text:
    Frederick S. Meyers, Resp’t, v. Moses S. Rosenback, App’lt.

      (City Court of New York, General Term,

      Filed October 20, 1893.)

    Lease—False befbesentations—Evidence.
    Plaintiff, to induce defendant to lease certain premises for manufacturing purposes, represented to him and stated that he would guarantee that the building was strong enough to sustain the pressure of an engine larger than defendant would need. Belying on these representations defendant executed a lease for a term of years, but upon starting the engine the building vibrated so that no work could be done, and continued to do so notwithstanding changes made at the suggestion of plaintiff. Subsequently the building department served notice that the engine must be stopped, and defendant surrendered possession and moved out._ In an action for subsequent rent, the answer set up the false representations and a counterclaim for damages sustained in being compelled to remove. Held, that evidence of conversations and re~resentations_ claimed to be the inducing cause of making the lease, and evidence tending to show their falsity, and that it was known to plaintiff, was competent and material, and that the question of the falsity of the representations, and whether defendant relied on them, should have been submitted to the jury.

      Appeal from judgment in favor of plaintiff, entered upon verdict directed by the court.

      Hamilton R. Squier, for resp’t; Horwitz & Hershfield, for app’lt.
   McCarthy, J.

This is an appeal by the defendant from a judgment in favor of the plaintiff upon a direction of a verdict by the court, and from the order denying defendant’s motion for a new trial.

The plaintiff in December, 1891, was the owner of certain premises, Nos. 205 and 207 Bast Ninety-ninth street, New York city.

The defendant at that time was, and for five years prior thereto had been, a manufacturer of corsets at New Haven, Connecticut.

At that time the defendant desired to move his factory to New York city, and, in the course of his search for a suitable building for that purpose, he came across one owned by the plaintiff on Seventy-fifth street.

The defendant was directed by the person in charge of this building to see Mr. Meyers, the plaintiff, in reference to renting it.

The defendant thereupon, as the evidence shows, called by appointment, previously made, on Meyers, the plaintiff, at Meyers' office, in company with his salesman, Schwartz.

The defendant Rosenback at this interview with the plaintiff told the plaintiff that he, the defendant, wanted to have a building to manufacture corsets, and had looked at plaintiff’s building in Seventy-fifth street.

The plaintiff replied, “You cannot have that Seventy-fifth street place, because the building is let to another party. I have a place in Ninety-ninth street much more suitable. ”

Then they made an appointment to look at the Ninety-ninth street building, and pursuant to this appointment the plaintiff, the defendant and the defendant’s salesman, Schwartz, met there with a view to making arrangements for leasing the place should it prove suitable.

The defendant told the plaintiff that he observed there was no power in the Ninety-ninth street building to run ^ an engine, whereas the Seventy-fifth street building was supplied with power, and he required an engine and boiler, and that he preferred the Seventy-fifth street place.

The plaintiff told him that the Ninety-ninth street building was a better building, and that he would guarantee that it would hold fifty-horse power even in the weakest point of the building.

The defendant said that he had an engine and boiler in New Haven, and that, provided that plaintiff’s building was strong enough, he would put this engine and boiler up in this building.

This engine was an ordinary seven-horse power engine, which was running as many machines as the defendant then required in the manufacture of corsets.

The plaintiff suggested that, as it would involve a good deal of trouble to bring this engine down from New Haven, and cost a good deal to set it up, it would be cheaper for the defendant to buy a gas engine.

The defendant acquiesced in this suggestion, and at the further suggestion of the plaintiff went with him to one Hahner’s, who had a gas engine, which the plaintiff was desirous that the defendant should see.

After examining this gas engine the defendant concluded to take the plaintiff’s suggestion and purchase such an engine for use in his factory.

The plaintiff had even suggested to the defendant that, as the defendant was going to increase his business, he might put a larger engine in, and advised him to put in a fifteen horse-power engine, so that he could sub-let his power to any other tenant in »the building who might desire power.

The defendant said that he did not care to make any money that way; that all he wanted was to run his machines, and that a seven to ten horse-power would do ,that.

In all these interviews, the uncontradicted testimony shows that the plaintiff, in order to induce the defendant to lease the building, kept continually telling the defendant that the building was strong enough for the defendant’s wants and purposes, and that he, the plaintiff, would guarantee that it would be strong enough even in the weakest point in the building, which was over the stairs.

Belying upon the truth of these statements made by the plaintiff, that the building on Ninety-ninth street was of sufficient strength to support the engine for the generation of steam-power required by the defendant in his business, and that it was so constructed that it would sustain the weight and pressure of such engine for the generation of power, the defendant was induced to sign a lease of the premises for four years and one month from the first day of January, 1892, at the yearly rent or sum of $1,-400 a year.

After the execution of this lease the defendant bought an engine of the character which the plaintiff had pointed out to him as being suitable for his purposes, and took possession of the premises, an$ started to fit up his factory.

He occupied the fourth and fifth floors of the building, and about the first day of January, 1892, proceeded to remove his factory from New Haven to New York, together with all his machinery and stock, and proceeded to fit it up for use by his employes, some forty in number.

After the gas engine, purchased at plaintiff's suggestion, had been set up in the front part of the building, at the first turn of the wheel the building began to vibrate, and the shock was so perceptible that it interrupted the work of all the people in the building, and caused many of the hands to become sick.

The defendant at once stopped his engine and notified the plaintiff of the situation of affairs.

The plaintiff called at the defendant’s premises, saw how the engine worked, and suggested to the defendant that the engine be removed to one side of the position it then occupied, and in accordance with this suggestion of the plaintiff the engine was set back on the very spot where the plaintiff indicated.

The engine thus removed to another spot was then again set to work with the same effect as to vibration of the walls as before.-

It shook so much that the people occupying the adjoining premises could not do any work at all, and threatened to move out, in fear of their lives, and in fear that the building was going to tumble over on them.

The defendant again notified the plaintiff to come up and see " for himself how bad matters were.

At this interview the defendant said to the plaintiff: “ I cannot stand this interruption of my business. I have all my hands," and they all work on piecework, and if I want to keep them I shall have to pay them by the day for piecework whether they work or not, in order to keep them together.”

The defendant further said: “ I want you to keep this building in shape so that I can work.”

The plaintiff then suggested that some lumber be bought, and that his carpenter would place uprights on the floor so as to brace up the ceiling.

The plaintiff’s carpenter did place these uprights in the way that the plaintiff had indicated and directed should be done.

When this was done, the engine was set to work again, but vibrated as much as ever, if not worse.

The plaintiff was again notified of the condition of affairs, and, at his suggestion, his own carpenter wedged the braces that he had previously put up, so as to make them tight.

This, however, did not improve matters; the vibration continued to be as strong as before.

The plaintiff then said: “We will try one more thing; we will take the engine and put it down stairs.”

In this the defendant acquiesced, and said: “All right; I will do anything to suit you. I want to get this factory going because it is money out of my pocket. I am losing daily. I am losing trade.”

The plaintiff and defendant then arranged to lower the engine to the floor below.

The plaintiff’s architect came to the defendant’s place of business and showed the machinist where the engine should be placed, and marked out the identical spot where he wished the engine set.

The defendant then had the engine moved from the fifth floor to the fourth floor, and set on a platform just where plaintiff’s architect had marked out the spot where he desired the engine placed. The engine was then again set to work.

It vibrated more than it did before when in its former position on the floor above.

Every time the engine made a move every beam in the building moved, and the entire building vibrated worse than it had ever done before.

The windows rattled continually; the merchandise on the shelves tumbled off; boxes piled up on shelves fell down.

The shaking was so strong and pronounced that it was impossible to continue business in that factory.

The defendant could not keep the machines in order at all; the sewing machines got out of gear.

The machinist found it impossible, with the vibration, to get the machines started. It made the people dizzy to walk through the building and see it.

The defendant, after complying with the plaintiff’s suggestion to put the machine on the fourth floor in the very spot where the plaintiff’s architect had designated, again sent for the plaintiff and told him that he could not any longer stand this state of affairs.

He showed him how the building shook, and for this purpose started up the machine.

When he called the plaintiff’s attention to the vibration caused by the running of the machine the plaintiff shook his head and said: “ I dont know; I cannot fix it.”

As the last resort the plaintiff suggested that the defendant should obtain permission from the party occupying the lower floor and cellar to place the engine i'n the cellar.

The defendant endeavored to obtain this permission, but failed.

He then reported to the plaintiff that he was unable to obtain permission to make use of the cellar, and the plaintiff said: “I don’t know what we can do.”

These changes and experiments, and moving the engine from place to place as suggested by the plaintiff, went on until about June 1st.

On June 2, 1893, the defendant received notice from the building department that his gas engine was rocking the building to such an extent as to disintegrate the walls, and he was required to discontinue the running of the engine at once.

This was a joint notice from the building department addressed to the' plaintiff as owner of the building, and to the defendant as lessee.

This notice was served on the defendant on the 3d day of June, and on that day he surrendered possession of the premises to the plaintiff, and moved out, it being impossible for him to continue his business without the use of motive power to generate the steam necessary to run his machines.

The testimony on behalf of the defendant showed that during all this time he suffered great difficulties in the'conducting of his business, which was interrupted by the frequent changes of the engine, necessitating the stopping of all work.

Orders taken by the defendant’s salesmen could not be filled because the defendant could not manufacture the goods for which orders had been taken.

