though they be considered severally or in combination, is the violation of but one right by a single legal wrong.’ ” It has also been said that ‘ ‘ there is an identity of causes of action when in both the old and new proceedings the subject-matter and the ultimate issues are the same * * (Res Judicata, 38 Yale L. J. 299, 313-314.) And in the leading case of Schuylkill Fuel Corp. v. Nieberg Realty Corp. (250 N. Y. 304, 306-307, Cardozo, Ch. J.), we said that a ‘1 judgment in one action is conclusive in a later one not only as to any matters actually litigated therein, but also as to any that might have been so litigated, when the two causes of action have such a measure of identity that a different judgment in the second would destroy or impair rights or interests established by the first (Cromwell v. County of Sac, 94 U. S. 351; Reich v. Cochran, supra [151 N. Y. 122]). It is not conclusive, however, to the same extent when the two causes of action are different, not in form only [case cited], but in the rights and interests affected. The estoppel is limited in such circumstances to the point actually determined * * See to like effect Karameros v. Luther (279 N. Y. 87, 91).

By his second complaint, the plaintiff sought to enforce a right which arose out of an express agreement and from defendant’s asserted ownership of accounts procured by him. Defendant’s alleged wrong was the misappropriation of those accounts and the proceeds thereof. Plaintiff’s right to all profits, save the 50% intended to compensate defendant for the use of his facilities, sprang from an alleged relationship, established by the express agreement, which, though vaguely expressed in the complaint, appears to have been in the nature of that existing between joint venturers, partners or landlord and tenant. The redress sought was, as we have seen, an accounting, judgment for moneys found due in accordance with the terms fixed by the agreement and the transfer of accounts belonging to plaintiff. In that action it was determined that defendant had no liability by reason of his being a party to the relationships alleged and that plaintiff’s title to the accounts was not superior to that of defendant.

In the present action plaintiff’s alleged right rests upon an implied contract. The relationship allegedly existing between the parties is somewhat analogous to that found between master and servant. The wrong alleged is defendant’s acceptance and retention of benefits, conferred upon him by plaintiff, without payment in return of fair compensation. The relief now sought is merely the reasonable value of the services rendered to defendant at his request or with his consent.

The two actions involve different ‘ ‘ rights ’ ’ and ‘ wrongs ’ ’. The requisite elements of proof and hence the evidence necessary to sustain recovery vary materially. The causes of action are different and distinct and the rights and interests established by the previous adjudication will not be impaired by a recovery, if that be the outcome, in quantum meruit. We think that this conclusion is dictated by the foregoing general authorities and analyses of the complaints, and that further support is to be found in those following which bear more specifically on the matter before us. (Sielcken-Schwarz v. American Factors, 265 N. Y. 239; Young v. Farwell, 165 N. Y. 341; Marsh v. Masterton, 101 N. Y. 401; Bialostok v. Wolfer, 191 Misc. 385, Froessel, J.; 2 Freeman on Judgments [5th ed.], § 736, pp. 1552-1553.)

Having concluded that the present complaint does not embody the same cause of action, or a cause of action which bears such a measure of identity with those set forth in the second complaint that the matters embodied in the present complaint are matters which “ might have been litigated ” before, the question is whether the matters actually determined are fatal to the instant action. We think not. Plaintiff’s failure to recover on the causes stated in his second complaint was due to the fact that he did not establish the existence of the arrangements therein alleged. The decision was not that plaintiff failed to prove compliance with an existing agreement. It was not decided that no services were rendered to defendant with his consent, nor that the services rendered conferred no benefit upon the defendant — those matters are still open and it is those which plaintiff now seeks to prove.

Defendant does not urge that the determination of Special Term — that the contract alleged in the first complaint failed to comply with the Statute of Frauds — bars the present action. Indeed he could not. Upon the dismissal of the first complaint, plaintiff was given leave to amend. There was no final adjudication on the merits. The conclusiveness of the determination dismissing the first complaint is confined to the precise issue then determined. That being so, the order of dismissal is conclusive only as to the point that the contract alleged in the first complaint did not comply with the Statute of Frauds. That narrow determination is insufficient to preclude the present action, the plaintiff here being entitled to a construction of his complaint most favorable to him.

