author:
Van Brunt, P. J.
      Brady, J. Daniels, J.

text:
    William Thos. B. Stamp, Resp’t, v. Charles A. Herpich, App’lt. Jules Koenigswerther, Resp’t, v. Same. Richard Henry Poland et al., Res’pts, v. Same. William Dadel et al., Resp’ts, v. Same.

      (Supreme Court, General Term, First Department,

      Filed March 31, 1887.)

    Attachment—Evidence of fraud.
    False representations as to mercantile standing, form no ground for an attachment. Where a statement has been made of the debtor’s financial condition and later another is made showing a decrease in the stock of large magnitude, the existence of this discrepancy will not be evidence of a fraudulent disposition of the property and will not be sufficient to sustain the levy when it appears that the latter statement was made rather carelessly, and it finally appears that the property seized exceeds in value the inventoried estimate, and the decrease is proved to have been caused by the ordinary conduct of business transactions. The threat to make an assigment is not a fraud nor is the payment of certain creditors in full in preference to others, as under the law the debtor has the right so to do.
    Appeal from orders denying motion to vacate attachment granted against the property of the defendant upon the ground that he had disposed of or secreted and is about to dispose of his property with intent to defraud his creditors.

      W. Bourhe Cochrane and Chas. Strauss, for resp’ts; Noah Davis and Stern & Myer, for app’lt.
   Van Brunt, P. J.

The affidavits in the four cases are similar so far as respects the allegations claiming to establish the fraud of the defendant, and in the discussion of the questions involved upon this appeal those in only one of the cases will be referred to.

The attachments in question were issued upon the affidavits of Charles J. Abbott, Eugene Wulzo and Albert Schmidt.

The affidavit of Abbott after alleging the indebtedness of the defendant to the plaintiff, Bladfield, Stamp & Heacock, who did business in London, England, and alleging an indebtedness to other foreign creditors, states that during the month of March, 1886, the plaintiff applied for a settlement of his account in conjunction with accounts alleged to be due to the other plaintiff herein, who are also attaching creditors.

That the defendant expressed his inability to pay said claims, or any of them, and requested? an extension of time, and that to induce such extension, made a written statement of his condition showing his total liabilities, foreign and domestic, to be the sum of $224,046.53, and his assets as follows:

Beal estate valued at........................ $58,000 00

Cash balance on hand....................... 11,242 92

Merchandise as per inventory................ 180,555 08

Merchandise in Europe...................... 757 56

Store office fixtures......................... 3,000 00

Sundry debtors, balance and favor........... 39,656 32

Bills receivable, notes on hand............... 1,642 47

$294,854 65

The difference between the liabilities being $70,808.12 in favor of the defendant.

The said Abbott further states in his affidavit upon information and belief that the defendant made a statement to the commercial agency as appears by a statement issued by said agency under date of March 28, 1886, showing that the defendant’s inventory of February 1, 1886, was:

Stock, about................................ $200,000 00

Open accounts, good........................ 30,000 00

Bills receivable............................ 14,000 00

Land on Staten Island...................... 50,000 00

Leasehold of building....................... 8,000 00

Cash....................................... 12,000 00

$314,000 00

Liabilities.................................. 175,000 00

Leaving him worth......................... $139,000 00

The said Abbott further states that influenced entirely by the said representations, the plaintiff consented to an extension.

That said extension having expired and no payments being made in November twenty-nine, the defendant having been pressed for payment the defendant made the following statement of his condition, asking for a compromise of fifty cents on the dollar:

Liabilities.............................. $211,699 89

AssGts *

Stock on hand.............................. 100,000 00

Outstanding open accounts................... 27,098 91

Bills receivable.............................. 751 86

Cash on hand............................... 2,129 87

Total................................. $126,980 64-

The said Abbott then states that a comparison of this statement with the one previously set forth herein shows a difference in assets in the possession of the defendant on January 1, 1886, and on November 29) 1886, to be $167,784.01, which affirmation is as evidently untrue and Was so to Abbott’s own knowledge as can be claimed in respect to any. affirmation contained in any of defendants’ affidavits or statements and seems to have been made with the intention of misleading the court as he knew that the defendant still owned the Staten Island real estate put in the first statement of $58,000, and the store fixtures valued -in the first statement at $3,000.

The said Abbott said further states that in the last part of November, 1886, having applied to the defendant for payment, that defendant refused to give any information except that he had written a proposition to the other side and expected an answer to that, and that defendant refused to make any payment whatever, and that he, the said Abbott, has since learned that the proposition to which defendant referred was his offer of fifty cents to the dollar, and that the defendant had threatened, if his offer was Hot accepted, that he would make an assignment. The affidavit then states that in view of the circumstances above detailed, that said Abbott verily believes that the defendant has disposed of or has secreted property or is about to dispose of his property with intent to defraud his creditors. The affiant has not explained how it was possible that the defendant, if he had disposed of or secreted his property, could be about td do so.

The affidavit then states that the defendant had admitted his insolvency and that the defendant Was committing the grave offense of, notwithstanding these facts, buying and selling riiercharidiSe arid doirig business iti every respect as though he Was solvent, arid then alleges that by this itieatis he is depleting his stock of merchandise, the inference drawn, however, being not by ariy tiieans apparent, as we fail to comprehend how by the buying and selling of merchandise he necessarily depletes á stock in trade.

The affidavit of Wolzo simply states that he is the agent of one of defendants’ foreign creditors and that the stock of goods carried by. defendant had not been depreciated in value during the past year; and that when he requested defendant to explain to him the mysterious difference ill value of his assets,. he could .give no explanation of the same and simply stated .that what he wanted was a settlement of fifty cents or that he would have to make an assignment, and that the defendant had admitted that he had obtained about $16,000 .on chattel mortgage recently.

It appears that defendant never borrowed anything on chattel mortgage whatever.

The affiant Schmidt swears that he came to this city on the ninth of November as the agent for these foreign attaching creditors, and that the statement of November 29, 1886, was handed by the defendant to him, and that even the same day the defendant told him, Schmidt, that if his proposition of fifty per cent on the dollar was not accepted he would make an assignment, and that in any case several creditors, whom he named, he would pay in full. The said Schmidt further deposes that he knew the defendant to be insolvent, and seeing him carry on his business from day to day, asked for a small payment on account; that the defendant replied that he would not pay a single dollar until he had the assent of all his creditors; that they would settle in full for fifty cents, and that he had not paid a dollar to any of his creditors since he had made his proposition, and would not until it was accepted, and that if he could not get a settlement he would make an assignment.

The affiant then makes the sweeping assertion that he believes that the defendant has, during the past year, disposed of or secreted his property to the extent of upwards of $100,000, and is about to dispose of his remaining property with intent to defraud his creditors.

The ground upon which the affiant Schmidt’s belief is founded he has studiously kept to himself; in any event he has not disclosed it in his affidavit.

The attachments issued upon the foregoing affidavits having been levied upon the property of the defendant, a motion was made to vacate the attachments upon the affidavits of the defendant, Charles Bolt, his bookkesper, Otto Jeschke, Josiah Brown, Frederick Hoffman, Denis J. Hart, John J. Donavan, clerks of the defendant and the affidavits of several merchants.

In his affidavit the defendant admits the making of the statement of March, 1886, claiming, however, it to have been a mere informal statement, admits making the statement of November 29, 1886, which statement he claims to have been simply a rough statement, and to have been so understood by the parties, admits saying that he would make an assignment unless he was able to make a compromise, and alleging that since said attachments he has made an assignment with preferences; that he has been doing a losing business for some period of time.

That all his books of account, merchandise and assets are in the hands of the sheriff under the attachments, and that he has applied to the plaintiffs’ attorneys for permission to examine his books and inventory of January, 1886, which has been denied, and that upon an examination of said books and inventory it would appear precisely what had become of all merchandise contained in said inventory and of the proceeds thereof, and that he had made a motion to the court to compel permission to examine said books, etc.

In a subsequent affidavit the defendant states that having obtained permission to examine said books and stock, he commenced doing so on January 18, 1887.

That in assigning values to the stock he adopted the prices of January, 1886, as far as said stock consisted of the same articles as were on hand January 23, 1886, but as to articles bought since January 23, 1886, they were taken at cost; and that the merchandise thus inventoried, to-

tether with some goods sold by the assignee, amounted to 183,416.60, or nearly three thousand dollars more than the inventory of January, 1886..

As to the method of keeping books and the fact that no property either came in or went out of the store without being entered upon the books, the defendant is corroborated by the affidavits of his clerks above mentioned.

In reply, the plaintiffs read the affidavit of Mr. Strauss, proving the assignment of Mr. Frey; proving the representations to the mercantile agency—the affidavit of Mr. Schmidt contradicting some of the details of the defendant’s affidavit; the affidavit of Mr. Wolzo stating without the slightest apparent knowledge, among other things, that the $15,000 raised on the mortgage on real estate is no where accounted for, which on the contrary the defendant asserts appears upon his books, and said affidavit stating deductions which he makes from the statements of the defendant, in which he does not take the slightest account of any purchases of merchandise, and contradicted allegations of the defendant which are not contained in his affidavits.

