author: Ward, J.

text:
    John R. Langworthy, Pl’ff, v. Elverton Crissey, Def’t.

      {Supreme Court, Chautauqua Special Term,

      Filed December 3, 1894.)

    1. Gift—Causa mobtis.
    In order to constitute a gift causa mortis, the act must be done under the apprehension of death from present disease or other impending peril, and death must result therefrom or from some other disease existing at the time of the gift.
    8. Same—Inteb vivas.
    The delivery to a third person, to he unconditionally delivered to another on the donor’s death, is a valid gift inter vivas.

    3. Same.
    In such case, the acceptance may he implied, where the gift, otherwise complete, is beneficial to the donee.
    Action to recover upon a promissory note.

      A■ R- Moore, for pl’ff; Frank W. Stevens, for def’t.
   Ward, J.

The plaintiff sought to recover upon a promissory note executed and delivered by the defendant to Cornelia Lang-worthy in 1885 for $448, payable to her order! The plaintiff is the son of Cornelia Langworthy. The defendant is her son-in-law. She -lived about two miles from Sinclairville, in Chautauqua county. Mrs. Rosina Love,who resided at Sinclairville, was her sister-in law. About September 1, 1891, Mrs. Langworthy went to Sinclairville. and delivered the note, without indorsing it, to Mrs. Love, saying in effect that it was for the plaintiff; that she wanted him. to have it; that he was poor and crippled, and needed it; that if he were there she would have given it to him then; and she directed Mrs. Love to take care of the note, and when she died to give it to the plaintiff, and expressed some fears that unless it was taken care of it might be lost. Some talk was had as to how the note was to be kept in the meantime, and the ladies finally concluded that Mrs. Love should seal it up in an envelope, and deposit it in a bank at Sinclairville for safe-keeping, and upon the death of Mrs. Langworthy, Mrs Love was directed to deliver the note to the plaintiff. There was no reservation of interest in the note, or right to recover its possession, made by Mrs. Lang-worthy, who will hereafter be termed the “deceased.” Mrs. Love deposited the note in the bank as directed, and after the death of the deceased, which occurred the latter part of December, 1891-, Mrs. Love obtained the note from the bank, and delivered it to the plaintiff, who has since retained possession thereof, and brings this action to recover the amount thereof, claiming title thereto as an absolute gift from the deceased ; and the sole question tried was whether there was a valid gift of the note to the plaintiff. When the plaintiff’s proof was closed, the defendant moved for a nonsuit, and, failing that, moved that the court direct a verdict for the defendant. The plaintiff moved that a verdict be directed for himself. Neither party asked to go to the jury, and the court directed a verdict-for the plaintiff for the amount of the note and interest, deducting a small payment thereon of $10.

The defendant claims that the facts proved in this case did not create a valid gift of the note to the plaintiff, either inter vivas or causa mortis. The deceased was about 76 years of age, and, though feeble in health, and somewhat apprehensive of death, seemed to have no positive disease at the time she delivered the note to Mrs. Love. When she died, in December thereafter, it was from a sudden attack of la grippe. In order to make her act a gift causa mortis, it must have been done under the apprehension of death from present disease or other impending peril, and death must result therefrom, or from some other disease existing at the time of the gift. Ridden v. Thrall, 125 N. Y. 572; 35 St. Rep. 913. These conditions did not obtain in this case, and the gift was not, therefore, made causa mortis.

The remaining question is whether this may be regarded as a gift inter vivas, or that the facts established a trust in favor of the plaintiff, of which he could avail himself after the death of Mrs. Langworthy. In either event, the title to the note has passed to him. Had the note been delivered to the plaintiff by the deceased with the above statements accompanying it. no question as to a complete gift inter vivas could arise. Had she delivered the note to Mrs. Love with the same statements, and that she should deliver it to the plaintiff, and that was done in the life of Mrs. Lang-worthy, then no question of the validity of the gift could successfully be made. A delivery to a third person for the use of the donee is sufficient. Hunter v. Hunter, 19 Barb. 633; Grymes v. Hone, 49 N. Y. 20, 22, and cases cited; Hathaway v. Payne, 34 N. Y. 92. It was not necessary to indorse or assign the-note to pass the title. Montgomery v. Miller, 3 Redf. Sur. 155; Westerlo v. De Witt, 36 N. Y. 340; Hackney v. Vrooman, 62 Barb. 650. The question here is whether the delivery of the note with the accompanying statement to Mrs. Love, the subsequent death of the deceased, and the delivery of the note to the plaintiff, was equivalent to a present delivery to him. There can be no doubt as to the intention of the deceased,—that she intended an absolute gift at the time of such delivery to Mrs. Love, and that the expedient of Mrs. Love’s retaining it for a time was to preserve it for the plaintiff, who was absent. To deprive the plaintiff of this property would be to defeat such intention, and the courts will strive to effectuate such intention when it can be done consistently with the rules of law. Assuming, however, that the event upon which the possession of the note was to pass to the plaintiff was the death of the donor, it was an event certain to occur. The donor had done all that was necessary to accomplish her purpose of vesting the title to the note in the plaintiff and the acceptance may be implied where the gift, otherwise complete, is beneficial to the donee. Beaver v. Beaver, 117 N. Y. 421; 27 St. Rep. 405; Matson v. Abbey, 53 St. Rep. 794; 24 N. Y. Supp. 284; Hunter v. Hunter, supra. In the last case the marginal note, fairly reflecting the decision, is as follows: “A delivery to the donee in person is not necessary. A delivery of the thing granted to another person for the use of the donee is sufficient, and the donee’s subsequent demand of the property given, and his efforts to obtain possession thereof after the same has come into the hands of the donor’s executor, is evidence of his acceptance of the gift.”

Under these circumstances, was not the gift completed within the spirit of the law ? I think that it was. The requirement that actual delivery of the subject of the gift should be had and be clearly proved was to shut the door against fraud by showing unequivocal acts of transfer. This purpose of the law is as well accomplished by this species of delivery as any other. Delivery of this kind has been sustained as to important transfers of real, estate. The delivery of a deed of real estate to a third person, to be delivered to the grantee after the death of the grantor, has been sustained in numerous cases. The delivery being regarded as óf the time of the delivery to the third person, and while the grantor was still alive, and asserting the principle that where the delivery to the grantee depends upon an event certain, and thus is only a question of time, it is regarded as vesting the title in the grantee as of the time of the first delivery. Hathaway v. Payne, 34 N. Y. 92, 105, et seq., and cases cited; Diefendorf v. Diefendorf, 132 N. Y. 100, 108; 43 St. Rep. 384. Why not apply the principle here asserted to the case before us? I can see no difference in principle between the gift of real estate by deed and the gift of personal property by note or other evidence of debt. In Green v. Tulane, (N. J. Ch.) 28 Atl. 9, where T. deposited bonds with a third person to be delivered to M. and her sister 'after the death of T., is was held to be a valid gift to the donees, which became effective after the death of T. A wife, on her deathbed, and in the presence of her husband, and with his consent, delivered money belonging to him to a third party in trust for her children. Held a completed gift on the part of the husband. Frazier v. Perkins, 62 N. H. 69. A delivery of notes by the owner to his son with the agreement that such owner shall have the interest thereon as long as he lives, and at his death they shall be divided between two of his daughters, is valid as a gift inter vivas. Seavey v. Seavey, 30 Ill. App. 625. And see Second Nat. Bank v. Merrill & Houston Iron Works, 50 N. W. 503; Reynolds' Adm'rs v. Reynolds, 18 S. W. 517. Should it be necessary, in order to sustain this gift, to regard Mrs. Love as a trustee for the plaintiff, and the delivery to her, with the directions accompanying it, vested the absolute title to the note in the plaintiff through such trustee, there are not wanting authorities which at least inferen tially sustain that position. Grymes v. Hone, 49 N. Y. 22, 23; Martin v. Funk, 75 N. Y. 134. And the trust may be by paroi. Wadd v. Hazelton, 137 N. Y. 218; 50 St. Rep. 400; Gilman v. McArdle, 99 N. Y 451. And though made without the knowledge of the beneficiary, may be adopted by him. Berly v. Taylor, 5 Hill. 586 et seq. These Views lead to the conclusion that the verdict should be sustained, and the motion for a new trial is therefore denied, with $10 costs.

Ordered accordingly.


source: Caselaw Access Project

author: Martin, J.

license: Public Domain

text:
    John H. Law, by Guardian, etc., App’lt, v. Willey J. P. Kingsley, Resp’t.

      (Supreme Court, General Term, Fourth Department,

      Filed November, 1894.)

    Municipal corporations—Sidewalks.
    A lot owner is not liable to persons injured.through defects in the sidewalk adjoining his lot.
    Appeal from a judgment of nonsuit.

      Sayles, Searle & Sayles, for app’lt; J. S. Baker, for resp’t.
   Martin, J.