We turn now to the question of whether or not, having attempted and failed to succeed on the causes involved in the second complaint, plaintiff should be held to have elected his remedy and thus to have lost his right to sue in quantum meruit.

In American Woolen Co. v. Samuelsohn (226 N. Y. 61, 66), the doctrine of election of remedies was expressed in these words:

‘ ‘ An election of remedies takes place when a choice is exercised between remedies which proceed upon irreconcilable claims of right.
“ When an election is made between such claims, with full knowledge of all the facts, an action may not thereafter be maintained upon the inconsistent claim.”

Although stating different causes of action, the second complaint is not so inconsistent or irreconcilable with the complaint in the present action in quantum meruit that the choice of the former action precludes resort to the present one. Both complaints assumed basically that there existed between the plaintiff and defendant a contractual relationship, and that defendant had reaped benefits at plaintiff’s expense. In this State .where a litigant fails to establish the right to recover upon an express contract he may, in the same action, recover in quantum meruit. (Harmon v. Peats Co., 243 N. Y. 473, 476; McKeon v. Van Slyck, 223 N. Y. 392, 399, 401.) If warranted by the pleadings and proof, the case may be submitted to a jury on both theories and an election need not be made. (See McKeon v. Van Slyck, supra; Sturtevant v. Fiss, Doerr & Carroll Horse Co., 173 App. Div. 113, 115; Byrne v. Gillies Co., 144 App. Div. 677, 678; Walar v. Rechnitz, 126 App. Div. 424; 1 Nichols on New York Practice, p. 1085.) In Walar v. Rechnitz (supra), where it was indicated that a plaintiff should not be required to elect but should be allowed to attempt recovery, in the same action, on express contract or in quantum meruit, it was suggested (p. 426) that after an adverse judgment in an action strictly limited to the theory of express contract a new action in quantum meruit could yet be maintained. (See, also, Restatement, Judgments, § 65, comment j.) It is thus clear that there exists no such irreconcilable inconsistency between the claims asserted by plaintiff in the present and former actions that he may be held to have made an election.

Moreover, where a litigant pursues a remedy which is unavailable because it is inappropriate to the facts alleged and sought to be proved, there is no election (Henry v. Herrington, 193 N. Y. 218). And where, as in the case before us, the remedy sought is unavailable because the facts turn out to be different from those supposed by plaintiff, the same rule has been applied, and properly so (Matter of Tate v. Estate of Dickens, 276 App. Div. 94).

We have said that the doctrine of election of remedies is a harsh one and should not be extended (Metropolitan Life Ins. Co. v. Childs Co., 230 N. Y. 285, 291). It has been criticized and the Legislature has indicated its disfavor for at least certain aspects of the doctrine by the enactment of sections 112-a-112-d of the Civil Practice Act. It is interesting to note that the Law Bevision Commission, in proposing the passage of sections 112-a-112-d, expressed the following view (1939 Report of N. Y. Law Revision Comm., p. 213): The danger of injustice is most acute where the unsuccessful invocation of a remedy — the election of a remedy that turns out to be unavailable — is held to bar the subsequent enforcement of another remedy.” The commission stated that inasmuch as the decisions in the cases of Schenck v. State Line Tel. Co. (238 N. Y. 308), and Clark v. Kirby (243 N. Y. 295), would discourage and, in doubtful cases, restrict the application of the doctrine, no general legislation was suggested. The proposals made were confined to those cases where lines of decision of long standing indicated to the commission that it was probable that legislation was required to effect a change. (See, also, Fitzgerald v. Title Guar. & Trust Co., 290 N. Y. 376.) We are of the opinion that this is not a proper case for the application of the doctrine.

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

Loughran, Oh. J., Lewis, Desmond, Dye, Fuld and Froessel, JJ., concur.

Judgment accordingly. [See 305 N. Y. 926.]


text:
    Edward Rager, Appellant, v. John J. McCloskey, Individually and as Sheriff of the City of New York, et al., Respondents.
    Argued December 1, 1952;
    decided February 26, 1953.