The plaintiff also read the affidavits of certain merchants declaring that there had been no fall in the value of merchandise during the preceding year.

The motion to vacate the attachment being thereupon denied these appeals are taken.

In the foregoing statement it has not been attempted to give more than an outline of the voluminous affidavits used in these proceedings.

The plaintiff claims to show by the disparity between the March and November statements a disappearance of merchandise, and by the defendant’s threats to make an assignment, an intent to dispose of property for the purpose of defrauding creditors.

If the plaintiffs were pursuing the defendant because of false representations contained in the statement of March 18, 1886, and in the statements to the mercantile agency, we could understand the strength of the case made by him, but false representations as to mercantile standing form no ground for an attachment.

The claim that the discrepancy between the valuation of merchandise in the March and November statements shows a disappearance of merchandise to a large amount is conclusively disproved by the evidence upon the part of the defendant that by a comparison of his books and the merchandise on hand with the inventory of January, 1886, it can be shown precisely what part of the merchandise has been sold and what has become of the proceeds.

If this claim is not well founded or the evidence in respect thereto is false, the plaintiffs had it in their power to prove the same, having possession of books, merchandise and inventory. In fact, it would seem that the plaintiffs were fearful that the defendant could justify himself if he had access to his merchandise and books, and, therefore, such access was refused until it was compelled by an application to the court.

It is no answer to this conclusive evidence to say that it is a well known fact that failing merchants usually manifest their prudence by showing an apparently well kept set of books, because experience has shown to the contrary that the books of failing merchants are never well kept, and the absence of books has always been considered one of the strongest indicia of bad faith.

The claim that there is nothing in these counter affidavits which shows that the defendant has not sold goods which were valuable at nominal figures, or has not disposed of goods which were shipped to him before delivery at the store, or that he himself had not disposed of them after delivery there, or that he has not disposed of the proceeds of sales during last year, or that he has not appropriated the large sums which he borrowed on mortgage and on merchandise, certainly cannot be sustained, because in those affidavits in connection with the stock of merchandise, books and inventory, the defendant has conclusively explained the apparent discrepancies in his statements. If the defendants claim that his books show all merchandise sold, all meichandise bought, all merchandise on hand, that all borrowed money went into the business, the plaintiffs, being in possession of the books, could easily have demonstrated the falsity of the falsity of the statement.

The affidavit in the court of sessions, to which reference has'not been heretofore made, adds no weight to the plaintiff’s claim of a fraudulent disposition of his property, as it is but a reiteration of the statement made'in March.

We are told that arithmetical calculation will demonstrate the impossibility of selling $140,000 worth of goods out of a total of $180,000 worth, and still leave two-thirds of the stock undisturbed. This proposition is undoubtedly correct, but it has not the slightest application to the facts presented in the case at bar, as it is nowhere pretended that the $140,000 of sales were made out of goods on hand in January, 1886. One of the complaints contained in the plaintiff’s affidavits is that the defendant was buying as well as selling merchandise.

The learned counsel for the plaintiffs call special attention to the additional affidavit of the defendant pretending to show by items his stock now on hand, in which there is no account whatever made of stock purchased since January, 1886, and that nowhere in his affidavits does the defendant claim to have purchased sufficient new goods to account at once for sales of this magnitude and the reservation of such a large proportion of his original stock.

The affidavit of the defendant preceding the statement referred to shows that in figuring up the merchandise in the store, goods purchased since January, 1886, were taken at cost prices and that the footing was arrived at by adding the inventoried prices of the goods on hand contained in inventory to the cost prices of goods on hand bought since the inventory. _ "

_ It is further claimed that the defendant being solvent in November, 1886, the threat to make an assignment showed a fraudulent intent.

The evidence, however, is overwhelming, if the affidavits read on the part of the plaintiffs can be believed, that the defendant was insolvent in November, 1886.

Abbott swears that the defendant admitted his insolvency to him, which he evidently believed, and Schmidt swears that he knew he was insolvent.

The threat to make an assignment was not a fraud nor the payment of certain creditors in full in preference to others as under the law the defendant had the right to do both of these things.

It would appear that these foreign creditors had entered upon the scheme of securing their debts by attachment, having no reasonable or proper grounds to suppose that the defendant had been guilty of the fraud alleged.

We are of the opinion therefore that there was no ground shown for the maintenance of the attachments and that they should have been vacated.

The orders appealed from should be reversed with ten dollars costs and disbursements in each case.

Brady, J.

In these appeals, the opinions already written by my associates are elaborate and convincing, and it may be that nothing more can be effectively said, but I am impressed with the absence of proof showing a fraudulent disposition or concealment of property by the defendant, and of any intention to dispose or conceal it or any of it fraudulently. The difference between the charge of obtaining goods by false representations and the fraudulent disposition of property should be kept constantly in view in the examination of these appeals. While as to the former there would be grave elements to consider if such were the accusation, as to the latter, the gravamen of the complaint is inference and inference only. It is assumed and contended that the great disparity in figures between estimates made first and last cannot be accounted for on any other assumption than fraudulent disposition or concealment as sales are not disclosed, or depreciation established which will account for the seeming diminution.

These inferences are denied or explained, and it is asserted in affidavits read on behalf of the defendant that except by ordinary sales the defendant’s stock had not been taken away or concealed. Aside from this the circumstances under which the statements were made are important whether upon an actual examination of the stock on hand and a careful estimate of its value, or a general informal valuation indicated so. to be with evil intent, and this applies to all estimates involved in the statements made. If, excepting ordinary sales, the property of which the estimate was originally given remains, it does not matter what its valuation was said to be It is indeed wholly immaterial on an issue as to a fraudulent disposition or concealment, however important it might be on an allegation of sales made on the faith of its truthfulness. When the answer is made, and it is apparently true: “I admit that I over-estimated the value of my property, but I have it yet, excepting ordinary sales,” the charge of fraudulent disposition and concealment is logically and meritoriously overcome. This seems to be the best point of view in which the facts appear on behalf of the plaintiff.

I, therefore, concur with my associates.

Daniels, J.

One of the two legal grounds upon which it has been strenuously insisted that the attachment in this and three other cases depending upon similar evidence should be sustained, is, that the debtor asserted his design to be to make an assignment for the benefit of his creditors in case a compromise should not be effected between himself and the persons to whom he was indebted. He had been engaged in business as a dealer in furs for many years, and. in the latter part of the year 1886 found himself financially unable to discharge his debts as he had agreed to do that. And to relieve himself from the emergency in which he was placed, he proposed to these creditors that they should compromise their indebtedness, with him at the rate of fifty cents on the dollar, or that he should make an assignment, and in his statements and correspondence mentioned what were supposed would be the result to the creditors of making the assignment. There was no assertion of any intention on his part to place any part of his property beyond the reach of his creditors, or to make any illegal preferences in favor of one class of creditors over another, but the design was stated to be to make an assignment which would probably prove prejudicial to these particular creditors, and at the same time burden the estate by the expenses of the trust in such a manner as thereby to prevent the creditors from securing the same advantages that they would through a voluntary compromise.

No disposition was expressed or manifested to subject the execution of the trusts under the assignment to any illegal or unlawful expenses, but the belief was disclosed that a settlement of" the debtor’s estate in that manner would necessarily be attended with expenditures and delays which would leave for the creditors a smaller percentage upon their debts than would be secured by them through the acceptance of the compromise proposed by the debtor. This is as extreme a view as the statements of the debtor will justify concerning what was intended to be done if an assignment should become a necessity, and it probably expressed no more than in the settlement of insolvent estates under assignments, has been found to be the practical realization of the facts. They are expensive proceedings often engendering litigation and forced sales of property, diminishing in that manner very much the value, of the assigned estate, and the proceeds finally remaining for distribution among the creditors. And where contests may arise concerning the legality of the instrument itself, or directions contained in it, there a proportionately larger diminution of the final fund must necessarily follow. The solicitude of the debtor seems to have been directed to the avoidance of these results rather than a coercion of the creditors into the acceptance of the terms of compromise. According to the statements made by him, he was anxious to avoid the alternative of an assignment and held out to the creditors what would be the probable consequences to induce them to accept as the most beneficial to themselves, as well as to him, his terms of compromise, instead of obliging him to adopt the other alternative of assigning his property for the benefit of his creditors. Such statements on the part of the debtor do not disclose the existence of an intent through the mediumship of an assignment to dispose of his property to hinder, delay or defraud his creditors, but they are entirely consistent with the design of making such a disposition by means of an assignment, as the law permits debtors to make for the distribution of the proceeds of their property among their creditors. This subject, together with the authorities pertinent to its consideration, was before the court it Farwell v. Furniss (67 How., 188), where it was held that statements, and the expression of purposes or designs, on the part of the debtor in this manner, and of this description, were not sufficient to expose his property to attachment on the ground that he was about to dispose of it to defraud his creditors.

