text:
    Francis W. Smith, Resp’t, v. S. Howard Barnes et al., App’lts.

      (New York Superior Court, General Term,

      Filed June, 1894.)

    1. Appeal—Waiver—Stipulation.
    Parties may stipulate that the decision of a court may he final, and thus waive the right of appeal.
    2. Same—Power op attorneys.
    An attorney may enter into such a stipulation without the prior consent of his client.
    Appeal from order of special term.

      Horatio C. King, for app’lts; David Leventritt, for resp’t.
   Gildersleeve, J.

This action, to recover commissions earned by the plaintiff’s assignor in the capacity of selling agent for the defendants, after being at issue nearly three years, was, under a stipulation, sent to a referee to hear and determine. The stipulation is as follows : “ The issue in the above-entitled action having been set down for trial this 16th day of October, 1898, and the case having been called and marked ready, it is hereby stipulated and agreed by and between the .parties to this action and their respective attorneys that the issues in the above-entitled action be, and the same hereby are, referred for determination to the Hon. William S. Keiley, as referee, the said reference to proceed without delay, and to continue thereafter without reasonable adjournment, as hereinafter specified. And it is further stipulated and agreed that neither party hereto will appeal from the judgment to be entered on the report of the referee, or make any motion in arrest or stay of the said judgment, or of the execution to be issued thereon, or appeal from any order denying any motion that may be made by the defeated or aggrieved party for a new trial, the object of this stipulation being to bring this litigation to a speedy and final determination.

Dated New York, October 16th, 1893.

David Leventritt,

Attorney for plaintiff.

Durnin & Hendrick, Attorneys for defendants.”

The trial proceeded before the referee about as usual in such cases, and in a reasonablé time the case was submitted, the report of the referee filed, and judgment duly entered in favor of the plaintiff. The defendants, by an order to show cause, moved at. special term to set aside the stipulation, and for a new trial on the ground of newly discovered evidence, or for an opening of the reference and a re-hearing. This appeal is from the order of the-special term denying thehe requests. The main argument of the-learned counsel for the appellants is an attack upon the stipulation. Defendant Barnes swears that the stipulation was made without the knowledge or consent of either of the defendants. - It is urged by appellants that the stipulation deprives the defendants of a substantial right, to wit: the right of appeal, and for this reason cannot be entered, into by an attorney without the prior consent of his clients. It must be observed that the time to appeal elapsed before the motions under consideration were made. Should the stipulation be set aside, it is beyond the power of the cóurt to restore the right to appeal. But we deem it proper; to add that, in our opinion, the stipulation was a reasonable and proper one under the circumstances and should be enforced. Parties, by their stipulations, may in many ways make law for any legal proceeding to which they are parties, which not only binds them, but which the court, are bound to enforce. They may stipulate away statutory and even constitutional rights. They may stipulate that the decision of a court shall be final, and thus waive the right of appeal; and all such stipulations not unreasonable, not against good morals or sound public policy, have been and will be enforced, and generally, all stipulations made by the parties for the government of their conduct or the control of their rights in the trial of a cause or the conduct of a litigation are enforced by the courts. In the Matter of N. Y., Lackawana & W. R. R. Co., 98 N. Y. 447. See, also, People v. Stephens, 52 N. Y. 310; Townsend v. Masterson Stone Dressing Co., 15 id. 587; Hong Kong & Shanghai Banking Corporation v. Cooper, 114 id. 388; 23 St. Rep. 787; Riggs v. Commercial Mut. Ins. Co., 125 N. Y. 7; 34 St. Rep. 465; Staples v. Parker, 41 Barb. 648 ; Cox v. N. Y.C. & H. R. R. R. Co., 63 N. Y. 414; McGuire v.Id., 6 Daly, 70; Ballou v. Parsons, 55 N. Y. 673. Even assuming that the stipulation was made without the knowledge or consent of either of the defendants, we are inclined to think that thé attorneys had power to enter into the stipulation without special authority, and that the defendants are bound by the act of their attorney. It is a general rule that proceedings regularly had by attorneys, lawfully appearing for the respective parties, cannot, in the absence-of fraud, be questioned by their clients because of the want of specific authority to do the acts done or consented to by them. Palen v. Starr, 7 Hunr. 422. The stipulation was proposed by the defendants’ attorney and" by it the defendants secured the benefit of an adjournment, the waiver of a jury trial and the appointment of a referee named by them. As a condition of granting the favor, both parties, by their attorneys united in a stipulation not to appeal. The plaintiff was justified in assuming the authority of the defendants’ attorney to make the stipulation, and in consideration thereof waived a default and an inquest The court of appeals in Cox v. N. Y. C. & H. R. R. R. Co., 63 N. Y. 414, held that the attorney for a defendant might stipulate that the action should not abate on the death of the plaintiff, in order to secure an adjournment of the trial, without special authority from the defendant. The court said: “It pertains to the procedure in the action; and it is a just implication that the authority of the attorney extends to the management of the cause in all the exigencies which arise during its progress. The attorney cannot compromise the claim of his client, or release the cause of action, or satisfy a judgment in his clients’ favor without payment, in the absence of special authority. There is no implication of an authority to do acts of this character from his appointment as attorney in the case; and a party dealing with him is bound to take notice that they are not within the scope of his authority. But in matters relating to the conduct of the cause, liis authority is very broad.” Denton v. Noyes, 6 Johns. 295; Gaillard v. Smart, 6 Cow. 385; Gorham v. Gale, 7 id. 739; Corning v. Southland, 8 Hill, 552; Gainsford v. Grausnar, 2 Camp. 9.

But aside from this consideration, we are of the opinion that the evidence fairly shows that the stipulation was fully assented to, in the course of its execution, by the defendants, and they ratified it, and are estopped from questioning its binding force. Since we reach the conclusion that the stipulation must stand, the appeal from so much of the order as denies the motion for a new trial must be dismissed. The terms of the stipulation preclude the appeal. • The motion" for a new trial on the ground of newly discovered evidence is without merit. The most that can be said on this branch of the case is that the appellants’ insistance th.at their own counsel did not present their case fully and with the ability the situation demanded, should not be permitted to work a disadvantage to the plaintiff and cause him to surrender rights lawfully acquired under the stipulation.

This grievance the defendants must settle with their former counsel, who conducted the trial. Ho fraud or collusion is charged. The stipulation was fully executed and performed. Ho sufficient reason appears for setting aside or interfering with the proceedings had, and the defendants, though disappointed, should accept the result and pay the judgment.

Order affirmed, with ten dollars costs and disbursements.


source: Caselaw Access Project

author: Bischoff, J.

license: Public Domain

text:
    James L. Clark, App’lt, v. Andrew J. Smith, Resp’t.

      (New York Common Pleas, General Term,

      Filed June 27, 1894.)

    1. Appeal—Weight oe evidence.
    ‘Upon appeal from the New York city court, the common pleas is concluded by the judgment of affirmance below with regard to the weight of evidence and can examine only rulings -upon questions of law, duly excepted to, for reversible error.
    2. SameR-Exceftions.
    Exceptions to rulings upon evidence, where no ground of objection is stated, are unavailing on appeal.
    8. Same—Reversible error.
    The error for which a reversal is to be directed must be one which operates prejudicially to the appellant.
    4. Witness—Credibility.
    Testimony of parties, even though uncontradicted, is not conclusive.
    5. Appeal—Opening and closing.
    The bestowal of the opening and closing in a judicial trial, where the right thereto does not exist, does not afford to the recipient party a valid ground of complaint.
    Appeal by the plaintiff from a judgment of the general term of the city court of New York entered upon an order affirming a judgment at trial term in favor of the appellant. Action for goods sold and delivered; the defense being payment.

      J. George Flammer, for app’lt; Charles F. Holm, for resp’t.

      Affirming 58 St. Rep. 407.

   Bischoff, J.