      Lloyd Paul Stryker and Harold W. Wolfram for appellant.
    I. Plaintiff has pleaded a cause of action against defendants for the intentional infliction of injury without justification. (Opera on Tour v. Weber, 285 N. Y. 348; American Guild of Musical Artists v. Petrillo, 286 N. Y. 226; Langan v. First Trust & Deposit Co., 293 N. Y. 604; Advance Music Corp. v. American Tobacco Co., 296 N. Y. 79; Wilson v. Hacker, 200 Misc. 124; Rochette & Parzini Corp. v. Campo, 301 N. Y. 228; Barile v. Fisher, 197 Misc. 493; Beardsley v. Kilmer, 236 N. Y. 80; Pagano,

      Inc., v. New York Life Ins. Co., 198 Misc. 598; Original Ballet Russe v. Ballet Theatre, 133 F. 2d 187.) II. The injury to plaintiff consists of the temporal damages which he has sustained and the severe emotional distress inflicted upon him. (Opera on Tour v. Weber, 285 N. Y. 348; Aikens v. Wisconsin, 195 U. S. 194; Mogul S. S. Co. v. McGregor, Gow & Co., 23 Q. B. D. 598; Rochette & Parzini Corp. v. Campo, 301 N. Y. 228; Klumbach v. Silver Mount Cemetery Assn., 242 App. Div. 843, 268 N. Y. 525; Dyer v. Broadway Central Bank, 252 N. Y. 430.) III. Plaintiff has pleaded a cause of action against defendants in trespass. (People ex rel. Paul v. Warden of City Prison, 190 Misc. 528; United States v. On Lee, 193 F. 2d 306.)

      James M. Gilleran and John J. O’Connor for John J. McCloskey and another, respondents.
    I. The intermediate order of Special Term dismissing the first amended complaint is the law of the case because it was not brought up for review in the notice of appeal. (Matter of O’Connor Long Island Properties Corp. v. Bruckman, 288 N. Y. 23; Menkes Feuer, Inc., v. Peoples Bank of Johnstown, 294 N. Y. 748; Landmesser v. Hayward, 157 App. Div. 74; Duerr & Co. v. Craven, 114 N. Y. S. 784; McIlvaine v. Steinson, 90 App. Div. 77; Matter of Flanagan [Flanagan], 271 App. Div. 1014; Waldo v. Schmidt, 200 N. Y. 199; Potter v. Emerol Mfg. Co., 275 App. Div. 265; Linton v. Perry Knitting Co., 295 N. Y. 14.) II. The second amended complaint fails to state a cause of action in “ prima facie ” tort. (Stevenson v. News Syndicate Co., 302 N. Y. 81.) III. The words pleaded in the first and second amended complaints are not slanderous or libelous. (Weidberg v. La Guardia, 170 Misc. 374; Bordman v. Gazette Co., 225 Iowa 533; Dillard v. Shattuck, 36 N. M. 202; Bleecker v. Drury, 149 F. 2d 770.) IV. The acts pleaded in the first and second amended complaints are not trespass. (Hinman v. Borden, 10 Wend. 367; People ex rel. Paul v. Warden of City Prison, 190 Misc. 528; Dubbard v. Mack, 17 Johns. 127; Cantrell v. Conner, 6 Daly 39.)

      August Zolotorofe for Edgar A. Palmieri, respondent.
   Fuld, J.

We are here concerned solely with the legal sufficiency of a pleading, plaintiff’s second amended complaint. The first amended complaint, setting forth ten separately stated causes of action, was previously held insufficient, by the court at Special Term and by the Appellate Division, as to all but one cause of action and dismissed, with leave to serve a further amended complaint. In his second amended complaint, plaintiff realleges substantially the same facts as were earlier set forth, although in the form of a single cause of action.

Plaintiff and defendant Palmieri are attorneys who represented the adversary parties in certain matrimonial litigation. Defendants McCloskey and Dickstein are, respectively, the sheriff and a deputy sheriff of the City of New York. The complaint charges defendants with a conspiracy maliciously to destroy plaintiff’s professional practice and reputation and sets forth a number of allegedly false statements claimed to have been made by Palmieri concerning plaintiff, as well as allegedly false statements and other acts attributed to Dickstein in connection with the latter’s attempts to serve certain process on plaintiff at the instance of Palmieri.