The other circumstance upon which the attachments were placed was the very large discrepancy appearing in the financial condition of the defendant between statements made by him in the early part of the year 1886, and another statement made at the instance of these creditors the last of November of that year. The difference between these statements is very large and striking, so great in fact, if that was all there was of the case, as to raise a very decided probability that the difference could not have arisen in the ordinary course of the transaction of the defendant’s business. The sales made by him out of his stock would not account for its great diminution between the statements in the early and the latter part of the year.

But in explanation of this difference, it has been stated that the statement relied upon, which ivas made near the last of the month of November, was mainly an estimate, hurriedly made, and did not show the actual situation of hisaffairs. And as to this the defendant is confirmed by the statement itself, which mentions the fact that the stock on hand was estimated at the value mentioned in the statement. His real estate is sworn to have been omitted by inadvertence, and so with the fixtures in his store, and no reason appears for doubting the truth of these explanations made by the defendant. And that this latter statement is not to be relied upon as disclosing a condition of the defendant’s affairs which should be binding upon himself, is further sustained by the inventory of the property while it was in. the possession of the sheriff under the attachments. This inventory is shown to have been made upon the same basis as that which was taken in January, 1886. The same prices as far as the property was on hand were adopted, as the value of the stock, when it was in the possession of the sheriff, as had been mentioned in the inventory of the early part of the year. And by taking the inventory in this manner no such discrepancy or difference in its amount appeared as to awaken the suspicion even that the defendant had appropriated or disposed of any part of his property otherwise than by means of sales in the usual course of his business. The latter inventory, following out the scale of prices already mentioned, brought up his stock to the sum of $183,416.60, while in the inventory taken in the early part of the year his merchandise in the city of New York was inventoried at the sum of $180,555.08, and that in Europe at the sum of $756.56. The debts owing to him were still greater than those of the commencement of the year, his fixtures were of the same value, his cash reduced less than the sum of $5,000, and the value of his real estate only so far as it had been encumbered by a mortgage for $15,000, stated to have been borrowed and put into his business.

Between this final statement and that which is related to have been given to the mercantile agency of Dun & Go, there is still a substantial difference, but that is explained by the defendant by the fact that what was said to the representative of the agency was in a general conversation,, in which no items or figures were taken by the agent himself, and which were not designed to vary substantially from the condition in which the estate of the debtor was found as it was exhibited by the inventory of January, 1886. This statement is highly probable, for as the defendant had so recently before the conversation taken this inventory, exhibiting what is assumed to have been a truthful situation of his financial affairs, it is not probable that he intended to depart materially from its results in the conversation between himself and the representative of this agency.

In the statements made by the defendant he is further sustained by those of the persons; in his employment, tending to prove the fact that no part of the stock was taken or disposed of otherwise than in the regular course of business, and was entered in the books of the defendant, which remained in the possession of the sheriff, to which the attaching creditors had access, and could contradict the assertions of the defendant and the persons in his employment, whose affidavits were read upon the hearing, if the entries, did not there appear to be as they have been stated. These-proofs, as has been particularly shown in the opinion of the presiding judge, fully overcame the weight and effect of the affidavits made in support of the attachments, and they placed the case in a position liberated from all real grounds of suspicion that the debtor either had, or intended to, dispose of his property to hinder, delay or defraud his creditors. They removed entirely from the case the suspicion arising out of the difference between the statements of his affairs made in the early part of the year 1886 and the estimated statement of the latter part of November. The charges have been fully and completely answered, and the orders from which the defendant has appealed should, as that has been directed to be done by the opinion of the presiding judge, be reversed and the attachment set aside.


source: Caselaw Access Project

author: Van Brunt, P. J.

license: Public Domain

text:
    John M. Hayward, App’lt, v Maria L. Hood, Resp’t.

      (Supreme Court, General Term, First Department,

      Filed March 31, 1887.)

    Pleading—Supplemental complaint—Demurrer.
    Where the supplemental complaint is to he read as part of the original complaint, and does not pretend to set out an independent or different-cause of action, if the two together allege facts sufficient to constitute a cause of action, a demurrer to the supplemental complaint alone is improper.
    Appeal from judgment dismissing the complaint and from an order sustaining a demurrer interposed by the defendants herein.

      A J. Dittenhoefer, for app’lt; John J. Macklin, for resp’t.
   Van Brunt, P. J.

By an order of this court the defendants were granted leave to file a supplemental complaint, and by the order granting such leave the defendants were permitted to answer or demur In pursuance of such leave the plaintiff, in addition to the former complaint theretofore served, made his supplemental complaint alleging certain additional facts to those which were contained in the original complaint. The defendants demurred to this supplemental complaint upon the ground that it did not state facts sufficient to constitute a cause of action, which demurrer was sustained, and this appeal was taken from the order entered thereon.

It is undoubtedly true that the supplemental complaint did not set up a cause of action as against the defendants. It was not intended so to do. It was the mere allegation of additional facts to those which had been alleged in the original complaint for the purpose of supplementing that complaint. It is also true that the order gave the defendants the right to answer or demur to said supplemental complaint. But as the supplemental complaint did not pretend to set out an independant or different cause of action from that contained in the original complaint, it was to be read as part and parcel of the complaint and if the two contained a cause of action which was not demurrable an answer upon the part of the defendant was required. It would seem, therefore, that no issue whatever was raised by the demurrer to the supplemental complaint that not being a. complete complaint within itself and that it was error to entertain such demurrer.

The order and judgment appealed from must, therefore, be reversed and the defendant allowed to withdraw said demurrer, and to answer upon payment of the costs of demurrer and of the appeal from the order sustaining the same.

Daniels and Bradley, JJ., concur.


author: Lawrence, J.

text:
    Mary McDermott, as Administratrix, etc., App’lt, v. The Third Avenue Railroad Co., Resp’t.

      (Supreme Court, General Term, First Department,

      Filed March 31, 1887.)

    Negligence, contributory—Burden oe prooe—Evidence.
    Where an action is brought for negligence causing death, the burden of establishing affirmatively freedom from contributory negligence is upon the plaintiff, and although there were no eye witnesses of the accident, the absence from contributory negligence may be established sufficiently to make it a question for the jury by proof of the surrounding circumstances. Yet if the facts and circumstances coupled with the occurrenceof the accident do not indicate or tend to establish the existence of some cause or occasion therefor, which is consistent with proper care and prudence, the inference of negligence is the only one to be drawn, and the defendant is entitled to a non-suit. Following Tolman v. Syracuse, Binghamton and W. 7.B.B. Go , 98 N. Y., 198.
    Appeal by the plaintiff from a judgment dismissing the complaint on the ground that there was no evidence showing negligence on the part of the defendant, and also on the ground that the absence of contributory negligence was not shown on the part of the deceased, but that the presence of contributory negligence had been proven on his part.
    The complaint alleges that on the evening of the Yth of February, 1885, Patrick McDermott, late of the city of New York, now deceased, while endeavoring to cross the Third avenue, at the corner of One Hundred and Seventeenth street, in said city, without any fault or negligence on his part, was, through the negligence, default and wrongful act of the defendant, its agents and servants, struck by one -of the defendant’s cars and knocked down, and had the bones of his leg severely fractured by one of the wheels of said car, from which injuries he died on the 8th of February, 1885.
    The answer of the defendant denies this allegation in substance, and alleges that the injuries in the complaint alleged to have been sustained by Patrick McDermott were caused solely or in part by the negligence of said Mc-Dermott.

      E. I. Wood, for app’lt; Walter N. Cohen, for resp’t.
   Lawrence, J.

It was held by the court of appeals in the case of Tolman v. Syracuse, Binghamton and N. Y. R. R Co. (98 N. Y,, 198), that “In an action for negligence causing death, the burden of establishing affirmatively freedom from contributory negligence is upon the plaintiff, and while although there were no eye witnesses of the accident, and although its precise cause and manner of occurrence are unknown, absence of contributory negligence may be established sufficient to make it a question of fact for the jury by proof of such facts and surrounding circumstances as reasonably indicate or tend to establish that the accident might .have occurred without negligence on the part of the deceased; yet if the facts and circumstances coupled with the occurrence of the accident do not indicate or tend to establish the existence of some cause or occasion therefor, which is consistent with proper care and prudence, the inference of negligence is the only one to be drawn and the defendant is entitled to a non-suit.”

