text:
    Samuel C. Brookes, App’lt, v. Eliza A. Munoz et al., Resp’ts.

      (Court of Appeals,

      Filed January 13, 1891.)

    Former adjudication—Mortgage foreclosure—Fraud.
    A judgment between parties to a conveyance or mortgage which affirms the validity of the deed or mortgage, whether obtained by default or upon litigation, especially where the exact issue whether or not it was a fraud upon creditors was not presented by the pleadings and decided, does not preclude a creditor not a party to the action from subsequently assailing the original transaction as a fraud upon his rights as a creditor.
    Appeal from, judgment of the supreme court, general term, second department, affirming judgment for defendant
    The controversy in this case is as to the right to surplus moneys derived under a foreclosure of certain first mortgages on lands in the city of Brooklyn, which on and prior to February 13, 1878, were owned by the defendant Michael K. Wilson, and whose title was subject to such mortgages. The surplus moneys, the subject of this controversy, were deposited with the treasurer of Kings county to the credit of the foreclosure action, where they still remain. The plaintiff is the assignee of a judgment recovered by one Oscar Haake against Michael K. Wilson, January 7,1880, for $1,323.81, in the superior court of the city of New York, in an action commenced January 18, 1878, on a cause of action which arose prior to that date. A transcript of this judgment was duly filed in Kings county, and execution issued thereon to the sheriff of that county, which was returned unsatisfied. The validity of the judgment is not questioned. The plaintiff claims the surplus moneys upon this j udgment.
    The defendant Eliza A. Munoz is the administratrix of Elizabeth Jane Olay, and claims to have the surplus moneys applied upon a subsequent mortgage on the premises embraced in the foreclosure action, dated October 2, 1879, executed by George Wilson, the brother of said Michael, to Elizabeth Jane Clay for the sum of $8,500, and recorded in Kings county December 31, 1879. The record title of the premises was in George Wilson when the mortgage to Mrs. Olay was executed and recorded. They were conveyed to him by his brother Michael, February 13, 1878, a few weeks after the commencement of the Haake action, and while that action was pending.
    But prior to the existence of the Olay mortgage and on the 6th day o.f February, 1878, George Wilson, at the request of Michael, executed a deed of said premises to Eliza A. Wilson, the wife of Michael, but the deed was not recorded until October 14, 1881, nearly two years after the recording of the mortgage to Mrs. Clay. The Clay mortgage was executed by George Wilson at the request of Michael, and was by him delivered to Michael, who placed it upon record. After the .death of Mrs. Clay and on or about the 10th of April, 1882, the defendant, Eliza A. Munoz, commenced an action to foreclose the mortgage to her intestate, making Michael K. Wilson, Eliza A. Wilson, his wife, George Wilson and others, defendants. But neither Haake, the judgment creditor, nor the plaintiff, his assignee, were made parties. Michael K. Wilson did not appear in the action, but made default. Eliza A. Wilson, his wife, and George Wilson appeared and put in separate answers, in which they alleged in substance that the mortgage was without consideration and not founded upon any indebtedness and was never delivered to the mortgagee. The issues were tried and resulted in a judgment for the plaintiff and a decree of foreclosure. The trial judge found that the deed from Michael K. Wilson to George Wilson, and from the latter to Eliza A. Wilson, were without consideration, and were made with intent to hinder, delay and defraud the creditors of Michael. But he found that Michael was indebted to Mrs. Glay at the date of the mortgage, and that Michael K. Wilson procured and induced the making, execution, delivery and record of said mortgage for the purpose of securing payment of his indebtedness to the mortgagee. The case came on appeal to this court and the judgment was here affirmed. Ill ET. Y., 295 ; 19 1ST. Y. State Rep., 372.
    In the present action the plaintiff sought to assail the bona fides of the mortgage to Mrs. Clay. The defendant, Mrs. Munoz, her administratrix, set up in her answer the judgment in the action of foreclosure as an estoppel by record upon the question of the validity of the mortgage. The record was admitted in evidence by the trial judge. The judge found that the deed from Michael EL Wilson to George Wilson, of February 13, 1878, was without consideration and made to defraud the creditors of Michael. But he refused to find that the mortgage to Mrs. Glay was without consideration or was fraudulent as to creditors of Michael, and affirmatively found that it was given to secure an indebtedness from him to the mortgagee, and awarded judgment that the mortgage was a valid and subsisting lien on the surplus moneys, superior to any claim of the plaintiff’s. The general term affirmed the judgment of the special term.

      A. W. Gleason, for app’lt; Wm. T. Gilbert, for resp’ts.

       Reversing 25 N. Y. State Rep., 1035.

   Andrews, J.

Upon the facts it is very difficult to resist the conclusion that the mortgage to Mrs. Glay was a part of the scheme of fraud originated by Michael K. Wilson for the purpose of putting his property beyond the reach of his creditors. It ■ has been adjudged that the conveyances of Michael to his brother, and from the latter to Eliza A. Wilson, the wife of Michael, were made to defraud the creditors of Michael. The suit of Haake was then pending, and in October, 1879, a few days before judgment was recovered therein, George, the fraudulent grantee of Michael, at the latter’s request, executed a mortgage for $8,500 to a poor woman who lived by her daily labor, in consideration, as is alleged, of a loan for that amount made by her to Michael EL Wilson.

But the question of law here is as to the effect of the foreclosure judgment as an adjudication in this action, as against this plaintiff, of the bona fides of the mortgage. The general principles upon which the doctrine of res adjudica ta is founded do not seem to have any appropriate application to prevent the plaintiff from litigating the question of fraud in this action. The plaintiff was not a party to the foreclosure action. His status as creditor may, in a loose sense, be said to be under the judgment debtor. But in attacking a conveyance or mortgage made by his debtor in fraud of his rights as creditor, he claims, not under, but in hostility to the debtor and his grantee or mortgagee. By the general rule a judgment binds parties and privies, but not strangers. '

The defendants rely upon a class of cases which hold that a judgment recovered for a debt establishes not only the relation of debtor and creditor between the parties to the judgment, but also as to third persons, so as to preclude them, in the absence of fraud or collusion, from questioning the validity of the judgment or denying that the debt upon which it was rendered actually existed.

The case of Candee v. Lord, 2 N. Y., 269, is a leading authority upon this point. That was a judgment creditor’s action charging that the defendants had under fraudulent .judgments sold the debtor’s property and received the proceeds, and the defendant sought to assail the plaintiff’s judgment on the ground that the endorsement upon which the action was brought was forged. No fraud or. collusion was alleged or shown between the parties in the procuring of that judgment, and it was held that the defendants were bound and could not re-litigate the question of forgery in the creditor’s action.

In several subsequent cases of the same general character, brought to set aside transfers in fraud of creditors, it was held that the defendants could not, in the absence of fraud or collusion, impeach the consideration of the judgment upon which the action was founded, or be permitted to show that the contract upon which it was rendered had in fact no existence or was not enforceable. Burgess v. Simonson, 45 N. Y., 225 ; Carpenter v. Osborn, 102 id., 552; 2 N. Y. State Rep., 520; Decker v. Decker, 108 N. Y., 128; 13 N. Y. State Rep., 131. But these cases do not, we think, go to the extent of supporting the claim of the defendants in this case, that the judgment in the foreclosure action conclusively establishes, as against this plaintiff, that the mortgage there sought to be foreclosed was valid and founded upon a good consideration, and was not executed in fraud of creditors of the mortgagor. It is a universal rule of law, founded upon the plainest morality, that a party coming into a court of justice for relief must come with clean hands. Upon this principle it was held in Alexander v. Gould, 1 Mass., 165, that although a deed is fraudulent as to creditors, yet it cannot be avoided by a creditor the consideration of whose judgment was illegal. In Humes v. Scruggs, 94 U. S., 22, it was held that a decree in a suit between husband and wife, confirming a conveyance of real estate made to her by him, does not bind his assignee in bankruptcy suing to set aside such conveyance on the ground that it was made in fraud of creditors.

Hunt, J., in his opinion very appositely says, “there would be little difficulty in making and sustaining fraudulent transfers of property if the parties thereto could by a subsequent suit between them so fortify the deed that no others could attack it.” We are of the opinion that a judgment between parties to a conveyance or mortgage, which affirms the validity of the deed or mortgage, whether obtained by default or upon litigation, especially where the exact issue whether or not it was a fraud upon creditors was not presented by the pleadings and decided, does not preclude a creditor not a party to the action from subsequently assailing the original transaction as a fraud of his 'rights as a creditor. This is as far as it is necessary to go in this case to justify a reversal of the judgment below. The finding that the mortgage in question was valid and founded on a good consideration may have proceeded on the effect given to the adjudication in the foreclosure action. There was no direct issue in that case upon the question whether the mortgage was executed to hinder, delay or defraud the creditors of Michael K. Wilson, and without now deciding whether if that issue had been squarely presented the judgment would have concluded the present plaintiff, we reverse the judgment below on the ground that as the question was not put in issue directly the judgment does not bind the plaintiff. See Raymond v. Richmond, 78 N. Y., 351.

Judgment reversed, new trial granted, with costs to abide the event

All concur.


source: Caselaw Access Project

author: Gray, J.

license: Public Domain

text:
    William R. Barr et al., App’lts, v. The N. Y., Lake Erie & Western R. R. Co. et al., Resp’ts.

      (Court of Appeals,

      Filed January 13, 1891.)