This action was brought to recover damages alleged to have been caused by the negligence of the defendant in omitting to keep the sidewalk on a street adjoining his lot in the city of Rome N. Y., in proper repair, whereby the plaintiff fell and was injured. The plaintiff was nonsuited. It was conceded that when it was orginally built the walk where the injury occurred was properly constructed, hence the only ground upon which the plaintiff claimed to recover was that the defendant had neglected to-keep the sidewalk in a proper state of repair. On the trial the plaintiff proved that the defendant owned the premises adjoining the street or sidewalk where the injury occurred ; that it was included in the corporation tax district of the city; that the walk was built by him 13 years before, and had. been used as one of the puolic sidewalks of the city since that time; .and that while passing over it in 1893 the plaintiff’s foot" was caught between .the boards of the walk, and he fell, and broke his left arm. As there was no evidence in the case to show that the sidewalk was not build by the direction of the common council of the city of Rome, it is to be presumed that it was made under the direction and with the knowledge and consent of the city, rather than that it was constructed without authority, or was a public nuisance, especially as the city had acquiesced in its use for more than 12 years before the injured occurred. Assuming, as we think we must, that this sidewalk was properly constructed under the direction or by the consent and acquiescence of the city of Rome, the authorities cited by the appellant relating to cases of public nuisance or wrongful interference with a street have no application. Therefore the only question here presented is whether, if this sidewalk was constructed under the direction, with the knowledge, acquiescence, or consent of the city, the defendant was liable to the plaintiff for any injury he sustained by reason of its being out of repair. It seems to be well settled that a municipal corporation is liable to persons using its streets or sidewalks for damages arising from a neglect to keep them in a proper state of repair, notwithstanding a duty to repair such sidewalks is also imposed upon the property owners in front of whose premises the injury occurs. Russell v. Village of Canastota, 98 N. Y. 496; Pettengill v. City of Yonkers, 116 N. Y. 558; 27 St. Rep. 531; Saulsbury v. Village of Ithaca, 94 N. Y. 27; Ballock v. City of New York, 99 N. Y. 654; Pomfrey v. Village of Saratoga Springs, 104 N. Y. 459; 5 St. Rep. 802; Jewhurst v. City of Syracuse, 108 N. Y. 303; 13 St. Rep. 623.

Section 1 of title 6 of the charter of the city of Rome declares: “ The common council shall be commissioners of highways in and for the portion of said city included in the 1 corporation tax district,’ and shall have all the powers and discharge all the duties of commissioners'of highways in the towns of this state, subject to the provisions of this act. They shall also have power within said limits to make and maintain cross walks, and to regulate, repair, amend, clean, and prevent the incumbering of the streets, alleys, highways, bridges, side and cross walks, drains, sewers, wharves,- piers and docks; to compel every person to clean the snow, ice and dirt from off the sidewalks and waterways, and to sweep and clean the sidewalks, water-ways and street in front of the premises owned or occupied, in whole or nr part, by such person, and to keep such sidewalk in good repair; and to direct the removal of dirt from the streets,” and to enforce the above by suitable ordinances and penalties.

Section 15 of the same title (as amended in 1881) provides: <l It shall in all cases be the duty of the owner of any lot or piece of land within the 1 corporation tax district ’ to keep the sidewalk adjoining his lot or piece of land in good repair, and also the duty of every owner or occupant to remove or clean away snow or ice or other obstruction from such-sidewalk, and to keep half the street or alley adjoining the same free from obstruction or obstacle. The city of Rome shall not be liable for any injury caused from such sidewalks being out of repair or unlawfully obstructed or dangerous from snow or ice, unless actual notice of the unsafe condition thereof has, prior to such injury, been given to the mayor or common council. The superintendent of streets shall have power to repair any sidewalk when the owner of the property shall neglect to repair the same for five days after written notice so to do has been served on him personally or at his residence, if his residence be known and he live in the city, or otherwise by being left on the premises, and no ordinance for the same need be passed or notice be published or posted. The superintendent of streets shall also have power to clean any sidewalk from snow, ice or other obstruction, where the same shall have remained for twenty-four hours. The street superintendent shall have the power to collect the expenses of any such work or repair from the owner of the property, and he shall send such owner, if his address be known, a bill of the amount thereof. The expenses of such cleaning may be'collected from either the owner or occupant of the property in like manner. If such expense is not paid, the street superintendent shall file his affidavit showing in detail the actual cost thereof, and the property in front of which the work, repairing and cleaning was done, with the city chamberlain, and he shall add the amount thereof, with interest at fifteen per cent, from the time such affidavit was filed, to the amount assessed against such land for the next general city tax, and the whole amount of such assessment shall be collected as is provided in reference to general city taxes.”

In City of Rochester v. Campbell, 123 N. Y. 405; 34 St. Rep. 77, where the plaintiff’s charter in all its essential particulars is like that of the city of Rome, it was held that an action was not maintainable against a lot owner to recover the amount of a judgment against the city for damages sustained by one who, in consequence of a defect in the sidewalk in front of such owner’s premises, had been thrown down and injured; that, as a duty was imposed upon the municipality, by its charter, to keep its streets in good and safe condition, and so, through its common-law liability, abundant indemnity was provided for any damages caused by defective streets, the purpose of the provision was not the protection of the public or individuals, but to furnish the municipality, by a proper distribution of burdens, the means of discharging its duties; and that the lot owner could only be made liable for any expense the corporation incurred in making the necessary repairs. In that case it was also held that the primary duty of constructing sidewalks and keeping them in repair rested upon the municipality, and that it alone was liable to persons injured by defects therein. See, also, Avery v. City of Syracuse, 29 Hun, 537; Village of Fulton v. Tucker, 3 Hun, 529; Moore v. Gadsden, 93 N. Y. 12; Wenzlick v. Mc Cotter, 87 N. Y. 127; Dill. Mun. Corp. § 1012; Hill v. City of Fond du Lac, 56 Wis. 242; Knupfle v. Knickerbocker Ice Co., 84 N. Y. 488; Weller v. McCormick, 47 N. J. Law, 397; Kirby v. Association, 14 Gray, 249; Flynn v. Canton Co. of Baltimore, 40 Md. 312; Heeney v. Sprague, 11 R. I. 456; City of Hartford v. Talcott, 48 Conn. 525; Eustace v. Jahns, 38 Cal. 3; Jansen v. City of Atchison, 16 Kan. 358; State v. Gorham, 37 Me. 451; City of Keokuk v. Independent Dist. of Keokuk, 53 Iowa, 352; Taylor v. Railroad Co., 45 Mich. 74, which are cited by Rugbr, C. J., in City of Rochester v. Campbell, supra, as sustaining the doctrine of the nonliability of the lot owner to travelers or municipalities. In the further discussion of this question the court said : 4 We have thus referred at length to many of the cases holding the nonliability of the lot owners, for the reason that there seems to have been quite a common impression, in which judges and lawyers have shared, that abutting owners are in some way liable to an injured party for damages occasioned from their neglect to keep sidewalks in repair when that duty is in any way enjoined upon them. It seems to us that there could never have been any logical cause for such impression, and it seems it has no foundation in the reported cases. Auy other conclusion than that reached by us would, we think, be most unfortunate, as it would tend to relax the vigilance of municipal corporations in the performance of their duties in respect to the repair of streets and highways, and impose that duty upon those who might be utterly unable to discharge it. It would tend directly to demoralize the public service, and lead to disorder, decay, and impassability of the public highways.”

The principal of these cases renders it quite manifest that the plaintiff cannot maintain this action, and that the court properly granted the defendant’s motion for a nonsuit.

Robinson v. Chamberlain, 34 N. Y. 389, and other kindred cases, cited by the appellant, which in effect hold that a public officer, or person engaged to perform the duties of a public officer, is liable for negligence or malfeasance to any one sustaining special damage in consequence thereof, have no application here. Judgment affirmed, with costs.

All concur.


author: Per Curiam.

text:
    Francis V. Greene, as President, etc., Resp’t, v. Frederick B. Carey, App’lt.

      (Supreme Court, General Term,, First Department,

      Filed November 16, 1894.)

    1. Deposition—Discovert.
    The plaintiff cannot examine the. defendant before trial, for the purpose of determining whether he has one or the other of two causes of action.
    2. Same—Production of papers.
    An order, which requires the proposed defendant to produce his books upon his examination before trial, in order to enable the plaintiff to frame his complaint, is improper.
    Appeal from an order denying a motion to vacate an order for defendant’s examination and the production of his books.

      The defendant entered into a contract with plaintiff, by the terms of which the privilege was accorded him of obtaining advertisements to be inserted in a souvenir volume, and, as a consideration for such privilege, the defendant agreed, at his own expense, to print and deliver to plaintiff 3,000 copies of the book, and, in addition, to pay 25 per cent, of the gross amount received for advertisements. The plaintiff alleges that but 1,000 copies of the book were ordered, printed, or delivered ; that the defendant failed to keep accurate books of account of his receipts, or to pay the proportion thereof that was due the plaintiff; and that he unlawfully solicited subscriptions for furnishing the Armory, for which he has never accounted. The affidavit then states “ that the action which deponent is about to bring against the defendant on behalf of said board is to compel said Carey to specifically complete his contract, and to recover moneys due under said contract, and to recover subscriptions unlawfully collected by him ; * * * and the examination of said defendant is absolutely necessary in order that he may prepare his complaint.”

      Abram Kling, for app’lt; Henry S. Van Duzer, for resp’t.
   Per Curiam.

It is evident from a reading of the affidavit’ and considering the form of action contemplated, that all the facts necessary to formulate the complaint are within the plaintiff’s knowledge. It may be that, for the purposes of a trial, an examination of the defendant may be necessary; but, in order to prepare a complaint, no facts in addition to those that the plaintiff swears to would be necessary, assuming, as the portions of the affidavit quoted would seem to indicate, that the plaintiff intends to bring suit in equity for specific performance and an accounting. The plaintiff claims, however, that he is in doubt as to whether he shall bring such an action or one at law, and that the examination is required in order that he may determine this question. We do not think he is entitled to any such relief, the provisions of the Code confining examinations of parties to the eliciting of information which shall enable a plaintiff to frame his complaint, or for use on the trial, and not for the purpose of determining whether he has one or the other of two causes of action.