In this case the only witness who testified to having seen the deceased before the accident, was James Grlennon, who was standing beside the driver on the front of the car. He testified that McDermott was between ten and fifteen feet away from the horses when the driver shouted. He further testified that after the shout, McDermott came partly to a stand-still; that he was outside the line of the track, and about four feet from the east rail of the up track, and that at the distance at which he was standing the car could have passed safely. The question as to whether, that, at the distance at which the deceased was standing, the car could have passed safely, was objected to, and exception was taken to its allowance. I am of the opinion that that exception was not well taken. The witness was on the front of the car and had been in the employ of the company taking care of horses, for pretty nearly five years, and the subject as to which he was interrogated was a matter as to which any person of ordinary intelligence could properly testify.

In Hallahan N. Y., L. E. and W. R. R. Co. (102 N. Y., 199), (1 N. Y. State Rep., 367), Miller, J., in delivering the opinion of the court, says in regard to a somewhat similar question: “But even if the evidence maybe regarded as calling for an opinion in any way, as the testimony was based upon the personal knowledge of the facts, we think it may be considered as competent.” See, also, Blake v. People, 73 N. Y., 586.

It seems that under the decision of Tolman v. Syracuse, Binghamton and New York Railroad Co. (98 N. Y., 198), on the facts proven at the trial, the plaintiff was properly non-suited for not establishing that the deceased was free from contributory negligence.

Under that case and the case of Barker v. Savage (45 N. Y., 191), it was necessary for the plaintiff to establish before recovery could be had, that the deceased was free from contributory negligence.

As has been before stated the only evidence in the case from an eye witness, was that given by James Glennon, who testified that McDermott was between ten and fifteen feet in front of the horses and came thereupon partly to a stand-still, being at that time four feet outside of the track, and that at the distance at which he was standing the car could have passed safely. Such being the uncontradicted, evidence it is immaterial whether the defendant was guilty of negligence or whether any of the exceptions to the admission or rejection of evidence were properly taken, it. having been determined that the objection and exception, to the evidence of Glennon heretofore referred to are untenable.

I am, therefore, of the opinion that the dismissal of the. complaint was correct, and that the judgment below should, be affirmed, with costs.

Van Brunt, P. J., and Bartlett, J., concur.


author: Bartlett, J.

text:
    George L. Kingsland et al., as Executors and Individually, App’lts, v. Clarence Tucker et al., Executors, Resp’ts.

      (Supreme Court, General Term, First Department,

      Filed March 31, 1887.)

    Party walls—Construction of agreement as to—Lateral support.
    Where the agreement as to a par;y wall is that the one party shall pay the other one-half part of the value of the wall in case he makes use of' the same in the erection of any new building, the question whether in the-erection of the new building this wall is made use of, must be determined by ascertaining whether the new structure is fastened to or leans upon the-party wall to such an extent as not to be secure without this support. The. lateral support to constitute a use must be more than merely incidental.
    Appeal from judgment entered on the report of a referee.

      Albert Stickney, for app’lts; Sidney S. Harris, for resp’ts.
   Bartlett, J.

This appeal presents a simple but interesting question.

In 1867 George W. Tucker owned the lot No. 12 White-street, in the city of New York, and Ambrose C. Kings-land, George L. Kingsland"and Ambrose C. Kingsland, Jr., owned the adjoining lot, known as No. 14. On April 12,. 1867, the respective owners entered into an agreement concerning the erection of a party wall by the Messrs. Kings-land, partly on their lot and partly on Mr. Tucker’s. Among other things, this contract provided that Mr. Tucker might use the wall for the support of the beams of his building then standing on his lot, but that whenever he or his heirs or assigns should “ make use of the same in the. -erection of any new building to be constructed on lot No. 12 White street,” he or they should pay to the Messrs. Kings-lands, their heirs or assigns, one equal half of the value thereof at the time of using it.

The party wall was built under this agreement. In 1883, the defendants, who are executors under the will of George W. Tucker, erected a new building on the lot number 12, adjoining the lot of the Messrs. Kingsland and next to the party wall; and the question which arises in the present case is whether in so doing they made use of the party wall within the true meaning and intent of the clause in the contract above quoted.

The plaintiffs insist that use was made of the wall by the ■defendants in the erection of the new building, and bring this suit to recover half the value of the wall as determined by arbitrators. The defendants deny that they made any use of the party wall whatsoever. The referee before whom the cause was tried found in favor of the defendants, and from the judgment entered on his report the plaintiffs now appeal.

It appears from the evidence in the case that the defendants originally applied to the bureau of inspection of buildings for permission to put up a store sixty-six feet high, with walls only twelve inches thick, and that permission was refused because the proposed wall was too thin. The application was then modified by a proposition in behalf of the defendants to “line up ” the party wall; that is to say, to build the wall of their new building close to the party wall, so as virtually to increase the thickness of the latter. This is the interpretation put upon the phrase by the official examiner who inspected the party wall under the direction of the inspector of buildings in order to ascertain its condition. Upon a favorable report from him the modified application was finally granted, and the defendants, in the language of the learned referee, “were enabled to build a thinner wall by reason of the party wall being there, than-the department would otherwise have allowed.”

The defendants do not profess to have kept their engagement, express or implied, with the bureau of inspection of buildings, to ‘ line up ” the party wall in building their ■own. Their position is that it proved impracticable to do this, because the party wall was out of plumb. They built their own wall, they say, independently, without anchoring it or tying it to the party wall. In other words, according to the case as presented in their behalf, they built an independent wall, thinner than would otherwise have been tolerated, under a permit which authorized only the erection of a wall which should be dependent to some extent upon a pre-existing structure, and practically an addition to it. This is a matter, however, with which they contend the plaintiffs have nothing to do. They deny any liability on their part, unless it is proved that they have made a substantial use of the party wall in putting up their new building, and not merely a constructive use.

Whatever judgment ought to be pronounced upon the action of the defendants in the domain of ethics, we are disposed to agree with them that the contract contemplates an actual, physical use of the party wall. If, in order to constitute a substantial use of this nature, it was necessary that the wall of their new building should be tied or anchored to the party wall, and should “ line up ” the latter at all points, the referee was clearly right in his conclusion that no use was established by the proof in the case. If less than this would suffice, however, there is grave reason to doubt the correctness of the result he reached.

On their direct examination, the witnesses called in behalf of the defendants testified strongly to facts tending to show that the new wall was wholly independent of the party wall, but this testimony was much weakened by their statements when cross-examined. Thus the contractor for the mason work admitted that the rear of the new wall touched the party wall almost all of the way up; while the foreman said the front touched it-to the same extent. The latter witness described the party wall as irregular, overhanging in some places and receding in others. The walls came together at the places where it overhung, and the greatest distance between them at‘any-point where the party wall receded was estimated by this witness at three inches. The testimony of the principal contractor was to the same effect. Moreover it appeared that there were projections of brick work from considerable portions of the surface of the party wall which had to be cut away to make room for the defendants’ wall as it rose, and at these places of course the walls came into contact.

Even if we look only at the evidence in behalf of the defendants, supplemented by the observations of the referee who made a personal inspection of the premises; there is enough in the case to leave no doubt that there are long lines and extensive areas of contact between these walls. Notwithstanding this fact, the referee refused to find that the party wall afforded any lateral support to the new wall. He appears to have based this refusal upon the ground that even if the defendants did avail themselves of the pre-existing party wall for purposes of lateral support, to do so would not be to “make use” of the party wall; for he expressly says in his opinion that such could not have been the intent of the- agreement. We are unable to concur in this view. If the defendants had built their new wall of such a thickness that it could safely stand alone, it might well be that the fact that it derived additional strength from the proximity of the party wall, and contact therewith would not establish a substantial use of the latter, since the lateral support in that case would be wholly needless and would add nothing to the value of the new wall.

Here, however, it must be presumed that the defendant’s wall of less than the thickness prescribed for an independent structure was unsafe unless built in contact with the party wall. This inference is fully warranted by the action of the bureau of inspection of buddings, and the assent of the defendants to the propriety of the requirement that they should “line up” the party wall as a condition of making their own wall only twelve inches thick. It is true they failed to comply with this condition, and by omitting to “line up” the party wall deprived their own of the full measure of support and strength it would have acquired by contact with the party wall throughout its whole extent. But because the new wall did not receive all the lateral support designed by the inspector of buildings, it does ° not follow that it did not receive any. One of the defendant’s witnesses did indeed swear that if the plaintiffs’ building, of which the party wall forms one side, should fall down it would not hurt the new building of the defendants, but even he does not say that the twelve inch wall would in that event remain as strong and stable as it is now. We find it impossible to believe that it would. On the contrary -the evidence convinces us that the lateral support which the new wall receives from the party wall, at the various points and places where the two structures come into contact, contributes materially to the strength, stability and safety of the wall of the defendants; and hence that they did “make use” of the party wall in the erection of their new building, within the meaning of that phrase as employed in the party wall agreement.

It follows that the judgment appealed from must be reversed upon the facts and a new trial must be granted, with costs to abide the event.