    1. Fbaud—Lease—Equity.
    Property cannot be retained and enjoyed and payment of a stipulated rental therefor refused by its holder on the plea of fraudulent practices or because of the criminal conduct involved in the making of the contract by which the property was transferred and'the obligation to pay imposed. Aid of equity will be denied where the contract has been executed; unless the party claiming to be injured acts diligently in asserting the right to rescind, and honestly by yielding up what came to it, and continues to be held and enjoyed under the contract.
    2. Same.
    Fraud furnishes ground for rescinding a contract and for avoiding an obligation imposed, but while serving to divest the obligation it cannot be availed of as a means of continuing the possession of the property which the contract, legal in itself, was designed to and did transfer.
    Appeal from judgment of the supreme court, general term, first department, affirming a judgment of special term dismissing plaintiffs’ complaint
    The plaintiffs, as stockholders of the Suspension Bridge & Erie Junction Railroad Company, have brought this action against that company, the New York, Lake Erie & Western Railroad Company and Hugh J. Jewett, as receiver of the Erie Railway Company, as defendants, to compel the payment of certain rental moneys, which were payable according to the terms and provisions of a lease under which the New York, Lake Erie & Western R. R. Company is now operating the road of the company. The action was instituted by the plaintiffs, because the lessee company owned all the rest of the stock of the lessor company and through its possession had obtained the control of its management and board of direction. Upon the trial, the complaint was amended by striking out the Erie Railway Company as a party defendant and the recovery sought is actually against the present corporation, which is in possession of the leased road as successor to the Erie Railway Company and to Jewett as its receiver, and the demaud covers the period commencing with and continuing since his possession and operation ás such receiver. The facts proved concerning the origin and history of the lease in question and which exhibit the acts of all the parties are not in dispute.
    In October, 1868, the plaintiffs’ company was incorporated to-construct and operate a railroad in order to connect that of the Brie Company, at the city of Buffalo, with the Canadian system of railroads by way of the Falls of Niagara. This was unquestionably a desired and much needed connection. The then Erie management promoted the formation of this company, and some of its incorporators were directors of the Erie company. Various schemes of construction were prepared and abandoned, but in June, 1870, a contract was made by which Mortimer Smith agreed to build the road, and the Suspension Bridge Company agreed to issue in.payment therefor $1,000,000 of its seven per cent bonds, and $500,000 of capital stock; these issues, to constitute the whole of its stock and bonded debt Of the directors, who authorized this contract, several' were also Erie directors. Smith was an assistant secretary of the Erie company, and was a mere figure head, or conduit of interest; for, on the same day, a syndicate was formed, composed wholly of members of the board of directors of the Suspension -Bridge Company, whose agreement was to subscribe and take the stock -and bonds from Smith as they were received, and to whom, a few days later, in June, upon their request, Smith assigned his contract. In July, 1870, the lease in question of all the property and franchises of the plaintiffs’ company was executed. Its execution had been authorized, in the previous month, at a special meeting of the Erie board of directors, their resolution reciting the project of the road, the issuance of bonds for completing it, and directing a lease, in which the rent reserved should be fixed at a sum equal to thirty per cent of the gross earnings of the leased road, and guaranteeing that such sum should never be less than $105,000 per annum. In November following, the executive committee of the Erie Company, by resolution which recited the making of the lease and the guarantee by the lessee of a rental of $105,000, equal to seven per cent interest on the issue of bonds, and seven per cent dividend upon the $500,000 of capital stock, authorized the execution of a guarantee of the payment of a semi-annual dividend of three and a half per cent upon the stock.
    In December, 1870, the road being then almost but not in all respects completed, it was taken possession of by the Erie company. In February, 1871, the directors of the lessor company formally ratified the lease. There had been expended by the syndicate in construction work about $850,000, of which plaintiff Barr and plaintiff Bush’s assignor had contributed each their due proportion. The stock and bonds had been issued to the piembers of the syndicate and, of the former, plaintiff Barr received 335 shares and plaintiff ■ Bush’s assignor received 330 shares, of which eighty were assigned to Bush. The Erie company paid the full amount of the rental moneys, in interest on bonds and dividends on the stock, down to January 1, 1872, and since then -only an amount of money equal to the interest on the issue of bonds has been paid. In March, 1872, a change occurred in the Erie management, which was overthrown, and the road then came under the direction of a board presided over by John A. Dix. In May, 1875, the Erie company became insolvent, and Hugh J. Jewett was appointed by the court as its receiver. Under the court’s authority to that effect, he continued to operate the leased road as a part of the Erie’s system of connections. Between the years 1872 and 1876, the Erie company and its receiver Jewett acquired, at various prices, by negotiation and by purchase, practically all of the stock of the Suspension Bridge company, except wfiat the plaintiffs possessed. With this ownership of the capital stock, the management of the Erie company and of its successors in interest obtained complete control and have elected directors in their company’s interest. In 1878, the defendant, the New York, Lake Erie & Western Bailroad Company, became the owner of the railroad properties and assets of the Erie company, by conveyance from a purchasing committee, who bought them in at a sale on mortgage foreclosure, and included in this conveyance was the leased property of the Suspension Bridge & Erie Junction Bailroad Company. The grantee also covenanted to assume the payment of all of the receiver’s liabilities. At all times the Erie company, its receive^ and its successor, the present company, have operated the Suspension Bridge road under the lease, as an integral part of the Erie road; but they never have paid since January 1, 1872, other rent than $35,000 semi-annually, in the shape of the interest due upon the lessor’s bonds. It was found by the trial court that at no time would thirty per cent, of the earnings from the operation of the leased road equal the guaranteed rent
    The lessor company’s stockholders had, in August, 1872, requested its board of directors to take the proper steps to collect the amount due by the terms of the lease, and that board did direct a formal demand to be made and proceedings to be taken. It was subsequent to these steps that measures were taken and negotiations entered into by the Erie Company to purchase the whole of the lessor’s stock. The trial court found that the “ syndicate, consisting of members of the board of directors of the Suspension Bridge, etc., Company, and of the Erie Bailroad Company, fraudulently caused the contract to be made * * * with Mortimer Smith,” and its assignment to themselves, and that it was designed for their benefit and gain solely, and to the loss of the Erie and Suspension Bridge Companies. He found that the execution of the lease and of the guarantees was fraudulently induced by the syndicate. His conclusion, upon all the facts, was that the complaint should be dismissed, and the defendants had judgment accordingly. At general term the judgment was sustained. The opinion of the learned judge who spoke for that court proceeded mainly upon the ground that as there were four persons interested in tne contract for the building of the road, and in the receipt of the bonds and stock payable therefor, who were directors in each, of the companies, it could confer no rights, and, to use his words, “ the agreement of lease created no binding obligation.” It was “incapable of performance through the instrumentality of courts of justice.” Rescission, in his opinion, was not required to enable the parties to the agreement to avail themselves of the invalidity of the lease, and continued possession does not aid the right to recover rental moneys. From the judgment of affirmance the plaintiffs have appealed to this court.

      IS Him Boot, for app-’lts; Wm. W. MacFarland, for resp’ts.
   Gray, J.

There is no conflict of evidence, nor any dispute about the facts which I have stated above. The plaintiffs’ appeal questions the correctness of the legal conclusion which has been deduced from these facts. In reviewing that conclusion we should not lose sight of what the action was intended to accomplish, and that was, simply stated, to compel the New York, Lake Erie & Western Railroad Company to pay for the use and operation of the railroad and property of the Suspension Bridge & Erie J unction Railroad Company the consideration, or rental moneys, secured to be paid by the contract of lease of that company, through which the right of possession and use was derived. . This is not an action to compel a specific performance of some executory agreement, but it is one to compel the defendant, as the successor in interest of the lessee company, to pay that which the contract of lease bound the lessee and its successors to pay as a condition of the right to have and to operate the leased road. The question, which is raised by the defense to the action, is whether the fraudulent nature of the acts and proceedings, by which the railroad was constructed and the contract of lease effected, are matters which have reached in their vice so far as, at this day, to disable the plaintiffs from enforcing against the lessee of their company the payment of the full amount of rental stipulated for in the lease. I cannot think that such is the result, or that the law intends such consequences to attach as the respondent claims and as the courts below have held. There is something repugnant to our sense of justice and a seeming subversion of ideas respecting property rights in the position that property may be retained and enjoyed and payment of the stipulated rental therefor refused by its holder, on the plea of fraudulent practices, or because of the immoral conduct involved in making of the contract by which the property was transferred and the obligation to pay imposed.

We would naturally reason that these considerations furnished grounds for repudiating a transaction so tainted and for refusing to remain under the obligation to keep and pay for the use of the-property; but our reason fails to make it evident how, with knowledge of the fraud or immorality practiced and with opportunity to act in repudiation, the party may retain possession and enjoy the advantages which possession gives, and, nevertheless, refuse the payment which was the condition of the right to its possession and use. Fraud furnishes ground for rescinding a contract and for avoiding an obligation imposed, but I do not understand that, while serving to divest the obligation, it can be availed of as a means of continuing the possession of the property which "the contract, legal in itself, was designed to and did transfer.

I assume that the right of the plaintiffs to maintain an action to enforce the claims of the Suspension Bridge Company is not disputed, save in the respects that the general issue of stock is alleged to have been fraudulent and void and that the existence of any enforceable rights is denied. Nor could their rights as stockholders, to prosecute such a cause of action, be seriously questioned inasmuch as their corporation is wholly under the control of its lessee, the defendant proceeded against Its directors are elected and manage its affairs solely in the interest of the lessee company. The lessor company1 as a corporation is, therefore, in no position to assert any rights against the lessee, and under well settled principles, if there are rights which are suffered to remain unenforced, its stockholders may assert and maintain them in equity. Ang. & A. Corp’s, § 812; Robinson v. Smith, 3 Paige, 233; Brinckerhoff v. Bostwick, 88 N. Y., 52-56; Detroit v. Dean, 106 U. S., 537.

The respondent has questioned the legality or validity of the issue of shares upon which plaintiffs base their right to sue. I do not think it is in a position to raise that question, and for several manifest reasons. All of the stock and bonds were issued in payment for the construction of the railroad and were taken by a syndicate of persons who assumed the contract for the work. It is true that that syndicate was made up of members of the board of directors, but, as the members of-the syndicate were practically the company and composed the whole number of stockholders, there was no one to object, and the manner in which they ■chose to divide up their interests in the proprietorship of the corporation and to represent them in shares concerned only themselves. No principle of law forbade the company agreeing to pay for the construction of its railroad in the way or in the amount it did. Van Cott v. Van Brunt, 82 N. Y., 535.