Upon appeal from the city court of New York to this court we are concluded by the judgment of affirmance below with regard to the weight of the evidence and are to examine only rulings upon questions of law, duly excepted to, for reversible error. Arnstein v. Haulenbeck, 16 Daly, 382 ; 34 St. Rep. 297; Smith v. Pryor, 16 Daly,169; 30 St. Rep. 553; Rowe v. Comley, 11 Daly, 318; Meyers v. Cohn, 4 Misc. Rep. 185; 53 St. Rep. 223. The action was brought to recover for goods sold and delivered and defendant had, prior to the trial, offered judgment for the sum found by the jury to be due. Payments had been made to plaintiff, from the proceeds of defendant’s business, by defendant’s clerk Petersen, which, in the aggregate, according to defendant’s books of account, brought the account between the parties to a figure which corresponded to defendant’s contention. The payments were by note in two instances, and by cash in the remaining cases. It was claimet^by plaintiff that the former payments were made on the account of Petersen individually, and that the latter were applied upon an earlier indebtédness of defendant’s, this indebtedness not being specified. It appeared that Petersen had previously owned the business, which was conducted by defendant at the times covered by the suit, and had sold the same to the latter. All the payments made to plaintiff were entered in defendant’s ledger by Petersen, and he testified that he had not charged himself with the amounts stated to have been paid for his individual account. He further claimed that there was an agreement between defendant and himself whereby such use of the proceeds of the business was allowed to be made for his, Petersen’s account, and this the defendant emphatically denied. As to the application of the payments to an earlier indebtedness for goods sold, defendant testified that the full amount owing for goods furnished by plaintiff since he, defendant, purchased the business from Petersen, was in the sum which exactly equalled the amount of the payments made together with the amount tendered by defendant and which his answer conceded to be due. Here was certainly a question for the jury upon the issue litigated, and moreover, the credibility of the only three witnesses called was for the jury’s determination. Petersen was somewhat discredited by the contradiction appearing between his version of the sale of the business to defendant as given upon the trial, on the one hand, and in his sworn statement in supplementary proceedings under a certain judgment, on the other. Neither the testimony of the plaintiff nor of the defendant was conclusive, even, when uncontradieted, being that of parties interested in the issue. Wennerstrom v. Kelly, 57 St. Rep. 522, and cases there cited. The few exceptions taken to rulings upon evidence are unavailing upon this appeal, no ground of objection having been stated. Malcolm v. Lyon, 46 St. Rep. 921; Meyers v. Cohn, 4 Misc. Rep. 185; 53 St. Rep. 223. But upon an examination of them "we find no prejudice to appellant. Stress is laid upon the one remaining exception in the case, which was taken to the court’s refusal to instruct the defendant to take the affirmative upon the issue. It is argued that upon the pleadings the defense of payment was the only issue presented, the answer having admitted the sale and delivery of the goods during the period covered by the complaint, and the denial of value, appearing in the exact figures stated in the complaint and thus fraught with a negative pregnant, being insufficient to present an issue. Baylies' Code Pleading, 229, Bliss’ Code Pleading, § 332; Maxwell’s Code Pleading, 16, 389; Boone’s Code Pleading, 361. Wxe assume, as contended by appellant, that the answer was insufficient to raise a material issue touching the allegations of the complaint, Abbotts Trial Brief on Pleadings, §§ 585, 587, hut it is inconceivable that the plaintiff was harmed because he was constrained to prove what was already admitted. The only issue litigated was that of payment and there is nothing in the record to indicate that the plaintiff was forced to assume, or that he did assume, the burden of proof with regard to that defense. Indeed it appears that he did not do so, and the court properly instructed the jury that the burden of proof of payment was upon the defendant. The only effect therefore of the ruling that the affirmative was with the plaintiff, was to deprive the defendant of his right to begin and conclude and to bestow the advantages to be derived from the exercise of the right upon the plaintiff. The beginning and conclusion in judicial trial has been uniformly regarded as an advantage, Am. & E. Ency. of Law, vol. 17, p. 194; “ Onus Probandi,” p. 603, and only the denial of the right to present ground for reversal. Thompson on Trials, vol. 1, § 226, note 2, and cases cited. The bestowal of the advantages, where the right thereto does not exist, cannot therefore afford a valid ground for complaint Mere error is never sufficient to warrant the interference of the appellate court. "The error for which a reversal is to be directed must be one which operated prejudicially to the appellant. Tracey v. Altmyer, 46 N. Y. 598, 604; Appleby v. Erie Co. Sav. Bk., 62 N. Y. 12, 18; Carman v. Pultz, 21 N. Y. 547 ; Briant v. Trimmer, 47 N. Y. 96. Judgment of the general and trial terms of the court below af-firmed, with costs.


text:
    Ephriam C. Gates et al., App’lts, v. Ellen Williams, Impleaded, etc., Resp’t.

      (New York Common Pleas, General Term,

      Filed June 27, 1894.)

    Bills and Notes—Indorsement—Consideration.
    Where an indorsement is made for the accommodation of the makers, the acceptance of the note by the payee before maturity and in discharge of the makers’ precedent debt, furnishes adequate consideration for the indorser’s promise.
    Appeal from an order of the general term of the city court of New York which reversed a judgment for the plaintiffs rendered upon a verdict directed in their favor, and directed a new trial. Action by the payees named in a promissory note to recover against an indorser.

      George W. Stevens, for app’lts; James A. Deering, for resp’t.

      Reversing, 52 St. Rep. 425.

   Bischoff, J.

The plaintiffs, being the payees named in the note in suit, were prima facie liable as first indorsers, and could not maintain this action against the defendant-respondent in -the absence of an agreement whereby the latter assumed to be answerable as indorser to the former, Bornstein v. Kauffman, 53 St. Rep. 69, and cases cited. Conceding this the plaintiffs alleged in their complaint that the note, indorsed by the defendant, was given by the makers in payment of the purchase money for certain lumber thereafter to be supplied by the plaintiffs to the makers for use in the defendant’s proposed building, and that at the time of the plaintiffs’ acceptance 'of the note, and in consideration of such acceptance, the defendant promised to pay if at maturity the makers did not. An agreement to the effect stated was denied by the defendant. The trial court directed a verdict for the plaintiffs, the judgment whereon was reversed by the general term of the court below, the particular ground for reversal being that the agreement alleged in the complaint was without support in the evidence. That the reversal was error is obvioufi It is not to be sustained upon any ground as none of the exceptions taken during the trial present error.

On the trial the plaintiffs failed to establish the agreement alleged, but thelfe was sufficient evidence from which it appeared that the note, indorsed by the defendant, was accepted by the plaintiffs in satisfaction and discharge of a demand which arose from the past supply of lumber, by the plaintiffs to the makers of the note, and for use in the defendant’s building; and the note was so accepted by the plaintiffs under circumstances which admit of no other reasonable inference than that the defendant assumed to be answerable as indorser to the plaintiffs, upon the makers’ default, in consideration of the plaintiffs’ acceptance of the note for the purposes stated. This last mentioned evidence was substantially conceded on the part of the defendant to be true, as 'we shall hereafter show, and was admitted without objection. Unless therefore the agreement proved was in itself insufficient to constitute a cause of action the objection that the cause of action as alleged, was unproved in any essential particular was not available to the defendant, Frear v. Sweety 118 N. Y. 454; 29 St. Rep. 972. If necessary in support of the judgment the appellate court may conform the pleadings to the proof. Reeder v. Sayre, 70 N. Y. 180; Harris v. Tunbridge, 83 N. Y. 92. The indebtedness of the makers to the plaintiffs, in the amount for which the note was given, was conceded. The plaintiffs’ collector, Robinson, testified that he was sent by his employers to collect their demand, and that, having met the defendant, the indorser, he was by her referred to her husband, at the latter’s place of business, there to meet her, with Fritz & Hafner, the makers of the note, for the purposes of a settlement relating to the construction of her building; that he met the defendant’s husband, and Fritz- & Hafner, at the place appointed, but did not see the defendant though she was in another part of the house; that he then requested payment of the plaintiff’s bill; that Fritz stated that he was without money; that the witness then offered to accept Fritz & Hafner’s note for the amount provided the defendant would indorse it; that Fritz thereupon produced the note in suit, signed by his firm, and payable to the otder of the plaintiffs, and handed it to the defendant’s husband, who was present throughout the interview and assumed to act for his wife; that the defendant’s husband took the note out of the room, returning with it shortly afterwards, indorsed by the defendants ; that the note, so indorsed, was thereupon delivered to the witness, either by Fritz or the defendant’s husband, and that the witness in exchange therefore gave Fritz the plaintiff’s receipted bill against Fritz and Hafner. That Robinson was referred by the defendant to her husband, on the occasion alluded to by the witness, was nowhere denied; and that the defendant’s husband assumed to act as her representative, with her knowledge and approval, clearly appeared from her husband’s testimony when examined as a witness for his wife. The witness last alluded to not only admited his presence and participation in the negotiations which led to the delivery of the plaintiffs’ receipted bill, and that he had just made a payment for his wife to Fritz & Hafner on account of the building matter, but he fully corroborated Robinson’s statement that the defendant was in an adjoining room and indorsed the note at the husband’s procurement. The defendant’s husband further corroborated Robinson with regard to the latter’s refusal to accept Fritz & Háfner’s note except with the defendant’s indorsement. From the defendant’s own admissions, it was obvious that when she indorsed the note she was aware that it was intended to be delivered to the plaintiffs in liquidation of their claim against the makers. Fritz, one of the makers, and a witness for the defendant, testified to the same effect. But whether, or not, the defendant had personal knowledge of that fact, was immaterial, since, for the purposes of the negotiation and delivery of her indorsement, she had constituted her husband her agent. True, the defendant and Fritz contradicted Robinson in so far as they said that it was Fritz who took the note out of the room to secure the defendant’s indorsement, but while so doing they equally contradicted the defendant’s husband. Whatever may have been the fact in that respect, it was of no substantial • importance, in view of the further and conceded fact that the defendant’s indorsement was procured with the cognizance and approval of her husband, who, for the purposes of the negotiation of the note for the maker’s account, represented his wife, the indorser. From the conceded facts, as they are narrated above and appear to us from the evidence, the conclusion is irresistible, that the defendant, acting for the purpose by her husband as her authorized representative and agent, intended the plaintiffs through their collector, to understand that the note was given in liquidation of the maker’s indebtedness to them, and that, if at maturity the makers failed to pay, she would pay the amount. Hence in legal effect such was her promise. Any claim for the defendant that she indorsed the note for the accommodation of the plaintiffs was, if her testimony to the effect that the payees were utter strangers to her was true, preposterous, and, assuming that the defendant’s indorsement was made for the accommodation of the makers, the acceptance of the note by the plaintiffs before maturity, and,in discharge of the maker’s precedent debt, furnished adequate consideration for the defendant’s promise. Mech. & Traders' Bank v. Livingston, 6 Misc. Rep. 81;-55 St. Rep. 394. Onr conclusion is that there was no substantial defense to the plaintiffs’ cause of action as it was proved without objection, and that a verdict for the plaintiffs was properly directed.

The order of the general term of the court below should therefore be reversed, and the judgment of the trial term be affirmed, with the costs of both appeals to the present appellants.

All concur.


author: Bischoff, J. Pryor, J. (Concurring).

text:
    In the Matter of the Petition of John J. Hopper to Punish Edwin S. Updike, Sr., for Contempt of Court.

      (New York Common Pleas, General Term,

      Filed June 23, 1894.)
    1. Contempt—Fraudulentisurety.
    The fraudulent justification of a bond, given to discharge a mechanic's lien, constitutes a contempt of court for which the lienor is entitled to redress to the extent of the injury inflicted upon him.
    2. Same.
    The fact that the lienor and his attorney, in good faith, approve the bond, and by that means facilitate the fraud, does not palliate the offnese.
    3. Same.
    Reparation for the injury inflicted upon the lienor, in whole or in pari, is entitled to consideration in determining the measure of the redress.