Bradley and Daniels, JJ., concur in the result.


text:
    Cincinnati Cooperage Co., Resp’t, v. Michael O’Keefe et al., App’lts.

      (Supreme Court, General Term, First Department,

      Filed March 31, 1887.)

    Corporations—Manufacturing—When the trustees report must be filed.
    By the Laws of 1848 the trustees of a manufacturing corporation are required to file their annual report within the first twenty days of January, and it will he construed to he a failure to file the report even though it be filed prior to January first.

      The plaintiff is an Ohio corporation. The New York Brewing Company, during the years 1883 and 1884, was a domestic corporation created and existing under the laws •of the state of New York for the formation of corporations for manufacturing, mining and other purposes. During the said years the defendants were the trustees of the said New York company. In the year 1884, and prior to the 19th of February, 1884, the plaintiff sold and delivered to the New York Brewing Company goods to the amount of $1,015, for which the company gave the plaintiffs their note payable three months after date and dated February 19, 1884. At the time of the making of said note and at the maturity thereof, the defendants were still the trustees of the Brewing Company.
    The note, although long past due, has never been paid. On the 1st of January, 1884, more than a year had elapsed from the time of' the filing of the certificate of incorporation of the New York Brewing Company, which company did not, nor did the defendants, nor any of them, within twenty days from or after the 1st day of January, 1884, or at any time thereafter, make a report stating the amount of the capital of said company, or of the proportion actually paid in, or of the amount of its existing debts, nor did they at any time after the 1st of January, 1884, publish such a report or file the same in the office of the clerk of any county in the state of New York. On the 22d of December, 1883, such a report, dated on the 21st of December, 1883, signed by the defendants, was published in the New York World, and on the 28th of December, 1883, filed in the' office of the clerk of the city and county of New York. The plaintiffs upon this state of facts having brought their .action against the trustees for failure to file such report, judgment was rendered in their favor, and from such judgment this appeal is taken.

      Michael M. Forrest, for app’lts; Samuel Untermeyer, for resp’t.
   Van Brunt, P. J.

The question involved in this case is whether the provisions of the statute requiring every company incorporated under the Manufacturing Act of 1848 within twenty days from the 1st day of January to make a report, which shall be published and filed, authorizes the making, filing and publishing of such report within twenty days before the 1st day of January, as well as within twenty days after the 1st of January.

For the solution of this question it is possible' to refer with entire confidence to the opinion of the learned justice who tried this case in the court below, by whom it was ¡held that the reasonable construction of the act was that the publishing and filing must be done within twenty days after the first of January; and that this requirement is not satisfied by a filing in the month of December previous, although done within twenty days before the first of January. It is to be observed that the intention of the legislature was to require such corporation at fixed periods to give a history of their condition in order that creditors might ascertain the same and enter into engagements with such corporation upon the information furnished by the statement required by law.

In the case of Cameron v. Seaman (69 N. Y., 396), it is assumed by the court of appeals that there is no question upon this subject, and Mr. Justice Andrews, who wrote the opinion of the court, says:

The statute intended to give the companies twenty days after the first day of January in each year to make up their accounts and prepare the statement to be embodied in the report. The law implies, in the absence of any express provision on the subject, that the filing and publication must be within a reasonable time after the twenty days, and this requirement in view of the object of the statute could only be satisfied by the prompt performance and diligent action on the part of the trustees.” This construction was based upon what the court deemed to be the general purpose of the section namely: To provide authentic information to creditors of the company and those who might have dealings with it, of its financial condition at fixed recurring periods, so as to enable them to act intelligently in their transactions with the corporation.

The claim that the report having been filed on the twenty-eighth of December, was on file during the first twenty days following the first of January, and therefore complied with the law, is clearly untenable in view of the decision in Cameron v. Seaman (supra). That case holds that the report must be made within the twenty days following the first of January, although it may be filed and published within a reasonable time thereafter. The requirement of the statute is explicit as to the making, but is somewhat indefinite in regard to the fifing and publishing. This report, therefore, not having been made within twenty days after the first of January, did not comply with the statute, and the judgment must be affirmed, with costs.

Daniels and Brady, JJ., concur.


text:
    The Central National Bank of the City of New York, Resp’t, v. The North River Bank of the City of New York, App’lt.

      (Supreme Court, General Term, First Department,

      Filed March 31, 1887.)

    1. Bills and notes — Fraudulent endorsement—Recovery of payment.
    Money paid to an innocent holder whose title is derived through a fraudulent endorsement, can be recovered by the payee, and it is immaterial whether or not the payees have first been obliged to reimburse the lawful owner.
    2. Same—Fraud—Laches.
    After the discovery of fraud the parties are hound to proceed diligently, hut no laches can be imputed prior to its discovery.
    Appeal from judgment entered upon verdict of a jury.

      E. L. Bushe, for app’lt; F. C. Reed, for resp’t.
   Van Brunt, P. J.

The defendant in this action presented for payment to the plaintiff, certain checks payable to the order of the National Suspender Company, which certain depositors of the plaintiff had drawn upon the plaintiff to the order of said suspender company, which checks purported to be endorsed in blank by the duly authorized agent of the suspender company, and such checks were paid by the plaintiff to the defendant.

The endorsements upon these checks were made without authority, and the checks appropriated by a clerk of the suspender company.

Upon learning these facts the plaintiff paid the amount of said checks to the suspender company, and brought this action to recover the amount paid to the defendant upon these stolen unendorsed checks.

The defendant by presenting these checks for payment asserted its ownership of the same, or its right to collect, and the plaintiff in making the payment had the right to rely upon this assertion of right or title.

It subsequently appearing that these checks had been stolen from the payees thereof, the true owners, and that they were never endorsed by them, it seems too clear for argument that the plaintiff had a right to recover back the money which it had been induced to pay by the false assertion of ownership or right to collect made by the defendant.

The defendant in presenting this check for payment guaranteed the endorsement, and it is immaterial whether the plaintiff had actually paid the money again to the payees of the check or not; the liability to pay existed, and the defendant has no right to retain money obtained by the false pretense that it was entitled to receive the money.

It is sought to defeat the plaintiff because of some alleged laches of somebody.

That the position of the defendant with reference to the depositor from whom the defendant received these checks has been changed, and that therefore it would have been inequitable to allow recovery, and our attention is called to the case of Mayer v. The Mayor, etc., 63 N. Y., 455.

This case, however, is no authority in the case at bar.

In the case cited, the rule is being laid down in a case where the person making the payment who seeks to recover it back is negligent, not the case where if there is any negligence it is the party receiving the payment and who refuses to pay it back.

The parties were bound to proceed diligently after discovering the fraud, but no laches can be imputed prior to its discovery.

The claim that the clerk of the National Suspender Company had any right to endorse these checks is entirely unsupported by the evidence, unless every merchant, by the employment of a bookkeeper, thereby gives him authority to endorse commercial paper hi his name.

With the condition of the account between Morse and the suspender company, neither the plaintiff nor defendants have anything to do.

Morse had stolen these checks, and the owners had the right to recover them back and collect them even if they did owe him some money.

The defendant had received from the plaintiff the amount of these stolen checks, representing that the payees had endorsed them, and they had the legal title to the same, and the plaintiff is entitled to recover its money back upon proof that they were stolen property, and that the payees had never endorsed the same, and this claim cannot be complicated by an attempt to show that the thief had a counter-claim which he himself could not set up. But the evidence conclusively shows that the suspender company owed Morse nothing.

The proof by Mr. Bernheimer, supported by his books, proves conclusively that cash was advanced when the check was received. It may be that if there had been only the verbal testimony of Mr. Bernheimer the defendants might have had the right to have the question submitted to the jury, but supported as it was by entries made at the time of the transaction in his check book, there was no question for the jury.

It is, besides, doubtful if any sufficient request was made to go to the jury upon this point.

Judgment affirmed, with costs.

Bartlett and Macomber, JJ., concur.


author: Potter, J.

text:
    William H. De Camp, App’lt, v. John E. McIntyre, Impleaded, etc., Resp’t.

      (Supreme Court, General Term, First Department,

      Filed March 31, 1887 )
    1. Statute op limitations—Action on a note—Evidence op part pat MENT.
    In an action on a note which is barred by the statute of limitations, it is competent to put in evidence the various transactions out of which grew the debt for which the note was given, and in so doing to prove a payment which takes the note out from the operation of the statute.
    2. Evidence—Mode op pooop—Objection to be stated.
    If the mode of proving a competent fact is objectionable, the objectionable feature should be stated that the party may avoid the objectionable mode if possible.

      Chas. H. Johnson, for app’lt, with James Fox; John H. Miller, for resp’t, with H. D. Classon.

   Potter, J.

This is an appeal from an order denying a motion upon behalf of the plaintiff to amend the complaint, and from a judgment dismissing the complaint sought to be amended.

These questions arise somewhat peculiarly and possibly in such a manner as to prevent them from being disposed of upon their merits. That result should be avoided if possible.