If the company’s directors were interested in the work and profits of construction and evaded a direct contract through the form or device of an intermediary contractor, that was a matter for the company or for its stockholders to take hold of. But the stockholders and the members of the syndicate were the same persons, and however wrong the transaction might be if other persons were •concerned here no injury was effected to any one interested in the corporation, and however illegal the transaction, there was no person apparently to complain of it. As the stock was issued' as a part of the consideration for construction it cannot be said that it was taken without value given and the mode of its apportionment •or division concerned only those interested in the contract through which it was received as payment

We may concede that the contract was voidable as a scheme concocted by the directors for sharing in the profits of construction; but the difficulty is that all the members of the corporation were assenting to it. There was, therefore, in fact no fraud practiced upon the company. Practically the promoters of the corporation in this way placed a valuation upon the corporate properties and franchises, which the contribution and expenditure of their money-created, and the fact that they were created for an expenditure less than the par value of the aggregate issue of capital stock and bonds does not affect the question at all. The stock so issued constitutes the only stock of the company and is represented in the holdings of the plaintiffs and of this respondent, the New York, Lake Brie & Western R. B. Co. Their shares stand on precisely the same footing as to validity. The plaintiffs were parties to the construption contract and the original holders of the respondent’s shares received their stock in the same way and for the same consideration. The contention is, therefore, brought to this point: did the Suspension Bridge Company have a cause of action against the present successor in interest of its original lessee ? All questions are eliminated from the controversy as to the liability of the New York, Lake Brie & Western Railroad Company to the Supension Bridge Company, save the one of whether the taint of original fraud in the procurement of the lease operates to prevent the enforcement of the obligations of that instrument.

That the contract of lease was voidable and quite indefensible because of the immoral conduct of directors who abused their trust in procuring its execution, I quite concede. The proofs could lead to no other finding than that the lease and the rental guarantees were the work of a combination or syndicate, composed of members from the boards of directors of the two companies, who caused the same to be made by the Brie Company for purposes of their own individual gain and in fraud of that company’s rights. The identity of certain of the directors of each company when the lease was made, the interest of four of these common directors in the contract for the construction of the Suspension Bridge road, and in the stock and bonds to be guaranteed as a condition of the leasing of the road, stamped the whole transaction as a fraud upon the Erie Company, and brought it under the condemnation of the rule which forbids those who fill fiduciary positions from making use of them to benefit their personal interests. This.rule is deservedly strict in its requirements and operation. It extends to all transactions where the individual’s personal interest may be brought into conflict with his acts in a fiduciary capacity, and it works independently of the questions of whether there was fraud, or whether there was good intention. Where the possibility of such a conflict exists, there is the danger intended to be guarded against by the absoluteness of the rule. Davoue v. Eanning, 2 Johns. Ch., 260; Barnes v. Brown, 80 N. Y., 527. But the rule does not operate to avoid ab initia all transactions of a trustee where he is interested, but is generally limited in its operation to rendering them voidable at the election of the party whose interests are concerned in the question of their affirmance or disaffirmance. If, therefore, nothing is done in avoidance, the transaction remains. If kúowledge and opportunity concur whereupon to move, delay, if-unreasonable, or attended by retention and enjoyment of the results of the transaction, may be deemed equivalent to an adoption and ratification of that which before was the subject for action in repudiation of any obligation The rule is not designed to work injustice, but to protect those who repose confidence, voluntarily or perforce, in others holding towards them fiduciary positions, and to whose care have been confided the management and custody of property and of interests. Duncomb v. N. Y., etc., R. R. Co., 84 N. Y., 193—199.

But, that the plaintiffs were parties to a scheme for imposing a continuing obligation upon the Erie Company and knew, or were chargeable with knowledge, of the fraudulent devices to bring about that obligation, are not sufficient, at this day, as facts in defence of this action. It is the respondent’s own attitude and the conduct and acts of its predecessor in interest, which create the difficulty in defending against the demand of these plaintiffs.

The vice in the original transaction, from the collusion between a combination of the common directors with others, does not necessarily so inhere in the agreements of the lease as to prevent ratification, or to survive acts amounting in effect to acquiescence and waiver on the part of the Erie Company and,its successors in interest It may be adverted to here that the particular loss and disadvantage which resulted to the Erie Company from these transactions in 1870 were in the imposition upon it of the burden of a rental greater in amount than it would have been, if it had been measured by a percentage upon the actual ascertained cost of construction. There is- no question but that the road was deemed to be an important construction for the Erie Company, and it appears, affirmatively, in this record that as a link in the connections of that company it was a most valuable adjunct. From March, 1872, the time when a change occurred in the management of the Erie Company and payment was refused of that portion of the rental represented by the guaranty of dividends upon the stock, nothing was done to avoid and rescind the contract of" lease. Then was the opportunity to take advantage of the legal fraud in its procurement, and there must have been knowledge then as to the facts surrounding the lease, for refusal to pay upon the stock evidences it, as does the subsequent effort to buy up the stock. But, as appears from a report of the president, Mr. Dix, to the stockholders, in July, 1872, this leased road was indispensable as a route to Miagara Falls and as a connection with Canadian roads. When, in 1875, the Erie road was operated by a receiver, he continued the use of this leased line, reporting, with respect to it, that it was a necessity to the Erie road and that it was not thought best to abandon it, but rather to reduce the rental by buying up its capital stock.

And, finally, when, in 1878, two years before this action was commenced, the Mew York, Lake Erie & Western Bailroad Company was organized, and took over the road, properties and assets of the Erie Company, there was included in the purchase thereof this lease, and the leased properties were operated in connection with Erie’s main line. If these facts do not clearly evidence an election to abide by the lease which had been made with the Erie Company, and to waive any irregularities or fraud in its execution, it is not easy to understand how such acts could ever be evidenced. The ratification of this lease was not necessary to be shown by any particular or peculiar act. A course of conduct and the retention of the property might be sufficient to make it a valid contract by acquiescence. To be silent, and to-hold and use the leased property as its own were incompatible with the maintenance by the Erie Company of a serious claim to rescind for fraud. I think it quite incompatible with the principles upon which equity proceeds to hold and use property, the only right to which is derived through a contract of lease, and to refuse payment of a part of the rent stipulated in the contract on the ground of the existence of fraud in its procurement. The contract was not severable, nor the consideration apportionable. If it was bad for some fraud in the agreement, then it was voidable as a whole. The Erie Company, or its successor, could not adopt in part, and repudiate in part. They could not be heard to say “ we want and will keep this railroad branch, but we will not pay the whole of the rental agreed upon for its use in the lease. We will not pay the guaranteed dividends upon the capital stock, and if an attempt is made to force us to pay them, we will set up fraud in the mak- , ing of the lease, and will assail the complainants’ standing as stockholders.”

There can be no such fast and loose playing with legal rights. I have said that this contract of lease was voidable, and not void,1 and, therefore, could be, and was, upon the showing of this record,: validated by acquiescence and adoption. It was a good enough contract at law, but because of the immorality of directors, common to both contracting companies, combining to procure the execution of a contract in which they were personally interested, a court of equity could interfere and set it aside at the instance of the injured party. The right, however, to invoke the equitable interference of the courts depends upon the circumstances of the case, and aid will be denied where, in a case like the present one, the contract has been executed, unless the party claiming to be injured acts diligently in asserting a right to rescind, and honestly, by yielding up what came to it and continues to be held and enjoyed under the contract.

The cases are many in which has been discussed the equitable rule that such contracts are not absolutely void, but only voidable ; and, notwithstanding the vice or immorality which tainted their origin, may be validated. The opinions in Thomas v. Brownville, etc., R. R. Co., 109 U. S., 522; Twin Lick Co. v. Marbury, 91 id., 587; Duncomb v. N. Y., etc., R. R. Co., 84 N. Y., 193; Risley v. Indianapolis, etc., R. R. Co., 62 id., 240; Barnes v. Brown, 80 id., 527, are sufficient to be referred to upon that subject, and further elaboration is quite unnecessary. The authorities relied upon by the court below at general term do not conffict with our views of this case.

Munson v. R. R. Co., 103 N. Y., 58; 3 N. Y. State Rep., 31, was an action to compel the specific performance of an agreement affected by the vice that a director of the defendant corporation was a party to it and participated in the action of the corporation in assuming-the obligation. The agreement, in substance, was for the sale of certain railroad property held by the plaintiffs a,nd its purchase by the defendant corporation. The court, it was there held, would not aid in the enforcement of this executory • contract, for it was “ repugnant to the great rule of law which invalidates all contracts made by a trustee or fiduciary, in which he is personally interested at the election of the party he represents.” This is not the present case, where the contract was executed and its results retained and enjoyed long after the opportunity for repudiating it because of the facts underlying the transaction.

In the case of Wardell v. R. R. Co., 103 U. S., 651, the agreement sought to be enforced was tainted with the same vice, in the collusion of directors. The agreement licensed certain parties to prospect and to open and operate coal mines along the line of the railroad' and leased the company’s coal lands for a term of years, and it bound the company to purchase the coal mined at certain rates. A company was formed and a majority of its stock was taken by six of the railroad company’s directors and the contract referred to was assigned to the coal company.