      Appeal.from an order denying the application of the petitioner in proceedings instituted to punish a surety upon a bond, given to procure the discharge of a lien under the provisions of the Mechanic’s Lien Law, for contempt of court; said surety having falsely represented himself to be worth double the amount of the penalty of the bond oyer and above all debts and liabilities and property exempt by law from levy and sale under execution, and thereby induced the court to direct the'discharge of the lien.

      Carpenter & Bassett, for app’lt; David McClure, and Harry B. Wesselman, for Edwin S. Updike, Sr., Resp’t.
   Bischoff, J.

The petitioner, John J. Hopper, was the lienor named in a notice claiming a lien pursuant to the provisions of the Mechanic’s Lien Law (Ch. 342, L. 1885) which notice was filed as by statute is for such cases made and provided. The lienees, intending to secure the discharge of the lien upon giving security as provided by subdivision 6 of § 24 of the Mechanic’s Lien Law, caused the lienor to be served with a copy of the proposed bond and notice to the effect that the sureties would appear at a time specified, before the court, for examination with regard to their sufficiency. Relying upon the truth of the formal affidavit of sufficiency, made by each of the sureties, and endorsed on the bond, to the effect that the affiant was at the time a freeholder within the state and worth double the amount of the penalty over and above all debts and liabilities and property exempt by law from execution, the lienor’s attorney waived further examination of the sureties and approved the bond. The court thereupon also approved the bond and by its order directed that the lien be discharged. Pursuant to the directions of the order the lien was in fact discharged. Subsequently the lienor recovered judgment in an action brought to foreclose the lien. The judgment remaining unpaid the lienor next recovered judgment upon the bond against the sureties. Supplementary proceedings in aid of an execution against the property of Edwin S. Updike, Sr., one of the sureties, developed that he was then worthless. These proceedings were then instituted against Updike to punish him for his misconduct in having by means of his wilful misrepresentation of the substance of his formal affidavit of justification imposed upon the court and thus induced it to direct the discharge of the lion to the petitioner’s injury. _ On the hearing it transpired, as stated, that the petitioner had not availed himself of the opportunity afforded for the particular examination of the sureties with regard to their sufficiency before the approval of the bond; that the surety proceeded against actually held the record title to several pieces of real property situated in the city of How York" at the time he tendered himself as such surety, and that the petitioner, prior to the institution of these proceedings, and after the surety’s examination in supplementary proceedings, had brought two actions in the superior court to set aside certain conveyances made by the surety subsequent to the signing of the bond, as fraudulent respecting the creditors of the grantor, which actions were pending and undetermined. For these reasons the learned judge at special term dismissed the proceedings. The bond given upon the discharge of the lien was i,n the penalty of thirteen hundred dollars and from Updike’s sworn testimony as a judgment debtpr it appears that his formal affidavit of sufficiency as surety was unqualifiedly false and perjurious. He most explicitly admitted that his ownership of the several pieces of real property, excepting the premises Nos. 12 to 22 East 106th street, the title to which was in him when he qualified as surety, was wholly nominal, and that he had since conveyed them as directed,by the actual owners. With regard to the 106th street property he stated that his interest therein was only to the extent of- oqefifth of their value over and above the cost of construction; that the estimated cost of construction was $159,000, the actual cost $180,000, and their value not above the last mentioned sum. He further admitted that at, or about, the time he tendered himself as surety he was indebted to his daughter-in-law, Fannie M. Updike, in the sum of $5,000, and that his personal property at the same time did not exceed $200. Accepting now the cost of the 106th street houses at $159,000, and their value at $180,000, Updike’s interest in the excess of, value above the cost was not over $4,200. Adding to the last mentioned amount the value of his personal property, without deduction, the aggregate amount of property owned by Updike when he offered himself as surety was $4,400. Deducting from the last mentioned sum his indebtedness to his son’s wife, $5,000, it is apparent that after giving him the benefit1 of the most favorable construction of his testimony, Updike was actually insolvent when he persuaded the court to accept him as a sufficient surety for $1,300, and that he swore falsely when he stated, under oath, that he was worth double that sum above all debts and liabilities and property exerhpt by law from levy and sale under execution. That the imposition so successfully practiced by Updike constitutes a contempt of court for which the petitioner is entitled to redress to the extent of the injury inflicted upon him is a proposition so well supported as to be no longer debatable. Simon v. Aldine Pub. Co., 14 Daly, 279; 8 St. Rep. 377; Lawrence v. Harrington, 63 Hun, 196; 43 St. Rep. 413; Foley v. Stone, 30 St. Rep. 834; People ex rel. Munsell v. The Court of Oyer & Terminer, etc., 101 N. Y. 245; King v. Barnes, 113 N. Y. 476; 23 St. Rep. 263. Nor does the neglect' of the petitioner’s attorney to avail himself of the opportunity to inquire into the particulars of the surety’s sufficiency assuage in any degree the latter’s outrageous and criminal conduct. The fact remains that he knowingly and deliberately carried his attempted imposition upon the court into successful execution and by fraudulent means secured the order which deprived the petitioner of his security. That the petitioner, and his attorney, unwilling unnecessarily to tax the endurance of the court and to delay the discharge of-its duties in other respects by, what seemed to them, a needless examination, in good faith, and unwary of the attempted perpetration of the fraud, approved the bond, and by that means facilitated the fraud, does not palliate the offense. Nor is the apparent inconsistency of the petitioner in prosecuting these proceedings and the superior court actions at one and the same time available as a means of exonerating the offender. The offense was one against the dignity of the court which it was neither the province of the petitioner, nor his right, to compromise or condone. It is owing to the court that the offense should not go unpunished, if for no other reason than to deter others from the commission of like acts. If the actions brought to set aside the alleged fraudulent conveyances had been prosecuted to success that fact might have ■afforded a refutation of the present charge. We are not permitted to indulge a presumption that the conveyances were fraudulently made. As it is the offense is not only denied but substantially conceded. If reparation for the injury inflicted upon the petitioner by the loss of his security had been made, in whole or in part, that fact would have been entitled to consideration in determining the measure of the redress to be awarded to the petitioner and be exacted of the offender by way of punishment to be imposed. The order of the special term is reversed, with costs, and the prayer of the petitioner is granted with costs, Edwin S. Updike, Sr., is adjudged guilty of a contempt of court, •and fined in the amount of the judgment recovered against him, with the costs and expenses of the supplementary proceedings, of these proceedings, and the costs of the appeal, besides one hundred dollars for the fees of the petitioner’s attorney. The order hereon must be settled on notice.

All concur.

Pryor, J. (Concurring).

It was the privilege but not the duty ■of the claimant to examine the surety as to his sufficiency. He had a right to rely on the surety’s sworn statement of his pecuniary resources; indeed, such statement was enough to quiet apprehension and remove suspicion. A party “has an absolute right to rely on the express statement of an existing fact, the truth of which is known to the opposite party and unknown to him ; and he is under no obligation to investigate and verify statements to the truth of which the other party has deliberately pledged his faith,” Mead v. Bunn, 32 N. Y. 275, 280, a fortiori, when the statement relied on is attested by oath and prescribed by law for the satisfaction of the party reposing upon it. The proceedings supposed to be inconsistent are not mutually exclusive within the principle of the doctrine of election of remedies. “A plaintiff is entitled to all the remedies provided by law for the collection of his debt.” Oneida Co. Bank v. Bonney, 101 N. Y. 173, 375. I concur with the opinion of Judge Bischoff.


text:
    The Monroe Miller Company, Resp’t, v. Edward S. Stokes, App’lt.

      (New York Common Pleas, General Term,

      Filed June 27, 1894.)

    Appeal—Final judgment.
    An appeal to the common pleas from a judgment of the New York city-court may be taken only when the judgment is final and was rendered upon an appeal to the general term.
    Appeal from a judgment of the general term of the city court of New York which affirmed a judgment at special term sustaining a demurrer to part of the answer. Action in conversion.

      John Delahunty, for app’lt; Shepard & Prentiss (Wm. H. Shepard, of counsel), for resp’t.
   Bischoff, J.

The answer, besides denying the alleged conversion, interposed a counterclaim for rent. A judgment at special term sustaining the demurrer to the counterclaim was affirmed at general term of the court below and from the judgment of affirmance defendant has attempted to appeal to this court. The remaining issues tendered by the pleadings are untried and that judgments of the character alluded to are severally interlocutory was ruled in Biershenk et al v. Stokes, 46 St. Rep. 179 ; 18 N. Y. Supp. 854. An appeal to this court from a judgment of the city court of New York may be taken only when the judgment is fined and was rendered upon an appeal to the general term. Code Civ. Proc. § 3191 subd. 1. The appeal must be dismissed with costs. All concur.


author: Pryor, J.

text:
    Mount Morris Electric Light Company, Resp’t, v. U. S. Horse and Cattle Show Society, App’lt.

      (New York Common Pleas, General Term,

      Filed June 27, 1894.)

    1. Appeal—Incompetent evidence.
    The rules of evidence are rules of law, of imperative obligation upon courts; and they may not be disregarded but at the risk of a reversal of the judgment that proceeds in disregard of them.
    2. Same.
    The presumption is of prejudice from error in the admission of incompetent evidence ; and such' error is fatal to the judgment unless the absence of prejudice be conclusively apparent.
    3. Same.
    The admission of immaterial evidence against due objection will be fatal to a judgment, if in any aspect the evidence might have been of effect upon the determination of any jury.
    Appeal from general term of city court, affirming judgment on verdict. The opinion states the case.

      Jay & Candler (Samuel Hoff, of counsel), for app’lt; Poster, Hotailing & Klenke, for resp’t.

       Reversing 57 St. Rep. 859.

   Pryor, J.