The second amended complaint, the one now before us, was dismissed, on motion, by Special Term — finally as to McCloskey and Dickstein and with leave to amend as to Palmieri — upon the ground that the prior order dismissing the first amended complaint was res judicata and conclusively established the complaint’s insufficiency except for the allegations of the single cause of action previously sustained.

Since the earlier order dismissing the first amended complaint granted plaintiff leave to serve a further amended pleading, it lacked the quality of finality and may not, following the service of the amended complaint, be treated as a conclusive adjudication precluding further consideration of the issues. (See Walker v. Gerli, 257 App. Div. 249; see, also, Bannon v. Bannon, 270 N. Y. 484, 490.) Nor may the doctrine of the law of the case here be invoked. That doctrine, as distinct from res judicata, is limited in application — at least insofar as intermediate or interlocutory determinations are concerned — to a tribunal of co-ordinate jurisdiction, and the prior ruling is, therefore, not binding upon this court. (See Hornstein v. Podwitz, 254 N. Y. 443, 450; Vogeler v. Alwyn Improvement Corp., 247 N. Y. 131, 134-135; Ansorge v. Kane, 244 N. Y. 395, 397.)

Independent study persuades us that the complaint now under consideration does spell out a cause of action, not only against Palmieri — as the courts below previously held — but against the other two defendants as well.

The cause of action against Palmieri, one for slander, charges that that defendant, in a telephone conversation Avith one of plaintiff’s employees, falsely accused plaintiff of having “ committed a fraud ” in obtaining a Nevada divorce decree for his client, and stated further that he could get plaintiff ‘ ‘ into quite a mess and even disbarred ”. The imputation unquestionably concerned plaintiff in his professional character as an attorney and was reasonably susceptible of such a construction as would tend to injure him in that capacity. (See Kleeberg v. Sipser, 265 N. Y. 87; White v. Barry, 288 N. Y. 37.) That being so, the statement is actionable as slander per se, without the necessity of pleading special damage. (See Sanderson v. Caldwell, 45 N. Y. 398, 405.)

The cause of action against Dickstein and McCloskey, for trespass, charges that Dickstein entered plaintiff’s law office, apparently for the purpose of serving process upon plaintiff, and that, not finding plaintiff there, he made ‘ ‘ violent efforts ’ ’ to open the doors into the inner offices, forcibly wrenched apart the glass partition into the typists’ room, used abusive and profane language, and threatened plaintiff’s employees Avith jail unless they produced plaintiff. It is additionally alleged that, although he was repeatedly told to leave, he remained until removed by a police officer. A trespass may consist, not only in making an unauthorized entry upon private property, but in refusing to leave after permission to remain has been withdraw. (See Restatement, Torts, § 158; Prosser on Torts, p. 89.) Consequently, while Dickstein’s original entry may have been lawful — and quite apart from the effect of the other acts charged to him while on the premises — the allegations that he refused repeated requests to leave and persisted in remaining there for a not inconsiderable period suffice to charge a trespass by Dickstein. (See Adams v. Rivers, 11 Barb. 390, 397; see, also, People ex rel. Paul v. Warden of City Prison, 190 Misc. 528, 529.)

Although there is no showing that McCloskey directed or authorized his deputy Dickstein to go to the lengths alleged in the complaint to effect service, the facts stated are, nevertheless, also adequate for a cause of action in trespass against Dickstein’s superior. By the common law,” it has been said, “ a sheriff is liable in trespass for the acts of his deputy committed in the attempt to execute process, although without his direction or recognition.” (People ex rel. Kellogg v. Schuyler, 4 N. Y. 173, 181; see, also, Pond v. Leman, 45 Barb. 152.)

Since, then, the complaint does state a cause of action against each of the defendants, it is immune from attack for insufficiency, even though it may contain additional allegations that are inadequate to charge any further cause of action. (See Abrams v. Allen, 297 N. Y. 52, 54; Advance Music Corp. v. American Tobacco Co., 296 N. Y. 79, 84; Abbey v. Wheeler, 170 N. Y. 122, 127.) Accordingly, we postpone for possible future consideration the question whether other allegedly false statements — attributed to one or another of defendants — may be ruled defamatory and slanderous per se, as well as the further question whether the recitals of conspiracy are sufficient to charge each of the defendants with liability for the acts of the others.