Subsequently officers of the railroad company seized upon the coal company’s property and books and held them. Hence the suit by plaintiffs. The facts are not stated with fullness, but presumably the seizure was at the instance of a new management of the Union Pacific Bailroad Company, who, upon discovering the fraudulent combination of the former directors to make a profit in working the company’s properties, repudiated the contract and repossessed the company of its lands. As the appellant’s counsel suggests in his argument, the point of the decision condemning the transaction and refusing to sustain the plaintiff’s claim is found in the remark of Mr. JusticeEield that the law will relieve against such transactions “ whenever their enforcement is reasonably resisted.” The case is not parallel to this case, where, concededly, no attempt has ever been made to annul the contract of lease and no offer made to return the property. The defendants had the right to elect to continue the use of this leased road, notwithstanding the causes which existed for their refusing to be bound by the contract through which it was transferred. That election was evidenced in many ways and a cause of action accrued to the lessor company upon the failure to make such payment as the contract of lease called for, which enured to a stockholder’s benefit when the direction of the company’s affairs passed into hostile hands.

It is quite a misapprehension of the matter to treat the contract of lease as in itself illegal and, therefore, incapable of enforcement in the courts. The contract was not illegal in itself, but, on the contrary, was one the companies could enter into through the action of their directors with perfect propriety. What happened as the result of the combination of persons and of directors common to each contracting company, was that that fact infected the agreement and impaired its binding force as an obligation. It did not annul or destroy it, but subjected it to the condemnation of the law. A court of equity could give relief against it, but whether it would exert its power would necessarily depend upon the circumstances of the case and the conduct of the parties. Delay and conduct inconsistent with a purpose to throw up the lease are sufficient reasons for holding the contract to have been validated and the objections to it waived.

For the reasons expressed it was error for the trial court to have dismissed the complaint on the merits and, therefore, the judgment should be reversed and new trial ordered, with costs to abide the event.

All concur.

       Reversing 24 N. Y. State Rep., 188.


author: Daly, Oh. J.

text:
    Jonathan E. Van Doren, Resp’t, v. Fajbush Liebman, Impl’d, App’lt.

      (New York Common Pleas,

      General Term,

      Filed December 3, 1890.)

    Partnership—Notice of dissolution—Service by mail.
    In an action against vartners where the defense is that the partnership was dissolved before the goods or services in question were ordered and notice of such dissolution sent to plaintiff by mail, it is error for the court to refuse to charge that if the jury believe the notice was mailed a presumption that it was received arose from- that fact, and such error is not cured by a direction that it was for them to determine whether notice was sent through the mail.
    Appeal from judgment of the ninth district court.
    Action to recover for advertising done for defendants under their firm name on written orders. Defendant denied his liability for that portion of the claim ordered after November 1, 1889, on the ground that the partnership was dissolved on that day and plaintiff notified thereof.
    A witness for plaintiff testified that he deposited in the post office a large number of notices of the dissolution, including one to plaintiff, post paid. Plaintiff and his witnesses testified that he never received it

      David Leventritt, for app’lt; Alexander & Ash, for resp’t
   Daly, Oh. J.

When the question was submitted to the jury whether notice of dissolution was received by the plaintiff, the defendant was entitled to the benefit of the presumption that a notice properly directed and duly mailed and post-paid was received by the party to whom it was addressed; under the ruling in this case he was deprived of the benefit of that presumption. The jury were not permitted to deliberate upon the case with that presumption in their minds. The fact that a notice was properly directed and duly mailed raises the presumption that it was received in course of mail. The jury might believe, notwithstanding such mailing, that the plaintiff never received it, and give a verdict accordingly, as they did in this case; but they were bound to take into consideration the mailing of the notice and the presumption raised thereby. Of that the defendant was deprived in this case.

Counsel. Does your honor note what the judge says ? Thsit it was for them to determine whether notice was sent through the mails.

Daly, Oh. J. That does not cure the error. He was requested to charge the jury that if they believed 'the notice was mailed, then a presumption that it was delivered arose -from that fact. He . said he would not charge that; yet such is the law as stated in Austin v. Holland, 69 N. Y., 571.

Judgment reversed and new trial ordered.

Bischoff and Pryor, JJ., concur.


author: Per Curiam.

text:
    Samuel Lawrence, Resp’t, v. Eugene Everett, App’lt.

      (New York Common Pleas,

      General Term,

      Filed December 18, 1890.)

    'Contract—Sale—Breach—Tender oe purchase money.
    Where goods are bargained for and sold and there is no stipulation for credit or delay, no right of action accrues as for a breach of contract, by .reason of non-delivery, without a tender of the purchase money. A mere readiness to pay is not sufficient.
    Appeal from judgment of the fourth district court.

      S. Muller, for app’lt; J. G. Rosenbaum, for resp’t.
   Per Curiam.

This is an appeal from a district court. The pleadings in the action were oral. The plaintiff's complaint was “ for damages for breach of contract on assigned claim.” The answer was a general denial. The plaintiff’s claim, as made on the trial, was that he purchased from defendant a certain line of goods for $66.10, on condition that defendant would sell him certain other goods which he expected to receive, to wit: about ten ■ounces of aigrettes, at six dollars an ounce ; that defendant never delivered the aigrettes. The defendant denied that the bill of goods sold was sold on any condition whatever. The evidence on behalf of the plaintiff as to the making of the contract is as follows:

Q. State what the conversation was and what you said to him ? A. I went to see him about that time to buy some long white aigrettes ; when I came in the place he said that I had never bought any goods of him before and he did not see the reason why I should now; I said I would buy the goods if I could get the aigrettes.

Q. He said that you had never bought any goods from him before and there was no reason why you should buy them now ? A. Yes, sir; and I said I will buy those goods if he would sell me the aigrettes.

Q. What did he say? A. That he would.

Q. Did you at that time purchase any goods from him? A. Yes, sir. 1

Q. Those goods were bought only upon condition that the aigrettes were to be subsequently delivered ? A. Yes, sir.

Q. State whether those goods were purchased upon any condition? A. Upon the condition that I would get the aigrettes.

Q. What was the condition; what was said at the time ? A. It was said that if I bought the goods I would get the aigrettes.

Q. When were you to get them ? A. As soon as he received them.

Q. How many aigrettes had he promised you; was any promises made as to the amount? A. He expected about ten ounces.

Q. Did you go into the market; what was your price with Mr. Ewrett for these aigrettes? A. About six dollars an ounce.

And the evidence on his behalf as to the receipt of the aigrettes by defendant is as follows, one witness testifying :

Q. Did you have any subsequent conversation with him about-the aigrettes having come here ? A. Yes, sir; I did; Mr. Everett came to our store one day and I told him where are the aigrettes; he said: I am going right down to the express office, they are here- and I will send them up to you and you can break the seal.

Another witness testified:

Q. State what was said while Mr. Everett was present ? A. He was present in my place when we were talking together because we paid such a big price for those goods; he said I will write a note to the express office and send the aigrettes down and. you will make up for what you paid for the skins.

The defendant being put on the stand testified, that there was-no sale or contract to sell the aigrettes. His evidence on this subject is in substance:

Q. .You never promised specifically to sell aigrettes at six dollars per ounce ? A. No, sir; they were worth thirty-five dollars-per ounce; the plumage is what he wanted and not the aigrettes;, they were worth nine dollars per ounce and the short plumage for ladies hats they were worth thirty-five dollars per ounce; he said after he bought the goods, I have paid you a big price ; I said, I do not.know what you paid me; I want you to. help me out, he said; I paid you a big price and I want you to sell me some aigrette plumage; I said, certainly, I will sell you anything I have, I will be pleased to; I had no plumage in sight at that time; at that time aigrettes plumage was thirty-five dollars per ounce and not nine dollars, and if he said I agreed to sell him for six dollars, an ounce at that time, it is erroneous.

Q. You told him you would deliver aigrettes to him? A. That is absolutely false, at six dollars per ounce.

Q. What he says is not so? A. Yes, sir.

Q. When he came to see you, what did he ask for ? A. Aigrette plumes, I believe; I admit that.

Q. Those were the plumes that he referred to as purchasing for twelve dollars afterwards ? A. I do not know what he agreed to buy them for.

Q. You did not sell him aigrette plumes ? A. No, sir.

Q. You sold him skins ? A. Yes, sir.

Q. He didn’t come in for the purpose of buying skins ? A. I do not know.

Q. He came in, asked for aigrettes? A. Yes, sir.

Q. And you told him that you did not have any ? A. Yesr sir.

Q. But you expected them? , A. Yes, sir.

Q. And if any came in he would get them ? A. Yes, sir.

Q. When you spoke to Mr. Lawrence about these aigrettes, as you say, you did not promise him aigrettes when they came; did you say to him at that time that he would have the first chance at aigrettes when they came ? A. Yes, sir.

Q. Was anything said about the price? A. No, sir.

Q. Nothing about the price ?. A. No, sir.

And the evidence as to the receipt by him of the aigrettes, and his statement at Freedman & Co.’s is in substance:

Q. Did you tell them that you had them in the express company’s office ? A. I told them I had, but there was a draft against them.

Q. Did you ever take out that shipment of aigrettes, the one which you referred to, while up in the store of Freedman & Co., the one which there was a draft against ? A. I never got any aigrettes.

Q. When you came up to Freedman & Company’s store on Broadway and Mr. Lawrence complained to you that he had paid such an enormous price upon condition that you would give him aigrettes, and that you didn’t give him aigrettes, you said that you were sorry for him and that you would make things all right ? A. I would try to help him out in further purchases.

The goods which were sold for $66.10 were delivered and the purchase money paid at the time of the sale.

The plaintiff obtained judgment below for sixty dollars. From the amount claimed in the summons, $66.10, and the evidence adduced by the plaintiff tending to show an offer to return the goods sold and delivered, it would seem that the plaintiff originally placed the case in the aspect of an entire contract of sale of both lines of goods and claimed to rescind the contract and recover back the amount paid for the goods sold and delivered by reason of the breach in the non-delivery of the aigrettes.

