author: Hardin, P. J.: • Churchill, J. : Follett, J.

text:
    THE NEW YORK STATE MONITOR MILK PAN COMPANY (Limited), Respondent, v. PHILO REMINGTON and Others, Appellants.

      Agreement to manufacture and deliver articles subject to inspection by vendee — when the latter is bound by the acceptance of articles by his inspector — when the fact that the inspector did not know of the test by which the defect could be discovered will not relieve the vendee — measure of damages when one only of several separable parts of the article is defective.

    This action was brought to recover damages lor a breach of a written contract, dated November 26, 1875, whereby the defendants agreed “ to make for the party of the second part (the plaintiff), at the works of the said party of the first part (the defendants), at said Ilion, in a good, workmanlike manner, two hundred sets of milk coolers, patented June 29, 1875, and the right to manufacture which in the State of New York now belongs to the party of the second part (the plaintiff), to consist of four coolers or pans complete to each set. * * * Each ten sets subject to the inspection of the party of second part within five days after notice of completion. * * * Payment to be made one-half cash, on inspection, and the remainder at the expiration of four months.”
    The sets were all made, inspected by an agent selected and appointed by the plaintiff, accepted and paid for. Thereafter it was found that the enameling of two hundred and fifty-three pans of the sets last made and known as the Crowley pans would not resist the action of the lactic acid contained in milk, and that the pans were, for the purpose for which they were made, worthless. Each cooler consisted of a pan for milk, a vat for water, and a frame for supporting the pan and vat. The pans cost about fifty-five per cent of the whole price, and when worthless could be replaced by a proper one.
    It appeared that an inspector was appointed by the plaintiff, who examined, inspected and approved or rejected the coolers, and the evidence showed that he might, by the use of lactic acid, have readily determined the character and quality of the enamel at the time he inspected the article, and might by proper tests-and examinations have discovered the defects complained of.

      Held, that as an agent, selected by the plaintiff, pursuant to an express provision of the agreement, for the express purpose of making suitable and proper inspection, had examined and approved the pans, and as the defect complained of might have been discovered by the application of the proper tests, the ^damages arising from his negligence, inattention or want of capacity should fall upon the plaintiff and not upon the defendant. (Hardin, P. J., and Churchill, J.)
    ■That the fact that the referee found that the test by lactic acid was not known at the time of the inspection to either party, and was not then in practical use, and that there was no evidence that it was then known except to scientists, did not relieve the plaintiff from liability for the omission of its agent to employ it. (Follett, J., dissenting.)
    The referee found that the pan, as made, had no market value, and that the defendants had given no evidence tending to establish that it had any, and awarded as damages the price of the whole cooler, including the pan, vat and frame.

      Held, that this was error; that the fact that the pans were so defective as to be of no value, did not entitle the plaintiff to recover as damages the money which he had paid for the other parts of the coolers. (Follett, J., dissenting.)
    Appeal from a judgment, entered in Delaware county on the report of a referee, for $7,694.62 damages and $917.10 costs.
    The action was brought to recover damages upon a written contract, dated the 26th day of November, 1875, wherein the defendants contracted with the plaintiff and agreed to “ make for the party of the second part (the plaintiff), at the works of the said party of the first part (the defendant) at said Ilion, in a good, workmanlike manner, two hundred sets of milk coolers, patented June 29, 1875, and the right to manufacture, which in the State of New York now belongs to the party of the second part, to consist of four coolers or pans complete to each set.” The articles to be manufactured are particularly described in the contract. The contract also provided, viz.: “ Each ten sets subject to inspection of the party of the second part within five days after notice of completion, * * * payment to be made one-half cash on inspection, the remainder at expiration of four months.” * * *
    The articles were manufactured according to the contract and delivered to the plaintiff, and by its agent for that purpose duly appointed and selected, accepted and settlements had and payments made therefor. The plaintiffs allege that the pans were defective in that they were not properly and sufficiently enameled, and that the enamel was not so placed upon them as to remain hard and durable and to resist the action of the acid of the milk stored and held in the pans. Of the pans two hundred and fifty-three were found by the referee to be defective. It appears by the supplementary report of the referee correcting his first report “ that such defective milk pans could be used for some purposes foreign to that for which they were made.” The referee also found “ that the milk coolers contracted to be delivered under such contract would, on the 2d day of December, 1876, have been worth the sum of five thousand two hundred and thirty-nine dollars and nineteen cents.” He also found “ that the actual damage that the plaintiff sustained on' account of such defective pans was five thousand two hundred and thirty-nine dollars.” He also found that such damages “ did include the cost of the vats, legs and braces, as well as the pans, as amongst the elements of damage.” The referee found as a matter of law, viz.: “ That there is no express warranty between the parties, except as contained in the agreement of November, 1875.”

      Francis Fernán and Thomas Richardson, for the appellants.

      W. H. Johnson, for the respondent.
   Hardin, P. J.: •

In Cary v. Gruman (4 Hill, 625) it was held that “ a warranty on the sale of a chattel is in legal effect a promise that the subject of sale corresponds with the warranty in title, soundness or other quality to which it relates. * * * It naturally follows that if the subject prove defective within the meaning of the warranty the stipulation can be satisfied in no other way than by making it good. That cannot be done except by paying to the vendee such sum as together with the cash value of the defective article shall amount to what it would have been worth if the defect had not existed.”