We might have stopped at this point were it not for plaintiff’s strong and primary insistence upon the prima facie tort doctrine. The trial court, confronted with a voluminous complaint and faced with the task of appraising the impact of a doctrine still in the process of growth, is entitled to a brief expression of our views upon the subject.

It is plaintiff’s argument that, even if the averments of his complaint do not fall within any one of the .traditional categories of tort, they may be upheld upon the theory that, ‘1 prima facie, the intentional infliction of temporal damage is a cause of action, which * * * requires a justification if the defendant is to escape.” (Aikens v. Wisconsin, 195 U. S. 194, 204; see, also, Rochette & Parzini Corp v. Campo, 301 N. Y. 228, 232; Advance Music Corp. v. American Tobacco Co., supra, 296 N. Y. 79, 84; Opera on Tour, Inc., v. Weber, 285 N. Y. 348, 355; Note, 52 Col. L. Rev. 503.) However, whether reliance be placed on that doctrine or- on the related right of action for damage resulting from intentional falsehood (see Al Raschid v. News Syndicate Co., 265 N. Y. 1, 3-4; Ratcliffe v. Evans, [1892] 2 Q. B. 524, 527), the allegations of the complaint — apart from those relating to the particular torts already noted — are defective in failing to show any actual temporal damage resulting from the false statements or the acts complained of. The recital in the complaint that plaintiff suffered the loss of clients as the result thereof must be rejected as “ a mere conclusion or surmise ” and may not be regarded as the essential statement of facts giving rise to liability. (See Al Raschid v. News Syndicate Co., supra, 265 N. Y. 1, 5.) None of the challenged statements — putting aside any which does, or may, constitute slander per se — was such as to be “ calculated in the ordinary course of events ” to produce the consequence averred. (Cf. Mogul S. S. Co. v. McGregor, Gow & Co., 23 Q. B. D. 598, 613, affd. [1892] A. C. 25; Ratcliffe v. Evans, supra, [1892] 2 Q. B. 524, 527.) Moreover, no facts are alleged to show that any clients were on the scene or within hearing when the asserted statements were made. In essence, plaintiff’s plaint is that he has been injured in his reputation. But, except insofar as the facts pleaded amount to actionable defamation — in which event damage to plaintiff’s reputation would be presumed — plaintiff has no right of action, unless the complaint makes a showing that actual damage has resulted. That the pleading before us fails to do.

However, since the complaint does effectively charge Palmieri with a cause of action in slander and McCloskey and Dickstein with one sounding in trespass, it should not have been dismissed. The judgments dismissing the second amended complaint as against defendants McCloskey and Dickstein should be reversed, and the motion made by those defendants denied. The orders dismissing the second amended complaint as against defendant Palmieri should likewise be reversed, the question certified answered in the affirmative, and the matter remitted to Special Term for further proceedings upon the motion made by that defendant under rules 103, 107 and 90 of the Rules of Civil Practice. Plaintiff should be granted costs in all courts.

Loughban, Ch. J., Lewis, Conway, Desmond, Dye and Fboessel, JJ., concur.

Judgment accordingly. [See 305 N. Y. 924.]


author: Lewis, J. Desmond, J.

text:
    In the Matter of the Arbitration Between Level Export Corporation, Respondent, and Wolz, Aiken & Co., Appellant.
    Submitted December 5, 1952;
    decided February 26, 1953.

      David L. Shandalow for appellant.
    I. There is direct and decisive authority for compelling arbitration where, as here, an arbitration clause is incorporated by reference. (Matter of Hines [Ziegfeld], 222 App. Div. 543; Beaver Concrete Breaking