But from the facts that the judgment is for sixty dollars and that the plaintiff introduced evidence as to the sum he was obliged to pay in the market (the difference between the sum he paid and the sum which he says the defendant agreed to sell for being equal to the amount of the judgment) it would seem that the case at the trial was put upon the theory of there being a separate and independent contract for the sale of the aigrettes, and a claim for damages for a breach of such contract by reason of the non-delivcry of the goods. In whichever aspect the case is viewed (and conceding the evidence is sufficient to establish a contract for the '■•ale of the aigrettes according to either claim, which is exceedingly oubtful, and without passing on the question whether the claimed contract is void for uncertainty or not, or the question whether or not the defendant was bound to pay the draft against the aigrettes, whatever the amount, so as to procure the goods for delivery to the plaintiff) there is an insuperable objection on the evidence to sustaining the judgment. ■

Where goods are bargained for and sold and there is no stipulation for credit or delay, no right of action accrues as for a breach of contract by reason of non-delivery without a tender of the purchase money. A mere readiness to pay is not sufficient. Speyer v. Colgate, 67 Barb., 192; Nelson v. Plimpton Co., 55 N. Y., 480.

In this case there is no proof of a tender to the defendant of the purchase money of the aigrettes: it follows therefore that the plaintiff has established no cause of action arising out of their non-delivery.

The judgment should be reversed and a new trial ordered, with costs of appeal to abide the event.

Allen and Bookstaveb, JJ., concur.


author: Bookstaveb, J.

text:
    Ellen Carter, Resp’t, v. Mary Anderson and William Anderson, App’lts.

      (New York Common Pleas,

      General Term,

      Filed December 18, 1890.)

    1. Forcible entry and detainer.
    A mere refusal to give possession unless put out by law does not constitute an unlawful detainer; nor does a statement that any one attempting to enter by force would be arrested amount to a threat tending to create a breach of the peace.
    2. Same—What acts will not constitute.
    Plaintiff claims title to certain property under a bill of sale from one K. After K.’s death the defendant William, who was his nephew, and had been employed by him in the store, of which he had a key, in ignorance of the bill of sale, quietly entered the same and placed a padlock on the door. The defendant Mary, his mother, never entered, but refused possession to plaintiff. The only threats or force used to keep plaintiff from taking possession were made by the police in the interest of the public peace, and it did not appear that defendants were instrumental in inducing them to do so. Held, that these facts did not show a forcible entry and detainer.
    Appeal from a final order of the seventh district court in favor of the respondent, awarding her the possession of a liquor store known as No. 1430 Third avenue.

      William P. Burr and Samuel Muller, for resp’t; Poe & Machlin, for app’lts.
   Bookstaveb, J.

The action was brought by the respondent for the forcible entry and detainer of the store in question by the appellants.

A forcible entry and detainer is a violent taking and keeping possession by one of any lands and tenements occupied by another, by means of threats, force or arms, and without authority of law. It is essentially an action to protect the actual possession of real estate against unlawful and forcible invasion, to remove occasion for acts of violence in defending such possession, and to punish breaches of the peace committed in the entry upon or the detainer of real property. 8 Am. & Eng. Ency. of L., p. 102, and cases cited.

This remedy at common law is purely criminal in its nature, but under our statutes it has been made a civil remedy as well, the sole object of which is to regain a possession which has been invaded, and the only judgment which can be rendered in the civil action is that plaintiff have restitution of the premises of which he has been unlawfully deprived.

The only questions to be tried are whether or not the plaintiff was lawfully or peaceably in possession of the premises sought to be recovered, and whether or not the defendant unlawfully entered or forcibly detained the same. Neither the right of entry nor the right of possession is involved in the issue. Carter v. Newbold, 7 How., 166; Kelly v. Sheehy, 60 id., 439; Beeler v. Cardwell, 29 Mo., 72; Beauchamp v. Morris, 4 Bibb, Ky., 312.

In this case I do not think it is necessary to determine whether or not the plaintiff was ever lawfully possessed of the premises in question, as I think it clear from the evidence that neither of the defendants were guilty, of either a forcible entry or a forcible detainer. As before stated, in order to constitute either a forcible entry or detainer, it is necessary that some violence or force should be used tending directly to create a breach of the peace. People v. Fields, 1 Lans., 222 ; People v. Carter, 29 Barb., 208.

If none was used this proceeding cannot be sustained.

As far as Mrs. Anderson is concerned, there is no proof that she ever entered the store in question by force or otherwise, or authorized any other person on her behalf to do so. Neither did she do anything or cause anything to be done which prevented the plaintiff from taking possession of the premises. The" utmost that can be said of her is, that when asked to send her son to open the store for plaintiff she refused to do so; but a mere refusal to give possession unless put out by law does not constitute an unlawful detainer. Johnson v. West, 41 Ark., 535; Hoffman v. Harrington, 22 Mich., 52.

The mere statement by her that anyone who attempted to go into the store by force would be arrested does not amount to a threat tending to create a breach of the peace.

As far as William Anderson is concerned, it appears that he was a nephew of Patrick J. Kennedy, the former owner of the store, through whom the plaintiff claims title under a bill of sale; that he had been employed by Kennedy as a bar-keeper for more than a year prior to such bill of sale; that he had never been informed by him of the bill of sale or any transfer of the property; and that he was retained in his employment up to the day of his death; that he had a key to the store given to him by Kennedy, with the right to- use the same which had never been revoked; that the license for the place was in Anderson’s name, and that Mrs. Anderson, his mother, was the next of kin of the deceased. The latter fact, however, I regard of but little consequence. It is sufficient that he was in the employment of the apparent-owner of the store at the time of the latter’s death, to warrant him in con-' tinning in possession and guarding his master’s property until the true owner should appear and take possession. It would be intolerable to hold that a servant would be released from all responsibility or care of the master’s goods immediately on his death, although the latter fact may dissolve the relations theretofore existing between master and servant. The entry which he made upon the premises was quietly done, without force or threats, by using the means of entrance which the master had given him, and apparently solely for the purpose of looking after the store and its contents and feeding the cats that were on the premises; and this certainly could not constitute a forcible entry. When he discovered that the premises had been entered by the plaintiff, and after she had quietly left the same, he placed a padlock upon the door, in ignorance of the plaintiff’s claim, and, as I judge from the evidence, solely for the purpose of protecting the property, which, under the circumstances of the case, I think it was his duty to do. ■

The testimony leaves it in grave doubt whether he was even applied to by any one on behalf of the plaintiff to give her a key to the premises, or to open the same for her. At most, his acts in that respect amounted to a mere refusal, and, as before shown, this is not sufficient to sustain such an action.

The only force or threats that were used by any one to prevent the plaintiff from taking possession of the store, or to keep her out of the same, were by the police in the interest of the public peace, and it is not shown that either of the defendants had any agency in inducing them to use this force or these threats.

The person in actual possession at the time of the trial was Mr. Thomas P. Wallace, who, after the commencement of the action, together with Mrs. Anderson, had been appointed administrator of the estate of Kennedy, and who had quietly and peaceably obtained such possession, but he was not made a party to this action.

The defendants first answered denying the forcible entry and detainer, and afterwards put in an amended answer which omitted to make such denial, and a motion was made for a final order on that account, but it was denied by the justice, and the case was tried as if there had been such a denial; and upon the facts, as before stated, I think the justice erred in making the final order he did, and that the same should be reversed, with costs of this appeal; but, under the circumstances, I do not see how we can award restitution.

Allen, J., concurs.


author: Daly, Ch. J.

text:
    Morris Isaacs, Resp’t, v. Isaac Mintz, Def’t. Hyman Levy, Resp’t, v. Isaac Mintz, Def’t.

      (New York Common Pleas,

      General Term,

      Filed January 5, 1891.)

    Pleading—Misnomer of defendant.
    , If a man. be known by two names he may be sued by either, and process against his property or Ms person in such an action may be justified by showing that he was equally well known by both names. It is not necessary that both names be set forth.
    Appeal from an order of the general term of the city court, affirming an order of the special term denying a motion to set aside levies and sales under execution in the above actions, and that the plaintiffs therein pay over the proceeds of such sales to the receiver of Israel Mintz. .
    The ground of the motion was that the name of Isaac Mintz in the proceedings, judgments and executions in said actions was a misnomer, the defendant’s real 'name being Israel Mintz, and not Isaac, and that the sales of his property under process in which he was so misnamed was void.

      Carlisle Horwood, Jr., for rec’r, app’lt; Herman Joseph {Arthur Furber, of counsel), for resp’ts.

       Affirming 33 N. Y. State Rep., 423.

   Daly, Ch. J.

The city court found upon the facts before it that the defendant Mintz was equally well known by the name of Isaac and Israel, and held, therefore, that there was no misnomer in the proceedings and process.

There was abundant evidence to sustain this conclusion. The defendant’s wife swore that some persons called him Isaac, and although she could not recollect any particular person who did so in her presence, the value of her testimony was not thereby destroyed.. The defendant admitted to the deputy sheriff that his name was Isaac. He stated when served with the summons that his name was Isaac; and the affidavit of Hyman Levy says that in Hebrew the names of “Isaac” and “Israel” are interchangeable. The appellant, however, claims that if the defendant were equally well known by both names, the fact should have been alleged in the complaint, and the defendant should have been sued under one of the names with an alias. This was not necessary. If a man be known by two names, be may be sued by either, and process against his property or his person in such an action may be justified by showing that he was equally well known by both names.

In Gurnsey v. Lovell, 9 Wend., 319, Savage, Ch. J., says: “ The defendants could not justify the arrest of the plaintiff by a wrong name, though he was the person intended to be arrested, unless he was known as well by one name as the other,” citing Mead v. Haws, 7 Cow., 332, in which he said it was decided in Shadgett v. Clipson, 8 East, 328, that the defendant could not justify an arrest of the plaintiff by a wrong name, though he was the person intended to be arrested, unless it was shown that he was known by one name as well as the other. And reference was made to the case of Griswold v. Sedgwick, 6 Cow., 456, where Sutherland, J., cited and followed Cole v. Hindson et al., 6 T. R., 234, in which Lord Kenyon remarked that the defendants were not justified in seizing the goods of Aquila Cole under a distringas against Richard Cole; and that the averment in the plea that Aquila and Richard were the same person did not assist the defendants, as they had not also averred that the plaintiff was known as well by one name as by the other.