Salesmen who were on the road soliciting orders at expensive yearly salaries were called back to New York, and were kept idle during the busy season because of the inability of the defendant to make and deliver the goods which the salesmen were selling.

The defendant was also subjected to other expenses by being compelled to move to other quarters at a higher rental, the rent of the new place being $1,800, while that of the plaintiff’s premises was only $1,400.

This action was brought to recover the rent for the month of June, 1893.

The answer sets up the defense that the defendant was induced to lease the premises by means of the statements and representations of the plaintiff, known to him to be false, that his building was suitable in every respect for defendant’s business, and that it would sustain the weight and pressure of such an engine, even a fifty horse-power one, as the defendant would require.

The defendant also set up a counterclaim of $2,000 for damages sustained by him in being compelled to remove.

Upon the trial of the action the defendant offered to prove the defective condition of the building in the year 1890 by expert builders, who had thoroughly examined the same in that year, and who found that it was imperfectly constructed, and that the defects were such as to render it unsafe for occupancy; the defects being in the foundation walls and in the stone wall resting upon the foundation, and that the plaintiff knew of these defects.

The defendant also offered to prove by one John Drew, who •was a house mover, and had been in that business for thirty years, -and was thoroughly familiar with the shoring up and strengthening of buildings and work of that character, that in December, 1891, he was employed by the plaintiff to examine the building on Ninety-ninth street, and that he had discovered it to be unsafe and insecure, and that, by the plaintiff’s direction, he proceeded to endeavor to make the building secure by underpinning it, but was prevented from doing anything to the building by the refusal of a tenant occupying the lower portion of the same to allow him to enter.

The defendant offered to prove by the same witness that, after the defendant was compelled to leave the premises, the witness Drew was employed by the plaintiff to make the building secure by underpinning and doing work on the lower walls, and that he did so work on the premises.

All these offers were excluded by the court on the ground that they were immaterial and irrelevant, but not on the ground that they were made in the form of an offer.

The defendant also offered to prove by the witness Loomis that it was not the fault of the gas .engine, or anything connected with it, that caused the vibration.

The defendant also offered to prove by the witness August Schweitzer, an inspector of buildings of the building department of the city of New York, that during the months of February, „ March, April and May, 1892, he inspected the premises in question, and found that they were so badly constructed as to render the building utterly unsafe and unfit for occupancy, and dangerous to life and limb, and that such was the condition of the building at the time the defendant, Eosenback, abandoned the premises.

The defendant also offered to prove by the same witness that this condition of the building, as discovered by him, was communicated to the plaintiff immediately after the witness himself had discovered it.

These offers were also rejected by the court on the ground that the testimony was immaterial and incompetent, and not for the reason that they were made in the form of offers, the defendant duly excepting to the court’s ruling.

The defendant also offered to prove by the witness Schwartz, that prior to the making of the lease of the premises in question, the plaintiff in the presence of the witness represented to-the defendant that the Ninety-ninth street building was per- . fectly safe and sound and able to hold such machinery as the defendant described, or that he required the building for, and-that the defendant explained fully to the plaintiff the purposes ■ for which the defendant required the building, and stated to the plaintiff that unless the building was fit for ■ such purposes it was useless to the defendant.

That the plaintiff thereupon warranted the building to the defendant as safe and sound and as thoroughly fitted to hold such machinery as the defendant required for his business; that the plaintiff so warranted it to the defendant as an inducement to-enter into the lease, and that the defendant relied on such recommendations and statements, and was induced by means thereof to execute the lease.

It was also offered to prove by the same witness that this war* ranty and representations were false and untrue, and known to. the plaintiff to be so.

This offer was also rejected by the court on the ground that it. was incompetent and irrelevant..

The present appeal presents to this court the correctness of the: rulings of the court below in rejecting the various offers of proof' as above detailed, to all of which the defendant duly excepted, and also presents the exceptions to the rulings of the court in denying the request of the defendant to go to the jury upon the question as to whether or not the representations made by the-plaintiff were false and untrue, and as to whether the defendant relied upon these representations, and by reason thereof was-induced to enter into the lease, and whether they were material representations.

The defendant also asked leave of the court to submit to the-jury whether the representations made by the plaintiff were false and untrue, and that if by reason of these representations the defendant was induced to forbear making other investigations or • inquiry as to the premises, that a verdict should be directed for the defendant.

The defendant also asked for leave to go to the jury upon the-question of the warranty by the plaintiff as to the condition of the building, and upon the question whether the warranty was-given, and, if such warranty was given, and the facts were other-than as warranted, and that the facts other than as warranted, were material facts, that a verdict should be rendered for the • defendant.

The defendant also asked leave to go to the jury upon all the evidence in the case.

These motions were all denied, however, and the defendant eixcepted to the refusal as to each of them seriatim, and excepted also to the court’s granting the motion for a direction of a verdict.

The court, on motion of the plaintiff, directed a verdict in favor of the plaintiff.

From the judgment thereafter entered in favor of the plaintiff, and from the order denying the motion for a new trial, the defendant appeals to this court.

Inasmuch as the trial justice in passing on the questions raised by the exceptions did not intimate any special ground for his ruling, and in directing a verdict for the plaintiff did not render any opinion, we are to assume that the ground for such rulings and directions was an attempt on the part of the defendant, by such evidence to alter or vary the terms of the lease in question, and that all conversations had prior to, or at the time of making the same was merged therein; but the evidence presented and the proof offered, and which was rejected, was not for such purpose and did not alter or vary the written instrument.

By the pleadings it was admitted that the lease set forth had been made and signed and if a valid contract the defendant was liable, but it was claimed by the defendant that by reason of false and fraudulent representations made by the plaintiff and which, were known to the plaintiff at the time, the defendant was induced to and did sign such lease.

Then this presented an entirely different question, and could be proved only by evidence of the conversations and representations made and which were claimed as the inducing clause.

We think the court erred in its rulings, and that the evidence was competent, and being competent was certainly material in order to prove defendant’s entire case.

They were not mere opinions, but rather the representations and statements of a material fact, to wit: the conditions of the building for the purposes of the defendant, fee Hickey v. Morrell, 102 N. Y., 454 ; 2 St. Rep., 408, and this was then a fraud by the plaintiff by which the defendant was induced to assume the lease, The Indianapolis, Peru & Chicago Railway Co. v. Tyng, 63 N. Y., 653, and this is shown particularly by the offer of evidence in which would have been proven that plaintiff had knowledge of the defective and unsafe condition of the building at the time of the making of the lease.

Fraud vitiates every contract no matter how solemn.

The representations were relied on by the defendant. Follett, C. J., in Daly v. Wise, 132 N. Y., 311; 44 St. Rep., 422, says: “In case the owner of a dwelling knows that it has secret defects and conditions rendering it unfit for a residence, and fraudulently represents to one who becomes a tenant thsCt the defects and conditions do not exist, or if he fraudulently conceals their existence from him, the lessee if he abandons the house for such cause will not be liable,” see Jackson v. Odell, 12 Daly, 345; Bennett v. Judson, 21 N. Y., 238, and where a tenant continues in occupation, but did so under the assurance of the landlord that the cause of the complaint should be removed, his continuance is not of such a nature as to amount to an adoption of the contract or to make the tenant liable for the payment of the rent for the period while in actual occupation. Wallace v. Lent, 1 Daly, 481.

In the case at bar, the defendant constantly complained of the conditions of the building, and at the request and solicitations of the plaintiff made changes from place to place on the assurances of the plaintiff to remove the cause.

Defendant removed from the premises when the plaintiff failed.

There was no act in affirmance of the contract.

The right to rescind on the part of the defendant when he discovered the fraud was not lost.

It was simply held in abeyance by the order of the plaintiff to remove the engine from place to place and the assurance given to remove the cause. N. Y. L. I. Co. v. Chapman, 118 N. Y., 295; 28 St. Rep., 780; Gould v. Cayuga Co. Nat. Bank, 99 N. Y., 333.

The correctness of the rule being now shown that the defendant had a good defense by reason of the false and fraudulent representations and that the evidence was admissible and proper.

It was error then for the court not to submit the questions of fact to the jury as requested by defendant’s counsel.

There was sufficient evidence, and whether a representation is merely an expression of opinion or belief or an affirmation of a fact to be relied upon is a question for the jury. Sumar v. Canaday, 53 N. Y., 298-306-367 ; Meyer v. Amidon, 23 Hun, 553.

It is well settled that even where a statement is made by a party who assumes or intends to convey the impression that he has actual knowledge of its truth, being conscious that he has no such knowledge and knowing the inquirer relies and is about to act upon his statements and of the injury sustained, that the party making the same intended to deceive and defraud the injured party.

The intent is of course a question of fact to be found by a jury and not one of law to be disposed of by a court. Meyer v. Amidon, 23 Hun, 553.

We have examined the authorities carefully presented by the respondent, but do not think they bear out his contention.

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

Ehrlich, Oh. J., concurs.


source: Caselaw Access Project

author: McCarthy, J.

license: Public Domain

text:
    Alice Watson, Resp’t, v. John H. Russell, App’lt.

      (City Court of New York, General Term,

      Filed October 20, 1893.)