      Co. v. Nadal Boxendale Inc., 278 App. Div. 929; Matter of Hatzel & Buehler [Fuller Co.], 303 N. Y. 836; Matter of Miller & Sons [United Office & Professional Workers], 195 Misc. 20; Metzger v. Ætna Ins. Co., 227 N. Y. 411; Amend v. Hurley, 293 N. Y. 587; Knight v. Kitchin, 237 App. Div. 506; White v. Idsardi, 253 App. App. Div. 96; Matter of Levy [Hirsch], 271 App. Div 431, 296 N. Y. 837; Jones v. Cunard S. S. Co., 238 App. Div. 172.) II. The language of the contracts being clear and unambiguous, the injection of the Worth Street Rules was improper and their consideration erroneous. (Matter of Delaware Co. Elec. Corp. v. City of New York, 278 App. Div. 526; Gans v. Ætna Life. Ins. Co., 214 N. Y. 326.) III. Sound public policy requires the direction of arbitration herein. (Matter of Arthur Philip Export Corp. [Leathertone, Inc.], 275 App. Div. 102; Kloberg v. Teller, 103 Misc. 641; Simons v. Fried, 302 N. Y. 323.) IV. It is the policy of the courts to encourage and uphold arbitrations, as they are an inexpensive, simple and expeditious method of adjusting controversies and tend to prevent litigation. (Matter of Feuer Transp. [Local No. 445], 295 N. Y. 87; Welch v. Probst, 151 App. Div. 147; Matter of E. A. Laboratories, 50 N. Y. S. 2d 222; Fudickar v. Guardian Mut. Life Ins. Co., 62 N. Y. 392; Matter of Webster v. Van Allen, 217 App. Div. 219.)

      Charles H. Levitt for respondent.
    I. Respondent did not agree to arbitrate. (Matter of Lehman v. Ostrovsky, 264 N. Y. 130; Matter of Arthur Philip Export Corp. [Leathertone, Inc.], 275 App. Div. 102; Matter of Albrecht Chemical Co. [Anderson Trading Corp.], 298 N. Y. 437; Matter of Eagar Constr. Corp. [Ward Foundation Corp.], 255 App. Div. 291; Matter of General Silk Importing Co. [Gerseta Corp.], 198 App. Div. 16; Matter of Bachmann, Emmerich & Co. [Wenger & Co.], 204 App. Div. 282; Matter of Gold [A. Broido, Inc.], 185 Misc. 1039.) II. Appellant’s cases do not support its position that respondent is required to arbitrate.
   Lewis, J.

Incidental to a commercial transaction between the parties to this proceeding, there has emerged the question, now decisive in this litigation, whether each of the two contracts, which fixed the obligations of the parties, validly incorporated an agreement that Any controversy arising under, or in relation to, this contract, shall be settled by arbitration.”

As to facts: The petitioner-respondent, Level Export Corporation, to which reference will be made as the buyer, is engaged in the purchase and export of a variety of commodities including textiles. On January 22 and February 14, 1951, the buyer executed two written contracts, practically identical in text, by which it agreed to purchase from the respondent-appellant, Wolz, Aiken & Co., hereinafter referred to as the seller, a total quantity of 135,000 yards of leño — a light-weight cotton fabric used in making summer garments. Each of the two agreements contained the names of the parties, the quantity of fabric sold, the delivery dates and the terms of payment. The balance of each contract — covering a substantial portion of the single page upon which the agreement was printed — consists of the following two paragraphs:

“ This Salesnote is subject to the provisions of Standard Cotton Textile Salesnote which, by this reference, is incorporated as a part of this agreement and together herewith constitutes the entire contract between buyer and seller. No variation therefrom shall be valid unless accepted in writing.
Prices on any undelivered portion of this contract are subject to any further increase or decrease due to Governmental action and any present or future Federal or State legislation affecting the seller’s costs, and deliveries may be modified to the extent necessitated by any such Governmental action or legislation affecting production.” (Emphasis supplied.)

The standard cotton textile salesnote which — by the words italicized above- — -is incorporated by reference in each of the two agreements here involved, contains ten subdivisions which, by their titles, relate to — I. Construction ”, “ II. Passing of Title “ III. Storage and Insurance ”, “ IV. Terms of Collection and Credit ”, V. Cancellations, Rejections and Claims ”, VI. Defaults in Payment ”, “ VII. Furnishing Specifications ”, “ VIII. Casualty ”, IX. Other Contingencies ”, and “ X. Arbitration ”. The tenth subdivision, relating to Arbitration ”, provides as follows: “ Any controversy arising under, or in relation to, this contract, shall be settled by arbitration. If the parties are unable to agree respecting time, place, method, or rules of the arbitration, then such arbitration shall be held in the City of New York in accordance with the laws of the State of New York and the rules then obtaining of the General Arbitration Council of the Textile Industry and the parties consent to the jurisdiction of the Supreme Court of said State and further consent that any process or notice of motion or other application to the Court or a Judge thereof may be served outside the State of New York by registered mail or by personal service, provided a reasonable time for appearance is allowed.”