In Farnham v. Hildreth, 32 Barb., 277, all the foregoing cases were cited, and the decision in Cole v. Hindson quoted; and Allen, J., says: “ It is well settled that a defendant in an action fof false imprisonment cannot justify the arrest of the plaintiff by a wrong name, though he is the person intended to be arrested, unless it is .shown that he is as well known by one name as the other.”

From these cases it appears that even though the defendant be •sued by a name not his real one, and his property or his person be taken by process in such a name, yet in action for trespass or false imprisonment such process would be justified by showing that he was equally well known by both names. It is nowhere stated that in the original action both names must be set forth. It is the language used in Cole v. Hindson in regard to what is necessary in the plea of justification which the appellant here wrongly interprets as holding that there must be the same averment in the original complaint.

The city court decided correctly, therefore, in holding that the executions were not void because the defendant was named therein as Isaac Mintz and not as Israel Mintz, the court being satisfied that he was equally well known by both names.

The question of fraud was also properly disposed of. It would not be advisable to try such an issue upon a motion. The receiver has his action to set aside the judgment of these plaintiffs on the ground that the debts were fictitious, if he is disposed to try that issue. We think he loses no right in that respect by this decision.

The order appealed from should be affirmed, with costs

Bischoff and Pryor, JJ., concur.


author: Bischoff, J.

text:
    Jennie Fisher, Resp’t, v. Robert B. Monroe et al., App’lts.

      (New York Common Pleas,

      General Term,

      Filed January 5, 1891.)

    Master and servant—Discharge—Excuse for non-attendance.
    Plaintiff was an actress in the employ of defendants, and was dismissed for refusal to attend a rehearsal. The refusal was made the day previous to the rehearsal on the ground of physical exhaustion. It did not appear that such exhaustion continued to the time of the rehearsal. In an action for wrongful discharge, Held, that no excuse for her non-attendance was shown, and that a verdict in plaintiff’s favor for subsequent salary was against the law and the evidence.
    Appeal from judgment of the general term of the city court of New York, affirming judgment in favor of plaintiff.
    Action for damages for breach of contract of employment by wrongful dismissal of plaintiff.

      Seaman Miller, for resp’t; Hoover & Sulzer, for app’lts.

       Reversing 32 N. Y. State Rep., 236.

   Bischoff, J.

On or about September 1, 1888, plaintiff, an actress, and defendants, theatrical managers, entered into an agreement, pursuant to which the plaintiff was to “render services at such theatres, opera houses, and halls as required ” by the defendants, for a period of thirty weeks or longer, at the option of the defendants, for which services the defendants agreed to pay the plaintiff thirty dollars per week. The agreement also provided, among other things, that either party thereto might, upon two weeks’ previous notice to the other, terminate the employment.

Under this agreement plaintiff entered upon the performance of her services and continued doing so until about the seventeenth day of November, 1888 (being a period of ten weeks), and on which last mentioned day the defendants refused to continue the employment upon the ground that the plaintiff had violated the contract on her part by her refusal to attend a rehearsal at which. her presence had been requested. The plaintiff thereupon brought this action against the defendants to recover damages for her alleged wrongful dismissal from their employ, the damages claimed being the salary for the time subsequent to her dismissal, to wit: thirty dollars per week for twenty weeks, less the sum of thirty-five dollars, earned by her from other sources, and alleged in her complaint that during the entire term of her employment she was ready and willing to perform all the conditions of the agreement on her part. The defendants denied that the plaintiff was ready and willing so to perform, and asserted that the plaintiff refused to perform the same, and that for good and sufficient cause the plaintiff was discharged from their employ, and had been fully paid for all services performed by her up to the time of such discharge. The action was tried and resulted in a verdict for the plaintiff for §565 and interest, judgment upon which was duly entered, from which an appeal was taken to the general term of the court below, where the verdict was sustained, and from which, latter determination the defendants have now appealed to this court. Upon the trial in the court below it appeared that the term of plaintiff's employment commencéd September 3, 1888, and that such employment continued until November 17th of the same year, on which day she was discharged by the defendants, and informed that her future services would not be accepted by them, the ground for her discharge being her alleged refusal to-attend at a rehearsal occurring on the day of her dismissal, and at which she had been directed to attend the day before. The only witness examined for the plaintiff was herself, and she admitted that she was requested to attend such rehearsal, and that she failed to attend the same.

She, however, sought to excuse her failure to attend the rehearsal upon the ground that, when she was directed by the defendants: to appear thereat (which she admitted was on the day preceding the rehearsal), she was “physically exhausted,” and that in consequence thereof she could not attend. But it nowhere appears from, the evidence submitted to us upon this appeal, that the physical exhaustion of the plaintiff continued beyond the time fixed for the rehearsal, or that at the time of the rehearsal she was, in fact, physically unable to attend. Construing the term “physical exhaustion ” most strongly in favor of the plaintiff, and admitting that at the time of her refusal to attend the rehearsal she was reduced to a state of physical debility which temporarily incapacitated her for further services, the most which can be said of her excuse for such refusal is that she anticipated a continuance of such debility for a period which-would prevent her presence at the rehearsal. That it did so continue, and that she was so debilitated at the time the rehearsal took place, did not appear upon the trial, so far as we are able to ascertain from the record of this appeal, and no excuse for her refusal to attend the rehearsal was, therefore, shown.

It will be borne in mind that this action is brought to recover for the loss of salary accruing to the plaintiff subsequent to her alleged wrongful dismissal, and that compensation" for services prior to such time is not a part of the damages claimed.

Assuming that plaintiff at the time for which the rehearsal was called was in such a state of physical debility as rendered her attendance impossible, and that upon her recovery she at once sought out the defendants and offered to continue her services for the remainder of the term of employment, the question still remains, were the defendants obligated to accept such offer? This question underlies the plaintiff’s entire cause of action; and hence it follows that if the same must be'determined adversely to her, she is not entitled to any part of the damages awarded her in the court below. I am unable to find that this precise question has ever been adjudicated in this state, and counsel for the parties to this appeal do not in their briefs refer to any such adjudication.

It has repeatedly been held, that if a person under contract to render personal services of a peculiar kind, requiring the personal skill of the person who is to render the same, is prevented by reason of sickness from the performance thereof, his failure to perform will excuse him from such performance to such an extent that he will be enabled to recover upon a quantum meruit for the services actually rendered up to the time of his failure to continue the same by reason of such sickness. Wolfe, Exr., etc. v. Howes, 20 N. Y. , 197; Spalding v. Rosa, 71 id., 40 ; Robinson v. Davison, L. R., 6 Exch., 269; 40 L. J., Exch, 172; Fuller v. Brown, 2 Metc., 440.

So it has been held that an employe who is prevented by sickness from fulfilling his agreement to render services cannot be held answerable in damages for such failure to the employer. Dickey v. Linscott, 20 Maine, 453. The principle underlying these cases is, that the contract was entered into by the contracting parties upon the implied condition of the continued ability of the party who is to render the services to perform, and that when unable to perform because of sickness, or physical or mental incapacity proceeding from no wilful or deliberate conduct of the party, such inability is in consequence of an act of Grod and excuses performance. But what is the effect of the failure of the party of whom the services are required to perform, under the circumstances above described, upon the contract? To render the contract operative and binding upon the parties at its inception, the obligations of the contracting parties must be mutually dependent, that is to say, the obligation of the party who is to receive the services to pay is conditioned upon -the obligation of the party who is to render the services to perform, and vice versa. If the contract of employment is to continue operative and binding, those inter-dependent obligations must continue to exist, and if one party is excused from the performance of his obligations, the obligations of the other party must likewise come to an end.

In Spalding v. Rosa, cited above, Allen, J., says: “ Contracts for personal services are subject to this implied condition, that the person shall be able at the time appointed to perform them; and if he dies, or without fault on the part of the covenanter becomes disabled, the obligation to perform is extinguished.”

In Fenton v. Clarke, 11 Vermont, 557, Bennett, J., says: “In the case before the court, the plaintiff contracted with the defendant to labor personally for him for four months, at ten dollars per month, and by the terms of the contract was to receive no pay till he had worked the four months. These services being of a personal character, the contract could not be performed by another, and as the plaintiff was disabled to perform it himself, by reason of sickness, which was the- act of God, upon the authority of the foregoing cases the contract was discharged.”

In Dickey v. Linscott, cited above, in dismissing the employer’s claim for damages, Chief Justice Weston uses the following language : “In a contract for the performance of mutual manual labor requiring health and strength, we think it must be understood to be subject to the implied condition that health and strength remain. * * * The contract failing without the fault of the defendant, it would be neither just nor equitable to hold him obliged to labor for the plaintiff, when the days were longest, and labor in husbandry most valuable. The plaintiff was not obliged to accept such partial performances. He had a right to secure the services of another man, and might have had as many laborers as it was for his interest to employ.”

It is apparent from the foregoing cases that the theory upon which the person who contracted to render services was permitted to recover upon a quantum meruit, for services actually performed at the time he became unable by reason of sickness to continue, was that the condition of his continued ability to perform having failed, the contract itself had come to an end. He was excused from further performance, and that being the case, the other contracting party was likewise excused from further performance of the contract on his part.