    Contract—Theatrical—Damages.
    Plaintiff entered into a written contract to serve defendant as an actress for a specified term, which contained a provision that it might be canceled at any time by giving her a week’s notice and paying an additional week’s salary. This slie signed and sent to defendant by mail, but upon: reporting for rehearsal defendant denied having received the contract and stated that he had employed another person in her place. In an action for, breach of the contract defendant denied making the contract. Held, that the provision of the contract did not limit the damages to the two weeks’ salary; that the clause was intended asa penalty and not as liquidated damages, and that the proper measure of damages was the full compensation under the contract, less the amount earned in other employment during the term.
    Appeal from judgment in favor of plaintiff, entered upon verdict directed by the court.

      Van Duzer & Taylor, for resp’t; Vanderpoel, Cuming & Goodwin, for app’lt.
   McCarthy, J.

This action is for damages for defendant’s breach of a written contract by which plaintiff was to serve him as an actress for thirty weeks at thirty dollars per week.

It was agreed at the trial that were the plaintiff entitled to recover in full, her recovery with interest then would be $485.46. This is salary for thirty weeks, less what plaintiff was able to earn in that period. The answer contains as follows : (1) A denial of the making of the contract sued on, and of the plaintiff’s compliance with the terms thereof, also a denial of her damages, and an allegation that defendant was willing to make such a contract. (2) A counterclaim for breach of said contract by plaintiff, and that in consequence defendant had to hire another actress in her place for thirty weeks at an increased cost of $235.

The reply to the counterclaim is a denial. The contract, signed by defendant, was handed to plaintiff in duplicate 8th July, 1891. The defendant’s signature was written by his agent, Biddle, but the contract so signed was delivered by defendant.

At bis request she signed it at her home and mailed it to him, together with her address at which she might be notified for rehearsals.

She never was notified, except on receiving contract from defendant he told her to report for rehearsal about 15th August. Having no other word from defendant, she came from Chicago and reported for rehearsals at his theatre, this city, Saturday, August 15th, but found no one there.

In the interval she had refused other employment. On the next Monday she found defendant’s agent, Biddle, at the theatre, who told her it was a “ mistake ; ” that he was “ sorry; ” that he would try to get her other employment; that he had never received the contract, and that plaintiff’s place had been filled. He gave plaintiff a letter to get another position.

She earned what she could during the contract period of thirty weeks, and sues for the balance, $485.46.

The defendant moved the court to direct a verdict of sixty dollars for the plaintiff under a clause of her contract given below.

This the court denied, and by direction there was a verdict for the agreed sum of $485.46, and from which the defendant appeals.

Ho evidence was given or offered in behalf of the defendant, nor a request to go to jury upon any fact.

By the motion to direct a verdict for sixty dollars damages the defendant conceded his liability and that the plaintiff had proven a cause of action against him in damages to the extent of sixty dollars.

The trial justice having denied the motion, the only question to consider is, what was the proper measure of damage in such a case.

The appellant contends that the clause, “ It is further agreed that the said John H. Russell may cancel this contract at any time on giving the party of the second part one week’s notice and paying one week’s additional salary, the party of the second part agrees to accept one week’s notice of cancellation at any time,” limits the plaintiff’s damage to the two weeks’ salary, and cites in approval of this view the case of Fisher v. Monroe, 21 N. Y. Supp., 995; 51 St. Rep., 585; Peverly v. Poole, 19 Abb. N. C., 271; and Parry v. Am. Opera Co., id., 270; 9 St. Rep., 521.

We think that this case is clearly distinguishable from these, even conceding for the argument that they are correct. .

In all these cases the parties had entered on the performance of the contract and thus left the defendant to act under the same, either by notice or without, subject to such rights possessed by the plaintiffs.

But no such contention is made here. It is purely and simply that there was no contract.

There is no evidence of his admission of the contract and notice or intent to cancel. It being proved that there was a contract such as claimed, the mere fact of the defendant having employed some one else to perform the same service under a misapprehension will not be said to be an act performed by him under the terms of the same.

He could, if he saw fit, have continued both persons to perform these services alternately, or in any other manner satisfactory to himself.

It could not be the intention of the parties that the defendant was to relieve himself of the effect of his liability or limit the same by claiming that there was no contract.

This clause was not intended as liquidated damages, but rather as a penalty, and where there is any doubt as to whether the damages are liquidated, the general rule of damages will apply.

We think that this case comes under that of Howard v. Daly, 61 N. Y., 362, and similar cases, in which the rule of damages is the full compensation under the contract less the amount earned in other employment during the term thereof.

The case of Parry v. Am. Opera Co., referred to by the appellant, is not in point; there the plaintiff was hired for twenty-five weeks and was discharged after eight weeks’ service. He then sued and recovered judgment for the damages sustained for the two weeks following his discharge.

It was there held, that this barred any further action for damages for the remainder of the term for which he was hired. The judgment so recovered being a complete bar to any further recovery on the same breach.

Bor these reasons judgment should be affirmed, with costs.

Hewburger, J., concurs.


text:
    George K. Walker et al., Resp’ts, v. Philip G. Hubert, App’lt.

      (City Court of New York, General Term,

      Filed October 20, 1893.)

    Evidence—Parol to vary written contract.
    Evidence of conversations before and at the time of making a written contract, and which would tend to alter the terms of the contract, is inadmissible.
    Appeal from judgment in favor of plaintiff, entered upon verdict.

      Clark & Sanborn, for resp’ts; J. A. Dennison, for app’lt.
   McCarthy, J.

A contract in writing was entered into between the parties to this action, dated January 1, 1890, whereby plaintiffs agreed to furnish lithographs to defendant, to the amount in value of $1,820, to be paid for promptly as used, and which defendant agreed to use and pay for within two years from the date of the contract.

This action was brought to recover a balance of $1,002.96 and interest, due on that contract.

By amended answer served shortly before the trial, defendant set up as a defense that an agreement was made, after the contract was signed, that the defendant should be released from liability upon it, and Gustave Frohman, defendant’s son-in-law, substituted in his place as debtor, and it was alleged as a further defense and counterclaim that said Frohman was to be allowed a commission for printing and lithographing obtained for plaintiffs,from third parties, and that such commissions were to be applied on the debt in suit, and that such commission had become due Frohman to an amount exceeding the demand in suit.

There was testimony given in behalf of defendant of a conversation between Froliman and a Mr. Barnes, who was plaintiff’s agent, and who had died since the trial of this cause, in which Frohman agreed to assume the debt, and defendant was to be released.

This conversation was denied by Mr. Barnes, and there was no written evidence of any such agreement.

In support of the other alleged defense, defendant relied upon a letter written by plaintiffs to Frohman under date of August 20, 1890, which was shortly after a contract (Ex., 17) other than the one in suit had been entered into between the parties to this action, for other lithographs, in' which letter it was stated that commissions were to be allowed Frohman and credited on the last shipment of lithographic work made for defendant.

A letter was introduced in evidence by plaintiffs, dated February 13, 1890, shortly after the contract in suit had been signed, in reference to allowing Frohman commissions, which contained nothing conflicting with the letter of August 20th, but which expressed another condition of the contract as to commissions, viz.: that the commission was to be paid when all the lithographs on which it was claimed were taken and paid for. Ex. 0. This condition was assented to.

The principal contracts on which commission were claimed by Frohman were made with one Pearson, and the evidence showed that Frohman had not obtained any contracts whatever for plaintiffs which had been carried out by the parties giving the orders, and so no commissions had become due him.

Until the trial Frohman had never claimed commissions on the face of the contracts. Ex. D.

In August, 1891, Frohman stated to Mr. Barnes that he was paying money to defendant to meet the bill now in suit, which would become due the following January, and that the bill would be paid when due.

Plaintiffs have been constantly doing printing and lithographic work for Frohman since the contract in suit was executed.

The defendant by his answer admitted the claim of the plaintiff and the credit allowed by him, and endeavors to avoid the payment of the balance claimed by the contentions presented in his defenses.

The question on this appeal for consideration therefore arises on the refusal to admit certain testimony presented by the defendant of conversations had between the parties before and at the time of the making of the written contract under which the plaintiff seeks to recover.

Also to exceptions taken by the defendant on the refusal of the court to charge as requested.

It is apparent that the evidence ruled out and stricken out was improper and would have altered the terms of the written contract.

The law in this state, “ That one cannot vary or alter a written contract by oral statements made prior to or at the making of the contract and that such conversations are deemed merged in the contract,” is so well established that it is unnecessary to cite authorities of an oral agreement affecting the details as to the manner of payment. Such agreement having been made subsequent to the written contract, this was properly admitted, and in the able and impartial charge delivered the whole question of fact was fully and fairly submitted to the consideration of the jury.

The issues were of fact, and the jury had a right to accept or disbelieve the testimony of one side or the other.

There is sufficient evidence to support the verdict. We .find no errors on the part of the trial judge, and therefore judgment should be affirmed with, costs.

Ehrlich, Ch. J., and Newburger, J., concur.


text:
    Robert Lorzing, Resp’t, v. William Eisenberg, App’lt.

      (City Court of New York, General Term,,

      Filed October 20, 1893.)

    Default—Laches.
    A judgment By default was taken in April, a corrected judgment entered in May and a motion to open the default made on June 10. Ileld, that the defendant was not guilty of laches in making the motion, and that the application being made in good faith and as the defenses, if proved, would prevent a recovery by plaintiff, the motion should be granted on terms.

      Appeal from order denying motion to open a default.

      William H. Regan, for resp’t; Fromme Brothers, for app’lt.
   McCarthy, J.

This is an appeal from an order denying a motion to open a default, and the question is whether from all the facts presented the application was in good faith, and whether the defendant presented a meritorious defense, and whether any injustice may be done by such denial.

It appears that the judgment was- taken in April, 1893, but that, the judgment being imperfect a correct judgment was entered in May, 189Í

On June 10, 1893, a motion was made to open the default, and the ground of which appears in the affidavits.

The motion was denied on the ground of laches.

This was not, in our judgment, an unreasonable delay in seeking to open this default and set aside the judgment if the application was in good faith and there was merit in the defense. See Code Civ. Pro., § 724.

Earl, J., in Ladd v. Stevenson, 112 N. Y., 325; 20 St. Rep., 746, says : “ But in the exercise of its control over its judgments it may open them upon the application of anyone for sufficient reason, in the furtherance of justice. Its power to do so does not depend upon any statute, but it is inherent, and it would be quite unfortunate if it did not possess it to the fullest extent.”

The application was certainly made in good faith, since the actual engagement of counsel in an important litigation at the-time was not denied.

Besides, if the defense and counterclaim set forth in the answer can be proved, it seems to me the plaintiff is not entitled to recover, and, therefore, should not have a judgment against the defendant until after a fair and impartial trial.

We think under these circumstances a great injustice would be done, and while it is the,desire to sustain the discretionary powers of the court, yet where there is an.apparent good faith the court will not act arbitrarily but will give the fullest and fairest opportunity to dispose of the issues involved.

We think, therefore, that the default should have been opened upon payment of forty dollars costs and the disbursements in entering the judgment and ten dollars costs of the motion to open such default.

The order is therefore reversed without costs or disbursements, and the default opened and the cause restored to calendar for trial part IV, for Monday, Kov. 6,1893, on payment by defendant of the forty dollars costs and disbursements and the ten dollars costs above set forth, the defendant also stipulating to try cause on that day, and that otherwise judgment absolute shall be entered against him; such stipulation to be filed by the appellant with the clerk of this court within two days of the entry of this order,

Fitzsimons, J., concurs.


text:
    Robert Lorzing, Resp’t, v. William Eisenberg et al., App’lts.

      (City Court of New York, General Term,

      Filed October 20, 1893.)

    Appeal from judgment in favor of plaintiff.

      Wm. H. Regan, for resp’t; Fromme Bros., for app’lts.
   McCarthy, J.

Having determined in the action of homing v. Fisenberg, on the appeal from the order denying the motion to open the default, to reverse said order, as matter of course this judgment falls.

But this is without fault of the respondent.

The judgment is, therefore, reversed and a new trial ordered. Ho costs.

Fitzsimohs, J., concurs.


author: Van Wyck, J.

text:
    Leopold Goldberg, Resp’t, v. Moritz Lippmann, App’lt.

      (City Court of New York, General Term,

      Filed November 27, 1893.)

    1. Limitation—Pleading.
    An allegation in an answer to an action on a note that “the note fell ' due ” more than six years prior to the commencement of the action is a sufficient plea of the statute of limitations.
    3. Same—Bills and notes.
    A person who has resided continuously under his true name in this state for six years prior to an action against him on a note or bill of exchange made in a foreign state can, by pleading and proof, avail himself of our statute of limitation. Section 390 of the Code, requiring a defendant to plead the law of limitation of the foreign state, applies to a non-resident who is sued here.
    Appeal by defendant from judgment entered upon verdict returned against him.

      M. A. Kurscheedt, for resp’t; Jno. J. Gleason, for app’lt.
   Van Wyck, J.

The alleged cause of action is upon a promissory note, by setting forth a copy of same, made by defendant to order of plaintiff, dated “ Denver, August 27, 1883,”. and payable three months after date. The defendant by answer pleaded the statute of limitation of this state by alleging that this action was begun on Hovember 3, 1892, that for six years prior thereto he had continuously resided in this state, and that the note sued on fell due more than six years prior to commencement of the action. This cause of action accrued when the note fell due, and hence there is no merit in respondent’s suggestion, that the defendant must allege specifically that “ the cause of action accrued,” instead of that “ the note fell due,” more than six years prior to commencement of action. At trial defendant, at the very threshold of his defense, was prevented from proving his continuous residence in this state for more than six years, under a ruling that the law of the state of Hew York was not applicable,. but that the law of the state of Colorado was applicable, and to which he duly excepted.

Ho suggestion in justification of this ruling is made except in respondent’s brief, that § 390 of the Code requires a defendant to plead the law of limitation of the foreign state, but this section by express terms applies to a non-resident defendant sued here to enable him to avail himself of his residence in the foreign state during the period of limitation there as a defense in the action against him here. But this defendant is not a non-resident and alleges six years continuous residence in this state, hence he plead properly by setting up the statute of limitation of New York, for the plaintiff sought his remedy here, therefore the defendant could avail himself of our statute of limitation, and had no concern whatever with the statute of the state where the contract was made. In the Engel case, 102 N. Y., 400 ; 2 St. Rep., 56, Judge Earl writing, the court of appeals held that the defendant, who was sued in this state upon a bill of exchange accepted by him in Vienna, Austria, could plead successfully his residence here for six' years, and our statute of limitation in bar of the cause of action, although he had absconded and fled from Vienna, and came and resided here under an assumed name for the purpose of concealing himself from his creditors. This decision in 1886 probably suggested the amendment of 1888 to § 401 of the Code, which now precludes a defendant who “ resides within the state under a false name ” from availing himself of our statute of limitations; but this, nor any other existing provision of the Code, disturbs the rule that a person who resides continuously under his true name in this state for six years prior to action against him on a note, bill of exchange or other causes of action enumerated in § 382, can by pleading and proof avail himself of our statute of limitation in bar of such cause of action. This defendant’s pleading entitled him to make proof of the facts pleaded, and it was error to prevent him from doing so at trial. Judgment reversed and new trial granted, with- costs to appellant to abide event-.

Newburger and McCarthy, JJ., concur.


text:
    Matthew J. McKeon, Resp’t, v. May M. Kellard, App’lt.

      (City Court of New York, General Term,

      Filed November 27, 1893.)

    1. Appeal—Judgment.
    No appeal lies from a judgment by default.
    2. Same—Denial oe postponement oe trial.
    No appeal lies directly to the general term from an order denying a motion for postponement made at trial term against a defendant who withdraws from the trial. The proper remedy in such a case is by motion to set aside such decision, open the default and vacate the judgment.
    Appeal from judgment entered on inquest after withdrawal by defendant and from order denying motion to set aside the verdict.

      Jas. C. De La Mare, for resp’t; Gardner & Linehan, for app’lt.
   Van Wyck, J.

When this cause was called for trial, the defendant moved on affidavits for a postponement of the trial, which was refused, whereupon defendant withdrew from the trial and plaintiff was allowed to take an inquest before the jury, who by direction of the court returned a verdict for him upon which the judgment was entered. No appeal lies from a judgment by default. Keller v. Feldmann, 49 St. Rep., 718. The order appealed from was made at trial term and recites the affidavits used and filed by defendant on her motion to postpone the trial and that the motion is to set aside the verdict; but the record does not show that any such motion was made, but does show that the motion to postpone was made by her before she withdrew from the trial, so that if this order determines anything, it is a denial of the motion for postponement and will be so treated. No appeal lies directly to the general term from such an order made at trial term against a defendant who withdraws from the trial. The correct and established practice in such cases is that: When a party defendant feels himself aggrieved by a refusal to postpone a trial before a jury, he may withdraw (as this defendant did) from the trial, and if the trial proceeds in his absence and the cause is decided against him, he may, upon affidavits showing his application at trial term to postpone, the papers upon which it is founded, its denial, and that a decision has been made against him, make a non-enumerated motion at special term to sef aside such decision, and he may, upon fuller and additional affidavits, include in this motion, if made within one year, but which should be made promptly, an application for the relief vouchsafed to him under §724 of the Code and thus have his default opened, the inquest set aside and the judgment vacated.

Except for the firm conviction that the maintenance of an orderly system of practice requires that a well established rule of practice should never be violated when the party can reach exact justice by being forced to a compliance therewith, this order would be reversed, and the inquest and judgment set aside, not because of error on the part of the trial judge, but because from reading the records in this and its companion case of Gross v. Kelard, this day reversed by the general term, it would seem that an infamous system existe,d of exacting interest at the rate of 100 per cent per year upon small loans secured by chattel mortgages.

However, in obedience to the established rule of practice as above indicated, the appeals must be dismissed, but without costs or disbursements, and "with leave to defendant to make a non-enumerated motion at special term to set aside the inquest and vacate the judgment entered by default, with the suggestion to her counsel to prepare with'care the affidavits to be used, making them full and comprehensive.

Newbitrger and McCarthy, JJ., concur.


text:
    Leopold P. Littmann, App’lt, v. The Dry Dock, East Broadway & Battery Railroad Co., Resp’t.

      (City Court of New York, General Term,

      Filed November 27, 1893.)

    Negligence—Street railroad—Contributory.
    Plaintiff attempted to hoard an open street car which was standing still, when it started up and plaintiff came in contact with a truck which stood between the curb and track and which plaintiff had seen while approaching the car. It was not shown that the driver or conductor saw either the truck or the plaintiff. Held, that plaintiff was properly non-suited.
    Appeal by plaintiff from judgment of nonsuit.

      Abm. Gruber, for app’lt; Jno. M. Scribner, for resp’t.
   Van Wyck, J.

The plaintiff, a man forty-two years old, in good health, and, at the time of the accident, unincumbered, seeks to recover for personal injuries sustained by him while standing on the platform step running along the side and entire length of an open or summer car of defendant’s Grand street line. He was the only witness who testified in regard to the circumstances of the accident, and in substance swore: That while the car was standing still on Grand street, headed east, he approached it from the rear and south, and without signalling either the conductor or driver, stepped up on the right hand side foot rail just ahead of the rear platform, and in front of the rear cross seat, when the cars without any warning started ahead, and that as “ he was going upon the step to see for a place,” and within five seconds after he stepped upon the rail, his body came in contact with a red truck, which he had seen as he approached the car, and before boarding it, standing in the street between the southerly sidewalk and the car track, about fifteen feet in advance of the car, and headed in the same direction. There was no evidence that the driver or conductor saw either the truck or the plaintiff, or perceived the danger; while it is in proof that the plaintiff saw the truck before he attempted to board the car; and if he did not perceive the danger, how could it be expected that the driver or conductor could perceive the danger without proof that they had seen the truck; and if they were careless in not seeing it, the plaintiff was more careless in not avoiding the danger, after seeing the truck, by holding himself within the step rail line.. The plaintiff was properly nonsuited. See the opinion of Earl, J., read for reversal in Moylan v. Second Ave. R. R. Co., 128 N. Y., 583; 37 St. Rep., 871.

The judgment of nonsuit affirmed, with costs.

Hewburger and McCarthy, JJ., concur.


author: Parker, J.

text:
    Frank Brown, App’lt, v. Charles E. Coddington el al, Resp’ts, and Emily K. Bond, App’lt.

      (Supreme Court, General Term, First Department,

      Filed October 13, 1893.)

    Contract—Agreement not to partition.
    In an action of partition the defense was that the heirs and administrators of an intestate entered into an agreement providing for the management of the estate for a certain time by the administrators, one of them to receive a certain commission for his services as attorney, and which contained a covenant that during the continuance of the agreement there should be no partition of the reales’ate. Held, that the agreement not to p irlition was valid and a good defense to the action.
    Appeal from judgment dismissing the complaint.

      Henry B. Weselman and A. J. Skinner (David McClure, of counsel), for app’lts ; A. B. Cruikshank, for resp’ts, Coddington;
      H. C. Henderson, for resp’t, Hayes ; Coddington & Cruikshank, for resp’t, Hennen ; James Bilger, for resp’t, Ryan; Lachman, Morganthau & Goldsmith, for resp’t, Siegman.
   Parker, J.

By this action it was sought to partition certain property of which Kathleen E. Brown was, at the time of her death, seised and in possession of. She died intestate, September 5, 1886, leaving the plaintiff, Frank Brown, and the defendants, Lily A. Gh Coddington and Emily K. Bond, her children, as her only heirs at law and next of kin. The trial court held that the plaintiff had neither actual nor constructive possession, and dismissed the complaint. A few days after the death of intestate, Lily A. Gr. Coddington and her husband, Charles E. Coddington, were duly appointed administrators of the personal estate of said-intestate, and thereafter entered upon the discharge of such office. About the 10th day of October, following, the parties named entered into a tripartite agreement, in which the administrators were named as the parties of the first part, the heirs at law and next of kin of intestate as parties of the second part, and Charles E, Coddington party of the third part. After describing' the property of which intestate was the owner at the time of her death, and reciting that the property was incumbered with liens and claims for taxes, water rates, ground rents, bonds, mortgages and debts, declaring it to-be the belief of 'the parties that a sale or. division of the property would result in great loss, and, further, that the actual management of all of said interests should be had by one person, rather than by the acts of all the persons interested in said property, the agreement provided for the conduct and management of the estate in substance as follows:

The party of the first part and the party of the third part to act as the agent and attorney of all the other parties ; that a fund should be accumulated wherewith to pay liens, mortgages and debts, to accomplish which it was agreed that the parties of the first and third parts would not be required to deliver to any of the parties any of the property during the existence of the agreement, or to pay to either of them, in- any one year, a sum exceeding SI,200. The compensation of the party of the third part was fixed at five per centum on the moneys received. By the seventh clause it was expressly covenanted that no partition should be had during the continuance of the agreement. The tenth clause fixed the term of the agreement at eight years from the date of the instrument, unless cancelled by the written consent of all the parties of the second part, or until the death of the party of the third part, or his refusal to act further in the matter, either of which events should terminate the agreement. At the time of the com men ce- ' ment of this suit neither of these events had happened. The parties of the first andjffiird parts at once entered upon the performance of the obligations assumed by the agreement, and were so continuing at the time this suit was begun, September 12, 1880. Paragraph 7 of the amended complaint alleged “ that the said defendant Charles E. Coddington has been in the possession and control of said premises, and collecting the rents thereof, under an .alleged authority claimed by him to be conferred,” by the instrument in writing to which reference has already been made ; and .as to it the complaint further averred “that in truth and in fact this plaintiff was wholly uninformed as to the contents thereof when he signed the same, and the same is not, and never was, a binding obligation on this plaintiff.” His assertion of lack of knowledge of the contents of the agreement was not borne out by the testimony on the trial. The references so far made to the contract establish its mutuality, and the agreement therein containéd, “that it is now expressly covenanted and agreed that no partition whatever of such real estate shall be had during the continuance of this agreement without the written consent, previously given, of the'said party of the third part,” has sufficient consideration to support it.

But the appellant contends that the agreement not to partition during the existence of the contract does not constitute a legal defense to this action commenced while it is still in force; his position being that it is in effect a contract not to sue fora limited time, and therefore not pleadable either in bar or abatement to this suit, within the rule asserted in Chandler v. Herrick, 19 Johns., 129, and Winans v. Huston, 6 Wend., 471. Those cases, as well as the other leading cases, both in England and this country, were carefully examined and considered by the supreme court of Michigan in two cases, Robinson v. Godfrey, 2 Mich., 408, and Morgan v. Butterfield, 3 id., 615, and a contrary conclusion reached. With the reasoning of the court in those cases we concur. The judgment should be affirmed, with costs.

O’Brien and Follett, JJ., concur.


text:
    In the Matter of the Judicial Settlement of the Account of James Brown, as former general guardian of Elizabeth Sandison.

      (Supreme Court, General Term, First Department,

      Filed October 13, 1893.)

    1. Guardians—Bonds.
    One who is appointed'general guardian and thereafter becomes executor under a will by which his ward takes a legacy, can, as executor, pay to himself, as guardian, the_ amount of such legacy without first giving a new bond, as provided for in § 2746 of the Code, and the sureties on his bond as guardian are liable for his failure to account for the amount of the legacy.
    :2. Same—Liability of sureties.
    On the accounting of such person as executor he filed the receipts from himself as guardian, and on their strength procured his discharge as executor. Held, that thereafter the sureties on his bond as general guardian could not be heard to deny the right of his ward to a decree charging him with such amount, in the absence of a conspiracy1 between him and his ward for the purpose of relieving him at the expense of his sureties.
    Appeal by George McGrath et al. from an order of the surrogate denying their application to open, vacate and set aside the decree made and entered on the final accounting of said James Brown, as said former general guardian

      Black & King, for app’lts; John C. Clark, for resp’ts.
   Parker, J.

The appellants, sureties on a general guardian’s bond, petitioned the surrogate that the decree settling the guardian’s accounts be opened, to the end that the sureties might be permitted to show that there was not anything due to the ward from the general guardian. James Brown was the general guardian, of the infant, ancl also the executor under the will of her grandmother, in which capacity he received certain moneys bequeathed to the infant. The sureties insist that the general guardian was in the decree settling his accounts wrongfully charged with moneys he held as executor. The moneys belonged to the infant in either event, but it is urged that Brown, as executor, and not as general guardian, should be decreed to pay them. The surrogate denied the application. An appeal having been taken to this court, his determination must be reviewed as if an original application had been made to this term. Code Civ. Pro., § 2481, subd. 6. Briefly, the history of the parties, so far as material in this proceeding, are as follows: James Brown was appointed general guardian of Elizabeth Sandison June 8, 1880, appellants being his sureties. On the same day letters of administration on the estate of Elizabeth Sandison, deceased, mother of the infant, were issued to him, appellants again becoming his sureties. Six months later, Sarah Armstrong, grandmother of the infant, died, leaving a will, in which'she named the infant as residuary legatee, and appointed Brown executor. Being compelled to a final judicial settlement as executor, he filed a verified account on June 3, 1890, in which he credited himself as executor with having paid to himself as general guardian of the infant, Elizabeth Sandison, the residuary legatee of Sarah Armstrong, the following sums : 1882, April 18th, $2,000; 1885, January 15th, $1,100; 1885, March 26th, $500; 1887, February 20th, $300. In support of his account he filed vouchers, and a decree was thereupon entered, settling his accounts, and discharging him as executor. Nearly eighteen months later—on February 4,1892— Brown was removed from his office- as general guardian, and thereafter required to render an account. In the account he charged himself as guardian with having received, from himself as executor the sums with which he credited himself in his accounts as executor. In the decree, which bears date January 5, 1893, he was ordered to pay over to the present general guardian of the infant the sum of $2,512.36. Having failed to make the payment, an action was brought against the sureties to recover such amount; hence this proceeding, which has for its apparent object the shifting of the burden imposed by the decree from the general guardian, who has sureties, to the executor, who has none.

As the executor is insolvent, the ultimate result of the contest must be that either the sureties or the ward must lose the sum which the executor guardian has misappropriated. The sureties contend that the only way in which he could have transferred the moneys from himself as executor to himself as general guardian would have been in pursuance of a decree of the surrogate’s court, requiring that the general guardian first give a new bond, conditioned to faithfully apply such legacy or distributive share. Code Civ. Pro., § 2746. Cases are cited where the surrogate’s court has required this to be done, and it is now argued that in default of such a bond a payment to a guardian, although pursuant to a decree, would be illegal. We do not understand such to be the effect of the statute, or that the decisions quoted attempt to give it such a construction. The statute requires the surrogate to exact such a bond from the guardian to more certainly assure the property of the infant’s estate, because it frequently happens that a bequest to an infant succeeds the granting of letters of guardianship, and therefore is not considered in determining the value of the infant’s estate as a basis for the bond. And this provision of law is generally enforced, but an omission to do so could not avail a guardian receiving the moneys. He could not say: “ I cannot be compelled to account for these moneys, because the surrogate’s court omitted to decree that I should give a special bond, as provided by statute.” He would not be permitted to dispute that moneys paid to him under such circumstances were the moneys of the ward; and the statute, as well as his bond, obligates him “ to render a true and just account of all moneys and property received by him and of the application thereof.” So, if he did receive these moneys as general guardian, he must account for them, and for that which he is chargeable with on an accounting his sureties are responsible. On the accounting as executor he credited himself with having paid to himself as general guardian the sum of $3,900; but, urge the appellants, “We are not bound by his acts as executor, and it was in that capacity he presented his accounts for settlement.” True, but in support of that account he filed receipts for the several amounts from himself as general guardian. On the strength of those receipts he was discharged from all liability as executor. Thereafter the general guardian could not be heard to deny the right of the ward to a decree charging him with such amount, nor would the sureties be in any better position than their principal. An exception to this general rule would be presented if a guardian and ward should conspire together for the purpose of creating a situation where the guardian would be relieved at the expense of his sureties. But that is not this case. There is no evidence here that would justify a finding that the ward, or the special guardian representing her on the final settlements, did not fully believe the accounts presented by the executor and guardian to be true.

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

O’Brien and Follett, JJ., concur.


author: O’Brien, J.

text:
    Sumner T. Dunham, Resp’t, v. John Ringrose et al., App’lts.

      (Supreme Court, General Term, First Department,

      Filed October 13, 1893.)

    Default—Motion to open.
    In the same action, on motion of defendant, judgments by default were twice opened and preliminary stays granted, which were afterwards set aside, until the final determination of an equitable action by defendant against plaintiff involving the same matters as set up by defendant. For a third time judgment by default was entered, and a stay again granted. ,but before further proceedings the complaint in the equitable action was dismissed. Held, that a motion to open the third default was properly denied.
    Appeal from an order of the special term denying a motion to open a default and set aside a judgment.

      Jay K. Smith, for app’lts ; Clark Bell, for resp’t.
   O’Brien, J.

If the rule of law that there should be an end to litigation is not an obsolete one, then should it be applied to the facts here appearing. The defendants’ attorney, who'was the principal debtor, has, by procuring the substitution of sureties, the giving of an undertaking, the assignment of a mortgage as collateral, and above all by dilatory motions and an equity action, succeeded in preventing the collection of a debt, originally evidenced by a promissory note given for value, and which, after a protracted litigation, carried twice to the general term on appeals from orders, it was adjudged he should pay. Upon one of such appeals the undertaking was given by the defendants which is the subject of this action. "With a final judgment in one’s favor, secured by an undertaking upon appeal, and after exhausting the remedy by execution against the judgment debtors, it would seemingly present a case where a creditor might reasonably expect satisfaction of his claim against the sureties. Not so in this instance, for the defendants’ attorney, having but sharpened his appetite in the first action, found ample food to sustain him in a guerilla warfare which he has successfully waged for more than two years. Having tired out Taylor, the original and judgment creditor, the hitter assigned the judgment and undertaking to this plaintiff, for what is sworn to by the latter to have been a valuable consideration. In this suit against the sureties on the undertaking, the execution of the undertaking, the recovery of judgment, and notice to defendants are admitted; but by way of defense it is claimed that in a transaction between Andrew K. Smith, one of the sureties on the original note, and Taylor, the latter had extended the judgment, on receiving an assignment of a mortgage as additional security, to March 14, 1891, when, upon payment of the claim, the judgment and mortgage were to be reassigned to Andrew K. Smith, and, if not paid in cash, that the mortgage was to be accepted by Taylor as a satisfaction of or as a consideration for the assignment of his judgment. In passing, it may bp said cash was not paid on March 14, 1891. The case,was placed on the short-cause calendar for trial, and, when reached, the defendants not appearing, a judgment in plaintiff’s favor was had. Thereupon defendants moved to open the default, and asked fora stay until the final determination of an action brought by Andrew K. Smith to compel an assignment of the judgment upon the same state of facts set up by way of defense in this action. So much of the motion as asked for a stay was denied, but the default was opened upon terms, the judge ordering the case again on the short-clause calendar for trial. Upon a motion to bring in this plaintiff as a defendant in the Smith suit, and for an order enjoining the trial of this action until the determination of that, a preliminary stay was granted, but upon the hearing it was vacated, and an order was made making Dunham (this plaintiff) a defendant in that action, but without prejudice to this action. Again placed on the short-clause calendar, this action was again reached for trial, but, defendants absenting themselves, plaintiff recovered judgment in May, 1892. A motion to open this default was made, and another preliminary stay obtained. Again the stay was vacated, but the default opened upon terms. The •explanation of defendants’ course is to be found in the fact that by suffering these defaults and by obtaining intermediate temporary stays they obtained what they sought, and what the court had refused them, viz., a trial first of the Smith suit against this plaintiff and Taylor. Though tried, no decision was given, and, though three judges had decided that this should not prejudice this plaintiff’s action against these defendants, another temporary stay was obtained until the hearing of a motion returnable December 27, 1892. Dates are now important.

This cause was again reached for trial on December 16, 1892, and was postponed upon an express stipulation by defendants that it should be tried or a judgment suffered on the 23d. On December 23d, no one appearing for defendants, a default was taken, and for the third time a judgment entered, and thereafter on the same day the stay upon the motion made returnable on the 27th was served on plaintiff’s attorney. This prevented any further action until January, 1893, when the decision in the Smith suit was handed down, dismissing the complaint on the merits. Thereupon this plaintiff, as he had a right to do, proceeded to enforce his judgment by issuing execution, but before he obtained a return from the sheriff the defendants obtained another stay, and made another motion to open the default of December 23d; and it is from a denial of this last motion that this appeal is taken.

We have thus gone over the successive steps taken in the two actions because they render further comment unnecessary. The same attorney, who, as said, was the principal debtor, appeared throughout, and is entitled to the credit of having successfully held off this plaintiff for two years in a simple action that could be tried in an hour, even if we assume that the transactions between Andrew K. Smith and Taylor were available in this action between these parties. Having been beaten in the Smith equity suit, he can, as was therein suggested, if unsuccessful on his appeal, obtain an adequate remedy at law. But whether he can or not, he has exhausted his remedies in this action, and we think that the discretion was wisely exercised by the judge at special term in denying the motion to open the last default, and that the order appealed from should be affirmed, with ten dollars costs and disbursements.

Folleto and Parker, JJ., concur.


author: Follett, J.

text:
    Thomas H. Unckles, App’lt, v. Romulus R. Colgate et al., Resp’ts.

      (Supreme Court, General Term, First Department,

      Filed October 13, 1893.)

    Accounting—Unlawful agreements.
    As a combination or trust organized for the purpose of monopolizing the business of manufacturing and selling a certain article is a misdemeanor, an accounting between the parties to such combination will not be granted.
    Appeal from judgment and order sustaining a demurrer to the complaint.
    On the 1st day of October, 1887, certain manufacturing corporations, their shareholders, and certain firms then engaged in manufacturing and selling lead, and all of its products, entered into a. written agreement, of which the following is a copy of its material parts : “ Whereas, it is designed to form a trust, known as the-1 National Lead Trust,’ for the purpose of securing intelligent cooperation in the business of smelting, refining, corroding, manufacturing, vending and dealing in lead and all its products, and-carrying on all other business incident thereto, therefore it is mutually agreed by all who may sign this agreement, or become at any time the holders of the certificates of trust herein provided for, as follows: First. The trust herein created shall, be vested in nine trustees. Second. Henry Hentz, W. R. Thompson, 0. P. Wells, are hereby appointed trustees, to hold their office until the first Wednesday in February, A. D., 1888. Third. J. A. Dean, D. B. Shipman, S. Beymer, are hereby appointed trustees to hold their office until the first Wednesday in February, A. D., 1889. Fourth. S. R. Bradley, A. T. Groshorn, W. H. Pulsifer,. are hereby appointed trustees to hold their office until the first Wednesday in February, A. D., 1890. Fifth. The trustees shall prepare certificates which shall show the interest of each beneficiary in said trust, and deliver them to the persons entitled thereto. The certificates shall be divided into shares of the par value of one hundred dollars each, and shall be known as the 1 National-Lead Trust Certificates.’ The trustees shall have power to agree upon and direct the form and contents of said certificates, and the mode in which they shall be executed, attested and transferred. The certificates shall contain an express stipulation that the holders thereof shall be bound by the terms of this agreement, and by the by-laws herein provided for. Sixth. No certificate shall be issued, except for bonds and stocks, as herein provided. The certificates shall be the best evidence of the amount of interest of the beneficiaries in this trust. No duplicates shall be issued by the trustees, except upon surrender of the original certificate for cancellation, or upon satisfactory proof of the loss thereof, and the giving of satisfactory bond of indemnity. Seventh. Each subscriber hereto agrees to assign and transfer to said trustees the number of shares of capital stock of the particular corporation or corporations indicated by the memorandum accompanying his signature hereto, in consideration of which said trustees do hereby agree to execute and deliver to each subscriber trust certificates, as above specified, for the number of shares, the par value of which shall represent the agreed value of the stock so delivered. The value of the capital stock of any corporation whose stock shall be assigned to said trustees shall be first agreed upon between said trustees and stockholders willing to transfer the same, and after it is agreed upon there shall be no discrimination in the purchase price thereof as between stockholders of the same corporation transferring their shares at the same time. Eighth. This agreement shall take effect as soon as those holding a majority of stock in the following corporations, to wit, Anchor White-Lead Co., the Bradley White-Lead Co., St. Louis Lead & Oil Co., St. Louis Smelting & Refining Co., Brooklyn White-Lead Co., Jewett White-Lead Co., D. B. Shipman White-Lead Works, thej. H. Morley Lead Co., Beymer-Bauman Lead Co., have subscribed to this agreement to transfer the same to said trustees. Thereafter, the said trustees and their successors shall have power to purchase other stocks and bonds of the same companies, or of companies organized for conducting the same business, or any of the businesses hereinbefore specified, and may issue therefor certificates of trust, equal, at par value, to the agreed value of the stocks and bonds so purchased. Ninth. All stocks and bonds sold and transferred to said trustees shall be held by them and their successors for the benefit of all the owners of said trust certificates. No stocks so held by said trustees shall be sold or surrendered by said trustees during the continuance of this trust without the consent of a majority, in number and value, of the holders of trust certificates; provided, however, that said trustees may, from time to time, assign such shares of stock as may be necessary to qualify any person or persons chosen, or desired to be chosen, as directors of any companies, the stocks of which are held by said trustees. Bonds held by said trustees may be sold by them. Tenth. The said trustees shall have power to cause corporations to be formed for the purposes, and with all or any of the powers, specified in section first of this agreement; provided, that the stock of such corporations shall be issued for cash, or for property at cash value, and shall be issued to or be purchased by said trustees in the manner provided in section eight of this agreement. Eleventh. Said trustees shall receive and safely keep all moneys received from dividends of interest upon stocks, bonds or moneys held in trust, and shall distribute the same, as well as moneys received from sales of trust property, by declaring and paying dividends upon said trust certificates as funds accumulate which are not needed for the uses and expenses of the trust. The trustees, shall, however, keep separate accounts of receipts from dividends and interest, and of receipts from sales of trust property, and, in declaring any dividend in which moneys derived from sales of trust property are included, shall render the holders of trust certificates a statement showing what amount of the fund distributed was derived from such sales or transfers. Twelfth. The trustees shall render to the holders of trust certificates, at each annual meeting, a state-meat of the affairs of the trust. They shall also, when demanded by 67 per cent, in value of the holders of trust certificates, furnish a true and perfect inventory and appraisement of all property held in trust, and a statement, as full as possible, of the financial affairs of the various companies whose stocks are held in trust. Thirteenth. Said trustees shall exercise supervision, so far as their ownership of stocks enables them to do, over the several corporations or associations whose stock is held by said trustees. As stockholders of said corporations, they shall elect, or endeavor to elect, honest and competent men as directors and officers thereof. They may elect themselves as directors and officers, and shall endeavor to secure such judicious and efficient management of such corporations as shall be most conducive to the interest of holders of trust certificates. Fourteenth. All the powers of the trustees may'be exercised by a majority of their number. They may appoint from their own number an executive committee, and may appoint other committees, composed wholly or partly of persons not of the board of trustees, and may delegate to such committees such of their powers as they may deem advisable. A majority of such committees may exercise all the powers conferred upon such committees. * * Twenty-sixth. The trust shall continue for twenty-one years from this date, and shall thereafter continue until the termination by a vote of 67 per cent, in value of the holders of trust certificates at a meeting called for the purpose. After 67 per cent, in value of the holders of trust certificates shall vote to terminate the trust as aforesaid, they may at the same meeting, or at a subsequent meeting called for that purpose, decide, by a vote of 51 per cent, of their number, the mode in which the affairs of the trust shall be wound up, and whether the trust shall be distributed, or whether it shall be sold, and the value thereof distributed, or whether part, and, if so, what part, shall be divided, and what part shall be sold, and whether such shall be private or public. The trustees who shall continue to hold their offices for that purpose shall wind up the affairs of the trust in the mode agreed upon by the holders of trust certificates, as aforesaid.” The omitted articles,’ fifteenth to the twenty-fifth inclusive, relate to the trustees and their mode of selection.
    It is alleged that, after the execution of this agreement, the ■shareholders in various other corporations and partnerships, aggregating thirty in number, became parties thereto, and that a majority, if not all, of the shareholders in the various corporations mentioned transferred and delivered to the trustees all of the stock owned by them, for which trust certificates were issued. It is also alleged that the corporations and partnerships which became parties to this agreement “produced the largest part of the white lead used and consumed within the state of New York and "that part of the United States lying east of the Rocky mountains, and although the operation of said business, as conducted and carried on by said trustees and their successors, including defendants, yet said agreement or scheme has ever been a monopoly, and inimical to the best interests of the public at large, yet a continued interruption and cessation of said productions would decrease the supply, and correspondingly increase the cost of manufacturing white lead to the said public, and cause irreparable loss and injury to the people of this state and of the United States.” It is also alleged that a large amount of property has accumulated under said trust agreement, the extent, nature and value of which is unknown to the plaintiff, but aggregating many thousands of dollars, and for which the trustees have not accounted. The plaintiff alleges that he now is, and since May 22, 1889, has been, the owner of 700 shares of the certificates of trust issued by the trustees under said agreement. It is also alleged that the defendants and their predecessors carried on the business organized under the trust agreement under the name of the National Lead Trust until December 12, 1891, and since that date under the name of the National Lead Company, a corporation organized by the defendants and others for that purpose under the statutes of the state of New Jersey, to which corporation, on or about that date, the trustees transferred the property received and accumulated under the trust agreement to said New Jersey corporation. The plaintiff demands a judgment requiring that the defendants be required to account for the property in their hands; that it be sold, and the avails thereof distributed among the holders of the trust certificates. To this complaint the defendants demurred upon the grounds (1) that the complaint does not state facts sufficient to constitute a cause of action ; (2) that it appears upon the face of the complaint that Charles C. Bowen and the National Lead Company are necessary parties to this action. Both grounds of demurrer were sustained by the special term, and a judgment ordered, dismissing the complaint, with costs.

      Porter & Kilvert (Thomas Allison, of counsel), for app’lt; Alexander & Green (Elihu Root and William C. Gulliver, of counsel), for resp’ts.
   Follett, J.

This action is not prosecuted by a former shareholder in any one of the constituent corporations of the National Lead Trust to compel a return and reassignment of shares assigned to the trust by the plaintiff, or by his predecessor in interest, nor by a shareholder, or the successor of a shareholder, of any one of the constituent corporations, to compel the defendants to restore to the corporation the specific property received by the defendants or their predecessors from said corporation, upon the theory that the defendants are mere agents or depositories of said property; but the action is prosecuted in behalf of the holder of trust certificates, upon the theory that the so-called agreement is the measure of his lights, and of the defendants’ liabilities. Whether an action can be maintained by the holder of the certificates to compel the defendants to restore the specific shares and property which they have received from the corporations and their shareholders isa question not involved in this case. The plaintiff alleges in his complaint, and his counsel concedes in his brief, that the trust was organized and carried on for the purpose of monopolizing the business of producing and selling various important products of lead, and that the objects sought to be attained by means of the trust agreement were and are contrary to public policy, and that the agreement is void under the laws of this state. Entering into and carrying on this combination is an indictable misdemeanor, Penal Code, § 168, and was at common law. The learned counsel for the plaintiff seeks to avoid the class of decisions holding that a court of equity will not determine the respective,rights and interests of persons arising out of an unlawful agreement, by citing cases holding that, when money has been paid or property delivered upon an unlawful executory contract, an action may be maintained, under certain circumstances, to annul the contract, and recover the money paid or property delivered. This action does not fall within that class of cases, for the reason that it is not alleged that the plaintiff ever delivered any property or paid any money to the defendants, or to their predecessors. If it be said that the person to whom plaintiff’s certificates were first issued must have done so, the answer is that it is not alleged by what corporation the shares exchanged for plaintiff’s certificates were issued, there is no identification of the property, and there are no appropriate allegations in the complaint for the recovery of the original consideration, whatever it was, for these certificates. This action plainly proceeds upon the theory that the plaintiff’s rights are to be determined by the trust agreement, and that it is necessary, in order to determine these rights, to have an accounting of all the transactions of the defendants and of their predecessors in carrying out this unlawful agreement. This is precisely what a court of equity will not do. This proposition has been so many times decided by the courts of this state that a citation of many authorities, and a discussion of the reason of the rule, would be a work of supererogation. Woodworth v. Bennett, 43 N. Y., 273; Knowlton v. Congress & Empire Spring Co., 57 id., 518; Arnot v. Pittston & Elmira Coal Co., 68 id., 558; Leonard v. Poole, 114 id., 378; 23 St. Rep., 753; Gray v. Oxnard Brothers Co., 59 Hun, 387; 36 St. Rep., 237. The case last cited was brought by the receiver of the North River Sugar Refining Company to compel an accounting of the sugar trust. It was held in that case that the combination represented by the defendants, and entered into between the parties, was unlawful, and for that reason the plaintiff was not entitled to the aid of a court of equity to compel the defendants to account. We think that case is not distinguishable in principle from the one at bar, and is controlling upon this court. Both actions are for the same purpose, to recover the amount which the plaintiff maybe entitled to on an accounting of the transactions had under an unlawful contract. It is urged that it is a hardship to leave the persons who have entered into this combination without any remedy in the courts. The answer is that if the courts take an accounting, and attempt to do justice as between the wrongdoers, a precedent will be set, and judgments declaring such contracts illegal will be without any deterrent effect, because it will be known that, if the enterprise is declared to be contrary to law, notwithstanding, all of the rights of the participants therein will be protected by the courts.

We think the complaint does not state a cause of action, and on

that ground, without considering the question of parties, the judgment should be affirmed, with costs.

O’Brien and Parker, JJ., concur.


text:
    Frederick H. Levey, Resp’t, v. Victor S. Allien, App’lt.

      (Supreme Court, General Term, First Department,

      Filed October 13, 1893.)

    Usury—Renewal of usurious note.
    Defendant gave plaintiff a note “ solely in renewal and in cancellation of” a note void for usury; the renewal note 'was without interest and it appeared that the entire amount of money received by plaintiff from the date of the first note, down to the date of the renewal note, did not equal the legal rate of interest on the sum loaned. Held, that the court could not, as a matter of law, hold that the new note was not usurious.
    Appeal from a judgment entered upon the verdict of a jury rendered by direction of the justice presiding at circuit, and from an order denying the defendant’s motion to set aside the verdict, and for a new trial.

      Luke A. Lockwood, for app’lt; George W. Wingate, for resp’t.
   Parker, J.

Action on a note. Defense usury. The appellant discusses the case from the standpoint of a judgment entered on the verdict of a jury, pursuant to a direction by the court after trial. Respondent assumes that his motion for judgment on the pleadings was granted, and presents an exhaustive argument for the purpose of convincing the court that the granting of the motion was required by the pleadings. Which position is the •correct one may properly be first determined.

Immediately after the impaneling of the jury, the counsel for the plaintiff made a motion for judgment on the pleadings, supporting it with an argument which seems to have met, in some measure at least, with the approval of the court. Instead of granting the motion, the court requested counsel to “ make a statement of the facts of the case, and put it in the record.” The record of the subsequent events of the trial is as follows:

“ Counsel agreed upon the following facts:
“ That on the 3d day of January, 1887, at the city of New York, the defendant made and delivered to the plaintiff his promissory note, in the words and figures following, to wit:
“ 1 $5,000. New York, January 3, 1887.
“ ‘ On demand, I promise to pay, to the order of Frederick H. Levey, five thousand dollars, with interest, payable quarterly. Value received.
.“‘No. A. Due. Victor S. Allien.’
“— payable on demand for the sum of $5,000, with interest. That, at the time of the making and delivery of the said note, it was agreed by and between the plaintiff and the defendant, in consideration of the sum of $5,000, for which the said note was given, that the said defendant would pay, and that the said plaintiff should receive, in addition to the interest reserved by said note for the loan and forbearance of the said money, and in addition to six per cent per annum, ten per cent of the net profits of the business as commission merchant of the said defendant during the year 1887, and twenty per cent of the net profits of said defendant’s said business during the year 1888. That, in pursuance of said agreement, the said plaintiff did, on or about the 20th day of January, 1888, pay to the said plaintiff, and said plaintiff received, the sum of $201.13, being ten per cent of the profits of the business of said defendant for the year 1887, in addition to the interest on the amount of said note at the rate of six per cent per annum; and that thereafter, and on the 9th day of December, 1891, the said defendant made and delivered to the said plaintiff the note now in suit solely in renewal and in cancellation o'f the note first mentioned, and upon no other consideration ; and that no other payments were made by the defendant to-the plaintiff than those above stated, except the interest on the original note was paid up to the 7th day of January, 1889. That the original note and the loan were made in pursuance of an oral bargain to the same effect before the completion of the transaction.
“ Plaintiff’s counsel: I will make the admission. We will save time by it. I will admit that the note of 1887, and the agreement to pay the commission, was made in pursuance of a previous oral agreement between the parties. Defendant’s counsel: Only I don’t want in the statement of the case to waive the agreement to-pay the ten per cent and twenty per cent profits. The note first offered was given in. pursuance of an oral bargain for a loan upon the terms thus specified and performed. I believe that presents the case. Of course we have liberty to take in the original note itself in case it becomes necessary. The amount of the claim is $5,000, and $400 interest—$5,400. Plaintiff’s counsel: I now make a motion to direct a verdict for the plaintiff. Defendant’s counsel :■ I object to that, and ask to have the case submitted to the jury on the question whether or not the note in suit was usurious. (Motion denied. Defendant excepts.). Defendant’s counsel: I also ask, before your honor passes upon the other motion, that your honor direct a verdict for the defendant. (Motion to direct a verdict for the defendant denied. Defendant excepts.) The Court: The motion to direct a verdict for the plaintiff is granted. (Defendant excepts. By direction of the court the jury found a verdict for the plaintiff for the sum of $5,400.) Defendant’s counsel: I suppose, for greater certainty, I had better make the usual motion for a new trial. (Motion denied. Exception by defendant.)”

It appears, therefore, that the motion for judgment on the pleadings was not granted, the suggestion of the-court to stipulate the facts being at once adopted and carried out by the respective counsel, after and necessarily upon which the court was moved by the plaintiff for the direction of a verdict, which was granted.

It is true that the judgment recites the granting of a motion for judgment on the pleadings, but the record of the proceedings, upon which this judgment was founded, and which it should have followed, demonstrates that such was not the case. Therefore we shall not consider respondent’s position that the answer does not well plead the defense of usury.

From the stipulated facts it appears that in January, 1887, the defendant made and delivered to the plaintiff his promissory note for $5,000, with interest. That note, by reason of an agreement between the parties that the maker should pay, and the payee receive, for the use of the money, a sum in excess of that which the statute permits, was usurious and void. About three years and one month later, defendant made and delivered to the plaintiff the note in suit, for the same amount; and it appears that it was given “ solely in renewal and in cancellation of the note first mentioned. ” It further appears that, while a portion of the profits of defendant’s business for the year 1887 was paid to the payee in addition to the legal rate of interest, the entire amount of money received by him from the date of the first note, down to the date of the renewal note, did not equal the legal rate of interest on the sum loaned. The question is whether, under these facts, the court may hold as matter of law that the renewal note is free from the taint of usury. If not, then the direction of a verdict against defendant’s objection, and in defiance of his request to go to the jury, was error.

It is too well settled to call for the citation of authority that where a note is given solely in renewal- of another note, tainted with usury, and void, it is equally tainted, and alike condemned by the statute, because it operates merely as a renewal or continuance of the usurious contract. So, were there no other facts in the record than the stipulation that this note was given in renewal and cancellation of the note first mentioned, the defendant would have been entitled to a direction in his favor. Other facts stipulated, it is said, show that the original contract was abandoned, and the result of the making of the new contract thereafter was to do away with the usury originally agreed upon. It is well settled that if a usurious contract be mutually abandoned by the parties, and the securities canceled or destroyed, so that they may not become the foundation of an action, and the borrower then makes a contract to pay the amount actually received by him, this last contract will not be tainted by the original usury, and may be enforced. Sheldon v. Haxtun, 91 N. Y., 125.

Just what is necessary to be done, touching an old and usurious contract, in order to place the parties to it in a position where they can feel assured that a contract is free from all usurious taint which has for its support a promise founded on the consideration of the original corrupt agreement, has not been fully outlined by the courts. But, in order to do away with the old agreement, both parties must act; and, in the absence of a specific declaration of their intention, the circumstances proven, must be such as to warrant an inference of fact that the parties intended to do away with the old contract, and to put each other in precisely the same position as if the illegal feature of it never existed ; and, in order that the court may direct a verdict, it is necessary that the facts should be susceptible of only one inference. Certainly, it cannot be said that the facts stipulated in this case are of such a character as to require a finding that both parties intended the abandonment of the original contract, for the purpose of creating a new one which should be free from the fault which rendered the original contract void. The evidence tending to show it consists in the giving of the new note, without interest, for an amount which, if added to the total payments subsequent to the giving of the first note, would aggregate considerably less than the loan with legal interest added. Its force in the direction claimed for it is somewhat impaired by the stipulation of the parties that the note was given solely in renewal of the original note. Considered together, they do not require a finding that both maker and payee intended to do away with the old contract, and create a new one, which should not be in contravention of the usury statute. As the conclusion reached necessarily calls for a reversal of the judgment, we refrain from considering whether a question was presented for the jury, as it may well be that the facts will be so changed on the retrial as to render such a discussion fruitless.

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

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