The order is also improper in that it directs the production of the defendant’s books, the most that the plaintiff could claim being the right to examine the defendant; and if, in that connection, for the purpose of testifying, resort to the books were necessary, the defendant would be required to refer to the books for the purpose of giving the desired information. Considerable latitude is always permitted with respect to the examination of an agent by a principal, or by one towards whom the person being examined stands in a fiduciary relation, where the facts are peculiarly within the knowledge of the one under examination, but the rule permitting such latitude does not go to the extent of allowing a person to ascertain all the defendant’s evidence, with a view to selecting one of two causes of action against him. As the plaintiff here has sufficient information, as shown'by his affidavit to frame a complaint in a suit in equity, he should not, upon the ground that perhaps he might bring an action at law, be permitted to speculate upon the results of the examination of the defendant and his books, or the facts that he might unearth thereby.

We think that the affidavit upon which the order was granted was insufficient, and the order itself too broad, and that, for these reasons, the order should be reversed, with $10 costs and disbursements, but without prejudice, and with leave to plaintiff to renew the application upon proper papers, after he has determined the form of his action, if he can show that any information peculiarly within the knowledge of the defendant is essential to enable him to frame his complaint, or necessary for use upon the trial.


author: Yan Brunt, P. J.

text:
    Benedict Fischer et al., Resp’ts, v. Berthold Blank, App’lt.

      {Supreme Oourt, General Drm, First Department,

      Filed November 16, 1894.)

    1. Injunction—Order—Construction.
    Where an order enjoins defendant from selling tea put up in packages of a certain shape, inclosed in certain wrappers, “and ” from making use of a certain designation in the sale thereof, the word “ and ” is used in a disjunctive, and not a conjunctive, sense.
    2. Same—Void.
    The omission of tlife court to follow the decision of the court of appeals in reference to the modification of the injunction, does not make its action void.
    . Appeal from an order, punishing defendant for contempt of court for the alleged violation of an injunction.

      Chas. Goldzier, for app’lt; {Rowland Cox, for resp’ts.
   Yan Brunt, P. J.

It is not necessary to discuss the question as to whether there was a violation of the injunction upon the part of the defendant. It is apparent from the conceded facts that such violation took place. It is idle to claim that it was the intention of the court, or that it was so understood by the defendant, that to constitute such a violation it was necessary that there should be a combination of all the things referred to in the injunction order. The order enjoins the defendant from selling, etc., tea put up in packages having the shape of a parallelepiped, inclosed in wrappers like, or substantially like, that designated “ Plaintiffs’ Exhibit 0,” and from making use of, in connection with the sale of, or to designate, such package or packages of the designation “ Black Package Tea.” It is substantially admitted that the appellant violated the injunction by the use of packages and wrappers of the form enjoined, but because he did not also put upon the packages the words “ Black Package Tea ” it is urged that he did not violate the injunction upon the ground that all these things must combine in order to constitute such violation. It is perfectly plain from a reading of the order that the word “and” was used in a disjunctive, and not in a conjunctive, sense, although the latter is the ordinary sense in which it is used. The wrappers and form of package spoken of in the injunction were just as much a part of the plaintiffs'' proprietary right as the use of the language which it is claimed the defendant did not use. But it is urged that the court had no authority to enter the order which it is claimed was violated upon the ground that the remittitur of the court of ajrpeals did not authorize the issuance of any such order. It is apparent from the remittitur of the court of appeals that there was a modification made by that court of the injunction theretofore granted, and the court at special term attempted to enter a judgment in accordance with that remittitur. What it had before it does not appear, and, if the court did not follow the decision of the court of appeals in reference to the modification of the injunction, that fact did not make its action void. The proper course for the defendant was to have moved to vacate the order, and, if that was refused, to appeal. If he disregarded the order, he did it at his peril. The court was not without jurisdiction ; it was acting within its jurisdiction when it attempted to make the judgment of the court of appeals the judgment of this court. Erroneous action is never a ground for attacking the jurisdiction of the court.

The order appealed from should be affirmed, with ten dollars costs and disbursements.


author: Parker, J.

text:
    William C. Hackstaff et al., as Executors, etc., Resp’ts, v. Charles L. Hackstaff, App’lt.

      {Supreme Court, General Term, First Department,

      Filed November 16, 1894.)

    Witness—Section 829 op Code.
    Where a party examines the adverse party as to a conversation with the decedent, the latter party may, in his own behalf, give such conversation in full.
    Motion for a new trial on exceptions, ordered to be heard at general term in the first instance.

      C. A. de Gorsdorff, for pl’ffs; Charles Be Hart Brower, for def’t.
   Parker, J.

A careful examination of the evidence satisfies us that the trial court did not err in directing a verdict for the plaintiffs upon the evidence as it stood at the close of the trial. But several exceptions were taken to the refusal of the court to allow' the defendant to testify fully on re-direct examination concerning certain conversations had with the deceased, about which inquiry was made of the defendant on cross-examination.

The ground of the objection was that the evidence was inadmissible under § 829 of the Code of Civil Procedure. So it would have been, had not the plaintiffs opened the door for its admission by inquiries of tire defendant in respect to it on his cross-examination. The sum in controversy was $4,491.78. The plaintiffs, as executors of Anna G. Hackstaff, claimed that these moneys belonged to her estate; defendant, that she had given them to him in her lifetime. These moneys, with others, were collected by the defendant from tenants of Mrs. Hackstaff during a period of years with her consent. Apparently for the purpose of showing a retention of control over the moneys by the decedent, and thus negativing defendant’s claim that he held them as a gift, defendant was asked by the plaintiffs on cross-examination whether his mother knew of the account he had in trust for her in the Seamen’s Bank, and whether she kept track of the deposits made in defendant’s name in trust for her in such bank. Inquiry was also made about conversations between the decedent and witness relating to the payment of taxes on her property, and the saving of money for that purpose. Other subjects of conversation between them, tending in the same general direction, were inquired about, but those already referred to will sufficiently present the error into which we think the trial court fell. It should be said that counsel insists that the testimony to which we have referred was volunteered by the witness. If such were the fact, it is not disclosed by the record, which we must assume to be correct. The inquiries to which we have referred entitled the defendant to call out the whole of the conversations thus referred to. Nay v. Curley, 113 N. Y. 575; 23 St. Rep. 496. The defendant attempted to bring out the conversations in full by the following questions: “Q. You were asked on cross-examination in regard to having advised your mother as to the accounts in trust for her. What conversations did you have, if any, with your mother in reference to the accounts in trust? ”

“Q. What conversation, if any, did you have with your mother in reference to saving up taxes from the Church street rents?”

They were severally excluded, and the exceptions taken to the rulings require a reversal of the judgment, for the court cannot know but that the answers, if given, might have had a very important, perhaps a controlling, influence upon the question in issue between the parties.

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

All concur.


author: O’Brien, J.

text:
    George W. Montgomery, Resp’t, v. Vincent R. Schenck, App’lt.

      {Supreme Court, General Term, First Department,

      Filed November 16, 1894.)

    1. Bills and notes—Liability of indorser to payee.
    The test of the liability of an indorser to the payee is, whether he intended to create credit with the payee for the maker.
    2. Evidence—Bills and notes—Payment.
    In an action by the payee against the indorser, evidence that the former received from the maker, as collateral, a certificate of membership in an association, the face value of which was more than the amount of the note, and that, under an agreement with the maker, he had surrendered such certificate and obtained one in his own name, is admissible under the plea of payment.
    Appeal from a judgment entered on a verdict in lavor of plaintiff.

      William 0. Beecher, for app’lt; JEdward F. Brown, for resp’t.
   O’Brien, J.

No motion was made for a new trial, and consequently no appeal is taken from an order denying the same, and we are left to consider merely the exceptions. The action was brought to recover on two promissory notes, liability upon one of which was conceded, the controversy turning upon the question of defendant’s liability upon the other. This note was made by one Midgley to the order of the plaintiff, and indorsed by defendant. The evidence showed that these notes were renewals of two former notes, which were indorsed in the same way, and delivered to the plaintiff as the' outcome of an arrangement for an extension. The defendant’s contentions are that there w-as no evidence to show that his indorsement was for the purpose of enabling the maker to obtain a credit of the payee, and that the maker had paid the note. The plaintiff presented his testimony in a rather confused way, so that it is somewhat difficult upon the record to determine whether the arrangements made at the time of the giving of the notes related to the original or these renewal notes ; but giving, as the jury did, the most favorable inference to plaintiff’s testimony, this was met by the defendant’s to the effect that he indorsed it because the plaintiff so wanted it, and because he wanted to handle it, and not for the purpose of giving credit to Mr. Midgley. If true, this tended to show that the indorsement was to benefit Montgomery, and not to give credit to the maker. In this condition of the record, it was important that the law bearing upon the question should be clearly stated ; and the court, at the outset of its charge, correctly stated the rule, as laid down in Coulter v. Richmond, 59 N. Y. 478, “ that where a note is made payable to the order of one person, and before it is delivered to the payee it is indorsed by a third person, that person is not to be considered as liable as indorser to the payee, unless the note was given for the specific purpose of obtaining credit with the payee, and there was an agreement to that effect.” In the application, however, of this rule the court said that if plaintiff determined “ that he would not take a new note unless it was indorsed by Schenck, and if he consented to the renewal, and took the note under those circumstances, then he is liable as indorser to the plaintiff.” This seemingly would make the intention of the holder the test of liability, instead of the intention of the indorser; but the indorser’s liability is to be determined by a consideration of the question as to whether he intended to create a credit for the maker. We think also that the court was inexact in its further charge, referring to the testimony of the defendant that the indorsement was to enable the plaintiff to handle ” the paper, in saying: “If you believe he meant by that expression that he could get the note more readily discounted upon the ground that this defendant had agreed to become the indorser -to him, [the payee], then I charge you that you render a verdict for the plaintiff.” Apart, however, from this, we think that for another reason the judgment must be reversed. The defendant alleged payment by the maker of the note, and attempted to prove such payment by showing that at the time the note was given there was an arrangement about furnishing additional secu rity in the shape of collateral, which was subsequently done by the delivery of a certificate of membership in the Assurance Lloyds of America, and that there was to ¿he credit of this certificate $5,000, the amount originally deposited by Midgley, together with $2,000 surplus; thus giving to plaintiff a certificate representing $7,000, which was indorsed to him, and surrendered, and for which he received a new one in his own name, thereby constituting him a member entitled to all of Mr. Midgley’s rights in the Lloyds. As the note was for but $5,000, we think it was competent to prove the delivery to plaintiff of the certificate entitling him to the $5,000 deposited by Mr. Midgley, together with the profits upon the certificate, and which he took possession of by surrendering and obtaining a certificate in his own name. The court struck out all the testimony offered upon this point, and would not permit Mr. Midgley to testify to the agreement between himself and the plaintiff regarding the certificate, nor permit the certificate itself to be put in evidence; and thus all the proof offered by the defendant tending to support his defense of payment was excluded. We think he should have been allowed to show, if he could, that the plaintiff had obtained payment on the note by reducing the collateral pursuant to his agreement with the maker.