To hold otherwise, and to regard the employer as under a continued obligation to perform his part, and to receive the services of the employe when the latter has recovered from his sickness or disability, would thrust into every contract of employment requiring the personal services of skilled artists, artizans and mechanics, in the varied enterprises and occupations of mankind, an element of uncertainty, which would lead to serious confusion, and to uncertainty of their duration. If, under such circumstances, the employer is compelled to speculate upon the chances of the early recovery of the employe, it can be readily seen that, if the enterprise is to be continued, he can only contract for like sérvices at the peril of being required to pay both the former employe and those whose services have become necessary because of the inability of the former employe to continue. To hold that by the sickness of the employe both contracting parties are discharged from further performance of the contract of employment, imposes no greater hardship upon such employe than is suffered by any person who is prevented from continuing his earnings by means of the employment of his services, since he is not required to-forfeit compensation for the services actually performed.

A distinction should, however, be made between permanent and temporary disability arising from causes beyond the control of the employe. In the case of a mere temporary disability, the effect thereof would not in every case be to work a dissolution of the contract of employment. Wharton on Contracts, vol. 1, § 323. In such cases I apprehend the rule to be, that if the temporary disability did not in any substantial manner prevent performance on the part of the employe, the employment mticfc bo regarded as continuing. It would, therefore, appear to be necessity in every such case to inquire whether or not the presence of the employe in the employer’s service during the continuance of the disability was material and essential to the prosperity of the enterprise in which the services were required, and if such presence was not so material and essential, the employer is not relieved from his obligation to accept the services of the employe when the latter, upon his recovery, offers to continue.

In the case at bar the plaintiff was an actress; the service which she was required to render was in performances at the defendants’ theatres and opera houses, and to that end her services at rehearsals were undoubtedly at times not only necessary but indispensable; but it also appears that the plaintiff had been excused from attendance at some former rehearsals, and that the rehearsal at which she failed to appear might have proceeded without her, by the employment of some person to read her part, and from these facts it might be concluded that the failure of the plaintiff to appear at this particular rehearsal, for the non-attend-once at which she was dismissed, did not in any material or substantial manner hinder the defendants from continuing their enterprise, or giving the contemplated theatrical performances. It was proper for the trial court to submit to the jury the question whether or not the plaintiff, by reason of her temporary disability, failed to perform the contract of employment on her part in any substantial manner, but inasmuch as defendants’ counsel failed to make a specific request that the court so charge, his-omission to submit that question to the jury cannot, for the purpose of this appeal, be assigned as error. Winchell v. Hicks, 18 N. Y., 559; Muller v. McKesson, 73 id., 195.

For the reason, however, as above stated, that the evidence fails to show a sufficient excuse for the plaintiff’s non-attendance at the rehearsal at which she was directed to attend, I am of the opinion that the verdict is against the law and the evidence, that the motion for a new trial upon the minutes should have been granted.

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

Daly, Oh. J., and Pryor, J., concur.


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    Henry O’Neill et al., Resp’ts, v. John S. Crotty, App’lt.

      (New York Common Pleas,

      General Term,

      Filed January 5, 1891.)

    Sat/e—Action for part delivery.
    Where separate deliveries are contemplated in a contract of sale, and payments are to he made upon each delivery, an action may he maintained as for the sale and delivery of the particular goods sued for. In such action the vendee may set up the contract for the whole, plead the failure to make the deliveries under it, and claim damages for such breach; but if he set up the breach without a counterclaim, it is no defense to the action.

      Appeal from judgment of the general term of the city court, affirming the judgment of the trial term, rendered by the judge who tried the cause, without a jury, in favor of plaintiffs for $317.80, with costs.
    The complaint alleged the sale and delivery between June 11th and August 31,1889, to the defendant of 155 gross of embroidery edging, of the value of $310, and for which defendant promised to pay that sum on or before October 10, 1889, and that no part thereof has been paid, although the time within which payment was to have been made has expired. The answer was a denial of all these allegations.
    Upon the trial, one of the plaintiffs, George Quackenbush, was called by plaintiffs to prove the sale. Upon cross-examination, the defendants elicited that the 155 gross sued for was a delivery under a special executory contract for the sale of 200 gross of. embroidery edging, to be manufactured according to sample, 100 natural color and 100 white, at two dollars per gross; that after the first delivery under the contract (100 gross natural color, on August 28th), the defendant complained about the quality of the goods, and the plaintiff told him if he could not use them to return them; that the defendant then required the white to be delivered, and plaintiffs delivered on August 31st fifty-five gross of the white; that defendant then came to complain or to make a claim, and plaintiffs again told him that if he could not use the goods to return them; that the defendant then went away and brought an action against plaintiffs; that plaintiffs were ready to go on and furnish the balance of the goods, if he would have accepted them. ' There was some evidence from which it might be inferred that the goods were to be paid for as delivered; the terms of sale were “ thirty days dating and ten days time,” which meant ■ that the defendant’s bills were to be dated thirty days from the date of delivery, and he had ten days thereafter in which to pay.
    At the close of the testimony of the witness Quackenbush the plaintiff (who objected to the cross-examination as to the sale by sample on the ground that it was not pleaded, and as immaterial, irrelevant and incompetent) made a motion to strike out the evidence in reference to the goods delivered conforming to the sample, and to strike out the evidence in reference to the special contract. The motion was granted, and the defendant excepted. No other evidence was offered by either party. Defendant then moved to dismiss the complaint, 1st, on the ground that the plaintiffs had failed to prove the cause of action set forth in the ■complaint; failed to prove any sale or agreement to sell 155 gross of edging, and any delivery under such an agreement; 2d, that the only sale shown by the uncontradicted evidence was of 200 gross of edging, and that the proof is at variance with the complaint; 3d, that the agreement for the sale of 200 gross was entire, and a full delivery thereunder was a condition precedent to a recovery, and that plaintiffs had failed to perform said agreement.
    The motion was denied, and the defendant excepted. The court found, as matter of fact, a sale and delivery of 155 gross, at two dollars per gross, which became due and payable on October 10, 1889. The defendant excepted to this finding, but made no requests to find as to any fact or conclusion of law.

      J. Tredwell Richards, for app’lt; George M. Balter, for resp’ts.
   Daly, Ch. J.

Where separate deliveries are contemplated in a contract of sale, and payments are to be made upon each delivery, an action may be maintained therefor as for the sale and delivery of the particular goods sued for.

In such an action the vendee may set up the contract for the whole, plead the failure of the vendor to make other deliveries under it, and claim damages for such breach; but if he set up the breach-without a counterclaim, it is.no defense to the action. In Avery v. Willson, 81 N. Y., 341, there was an indivisible contract, and a delivery of part with a waiver of a completé delivery of the whole as a condition precedent to payment for such part. The action was for goods sold and delivered. Defendants set up the special contract for the whole and a refusal to deliver the residue. The court said: “ While the defendants had the right to recoup any damages sustained by a failure to deliver the glass as agreed upon, or to bring an action to recover the amount of the same, they cannot under the pleadings in this ’ action prevent -a recovery for the value of the glass actually delivered, as they have not set up a counterclaim, but simply based their defense on the non-performance of the contract.”

This rule undoubtedly governs the case of an agreement to pay for goods as delivered, and in the case before us there was some evidence from which it might be inferred that such was the contract between these parties. The goods were to be manufactured abroad, and imported, and deliveries were made as they arrived; “bills were to be dated thirty days ahead from the date of delivery, and if he paid his bills in ten days, he was to get a seven per cent cash discount.” * * * “ The credit for these goods expired October 10th, which was forty days after the last delivery. They were sold at two dollars a gross, thirty days dating and ten days’ time.” This was the testimony of the plaintiff, and was not contradicted. There was evidence, therefore, to sustain the finding of the trial judge that the amount sued for became due and payable October 10, 1889 ; and that is all we are required, as an appellate court, to inquire into upon a simple exception to a finding of fact. We are only authorized “ to review the facts for the purpose of ascertaining whether any allowable construction of which they are capable will warrant the conclusion of fact at which the judge or referee has arrived.” Stilwell v. Mut. L. I. Co., 72 N. Y., 388. We cannot review the facts “ after an affirmance by the general term, so long as there i s any evidence tending to support the findings.” Potter v. Carpenter, 71 N. Y., 75.

The defendant, therefore, having become indebted, as found by the trial judge, for the portion of the goods delivered, an action as for a sale and delivery thereof was maintainable; and the motion, to dismiss the complaint was properly denied, notwithstanding such delivery was under a contract'for the sale of a greater quantity. There was nó variance between the pleading and the proof.

The exception to the granting of the plaintiff’s motion, made at the close of plaintiff’s case, to strike out the evidence elicited by defendant upon cross-examination of plaintiff’s witness in reference to the goods delivered not conforming to the sample, and also the evidence in reference to the special contract, does not show error. Ho claim for damages on account of the goods not conforming to the sample was set up in the answer; and proof of the special contract constituted no defense, as complete delivery of the whole of the goods thereunder was not a condition precedent to payment

It is proper to say here that under the denial in the answer of a sale of 155 gross, the defendant was entitled to show exactly what the contract of sale was, and if this involved proof of a special contract for 200 gross, he was entitled to prove it, for there was no way of disproving plaintiff’s allegations except by showing of the facts. Dietrich v. Dreutel, 43 Hun, 342 ; 6 N. Y. State Rep., 528; Manning v. Winter, 7 id., 482. The trial judge allowed this proof to be given by cross-examination of the plaintiff’s witness; and I understand that, in striking out the evidence of the special contract at the close of the testimony, he did no more than rule that such special contract as proved constituted no defense under the circumstances disclosed by the testimony.

The defendant offered no evidence to, show that payments under the contract did not become due until all the deliveries thereunder were made, but left the plaintiff’s evidence in that respect uncontradicted; under those circumstances the special contract was no defense, and evidence thereof was immaterial.

The judgment-should be affirmed, with costs.

Bischoff and Pryor, JJ., concur.


text:
    J. Gardner Curtis, Resp’t, v. Robert Soltau, App’lt.

      (New York Common Pleas,

      General Term,

      Filed January 5, 1891.)