The action is in contract, for the value of work, labor and material in lighting up defendant’s premises for a horse show. On the trial the sole question in controversy was, whether the plaintiff guaranteed the sufficiency of the light. The amount of the recovery was not disputed; but whether there could be any recovery depended upon the issue as to the guarantee of the light, and upon that the evidence was conflicting and the struggle strenuous. Against objection and under exception, the court received proof of an insolvent proceeding against the defendant corporation in the chancery court of New Jersey, and of an ex parte verification by plaintiff of the amount of its claim against the defendant. That the insolvency of the defendant was entirely irrelevant to any issue on trial, and that plaintiff's mere assertion of its claim in no degree tended to establish its validity, are perfectly plain propositions. As admissions of an agent the statements in the papers could not affect the defendant. Luby v. Hudson R. R. R. Co., 17 N. Y. 131, 133 ; Thalhimer v. Brinckerhoff, 4 Wend. 394; Hubbard v. Elmer, 7 Wend. 446; Pringle v. Leverich, 97 N. Y. 181. ,Indeed, the incompetency of the evidence was virtually conceded by the court below, and is not now plausibly disputed. It is argued, however, that because the evidence was immaterial, the error in its admission was without prejudice to the appellant. But, who knows its effect on the jury? By contending for its admission, plaintiff’s counsel asserted its importance to the interests of his client. By resisting its admission defendant’s counsel conceded its damaging effect on the cause of his client. By receiving the evidence the court gave assurance to the jury that it was fit for their consideration and should be an operative influence in the determination of their verdict. Who can say that this illegal evidence was not a potent factor in the deliberation and decision of the jury ? In its nature the evidence was well calculated to prejudice the defendant’s cause. The institution in another state of an insolvency proceeding against the defendant by its own president, doubtless conveyed to the jury the impression of an attempt to elude payment of its debts to the citizens of New York. To laymen the proceeding wore the aspect of a fraudulent scheme to defeat the plaintiff in its endeavor to collect its honest claim. To laymen the sworn authentication of plaintiff’s claim, though ex parte, might well be mistaken as conclusive proof of its validity. So far from disregarding the error in the admission of the evidence as harmless, the inference is that it clouded the defendant’s case with odium and suspicion, and induced the jury to reject the pretense of a guarantee as another dishonest effort to escape payment of its debts. Tabor v. Van Tassell, 86 N. Y. 642, 643. “ Upon a closely contested question of fact, slight influences may turn the scale; and every rule of propriety and of justice demands that nothing outside of the legitimate facts should be introduced to affect the minds of those who are to d'ecide the question,” O'Hagan v. Dillon, 76 N. Y. 170, 172.

■ The rules of evidence are rules of law, propounded for the guidance of courts and juries in the trial of causes. They are of imperative obligation; and are not to be put aside, in the discretion of .the court, from solicitude for the supposed interests of justice. The only justice known to courts is such justice as is ascertained and certified by legal evidence. Once suffer courts to break away from the rules recognized for ages as indispensible guides in forensic investigations, and the administration of justice, instead of proceeding upon a certain, and uniform system, will be determined by no more steady and consistent principle than the diverse opinions and capricious humors of individual judges. “It is the rule, alike of reason and of law, that litigants may present to the court all relevant and competent evidence, and that incompetent and irrelevant evidence shall be excluded, so that the case shall be heard and decided upon competent and legal proof,” Matter of Smith, 95 N. Y. 516, 527. The effect of the admission of immaterial evidence on the validity of a judgment, varies in different jurisdictions. Winkley v. Foye, 66 Am. Dec. 715, 717, note. But in this state the rule is inveterate that, “ where improper testimony has been admitted in, evidence, unless the court can see that the jury were not influenced by it, and that it could not by any possibility have affected the verdict, a new trial will be ordered.” Waring v. U. S. Telegraph Co., 4 Daly, 283; Allen v. James, 7 Daly, 13, 15; Baird v. Gillette, 47 N. Y. 186, 187; Carroll v. Deimel, 95 N. Y. 252 ; Wilder v. Peabody, 21 Hun, 376, 380; Underhill v. R. R. Co., 21 Barb. 488, 497; Bennett v. Mc Guire, 58 Barb. 625; Erben v. Lorillard, 19 N. Y. 299, 302. “ The true rule and the-only rule that can be sustained upon principle is, that the intendment of law is, that an error in the admission of evidence is prejúdical to the party objecting, and will be ground for reversal of the judgment unless the intendment is clearly repelled'by the record,” Coleman v. People, 58 N. Y. 555, 561-2; N. Y. Guaranty & In. Co. v. Gleason, 78 N. Y. 515, 517; Myers v. Malcolm, 6 Hill, 292. Other errors are alleged by the appellant; but the one discussed being fatal to the judgment, they require no consideration.

Judgment reversed and a new trial ordered; costs to abide event. All concur.


text:
    Walter Myers, Resp’t, v. Robert J. Dean, App'lt.

      (New York Common Pleas, General Term,

      Filed June 27, 1894.)

    Brokers—Commissions.
    A commission for obtaining a lease- is not earned, unless the broker is the procuring cause of the lease.
    Appeal from judgment on verdict and from order denying new trial. Action for services in procuring a lease to defendant of premises, the property of the city. The opinion gives the case.

      Bcothhy & Warren, for app’lt; P. Q. BcJcerson, for resp’t.
   Pryor, J.

The complaint is equivocal, and might authorize a recovery for the value of plaintiff’s services in helping to procure the lease or brokerage eo nomine, for procuring the lease. If the action proceeds 'upon the former alternative, it is impossible that the judgment shall stand; because unsupported by any evidence of the value of plaintiff’s services. The proof was only of the customary commission for actually procuring such a lease. Was the plaintiff, then, the procuring cause of the lease? In the nature of the case the lease could not have been the effect of his agency. For, being municipal property, the law required it to be let, as it was let, to the highest bidder at public auction. Supposing, as we are bound to assume, that the auction was fairly conducted by the representatives of the city, the acquisition of the lease by the defendant was due to the excess of his bid over the offers of competitors. It appears, however, that by the method of procedure in the comptroller’s office, proposals for the property were previously received, that then it was put to auction with the highest offer as the upset price, that defendant's was the highest offer, and that, the upset price being the only bid, th'e property was knocked down to the defendant. Under this arrangement, how was it possible for the plaintiff to be the procuring cause of the lease? The highest bid was the only conceivable cause of the lease to the defendant. In the negotiation for a proposal from the defendant, the comptroller reduced the provisional price of the lease from $35,000 to $31,000; and this sum the defendant agreed to bid at the auction. But, in the reduction of the price offered to the defendant, it does not appear that the plaintiff had any, the slightest agency. It might have been suspected that, at the private interview with the comptroller on the previous evening, the plaintiff had possibly persuaded him to lower his figure; but this inference the plaintiff repel* by the emphatic testimony, that the only object and result of that interview was to ascertain whether the defendant was playing him false. During the treaty of the next day, when the comptroller fell from $35",000 to $31,000, the plaintiff, by his own account, was a silent and passive spectator of the bargain between the comptroller and the defendant. The reduction was due only to the diplomacy of the defendant; unless, indeed, the mere presence of the plaintiff was of favorable influence with the comptroller—an inference which the high character of that official of itself suffices to intercept. If, however, it was the personal influence of the plaintiff with the comptroller that caused an accommodating offer of public property to the defendant, that was a service for which no court would suffer the plaintiff to recover a recompense. Lyon v. Mitchell, 36 N. Y. 235, 241 ; Oscanyan v. Arms Co., 103 U. S. 261; Mills v. Mills, 40 N. Y. 543. The reduction of the offér to the defendant being in no manner or degree the effect of plaintiff’s agency, how else could he be a procuring-cause of the lease to the defendant? Obviously in one way only; and that by preventing competing bidders from attendance at the sale, and so securing the lease at the defendant’s offer. This result he swears he accomplished, in collusion with the defendant; and accomplished it, too, by the false statement to intending lessees that the property was already rented. For this service, neither, will the law allow a recovery by the plaintiff. People v. Stephens, 71 N. Y. 527, 545; Atcheson v. Mal lon, 43 id. 147; Brisbane v. Adams, 3 id. 129, 130. Upon the uncontroverted proof the indispensable condition of plaintiff’s recovery was not performed; he was not the procuring cause of the lease to defendant. He did not direct the defendant’s attention to the property; he did not put the defendant in communication with the comptroller; he did not induce the reduction in the upset price; he did not negotiate the bargain; he did not bid in the property for the defendant. Again we ask, how, when or where did the plaintiff render meritorious service in procuring the lease for the defendant? If, upon the evidence before us, the plaintiff may found a claim for commissions, a speaking acquaintance with a broker is a hazardous connection. The complaint should have been dismissed, in conformity with defendant’s motion.

Judgment and order reversed, and a new trial awarded, costs to abide the event.

All concur.


author: Bisqi-ioff, J.

text:
    Adolph Rothmiller, Respt, v. Theodore G. Stein et al., App’lts.

      (New York Common, Pleas, General Term,

      Filed, June 27, 1894.)

    1. Fraud—Directors of corporation.
    The agents of a corporation are subject to the common rule imposing, upon a party making a false representation whereby another is misled, a liability for its direct consequences.
    3. Same—Duty of stockholder.
    Where the directors of a corporation make false representations as to the financial condition and state of earnings of the company, a stockholder may rely upon them m disposing of his stock and is not bound in any way to verify such report, though he had the opportunity.
    Appeal from interlocutory judgment overruling demurrer to complaint.

      Guggenheimer, Untermeyer & Marshall (Louis Marshall, of counsel), for app’lts; Kohn, Buck &. Lipmann ( William J. LApmann of counsel), for resp’t.
   Bisqi-ioff, J.

The actjon is brought against two managing officers of a corporation to recover damages for false representations as to the financial condition and state of earnings of the company, relying upon which the plaintiff, a stockholder, availed himself of a certain alternative offer for the purchase of his stock made to him by one Moore, a fellow stockholder. It is alleged that by reason of the "falsity of these representations, plaintiff was damaged in the difference between'the sum obtained by him upon this sale and the amount which, but for the - representations he would have accepted and received from Mqore upon acceding to the latter’s proposition in the alternative other than that which he actually accepted. This offer was for the purchase of plaintiff's stock at $80 per share, in cash, or for the sum of $50 per share, in cash, and the further sum of $50, pajmble if the dividends declared by the corporation during the succeeding year should amount to ten per cent. Relying upon the representations made by defendants, plaintiff accepted the latter offer, and by reason of the actual condition of the company, the contingent payment from Moore never became payable. -The statements alleged, and here admitted to have been made, with regard to the actual condition of the corporation, were certainly of a nature to justify the action of the plaintiff in accepting the offer in the alternative mentioned, and that plaintiff was damaged by this acceptance clearly appears from the allegations. The pleading is not open to criticism with regard to'the essential allegations of falsity and knowledge. For appellants it is contended that there was no damage to plaintiff, for a true report as to the condition alleged to have existed at the time (actual insolvency), would have precluded plaintiff’s acceptance of the advantageous offer without fraud as against Moore, but this is not a tenable position in view of the nature of the action. . Consistently with the established theory of 'an action for deceit, the damages are here claimed to have been sustained by plaintiff though his reliance upon the representations made. It does not appear that Moore’s offer was in anyway connected with the representation or that he knew of the report thus made which appears to have been for plaintiff’s supposed enlightenment alone. The proposition is alleged to have been an independent one, coming unsolicited. Plaintiff was called upon to exercise an option, should he assent to this proposition, and, while so assenting, he made his election in reliance upon the defendant’s representations and was thereby damaged, as subsequently appeared. He was not bound to so rely. He might, in disregard of the representations, have accepted the other alternative held out and have obtained the sum now claimed, without any possible fraud on his part as against Moore. But by his reliance he was damaged in the difference noted and the cause of action accrued. The false representations alone did not create this cause of action. Defendants having chosen to make such representations, their liability was suspended upon the plaintiff’s justifiable acts of reliance with the consequent damage as shown. $

Agents of a corporation are subject to the general common law rule imposing upon a party making a false representation, whereby another is misled, a liability for its direct consequences. Morawetz Corp. Sec. 573. Plaintiff was not bound in any way to verify the report given him by defendants as directors, although it must be assumed that he had the opportunity. The corporation was organized under the laws of the state of Hew Jersey, and by the common law,, which is presumed‘to obtain in such a case as the present, Whiteford v. Panama R. R. Co., 23 N. Y. 465. Waldron v. Ritchings, 3 Daly, 283, plaintiff had access to any one or all of the books and records of the corporation (Cook on stock and stockholders § 511), yet to defendants he owed no duty of vigilance, they being the parties guilty of the fraud as against him, and he was under no obligation to ascertain the facts with regard to representations, as to the truth of which the defendants, with peculiar means of knowledge, had pledged their faith. See Wright v. Denniston, 59 St. Rep. 549, 551. It is not necessary to discuss the allegations of mismanagement. That the complaint is to be upheld only upon the theory of an action for deceit, appears to be conceded by the parties, and is clear upon the reasons given at special term. We find no force in appellant’s argument to the effect that a negative and not a positive act was done by plaintiff in reliance upon the representations and that this was therefore not properly action." The argument is based upon the absence of any cases where the facts have disclosed a failure to perform a certain act, as the basis of an action for deceit but the point is without application in this case. The'active exercise of an election is certainly to be thken as action and this exercise, relying upon the representations, was the basis of plaintiff’s damage. ‘ It follows that the judgment must be affirmed with costs; leave to defendants to answer upon payment of costs. Bookstaver. P. J., concurs.


text:
    The People ex rel. Samuel Deutsch, Pl’ff, v. William Dalton et al., Def’ts.

      (New York Common Pleas, Special Term,

      Filed June, 1894.)

    1. Excise law—Transfer of license.
    The “Florence Mission" building'is not used exclusively for church purposes within the meaning of § 43 of the excise law.

      2. Same—Cebtiobari.
    The issuance of. the.writ of certiorari to the exise board is imperative in a case where an application for a license is denied.
    3. Same—Disobetion.
    The court may direct a license to issue upon its reversal of the excise board’s refusal, but it is not compelled to exercise this function.
    Returh of a writ of certiorari to review the determination of the board of excise of the city of New York.

      William F. S. Hart, for relator; Hdward Browne, for board of excise. - (,
   Bischoff, J.

Relator applied for the transfer of a saloon liquor license from the premises No. 170 Suffolk street to premises No, 11 Bleecker street, and the application was refused by the excise board upon the ground, solely, that the latter premises were upon the same street with and having entrance within 200 feet of a building occupied exclusively for church purposes.

The building referred to is that occupied by the “ Florence Mission,” an association devoted to the reformationof fallen women. It does not appear that this mission is organized in connection with any church, and it is alleged and uncontradicted that no clergyman or pastor is therewith associated. According to the description contained in the return made by the excise board, the building is utilized m the following manner :

“ The basement floor as a kitchen and dining room in connection with said mission. The first floor is used for religious meetings every evening until after midnight. The second floor as a sitting room, and two rooms which are occupied by the matrons connected with said mission, and also an office for the board of directors, which are'used in connection with said mission. The third floor contains two dormitories, with twenty-six beds, which are used by the inmates of said mission who attend the religious services. Another portion of said floor is used as a physician’s office, who is also connected with said mission. In the garret, or top floor, a portion of the same is used as a storehouse and also a cook’s sleeping apartment, which is also attached to said “ Florence Mission.”

Argument is unnecessary to demonstrate the fact that this building does not come within the rule invoked by the board of excise in sole support of its denial of the relator’s application, and yet we are to assume that by placing its decision upon this exclusive ground, the board exercised the ample discretion possessed in-such cases in favor of the applicant. The admirable object of the “ Florence Mission ” in its prosecution of the commendable work described might well have appealed to that discretion, and the appeal have resulted in the avoidance of such an opposing element to the mission’s pursuit as the close proximity of a saloon could readily be apprehended to present.

Disposition must be here made of the case, however, upon the ground stated in the return to the writ. It was not within the power of the court to refuse allowance of the writ of certiorari in this case, notwithstanding its possible satisfaction with the result of the board’s determination. By the common law the allowance of the writ was discretionary. People ex rel. Mayor v. McCarthy, 102 N. Y. 624;, 2 St. Rep. 546; People ex rel. Smith v. Commissioners, 103 N. Y. 370; 3 St. Rep. 615; People v. Peabody, 26 Barb. 437 , People v. Board of Health, 33 id. 344; People v. Rochester, 21 id. 656, People v. Andrews, 52 N. Y. 445; People v. Hill, 53 N. Y. 547; People v. Mayor, 5 Barb. 43, and so by Code of Civil Procedure, § 212 ; but by statute the issuance of the writ to the excise board is declared to be imperative in the case where an application for license is denied. Laws 1893, ch. 480, § 24.

By the terms of the above statute it is also provided that the court may direct a license to issue, upon its reversal of the excise board’s determination ; the court is empowered so to do, but this function it is certainly not required to usurp. People ex rel. Jones v. Bennett, 4 Misc. 10; 53 St. Rep. 724. It is indeed a question whether the legislature may have the power to impose such a nonjudicial duty upon the courts. People ex rel. Decker v. Waters et al., 4 Misc. R. 1; 53 St. Rep. 720, and the direction provided for rests, at all events, in discretion. Re Martin v. Symonds et al., 4 Misc. R. 6; 53 St. Rep. 718, People ex rel. Watkins v. Com'rs of Excise, 4 Misc. R. 547, 54 St. Rep. 202; People ex rel. Gentilesco v. Board of Excise, 7 Misc. R. 415 ; 57 St. Rep. 826 ; McNaughton v. Board, etc., 5 Misc. 457. ,

It would certainly appear that in this case the functions in question were sought to be thrust upon the court.

The determination of the board of excise is, therefore, set aside and the matter remitted for its further consideration and action in the exercise of its sound discretion.


author: Hardin, P. J.

text:
    Merchants’ National Bank of Binghamton, App’lt, v. Benjamin F. Tracy et al., Resp'ts.

      (Supreme Court, General Term, Fourth Department,

      Filed May 18, 1894.)

    1. Trial—Jury—Waiver.
    Jury may be waived by consent of parties after the trial has begun
    2. Bank—Knowledge of officers.
    Where the cashier of a bank conspires with another party to sell worthless property to defendant at par in order that the proceeds may be applied to the payment of a debt due the bank, it is chargeable with the knowledge which the cashier had of such conspiracy.
    3. Bills and Notes—Bona fide holder.
    The evidence was held sufficient, in this case, to sustain finding that plaintiff was not a bona fide holder of the check.
    Appeal from a judgment dismissing the complaint on the merits.

      Edmund O’ Connor, for app’lt; George B. Curtiss, for resp’ts.
   Hardin, P. J.

Although the trial of this action was commenced before a jury, and the jury found on the several questions submitted to them, and their further services in the case were waived by consent of both parties to the action, and further findings of fact were made by the court, it must be assumed there was not a mistrial. A somewhat similar course was adopted in Carr v. Carr, 52 N. Y. 252, and in the course of the opinion delivered in that case, which ivas decided by the court after the findings made by the jury, it was said: “It was, m substance, then, a trial by the court without a jury, and a decision upon the whole evidence, with the aid of the finding of the jury upon two questions of fact.” Opinion of Allen, J. (page 255).

2. It is insisted in behalf of the plaintiff that it paid full value for the check in question, and became a bona fide holder for value! In considering this question it is appropriate to recall some of the leading features of the evidence bearing upon the question of the ownership by the bank of the first and second checks. From the evidence it appears that in the fall of 1886 F. E.- Ross and Gregg had become instrumental in the organization, and actors in bringing into existence, a gas-machine company. A patent had been issued for a gas machine which was owned by one Hanford, and one-lialf interest therein was purchased by Ross for some $1,000, and that patent was put into the company, which was capitalized at $25,000, and the stock was issued to Ross and Hanford, each taking one-lialf in the concern, which commenced business, and began to borrow money of the plaintiff. This company apparently continued until early in July, 1888, when it was embarrassed, and its stock became of little or no value. The gas machine did not prove of much value. Frederick E. Ross was president, and Clinton Ross, a brother, ivas treasurer, and Gregg acted as secretary, and they were directors. In June, 1887, Fred Ross, Gregg, Clinton Ross, and others initiated and organized a company known as the Binghamton Hydraulic Power Company. One Van Deusen had obtained a patent for a water motor. It was first proposed to organize the company with a capital of $15,000. Subsequently Fred Boss and Gregg concluded to capitalize it at $25,000. Steps were taken to organize the hydraulic company, and the stock thereof was to be divided to them—Boss, $6,000; Gregg, $6,000; Clinton Boss, $6,000 ; and Van Deusen, for his patent, $5,000; and Scott was to receive $1,500 for some tools, and Grift $500. Tims the stock — 250 shares'— was distributed. _ Fred Boss, Clinton Boss, and Gregg received their stock from the company without paying any money to the company; and the company set out in business by borrowing from the plaintiff some $750. Its directors were: Clinton Boss, president; Scott, vice-president; Gregg, secretary and general manager. In bringing into existence these two companies, Fred Boss and Gregg were active instruments,' and in January,.. 1888, efforts were made to consolidate the two companies, and changes were made in the certificates of stock of the hydraulic company, so that there was inserted in the certificates the words “ Fully paid capital stock, $50,000,” instead of the words, “Fully-paid capital stock, $25,000.” From about that period of time it would seem that the gas-machine company was regarded as dormant, and was abandoned. The shares of stock that had been issued in the gas-machine company apparently were attempted to be extinguished by the issuance of shares in the hydraulic company. After these changes were made in a somewhat irregular manner, it appears that Brastus Boss became the owner of some 20 shares of the hydraulic stock, and Fred Boss some 200 shares, and Clinton Boss of some 70 shares, and Gregg of about 160 shares ; and apparently the hydraulic company was supposed to assume the debts of the gas company. The banking business of the two companies was transacted with the plaintiff. Brastus Boss was its president, and F. E. Boss was it cashier, and Clinton Boss was a director; and they owned a large portion of the stock of the plaintiff. It was conceded on the trial that no certificate was ever filed that the hydraulic power company’s stock had been paid for in full, and that no annual report was ever made. It appears that a meeting of the directors of the Automatic Gas-Machine Company Was held on May 5, 1887, “ at the Merchants’ National Bank,” at which all the directors were present except Mr. Hanford, and that a motion was there adopted “that this company pay a royalty or license fee of fifty per cent, upon the selling price of such motors and blowers machines which have been or may be used by them; said royalty to be paid to Mr. Frederick É. Boss and Mrs. Anna C. Gregg ” (she being the wife of D. W. Gregg). It appears that on January 28, 1889, Gregg sold 10 shares of the stock for 25 cents on a dollar. In May, 1889, the plaintiff held notes of the hydraulic company amounting to some $21,000, and the plaintiff held drafts which it had discounted, and which had not matured, something over $9,000 ; and evidence was given tending to show that the liability of the company exceeded their nominal assets by some $12,0.00. Other evidence was given, tending to show that the hydraulic company was insolvent in the month oí May, and that its stock had little or no intrinsic value ; and that the sales of the company fell off from some $4,200 in January, to some $1,200 in the month of May; and that in the month of May their expenses were more than their receipts; and that their sales in the month of April were but a small sum above the actual expenses of operating the company ; and that during many of the days in the month of May their account was overdrawn at the bank of the plaintiff,, to wit, on the 20th day of May the account was overdrawn $3,599 ; on the 21st, $2,356 ; on the 24th, $774; on the 25th, $2,533 ; on the 27th, $971; on the 28th, $1,576 ; on the 29th, $1,809 ; and that the president and cashier of the plaintiff, in the early part of 1889, had become somewhat alarmed, restive, and impatient with the situation of the financial affairs of the hydraulic company, and were taking measures to have the indebtedness of the hydraulic company to the plaintiff reduced and reinforced, and such solicitude and action of the officers of the plaintiff were communicated to Gregg, and he was urged to devise some means by which the desired result could be accomplished. Apparently lie set out with a view of selling some of the stock of the conip'ahy held by him and Cashier Ross, and with that end in view he obtained an option from Cashier Ross, and, armed with that, he commenced negotiations for the sale of the stock of the hydraulic company ; some of it standing in the name of the cashier, and s’ome of it standing in his name (and apparently some of the stock of the company had been hypothecated to the plaintiff). On the 20th May, 1889, the defendant Frank Tracy went to the office of the hydraulic company to buy an oil engine, and while there observed that he was out of active business. Thereupon Gregg, commenced a negotiation with him, and made statements as to the situation and condition of the affairs of the hydraulic company. That was followed by other interviews, and subsequently Frank Tracy, whose relations with Fred Ross had been somewhat intimate, and althotigh he did not know that the Rosses were connected with the company, visited the plaintiff’s bank, going directly from the hydraulic company’s office to see Fred Ross, and while at the bank asked him if he knew anything about the Binghamton Hydraulic Power Company, and he testifies that Ross replied, “ The company is all right, and, if properly managed, will make $30,000 a year.” On the 30th of May, Gregg, in accordance with a telephone sent to Frank Tracy, went to Apalachiu, and Mr. Tracy met him there, and drove him over to his farm, where he renewed his solicitations to young Tracy that he come into the company, and buy some of the stock; and in the course of the interview it was learned that Richards held a contract with the company for the right to manufacture the engine under the patent for two years, and, when making some objections to that, Gregg immediately said that Richards was willing, provided Tracy would come come into the company, to make an agreement with the company to manufacture the engine during the life of the patent, “ for the entire world.” Thereupon a proposition -in writing to that effect was drawn and signed by Richards, who shortly thereafter left and Gregg continued his negotiations with Tracy, who assured Gregg that he would not “come into the company without first consulting his father.” Upon representations further made in the course of that interview, Frank Tracy was induced to and did prepare two checks, one for $1,000 and one for $4,000, and delivered them to Gregg, and at the same time took from him a receipt in the following language :

“ Binghamton, May 31st, ’89.

“ Received of Frank B. Tracy his check dated June 1st; amt., one thousand dollars ($1,000.) This sum to he applied on the fifty shares of stock owned by F. E. Ross. He to give an option on his fifty shares for ten days from June 1st, and in case Mr. Tracy does not purchase the balance of the fifty shares, to return the check, or its equivalent. Also his check for four thousand dollars ($4,000), dated June 15th, for which I agree to deliver on June 15th ninety-six shares of Binghamton Hydraulic Power Company’s stock. In case said Tracy does not come into the company, said check, or its equivalent, to be returned, and the ninety-six shares returned to me.

“ [Signed] D. W. Gregg.”

Gregg and Fi’ank then agreed to go to Washington, and have an interview with the senior Tracy, and they were to meet in Brooklyn on the morning of June 1st; and before they parted Frank testifies that he said to Gregg, “Under no condition must those checks be used until you hear from me.” On the following day Gregg sent the certificates for ninety-six shares of stock, by a messenger, to Frank Tracy. On the morning of May 31st, Gregg saw Frank Ross at the Merchants’ National Bank, and he had the two checks with him at the time he went to the bank, and he handed both checks, one for $1,000, first to Chashier Ross, and “ told him that was his check for his option on the fifty shares,” and thereafter handed him the check for $4,000, and told him it was for ninety-six share, of my stock, and that I was depositing it to the credit of the Binghamton Hydraulic Power Company.” Gregg testifies that he was selling it to the Tracys at par, and he adds in his testimony:

“ I think I told him the agreement. I cannot recollect the full conversation. I remember telling him that Frank was going to investigate the company, and see his father, and that I was going to Washington with him, to see his father in regard to raising the balance of the money; and I thought he would go that very evening, and perhaps I should go with him ; and that is about all I can remember. I think I said that Mr. Tracy was going to Washington that night, to see his father in regard to raising the money to come into the company; but nothing was said in regard to investigating it, that I remember,—not at that time.”

Gregg presented to Cashier Ross the paper which he had heretofore received from him, giving him an option, and took a receipt for the $1,000 on the back of it, which option bore date May 22, 1889.

We are of the opinion that the evidence, although conflicting, warranted a finding that the scheme which was on foot to obtain from the Tracys money for the stock at par was fraudulent, and was known to be so by Gregg and by Ross ; and that when Gregg received the check of $4,0Q0 it was with an, understanding that it was not to be used until after a conference was had with the senior Tracy, and a determination made to purchase greater interest in the hydraulic company; and that the check of $4,000 was diverted from its proper use by Gregg when he delivered it to th„e cashier, and that it was a breach of the agreement made with Frank Tracy, as shown by the quotation made. Gregg testifies that he communicated the agreement to Cashier Ross at the time he delivered the $4,000 check. While this fact may be said to be. disputed by the testimony of Ross as a witness, it was for the trial court to determine whether faith and credence should be given to the testimony of Ross, situated as he was, largely interested in the financial affairs of the plaintiff, and charged with a perpetration of a wrong upon the defendants. According to the tenor of the opinion delivered by Ruger, C. J., in Canajoharie Nat. Bank v. Diefendorf 123 N. Y. 191; 38 St. Rep. 389, his testimony might, in accordance with the rule laid down in that case, be disbelieved and doubted. As said in that case, the onus was on the plaintiff to establish that it received the $4,000 check in good faith. We think the trial court was warranted in finding that the plaintiff did not acquire in good faith title to and ownership of the check of $4,000 delivered to it on the 31st day of May, 1889, under the circumstances disclosed by the evidence. Canajoharie Nat. Bank v. Diefendorf, supra; Vosburgh v. Diefendorf, 119 N. Y. 357; 29 St. Rep. 448. With the antecedent knowledge of the affairs of the hydraulic company, and with the negotiations that had' been initiated between Gregg and Frank Tracy on the 20th of May, with the circumstance that the knowledge two days thereafter, to wit, on the 23d of May, Fred Ross gave an option to sell fifty shares of his stock at par, with the facts relating to the obtaining of that option to the facts testified to by Gregg in respect to the negotiations with Tracy, and with the whole features of the case, we are unwilling to say that' the court committed any error in disregarding the testimony of Ross upon the subject of want of knowledge or notice of the qualified rights of Gregg in the check of $4,000. It may be observed that the check, although delivered on the 31st of May to the bank, was post-dated to the 15th of June ; and that circumstance is suggestive of the idea that for some reason the party presenting the check was not entitled to receive the proceeds thereof until that lapse of time; and that is a circumstance, coupled with the testimony of Gregg, worthy of some consideration in determining the conflict found in the, testimony between the version given by Ross as a witness and the other evidence before the court relating to the subject of the bona fide ownership of the plaintiff of the check of $4,000. We think the contention of the plaintiff that it was a bona fide holder without notice of the check for $4,000 must fail. We are also of the opinion, upon all the evidence, it was a question of fact to be determined as such, and not a question of law. Franc v. Dickinson, 34 St. Rep. 864. And we are further of the opinion that the finding is not against the weight of evidence. Bullion v. Bullion, 73 Hun, 437; 56 St. Rep. 24.

3. It is contended in behalf of the appellant that, although Fred Ross was guilty of a conspiracy with Gregg; the bank is not affected by his knowledge and acts and co-operation in carrying out the fraudulent scheme. The evidence discloses that he was, and had been for some time, acting as the cashier of the plaintiff, having supervision of its affairs, and that he had charge of the discounts and collections in behalf of the plaintiff ; and it also discloses that when he received the check of $4,000 he was acting in such capacity as cashier and his acts were binding upon the plaintiff, and the plaintiff is therefore chargeable with the knowledge or the notice that Ross had in the premises.

This case differs from Mayor, etc., of New York v. Tenth Nat. Bank, 111 N. Y. 457; 19 St. Rep. 133, referred to by the appellant. In that case the directors, who were conspirators, did not represent the bank in the transactions; and in the opinion, at page 457, 111 N. Y., it is said: The sole agent and representative of the bank was Bliss, its president; and he was entirely innocent of any wrong. The knowledge these conspirators had while engaged in their fraud for their own benefit could not, therefore, be attributed to the bank; and to this effect are all the decisions.”

Atlantic State Bank v. Savery, 82 N. Y. 307, is also distinguishable from the case before us. Nor do the cases of Casco Nat. Bank v. Clark, 139 N. Y. 307; 54 St. Rep. 590, and Merchant's Nat. Bank v. Clark, 139 N. Y. 314; 54 St. Rep. 593, support the contention of the appellant. We think this case is nearer like Holden v. N. Y. & Erie Bank, 72 N. Y. 286, where it was held: “ Where an agency is continuous, and made up of a long series of transactions of the same general character, knowledge acquired by the agent in one or more of the transactions is notice to the agent and the principal, which will affect the latter in any other transaction in which the agent, as such, is engaged, and in which the knowledge is material.”

In Cragie v. Hadley, 99 N. Y. 134, it is said: “But the general rule is well established that notice to an agent of a bank or other corporation intrusted with the management of its business, ;or of a particular branch of its business, is notice to the corporation in transactions conducted by such agent, acting for the corporation, within the scope of “his authority, whether the knowledge of such agent was acquired in the course of the particular dealing or on some prior occasion.”

In the course of the opinion delivered by Mason, J., in Davis v. Bemis, reported in 40 N. Y. 454, he said: “ For it is a general principle of law that the principal is held liable to the public or third persons in a civil action for the frauds, deceits, concealments, misrepresentations, torts, negligence, and other malfeasances in the course of his employment, although the principal did not authorize or justify or participate in it, or, indeed, know of such conduct.”

In Garner v. Mangam, 93 N. Y. 642, it appeared that defendants, by means of false representations, induced plaintiff to purchase 120 shares of stock which were utterly worthless. Each of the defendants contributed 40 shares, and all were parties to the fraud. In the course of the opinion it was said that one of the defendants “ could not receive the fruits of the bargain without being responsible for the fraud through which it was effected. ”

It seems to follow from what has already been said that when the check which was delivered to the plaintiff, dated the loth of June, matured, the plaintiff had not acquired an ownership thereof in good faith; and it appears by the evidence that its cashier operated with Gregg in a scheme to procure an extension of time or the renewal check which is made the basis of this action. There is testimony to the effect that Gregg prepared a letter to be addressed to the cashier, with a view of securing an extension of time for the payment of the first check. Inasmuch as the plaintiff did not have title as a bona fide holder of the first check, it had no valid claim against the defendants by reason of that check, which was tainted with the fraud relating thereto. It is, however, contended in behalf of the appellant that, because the first check was not returned to the plaintiff before the commencement of this action, it is in a situation to recover on the second check. In dealing with that question it is to be observed that the first check was made payable to the order of Gregg, indorsed by him, and also by the hydraulic power company. Gregg was an officer of the hydraulic power company, and through him it derived knowledge of the fraud being perpetrated by him, and his knowledge is imputable to that company. In Putnam v. Schuyler, 4 Hun, 166, it was held to be error to ■exclude evidence to show that notes were obtained by fraud, and that they were without consideration, in an action against the defendant, who had guaranteed the payment of them; and in the course of the opinion it is said: “If, in the principal obligation, there is essential vice which may annul it, as if it has been contracted by force, if it is contrary to law or to good manners, if ie be founded only on a fraud, or on some error which may suffict to annul it,—-in all these cases the obligation of the surety is likewise annulled. ”-

It does not seem too much to say that, if the bank held a fraudulent piece of paper, with the notice of the fraud, indorsed by one of the parties perpetrating the fraud and by another party having knowledge of the fraud, and, after such knowledge, having received moneys wrongfully thereon, the holding of such paper by the plaintiff would not give it any additional right of recovery against the indorsers of the paper. Besides, it seems anomalous to require of a party to a piece of fraudulent paper to return it to a person not entitled to enforce it, because it is tainted with fraud as a condition precedent to the right to defeat a recovery upon another piece of, paper given in substitution therefor in continuation of the fraud, and as a part of the'scheme fraudulent in itself, which defeats the right of recovery against the makers of it. Such a piece of paper would seem to be of no more value to the plaintiff than one where the name of the drawer of a check was stricken therefrom, leaving only theindorsements thereon. The defendants are in a position of asserting that the contract for the purchase of the stock was fraudulent and void, and of repudiating that contract; and whatever the defendants received under that contract they offered to return at the trial, to wit, the surrender of stock which were delivered to the defendants on the 1st of June. Surely the defendants have acquired nothing more of value to them; and, if the observations already made are correct, they have received nothing under the contract—which they repudiate—of any value to the plaintiff. In this case the defendants are seeking to withhold their moneys from the payment of a check that is tainted with fraud. They allege and furnish evidence indicative that the first check was obtained and diverted by fraudulent representations, and that in continuance of the fraud and scheme in which the conspirators were engaged; that the second check was obtained from them in furtherance and continuation of the fraud attempted to be perpetrated upon them. When they surrendered the certificates they surrendered all that they had acquired in the premises. In cases of rescission of a contract the rule is, “ that the party shall not retain the thing whicli is the subject of the contract.” Harris v. Equitable L. A. Soc., 64 N. Y. 200. It may be said the respondents’ defense is both legal and equitable, and, as said by Boardman, J., in Green v. Smith, 29 Hun, 168: “If the plaintiff suffers, it is due to his own fraudulent and dishonest act, and courts will not go to the romantic extent of striving to protect a fraudulent purchaser of property from the consequences of his own dishonest act.”

In Masson v. Bovet, 1 Denio, 74, in the course of the opinion delivered by Beardsley, J., he said, in speaking of a party who had perpetrated a fraud, that: “If, therefore, he has so entangled himself in the meshes of his own knavish plot that the party defrauded cannot unloose him, the fault is his own; and the law only requires the injured party to restore what he has received, and, so far as he can, undo what had been done in the execution of the contract. This is all that the party defrauded can do, and all that honesty and fair dealing require of him. If these fail to extricate the wrongdoer from the position he has assumed in the execution of the contract, it is in no sense the fault of his intended victim; and, upon the principles of eternal justice, whatever consequences may follow, they should rest on the head of the offender alone.”

Assuming, as I think we should, upon the whole evidence, that the second check was obtained by means of fraudulent representations, and in furtherance of the scheme to defraud the defendants, probably the plaintiff is entitled to recover damages by reason of the fraud which induced it to part with its moneys to the hydraulic company against Gregg and the hydraulic company, irrespective of that indorsement upon the check, which was fraud u-lent in its inception, and to which, as before seen, the plaintiff' did not acquire title in good faith.

The foregoing views lead to the conclusion that the decision made at the circuit, and the judgment entered thereon, should remain.

Judgment affirmed, with costs.

All concur.


author: Mayham, P. J.

text:
    Charles W. Little, Resp’t, v. A. Bleecker Banks, App’lt.

      (Supreme Court, General Term, Third Department,

      Filed May 8, 1894.)

    Contract—Construction—New York Reports.
    The contract for the publication of the New York Reports, under § 211 of the Code, was held to require the publisher to keep on hand the volumes published by him, and sell the same to all persons at a certain priee^ during the three-years limit of his contract, and for such reasonable time thereafter, as may be necessary to complete unfinished volumes.
    Appeal from a judgment entered on a verdict in favor of plaintiff, and from an order denying a motion for a new trial.

      Rosendale & Iiessberq (Simon W. Rosendale, of counsel), for app’lt; Mills & Bridge (JB.. Countryman, of counsel), for resp’t.
   Mayham, P. J.

This action was brought and prosecuted by the plaintiff to recover damages of the defendant for an alleged breach of a contract in writing, made and entered into between the defendant and the state of New York, represented by the state reporter, secretary of state, and comptroller, for publishing the reports of the decisions of the court of appeals for three years from December 14, 1877. The contract was made by virtue of the provisions of chapter 448 of the Laws of 1876, as amended by chapter 422 of the Laws of 1877. Code Civil Proc., § 211. This section, after conferring upon these state officers the power and authority to make contracts for the publication of the reports of the opinions of the court of appeals, prescribing .generally the kind of publication, and the maximum price at which the volumes may be sold, contains this provision as to the terms of the contract: “ Bach contract so entered into must provide for the publication of the reports for three years from the expiration of the time specified for that purpose in the last contract.”

The next section provides that: “Neither the state reporter nor any other person shall obtain a copyright of the opinions contained in the reports, and the same may be published by any person. ”

On the 12th day of December, 1877, the defendant entered into a contract with these state officers. The principal contention on this appeal is as to the liability of the defendant for a failure to, comply with the demand of the plaintiff, made at the defendant’s law-book store in Albany, for the delivery to the plaintiff of certain volumes of the court of appeals reports, published by the defendant under this contract, the delivery of which was demanded by the agent of the plaintiff of defendant’s agent on ten different days between the 31st of July and the 12th of August, 1890. For failure to comply with these demands, the plaintiff recovers of the defendant §1,000, being the liquidated damage of §100 for each of the ten refusals. The provisions of this contract for which this recovery is sought to be upheld read as follows: “The said party of the second part further agrees that he will, after publication of any volume of said reports in pursuance of this contract, keep the same on hand for open and public sale, and will sell and deliver the same, to any and all person or persons desiring to purchase, at and for the price of forty-eight cents per copy for each and every volume, at one or more of the regular law-book stores in the city of Albany, and also at one or more of the regular law-book stores in the city of Hew York, and that the same will be simultaneously placed on sale in each of said law-book stores; and also that he will sell and supply at the designated book stores in Albany, at the contract price, to any and all other law-book sellers, such number of copies of éaeh volume as they shall apply for, said party of the second part, however, not being required to deliver more than one hundred copies of any one volume to any one applicant or firm at one time, or within ten days ■after the delivery of that number of copies."

The contract further provides that for a breach of any of the terms of the contract the defendant shall forfeit and pay to the people of the state the sum of $5,000, as stipulated and liquidated damages, to be recovered by the attorney general or under his direction; and h further provides as follows: “ And it is further agreed that for any failure on the part "of the party of the second part to keep on sale, furnish and deliver the aforesaid volumes, or any of them, at the price and as hereinabove provided, the said party of the second part shall forfeit and pay, for any and every such failure, the sum of one hundred dollars hereby agreed and fixed upon, not as a penalty, but as the liquidated damages suffered by the person or persons aggrieved thereby; the same to be sued for and recovered by the person or persons aggrieved.”

It is insisted on the part of the defendant that the provisions of the contract above quoted are limited as to the time, both by the statute under which the contract was authorized to be entered into and by the terms of the contract itself, to the three-years’ limitation in the contract, and that no obligation was imposed thereby after a lapse of more than nine years after the contract liad expired by its own limitation. The language of the provisions of the contract relied upon by the defendant to support his contention is as follows : “ That it is agreed on the part of the said parties of the first part that the said party of the second part shall have the publication of said reports for the term of three years from and after December 14, 1877, to be prepared, and as prepared, by and under the direction of the state reporter; this contract not to include volumes 67 and 68 of said reports, now partly in print.”

The volumes of the reports demanded by the plaintiff, and for a failure to deliver which this action is brought, were Hos. 77, 78, 79 and 80, which were published by the defendant during the three years mentioned in the contract. It bannot be, and is not, contended that this contract authorized or permitted the defendant to publish the reports after the expiration of the three years limit fixed by that instrument. But it is contended that the three-years limitation related only to the time of publication, and not to the time for which the defendant" contracted to sell, and that the provision requiring him to keep the volumes published by him on sale was still operative and in force at the time of the demand of the books by the plaintiff. This is a question of vital importance in this case, and one not easy of solution. It reaches, not only to forfeitures to individuals who are refused their books on demand, but, if such refusal is a violation of the contract, for which an individual action will lie, the same violations would each authorize an action in behalf of the state by the attorney general to recover $5,000 forfeiture to the state in each case. If, therefore, the defendant in this case is liable to the plaintiff for ten. violations of the contract, he would be, for the same reason, liable to ten forfeitures to the state of $5,000 each. If, however, this contract, by a fair construction, leads to such ruinous consequences, it is not the province of the court to intervene to save a party from the result of improvident contracts, or the serious consequences which may follow from their breach; but where the construction is doubtful, and the real intention of t,he parties obscure, that fact may be taken into consideration in endeavqring to arrive at the meaning and intent of the contracting parties. The state officers who were empowered by the legislature to make this contract acted under special and limited authority conferred on them by the statute under which they were appointed and empowered to act. It expressly limited their power to contract to three years from the expiration of the time specified for that purpose in the last contract. Acting upon that authority, the contract made by these officers for this work, by its terms, terminated on the 14lh of December, 1877,—three years from the time of its date. That contract was succeeded by the one in suit, dated on the 14th of December, 1877, the first rfecital in which was that: “ The existing contract for the publication of the reportó of the decisions of the court of appeals, known as the “New York Reports,” expired December 14, 1877, save as to two volumes then partially in print,” etc.

This contract was succeeded by one made by the state officers, dated December 14, 1880, and starting with the following recital: “ Whereas^ the existing contract for the publication of the reports of the decisions of the court of appeals, known as the “New York Reports” expired December 14, 1880, save two volumes then partially in print,” etc.

Thus it will be seen that by the successive action of these state officers they regarded their power to contract in any case as limited by the statute to three years, and at the end of that period, and on making a new contract for the next period of three years, they declare that the previous contract has “ expired." Can it be successfully maintained that if the contract has expired, so that its 'obligations cease to bind one of the contracting parties, the other party remains bound, without any direct provisions extending its obligations as to him ? Both the state, through its officers, and the defendant, seem to have treated this contract as having expired by its own limitations long before the plaintiff made this demand for the delivery of these books,—the state by having entered into another contract for the same kind of work with Weed & Parsons, and the defendant by having disposed of all the volumes of these books made by him during the three years fixed in the contract as its limit of duration. But it is insisted that it was not, by its terms, limited to any precise time of duration, because, when entered upon, there was an unfinished work by the previous contractor, and, when terminated by the contract with Weed & Parsons, that contract recognized the existence of two unfinished volumes in the hands of the defendant for publication. It seems to be a sufficient answer to that position that the state officers were limited by the statute to a contract for not more than three years But, if the necessities of the case compelled them to recognize the unfinished work of each contractor at the expiration of the three years’ limitation in the contract, that necessity could not extend the contract indefinitely beyond the time necessary to complete that unfinished work. The law of the contract would still confine its completion within reasonable limits, tested by the atnount of unfinished work and the nature of the contract. It would not annul all limits of time fixed by that instrument, and make the obligations perpetual, or extend them for a series of years. The rule seems well settled that, where the time of performance of a contract is not specified in terms therein, the law interprets the contract to demand performance within a reasonable time. Van Woert v. A. & S. Railroad Co., 67 N. Y. 538 ; Wright v. Bank of Metropolis, 110 N. Y. 237; 18 St. Rep. 92 ; Colt v. Owens, 90 N. Y. 368; Hedges v. H. R. Railroad Co., 49 N. Y. 223. We are, on the whole, inclined to the opinion that the fair interpretation of this contract required the defendant to print, bind, and keep on hand, for sale under this contract, at his store, -such books as the state reporter provided him with the material to make, during the three-years limitations in his contract, and for such reasonable time as was required to finish the books in process of completion after the expiration of such three-years limit, and dispose of them, or give the public a reasonable time to obtain them, after completion of such unfinished volumes under the favorable terms of the contract. It is quite apparent from the controversy growing out of this contract that there lurks in it an ambiguity, which alone can be settled by judicious interpretation, probably by the court of last resort. Called upon, as we are, to construe this instrument upon its ambiguous provisions, we should not, unless clearly justified by its provisions, give it an unreasonable interpretation, and such a one as will place one party entirely at the mercy of the other. In Russell v. Allerton, 108 N. Y. 288 ; 13 St. Rep. 629, it was held that when there is uncertainty or doubt as to the meaning of words or phrases used in a contract, in seeking for the intent of the parties, as evidenced by the words used, the fact that a construction contended for would make the contract unreasonable, and place one of the parties entirely at the mercy of the other, may piobably be taken into consideration. Jugla v. Trouttet, 120 N. Y. 21-28 ; 30 St. Rep. 182 ; Wright v. Reusens, 133 N. Y. 298-305; 45 St. Rep. 183. In this case the copyright' of all matter received by the defendant from the reporter is prohibited to the state and defendant, and, as we have seen, § 211 of the Code throws the publication and sale of the volumes covered by the contract open to all, giving the defendant no exclusive privilege or monopoly of the same. It cannot, theiefore, be claimed in this case that the time of the duration of this contract can be measured by the duration of a copyright, as the defendant cannot protect himself from competition in that way; and, as the publication and sale of their books are open to all, the refusal of the publication by the defendant after the expiration of his contract cannot deprive the public of the privilege of purchasing the same of other book concerns. We are therefore led to the conclusion that the plaintiff had no legal right, at the time of the demand of these books of the defendant, to insist upon their delivery, and no cause of action accrued to him to demand and receive this forfeiture, and that the learned trial judge erred in not dismissing the complaint, on the motion of the defendant. Judgment reversed, and a new trial ordered; costs to abide the event. All concur.