Judgment accordingly reversed, and a new trial ordered, with costs to appellant to abide the event.

All concur.


author: Van Brunt, P. J.

text:
    Railway Equipment and Publication Company, Resp’t, v. Lincoln National Bank, App’lt.

      (Supreme Court, General Term, First Department,

      Filed November 16, 1894.)

    1. Bills and notes—Bona fide holder.
    An indorsee is not a bona fide holder of a check, payable to a corporation, which is indorsed over by an officer, not authorized or accustomed to conduct its financial affairs.
    2. Corporation officers—Power.
    The manager is not authorized, by virtue of his office, to bind the corporation by his signature to commercial paper.
    3. Evidence—Corporation—By-laws.
    The by-laws of a corporation are admissible in evidence to show the respective powers and duties of its officers.
    Appeal from a judgment in favor of plaintiff.

      B. H. Tabor, for app’lt; Be Witt C. Morrell, for resn’t
   Van Brunt, P. J.

The points presented by the counsel for the appellant on this argument contained about eight pages of facts alleged to have been established by the evidence, without a single reference to the folios of the evidence which it is claimed establishes those facts; and we might very well, in the disposition of this appeal, because of his flagrant violation of rule 40 of the .general rules of practice, have refused to discuss in any particular the facts.

After having read the case with great care, it may not be improper to observe that we have been utterly unable to find any evidence to sustain the assertion of the establishment of many of the facts contained in this statement. This action was brought to recover for the conversion of certain checks belonging to the plaintiff. It is conceded that these checks had been the property of the plaintiff, and the question was whether the defendant obtained a good title to them because'of their indorsement in the name of the plaintiff by a man of the name of Sechrist, who occupied the position in the plaintiff's corporation of general manager. It is urged upon the part of the appellant that it is shown by the evidence that Sechrist was the general manager of the corporation, received all communications to the corporation ; that all moneys collected from debts due or checks received in connection with the business first went into his hands as manager, and, as such manager, he collected and receipted for such moneys; that he executed contracts generally for the corporation; and that he was, in fact, the corporation so far as the management of the business was concerned. What might be the conclusion as to his authority in reference to the indorsement of these checks had any such condition of affairs been established by the evidence it is not necessary to discuss here, because the evidence establishes no such general authority upon the part of manager in reference to the affairs of the corporation. It is not shown that he ever indorsed a check, except those the proceeds of which he has stolen, or that he ever receipted a bill, or, in fact, that he ever had anything to do in respect to the financial affairs of this corporation. There is no evidence that he ever paid out any money. It is true that he certified vouchers, and the treasurer paid the vouchers upon such certification. It is also true that he executed some contracts, being thereto authorized by the executive committee of the corporation. But he did not execute contracts generally, except, perhaps, such as might be called for by the ordinary routine business of the corporation; and there is no evidence whatever that he had any authority to sign the name of the corporation to any piece of commercial paper. It is undoubtedly true that, in respect to officers of corporations, a party has a right to assume that they possess the authority to act for the corporation in those capacities in which the corporation holds them out to be its representative, or permits them so to act; but in the case at bar there is no evidence that the corporation had ever permitted Sechrist to act in reference to the financial affairs of the corporation. He was subject to the executive committee in all that he did; and while, perhaps, he may have acted in some cases without the authority of the committee, there is no instance in which any authority is shown to have been conferred upon him to act in reference to the financial affairs of the company. The fact that he was held out as the manager of the business of the corporation in no way authorized the conclusion that he had the right to bind the corporation by his signature to commercial paper. This was out of his department. He had nothing to do with the finances of the corporation. All that he did was to receive and open the mail; and whatever moneys and checks were received in the mail his duty was to transfer over to the treasurer, whose duty it was to deposit them in the bank designated by the board of directors as the bank of deposit of the corporation. It further appears that these checks which were appropriated by the manager of this corporation were not collected in the ordinary manner in which commercial paper is collected. It appears that the checks which formed the subject of this litigation were given to a saloon keeper, who cashed them, and deposited them with the defendant in this action. This saloon keeper cannot say whether he had not cashed 50 or 100 similar checks for this man, and indorsed in this way. Can it be said, when transactions are conducted in this irregular fashion, that the taker of paper under these circumstances is a holder without notice, putting him upon inquiry in respect thereto ? It was endeavored upon the part of the defendant to show that upon two occasions the party w'ho cashed the checks went into the office of the company, and, in the presence of the treasurer, had Sechrist, in one case, put a date upon some paper, and, in the other, amend his indorsement. The treasurer, who was a witness for the defendant, denies ever having been present upon any such occasion, and it is very doubtful if he was. The referee has chosen to believe the treasurer in that regard, and we see no reason to differ from his conclusion. The facts, as established upon the trial, show an utter want of authority upon the part of this manager to indorse these checks and collect the proceeds so as to bind the plaintiff.

The only exception to which it is necessary to call attention is that in respect to the admission of the by-laws of the corporation. We do not think that the referee committed any error in admitting these by-laws in evidence. The corporation had a right to show what, according to the laws which were to govern the officers of the company, their respective duties were. It is true that, as far as the public were concerned, these by-laws were not conclusive evidence. But it became necessary upon the part of the defendant to show that there had been such a deviation (if such were the fact) from the requirements of the by-laws, in respect to the management of the affairs of the corporation, that the defendant had the right to assume that the officers of the plaintiff had other powers than those which were committed to them by the by-laws; and, as has already been observed, the defendant has utterly failed to establish any such general authority upon the part of this manager as would make his indorsement binding upon the plaintiff. The judgment should be affirmed, with costs.

All concur.


author: Follett, J.

text:
    Joseph B. Schram, Resp’t, v. Henry Werner et al., Impleaded, etc., App'lts.

      (Supreme Court, General lerm, First Department,

      Filed November 16, 1894.)

    Appeal—Exception to be heard at general term.
    When a motion for a new trial on exceptions has been made on the minutes and denied, an order, directing the exceptions to be heard in the first instance at general term, is void.
    Motion for a new trial on exceptions, ordered to be heard at general term in the first instance.

      Alberius Perry, for pl’ff; Nathaniel Myers, for deft Werner; Joseph Fettrelchi for deft Strauss.
   Follett, J.

All of the defendants answered except Samuel "Schram, who made default, but Efron did not appear on the trial, and the questions presented by the record arise between the plaintiff and the defendants Werner and Strauss, doing business under the firm name of Henry Werner. Their answers are identical. At the close of the evidence they moved that a verdict be directed in their favor, which was denied, but no exception was taken, and the plaintiff moved that a verdict be directed in his favor, which was granted, and the defendants excepted. Neither party asked to have any issue submitted to the jury. Upon such a record only questions of law can be raised on a motion for a new trial on the minutes, on a case, on exceptions, or on an appeal. Provost v. McEncroe, 102 N. Y. 650; Kirtz v. Peck, 113 N. Y. 222; 22 St. Rep 733. After the verdict was directed, the defendants moved on the minutes that it be set aside, and a new trial granted (1) on the exceptions ; (2) because the verdict was contrary to the evidence ; (3) because the verdict was contrary to law,—which was denied, and an order which, in addition, directed that the defendant’s exceptions be heard in the first instance at general term, and that judgment in the meantime be suspended. How the exceptions can be heard in the first instance at general term, under § 1000 of the Code of Civil Procedure, when they have been heard pursuant to § 999, is not apparent to the court. In case a motion for a new trial is made and denied under section 999, and an order is entered which the defeated party desires to review, it can be found only by an appeal from it; but in this case no appeal has been taken. In case a motion for a new trial is made on the minutes, on exceptions taken, which is denied, and an order entered,. an order directing that the exceptions be heard in the first instance at general term • is not authorized by the Code, and the motion will not be entertained by this court. Byrnes v. D. & H. C. Co.,7 Wkly. Dig. 549.1 In that case a verdict was rendered in favor of the plaintiff, and the defendant moved for a new trial on the minutes, which was denied, and an order entered. An order was then made directing that the defendant’s exceptions be heard at the general term in the first instance. The defendant appealed from the order, denying the motion for a new trial, which appeal, and the motion on the exceptions, were heard on the same record. The general term of the' third department held that the order directing the exceptions to be heard at general term in the first instance was a nullity, but reviewed the case on the appeal from the order. Ross v. Harden, 42 N. Y. Supr. Ct. 427, and Garner v. Mangam, 46 N. Y. Supr. Ct. 365, are sometimes cited as authorities for the position that exceptions may be ordered to be heard in the first instance at general term after a motion for a new trial has been made on the minutes and denied. In the first of the cases last cited a verdict was rendered, and a motion was made on the minutes for a new trial on the ground that the verdict was contrary to the evidence, was excessive, and contrary to the charge, which was denied, and an exception taken, but no order seems to have been entered upon the denial of the motion. Thereupon the exceptions were ordered to be heard at general term in the first instance, and they were so heard and determined. It will be offi served that the motion on the minutes was not founded on exceptions. In the second case cited a verdict was rendered for the plaintiff, and the defendants moved on the minutes to set it aside, and for a new trial, which was denied, and an order entered. Thereupon an order was entered directing the exceptions to be heard in the first instance at general term. A motion was made at special term to set aside this order, which was denied, and was affirmed on appeal by the general term of the superior court. The report of the case does not show whether the motion for a new trial was founded on exceptions—errors of the court —as well as on the errors of the jury. On’tho motion made in the case at bar there were no errors of the "jury to review, because it had committed none. The jury had simply returned a verdict in obedience to the direction of the court, and the motion for a new trial could have been made only upon the errors of the court, raised by exceptions. When a motion for a new trial on exceptions has been made on the minutes and denied, an order directing the exceptions to be heard in the first instance at general term is void, and the motion should not be heard, We must decline to decide the motion on this record, but, as the plaintiff has not moved to set aside the order, no costs are granted to either party.

All concur.


author: Herrick, J.

text:
    In the Matter of Charles W. Ward for an Order Directing the State Board of Pharmacy to Issue License.

      (Supreme Court, Albany Special Term,

      Tiled October 30, 1894.)

    Statutes—Repeal.
    Chap. 250 of 1893, providing for the licensing of pharmacists, was repealed by chap. 661 of 1893.
    Application for an order, directing the state board of pharmacy to issue a license to practice as a pharmacist.

      John P. Judge, for petitioner; Marcus T. Sun, for State Board of Pharmacy.
   Herrick, J.

Under § 184-of chapter 661 of the Laws of 1893 there are two classes of persons who are entitled to a license to practice pharmacy,—those who have had four years’ experience in the practice of pharmacy, prior to January 1, 1893, and those who hold certificates of designation as pharmacists by examination from any board of pharmacy legally created under the laws of the state. It will be seen that the one class requires a term of years of practical experience, which it is presumed has fitted them for the practice of this very important profession, and which takes the place of and renders an examination of their qualifications unnecessary. Those not having had such experience are to demonstrate their fitness by submitting to an examination. The petitioner seeks to bring himself within the class of those who need not be examined in order to receive their licenses, by showing that for a long number of years he has had practical experience as a phar-' maoist, and seeks to avail himself of the provisions of chapter 361 of the Laws of 1884, as amended by chapter 250 of the Laws of 1893. Section 3 of chapter 361 of the Laws of 18g4 provides that any person who, at the time of the passage of that act, was carrying on the business of retailing or dispensing drugs, medicines, etc., or practicing pharmacy on his own account, or who at the time of the passage of the act should have served five years or upwards at the business of retailing or dispensing drugs and medicines, and who was over the age of 21 years, and who held a certificate of registration from a board of pharmacy legally created, should be granted a license to practice as a pharmacist. Section 4 provided that any person entitled to a license as a pharmacist, as provided for in § 3, who should not apply within 90 days after the organization of a board of pharmacy, as provided for in said act, and make a written application to such board of pharmacy, for such license, should be deemed to have waived his right to-a license under the provisions of said act. The petitioner did not make an application within the time required by that act for a license, and he now seeks to be relieved from his default, under chapter 250 of the Laws of 1893, which is an act amending § 4 of chapter 361 of the Laws of 1884, and which provides, in substance, that where a person was entitled to a license under the provisions of said act of 1884, but who had failed within 90 days to apply to the board of pharmacy for a license, he might, upon giving not less than eight days’ notice to the secretary of the board of pharmacy, apply to the supreme court for an order directing the board to issue said license, and granting the court power to grant such order upon proof of good and sufficient cause shown for the neglect to apply for such license in due time. I have some doubts whether the petition of the petitioner avers facts sufficient to bring him within the provisions of chapter 361 of the Laws of 1884, as amended by chapter 250 of the Laws of 1893; but assuming, for the purposes of this case, that his petition is sufficient, I do not think that the statute of which he seeks to avail himself is still in force. Tinder the provisions of chapter 250 of the Laws of 1893, a person entitled to a license under the act of 1884, but who had not applied within the time required by that act, was enabled to apply at any time to the supreme court, and upon good and sufficient cause shown for his omission or neglect to apply and obtain an order directing a license to be issued to him. There was absolutely no limitation upon the time within which he might apply to the court. The application now here presented is made more than a year after the passage of the amendatory act. That act was passed March'31, 1893. May 9, 1893, chapter 661 of the Laws of 1893, was passed, and in it provision was made for a state board of pharmacy, and for the licensing of pharmacists. That act was evidently intended to take the place of all statutes theretofore passed in relation to those matters, and by it chapter 361 of the Laws of 1884 was expressly repealed (see schedule of laws repealed, page 1562, Laws 1893); an.d, the whole of said act being repealed, chapter 250 of the Laws of 1893, being an amendment too single section thereof, fell with it. Thepetitioner, however, contends that both these acts, having been passed at the same session of the legislature, should be construed together,, and full force and effect given to each, so far as they are not in conflict. Assuming that to be the proper construction, I do not see how the petitioner is benefitted, because it seems to me that chapter 250 and § 184 of chapter 661 of the Laws of 1893 are in direct conflict upon the point in question. As we have seen, by chapter 250,. any person who is entitled to a license under § 3 of chapter 361 of the Laws of 1884, which was passed on the 24th day of May, 1884, who had neglected to apply for a license within the required time,, might, upon application to the supreme court, procure an order directing the issue of such license, and that there was no limitation of time within which he must apply. Section 184 of chapter-661 of the Laws of 1893 limits the time within which such application shall be made. It provides as follows: “Any person, yrho, on the 24th day of May, 1884, was entitled to be licensed as, a pharmacist, but who failed within ninety days thereafter to apply to the state board for a license may, within ninety days after this chapter takes effect, on eight days’ notice to the secretary of such board, apply to the supreme court, at a special term, in the district where such applicant resides, for an order directing such board to issue such license; and such court may grant such order on proof of good cause for the neglect to so apply.”

It will be seen, then, that upon the question of time the two statutes are in direct conflict. Under the one first passed the applicant might apply at any time after the passage of the act; under the one last passed he was limited to a period of 90 days after the passage of the act. They cannot stand together; their is no reconciliation between them; and, such being the case, the latter statute must be held to repeal the first. Chapter 661 of the Laws of 1893 was passed, as I have before stated, on the 9th day of May, and § 210 thereof provided that it should take effect immediately. The petitioner made his application more than a year-after the passage of the act.

Further it may be said that § 184 is a restriction upon the appointment of those who were eligible to appointment under tne act of 1884. It will be observed by a reading of this section that there is no period prescribed within which a person must apply for a license who has had four years’ experience in the practice of pharmacy previous to January 1, 1893. They are permitted to apply at any time. But as to those who are qualified to receive-such license at the time of the passage of the act of 1884, they are required to apply within 90 days after the passage of chapter 661 of the Laws of 1893', and show good and sufficient cause why they neglected to apply under the act of 1884, and within the time-provided by that act, and if they fail to make application within that time I can see no provision in the statute for their obtaining a license, except by passing an examination.

The petition of the petitioner must therefore be denied.


author: O'Bbien, J.

text:
    Societe des Huiles d’ Olive de Nice, App’lt, v. James Rorke, Resp’t.

      (Supreme Court, General Term, First Department,

      Filed November 16, 1894.)

    Trade-mark—False representations.
    The evidence was held not to establish that the trade-mark, used by defendant on his label, was a representation that the goods sold by him, were manufactured by plaintiff, or that plaintiff ever obtained title to the label sought to be enjoined.
    Appeal from an order" denying an injunction pendente lite.

      George Putman Smith, for app’lt; Aaron Pennington Whitehead, for resp’t.
   O'Bbien, J.

The defendant and one Thomas N. Dwyer were partners from February, 1884, until October, 1893, in the wine and olive-oil business, under the firm name of Thomas N. Dwyer & Co. They purchased their oil in Europe, w’hich was put up in cases, tins, and bottles bearing a certain label, concerning the right to use which this controversy arises. The plaintiff’s claim was that the oil was manufactured by one Audemard, who in 1887 transferred to the plaintiff his business and property, and that, in the sale of their oils, Dwyer & Co. acted as agents. They used the following label:

In 1893, Dwyer & Co. dissolved, and the assets were sold at auction by the receivers of the firm, among which assets was in-eluded the label that had been used upon the oil, which was purchased by the defendant, who obtained from the receivers a bill of sale or assignment thereof. Thereafter, the defendant, having continued in business on his own account, entered into a contract with another firm at Nice, for oil, which was put up in suitable packages, and upon which was placed the following label:

In a circular to his customers the defendant states :

“I shall continue to import the oil in the same style packages as heretofore, except that I have made a few slight changes in the label by way of improvement. I have substituted the name of the producers,” etc.

The use of this lable is claimed to be an infringement upon the plaintiffs right, and the portion of the circular quoted is charged to be false'and misleading, and intended to impress the public with the fact that the oil now .sold by the defendant is the same oil formerly imported by Dwyer & Go.; and it is to enjoin the use of the label and the sending of the circular that the action is brought.

There is a similarity in the labels, but it is to be noticed that, while the plaintiff’s has upon it the name of Thomas N. Dwyer & Go., the defendant’s has the name of Louis Caisson & Cie, substituted as the producer; and it is clear" that this destroys any claim that there is a representation that the oil now sold by' the defendant is manufactured by the plaintiff. Nor can we find that in the wording of the circular there is any distinct false representation, the source from which the oil was obtained being clearly set forth by giving the producer's name. In other respects there is a similarity in the label; and if it were the property of the plaintiff, in which he had acquired a trade-mark, then it is clear that the defendant should not be permitted to use it.

In the affidavit used upon the motion the plaintiff stated that “in or about the month of May, 1884, deponent, who was then in Europe, secured the agency of the house of Felix Audemard, manufacturers and dealers in olive oil, and a certain label was then devised or contrived by said Audemard for a brand of olive oil and this is followed by a statement that the labels were thereafter used upon such oil until Audemard sold his property and interest to the plaintiff, who thereafter continued to use the label upon oils exported by it for Dwyer & Co. That this is not a correct statement of the origin of the label is not only apparent from the answering affidavits, but, as we understand it, is now conceded by the plaintiff. It now appears that the label in dispute was devised in 1884 by Dwyer and one Maignen, while traveling in France ; that at that time Dwyer & Co. were purchasing olive oil from the firm of E. ISTormandin & Co., with which firm Maignen was connected ; and that the label was used upon the oil so purchased down to July, 1886. During that period it bore upon its face the name of Thomas FT. Dwyer & Co., and the name of E. FTormandin & Co. was in no way used, the trademark appearing to be the property of Thomas FT. Dwyer & Co. When Dwyer & Co. began to buy of Audemard, in 1886, no change was made in the label, nor did Audemard’s name appear upon it; and it was thus used until 1889, when, Audemard having sold out to the plaintiff, a new contract was made with Dwyer & Co., by which the latter was to sell no oils but those of the plaintiff, and they were to be sold under the brand of “ Thomas FT. Dwyer & Co.” In this agreement the latter firm are styled “agents,” but the fact appears that they were merely purchasers of oil. It is not claimed that ISTormandin & Co. ever transferred the trade-mark in question to Audemard, nor do we find any evidence that Audemard ever undertook to transfer the label to plaintiff, though it might follow, if the title to the label had been shown to be in Audemard, that by reason of the purchase of the business the plaintiff succeeded to his rights in the label

Apart, therefore, from other questions in the case, we do not think that there is sufficient appearing to show that the plaintiff ever obtained title to the label; and this, we think, would be apparent had the action been brought by plaintiff against Dwyer & Co. prior to the dissolution of that firm to restrain their use of the label. Such labels did not purport to sell the plaintiff’s oil, nor was the plaintiff’s name in any way upon them or connected with them, the contract being, as already stated, that the plaintiff’s oils were to be sold “under the brand of Thomas FT. Dwyer & Co.;” and, in connection with such sales as were made, the label devised by Dwyer and another person, in no way connected with the plaintiff or its predecessor, was used. Whether or not, therefore, the defendant acquired any right to use the label upon the purchase from the receiver, we think it clearly appears that the plaintiff had no such right therein as would entitle it to maintain an action to enjoin the defendant from infringing upon its property rights.

Upon all the facts appearing, we think the judge below was-right, and that the order appealed from should be affirmed, with costs.


author: Yah Bbuht, P. J.

text:
    Lippman Tannenbaum, Resp’t, v. Gyulo Armeny, App’lt.

      (Supreme Court, General Term, First Department,

      Filed November 16, 1894.)

    1. Appeal—Opinion.
    That the opinion and findings of the court do not coincide, is no ground for reversal.
    2. New trial—Mistake op issues.
    The remedy for any misapprehension as to the issues presented, if detrimental to the party, is by motion for a new trial.
    3. Appeal—Amendment op pleadings.
    Where there is any discrepancy between the allegations of the complaint and the findings and judgment of the court, the complaint will be amended in order to support the judgment, if evidence of the facts not alleged was introduced without objection.
    4. Statute op prauds—Part performance.
    Whether the amount paid on a verbal agreement to purchase lands is sufficient to take it out of the statute of frauds, depends on the amount of such contract.
    6. Evidence—Partnership.
    A writing, stating that “ there was a verbal agreement between the parties that in all mining interests they were partners from ” a certain previous time, is admissible to prove such partnership.
    6. Election—Essentials.
    In order that a party shall be bound by an election, he must be made acquainted wiik all the facts pertaining thereto.
    7, Partnership—Accounting.
    A partner may sue his copartner for an accounting as to property transferred to a third person, and compel a surrender 6f his share of the proceeds of such sale.
    Appeal from an interlocutory judgment in favor of plaintiff, and from an order denying a motion to amend the answer made after trial and decision, but before entry of judgment.
    The complaint alleged a copartnership for the establishment of certain mines, which defendant denied. Plaintiff introduced evidence to show that on a certain day the parties and others met in plaintiff’s office, and, in .the business discussion that followed, he accused defendant of having broken the partnership agreement, which defendant then denied. At that time and place the following writing was drawn up by plaintiff, and signed by defendant, and on the trial was introduced by plaintiff, as tending to prove the partnership,: “ Mr. Armeny never said agreement was broken. There was a verbal agreement between Lippman Tannenbaum and G. Armeny that in all mining interests of precious stones that were discovered by either of them they were partners from the time they went together in the Hiddenite mine.” The mine in question was discovered subsequent to their association in the Hiddenite mine.

      Otto Horwitz, for app’lt; F. Bien, for resp’t.
   Yah Bbuht, P. J.

This action was brought to obtain an accounting between the plaintiff and the defendant as to certain alleged copartnership transactions. As to some of these, it was admitted that the parties were copartners ; but, upon the trial as to the others, evidence was offered pro and con upon the question of copartnership; and the case was submitted, it being conceded that, if a copartnership was found by the court, an accounting would be necessary. When the learned court came to decide the case, he filed a memorandum to the effect that, under the pleading, it was admitted that a copartnership had been formed as to the subjects in controversy, the time of the duration of which was not specified; and that there was no evidence that the copartnership ever was dissolved, and that neither of the parties could dissolve the copartnership without the consent of the other, and, in fact, that there was no evidence that the copartnership ever had been dissolved. The memorandum further stated that he had found, as a matter of fact, that the mine in question was partnership property, and that there should be the usual accounting. i,n actions of this kind. The attention of the justice having been subsequently called to the fact that there was evidence tending to show that "the duration of the partnership was to be for a given time, in making his findings he found that fact. Subsequent to the filing of the memorandum above mentioned, and before the entry of judgment, an order seems to have been entered reciting the making of a motion upon the part of the defendant to amend his answer by denial of the paragraphs of the complaint-referred to in the memorandum above mentioned, denying said motion; and from the judgment entered upon said decision, and from said order, these appeals are taken.

The fact that the opinion filed and the findings signed do not coincide in no way forms a ground for the reversal of the judgment, because the opinion cannot be referred to for the purpose of showing the incorrectness of the findings upon which the judgment is based. If there has been any misapprehension during the progress of the trial in respect to the issues which are presented, and which has been of detriment to either of the parties, the remedy is not by appeal from the judgment entered upon the decision rendered at the trial, but by motion fur a new trial, upon the ground that the moving party has been misled in his consideration of the issues presented in the pleadings by the course which was taken by both parties at the trial. In the case at bar the court has found, as a matter of fact, the existence of the copartnership. It does not appear upon the face of the finding that it was because of any admission contained in the pleadings that it arrived at such conclusion ; and there was, nevertheless, evidence in the case sufficient to sustain the finding, and this court cannot interfere with it upon that ground.

It is urged that, even if this be true, the agreement was within the statute of frauds, and therefore void. But there was evidence introduced which tended to show that there had been a partial performance of the agreement of copartnership, and thus the agreement was taken out of the statute of frauds. It is claimed that the amount alleged to have been paid by' the plaintiff on account of the new enterprise was so insignificant that it could not operate in that direction. But the question of significance or insignificance depends upon the magnitude of the main subject; and -in respect to that we have little or no information in this record. We think, therefore, under the findings which have been made, and which are justified by the evidence, that this judgment cannot be reversed.

It is further urged that this action will not lie in respect to the disputed property, as a court will not decree specific performance to perform and carry on a copartnership. But the relief which is granted to the plaintiff in this action is not for the specific performance of a copartnership agreement, but for a winding up of the same, and a division of the property upon a settlement of the accounts between the partners—an action which has become quite familiar to the legal profession and to the courts. There seems to be no reason why, if the plaintiff could establish his rights as a copartner, he should not have the relief which has heen granted to him in this case.

It is urged that there is a material variance between the agreement alleged in the complaint and the proof adduced by the plaintiff, the plaintiff alleging no time for the copartnership, and the court having found that it was to exist for one year; and that there were some discrepancies in the proof and allegations in regard to localities. These objections are of no avail upon this appeal, because, if there is any discrepancy between the allegations of the complaint and the findings and judgment of the court, the pleadings will be amended in order to support the judgment.

It is also urged that a certain exhibit introduced in evidence should not have been admitted for the purpose of aiding the claim of the plaintiff as to the existence of a copartnership. The circumstances under which this exhibit was signed by the defendant were given. They certainly tended to support the claim of the plaintiff that a copartnership existed; and, although the exhibit was not definite as to the terms of the copartnership, yet it was competent evidence, as an admission that there had been an agreement of copartnership between the plaintiff and the defendant, no matter what the terms of such copartnership might be. The attack which is made upon the verity of the document is one which the trial court considered, and he rightfully placed great weight upon it in determing the issue upon which it bore.

The claim upon the part of the defendant that, assuming that the plaintiff had established a partnership, the refusal of the plaintiff to have anything to do with the mines after inspection of the samples submitted by defendant constituted a dissolution of the partnership if one existed, and left the defendant free to-embark with others in the mining schemes, is not well taken, for the reason that there was not a disclosure upon the part of the defendant of the true condition of 'affairs; it being claimed upon the part of the plaintiff that the fact that the defendant had bought this mine was not disclosed by him, and therefore there was no occasion for the plaintiff to make any determination in regard to the matter. He only expressed his opinion in regard to the samples which were shown. In order that a party can be bound by an election, he must be made acquainted with all the facts pertaining thereto.

Some point is made in regard to contradictory findings, and it is urged that a defeated party is entitled to have those taken which are most favorable to him, and may rely upon them in aid of his exceptions. But the variances which it is claimed occur in the finding in no way assist the position of the defendant in regard to the matters in dispute, and some of the contradictions claimed are neither apparent nor real.

The claim made that, the copartnership property having been transferred to another party by the defendant, the plaintiff must rely-upon his action for damages, is not well taken. He has a right to compel a surrender of his share of the proceeds which have been received by the defendant upon the sale of the copartnership property.

There are no other exceptions which it seems necessary to note, and the judgment appealed from should be affirmed.

In respect to the order denying the motion to amend the pleadings, it is to be observed that it does not appear to have been made upon any papers. There is not even a notice of motion, so far as we have been able to discover, in the record; simply a bald order denying an amendment of the answer. No ground is presented for the granting of such a motion; and we can only imagine what the theory of the learned counsel was from what occurred upon the argument of the appeal from the judgment. As already intimated, if the defendant was entitled to any relief, it should have been sought in a different manner, and the order should, therefore, be affirmed.

The judgment appealed from must be affirmed, with costs, and the order affirmed, with $ 10 costs.

All concur.


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    George Storm, Resp’t, v. New York Elevated Railway Company et al., App’lts.

      {Supreme Court, General Term, First Department,

      Filed November 16, 1894.)

    Damages—Elevated bailway.
    The company is not relieved from liability for loss of rentals by reason of the fact that the tenement is better in its construction than the neighborhood, in which it is situated, warrants.
    Appeal from a judgment in favor of plaintiff.

      B. L. Maynard, for app’lts; William 6. Pechham, for resp’t.
   Van Brunt, P. J.

Upon an examination of the evidence in this case, I am of the opinion that the damages awarded were too high. This aparment was built long after the elevated railroad was erected and long after the effects of its operation upon adjacent property were well known. It is therefore difficult to understand how its operation could have caused any falling of the rents in the apartment. It might well be the cause of an inability to procure as advantageous rents as otherwise would have been obtained, but a situation existing before the erection of the building, the effects of which are well known, could not be the cause of a fall in rents once obtained. If any such fall did occur, we must look for some other cause. In the case at bar this cause seems to be apparent. It appears that a fictitious scale of rental was established by the builder of this apartment, undoubtedly to give it an apparent enhanced value, by giving to tenants of these apartments agreeing to pay these excessive rents a period of time free from rent. When these apartments changed hands, this deceptive practice was discontinued, and the scale of rents naturally fell, and it took some time for them to find their level. It is also claimed by the appellant that another reason for the apparent smallness of rent received is because of the fact that the apartment is better in its construction than the neighborhood in which it is situated warrants; that, if situated at the corner of Lexington avenue (where there is no elevated road), it would rent' much better. The char: acter of the neighborhood, so far as it is affected by the existence and operation of the elevated railroad, affords no bar to an owner from improving his property with the best of structures, and the elevated road must compensate for damage to such structure by its continuing trespasses. If it desires to prevent the application of this rule, it must condemn the right upon which it has seized, and which it has appropriated. Until it does this, an owner cannot be prevented from improving his property as he sees fit; and, if such improvements do not make the return they would have done had there been no elevated road in the avenue or street, the elevated road must compensate for such loss. I am of the opinion, therefore, that the damages for lost rentals should be reduced to $7,058, and the fee damages to $9,000, with interest from date of entry of original judgment, the extra allowance to be reduced accordingly, and the judgment, as thus modified, affirmed, without costs. • .

All concur.


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    Francesco Ferrari, Pl’ff, v. James Saitta, Def’t.

      (Supreme Court, General Term, First Department,

      Filed November 16, 1894.)

    Partnership—Successors.
    TJie successors cannot bind the original firm by an acceptance of its draft.
    Submission of a controversy upon an agreed statement of facts.

      L. O. Van Doren, for pl’ff; Ullo, Ruebsamén & Cochran, for def’t.
   Van Brunt, P. J.

The plaintiff herein is a dealer in clivé oil at Porto Maurizio. Italy, and was such. on and for a long time prior to the 5th of November, 1891. In the year 1889 James Saitta, the defendant, formed a copartnership with his son Peter E. Saitta and one Antonio Fugazy, under the firm name of James Saitta, Son & Co., and carried on business at No. 234 Washington street, in the city of New York. Prior to the transaction which is the subject of this submission, there had been other business transactions between James Saitta, Son & Co. and the plaintiff, while the defendant was a member of said firm, and known to be such by the plaintiff. - In February, 1891, the copartnership of James Saitta, Son & Co. was dissolved, and the defendant herein, James Saitta, remained the sole owner of the business of said firm, and continued the business under the same firm name up to the 4th of September,, 1891, upon which day the defendant sold his business, with all the merchandise, good will, and book account, to Philip Saitta and Eugene Jeni, who assumed the firm name of James Saitta’s Son & Co., and continued such business in the same place. On the 13th of August, 1891, a letter was mailed from the office of James Saitta, Son & Co., to the plaintiff, asking him the price of certain cases of oil upon certain terms. This letter was received by the plaintiff on the 25th of August, 1891, and on the 26th he mailed a reply to James Saitta, Son & Co. On the 29 th of September, 1891, the plaintiff received a letter through the mail, dated September 13, 1891, upon the letter head of James Saitta, Son & Co., virtually declining his offer .because of its terms. On the 12th' of October, 1891, the plaintiff addressed a létter of explanation to James Saitta, Son & Co., modifying the terms, and informing his correspondents that if they would telegraph “50” or “100” he would understand that they wanted 50 or 100 cases of oil. Thereafter, on the 26th of October, 1891, the plaintiff received a telegram in the words following: “ 100 we recommend quality. Saitta.” Upon the receipt of this telegram the plaintiff shipped to James Saitta, Son & Co., on the 5th of November, 1891, 100 cases of oil: and simultaneously with the shipment of the oil, and to secure the payment of the purchase price of the same, the plaintiff drew to his own order and indorsed a bill of exchange in duplicate, and forwarded this bill of exchange'for presentation and acceptance through his bankers. The bill of exchange was presented for acceptance at No. 234 Washington street, on the outside of which premises was affixed a sign bearing the name “James Saitta, Son & Co.” The bill was presented to James Saitta, who replied to the person presenting the same that he had sold the business to Philip Saitta ■and Eugene Jeni, and that he had no interest therein, and had never heard of the order in the documents representing the shipment of 100 cases of oil. Thereafter, the holders of the bill of exchange and of the shipping document delivered the documents to Philip Saitta, at No. 234 Washington street, upon his signing an acceptance of the draft of plaintiff. This acceptance was signed: “Accepted Nov. 22, 1891. Jas. Saitta, Son & Co. Jas. 'Saitta’s Son & Co., Successors.” On presentation of the bill for payment, it was not paid, and was duly protested. No notice of the withdrawal of James Saitta from business under the firm name of James Saitta, Son & Co., or of the sale by him of said business, was sent to the plaintiff, or received by him, and he had no knowledge thereof. During all this time James Saitta was of good commercial standing and credit, which fact was relied uppn by the plaintiff, and bis successors were not known to him.

The question presented by this submission is, whether James Saitta was bound by the acceptance of said bill of exchange. If the question submitted had been as to whether the defendant was liable to pay for the. goods in controversy, a different case might have been presented. But there seems to be no ground upon which he can be held upon the acceptance. It was not signed by any person shown to have had authority to sign the name of James Saitta, Son & Co. thereto. Philip Saitta, who accepted the bill of exchange, was not a member of that firm, and was not shown to have any authority to accept bills for the same. He was a stranger to the firm, and had no connection whatever with it. Therefore, his acceptance in the name of James Saitta, Son & Co. in no way bound that firm, for the simple reason, as has already been stated', that he was not shown to have any authority to use the signature of that- firm under any circumstances whatever. It was though the name of James Saitta, Son & Co: had been signed to the acceptance by a complete stranger, without the slightest authority. Liability cannot be predicated upon an acceptance of that kind.

The judgment therefore must be that ;the defendant, James Saitta, is not liable upon the bill of exchange in question.

Judgment ordered accordingly, with costs.

All concur.


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    Archibald W. Berks, Pl’ff, v. Horace L. Hotchkiss et al., Def’ts.

      (Supreme Court, General Term, First Department,

      Filed November 16, 1894.)

    Attorney and client—Summary proceedings.
    A client cannot maintain summary proceedings against his attorney to compel him to perform a stipulation to vacate, without cost to such client, a judgment obtained against him through the attorney’s neglect.
    Motion to require an attorney to carry out a stipulation.

      Archibald W. Berks, in pro. per.

   Per Curiam.

We do not think that this proceeding calls for any summary action on our part. It is true, there are charges of duplicity and deception, but the real grievance which the client seems to have results from the alleged neglect of his attorney to appeahin time, whereby\such right was lost to his client. This, the client understood, gave him a right of action against the attorney, and he claims that it was in consideration of his agreement to defer such action that the stipulations set forth in the papers were made, under one of which it is claimed the attorney agreed to devise other legal actions, and to move to vacate the judgment, arid also to employ another lawyer in that connection, without cost to the client. If the attorney has- been guilty of a breach of the stipulations, the client is remitted to his original position, and has his right of action against his attorney for damages. It is not our province to interfere in quarrels between client and attorney, except where the latter has been guilty of such unprofessional and dishonest conduct as would require us to disbar, or in other ways discipline him. Here, however, it would appear that the attorney, through neglect, failed to serve his notice of appeal in time, and thus lost such right to his client; and the most serious misrepresentations claimed to have been made by the attorney were subsequent to this event, and were made, as alleged, in endeavoring to explain such defaults, or were the cause of the attorney’s entering into stipulations which it is insisted he has not fulfilled, and which it was the purpose of this motion, among other things, to compel him to do. It is not ve.ry clear how we could compel the attorney to proceed with the actions or proceedings, with a, view to remedying the omission to appeal in time, or how we could compel him to pay other lawyers, so that the plaintiff might have his rights restored at the cost and expense of the attorney. We think that the client should be remitted to his action at law, when, if he proves the facts that are here alleged against.the attorney, he can recover such damages as he is shown to have suffered by reason of such attorney’s neglect

The application is accordingly denied.


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    Jacob Ter Kuile, Resp’t, v. Frank E. Maraland, App’lt.

      (Supreme Court, General Term, First Department,

      Filed November 16, 1894.)

    Pleadings— Counterclaim.
    In an action for the conversion of money obtained by the defendant which, under the contract, he had no right to collect, he may set up that plaintiff had broken the contract and had conspired with others to deprive him of his rights thereunder and that a balance was due him.
    Appeal from an interlocutory judgment, sustaining a demurrer to a counterclaim set up in the answer.
    It is alleged in the complaint that April 1, 1892, the litigants and Orme, Evans '& Co. executed a written contract by which defendant agreed to solicit orders from dealers in the United States and Ganada for goods manufactured by said firm, which orders were to be in writing, and all bills for goods were to be made out in the-name of “Frank E. Maraland, Agent,” and that it should be stated on their face that they were to be paid to the plaintiff. It is also alleged that the defendant, “pursuant to said contract, ” procured orders from divers purchasers for goods to the amount of $2,055.50, which were furnished by the plaintiff, and that the defendant wrongfully and without authority from the plaintiff collected the amount due for the goods ($2,055.50), and converted it to his own use. The defendant annexes a copy of the contract of April 1, 1892, to his answer, and denies that he made the sales described in the complaint, and denies that he converted the sum therein mentioned, and sets up by way of counterclaims (1) that goods were sold under said contract to divers persons, on orders procured by the defendant, the price of which the plaintiff collected, and that there is due the defendant, by the terms of the contract, at least $2,000 ; (2) that the plaintiff broke the contract by refusing to pay the duties on goods received from Orine, Evans & Co., and also neglected to advise the firm of divers orders obtained by the defendant, which were not filled, to his dainage in the sum of $2,000; (3) that under the contract the defendant had the exclusive right to soliet orders in the United States and Canada for the goods manufactured by Orme, Evans & Co., and that the plaintiff and said firm conspired and confederated together, wrongfully and fraudulently, to deprive, and did deprive, the defendant of such right, to his damage of $2,000. The plaintiff demurred to the first and second counterclaims on two grounds: “(1) It appears on the face thereof that the counterclaim is not of the character specified in §• 501 of the Code of Civil Procedure, in that a counterclaim to recover money alleged to he due under a contract cannot be allowed in an action for conversion. (2) The counterclaim is insufficient in law, upon the face thereof. ” The plaintiff demurred to the third counterclaim! on three grounds: “(1) It appears on the face thereof that the counterclaim is not of the character specified in § 501 of the Code of Civil Procedure; in that a counterclaim to recover for an alleged conspiracy and confederation to deprive the defendant of the benefit, of an exclusive right to sell certain goods under a contract, cannot be allowed in an action for conversion. (2) It appears on the face thereof that the counterclaim does not state facts sufficient, to constitute a cause of action. (3) The counterclaim is insufficient in law, upon the face thereof.” The demurrer to the three counterclaims was sustained, and leave granted the defendant to serve an amended answer on paying the costs, and an interlocutory judgment was entered, from which the defendant appeals.

      William A. Abbott, for app’lt; Henry A. Forster, for resp’t.
   Follett, J.

The defendant may plead as a counterclaim a cause of action against a plaintiff which tends to diminish or defeat the plaintiff’s recovey', provided the cause of action is embraced within the two subdivisions of § 501 of the Code of Civil Procedure here quoted :

“1. A cause of action, arising out of the contract or transaction set forth in the complaint as the foundation of the plaintiff’s claim, or connected with the subject of the action.
‘‘2 In an action on contract, any other cause of action on contract, existing at the commencement of the action.”

The counterclaims set up in the answer are not embraced within the second division, and the question is whether they are embraced within the first subdivision. The first subdivision provides that a cause of action in favor of a defendant, and against a plaintiff, may be pleaded as a counterclaim in case it arises (1) out of the contract set forth in the complaint; (2) out of the transaction set forth in the complaint; (3) or is connected with the subject Of the action. The fact that the plaintiff in this action seeks to recover for the defendant’s conversion of money is not decisive of the question under consideration. The first subdi vision does not limit the right of a defendant to interpose counterclaims to an action brought on a contract, but gives the right to interpose counterclaims in an action brought to recover damages for a tort, if the causes of actions set out in the complaint and in the answer arise out of the same contract or transaction, or relate to the same subject. Mor does the subdivision provide that the cause of action set up as a counterclaim must arise out of a contract, but it authorizes the interposition of causes of actions arising out ol torts as counterclaims. The theory of the Code is to authorize all connected causes of action, whether arising out of contracts or torts, to be litigated in the same action. The cause of action set out in the complaint arises out of the alleged tortious breach, -by the defendant, of the written contract of April 1, 1892, to wit, the collection and conversion to his own use of money which, by that contract, he had no right to collect, but which should have been paid by the purchasers of goods to the plaintiff The plaintiff, as the foundation- for his cause of action, alleges what he asserts is the legal effect of the contract of April 1, 1892, which he must introduce in evidence before he will be permitted to give evidence tending to show that the defendant wrongfully broke it. All of the counterclaims arise out of the alleged nonperformance by the plaintiff of that contract, and, besides, they are connected with the subject of the action. In other words, the cause of action set out in the complaint and the causes of action set out in the answer as counterclaims arise out of the alleged breach of the same contract, and the causes of action set out in the answer may be pleaded as counterclaims under § 501. In Carpenter v. Manhattan Life Ins. Co., 93 N. Y. 552, the doctrine that a counterclaim cannot be allowed in an action to recover damages for a tort was repudiated. That case arose out of the following facts : The defendant held the first mortgage on a farm on which the plaintiff held the second mortgage. The plaintiff, while in possession of the farm under his second mortgage, cut 65 cords of wood, but before it was taken away the defendant acquired possession of the farm through the foreclosure of its mortgage, on which foreclosure there was a large deficiency. The defendant refused to permit the plaintiff to remove the wood, and, in an action to recover damages for its conversion, was permitted to set up, as a counterclaim, that the farm was inadequate security for the first mortgage, and that the mortgagor was insolvent, which facts the plaintiff well knew, and, being in possession, wrongfully committed waste by cutting the wood, to the injury of the farm of $500. In discussing the question, it was said that the transaction set out in the complaint was the conversion of the wood, and that the counterclaim did not arise out of that transaction, but it was held that it was connected with the subject of the action. The court said : “The counterclaim must have such a relation to, and connection with, the subject of the action, that it will be just' and equitable that the controversy between the parties as to the matters alleged in the complaint and in the counterclaim should be settled in one action by one litigation, and that the claim of the one should be offset against, or applied upon, the claim of the other.”

Thomson v. Sanders, 118 N. Y. 252; 28 St. Rep. 924, was an action on a bond, in which the defendant pleaded a counterclaim arising out qf fraudulent representations of the plaintiff in the transaction out of which the bond arose. It was held that these were causes of action arising out of the same transaction, and the damages arising out of plaintiff’s fraud were available as a counterclaim. It may be regarded as settled that, in case an action is brought to recover damages for a tort, a counterclaim arising out of a contract connected with the subject of the action may be pleaded; and that, in an action on a contract, damages arising out of a’ tort of the plaintiff, if the two causes of action are connected, may be interposed as a counterclaim. The word “transaction,” as used in the section, is broader than the word “contract,” and, in case the defendant’s cause of action arises out of a transaction out of which the plaintiff’s cause of action arose, it may be pleaded as a counterclaim. So the term “subject of the action” is brooded than the term “cause of action. ” In the case at bar the plaintiff’s alleged cause of action arose out of the collection of money which defendant had no right to collect, and the defendant’s counterclaims do not arise out of those facts,—out of the plaintiff’s cause of action; but the counterclaims are “connected with the subject of the action,” which in this case, is the rights and liabilities of the litigants arising out of their performance or nonperformance of the duties owing to each other under their contract, and the mutual transactions thereunder, and they are all connected, within the” meaning of the section of the Code under consideration. Sufficient facts are set up in the answer to constitute causes of action alleged as counterclaims. The interlocutory judgment should be reversed, with costs, and the plaintiff given leave to withdraw his demurrer and reply upon the payment of costs.