The action was brought upon a note made and delivered to the plaintiff by the defendants for lumber sold and delivered them by plaintiff in November, 1877.

The defendants were, when the lumber was delivered and the note given for the same, engaged as contractors in erecting a station house for the Second Avenue Railroad Company upon its premises in the city of New York.

The note not having been paid when due, the plaintiff some time thereafter filed a mechanic’s lien upon the structrue as against the defendants’ contractors. Upon the 12th day of February, 1880, the plaintiff, at the request of the defendants, executed a release of said lien, the same to be returned to plaintiffs in a reasonable time, or in lieu thereof the sum of $278.11, to be received from the said railroad company, in settlement of said lien against the owner and to be credited on account of moneys paid on the claim as against the contractors, the defendants and one Warren, and the balance to be settled thereafter on the return of one Gray, who is jointly interested with said plaintiff in said claim. ■

The release of the lien was not returned to plaintiff, but in lieu thereof the said sum of $278.11 was paid to plaintiff upon his claim pursuant to the agreement on the 12th day of February, 1880. Upon the trial the plaintiff proved the execution and delivery of the note to him by the defendants, who were a firm under the name of McIntyre Bros., and the same was offered and received in evidence.

The plaintiff was then asked how much had been paid on account of this note; that question, upon objection, was excluded, but the witness was allowed to state that his attorney received or was paid some money, and that the note was given for lumber.

Plaintiff then offered in evidence the paper providing for the release of the hen and the payment of the $278.11, upon his claim above referred to, and it was admitted. The plaintiff was then asked what was the claim referred to against the contractors, John E. and James McIntyre, and also what claim was referred to in the paper above mentioned ?

The plaintiff was not permitted to answer either of these questions.

The prospect before him was that upon the face of the note the statute of limitations had run and the defendants had set up the statute as a defense. The complaint, after setting out the note, had also alleged payment of $278.11 on the 12th February, 1880. Of course if that fact was allowed to be proved it would avoid the statute, but the court had refused to allow the plaintiff to prove it in the manner above stated.

In these rulings I think the court was wrong, and that the plaintiff should have been allowed to show that the note in suit was the claim referred to in the instrument and therefore a payment upon the claim was a payment upon the note as alleged in the complaint.

The plaintiff’s attorney asked leave to withdraw a juror and to make a motion to amend his complaint by setting out the original sale of the lumber and the state of the accounts upon which the note was predicated as a result. And he was permitted to do so in an order containing this among other provisions, that in case said motion shall be made and denied that the order be entered as on trial, that the complaint be dismissed with costs as moved by defendant the trial.

It is pretty manifest that the plaintiff’s attorney was somewhat embarrassed, and so he assented to the entering of this order, or when he took any advantage or benefit under it. This order is not appealed from plaintiff, nor could we give any relief from it if he had appealed.

The motion was made and denied, and then, of course, under the order, came the judgment dismissing the complaint, with costs.

The appeal is from an order denying the motion to amend and the judgment dismissing the complaint, with costs of the action.

Is thei any relief for the plaintiff from this dilema? Apparently he has a good cause of action against the defendants, and they have saved it from the statute of limitations by a payment. While the plaintiff cannot appeal from the order allowing him to withdraw a juror and to apply to amend his complaint, yet as that order provided that in case the motion to amend should be denied, the complaint should be dismissed with costs, as moved by defendant at the trial.

After the making and denial of the motion to amend, the case stood in the same position as when the leave to make such motion was granted. That position was, that plaintiff had proved the note, had proved that the note was given for a balance due upon the sale and delivery of lumber, that as alleged in the complaint that a payment of §278.11 had been made upon the note February 12, 1880, and the answer alleged that such payment was made in full satisfaction and discharge of the claim which was the sole and only consideration for said note, and a motion pending on behalf of defendant for a dismissal of the complaint, but no ground therefor was specified. The court excluded the evidence offered to show that the payment was upon the claim or note representing the claim, and dismissed the complaint.

It must be assumed that the dismissal was granted upon the ground that the statute of limitations barred the cause of action. We think the court erred in these rulings.

It was proper for the plaintiff to prove, in order to avoid the statute, that defendants had made the payment upon the note, as alleged in the complaint, or upon the claim, which was the sole consideration of and was represented by the note. The witness was asked, what was the claim mentioned in the receipt or paper which had already been received in evidence without objection. The question simply called for a fact, an answer was given accordingly, and then was stricken out without any specification of grounds.

If the mode of proving a competent fact is objectionable, the objectionable feature should be stated, that the party-may avoid the objectionable mode, if possible. Ward v. Kilpatrick, 85 N. Y., 413; Vincett v. Cook, 4 Hun, 318, 421; Simons v. Bank, 93 N. Y., 269, Coleman v. Manhattan, 94 N. Y., 229.

But in this case the fact itself, viz.: Payment upon the note was not permitted to be proven. If the mode of proving the fact was objectionable, the plaintiff could have proved the whole transaction of the sale of the lumber, the giving of the note for the balance due and the payment upon the note or balance • or perhaps a less involved and more direct way of proving the fact of payment, would have been to offer in evidence the defendant’s answer which alleged payment upon the note of this same sum though in full payment and discharge of it, and then tried the only issue that would have remained, whether it was a full or partial payment of the note. For this reason we think the judgment should be set aside and a new trial had, and this conclusion renders it unnecessary to review the order refusing the amendment or the question whether it is reviewable upon this appeal.

The order permitting the withdrawal of a juror and the making of the motion to amend, as we have seen, provided that in case the motion is denied, that the complaint shall be dismissed as moved by defendant at the trial.

Perhaps that provision prevents an appeal from that order and limits the plaintiff to a review of the question arising upon the trial strictly. If that question was properly open for review upon this appeal and the amendment was necessary in order to allow a trial upon the merits or in furtherance of justice, I should be inclined to the opinion that the amendment should have been allowed. The amendment would not have substantially changed the cause of action. It was whether there was a subsisting indebtedness for property sold and delivered by plaintiff to defendants. Vibbard v. Roderick, 51 Barb., 616, 636.

Indeed, the note being in first hands and the action between the parties to the original transaction, its consideration was open to inquiry and investigation and it had already, upon the trial, been shown to have been given for lumber sold by plaintiff to defendants, which was inline with the proposed amendment.

The judgment should be set aside and a new trial ordered.

Van Brunt, P. J., and Lawrence, J., concur.


text:
    William Campbell, Resp’t, v. Abner M. Wright and ano., App’lts

      (Supreme Court, General Term, First Department,

      Filed March 31, 1887.)

    1. Practice—Trial before jury—Requests to charge—Duty of the COURT.
    A request to charge is improper in form when it embraces a proposition of law and a statement of fact. It is not the duty of the court to detail the evidence to the jury.
    2. Brokers—Stop-order—Definition of the term:.
    The meaning of a stop-order is to await a certain figure, and whenever that figure is reached, to stop the transaction by buying in as well as possible.
    3. Same—Broker’s liability ik buyirg or a stop-order.
    If a broker’s buying is not authorized by a stop-order or the default in the margin, the customer may repudiate the transaction and recover the deposit made as aamargin. This action of the broker does not constitute a conversion. There is nothing to convert.
    4. Evidence—Hearsay—Entries of prices by the board of trade.
    The prices entered by the board of trade are admissible as evidence of the value of the stock and are not hearsay. The knowledge of the prices is obtained by those who are present at the sale, in the employment of the board of trade, to obtain these facts and hear these persons at the times of the various transactions. It is also competent to show that this book is used and relied upon by the Board of Trade and dealers.
    6. Same—Secondary evidence—Sworn copies.
    Where certain books are admissible, sworn or authenticated copies of them are competent if the original is an official paper or is not of the jurisdiction of the court.
    6. Same—Res gestje—Admissibility of letter.
    Letters between the parties to a transaction, are admissible in evidence when they form part of the res gestee.

    Appeal from the judgment entered upon the verdict of a jury and from an order denying a motion to set aside the verdict pursuant to section 999, Code of Civil Procedure.

      James E. Chandler and Wm. R. Darling, for resp’t; D. M. Porter, for app’lt.
   Potter, J.

The action was brought to recover, and a recovery was had, by the plaintiff, for the balance of moneys placed in defendant’s hands as a margin or indemnity against loss in the sale of wheat on plaintiff’s, account.

The agreement between the parties, and out of which this controversy has arisen, was made through their respective agents or brokers, and is substantially of this, ■nature; that the plaintiff, on the 9th of April, 1885, employed the defendants to sell for him in the month of May following, 50,000 bushels of wheat in the Chicago market for eighty-seven and five-eighths cents per bushel, the plaintiff agreeing to pay defendants commissions of one-eighth per cent each for selling and buying, and depositing with them reasonable margins ranging from three to six per cent from time to time; that the defendents accepted these terms that in pursuance of such agreement the plaintiff deposited with defendants’ agent, at their office in New York city, from time to time, margins aggregating $3,000.