That case was approved and followed in Muller v. Eno (14 N. Y., 605), where Judge Comstock said that, in accordance with the doctrine of Cary v. Gruman, “ the rule of compensation is now well settled, and this compensation, it should be added, is due immediately. I mean it is due immediately where the warranty relates to the soundness or quality of the article sold. The promise is not one of' indemnity against loss on a resale of the thing warranted by the purchaser. The promise is broken as soon as made, although the defect may not then be known, and its effect is to subject the vendor at once to a legal liability to make good in money the difference between the article as sound and its actual value. This liability stands upon the same footing as any other pecuniary obligation or 'debt.”

Again, at page 206 of 14 New York, Judge Comstock says: It has been already stated the measure of damages on a breach of warranty in the sale of goods is the difference between the value of the goods if they had corresponded with the warranty and their actual value. This rule rests upon a sound principle and it must be regarded as settled by the two carefully considered cases of Voorhees v. Earl (2 Hill, 288); and Cary v. Gruman (4 id., 625).” To the same effect is Comstock v. Hutchinson (10 Barb., 211). To the same effect also is Richardson v. Mason (53 Barb., 601). To the same effect is Milburn v. Belloni (34 Barb., 607), where the warranty was that the coal dust was free from soft coal, and that it was ft for use in making brick, and it was held that the recovery should have been “ the difference between the value of the article sold him (plaintiff) as it was, and its value as it would have been if it had been such as it was represented ” to be.

In Brigg v. Hilton (99 N. Y., 519) the rule was laid down to be “ the difference between the value of the goods if they had been as warranted, and the actual value of the goods in their defective condition.”

It appears by the testimony of Ross, the superintendent of the defendants, that none of the parts of the coolers were enameled except the pans, and no complaint was made of any of the parts of the coolers except as to the pans, and the defect complained of in respect to the pans was confined to the quality of the enamel on the pans. The witness added the proportion of cost, that is the proportion of price which we received for the manufacture of this whole complete arrangement, including a pan with its enamel, a vat and its legs and braces, would be fifty-five per cent for the pan and enamel, and about forty-five for the balance; that is, fifty-five for the pan with its enamel, and forty-five for the vat, legs and braces.”

The witness further added, viz.: “Assuming that the enamel is’ soft and that the pans are useless for the purpose for which they were manufactured, the pan only, assuming that they were too soft for the purpose of holding milk, yet they are not entirely valueless for other purposes. They might be used for water vats. We have used some of them for that purpose. In other words, where the element of lactic acid does not come into consideration, and its effect upon the enamel, these pans would be as serviceable with the enamel they have on them as any other enamel so far as I' know. So far as we have used them they answer the purpose.”

Plaintiff’s witness, Wright, who had negotiations leading up to the contract in behalf of the plaintiff, testified: “ If the pan was properly enameled it would make it good; I don’t know that I ever called on the defendants to furnish other pans in case of defective enameling; if from any cause a pan was worthless, another pan could be placed in that set; a proper pan would remedy the defect.”

It appears by the referee’s opinion that he took the price paid for the coolers, including all of their four several parts, “ as the market value of the articles contracted for, and that he reached the conclusion ” that the pans, as made, had no market value; and he also said in his opinion that the defendants had “ given no evidence tending to establish the same, ” that is, the market value of the pan as a separate and independent article.

It appears from his report, as well as from his opinion, that he has allowed the plaintiff to recover the whole price paid for the combined article called the coolers, embracing the four separate parts. If it be assumed upon the evidence that the plaintiff had satisfactorily shown that the pans were so defective as to be of no value, and that, therefore, the plaintiff might have a recovery of a sum equal to the price paid for the pans, it does not follow that because the pans were defective to such an extent as to be of no value, except, perhaps, for old iron, or for vats to hold other liquids, that the plaintiff was entitled to recover as damages that sum of money which it had paid for the other three parts of the cooler. It would seem, therefore, that the referee has fallen into an error in respect to the rule of damages.

Second. The written contract entered into by the parties provided for the inspection of the manufactured articles by the plaintiff. In pursuance of that contract it designated a party to inspect the manufactured articles. Defendants allowed him ample opportunity to make such inspection. He visited the works of the defendant and from time to time examined, inspected, approved, rejected or accepted the manufactured articles as in the exercise of his discretion and judgment'he deemed proper.

According to the evidence, in many instances, articles were rejected or disapproved of until remedied, and in some instances the rejection was entire. It is not pretended, in any aspect of the case, that there was any fraud or collusion practiced in respect to the inspection, 'examination or acceptance of the manufactured articles. It is manifest from the evidence taken upon the trial that the inspector, by the use of lactic acid, could readily have determined the character and quality of the enamel at the time he inspected the manufactured articles. It is inferable that had he made the proper tests and examinations, and carried his inspection to the extent that the spirit of the contract warranted, he would have discovered the existence of the defects that are complained of in respect to the enamel. Upon a discovery of that defect and a rejection, the process of manufacturing in that regard would have been arrested, or the defect remedied.

In the contract between the parties, as well as in the evidence in respect to their execution of it in the selection of an inspector, it appears that the plaintiff had it in its power, and it was its privilege to make the selection of any person it might choose, to examine the manufactured articles and exercise the power of inspection given to the plaintiff in the contract.

The language of Davis, P. J"., in McParlin v. Boynton (8 Hun, 453), is pertinent at this point. He there said of a party situated in respect to the right of inspection, as were the plaintiffs in the case now before us, that he “ had the privilege of selecting any person he chose. It was both his interest and duty to select an entirely competent and skillful man. If he failed to do that it was his misfortune or neglect. There can be no doubt that the defendant was not bound to take any of the saws rejected by the person he employed for not coming up to the requirements of the contract in any respect. It is more than probable that the defendant selected an incompetent man, but as all the saws, as they were made, were delivered into his hands, and passed upon by him, and subsequently delivered to the defendant, no remedy remained for lack of compliance with the contract, unless on some ground of fraud which is not alleged.”