When a dispute subsequently arose between the parties with regard to performance under the two purchase agreements, the seller instituted arbitration proceedings in accord with the rules of the General Arbitration Council of the Textile Industry. Thereupon the buyer, when requested to do so, refused to appoint an arbitrator and has thus far successfully opposed arbitration by motion for a stay made at Special Term upon the ground that no agreement to arbitrate exists between the parties (Civ. Prac. Act, § 1458, subd. 2).

The buyer admits that it executed the contracts of purchase mentioned above, each of which by its terms incorporates the standard cotton textile salesnote containing the provision upon which is based the seller’s demand for arbitration. The ground upon which the buyer resists arbitration, viz., that no arbitration agreement exists between the parties, is stated in the affidavit by the buyer’s secretary and treasurer, read in support of its motion in this proceeding, as follows:

“At no time was the petitioner informed in any way that the provisions of the Standard Cotton Textile Salesnote contained any provision requiring arbitration of any controversy between the parties.
“ Neither the petitioner nor any of its officers or directors is a member of any association or any textile group; none of us has ever seen the Worth Street Rules; we have never been provided with a copy thereof. Arbitration was mentioned for the first time by the attorneys for the respondent on September 14, 1951, which was several months after the controversy arose. At the time that the petitioner signed the contracts * * * neither the petitioner nor any of its officers or directors was aware of any provision requiring arbitration under the contracts. * * *
‘ ‘ The petitioner [buyer] did not know, if it is the fact, that by signing the agreements annexed hereto that it had agreed to arbitrate any disputes with respondent. No arbitration clause was ever called to the attention of the petitioner.”

The question thus presented is whether the factual allegations contained in the buyer’s affidavit, quoted in part above, serve to raise “ * * * a substantial issue as to the making of the contract ”, thereby entitling the buyer to a stay of arbitration. (Civ. Prac. Act, § 1458, subd. 2.) That question is one of law. (Matter of General Elec. Co. [United Elec. Radio & Mach. Workers of America], 300 N. Y. 262, 264; Alpert v. Admiration Knitwear Co., 304 N. Y. 1, 3.)

Mindful that “ No one is under a duty to resort to arbitration unless by clear language he has so agreed ” (Matter of Lehman v. Ostrovsky, 264 N. Y. 130,132), we are unable to find in the record legal justification for the buyer’s present claim that it is not obligated, by each of the purchase agreements to which it was a party, to arbitrate the disputes which have arisen in the course of performance of those agreements. Each of those contracts contains the statement that it is made “ subject to the provisions of Standard Cotton Textile Salesnote ” which, as we have seen, was expressly “ * * * incorporated as a part of this agreement and together herewith constitutes the entire contract between buyer and seller.” Difficult it would be to find words more clearly to express the contractual intent of the parties. There is no evidence that an attempt was made to limit the application of the standard cotton textile salesnote; nor was there indication that any one of the ten subdivisions of the salesnote was not intended to apply. Indeed, a contrary intention is indicated by the sentence which immediately follows the contract provision last quoted above “ No variation therefrom shall be valid unless accepted in writing.”

The effect of the foregoing contract provisions was to adopt, and to integrate into each purchase agreement, the terms of the standard cotton textile salesnote. Among those provisions is the tenth subdivision, bearing the caption “ Arbitration ”, beneath which is the printed statement ‘ ‘ Any controversy arising under, or in relation to, this contract, shall be settled by arbitration”, followed by procedural provisions in the event arbitration should become necessary.

In view of the documents to which reference has been made — which, when integrated, form the contracts executed by buyer and seller (see 3 Williston on Contracts [Rev. ed.], § 628) we regard the buyer’s contention — that no contract to arbitrate exists between the parties — as being at variance with the plain language of its agreements.

There is no allegation by the buyer of misrepresentation by the seller either with respect to the effect of the two purchase agreements, or with respect to provisions of the standard cotton textile salesnote. Nor does the buyer claim to have been innocently misled by words or conduct of the seller which indicated that disputes between the contracting parties would be settled by means other than by arbitration. The buyer’s sole contention is that through its own ignorance of the provisions contained in the standard cotton textile salesnote it failed to understand the significance and effect of those provisions of the purchase contracts to which reference has been made. Upon that phase of the case we note in the record a statement by an officer of the buyer that the business of that corporation “ * * ® consists of the purchase of commodities and their export to customers throughout the world ” and that the commodities purchased and exported comprise a wide variety of items including textiles. In those circumstances we may assume that the buyer — an exporter of wide experience — dealt with the seller with knowledge that the provisions of the purchase agreements here involved were to have legal effect and were thus enforcible.

In Metzger v. Ætna Ins. Co., 227 N. Y. 411, 416, this court had occasion to state the rule which we believe to be applicable to the present case: ‘ * * * when a party to a written contract accepts it as a contract he is bound by the stipulations and conditions expressed in it whether he reads them or not. Ignorance through negligence or inexcusable trustfulness will not relieve a party from his contract obligations. He who signs or accepts a written contract, in the absence of fraud or other wrongful act on the part of another contracting party, is conclusively presumed to know its contents and to assent to them and there can be no evidence for the jury as to his understanding of its terms.” (See,, also, Pimpinello v. Swift & Co., 253 N. Y. 159, 162-163; Amend v. Hurley, 293 N. Y. 587, 595; Matter of Levy [Hirsch], 271 App. Div. 431, 433, affd. 296 N. Y. 837.)

We regard as inapplicable to our present problem the decisions in Matter of General Silk Importing Co. (Gerseta Corp.), 198 App. Div. 16, and Matter of Bachmann, Emmerich & Co. (Wenger & Co.), 204 App. Div. 282, cited by the Appellate Division in support of its ruling herein. In each of those cases the contract under which arbitration was sought provided that “ ‘ Sales are governed by raw silk rules adopted by the Silk Association of America. ’ ” In refusing to direct arbitration, the court, in Matter of General Silk Importing Co. (Gerseta Corp.) indicated that the parties had not clearly expressed an intention that the raw silk rules should apply to anything more than to the completion of sales under the agreement. In Matter of Bachmann, Emmerich & Co. (Wenger & Co.) involving the identical contract provision, the case was decided upon the authority of Matter of General Silk Importing Co. (Gerseta Corp.).

Our examination of the present record leads us to conclude that it does not raise a “ substantial issue ” as to the making of the two purchase agreements in suit so as to avoid their legal consequences (Civ. Prac. Act, § 1458, subd. 2).

Accordingly, the orders should be reversed and the matter remitted to Special Term for further proceedings not inconsistent Avith this opinion, with costs to appellant in all courts.

Desmond, J.

(dissenting). I dissent and vote to affirm.

Whether respondent ever consented to arbitration was, on this record, a question of fact, and the negative answer to that question given by both courts below, leaves us powerless to reconsider it. No one can be forced into arbitration unless by plain language he actually agrees to arbitrate (Matter of Lehman v. Ostrovsky, 264 N. Y. 130, 132), and such an agreement is not established, conclusively and as matter of law, by a showing that he signed a contract Avhich incorporated by reference only and with no mention of arbitration, another document which, although he did not know it, contained a consent to arbitration. Decisions in cases where a party signed a contract without reading it, are not helpful here. Respondent, so it has been found as fact by both courts below, never saw the document incorporated by reference ” into the contract he did see and sign, never knew that appellant desired an agreement on arbitration, and never in fact knew that the other, or ‘ incorporated ”, document prescribed arbitration. In legal effect, the situation is identical with that in the two cases cited by the Appellate Division (Matter of General Silk Importing Co. [Gerseta Gorp.], 198 App. Div. 16, and Matter of Bachmann, Emmerich & Co. [Wenger & Co.], 204 App. Div. 282) where the arbitration provision was in the rules of the Silk Association, by which rules the sales involved in the two cited eases were “ governed ”.

Loughran, Ch. J., Conway, Dye and Froessel, JJ., concur with Lewis, J.; Desmond, J., dissents in opinion in which Fuld, J., concurs.

Orders reversed, etc.