The rights and duties of these parties towards each other under an agreement of such nature are that the defendants will not buy in to cover the liability of the plaintiff to deliver the wheat in May until that time, and will then buy it at the lowest price prevailing in the market.

This situation or relation of the parties is, however, cubject to these limitations; that the plaintiff had the right to require the defendants to buy in the wheat to fulfill the plaintiff’s obligation to deliver the wheat in the meantime,, and the defendants had the right to require such margins, until May, or the time such order to purchase was given, as a reasonable judgment would require for their indemnity, and in default of putting up such reasonable margins, within a reasonable time, the defendants would have the right to buy in the wheat at the prices ruling in the market at the time of buying in and charging the plaintiff with any deficiency between margin and the price paid to buy in. The plaintiff contends that the defendants did not buy in the wheat at the price specified in the stop order;, that plaintiff gave defendants, or at a price ruling at the. time that plaintiff was reasonably entitled to have, to furnish further margins; but disregarding their duty in both those respects, bought it in at ninety-one and three-eighths, when they could, and should have bought at eighty-seven, and three-eighths, and thus used and appropriated to themselves the $2,000 which this action is brought to recover of plaintiffs $3,000 margins.

The other one thousand having been repaid to plaintiffs, before the commencement of the action, the theory of plaintiff’s action is that defendants having violated their duty in the premises, he has a right to repudiate the purchase by defendants and recover the margins.

The defendants’ contention is that they bought in the wheat at the price ruling at the time they had a right to-purchase it under the plaintiff’s order, called a “stop order,” or by reason of plaintiff’s default in furnishing-margins, and that the plaintiff is bound by their action and not at liberty to repudiate the purchase.

Evidence was introduced upon the trial which is claimed by the parties, respectively, to have supported his side of' the contention. Those questions of fact were very properly and plainly submitted to the jury. The errors complained of by the defendants do not relate to the charge of the-court upon the submission of these questions but to rulings in response to requests to charge and to the admissibility of the evidence.

After a pretty careful examination of the alleged errors, we are satisfied that a new trial should not be granted on. account of them.

I will first notice those in relation to the charge. The request “to suggest,” if it is, be treated- as a request to charge, is twofold, embracing a proposition of law and a statement of fact. As a whole it was improper to charge the request.

The part of the request, and which if tantamount to a question of law that there is no evidence that Mr. Dawson communicated the matter to Mr. Wright, is altogether too indefinite for any practical purpose. Mr Dawson was the agent of plaintiff in these transactions and had various conversations and negotiations with Mr. Brown, the agent of defendants. Indeed the entire business was done through Dawson and Brown.

The counsel should have specified “the matter ” to the court. It is impossible for ttie court to know what matter the counsel has in his mind without some reference by counsel to “the matter.” Besides the entire transaction and conversations were with Brown, the agent of Wright, and it was immaterial whether any of them was communicated to Wright or not.

As to the request “to suggest ” the fact, it is not any part of the duty of a court to detail the evidence to the jury. That is the province of counsel in summing up the case. That had already been done by counsel, and to a proper extent by the court already in his charge upon the questions of fact submitted. Besides, it was a controverted fact whether the letter demanding margin was sent after the conversation upon that subject. The charge of the court in respect to the rule of damages was correct.

The true question in the case for the jury to determine, as we have stated before, was whether the defendants were warranted in buying in the wheat at the price and time of its purchase, under the stop order or because of default in the margin.

This presentation of the question to the jury was proper and was not excepted to by defendants’ counsel. Indeed the charge was more favorable to the defendants than they were entitled to. It permitted the defendants to justify their buying in under the stop order. I am inclined to the opinion that the defendants were not entitled to justify that act under the stop order. The stop order directed defendants to buy in when wheat was ninety-three and three-eighths.

“The meaning of a stop order is to await a certain figure, and whenever that figure is reached to stop the transaction by buying in as well as possible.” Porter v. Wormser, 94 N. Y., 443.

Defendants did not wait till it reached ninety-three and three-eighths, to which plaintiff’s margin carries it, but bought in at ninety-one and three-eighths.

But aside from this view, which puts the justification for the purchase upon the plaintiffs stop order out of the case, and assuming it was properly submitted to the jury with the other question, viz.: Default in margin, the jury were instructed, if the buying in was not authorized by the stop order or default in margin, to render a verdict in favor of plaintiff for $2,000.

The legal effect of this finding was that defendants refused to carry out their contract with plaintiff, and that when they refused to do so plaintiff was entitled to the return of the margin he had deposited with them for that ■purpose-, if the. plaintiff saw fit to repudiate the action of defendants and demand to be repaid his margin, as he did.

The court in his charge proper had said nothing about damages for conversion and the term was not used until it was mentioned in the counsel’s request to charge in respect to the rule of damages for conversion.

There was no conversion in the case. There was nothing to convert. The plaintiff had no wheat to be converted. There could not be a pretense of a conversion till defendants made this unauthorized, as the jury found, purchase of wheat which the plaintiff at once repudicated.

It might be said the wheat never actually existed between these parties and was never converted by anybody.

With all respect, it seems that the cases cited by defendants have no application to this case. Those cases relate to transactions where parties have contracted to sell and deliver property and have failed to do so, or where a party has made an unauthorized sale or disposition of property or stocks placed in his hands to sell and to the rule of damages that is applicable to such cases. In short, the court correctly charged the rule of damages in this case, by whatsoever name counsel was pleased to call it.

We have now come to consider the rulings upon the admissibility of evidence.

There are several such rulings, but it will not be necessary to consider them separately, for most of them are susceptible of classification and of treatment in that form. Much the larger class relate to the reception of evidence as to the prices at which wheat sold in the Chicago market and the mode of obtaining and communicating those prices to other points.

I think the entries made of prices, by the officers and employees of the board of trade, under the circumstances detailed are evidence. They were objected to as hearsay. A knowledge of those prices is obtained by those who are present at the sale in the employment of the board of trade to obtain these facts and hear the conversations and negotiations of the parties making the transaction. They are just as competent as the parties themselves to the transaction would be to testify to what was said and done by the parties.

_ They at the same time make memoranda of the transactions, and the same are at once, and before separation or proceeding to any other business, entered in a book. It was •competent to show that this book, as a matter of fact, is used and relied upon by the board of trade and the dealers', and persons having business transactions and arbitrators to settle differences on change.

In a sense the persons collecting and recording those transactions, sales and prices, are public officers or men in the common employment of all the members of the board of trade and parties dealing at the board or through its members or their agents, as were the defendants.

Entries thus made would at least be evidence, and presumptively correct with members of the board and those dealing through them.

These entries being evidence, it was proper to introduce sworn or authenticated copies of them, especially where the original was an official paper or detained at the business office out of the jurisdiction of a subpoena or was not accessible.

It should be observed that many of the rulings under which portions of this evidence were received were not excepted to; that to some portions of it, the objection was simply that the evidence was immaterial, and that further on in the trial this kind of evidence was not objected to at all, and that when the defendants had the case, they had resort to the same kind of evidence as that to which they had made objection when introduced in behalf of.' plaintiff.

There are one or two objections and exceptions to evidence of another character which ought to be noticed. The' letters of plaintiff to defendants, dated respectively April sixteenth and April seventeenth; the former was properly received, as it was in reply to one from defendants stating what they had done in the matter, repudiating the same.. The latter was proper, and it was necessary to make a demand for a return of margins before the plaintiff could maintain an action to recover them.

But if the letter had not contained the demand, or if a. demand had not been essential, I am clearly of the opinion the letters were properly received in evidence. It was a part of a correspondence between the parties in relation to-a transaction on the day succeeding in which the plaintiff states his ground of complaint and demands redress.

See cases in the opinion of the court cited by defendants, counsel. Peck v, Valentine, 94 N. Y., 569.

The exclusion of the question to the witness Brown as-to the excitement and condition of the Chicago market. ' was proper.

It called for the inference of the witness who was not in Chicago but in New York. Facts should be given the jury,, as had been done by those at Chicago, to draw such inference from. The statement contained in defendants books. was correctly received in evidence, for the book was shown to have come from the defendants office either at New York or Chicago.

I am of the opinion there are no errors for which the judgment should be set aside, and it is therefore affirmed, with costs.

Lawrence, J., concurs.


author: Kennedy, J,

text:
    Samuel Archer et al. v. Joseph Archer et al.

      (Supreme Court, Utica Special Term,

      Filed February 9, 1887.)