It is also said in the opinion from which we have quoted that it is within the power of parties to make such an arrangement for an inspection, as we find in the one before us, and the learned judge adds: “ Where parties stipulate that articles to be manufactured shall be of a particular kind and quality, and at the same time stipulate that they shall be tested by some person selected by the purchaser, before delivery, to ascertain whether they are of a specified kind and quality, and such test is in fact made by him, and the goods are thereupon delivered and accepted, no remedy by action can be had, upon the contract, although the goods, or some portion of them, are subsequently ascertained not to be equal to the warranty. In the absence of fraud and of collusion between the manufacturer and the person selected, his decision, upon the test that the articles are such as the contract requires, is conclusive against the purchaser who subsequently receives them.”

It appears the case, from which the above quotation is made, was taken to the Court of Appeals and the judgment affirmed (71 N. Y., 604), the affirmance receiving four affirmative votes. Under such circumstances it seems to be the duty of this court to accept the doctrine of McParlin v. Boynton, as laid down by the General Term of the First Department, in the opinion of Davis, P. J., from which quotations have been made.

Brigg v. Hilton (99 N. Y., 520) lays down the principle which enables a vendee who has received goods under a warranty, notwithstanding he has retained them and used them, to recover for damages arising out of the breach of warranty. In that case the goods were represented as sound and merchantable goods, represented for and known as cloakings,” and which the plaintiffs agreed “ should in all respects be equal to the samples,” and it was alleged that the vendee, “relying upon the plaintiffs agreement and guaranty, accepted and paid,” and that he subsequently discovered that none of the goods “ corresponded with the samples, but were imperfect, unmerchantable,” etc. In that case there was no express stipulation for an inspection by a party to be named by the vendee, nor in fact was there an inspection in pursuance of the tenor and spirit of the contract.

Here the parties carefully provided'for the mode and manner of ascertaining the character and quality of the articles offered to and delivered to plaintiffs under the contract. The undertaking of the defendants, found in the contract, was to make for the plaintiff, at the works of the defendant at Ilion, “ in a good, workmanlike manner,” the coolers named in the contract, which were to be shipped as the plaintiff should direct, and it was provided that the articles so manufactured were to be in sets of ten “ subject to the inspection of the party of the second part, within five days after the notice of completion; ” and it was further provided in the contract, viz.: “ Fayments to 'be made one-half cash on inspection, and remainder at expiration of four months, with interest for two months.”

By the acts of the parties in the execution of the contract, it is evident they understood, and, therefore, so proceeded in the execution of the contract, that it was the duty of the plaintiff, on receiving notice or request, to select and furnish an inspector. It did select and furnish such inspector in accordance with such understanding of the contract, and in accordance with its terms. "

The referee found, as a fact, that plaintiff paid for the articles manufactured before the defect in the enamel was discovered. He also found, viz.: “ Such defect was latent and was not ascertained or ascertainable by any process that could be reasonably employed, until the pans had been used for some weeks for storing milk. It is not easy to approve of the finding that the defect was not ascertainable by any process that could be reasonably employed until the pans had been used for some weeks for storing milk.”

It may be that the parties to this action, and certain witnesses that were called to the stand in the progress of the trial, did not understand the chemical effects of lactic acid, or understand the proper and correct mode of ascertaining the character and sufficiency of enamel when placed upon articles of the kind referred to in the contract. But it by no means follows that it was not the duty of the plaintiff to select a competent, capable person to sufficiently and suitably inspect the goods which they were to accept upon the inspection being made in their behalf, and for which they had expressly stipulated to pay “ on inspection.”

The referee found, as a matter of fact, “ that the quality and fitness of the enamel was ascertainable by applying lactic acid.” It was the neglect of the plaintiff that that test was not made. It had the opportunity to select a party capable of making such a test. If it failed to make the proper selection, that failure was because of its inattention to its privileges and rights. That neglect may not be •excused by the findings of the referee, to the effect that that test •“ was not known by either party,” nor by the finding that “ there is •no evidence that it was known except to scientists,” nor by the finding that the test was not in practical use.

Diligence on the part of the plaintiff in ascertaining the proper ¡test for the durability of the enamel, doubtless would have revealed the fact to “ scientists,” or other persons familiar with the nature and character of the component parts of milk, or its action upon .substances when kept for a long period of time in contact with them, and that such action was the same in effect as is produced upon substances by bringing them in contact with lactic acid, one of .the properties of milk. To test the enameling does not necessarily involve its use for a long period of time.

In Gautier v. Douglass Manufacturing Company (13 Hun, 524) it was admitted that the quality of the steel could not be ascertained without working it up, and “ that an inspection and examination of it would not reveal its defects.” At page 525, the judge who delivered the opinion in that case said, viz.: “ The test of the steel involved its use and it could not be rejected or returned.” That •case is, therefore, unlike the one before us.

In Gurney v. Atlantic and Great Western Railway Company (58 N. Y., 358) it was held that “ if a defect exists which could not be determined by examination upon the receipt of the articles, ■but only upon use, it is not the duty of the vendee to rescind the •contract and return or offer to return the property upon discovery, but he may retain them and recover or recoup his damages.” In that case the referee found the frogs were defective and brittle, but that this could not be discovered by examination, and could only be ascertained by use, and that the failure of one created no presumption that others were defective,” and in that case Churoh, Ch. J., said, viz.: The general rule is, when articles are sold upon an executory contract like the one in question, that the delivery and acceptance of the articles after examination, or an opportunity to examine them, is a consent or agreement that the articles correspond with the contract, and precludes a recovery for any defects which may exist.” (53 N. Y., 515.)

It was further observed by the court, viz.: “ The vendee must have an opportunity to examine, and when, from the terms of the contract or the nature of the article this can only be done by use, and such was, therefore, the mode of examination contemplated, the vendee is not foreclosed until the test is made. But when made and the defects discovered, is it not the duty of the vendee then to take his ground and rescind the contract and return or offer to return the property, or be held to a waiver and acceptance ? Upon principle I can see no difference in this respect on account of the time or mode of examination.”

It would seem that the case from which the quotation has just been made warrants the conclusion that when the contract in terms prescribes an examination or inspection or a test, and an opportunity has been afforded for the exercise of that option and privilege on the part of the vendee to examine, inspect and test, and it has been exercised, and it appears there has been no fraud or collusion in the test, examination or inspection contemplated by the contract between the parties, it is to be deemed final and binding upon them. In the case in hand the plaintiff’s agent, by it selected for the express purpose of making suitable and proper inspection, examined all the pans and the enameling thereof, and approved of the same. If he was incompetent, if he was negligent, if he was inattentive, the responsibility for such neglect, inattention or want of capacity, according to McParlin v. Boynton (supra), should fall upon the plaintiff.

The foregoing views, together with those expressed in the opinion of Churchill, J., lead me to concur in the result reached by him in bis opinion, in favor of a reversal and a new trial before another referee, with costs to abide the event.

Churchill, J. :

By the written contract of the parties the defendants were to make for the plaintiff, at the works of the former in Ilion, “in a good, workmanlike manner, two hundred sets of c milk coolers,’ patented June 25, 1875, to consist of four coolers or pans complete to each set.” The plaintiff was assignee of the patent for the State of New York and had the exclusive right to manufacture the coolers within the State. The contract further provided that each ten sets should be subject to the inspection of the plaintiff within five days after notice of completion, and that payment should be made one-half cash, on inspection, and the remainder at the expiration of four months, with interest after two months. The sets were all made, inspected, accepted and paid for. Subsequently it was discovered that the enameling of two hundred and fifty-three pans of the sets last made and known as the Crowley pans would not resist the action of the acid of milk, and that the pans for that reason were worthless.. The pans were separate from the other parts of the coolers and cost about fifty-five per cent of the whole expense, and when the pan was worthless, supplying a proper pan would remedy the defect.

The fact that the enameling of the defective pans wopld not resist the action of the milk was not discoverable by ordinary inspection, but could have been discovered by testing with milk if continued for a sufficient length of time, or by the use of lactic acid. No offer to return the defective sets was made by the plaintiff, and they yet remain in its possession. The referee gave as damages the entire price paid by the plaintiff for the defective sets. The words “ in a good, workmanlike manner ” are not surplusage and do not import into the contract an obligation which the law would imply without them. Taken in connection with the specifications accompanying the letters patent, the defendants thereby agreed to enamel the iron pans forming part of each set in such manner as “to protect the iron from the effect of the acids contained in the milk or cream when sour.” The Crowley pans were defective in this respect for which the plaintiff is entitled to damages unless the provision with respect to inspection prevents.

If it be true, as found by the referee, that the inspection made was not conclusive except as to patent defects and such as were discoverable by observation, and that the plaintiff was in no wise concluded by sucia inspection and subsequent acceptance as to latent defects, the provision for such inspection was surplusage, since such defects wonld have been waived by acceptance without any provision therefor in the agreement. This provision for inspection should be construed to mean something equally with the words “ in a good,workmanlike manner.” If not limited to patent defects it must extend to and include latent defects, and in the absence of collusion or fraud bar any recovery therefor. (McParlin v. Boynton, 8 Hun, 449; affirmed, 71 N. Y., 604; Wyckoff v. Meyers, 44 id., 143.)

Glacius v. Black (50 N. Y., 145) distinguishes Wyckoff v. Meyers as a case where payment was to be made upon the certificate of the architect. But in the present case payment was to be made “ on inspection.”

The pans were worthless to store milk unless enameled in such manner as to protect the iron of the pan from the effect of the acids of milk and cream when sour. The specifications forming part of the letters patent, of which the plaintiff was an assignee, showed this fact and also stated that the manner of preparing and applying the enamel was well-known to those skilled in the art. The defendants had a right to presume that the plaintiff had tests by which they could determine whether or not the pans were fit for the purpose for which they were made, and that the inspection provided for by the contract would at least extend to and determine whether or not in this essential particular they were of the kind required by the contract. The inspection by plaintiff’s agents of the pans complained of and their subsequent acceptance are a bar to any recovei’y in this action.

An improper rule of damages was adopted by the referee. The only part of the “milk cooler” which was defective was the pan, which cost about fifty-five per cent of the whole. “ If from any cause a pan was worthless, another pan could be placed in that set; a proper pan would remedy the defect.”

From this it would seem that by an expenditure of a little more than half the original cost of manufacture, the plaintiff could make perfect, the articles complained of. This being so, an award of the entire cost as damages was unauthorized.

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

Follett, J.

(dissenting):

The plaintiff owns the exclusive right to sell within the State of New York “Johnson’s milk cooler,” a patented utensil for the use of manufacturers of butter or cheese. Each cooler consists of (1) a pan for milk; (2) a vat for water; (3) a frame supporting the pan and vat. The pan is made of cast-iron, enameled on the inside and used for storing milk until the cream rises to the surface and is removed. The vat is made of cast-iron, encases the pan and is used for storing water, so as to keep the milk at a proper temperature. The frame is made of cast-iron and supports the pan and vat. Four of these utensils are called a set — a set consisting of four pans, four vats and four frames. The defendants are manufacturers of agricultural implements at Ilion, New York. November 26, 1875, the parties to this action entered into a written contract, by which the defendants, for a sum agreed upon, contracted to furnish the material and manufacture, in a good, workmanlike manner, 200 sets of milk coolers with enameled pans, and deliver them to plaintiff at Ilion, New York. Each ten sets subject to inspection by plaintiff within five days after notice of completion. Under this contract defendants manufactured and delivered to the plaintiff 136| sets of coolers, with 547 enameled pans, which were accepted by the plaintiff and pronounced satisfactory, except as to some slight imperfections in the surface of the enamel, called “ pinholes,” which did not impair the practical usefulness of the pan. The pans above-mentioned were enameled by Joseph Parks, and are known as the “ Parks pans,” over which no question is raised in this action.

Afterwards, the defendants manufactured and delivered to the plaintiff sixty-three and one-quarter sets of coolers, with 253 enameled pans, for which the plaintiff paid $5,239.19. These pans were enameled by J ob B. Crowley, and are known as the “ Crowley pans.” After the Crowley pans had been in use for a short time, the enamel was softened by the fermentation of milk and proved worthless for the purpose for wliieh they were made. This action was brought to recover damages occasioned by this defect. When milk sours or ferments, lactic acid is developed. So far as it is disclosed by the evidence, enameled cast-iron receptacles for milk undergoing fermentation were never used prior to the invention and use of this milk cooler; or, if used, the use was so limited that the action of lactic acid upon enamel laid on cast-iron had never been observed, at least, so far as was known to the parties to this action. The referee found that the 253 pans were not manufactured “ in a goo d, workmanlike manner,” as stipulated in the contract. It is unnecessary to consider whether the stipulation to manufacture, “in a good, workmanlike manner,” is technically a warranty, or simply an executory promise; for, if broken, the defendants are liable unless the plaintiff is estopped from claiming damages by inspecting, receiving and retaining the coolers.

The first question is, whether the above finding of fact is sustained by the evidence ? Farmers who used the pans enameled by Crowley testified that after a few weeks use the enamel softened, became rough and the pans were thereby rendered worthless for dairying purposes. Anable, one of defendants’ employees, who was sworn in their behalf, testified that he tested, with lactic acid, the pans enameled by Crowley, and that under the test the enamel softened, became rough and could be scraped off; that the enamel was defective, and by reason of the defect that the pans were worthless for dairying purposes, was not disputed on the trial.

Was this defect the result of unskillful workmanship? It is alleged in the complaint that the pans enameled by Parks resisted the action of lactic acid and served the purpose for which they were designed. This allegation is admitted in the answer. Yan Dyke used pans enameled by Parks in his dairy eight years, and they resisted the action of lactic acid. Young used pans enameled by Parks in his dairy four years, and they -stood the test. Anable, defendants’ employee, testified that under the direction of defendants’ superintendent, he tested, with lactic acid, pans enameled by Parks and pans enameled by Crowley, and that the pans enameled by Parks stood the test, but those enameled by Crowley did not. This evidence seems to establish the fact that there were no insuperable difficulties preventing the production of enameled pans which would serve the purpose for which they were designed. Crowley testified that he informed Ross, defendants’superintendent, that the furnace in which the enamel was hardened, or fused upon the pans, was defective, and asked for a different one. Ross denied this, and testified that Crowley asked that changes be made in the furnace, and that it was changed as desired. Anable testified that soon after Crowley commenced work, Parks said that Crowley’s enamel “ would not stand, being too soft.” Gribson, one of defendants’ workmen employed on these pans, testified that Parks told him that Crowley’s enameling would not stand. Both testified that they told Center, plaintiff’s general agent, what Parks had said, and that he replied he would risk Crowley’s work. Center denies this. At folio 76 of the answer it is alleged that defendants’ agents doubted the ability of the pans enameled by Crowley to resist the action of lactic acid, and that they communicated their doubt to the plaintiff’s agent. If it be true that defendants’ agents did not communicate to plaintiff’s agent Parks’ statement, and if it be true that Crowley informed defendants’ superintendent that the furnace was unfit for the purpose, it goes far towards charging defendants with a negligent nonperformance of their contract. Whether Crowley was employed upon the request or recommendation of plaintiff’s agents, was a disputed question. The credibility of these witnesses was for the referee, and, assuming that the plaintiff’s witnesses testified truthfully, the defect was the result of unskillful workmanship and the finding of the referee cannot be set aside as contrary to the evidence.

It is urged that the plaintiff cannot recover because it inspected, accepted and retained the coolers without offering to return them. If a manufacturer, having agreed to make and subsequently deliver in a good and workmanlike manner articles designed for a known use, delivers articles not so manufactured, which are unfit for the use, the vendee may retain the articles and recover the damages. (Brigg v. Hilton, 11 Daly, 335; affirmed, 99 N. Y., 517; Hoe v. Sanborn, 21 id., 553; S. C., 36 id., 93; Norris v. La Farge, 3 E. D. Smith, 375.) Apart from the provision in the contract in respect to the inspection, the retention of the coolers, after discovering the defect, would not bar the plaintiff’s claim for damages. Tire contract provides: Each ten sets subject to the inspection of the party of the second part (plaintiff), within five days after notice of completion.” Under this provision the plaintiff inspected, accepted and paid for the pans enameled by Crowley.

It is conceded that when the pans enameled by Crowley were inspected and delivered, the parties to the contract knew of no test by which the durability of the enamel could be tested, and that the defect subsequently developed by actual use was a latent one. Anable, after describing the process of inspection, testified: “ At that time I did not know that anything further could be done for the purpose of obtaining a better knowledge as to whether the pans would answer the purpose or not.”

A manufacturer, under an agreement to manufacture in a good and workmanlike manner articles designed for a specific purpose, remains liable for latent defects arising from unskillful workmanship, notwithstanding the vendee’s acceptance of the articles after inspection or trial, under a clause in the contract of sale giving the vendee the right to inspect or try. (Bird v. Smith, 12 Q. B., 786; Heilbutt v. Hickson, Law R., 7 C. P., 438; 2 Benj. Sales [Corbin’s ed.], § 911, p. 792 and cases cited.) The effect of this clause was to pass the title of the accepted coolers to the plaintiff and the defendants became entitled to the purchase-price, subject to their continuing liability on their agreement to manufacture in a skillful manner. It will be observed that the contract does not contain an arbitration clause or a clause of that nature, nor does it provide that acceptance after inspection shall discharge the defendants’ agreement to manufacture in a good, workmanlike manner.

Several cases have been cited as bearing upon this question. Wyckoff v. Meyers (44 N. Y., 143) arose over a building contract which contained an arbitration clause, naming arbitrators,.and it was held that the certificate of the arbitrators was binding upon the parties. Glacius v. Black (50 N. Y., 145) also arose over a building contract, which provided: “That the materials to be furnished shall be of the best quality, and the workmanship performed in the best manner, subject to the acceptance or rejection of Edward "Wall, architect, and all to be in strict accordance with the plans and specifications which are signed by the parties of the second part, and form part of this contract.” The builders procured the certificate of the architect and sued for the contract-price, and it was held that defendant might recoirp his damages arising from a failure to do tlie work in. a workmanlike manner. This case was distinguished from Wyckoff v. Meyers, because of the absence of an arbitration clause. Bird v. Smith (supra) was cited with approval. McParlin v. Boynton (8 Hun, 449) arose over a contract to manufacture and deliver saws of a stipulated quality, subject to the inspection of the vendee. The saws were inspected and accepted, but were subsequently found not to be of the quality warranted. In an action for the price it was held that the defendants could not recoup their damages, upon the ground that the defects were of a character that might have been discovered by inspection. None of the cases above cited are referred to in the opinion. This judgment was affirmed (71 N. Y., 604) without an opinion, three of the judges dissenting. Bigler v. Mayor (9 Hun, 253) arose over a contract to furnish lumber and timber of a specified quality and size, subject to the inspection of the superintendent of repairs and supplies of the department of docks.” The plaintiff held the certificate of the superintendent, and upon the trial of an action for the purchase-price, the court held the certificate conclusive upon the defendant, unless the jury found that it was fraudulently given or obtained. This was held to be error and a new trial was granted, the court holding that the certificate was not conclusive, as the contract did not so provide. In this case Bird v. Smith (supra) and Glacius v. Black (supra) were commented upon and approved, and Wyckoff v. Meyers (supra) was distinguished, but McParlin v. Boynton (supra), decided by the same court at the preceding term, was not cited. The construction given to the clause under consideration seems to accord, in principle, with the rule declared in Brigg v. Hilton (supra), as it is difficult to see why a liability survives the acceptance and use of defective articles with an ample opportunity to inspect under an executory agreement to deliver articles of a prescribed excellence, and not survive inspection and acceptance under a like agreement containing a clause simply giving a right to inspect, which right the vendee has without the clause. (Pope v. Allis, 115 U. S., 363.)

The measure of damages is the difference in value between coolers manufactured in a good and workmanlike manner and those delivered. Plaintiff’s witnesses testified that the defective coolers delivered would have been worth the price paid, $5,239.19, had they been manufactured in a good and workmanlike manner, which evidence is undisputed. The plaintiff’s witnesses also testified that the defective coolers were worthless. The burden was then upon the defendant to show that the coolers were of some value. Defendants’ superintendent testified that the coolers “ were not entirely valueless for other purposes; ” that defendants used some of them for sinks and the remainder of the rejected pans were broken up as old iron, for which purpose they were worth about a penny a pound, and that he told plaintiff’s agent that they were good for nothing else. Assuming that.the defendants were liable, the damages were not excessive, and the correct measure of damagas was adopted. None of the rulings of the referee upon the admissibility of evidence being questioned upon the argument, they are not considered.

The judgment should be affirmed, with costs.

Judgment reversed anda new trial ordered before another referee, with costs to abide the event.


source: Caselaw Access Project

author: Boardman, J. :

license: Public Domain

text:
    GEORGE E. GOODRICH, as Administrator, etc., of MILO GOODRICH, Deceased, Respondent, v. MARTHA McDONALD, Appellant,Impleaded with JENNIE L. GRAVES and Another.

      Lien of an attorney on the proceeds of a judgment Collected by his client — Oode of Chvil Procedure, sec. 66 — when not waived by allowing tlie proceeds to be paid to the client — • when the lien can be enforced against one taking an assignment of a mortgage in which the pi'oceeds were invested.

    One Goodrich, the plaintiffs intestate, as attorney for the defendant Graves, administratrix of her deceased husband, recovered a judgment in 1877 for some §12,000, which was after the death of Goodrich collected by another attorney, the amount thereof being paid to the defendant Graves, with the written consent of the plaintiff, who stated that as sole administrator of his father’s estate he was willing to look to Mrs. Graves alone for the share of the judgment coming to the estate.
    Mrs. Graves and her husband’s estate being insolvent at the time the action was commenced, it was understood that the receipt of any payment for the services to be rendered by her attorney was to be dependent on the success of the ' action, and as part of such agreement the defendant McDonald agreed to advance money to cover the expenses of the litigation and to support Mrs. Graves and her children in consideration of which, she was to have half of any recovery.
    The defendant McDonald having performed this agreement, a mortgage for $6,000, in which a portion of the proceeds received by Mrs. Graves upon the collection of the judgment had been invested, was transferred to her, all the remainder of the proceeds of the collection having been paid out and expended for various purposes.
    The plaintiff, after having recovered a judgment against the defendant Graves, establishing a lien in his favor for the services so rendered by the deceased, and ordering the payment thereof, and discovering that the $6,0o0 mortgage, which was the only part of the proceeds that could be found or identified, had been assigned to the defendant McDonald, brought this action to procure a judgment declaring himself entitled to a lien thereon and providing for its enforcement.

      Held, that prior to the payment of the amount of the judgment to Mrs. Graves the plaintiff had, under section 66 of the Code of Civil Procedure, a valid lien upon the judgment and its proceeds.
    That this lien was not waived or lost by the permission to receive the proceeds thereof upon their collection, given by him to Mrs. Graves.
    That as Mrs. Graves held the bond and mortgage in which these proceeds were invested, subject to the plaintiff’s lien, Mrs. McDonald took them subject thereto for three reasons, viz.:
    (1) That she parted with no new consideration.
    (2) That she took them with full notice of the plaintiff’s equities; and
    (3) That she took them, as the court found, in bad faith with intent to hinder, delay and defraud the plaintiff out of his debt and lien.
    That a judgment in favor of the plaintiff should be affirmed. (Follbtt, J., concurs in result.)
    Appeal from a judgment and decree of this court, rendered upon a trial had at the Cortland Special Term held on May 19, 1885.
    The object of the action was to recover for the services of Milo Goodrich, as attorney in an action commenced and conducted by him for one Jennie L. Graves, and from which she has since his death recovered about $12,000. It is an equity action brought to declare and enforce an attorney’s lien upon a bond and mortgage for the payment of about $6,000, now held by defendant McDonald, which is conceded to be a part of the $12,000 recovered for Mrs. Graves through the efforts of said Milo Goodrich. The judgment of the Special Term appealed from declares the Ren and provides for its enforcement, and the defendant McDonald appeals therefrom.
    IF". B. French, for the appellant.

      H. V. Howland, for the respondent.
   Boardman, J. :

Milo Goodrich, plaintiff’s testator, as an attorney for the defendant Jennie L. Graves, administratrix of her deceased husband, recovered a judgment in 1877 for some $12,000, and afterwards and before the same was collected died. Mr. Neman thereafter attended to the case for Mrs. Graves and in 1882 the proceeds of said judgment, including Milo Goodrich’s costs and counsel fees, were paid to Mrs. Graves. In the meantime plaintiff had been duly appointed the administrator of Milo Goodrich. On being informed by Mr. Neman that the money was ready to bo paid upon a proper discharge of the judgment, he wrote to Mrs. Graves January 18, 1882, among other things as follows : “ I am willing to allow you to receive the money and discharge the judgment and * * * my father’s estate will look to you alone for the amount coming to us.” On the same day he wrote to Mr. Neman as follows : “ While my father’s estate is interested in the judgment, I am willing to look to Mrs. Graves alone for the share of the judgment coming to us, and she may, therefore, discharge the judgment and receive all of the proceeds, after settling with you, so far as the claims of our estate are concerned. I am sole administrator of my father’s estate and as such consent that the judgment be discharged upon payment to Mrs. Graves.” In pursuance of such authority the money was paid to Mi’s. Graves and the judgment satisfied by her.

The most difficult as well as the most important question for our consideration is presented by these facts, viz.: Had the estate of Milo Goodrich a lien or interest by way of equitable assignment to the extent of the value of his services upon the proceeds of such judgment, before the same were paid to Mrs. Graves, and if so was such lien waived or interest released by plaintiff’s acts and declarations so as to preclude him from following the funds in the hands ot Mrs. Graves ?

That the plaintiff had a valid lien upon the judgment and its proceeds before payment of the same to Mrs. Graves cannot be doubted. Section 66 of the Code of Civil Procedure must set that at rest. By that section the attorney had a lien upon Mrs. Graves’ cause of action which attached to the judgment in her favor “and the proceeds thereof in whosoever hands they may come ” for the value of his services, and such lien cannot be affected by any settlement between tbe parties before or after judgment. (Marshall v. Meech, 51 N. Y., 143.) Tbe learned counsel for tbe appellant contends that no lien can exist without possession. We think he has overlooked the distinction between a general lien resting upon possession and giving the right to retain until the attorney’s whole bill is paid, and the lien upon a judgment recovered by him or its proceeds, for the value of his services and expenses in recovering such judgment. The latter form of lien does not rest on possession and can be actively enforced. The former cannot exist without possession, and the lien is not confined to a specific claim or debt. The distinction and authorities are quite fully discussed by Brown, J. (In re Wilson, 26 Alb. Law Jour., 271; S. C., 2 McCarty C. P. R., 151; Code of Civil Pro., § 66.) In the present case the lien is not general and does not depend upon possession, but is specific upon the judgment or its proceeds to the extent of the value of the services of Milo Goodrich in the litigation. Was such lien waived by plaintiff’s letters to Mrs. Graves and Mr. Hernán under which the money was paid ? That depends upon a proper construction of the language used in said letters. There is no express waiver. If any is found it must be inferred or sjaelled out of the words used. There must be something indicating an intention to release the lien. Nothing of the bind exists. The evident purpose was to allow the judgment to be satisfied by Mrs. Graves, and for that purpose allow her to receive the proceeds from the defendants. Without such action the defendants could not safely pay over the money to her and doubtless would not have paid. Plaintiff preferred to have the proceeds in Mrs. Graves’ hands, but beyond such transfer no intent was shown to change his relations to the fund. He simply consents to the discharge of the judgment upon its payment. He calls attention to his father’s interest in the judgment and consents to hold Mrs. Graves for the claim of his father’s estate. The interest and claim so referred to was an attorney’s lien upon the proceeds of the judgment in “whosesoever hands they may come.” The estate was the equitable assignee and owner of that portion of the proceeds due for costs. The payment to Mrs. Graves only changed the possession. It did not extinguish plaintiff’s ownership nor the lien. She took with full knowledge, and no reason is apparent why under the facts a court of equity should hold that she of all persons should take such moneys released from plaintiff’s lien and title. It would be the height of injustice to so hold. The court at Special Term has found that the payment did not constitute a waiver or release of the lien, and we think such finding is just and true.

If we are so far right Mrs. Graves took such moneys subject to plaintiff’s rights under his lien and as equitable assignee. In her hands equity would seize upon and compel the payment to plaintiff of the claim for services of Milo Goodrich. An action was brought against her to enforce the lien and compel payment of the debt as ascertained and judgment establishing the lien and ordering the payment was entered against her. As against Mrs. Graves such judgment is conclusive and the rights of plaintiff to equitable relief are adjudged. It turns out, however, upon examination of Mrs. Graves, that she had bought the Crane mortgage, now sought to be charged, for $6,000, and that the remainder of the proceeds of the collection had been paid out and expended for various purposes, so that at that time this $6,000 Crane mortgage constituted the only part of the proceeds which could be identified or found. Even this mortgage had been assigned to defendant McDonald by Mrs. Graves before judgment recovered against her. So that the plaintiff could obtain no relief under his judgment tagainst Mrs. Graves. 'He then brought this action against Mrs. Graves, Mrs. McDonald and Crane to establish his lien and procure payment of his claim out of the amount secured by the mortgage. Judgment was recovered in his favor, and Mrs. McDonald appeals.

"When Milo Goodrich undertook Mrs. Graves’ case it was understood that payment for his services must be dependent on his success, since Mrs. Graves and her husband’s estate were both insolvent. As a part of such original agreement Mrs. McDonald undertook to advance the necessary money to cover the expenses of the litigation, and in consideration thereof she was to have one-half of the recovery. The support of Mrs. Graves and her children by Mrs. McDonald was also alleged as a further consideration. Mrs. McDonald did furnish some money towards the expenses and did support her daughter and children. About the 1st of May, 1882, the Crane bond and mortgage were assigned by Mrs. Graves, as administratrix, to Mrs. McDonald as and for her one-half of the recovery. It is apparent that Mrs. McDonald took the same with full knowledge of plaintiff’s rights and the court so finds. It is also found that she took such assignment in bad faith with intent to hinder, delay and defraud the plaintiff out of his debt and lien.

Mrs. McDonald’s objections to the judgment are :

(1) That plaintiff never had any lien on the proceeds.

(2) That he waived his lien when he consented that they might be paid to Mrs. Graves.

’ (3) That she is the owner by a valid assignment of the bond and mortgage under the agreement above stated and for a valid consideration, and that in equity she is entitled to priority over the plaintiff’s claim.

(4) That plaintiff’s judgment against Mrs. Graves did not reach or bind this bond and mortgage, it having been assigned prior to such judgment.

(5) That appellant had no notice of plaintiff’s claim when she took the assignment.

(6) That the action should have been against Mrs. Graves as administratrix, she having received and invested the money and made the assignment as administratrix of her husband.

The first and second objections have already been considered and decided adversely to the appellant.

The third, fourth and fifth may be considered together.

Mrs. Graves held such bond and mortgage subject to plaintiff’s equity. "When she assigned them, to Mrs. McDonald, the latter took them subject to plaintiff’s equities, because she then parted with no new consideration, and for the further reason that she took them with full notice of such equities (Weaver v. Barden, 49 N. Y., 286), and in bad faith as the court has found. The judgment against Mrs. Graves may not be binding upon Mrs. McDonald because she was not a party to the action. But if the plaintiff’s claim was a lien upon the bond and mortgage in Mrs. Graves’ hands, it continued to be after the assignment to Mrs. McDonald. She was a party to the original arrangement, by which Milo Goodrich undertook the litigation. She was to make certain advances and to have half of the recovery. She was a party in interest in that litigation and might, under the agreement, have properly been made a co-plaintiff as half owner of the claim to be prosecuted. As such she would have become entitled to one-half of the amount collected after payment of the costs and expenses. But she has taken in this more than one-half and holds it charged in her hands with plaintiff’s equitable claim.

She and Mrs. Graves stand on the same plane. She is charged with the same knowledge possessed by Mrs. Graves and has no equities superior to those of plaintiff. (31 Alb. Law Jour., 304, 305.) Especially is this so if she took this mortgage with intent to defraud plaintiff. In such case the fraud would avoid the assignment. In our opinion the lien of plaintiff attached to the money and mortgage in Mrs. Graves’ hands, and was not lost by the tranfers to Mrs. McDonald. (Ward v. Craig, 87 N. Y., 560.)

The plaintiff seeks to charge property in the hands of Mrs. Graves by reason of the lien upon it, and by her transferred to appellant. It is not an action for money only. Mrs. Graves’ possession of the property sought to be reached is the reason why she is made the party. The. claim is not against her husband’s estate, nor against her as its representative. As equitable assignee of so much money, or such a proportion of this mortgage, the plaintiff makes his claim against the persons in possession of such property for his share. That share does not belong to the estate of Graves but to plaintiff,- and his remedy is to reach the property to satisfy his claim. (In re Knapp, 85 N. