author:
Daniels, J.:
      Brady, J.:

text:
    HELOISE KELLER, Executrix of CHARLES M. KELLER, Deceased, and HENRY WATERMAN, Respondents, v. THE WEST, BRADLEY & CARY MANUFACTURING COMPANY, Appellant.

      Bight of an executor of a deceased trustee to enforce a right of action existing in his favor — liability of the successor of a firm upon its sealed obligations — within what time they may be enforced— the statute does not commence to run until the payment is due — when a referee may disregard the evidence of an interested witness — a stockholder of a corporation cannot testify in its behalf as to a personal transaction with the plaintiff’s testator— Code of Oivil Pi'ocedure, sea. 839 — how far the succession to rights imposes covenant obligations associated with such rights.

    This action, was commenced August 33, 1878, by the plaintiff, as the executrix of one Keller, to recover royalties for the use of a patented process for hardening and tempering wire, which it was claimed the defendant corporation was hound to pay under a sealed agreement entered into in November, 1865, between the said Keller and the firm of West, Bradley & Cary. By this agreement the said firm agreed that they would on or about the tenth day of each and every month render a true and faithful account of the number of pounds of iron wire hardened and tempered in their establishment during the preceding month, and that they would pay to Keller or his legal representatives, or to his or their order, one cent for each and every pound of wire so hardened and tempered within ten days after the time of making such return. The assignment of the letters patent had been made to Keller, in trust, to enable him to grant licenses to persons desirous of using the invention, and to collect and pay over the royalties to one Waterman, who was joined with the executrix as party plaintiff in this action.
    Under the said agreement the firm of West, Bradley & Cary used the invention, made the returns and paid the amounts required thereby until the close of the year 1867, when it was dissolved In January, 1868, four of the five members of that firm formed the defendant corporation which, from that time until October, 1871, used the invention, making the returns and payments as provided in the agreement. From the 1st of October, 1871, to August 21,1872, the defendant made no returns, and refused to do so, although it continued to make use of the invention. The defendant entered into no written contract or obligation, assuming the performance of the aforesaid agreement made with the firm, but it took the business of the firm with all its property, rights and obligations, and assumed its liability to perform such obligations.

      Held, that as Keller had the title to the letters patent as a trustee of an express trust, within the meaning of section 449 of the Code of Civil Procedure, and as he died, prior to the passage of chapter 185 of 1882, the right of action then existing in him passed to his executrix.
    That the right of the plaintiff to recover the royalties for the use made of the invention for the period extending from October 1, 1871, to August 21, 1872, was not barred by the statute of limitations.
    That the action could not be treated as an action upon covenant, but must be maintained, if at all, upon the ground that the defendant agreed, by an unsealed contract, to perform the agreement and pay the royalties. (Per Daniels, J.)
    That so regarding it, the action was not barred by the six years’ statute, for the reason that, as by the terms of the agreement the payments were not to be made until ten days after the return for the preceding month had been made, the failure of the defendant to make' any return prevented the running of the statute. (Per Daniels, J.)
    That as the defendant was the successor of the firm and had succeeded to the rights secured by the covenant, which was still existing, and had acted under it, it became at once invested with and surrounded by the rules governing the covenant, not only as to its obligation, interpretation and construction, but also as to the rules prescribing the time within which proceedings to enforce any liability incurred thereunder might be commenced. (Brady, J.)
    The referee found that the defendant agreed to perform the agreement made by the firm and pay the royalties to Keller. The president of the company had been examined as a witness and denied that any such agreement had been made.

      Held, that the witness was so clearly identified in interest with the company as its president and a stockholder thereof, as to authorize the referee to reject his evidence as not reliable when it appeared to be inconsistent with the conceded facts and circumstances of the business.
    That as a stockholder of the corporation, the witness was interested in the event of the action so as to render his testimony as to any personal transaction or communication with the deceased trustee inadmissible under section 829 of the (’ode of Civil Procedure.

      Appeal from a judgment, entered upon the report of a referee.
    It appeared that the plaintiff, Henry Waterman, had received letters patent from 'the United States for a process of hardening and tempering wire. He assigned his right, title and interest, derived from such letters, to Charles M. Keller, in I860. The assignment to Keller was in fact in trust to enable him to grant licenses to persons desirous of using the invention, and to collect royalties for such use and pay them over to the plaintiff Waterman. After the assignment to Keller, and in November of the year 1865, he entered into an agreement with several different parties, including the firm of West, Bradley & Cary, by which they and their successors were licensed to use the patented invention upon payment of certain royalties for that use. The parties so licensed jointly and severally agreed that they would on or upon, the tenth day of each and every month render a true and faithful account, under oath, of the number of pounds of hoop skirt and other wire hardened and tempered in their establishment during the preceding month, and that they would pay to Keller, the testator, or his legal representatives, or to his or their order, one cent for each and every pound of wire so hardened and tempered, within ten days after the time of making such return. Under this agreement the firm of West, Bradley & Cary made use of and enjoyed the advantages of the invention until the close of the-year 1867, when it was dissolved. During that time they made their returns and paid the amounts as stipulated to the testator for the benefit and use of the patentee. At the expiration of that time and in the month of January, 1868, the present defendant was formed as a manufacturing corporation. The firm of West, Bradley & Cary consisted of five members at the time of its dissolution, one of whom retired and the other four associated themselves together and formed the corporation which is the defendant in this action. From the time of its formation until the month of October, 1871, it made use of the patented invention in the same manner as it had previously been used by the firm, and the officers of the corporation made returns under oath, as the agreement had required the firm itself to do of the quantity of wire manufactured by it. Those returns were delivered to the testator and in part to the plaintiff Waterman, and the license fees of royalties agreed to be paid for the use of the invention, were paid over upon the basis of such returns by the defendant. But from the 1st day of October, 1871, until the 24th day of August, 1872, no returns were made to either the plaintiff or the testator, of the wire manufactured by the defendant. The defendant, however, during that interval of time continued to make the same use of the invention that it had previously made of it, and which was made of it by the firm of West, Bradley & Cary before the corporation was formed. It was not shown that the license issued to the preceding firm was in form assigned or transferred to the defendant. This action was commenced on August 22, 1878, for the recovery of the license fees accruing between the 1st day of October, 1871, and the 24th day of August, 1872.

      Francis O. Reed, for the appellant.

      Charles D. Adams, for the respondents.
   Daniels, J.:

The judgment or decision made in the action directed an accounting by the defendant of the royalties for wire hardened and tempered by it, from the 1st of October, 1871, to the 24th of August, 1872, by the use of a patented invention made by I. Washburn and P. L. Moen, and assigued in trust to the testator. The action has been before this court on a previous occasion, and in its controlling features does not very materially differ from the case as it was then made to appear.

Before this corporation was formed, the copartnership firm of West, Bradley & Cary were engaged in the same business, and an agreement was made between them and the testator on the 1st of November, 1865, under which they were permitted to use the patented invention, and for that use this firm agreed to pay one cent for each and every pound of wire hardened and tempered by the use of this patented' invention. They further agreed that during the unexpired term for which the patents had been granted, they would render a true and faithful account under oath of the number of pounds of hoop-skirt and other wire hardened and tempered by them through the invented process ; that the account should be rendered on or before the tenth day of each and every month, and “ that the payment shall be made within ten days after the making of such return.”

This firm continued to use the invention until four of its five members united in organizing the defendant as a corporation to carry on the same business. This was done in the latter part of January, 1868. The defendant then succeeded to the property, business and interests of the firm, and continued to carry it on to the time of the commencement of this action, on the 22d of August 1878. For the wire hardened and tempered by the company under the patented process, returns were made according to the agreement entered into between the testator and this preceding firm. That continued to be done to the 30th of September, 1871, and payments of the royalties were from time to time made, according to the statements contained in the returns. • But from the 30th of September, 1871, to the 24th of August, 1872, the defendants made no returns of the use of the patented invention, and refused to do so, although it continued to make use of it in the transaction of its business. After that time the invention was used under another agreement made between the defendant and the plaintiff Waterman, as the owner of the invention.

It has been urged, as it was when this action was previously, before the court, that it cannot be maintained by the executrix of the deceased testator. But it is very clear from the transfer of the invention made to him that he held the title to it as a trustee of an express trust, for the unexpired terms for which the letters patent had been granted, and as such trustee an action might have been maintained in his name for the recovery of these royalties, for the benefit of the persons entitled to receive them from him, under section 449 of the Code of Civil Procedure. Upon his decease, which preceded the enactment of chapter 185 of the Laws of 1882, the same right of action vested in the testatrix (Wetmore v. Hegeman, 88 N. Y., 72), and the action to recover these royalties was therefore well brought in the name of the executrix, and her right to maintain it was in no manner qualified by the circumstance that Waterman himself, who seems to have been the owner of the invention, was joined as a party plaintiff with her.

The agreement with the firm of West, Bradley & Cary for the use of the invention was subscribed in their firm name, to which was added a seal, and for that reason it has been urged that the defendant, succeeding to their rights and interests, and' assuming their obligations, became bound to account for the royalties in controversy, according to the terms of this agreement as a covenant. And an opinion that such a liability would arise was expressed in Bommer v. The American Spiral Spring Co. (44 N. Y. Sup. Ct. Rep. [12 J. & S.], 454, 462). But the point was not made the subject of any extended examination in that case. It was rather passingly assumed to be the law without examination. But the opinion which was then expressed upon this point does not seem to be warranted by authority, even if such an execution of the agreement by the firm could be held to create a covenant on its part. One member of a copartnership firm has legally no authority as such to subscribe the firm name toan agreement under seal. (Parsons on Parts., 178 and 180, note J; Skinner v. Dayton, 19 Johns., 513.) It is true where that may have been done by one of the members of the firm the act may be ratified and adopted by the others in such a manner as to make the instrument the covenant of the firm. (Smith v. Kerr, 3 Comst., 144, 150.) But while the firm continued during its existence to perform the stipulations contained in the agreement, it was not shown that either of its members ever took such action as to ratify the addition of the seal to the firm name affixed to the instrument. The seal was for no purpose necessary in the execution of this agreement. It would have been equally as effectual and operative by the simple subscribing of the partnership name to it, and where that is the legal character of the instrument, the seal may be rejected as surplusage. (Parsons on Parts., 183, note M; Everit v. Strong, 5 Hill, 163.)

But it is not necessary to fully determine these points for the disposition of this case. For in succeeding to the rights, interests and obligations of the firm, the defendant entered into no written agreement or obligation whatever assuming the performance of this agreement. The most that it can be held to have done, was to take the business of the firm with all its property, rights and obligations, and to have assumed the liability on its part to perform such obligations. An agreement on its part to that extent is plainly inferable from the manner in which it succeeded to the business of the firm, and afterwards carried it on and observed and performed its obligations. And that agreement was what the law would designate as a simple contract on its part and not a covenant. The Case of Atlantic Dock Company v. Leavitt (54 N. Y., 35) does not reequire the adoption of any different conclusion. For there the party proceeded against was a party to the deed and by a covenant inserted in it assumed the performance of the obligation which was the subject of the action, and the deed itself concluded with the statement that the party of the second part had set his hand and seal to the deed. It was therefore held, inasmuch as he ■ had entered into the enjoyment of the property designed to be conveyed, and had in this manner adopted the seal affixed to the instrument, that he was estopped from denying it to be his seal and was accordingly bound by the covenant on his part contained in the deed.

There was no such state of facts in this case. For, as before observed, the defendant entered into no sealed or even written obligation for the observance or performance of the agreement made with the preceding firm. And where that has not been done, the party acquiring the rights secured to another, by means of a preceding covenant, cannot be proceeded against upon the mere force or effect of the covenant itself, but if liable at all, must be made liable upon the force and effect of his or its own obligation, being, as it was in this case, that of a simple contract. This subject, to some extent, was considered in Gale v. Nixon (6 Cow., 445). The instrument then in suit was indorsed and sealed in the firm name of the defendants by one member of the firm, and it was held that an action of covenant could not be maintained against them upon it. But it was stated in the course of the opinion of the court that “Assumpsit was the proper form of action. Covenant will lie only •whore the instrument is actually signed and sealed by the party or 'by his authority.” (Id., 448.) Hanford v. McNair (9 Wend., 54), maintains the same general view.

The action, if it can be maintained at all, can be maintained against the defendant upon the sole ground that it undertook and agreed, by an unsealed contract with the preceding firm, to perform ithis agreement and to pay these royalties to the testator. And that finch an agreement was made, or understanding entered into, was .found as a fact • by the referee before whom the trial took place. And it could be well found from the circumstances that the defendant was the successor of the preceding firm, and in that character acquired all its property and generally assumed, its obligations, and for a series of years performed this particular agreement according to its terms with the testator. This was denied by the witness Joseph I. West, president of the company. JBut the referee was not bound to accept this denial or his statements relating to this subject as the truth of the case. For he was a person so clearly identified in interest with the company as its presiding officer and a stockholder as to leave the referee at liberty to reject his evidence as not reliable when it appeared to be. inconsistent with the conceded facts and circumstances of the business. (Elwood v. Western Union Telegraph Co., 45 N.Y., 549, 553, 554.) And it seems to have been so considered and disposed of by the referee. It is therefore to be assumed, as it was upon the preceding decision of the case, that the defendant had entered into an agreement certainly to be 'implied from the circumstances, to pay the royalties reserved by the testator in his agreement with the preceding firm, and it was therefore liable for the royalties, payable for the use of the invention, from the 30th of September, 1871, to the 25th of August, 1872. Although it refused to make any returns or statements of the extent of its use of the invention, it at no time repudiated the agreement or declined to accept its advantages; but as the evidence established the fact, it continued the use of the invention with the consent, allowance and license of the testator, and for that it would be liable to make compensation, even though it had not in fact assumed the performance of this agreement. (Rider v. Union India Rubber Co., 28 N. Y., 379.) But that was not necessarily the theory of the plaintiff’s action. It was that the defendant had in fact become bound to fulfill the obligations of the firm for the performance of this agreement, and that was the view adopted by the referee in making his report, and in adopting it he was well sustained by the proof produced before him on the trial of the action.

But as the defendant cannot be held to be liable upon the agreement of the firm as a sealed instrument, it is objected that the referee erred in directing it to account and pay for the royalties accruing for the use of the invention, as he did, from the 1st of October, 1871, to the 24th of August, 1872. But that does not follow, for the plaintiff was clearly entitled to prosecute and maintain the action, under sections 380 and 382 of the Code of Civil Procedure, requiring such a suit to be commenced within six years after the cause of action had accrued, and this action was brought within that time, for the proof showed and the referee found'that the defendant did not make any of the monthly returns mentioned in the agreement during this period of time. This omission to make such returns seems to have been a conceded fact in the case, and still it continued in the use and enjoyment of the rights and privileges secured by. the invention under the license of the testator to the firm. This omission of the defendant to render monthly accounts prevented the running of the statute against its obligation to make the payments within ten days after making the returns, for as no returns were made this period of ten days was not set in motion. It was at no time commenced, and could not be under the agreement as long as the returns were not made. If the agreement had contained the obligation that the return should be made on the tenth of the month, and the payments on the twentieth of each month, the case might very well have been different. But it was not, for while the obligation was created to render the accounts on the tenth of every month the obligation to pay was explicit that the payment should be made within ten days after making the returns; and as no return was made up to the 2-fth of August, 1872, or indeed at any time after that, the action could well be commenced within six years after that date, for up to that time the testator was not in a position, by reason of the default of the defendant in making the returns, to enforce the immediate payment of the royalties. The precedent act to that right had not been performed by the defendant, and the contract required such performance to ascertain the amount and extent of its obligation, and after that was done the testator had ten days to require the payment of the amount. The referee was, therefore, right in requiring by his decision that the defendant shoirld still account for and pay these royalties.

During the trial various questions were asked of the witness West which, upon the objections of the defendant’s counsel, he was not then permitted to answer. But as to those which were first put to the witness he did afterwards give his evidence, fully and substantially answering such questions. This evidence was followed by other questions intended to disclose conversations and transactions had 'between the witness and the testator, and upon its appearing that he was a stockholder in the corporation, he was held to be incompetent to answer such questions under section 829 of the Code of Civil Procedure. This section has provided among other things that a. person interested in the event of the action shall not be examined, concerning a personal transaction or communication between himself and a deceased person, in an action where his executor may be a party. And as a stockholder in the corporation this witness was interested in the event of the action and within the prohibition of this section. Por it is entirely evident if the action could have been defeated by the evidence proposed' to be given, that he would correspondingly profit by the result in the increased dividends which would be made upon his stock. He had in this manner a direct and certain interest to be promoted by his testimony, and for that reason it was not competent for him to relate what had been said and done between himself and the testator. It has been said that the true-test of the interest of a witness, is whether he will gain or lose by the legal operation and effect of the judgment, and if he will the extent of his interest is not important. That fact will render him an interested witness in the action. (1 Greenlf. on Ev. [11th ed.], §§ 390, 391.) And that a stockholder in a private corporation (except banks, as section 829 has been amended), entitled to dividends upon his stock has this interest in a litigation for or against his company that may result in a judgment for the payment of money either to or by it, has been held in adjudged cases. (Grayble v. York, etc., T. Co., 10 Sergt. & Rawle, 269, 273; Crozer v. Leland, 4 Whart., 12; Eustis v. Parker, 1 N. H., 273.) And it follows that the witness was not competent to give this evidence from the rule already mentioned, which is further sustained by Marquand v. Webb (16 Johns., 89); and Ten Eyck v. Bill (5 Wend., 55).

The referee was right, therefore, in excluding the answers to the questions inquiring concerning transactions and communications between the witness and the testator, Neither of these points nor any other taken in behalf of the appellant, will sustain this appeal, but the judgment directed by the referee appears to have been right and legal, and it should be affirmed, with costs.

Brady, J.:

The questions presented on the appeal, to which it is considered necessary to refer, with two exceptions which have been considered, have been passed upon by the former appeal herein. (See opinion Daniels, J.) The right of Mrs. Keller to appear as á plaintiff was expressly declared, and is not, therefore, a subject for disputation. The obligation assumed by the defendant upon using the plaintiff’s patent was also stated, and, therefore, adjudicated. The defendant succeeded to the rights of the licensees West, Bradley & Cary, whose business they purchased, and who were to pay a royalty under a covenant. The defendant paid according to the terms expressed in it, conforming for a time, at least to them in all respects, and omitting to do so for the period mentioned in the complaint, only because, giving the defendant’s best reason, the obligation was supposed to have been arrested by the neglect of the licensor to prosecute for or arrest sales of the patented article, alleged to have been made by others, which, by the covenants and its benefits, the defendants had the exclusive right to make.

This feature of the controversy was also considered and disposed of unfavorably to the defendants by this court, on the ground that the facts shown did not establish the charge made or impose such a duty. The evidence taken and spread upon the record now does not call for a different view of the obligations of the parties in this respect, and upon the main issue the defendants must be regarded as defeated and liable, unless the evidence excluded for the reason that the plaintiff, Mrs. Keller, was the executrix of the licensor was error, or the statute of limitations had applied to the cause of action for an account. The effort in reference to the first of these propositions was to prove statements, admissions or assertions of Mr. Keller, deceased, affecting the covenant or relations springing out of it in regard to the use or practice of the invention, and were properly rejected under section 829 of the Code of Civil Procedure. Although Mr. Keller was a trustee, the covenant was made with him, and his power to deal with the subject was full and ample. To have established a modification of the rigor of the covenant, or any of the relations arising from it between the defendants and him, would have been to have done so with the principal, for he was, in fact, the contracting party. The section referred to clearly covers such a relation.

In regard to the second proposition the rule to be declared is not so easy of solution. This court, on the former appeal, held that, as to the transactions in August, 1872, the statute of limitations had not applied, and, therefore, a cause of action existed. The plaintiff, however, insists that the action is one on covenant and can be maintained at any time within twenty years. There is great force in this although it may not be sustained by any authority expressly so holding. The action, it must be observed, is upon the covenant made with licensees, to whose business the defendant succeeded, and who, availing itself of the privileges o.f the license manufactured under it, sold the product, and accounted in accordance with its requirements. This is thought to bind it so that when any dispute arose the covenant must be x-esorted to, to ascertain and determine the difference. And this being so the covenant is the foundation for the conti’oversy, invoking all the rules of law applicable to such an element. It has been held that a license need not be in writing, and an assignment of it, therefore, may be accomplished by parol and intended from facts and circumstances and the assignee takes subject to the same liability as the licensor incurred. (Marsh v. Dodge, 66 N. Y., 533; Walker on Patents, § 310; Goodyear v. Congress Rubber Co., 3 Blatch., 455.)

But it is not necessary to rely upon this rule alone for the defendant is, as already suggested, a successor. A railroad company formed by the consolidation of prior railroad companies may invoke the licenses which were given to either of its constituent corporations, because the consolidated company is a -successor rather than an assignee of those companies. (Walker on Patents, supra, §310.) As a successor its rights and privileges spring out of the covenant, if one exist, relating to the license, which is adopted and incorporated, and, therefore, becomes a part of the business and obligations of the successor’. If any right be claimed and denied, resort must be had to it to detex’mine it-, and the benefits cannot be enjoyed ■without the assumption of the burdens. (Goodyear v. Congress Rubber Co., supra.)

The defendant is the successor of the firm who wei’e the licensees and acted under the license, conforming to its provisions at least for a time, and all privileges enjoyed under it were. impressed with all the responsibilities which would have attached to its predecessors if acting alone. It is thought, therefore, on principio that when parties succeed to the rights of another secured by eovenant still existing, and act under it, they become at once invested with and surrounded by the rules governing the covenant, not only as to its obligation, interpretation and construction, but subject to the time within which proceedings to enforce any liability incurred may be commenced under the statute of limitations.

For these reasons the judgment should be affirmed, with costs.

Davis, P. J., concurred in the result.

Judgment affirmed, with costs.


source: Caselaw Access Project

author: Brady, J.:

license: Public Domain

text:
    THOMAS P. DWYER, Respondent, v. ORRIN C. HOFFMAN, Appellant.

      Practice —failure of a referee to deliver' or file his report within sixty days — a delay of the successful party to take it up, when induced by representations as to a settlement made by the unsuccessful pa/rty, does not justify the vacating of an order of reference.

    Within sixty days from the time of the submission of this case to the referee, and on February 24, 1885, he notified the parties that he had made a report in favor of the plaintiff and held the same ready for delivery. To accommodate the defendant, and substantially at his request and by reason of propositions looking towards a settlement of the litigation made by him, the plaintiff failed to take up the report within the sixty days.

      Held, that a motion by the defendant to vacate and set aside the order of reference because of the non-delivery or filing of the referee’s report within the time fixed by the statute was properly denied.
    Appeal from an order, denying the defendant’s motion to vacate and set aside an order of reference on the ground that the referee’s report was neither delivered nor filed within the statutory limit of sixty days.
    This action was brought against the defendant to recover damages for the conversion of a certain certificate of mining stock. The issues were referred in July, 1883, to Wm. J. Kane, Esq., as referee to hear and determine.
    The issues were finally submitted to the referee January fifteenth .and decided February 24, 1885. It was claimed by the plaintiff that at the request of defendant and his attorney, he delayed and forbore further action and to take up the referee’s report, pending negotiations for and promises of settlement, until after the limit of sixty days had expired. On July thirtieth the defendant’s attorney served on the plaintiff’s attorney notice electing to determine the reference, and thereafter made the motion above mentioned.
    The following opinion was delivered at the Special Term by Barrett, J.: “ It is quite evident that this case does not come within the spirit of the statute with respect to the time within which a referee must deliver or file his report. There is a conflict of facts in the affidavits, but I am satisfied that the plaintiff’s attorney was misled, and that the delay in taking up the report was really to accommodate the defendant and substantially at his request and for his purposes. To deprive the plaintiff of the benefit of the entire litigation, merely because he good naturedly gave defendant time to arrange some kind of a settlement, would be not only an injustice,-but, in my judgment, a very narrow strained and technical view of a statute which was simply intended to compel prompt and industrious attention to the case upon the referee’s part. The motion should be denied upon the plaintiff taking up the report, or upon the referee filing it within five days.”

      Samuel H. Randall, for the appellant.

      Montague L. Maries, for the respondent.
   Brady, J.:

The learned judge in the court below denied the motion, although the sixty days allowed by section 1019 had expired, upon the ground that the delay was caused by the defendant’s propositions and attempts to accomplish a settlement, and it would be unjust to allow him to take advantage of his own acts ; that such a $tate of facts withdrew the omission to take up or file the report from the operation of the statute. The case presented was not within its spirit. This view was a very just one and should be carried out notwithstanding the record shows a conflict upon the question as to the cause of the delay, as suggested in the opinion of Barrett, J. The facts make the controversy analogous to that of Ballou v. Parsons (55 N. Y., 673), in which an oral agreement before the referee to extend the time to make the report indefinitely was held to protect the validity and efficacy of the report though not filed in sixty days as required by section 273 of the Code of Procedure, which is similar to section 1019 of the Code of Civil Procedure. It would’ be unfair where the delay is occasioned by the unsuccessful party and for his benefit to permit him to avail himself of an advantage thus gained and his acts should be declared in effect a consent for the enlargement of the time within which the report should be made.

In Little v. Lynch (99 N. Y., 112) there were no facts such as are here presented. Indeed the only incident relied upon was that the report was ready and had been offered to the attorney.

I think the order should be affirmed, with ten dollars costs and disbursements.

Daniels, J., concurred.

Present — Brady and Daniels, JJ.

Order affirmed, with ten dollars costs and disbursements.


author: Per Curiam.

text:
    NEW YORK, LAKE ERIE AND WESTERN RAILWAY COMPANY, Respondent, v. GEORGE W. CARHART, Appellant.

      Practice — additional allowance not allowed, to the plaintiff where the controversy has been whether his recovery should be reduced by the amount of a counter-claim and such counter-claim has been established by the defendant.

    Appeal from an order made at a Special Term, granting an additional allowance.
    Tlie court at General Term said: “ The dispute in this case depended chiefly upon the right of the defendant to be allowed his counter-claim. The right of the plaintiff to the money was not controverted beyond the extent of this counter-claim and certain credits which the defendant appears to be entitled to, and received upon the trial. The defendant succeeded in establishing the counter-claim, and therefore was at least a successful party in the action, and as the right of the plaintiff to the balance of the money was not contested by him, it had no material fact for the disposition of that balance to prove in the case. It was accordingly not an action in which an allowance could justly be allowed to the plaintiff, and the order making it should be reversed and the motion denied, with ten dollars costs and disbursements to the appellant.”

      C. B, Smith, for the appellant.
    TP". W. Maefarland, for the respondent.
   Opinion

Per Curiam.

Present —Davis, P. J., Ready and Daniels, JJ.

Order reversed, with ten dollars costs and disbursements and motion denied.


author: Daniels, J.;

text:
    THE PEOPLE OF THE STATE OF NEW YORK, Respondent, v. ALEXANDER H. REAVEY, Appellant.

      Larceny — what constitutes the offense under sections 528 and 531 of the Penal Code— distinction between that crime and the offense promded for under section 148.
    Motion by the defendant for a reargument of this appeal.
    The defendant was convicted of the crime of larceny in the second degree for obtaining money by means of false representations or pretenses, as that offense has been defined by sections 528 and 531 of the Penal Code. He had been employed by the complaining witness to obtain a divorce, and from time to time falsely represented to her that the action was in different degrees of progress and by means thereof obtained various sums of money from her. The General Term affirmed the judgment of the Court of General Sessions, the opinion of Daniels, L, being reported in 38 Hun, 418.
    Hpon the motion for reargument the same justice again expressed the decision of the court in an opinion in which, in considering and overruling objections raised by the appellant’s counsel, he says: “ A prominent ground in support of the application for a reargument is that the defendant being an attorney was improperly convicted, under the indictment, of the crime of larceny in the second degree. This position has been now for the first time taken in the case, and section 148 of the Penal Code is supposed to sustain it, but it clearly does not. For the misdemeanors created by this section are made to consist, first of deceit or collusion on the part of the attorney to deceive the court or any party, in violation of the prohibition contained in section 70 of the Code of Civil Procedure, and secondly, of-willfully delaying his client’s suit for his own gain, or willfully receiving money or allowance for or on account of any money which he has not laid out or become answerable for, as that has been prohibited by section 71 of the Code of Civil Procedure. The offense created by these two subdivisions of section 148 of the Penal Code do not include the act of obtaining money or property by the attorney by false or fraudulent representations.' Such representations are set forth in the indictment as the foundation of the charge made against the defendant. They are in no manner provided for or referred to in this section of the Penal Code, but they are included and made an offense by section 528 of tbe Penal Code. And when money or property may be obtained by the color or aid of fraudulent represesentations or pretenses, and the amount or value exceeds the sum of twenty-five dollars and does not exceed $500 under this section and section 531 of the Penal Code, the offense of grand larceny in the second degree will be committed. These sections apply alike to all persons, attorneys as well as others, who may obtain money or property by the use of false and fraudulent representations or pretenses. And the case charged against the defendant in the indictment and to prove which evidence was given upon the trial was within these sections. It would be strikingly incongruous for the law to provide that the same act should form and be punished as a mere misdemeanor when committed by an attorney, which could be punished by imprisonment in the State prison when committed by another person. It has not so provided and is chargeable with no such absurdity.”

      A. Buy dam, for the appellant.

      De Lancey Nicoll, assistant district attorney, for the respondent.
   Opinion by

Daniels, J.;

Brady, J., concurred.

Motion denied.


author: IIaedin, P. J.:

text:
    JEREMIAH EIGHMIE, Respondent, v. EDGAR B. TAYLOR as Administrator, etc., of JAMES COLLINGWOOD, Deceased, Appellant.

      Power of the court to allow amendments to ¿leadings — when an action may be changed from contract to tort — amendment not disallowed because the claim is barred at the time the motion is made.

    In this action, brought by the plaintiff to recover damages for a breach of an oral warranty given by the defendant’s intestate, upon the sale of certain oil wells and fixtures to the plaintiff, a verdict recovered by the plaintiff was set aside by the Court of Appeals, upon the ground that as the sale of the wells and fixtures was evidenced by a written instrument, it was error to admit proof showing a parol warranty. Thereafter the plaintiff moved for leave to amend his complaint by alleging that at the time of making the statements and representations set forth in the complaint, the intestate knew that each and every one of them was false and untrue, and that each and every one of them was made by him with intent to induce the plaintiff to purchase the said property and with intent to defraud the plaintiff thereby.

      JJeld, that the court had power to allow the amendment to be made, and that an order permitting this to be done should be affirmed.
    That the fact that the statute of limitations had run against the plaintiffs claim at the time the motion was made, did not prevent the court from allowing it, as it was not barred at the time the action was commenced.
    Appeal from an order made at the Delaware County Special Term, allowing an amendment to bo made to the complaint.
    This action was brought in 1880 to recover damages for a breach of a verbal warranty or guaranty made by defendant’s intestate upon a sale to plaintiff of two oil wells and fixtures, situate at Tidioute, Warren county, Pennsylvania. The. defendant by answer denied the making of the verbal warranty.
    The case was first tried at the Delaware June Circuit of 1881, before Mr. Justice Follett and a jury. The defendant attempted to put the case over, and failing declined to appear, and the case was tried as an inquest, and a verdict was recovered by the plaintiff for about $6,400.
    Afterwards the defendant moved to set aside the judgment and for a new trial, and upon the hearing so excused his default that the motion was granted.
    The action was again tried at the Delaware February Circuit of 1883, before Mr. Justice Murray and a jury, and a verdict was recovered by the plaintiff for $13,000. The court on each trial holding that plaintiff could recover upon proof of the parol warranty made at the time of the sale. From the judgment entered on this verdict, the defendant appealed to this General Term, which affirmed the judgment, holding that plaintiff could recover upon the parol warranty. The defendant then appealed to the Court of Appeals. The cause was argued in February, 1885, and that court reversed the judgment at the circuit, and of the General Term, and granted a new trial, holding that proof of a parol warranty was not admissible to support a recovery in this action.
    After entry of judgment upon the remittitur, the plaintiff moved upon all the papers and proceedings in the case, and upon the affidavit of M. W. Marvin and a copy of the proposed amended complaint for leave to amend the complaint by setting up the allegation “ that at the time of making all the statements and representations hereinbefore in this complaiift set forth, .the said Oollingwood knew that all of said statements and representations were, and each and every one of them were false and untrue; and plaintiff alleges that such statements and representations were all and each and every one of them made by said Oollingwood with intent to induce plaintiff to purchase said property, and with the intent to defraud plaintiff thereby.”
    The motion was heard at a Special Term at Delhi, commencing June 30, 1885, and an order entered allowing plaintiff to make the amendment asked on payment of defendant’s taxable costs of the Circuit, General Term and Court of Appeáls.

      Thompson, Weeks c& Lovm, for the appellant.

      Marvin, Marvi/n <& Sewall, for the respondent.
   IIaedin, P. J.:

Section 723 of the Code of Civil Procedure provides that the court may upon the trial, or at any other stage of the action, * * * in furtherance of justice and on such terms as it deems just, amend any process, pleading or other proceeding', by adding or striking out the name of a person as a party,. * * * or by inserting an allegation material to the case.

Here we find the power to authorize the amendment allowed at Special Term. The power is not limited, as in the case in which pleadings are conformed to the proof already given. In that case a change of the claim or defense may not be made. (Chapin v. Dobson, 78 N. Y., 74; Southwick v. Bank of Memphis, 84 id., 420.)

Nor is the application for leave to amend embarrassed by any effort to unite improperly different causes of action net belonging to the same class, but it is proposed to abandon the cause of action upon contract and substitute one in place thereof, in fraud. Such an amendment seems to be sanctioned by the case of Brown v. Leigh, 49 N. Y., 78; S. C., 12 Abb. Pr. [N. S.], 193, note; see, also, Pom. Rem. and Rem. Rights, § 566.)

This case does not fall within the rule that a plaintiff, after having affirmed a contract and sued for damages under it, cannot afterward rescind the contract, sue in tort and recover damages upon the theory of its disaffirmance. The amended complaint does not ask to rescind the contract, but seeks to recover damages upon the theory that the defendant fraudulently induced the plaintiff to enter into it, and the original and amended complaints are not inconsistent. (Bowen v. Manderville, 95 N. Y., 237.)

The power to grant the amendment in question is conferred upon the .court by the section to which we have referred; besides courts have general powers over proceedings and pleadings when there is no statutory or other express limitations. (Hatch v. Central National Bank, 78 N. Y., 490.) When this action was brought the claim was not barred by the statute of limitations. Then the court obtained jurisdiction of the person of the defendant, and we are of the opinion that the fact that the statute had run against the claim at the time the motion was made for leave to amend, furnishes no reason why the motion should not have been allowed to prevail. (Hatch v. National Bank, supra.)

The case of Quimby v. Claflin (27 Hun, 611) is unlike the one before us; that was where the party sought to bring in an additional cause of action arising out of independent matters. Here the' plaintiff seeks to present only the same matters already before the court, with such averments as to the scienter as are pointed out in the added allegation. ¥e are of the opinion that the Special Term had power to authorize the amendment. The case of Ross v. Mather (51 N. Y., 108) is not an authority aiding the defendant. There it was held that in an action in fraud a recovery cannot be had in contract. Plaintiff seeks an amendment Itere because it appears that he has no action for a breach of warranty, and he therefore seeks the opportunity to try the question of fraud.

Barnes v. Quigley (59 N. Y., 265) simply holds that upon a complaint for fraud a recovery in contract may not be had, and that a change of the pleadings upon the trial so as to authorize such a recovery may not be made.

The Special Term exercised its discretion upon the facts and circumstances presented to it, and we are satisfied with the direction the discretion took, and therefore sustain the order below.

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

Foluett and Kennedy, JJ., concurred.

Order affirmed, with ten dollars costs and disbursements. '


author: Iíaedin, P. J.:

text:
    MARSHALL ROBINSON, Plaintiff, v. ENOCH H. BISHOP and HENRY E. FISHER, Defendants.

      Jssm of a town bond by a public officer — implied warranty of authority to do so— when liable to a purchaser for false statements as to Ms authm'ity recited in the bond — declarations of a prior owner of the bond, not admissible as against his ass’gneo.

    The plaintiff alleged in his complaint that the defendants and one Bradford having been duly appointed commissioners for the town of Sidney, and authorized to issue bonds of the said town to the amount of $50,000 to aid m the construction of a railroad, issued and sold bonds to that amount; that thereafter the said commissioners, without authority of law, wrongfully and negligently executed and issued other bonds in the same form as the former, ■which recited the acts under which they purported to be issued, the appointment of the commissioners and their authority to issue them; that one of the said bonds was, on July 1, 1877, issued to the plaintiff’s assignor Alexander Searles, who paid the full face value for the said bond; that the representations .and warranty contained in the said bonds were false and untrue, and that the said Searles purchased and received the bond, relying upon them; that ■ the signers of the bond, without authority from the town, paid interest on the bond down to July 1,1878, but nothing had since been paid on account thereof; that in November, 1883, Searles assigned the said instrument, and all his rights of action against the defendants, to the plaintiff for value, and that he had .tendered the bond (o the defendants, who had refused to receive it or to pay to him the money with interest received from Searles. The defendants moved for a nonsuit upon the ground that the bond was void upon its face, under section ^11 of article 8 of the Constitution of the State, prohibiting towns from loaning their credit, and that the purchaser was hound to know that fact.

      Meld, that as there was evidence tending to show that the defendants stated and represented to Searles that the bond was valid and within the $50,000 which they were authorized to issue, and thereby induced him to make the purchase, the motion was properly denied.
    'That it was not error to refuse to submit to the jury the question as to whether or not Searles was a purchaser in good faith, or whether the defendants had acted in good faith or were guilty of negligence, as, irrespective of these questions, the defendants were liable upon an implied warranty of the validity of their action as well as upon their express warranty.
    ■Upon the trial the defendants offered to show, by the testimony of one of them, that at a conversation had by him in 1878 with Searles, the latter said that he knew at the time he took the bond that more than $50,000 had been issued.

      field, that the testimony was properly excluded as the declarations of the prior owner were inadmissible as against the plaintiff.
    Motion for a new trial, made after a trial had at the Delaware 'Circuit in June, 1885, where a verdict was directed for tlie plaintiff for $708.16. On the hearing of the motion, “ in the discretion of the presiding judge, it was ordered that such motion and the exceptions taken upon the trial be heard in the first instance at the General Term.”
    The plaintiff in his complaint alleges that the town of Sidney is one of the towns of the county of Delaware and State of New York. That in pursuance of chapter 398 of the Laws o'f 1866, chapter 917 of 1867, chapter 61 of the Laws of 1868, chapter 8é of the Laws of 1869, and chapter 791 of the Laws of. 1870, the said town of Sidney was authorized to take stock in and to issue its bonds in aid of the construction of the New York and Oswego Midland railroad, which at the times hereinafter mentioned was a railroad corporation of this State duly organized. That on February 28, 1868, Reuben Lewis was one of the assessors of said town, and on that day he made an affidavit showing that the consent in writing of a majority of the taxpayers of said town (representing a majority of the taxable property of said town assessed and appearing upon the assessment-roll thereof for the year 1866, and a majority of the taxpayers and property required by said acts) had been obtained to the bonding of said town in the sum of $50,000 in aid of said railroad.
    The said affidavit, together with the consent therein referred to, were duly filed and recorded in the office of the clerk of Delaware county, in March, 1868, in book of railroad bonding (pp. 265-306), and certified copies were duly filed in the office of the clerk of said town. Said consent authorized and required the railroad commissioners of said town under said acts, “to borrow on the faith and credit of said town the sum of $50,000, being less than thirty per cent of the assessment valuation upon said assessment-roll for 1866, to execute bonds therefor, and to do and perform all other acts required of them by said act to carry into effect the purposes of said act, and to invest the same or the proceeds thereof in the stock of said railroad.”
    That under and in pursuance of the aforesaid acts of the legislature, "William H. Bradford, Henry E. Fisher and Harvey B. Morenus, were duly appointed railroad commissioners of said town and duly qualified, and were Midland railroad commissioners of said town until the year 1878, when the defendant Enoch H. Bishop was duly appointed a commissioner in the place of said Morenus, and duly qualified, and thereafter acted of assumed to act as such. That the said William H. Bradford died in the year 1878, wholly insolvent.
    That the said town of Sidney became and was bonded in the sum of $50,000, in aid of The New York and Oswego Midland Railroad, and the said commissioners were authorized to issue bonds of said town to the amount of $50,000, and no more, in such sums and payable at such times and places, not exceeding thirty years, and in such form as the said commissioners and their successors might deem expedient. That the said commissioners thereupon signed, sealed and executed $50,000 of such bonds and sold them to different purchasers. That the said bonds became and are of great value and now worth much more than the face amount thereof in each case. (
    And for a first cause of action the plaintiff alleges upon information and belief, that thereafter the defendants, Enoch H. Bishop and Ilenry E. Fisher, falsely assuming to act with said-William H. Bradford, deceased, as such commissioners, wrongfully and negligently exceeded their authority and issued bonds in excess of said $50,000 limit to purchasers in good faith and for value.
    That on or about July 1; 1877, the defendants, with said William EL. Bradford, deceased, executed and delivered to Alexander'Searles, of Sidney, an instrument in writing purporting to be a registered bond of said town, and of which the following is a copy: “ Registered bond, No. 27, $500. United States of America, State of New York, town of Sidney, county of Delaware. William H. Bradford, register.” Issued by virtue of acts of the legislature of the State of New York entitled, an act to facilitate the construction of the New York and Oswego Midland Railroad, and to authorize towns to subscribe to the capital stock thereof, passed April 5, 1866, and an act to facilitate the construction of the New York and Oswego Midland Railroad, and to exempt from certain taxation town and city bonds used in the construction thereof, passed May 15, 1867. These acts authorize any town or city in either of the counties of Orange, Sullivan, Hlster, Delaware, Otsego, Chenango, Cortland, Madison, Onondaga, Oneida, Oswego or Cayuga, to subscribe to the stock of the New York and Oswego Midland Railroad Company and to issue town or city bonds in payment therefor.

      “ Know all men by these presents, that we, the undersigned commissioners under the above entitled acts for the town of Sidney, county of Delaware, and State of New York, upon the faith and credit, and in behalf of said town, for value received, promise to paj' to Alexander Searles, of Sidney, the sum of five hundred dollars on the first day of January, in the year one thousand eight hundred and eighty-nine (1889), at the office of the commissioners in the village of Sidney Plains, Delaware county, New York, with interest at seven per cent, payable semi-annually at the same place. Transferable in person, or by attorney, only on the books of said town on surrender of said bond.
    “ In witness whereof wejlave hereunto set our hands and seals this first day of July in the year one thousand eight hundred and seventy-seven.
    “WILLIAM H. BRADFORD, [l. s.] “HENRY E. FISHER. [l. s.]
    “ENOCH H. BISHOP. [l. s.]”
    That said Searles paid the full face value for said bond. That in truth and in fact the said instrument was not the bond of said town of Sidney, but was in excess of the said $50,000 authorized to be issued, and which had been previously issued and were then outstanding, and neither of the said persons, Bradford, Fisher or Bishop, had any authority whatever to issue or sign the said bond as a commissioner under said act for the town of Sidney. That the representation and warranty of each of the signers to said instrument and contained therein, that it was ‘ issued by virtue of acts of the legislature of the State of New York,’ was false and untrue. That the representations and warranty of each of the signers to said instrument and contained therein that each of said persons had the right to act as a commissioner in the issuing of said bond, and to issue the same upon the faith and credit and in behalf of said town, was false and untrue, yet the said Searles purchased and received said instrument, relying upon each one of the said representations and warranties in said instrument of each of said persons. That in the issuing and delivery of said instrument the defendants stated and represented and warranted to the said Searles that it was a valid bond of the town of Sidney and within the $50,000 which they were authorized to issue, and that when the same was issued and delivered there would not be outstanding more than that amount of bonds, which statement was untrue and was negligently made, yet that the said Searles relied thereon and was thereby induced to purchase said instrument. That in fact the said instrument has no force or validity except as the individual note of the signers thereto. That the said signers without the authority of said town paid the interest on said instrument down to July 1, 1878, but the said town and the said persons have ever since neglected and refused to pay anything whatever on account of said instrument and said transaction. That on the 2d day of November, 1882, the said Searles by an instrument in writing duly assigned said instrument, and all his aforesaid right of action against the defendants to the plaintiff, for value received. That before the commencement of this action the plaintiff tendered back said instrument to the defendants and offered to assign the same to them and demanded the said $500 and interest, but the defendants neglected and refused to pay the same or any sum, and the plaintiff hereby tenders the said instrument to the defendants and demands of them as damages for the matters aforesaid the sum of $500, with interest thereon at seven per cent from July 1, 1878, together with interest on each semi-annual installment of interest to date, according to the terms of said instrument.”
    The case states that the plaintiff, to maintain the issues on his part, gave evidence tending to prove the facts alleged in the first cause of action of the complaint. The plaintiff called as a witness Porter Searles, who testified that prior to the alleged assignment to the plaintiff of his alleged cause of action, the witness demanded of - the railroad commissioners of the said town of Sidney, the payment of the interest upon the said bond in question, which was refused.

      T. Sanderson and W. E. Johnson, for the motion.

      Wm. (& J. B. Gleason, opposed.
   Iíaedin, P. J.:

It is insisted that the court erred “in excluding the testimony of Enoch IT. Bishop as to declarations of Alexander Searles, the plaintiff’s assignor.”

Enoch H. Bishop testified “ that in the summer of 1878, and sood after the death of William H. Bradford, the witness had an interview with Alexander Searles and Porter Searles, at Sidney Plains.” The defendants’ counsel then proposed “ to show that the old gentleman, Mr. Searles, asked the witness if this was his signature to the bond, and he said it was. And I further propose to show that the old gentleman then and there said that he knew, at the time he took the bond, that more than $50,000 had been issued of the bonds of the town of Sidney.” This was objected to by the plaintiff, the objection sustained, and an exception taken. When this evidence was offered, the case showed that the plaintiff, in 1882, purchased the cause of action alleged in the complaint, and gave his promissory note therefor, payable January 1, 1886, and that Searles, the assignor, had verbally 'guaranteed the collection of the bond.

We think no error was committed in excluding the declarations of Searles referred to in the offer. (Truax v. Slater 86 N. Y., 630.) The plaintiff was the purchaser of the chose in action for value, and the declarations of the prior owner were properly excluded. (Von Sachs v. Kretz, 72 N. Y., 548; Bullis v. Montgomery, 50 id., 352.) At the close of the plaintiff’s evidence, the defendant moved for a nonsuit upon four grounds, viz.:

First. That upon all the testimony which’ has been given upon the part of the plaintiff, he has not shown sufficient facts to entitle him to recover against these defendants.
Second. That there is no evidence here, except such as appears-by recitals contained in the instrument, that the assignor of the alleged cause of action ever paid anything for the bond which has been put in evidence.
Third. That there is no proof that the assignor was a purchaser in good faith, except that simple fact that the bond was issued to him.
“Fourth. That there is no proof of any bad faith on the part of these defendants, or either of them.”

This motion was denied. The motion was repeated at the close-of the evidence, predicated upon the grounds already stated, and upon the further ground, “ that the alleged bond "was void upon the face of it, having been issued in violation of section 11, article-8 of the Constitution of the State of New York, and being thus; void it did not purport to create any obligation against the alleged principal, and for that reason there could be no recovery against the defendants in tliis action; and further, there is not a particle of evidence that Searles ever paid any consideration for the bond.”

The court refused to nonsuit, holding that the “ transaction did not come within the prohibition of that section of the Constitution; and if it didn’t come, why then these defendants are liable, * * * and that there is no evidence in the case that establishes a defense.”

It is now insisted that the purchaser Searles was bound to know that no such obligation could be legally created, and that he cannot now be permitted to insist that he relied upon the signatures of the defendants or upon the representations contained in the instrument.

It is alleged that the defendants stated and represented and warranted the -said Searles, that is was a valid ‘bond of the town of Sydney, and within the $50,000 which they were authorized to issue, and that when the same was issued and delivered there would not be outstanding more than that amount of bonds, which statement was untrue, yet that the said Searles relied thereon and was induced to purchase the said bond. The case shows that evidence was given tending to show that these facts, were time. There was no allegation in the answer that the bond, which the defendants represented they had ¡lower to issue and was a valid bond, was illegal or unconstitutional.

We think in a case where it appears that the defendants had authority to issue $50,000 of bonds, and that having issued the $50,000, they made an offer to issue another thereafter and induced the purchaser to take the same in reliance upon their representations that the bond was valid and that they had authority to issue it, whereas, in truth, it was invalid and was put afloat in excess of any authority conferred upon the defendants, that they are not entitled to call to their aid the constitutional provisions already referred to. We think nothing can be, found in Falconer v. The Buffalo and Jamestown Railroad Company (69 N. Y., 491) to sustain such a position.

We think there was no error in refusing to submit to the jury the question of whether Searles was a purchaser in good faith, or ■whether the defendants had acted in good faith, or were guilty of ■negligence. We think, irrespective of these questions, the defendants were liable upon an implied warranty of the validity of their action as well as upon their express warranty. (White v. Madison, 26 N. Y., 124; Baltzen v. Nicolay, 53 id., 467; Clark v. Miller, 54 id., 534.) It was said in that case, viz., “ that the opinion or belief of the defendant as to his duty does not affect his liability, is established by the People v. Brooks (1 Denio, 457). Honest ignorance does not excuse a public officer for disobedience to the law.” It appeared by the evidence given upon the trial that the defendants never made any ex¿mination of the records of their office to find out how many bonds were outstanding until after Mr. Bradford’s death, and never made any examination to see whether this bond was or would be within the limit or not, or whether any bond was actually exchanged therefor, and that said Bradford was allowed by them to issue and deliver such bonds as he saw fit, and that the defendants gave no personal attention to the subject.”

We think, after such negligence shown on the part of the defendants, there was little or no question left to be considered !t as to whether these defendants acted in good faith or were guilty of negligence, and the fact that Searles lived in the same village with Bradford, who was his son-in-law, from whom he received the bond, and to whom he paid the money, is not sufficient to relieve the defendants from their warranty, or from the charge of negligence.” If a fraud or wrong was perpetrated by Bradford the defendants enabled him to perpetrate it. They, each of them, signed the bond and knew that it was to be issued. (Davis v. Bemis, 40 N. Y., 453, note.)

Alexander Searles, as a witness, testified: “ I had no knowledge or information from any source that these bonds were not good bonds of the town of Sidney. At that time I did not know that the full amount of $50,000 of bonds for the town of Sidney had been issued.” Thereupon, the counsel for the defendant offered to show that the witness Searles did know that the full $50,000 had been issued. This followed an offer which indicated that the effort was to show it by the declarations of Searles to Bishop, and the attention of Searles had not been called to the conversation. It was therefore proper to exclude the testimony sought for to contradict Searles.

Our conclusion is that no error was committed at the trial. The verdict was properly ordered for the plaintiff.

Motion for new trial denied, and judgment ordered for the plaintiff on the verdict, with costs.

Eollett and Churchill, JJ., concurred.

Motion for new trial denied,-and judgment ordered for the plaintiff on the verdict, with costs.


author: Hardin, P. J.:

text:
    ELIZABETH PRITCHARD, Appellant, v. JOHN W. HIRT, Respondent.

      Practice— to review a motion for nonsuit the case must show a ruling and an exception thereto — gift of a promissory note — the owner may testify as to his intent in delivering it.

    The case, as settled by the referee before whom this action was tried, stated that a motion to dismiss the complaint was made on the ground that no case had been proven against the defendant, but it did not state how he disposed of the motion, or that any exception was taken by either party. The referee subsequently found that the plaintiff had no title to the note upon which the action was brought, and directed the complaint to be dismissed.

      Held, that the case did not present for review any question as to the ruling of the referee on the motion for a nonsuit.
    The plaintiff testified that her husband, to whom the note had been indorsed and delivered by the defendant, gave it to her before it fell due, that he handed it to her and that she took the absolute possession and title to it by gift from him. Her husband corroborated her testimony. He was then asked by the plaintiff’s counsel, “ at the time you handed these notes to your wife, did you intend to part with the title and give the notes to her ? ”

      Held, that it was error for the referee to refuse to allow the witness to answer the question.
    Appeal from a judgment in favor of the defendant, entered upon tbe report of a referee in Oneida county.
    The action was brought to recover against tlie defendant as tbe indorser of a note set out in the complaint, which had been indorsed by the defendant and delivered to John J. Pritchard, the husband of plaintiff. It was alleged that the husband in August, 1876, before the note fell due, gave the same and transferred and delivered it to the plaintiff.
    The case, as settled by the referee, states, at the close of the evidence, that a motion was made for a nonsuit or to dismiss tlie complaint, on the ground that no case has been proven against the defendant. But it does not state what he did with the motion, nor that an exception was taken in behalf of either party. In the report of the referee it is stated, viz.: “And I having duly considered the evidence given find, as a fact, that it is not shown that the said plaintiff was the owner of said note at the time of the commencement of this action.” lie states also : “ I find as conclusion of law that the plaintiff has failed to show that she owned said note at the time of the commencement of this action, and that the defendant is entitled to judgment of nonsuit in this action, and I order and direct that such judgment be entered.” The plaintiff served and filed exceptions to the report. The defendant filed the report and entered a judgment “ that the plaintiff’s complaint herein be dismissed,” and for costs.
    Evidence was given tending to show a gift of the note to the plaintiff by her husband, and the note was produced from her attorney’s hands where she had sent it for collection. The plaintiff testified that she owned the note. Her husband was called to corroborate her evidence. The defendant to show to the contrary read in evidence the plaintiff’s testimony taken before the county judge of Herkimer de bene esse.

      Emmett J. Ball, for the appellant.

      li. O. Jones, for the respondent.
   Hardin, P. J.:

Vanderlip v. Keyser (68 N. Y., 444) requires a holding that the case, as made up, does not present to us an exception as to the ruling upon the trial upon defendant’s motion' for a nonsuit, or to dismiss plaintiff’s complaint. Appellant should have had his case show a distinct ruling and an exception. The referee at least “ should have been requested to decide the motion as of that time, and if he had refused to do so an exception taken to such refusal. If the motion had been granted an exception should have been taken to his decision.” (Miller, J., page 445.) Such should have been the case brought to us, if the appellant would reverse the finding or the decision of the referee as one of law that there was no evidence to sustain the complaint as to plaintiff’s ownership of the note. We are called upon to treat the referee’s report as one passing upon the eyidence and upon the merits of the case made by the evidence. The question of fact and the rulings and exceptions taken in the progress of the trial are here for review.

Second. Plaintiff’s position was that her husband gave her the note in question in August, 1876, before it fell due. That he handed the note to her and that she by a gift inter vivos took the absolute possession and title to the note from her husband. Her husband corroborates her in a narrative of the facts and circumstances attending the interview and delivery of the note He was then asked by plaintiff’s counsel, viz.: “ At the time you handed these notes to your wife, did you intend to part with the title and give the notes to her ? Defendant objected as incompetent, calling for a conclusion not fact. Plaintiff took an exception to the ruling excluding the evidmce.

We think the referee fell into an error. Whether a gift was made or not, was a question of fact. A delivery of the note with an intention to give it to plaintiff was essential to establish a valid gift. (Trow v. Shannon, 78 N. Y. 446; Young v. Young, 80 id., 422; Jackson v. Twenty-third Street Ry. Co., 88 N. Y., 526.)

What the intention of the husband was at the time of the delivery was^a fact not only essential to plaintiff’s theory of a gift, but it bore upon the position taken by the defendant that the delivery was to the plaintiff to enable her <(to keep the note” for the husband. If the husband had died and the plaintiff was seeking to establish the gift she would be permitted to prove the declaration of the husband, that it was his intention to give the note to his wife and that such was his intention when he delivered it to her. (Hunter v. Hunter, 19 Barb., 634; Seymour v. Wilson, 14 N. Y., 567; Forbes v. Waller, 25 id., 439.)

The fact that the husband was alive at the trial, and could give evidence of his intention does not change the rule or the principle upon which it rests. It merely alters the mode of proof. In conjunction with the facts attending the delivery of the note, it was competent to prove the actual intention of the donor of the note at the time of the alleged gift. We think the evidence was improperly excluded by the learned referee and that the exception presents an error which requires a reversal.

The evidence was conflicting before the referee, and we cannot say that he would not have been influenced by the evidence excluded. Certainly, the evidence related to the very pivotal point upon which the plaintiff was turned out of court without a recovery. Plaintiff had given prima facie evidence by production of the note of ownership. She had testified to ownership herself; had stated a gift to her, and her husband had corroborated her in many essentials. He was not allowed to add the fact that it was his intention, at the time of the delivery of the note to her, to make a gift of it to her. For the error thus pointed out, we think there should be a new trial. Plaintiff was only called upon to make out a valid transfer of the note to establish the legal title to it. Apparently upon the evidence before us, the defendant had no legal interest to inquire “whether the transfer was an actual sale or merely colorable, or whether a consideration was paid therefor,” or whether as between the husband and wife the gift was for good motives or not. (Sheridan v. Mayor, 68 N. Y., 30.) In either event a payment of the note by the defendant to plaintiff, or a recovery against him would bar the plaintiff and her husband, the former owner of the note. A formal transferee may be the real party in interest. (Code of Civil Pro., § 449; Merchants’ Bank of C. v. U. R. R. & T. Co., 69 N. Y., 373; Hays v. Hathorn, 74 id., 486; Sullivan v. Bonesteel, 79 id., 631.) When the husband was on the stand, the referee did not allow him to state that he was not owner of the note. We think the referee held the plaintiff within too-narrow compass in regard to her evidence, and that a new trial should take place.

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

Follett and Churchill, JJ., concurred.

Judgment reversed, and a new trial ordered before another referee, with costs to abide event.


text:
    OSCAR WENDELL, Respondent, v. L. D. STONE, Appellant.

      Specific performance of an agreement to give a lease — what acts of part performance will talce the ease out of the statute of frauds.

    In this action, brought by the plaintiff to compel the defendant to execute and deliver to the plaintiff a lease of certain premises for one year, with the privilege to the plaintiff of occupying the premises for another year upon the same terms and conditions, it appeared that, in pursuance of a verbal agreement between the parties that the defendant should give the lease as claimed by the plaintiff, the latter entered into possession of the premises, cutting his carpets to fit the rooms and paid the rent as provided by the agreement to the defendant, who accepted the same.

      Held, that the acts of the plaintiff, done in part performance of the agreement, were sufficient to take the case out of the statute of frauds, and that he was entitled to a decree compelling the defendant to specifically perform the contract on his part.
    Appeal from a judgment in favor of tbe plaintiff, entered upon tbe report of a referee in Broome county.
    The action was brought to compel a specific performance of an agreement to make, execute and deliver to tbe plaintiff a lease for one year, with tbe privilege to tbe plaintiff of occupying tbe premises another year at bis option upon tbe same terms and conditions named and stated for tbe first year. This action was commenced in December, 1883. The plaintiff was then in possession of the demised premises. The defendant, prior to tbe commencement of . this action, bad refused to execute tbe aforesaid lease. The plaintiff alleged that tbe agreement was made to give a lease in February, 1883, by parol. The defendant, in bis answer, admitted that at tbe time and place named in the complaint he made an agreement with plaintiff, whereby he agreed to and did rent to him tbe premises describedin tbe complaint, “ at and for twelve dollar’s a month, payable monthly, such renting to commence tbe first day of March, 1883.
    That under said agreement plaintiff, on or about the 1st of March, 1883, entered into possession of and has since occupied said premises.
    That it was talked that defendant should execute a written lease of said premises as in the answer admitted.

      Alexander Gumming, for the appellant.

      Arms & Arms, for the respondent.
   Hardin, P. J.:

Plaintiff, by the evidence offered, clearly and satisfactorily proved the agreement to have been made by and between him and defendant substantially as set out in the complaint. The admissions of the defendant in his answer, considered with plaintiff’s evidence and the feeble denial made by defendant as a witness of the alleged agreement, having all been considered and weighed, lead irresistibly to the conclusion that the referee properly found the agreement to have been made as stated by the referee. The defendant’s position is that he leased the premises for one year and no more. But the facts of the case, as shown by the evidence, are against his position. We must deal with the case upon the assumption that the defendant agreed to give a lease of the premises for one year, with an option or privilege to the plaintiff to have, hold and occupy for a second year.

That being clearly made out, the defendant ought not to escape from his agreement unless some substantial reason is furnished. His first position is that the agreement is void by the statute of frauds. Plaintiff’s reply to that is that he expressly refused to make an agreement for the premises without a condition that he might have the same a second year if he elected so to hold them. Plaintiff cut his carpets and adapted himself to the premises, relying upon the agreement, and moved into the premises relying upon the agreement which he had entered into with defendant. Under it he paid rent and performed wholly and fully on his part. The modification as to the month plaintiff was to take possession was made, and under.the modification “plaintiff, on or about the first day of March, 1883, entered into possession of the premises, and has since remained in the possession thereof.” We cannot regard the modification as to which month the occupation should begin as a new and independent agreement, abrogating all the other terms agreed upon between the parties.

The modified agreement having been made the defendant consented to .the possession of the premises, and the plaintiff took possession under it, and paid rent under it, and so far as he was required fully performed the agreement on liis part. The acts of part performance were under the agreement and in part performance of it, having direct reference to the agreement. Such acts of part performance were and are sufficient to take the case out of the statute o.f frauds, and they justify a court of equity in requiring a specific performance on the part of the defendant of that part of his agreement remaining unfulfilled. By defendant’s assent and acts the plaintiff was induced to take the premises, to adapt himself to the terms of the agreement, to move in, cut his carpets, pay rent, and rely upon the terms of the agreement. Defendant is estopped from setting up the statute and from questioning the validity of his agreement to give a lease for one year with the privilege of another. (Rathbun v. Rathbun, 6 Barb., 108.)

The terms of the agreement distinctly appear by the evidence, by the admissions and by the findings of fact, and they are quite satisfactorily made out and should be accepted, and the defendant held bound by them. (Parkhurst v. Van Cortland, 1 Johns. Chy., 273.) A court of equity will carry out “ an agreement framed in general terms when the law will supply the details.” (Fry on Specific Performance, p. 162, § 221.)

We think the contract made between the parties was fair and reasonable, and that the conduct of the plaintiff under it was fair and reasonable. There was no evidence of plaintiff being guilty of fraud or felony, or any proof of insolvency, either of which facts might, under well established precedents, have induced the court to refuse to enforce a specific performance. (Taylor’s Landlord and Tenant, p. 283, § 47, and cases there cited. Story’s Equity Jurisprudence, §§ 722, 763, 764.)

It was the duty of the defendant after the demand for the lease, which his agreement required him to give, to have it drawn and executed. (Taylor’s Landlord and Tenant, p. 29, § 60.) After it had been executed by the defendant and delivered to and accepted by the plaintiff, he would have been bound by it. It would then have become the written evidence of the terms and conditions agreed upon by the parties. The case of Wheeler v. Reynolds (66 N. Y., 232), referred to by the appellant is unlike the one in hand. J udge Earu says, in that case, viz : “ Every act done by the defendant was such as he had a perfect right to do, by virtue of his mortgage and his deed * * Here all the acts of the parties in respect to the premises in question were in virtue of the agreement which the plaintiff seeks to enforce. For, strictly speaking, the agreement made not only provided the terms upon which the premises might be, and were to be accepted, but that a written lease evidencing such agreement should be executed. As before said all of plaintiff’s acts are under and referable to the agreement which he seeks to have the defendant carry out on his part. (Robbins v. Robbins, 89 N. Y., 257.) We see no error occurring on the trial which was prejudicial to the defendant. (Code Civil Pro., § 1003.)

The judgment should be affirmed, with costs.

Follett and Kennedy, J J., concurred.

Judgment affirmed, with costs.


text:
    JAMES LYONS, Respondent, v. THE NEW YORK CENTRAL AND HUDSON RIVER RAILROAD COMPANY, Appellant.

      Negligence — when a master is liable to a servant for an injury resulting from the negligence of a fellow-servant of intemperate habits.

    While the plaintiff was repairing one of the defendant’s engines another engine ran into it, and from the sudden movement thereby given to it the plaintiff was injured. In this action, brought to recover the damages thereby sustained, the plaintiff claimed that the engine which caused the accident was defective, unsafe and out of repair, and that by reason thereof and the defective, improper and unskillful management of incompetent servants of the defendant, the injuries were sustained, and that the defective condition of the engine and the incompetency of the servants were known to the defendant but not to the plaintiff.
    Upon the trial the plaintiff, having produced evidence tending to show that the engine was out of repair and would start of itself, and that at the time of the accident the engineer in charge of it had left it, asked a witness whether he had seen the engineer in the yard in an intoxicated condition on the day of the accident, and also as to whether he had ever seen him intoxicated in the yard. The court excluded the evidence on the ground that there was no allegation in the complaint referring to the condition or habits of the servants but only to their skill and experience.

      Held, error.

      Appeal from an order granting a new trial, entered upon a motion made at the Onondaga Circuit after a trial and verdict for the defendant.
    The action was brought to recover damages for injuries sustained by the plaintiff on the 28th of December, 1878, while in the employ of the defendant, by the sudden movement of an engine' upon which the plaintiff was engaged in making repairs, in the yard of the defendant.
    Forbes, Brown de Tracy, for the appellant.

      William P. Gannon and G. L. Stone, for the respondent.
   Hardin, P. J.:

Plaintiff in his complaint said that a locomotive ran against him, one on which plaintiff was engaged in making repairs; that such sudden movement of said engine caused the injuries to the plaintiff. It is averred that the engine so causing the injuries “ was defective, unsafe and out of repair, and by reason thereof and of its defectiveness and its improper and unskillful management by defendant’s incompetent servants, took steam and ran against the one on which plaintiff was employed as aforesaid.”

Plaintiff also alleges that the unsafe and defective condition of said engine so taking steam as aforesaid, and the incompetency of its said servants in charge thereof, were well known to the defendant at and before the time aforesaid, and the same had been reported unsafe and out of repair, but the defendant negligently omitted to repair the same and continued to run and use it while thus unsafe, and for that purpose and in its management of its said road, negligently employed unskillful, incompetent and improper servants. That ■said unsafe condition of said engine and said incompetency of its .said servants was well known to- defendant but was unknown to plaintiff.” It was shown that the engine which crossed causing .the injuries had a leaky throttle; they had to tie up the rthrottle with a bell cord to hold her in place, she would get steam ■enough through the valve to move herself without opening the throttle. This defect was reported two or three times to Mr. Rayner, defendant’s servant, whose duty it was to see “ that the engines are in order to take the trains,” “ and that men are on them to see that they are in a condition to go.” It was shown that Dwyer was the engineer in charge of the engine prior to the accident, and that the accident was caused in part by his neglect in going off and ' leaving the engine unattended and not properly secured. The plaintiff sought to show that Dwyer was addicted to intoxication, and the plaintiff put the following questions to a witness, viz.: Q. In reference to the man Dwyer, state whether you ever saw him in an intoxicated condition in that yard ? Defendant objected to the .question and the court excluded the question, intimating that the pleadings were insufficient to allow the evidence, and plaintiff took an exception to the ruling.

Another question was put, viz., Q. Did you on or about the 28th day of December, 1878, see this man Dwyer in an intoxicated condition in the yard ? It was objected to and excluded, thé court remarking, u I think the allegation in the complaint refers to his skill and experience rather than to his condition or habits. Under these allegations you may show the engine was unskillfully managed. Yet, I hardly think you can show that it was managed by a man who was drunk. * * * I put my ruling on tne specific ground that it is not alleged in the complaint. The plaintiff duly excepted. Plaintiff then asked the witness, viz., Do you know whether or not Raynor ever discharged Dwyer for drunkenness ? This was objected to and excluded by the court, and plaintiff excepted. The Court of Appeals in affirming our decision in Cone v. The Delaware, Lackawana and Western Railroad Company (15 Hun, 172), said that in addition to the duty of the defendant to furnish its employees for use in the protection of its business good and suitable machinery, and keep it in repair, it was also its duty to furnish, for the management of such machinery, careful and worthy servants. * * * (Cone v. The Del., Lack. and Western R. R. Co., 81 N. Y., 208.)

We are of the opinion that a person addicted to intoxication is not a careful, trustworthy, competent or proper person to have the management and control of an engine. That the servant having charge of the engine that caused the injuries was an incompetent and improper one, was sufficiently alleged in the complaint. Proof of such incompetency and untrustworthy and improper character should have been permitted. The exclusion of the evidence offered was an error. (Mann v. Pres., 91 N. Y., 500; Oldfield v. The N. Y. & H. R. R. Co., 14 id. 313; Nolton v. Western R. R. Co., 15 id., 444; Edgerton v. N. Y. & H. R. R. Co., 39 id., 230; Chapman v. Erie R. R. Co., 55 id., 579; Brickner v. The Central, 49 id., 672; affirming S. C., in 2 Lans., 506, was decided upon the authority of Laning v. The Central, 49 N. Y., 521.)

In the 2d of Lansing, at page 514, Potter, L, in delivering the opinion of the court, said, viz.: “ If the presumption should be that it was "Westman, the boss carpenter, then the direction was' given by one as to whose competency by reason of his habits of intemperance was a question of fact properly for a jury.” Had the evidence been received, a question of fact might have arisen as to whether the injuries arose from the incompetency and improper character of the servant, retained in the defendant’s employ after notice that he was an incompetent and improper servant to be intrusted with the engine, causing the injuries. (Wright v. The New York Central, 25 N. Y., 562; Cone v. D. L. & W. R. R. Co., 15 Hun, 172; S. C. affirmed, 81 N. Y., 206.)

Our opinion is that the learned trial judge'was right when he granted a motion made upon his minutes for a new trial.

The order is affirmed, with costs of this appeal to abide event.

Pollett, J., concurred ; Kennedy, L, not sitting.

Order affirmed, with costs of the appeal to abide event.