    Deed of land—When set aside fob feadd and undue inlfuence.
    In an action brought to set aside a deed of certain lands in the city of Utica, executed by one Sarah Scott to the defendant, it appeared that said Scott was over ninety-three when she executed the deed, and for many years prior to that time she had been in feeble health, subject to fainting fits, her memory so much impaired that she retained no recollection of passing events and was unable to recognize her children and grandchildren, or her acquaintances with whom she was brought in frequent contact, etc. That she was in that condition of physical and mental weakness, which made her yield a ready and willing submission to the suggestions and request of those with whom she was immediately associated. She was ■under the immediate control of one of the grantees. Held, that it was incumbent on the defendants, the grantees, to show affirmatively that the deed was fairly and understandingly made, and that it expressed and carried out the true intent and purpose of the grantor, and that she understood the relation she bore to each of her children, their demands upon her bounty and the manner she in truth deshed them to be discharged. Failing in this, the deed should be set aside.

      W. T. Dunmore, for pl’ff; S. M. Lindsley, for def’t.
   Kennedy, J,

Action to set aside a deed of certain lands in the city of Utica, executed by one Sarah Scott to Joseph Archer and Eliza Pittam, bearing date, on the 31st day of May, 1882, on the ground that the same was procured by the grantees through fraud and undue influence exercised on the grantor, as well, also, that the grantor was at the time incompetent.

The grantor, Sarah Scott, was the mother of the plaintiffs and the defendants, Joseph Archer and Eliza Pittam; the remaining defendants are her grandchildren—children of her deceased children.

Sarah Scott died on the 13th of March, 1885, at the advanced age of ninety-six. For a number of years prior to 1882, she had been the owner and in possession of a house and lot in the city of Utica of the value of at least $1,500.

The property she acquired from her deceased husband, and father of her children, by devise from him.

On the 31st day of May, 1882, she then bemg such owner, executed a deed in form conveying said house and lot to the defendants, Joseph Archer and Eliza Pittam, for the consideration therein expressed of $1 and containing, in addition thereto, covenants by the grantées to support the grantor during her life, and within one year after her death to pay to certain of her other children and grandchildren difterent sums of money varying from fifty to one dollar, in all amounting to about $200. The lands conveyed comprise all the real estate owned by the grantor, and substantially all of her estate. For many years prior to the making of the deed, the grantor had. been in feeble health, subject to fainting fits; her memory was greatly impaired, so much so that she retained no recollection of passing events; she was unable to recognize her children and grandchildren or her acquaintances, with whom she was brought in frequent contact; her conversation was incoherent and disconnected, and while she had some intelligence and could appreciate simple things which might transpire in her presence, she was in that condition of physical and mental weakness which made her yield a ready and willing submission to the suggestions and requests of those with whom she was immediately associated. It appears also that she was very deaf, ignorant and illiterate.

About the year 1877 she went to Eve with the defendant EEza Pittam, and became a member of her family, where she remained until her death, she paying for her board and care $2.50 per week from certain rents derived by her for the house and lot in question and some other real estate of which she held a life lease.

The plaintiffs, Mary Ann Boff and Mary Jane Peck,- as weH, also, defendants EEza Molden, Joseph Kirkby, John H. Boff, Clarance Boff and Frank Peck, her grandchildren, Eved in Utica, at the time of the conveyance, but had no knowledge or information that the same was contemplated or about to be made.

Joseph Archer, one of the grantees, Eved in Iowa. He came to Utica at the request of his associate grantee, Mrs. Pittam, for the purpose, as avowed by him, of settling his mother’s matters. He had not seen her for several years prior to that time. On his arrival he was domiciled at the house of Mrs. Pittam, where the deceased was, and remained there until the day after the deed was executed, when he returned to Iowa, declaring that he had succeeded in settling his mother’s business. Attempt was made by Mrs. Pittam to conceal the fact that the deed had been given and placed on record. Many other facts and circumstances were given bearing more or less directly upon the question at issue.

Having, in view of the great age of the grantor, her feeble physical and mental condition, her inabihty to understand or appreciate passing events, her susceptibihty to influence of those in whose care she was, or with whom she was brought in connection, to which may be added the. fact that she was under the immediate control of Mrs. Pit-tam, one of the grantees, and necessarily looked to her for care and maintenance and the consequent relation of confidence existing between them. I think it is incumbent on the defendants, the grantees, to show affirmatively, that the deed was fairly and understandingly made, and that it expressed and carried out the true intent and purpose of the grantor. That she understood the relation she bore to each of her children, their demands upon her bounty, and the manner, she, in truth, desired them to be discharged.

The person who drew the deed, Frederick W. Klages, testifies to what he remembers took place at the time it was drawn, and to the directions received by him from Mrs. Scott as to her wishes in that regard, and if full credit is given to his testimony, it is quite apparent that Mrs. Scott bore her burden of her near an hundred years with ease and without their usually attending infirmities, and instead of being debilitated in body and in mind, that she was strong and vigorous in intellect, fully appreciating the business in which she was engaged, and competent to thoroughly understand the effect of it. From the same witness, it also appears, or at least he so testifies, that neither Joseph Archer, who had traveled from a distant state to see to it that his mother’s business matters were properly settled, nor Eliza Pittam, in whose care she was, were present at that time, or took any interest in what was being done by this aged woman. When the witness met her she was a stranger to him; he found her with her papers ready, and she at once presented him a deed containing a description of the premises to be conveyed, although she could not read, and informed him of the purpose for which he had been sent, and gave him a detailed statement, by way of instructions, of how she desired it to be done.

Aside from the improbability of the accuracy of this evidence, the witness is contradicted by several others, who testify that very soon after the deed was executed, Klages stated that both Joseph Archer and Mrs. Pittam were present at the time the deed was drawn by him and executed by deceased.

In the light of the circumstances and in view of the undisputed, necessarily feeble condition of the grantor, the conclusion to me is irresistible that the witness must be mistaken, unintentionally, perhaps, as to what occurred at the time he drew the deed and deceased executed it.

She was very deaf, and any conversation he had with her must have been made known to those in the house. She was illiterate, unable to read or write, and was an easy subject for improper influence or for deceit. And the circumstances surrounding the transaction; the situation of the parties; the relation of the grantees to the deceased; her condition of ignorance and great mental debility; the fact she had never suggested, so far as the evidence shows, her desire to make the disposition of her property, which she did, or indeed any ante-mortem disposition of it, when grouped, lead to the conclusion that the deed in question was not the deed of the deceased, but rather of the grantees benefited by its execution. By reason of the relation ex isting between the grantor and her daughter Eliza Pittam, the burden of proof is upon her, as one of the grantees in the deed, to show that the same was the uninfluenced act of the former. In Nesbit v. Lockman (34 N. Y., 168), the court say: “It is certain that the law regards a transaction like the one in question with great suspicion; that when persons standing in a confidential relation make bargains with or receive benefits from the person for whom they are counsel, attorney, agent or trustee, or when the relation of parent and child, or guardian and ward exists, may be added, the transaction is scrutinized with the extreme vigilance and regarded with the utmost jealousy, the clearest evidence is required that there is no fraud, -undue influence or mistake; that the transaction was perfectly understood by the weaker party. The presumption is against the propriety of the transaction, and the onus of estabhshing the gift or bargain to have been fair, voluntary and well understood, rests upon the party claiming; and this in addition to the evidence to be drawn from the execution of the instrument conveying the property. In Sears v. Shafer (6 N. Y., 268) the rule is thus stated :

“A court of equity interposes its benign jurisdiction to set aside instruments executed between persons standing in the relation of parent and child, guardian and ward, physician and patient, solicitor and client, and in various other relations in which one party is so situated as to exercise a controlling influence over the will, conduct and intent of another. In some cases undue influence will be inferred from the nature of the transaction alone, in others, from the nature of the transaction and the exercise of occasional or habitual influence.

It is unnecessary to refer to the many cases found in the books holding these principles and enunciating similar views.

If it should be assumed that the witness Klages is correct in the evidence he gives, and that the transaction of giving the deed was solely between him and the deceased, and that she gave him the minute instructions which he states, still, the conclusion would be just that they had been previously prepared for her by the parties interested and who were seeking benefits. . ,

It is said, in Tyler v. Gardiner (35 N. Y., 595): It is no sufficient answer to the presumption of undue influence which results from the undisputed facts that the testatrix was aware of the contents of the instrument and assented to-all its provisions. This was the precise purpose which the undue influence was employed to accomplish.”

I cannot believe that a person at the advanced age of the grantor, in the debilitated condition she is shown to have been, could deliberate and act, and unaided conclude, as Klages makes her do; no reason is shown why she should prefer her son Joseph, whom she had not seen for several years, or her daughter Eliza, over her other children in the disposition of her little estate; the latter had no unusual claim upon her mother. It is true she had been in her family and been taken care of by her; but. for this the daughter has received compensation in full, and as such care and services were rendered.

My conclusion is that the deed was procured through undue influence exercised by the grantees over the grantor, and for this reason the same is void and should be set aside, with costs.

The plaintiff’s counsel will prepare findings in accordance with the above. _