    Sale—Evidence.
    On the sale of a quantity of gutta percha by plaintiff to defendant, a memorandum of sale, stating the number of packages and terms of sale, was signed by defendant alone. In an action for the purchase price, Held, that the memorandum could not be said to be a contract between the parties; that it was in no sense the contract of plaintiff, and that paroi evidence was admissible to show that the sale was by sample, and that plaintiff warranted the goods sold to be like sample, and that some of the goods received were not gutta percha.
    Appeal by the defendant from a judgment in favor of the plaintiff for the sum of $3,065.48, entered upon a verdict rendered by direction of the court, and from an order denying defendant’s motion, for a new trial.
    The action was to recover $2,589.08, balance of the purchase price of certain lots of gutta percha on September, 6, 1888. The following is the only memorandum of sale which was made:

      “Boston, Sept. 6, '88.
    “ Bought of Messrs. J. Gardner Curtis & Co., Boston, the fol-
    lowing lot of Gutta Percha:
    XX. XX.
    0. WP.
    ex-Brilliant.....20 pcs. 14 packages. 84 packages.
    “ Chelsmford .. 86 “ 84 “ 104 “
    “ Slam at...... 93 “ 67 “ 37
    “ Mimi.......“ 34 “ 9 “'
    abt. 199 pcs. abt. 149 bkts. abt. 184 bkts.
    at the price of 32Jc. for C ; 12c. for w?; 12c. for XX.
    “ Terms cash 10 days less 1* brokerage from delivery of each lot as taken, lots all to be taken off by Soltau during month of September, 1888. Tare of each mark to be ascertained by taring actually 10* (ten per cent.) of same and to be applied on the lot. Baskets to be in good order, and any repairing to be done for seller’s account. Sample packages Soltau got to be settled at above prices for the three different marks.
    Egbert Soltau.
    “ Please make out three different delivery orders. One delivery order for each mark.”
    The answer set up that the sale was by sample and that plaintiff expressly warranted and represented the bulk of the gutta percha to be equal to the samples, and that subsequently it was discovered that ninety-eight baskets marked “XX” proved to be a certain foreign substance having no marketable or other value whatever, and possessing none of the qualities of gutta percha, and in no respect corresponding to the alleged samples; and a counterclaim of $994.78 damages is set up resulting from the loss of profits upon a contemplated sale which defendant alleges the plaintiff knew of at the time of the purchase.
    The reply of the plaintiff admits that the defendant received samples of the merchandise, but alleges that they were taken by the defendant himself from the bulk of the gutta percha in warehouse and that defendant personally inspected and had the opportunity to inspect the whole of said gutta percha and after such inspection took such samples as . he chose, and denies that plaintiff made any warranty or representation, and denies that any part of the gutta percha proved to be a foreign substance having no marketable or other value; and, whilst admitting that the plaintiff supposed defendant bought the gutta percha for the purpose of reselling the same, denies that plaintiff knew to whom, or for what price defendant expected to sell.

      Geo. M. Pinney, Jr., for app’lt; Frank F. Blackwell, for resp’t.
   Daly, Ch. J.

Upon the trial of the action the defendant offered evidence of conversations with the plaintiff at and before the sale and letters of the plaintiff written before the sale, to prove that the sale was by sample and also that the plaintiff at the time of the' execution of the written memorandum warranted that the gutta percha was of the same quality as the samples; and also offered evidence to show that the ninety-eight baskets rejected were not gutta percha within the meaning of the contract and were not merchantable, and that he had no opportunity for inspecting the goods which he purchased. This evidence was excluded.

There was no written contract of sale on the part of the plaintiff. The memorandum in evidence was signed by the defendant only, and purports to contain his obligation and no more. It cannot be said to be the contract between the parties. Hot having been •signed by the plaintiff it was not in any sense his contract. He could not have been sued upon it, and so far as he was concerned his agreement rested solely in paroi. Under these circumstances, as the agreement of sale has been executed and no question of the statute of frauds can be'raised, the defendant should have been permitted to show by paroi what the contract of the plaintiff was.

Since the trial of this action the precise point has been decided in Routledge v. Worthington Co., 119 N. Y., 592; 30 N. Y. State Rep., 195. In that case, which was an action to recover payment for certain goods sold by the plaintiffs to the defendant, the plaintiffs produced in evidence a writing signed by the defendant by which it agreed to take them at a price specified. Defendant set up a counter-claim and offered to prove by paroi that plaintiffs agreed, in consideration of the purchase and as a part of the agreement, that the trade price at which they sold the goods should not be lowered, and damages were claimed for a breach of that agreement. The testimony was objected to and excluded. This was held error; that the writing represented a part only of the contract, that is, the defendant’s undertaking, while that of the plaintiffs rested simply in paroi; that there was in fact no valid contract between the parties, but as it had been executed this took the agreement out of the statute of frauds and left the parties subject to, and bound by, the terms of the actual agreement made, citing Lockett v. Nicklin, 2 Exch., 93, which was an action of debt for goods sold and delivered, the goods being furnished upon a written order of the defendant, and the defendant offering paroi evidence to prove that the terms upon which the order was given was six months’ credit, etc.; the evidence was held admissible to show the whole contract, of which the paper contains only one of the terms. The rule is stated in the court of appeals opinion as follows: “The rule which rejects paroi evidence when offered with respect to a contract between parties, and put into writing, has no application to a case like this, where, of the original agreement which has been executed, a part only is in writing and the rest was verbal. The principle of liability is the same whether the whole transaction be embodied in one instrument setting forth the respective obligations of both parties, or whether it takes the form of a separate undertaking by each party. Whether we regard the writing of the defendant as an order or as an agreement is quite immaterial. In either view it was an admission only of the defendant’s engagement.”

In the light of this decision, the exclusion of the testimony offered by the defendant of the agreement made by the plaintiff was error, and the judgment must be reversed and a new trial ordered, with costs to abide the event.

Bischoff and Pryor, JJ., concur.


author: Pryor, J.

text:
    Jeremiah Cumber, Resp’t, v. Louis N. Schoenfeld, App’lt.

      (New York Common Pleas,

      General Term,

      Filed January 5, 1891.)

    Pleading—Amendment—Malicious prosecution—False imprisonment.
    The action was brought for malicious prosecution, and was tried on that question alone, but plaintiff having elicited from a witness, on cross-examination, that the arrest was without a warrant, moved, at the close of the case, for an amendment of the complaint to conform to the proof, Which motion was granted and the case submitted to the jury as authorizing a recovery as well for false imprisonment as for malicious prosecution. Reid, error. ,
    Appeal from judgment in favor of plaintiff, entered on verdict,- and from order denying motion for a new trial.
    • Michael Jacobs (Christopher Fine, of counsel),for app’lt; Albert I. Sire (Jacob Fromrne, of counsel), for resp’t.
   Pryor, J.

Appeal from a judgment for plaintiff, on a verdict, and from an order denying a motion for a new trial.

The complaint exhibits but a single cause of action, and that is strictly and exclusively for malicious prosecution. Plaintiff rested upon proof of a right of recovery for malicious prosecution only; hut,-having elicited, on cross-e'xamination of defendant’s witness, that the arrest was without a warrant (although his complaint expressly alleged that the arrest was under a warrant), plaintiff moved, at the close of the case, to amend the complaint to conform to the proof. The motion was granted, and although no amendment was actually made, it is clear, beyond controversy, that the amendment moved for and allowed was the addition to the complaint of a cause of action for false imprisonment. The amendment was. so regarded by counsel and by the -court; and, in the charge, the case was expressly submitted to the jury as authorizing a recovery as well for false imprisonment as for malicious-prosecution.

Upon proper objection made at the time, the trial judge would undoubtedly have refused to permit the amendment. That it is improper to permit at the trial a new cause of action to be introduced into the complaint is apparent upon the terms of the Code as well as by the uniform course of adjudication. Code Civ. Pro., § 723 ; Price v. Brown, 98 N. Y., 388, 393; Reeder v. Sayre, 70 id., 181; Harris v. Tumbridge, 83 id., 92, 97; Bockes v. Lansing, 74 id., 437; Baldwin v. Rood, 17 N. Y. State Rep., 517; Buffalo, etc., v. Allen, 12 Civ. Pro., 64; 5 N. Y. State Rep., 146.

It it be answered that no exception was taken by defendant to the allowance of the amendment, the reply is, that to authorize a review by the general term, a formal exception is not indispensable. Maier v. Homan, 4 Daly, 168; Madeville v. Marvin, 30 Hun, 282, 287, 289; Standard Oil Co. v. Ins. Co., 79 N. Y., 506, 510 ; Hamilton v. R. R. Co., 53 id., 25, 27: Lattimer v. Hill, 8 Hun, 171; Ackart v. Lansing, 6 id., 476.

The case, then, was limited throughout as an action for malicous prosecution and for nothing else; and it was not until both parties had rested and the summing up about to begin, that defendant intimated a claim to recover for false imprisonment. The fundamental condition of recovery in such an action is proof by plaintiff of the absence of probable cause for his prosecution; and it is impossible to say what would have been the determination of the jury upon it had it been submitted to them as a separate and distinct question. Hay, as the case was submitted to the jury, we cannot say but what they did not pass upon the question at all; for, in express terms, the court charged that, “ if the plaintiff shows that he has been illegally arrested or detained, that makes out his cause of action.” With such an instruction, the verdict might well have proceeded upon the illegal arrest alone, although the jury had found for defendant on the issue of probable cause; and so the effect of interpolating a new cause of action at the close of the case become, sufficiently manifest.

If it be said that no harm accrued to defendant by allowing a recovery for false imprisonment, because that ground of action was established by clear and incontrovertible proof, we answer: that, at all events, the defendant should have had a fairer opportunity to contest the fact of the illegality of the arrest than was afforded him by notice of an issue as to the fact given him for the first time after the close of the case.

We think, in the interests of justice, a new trial should be awarded, costs to abide the event.

Bischoff, J., concurs.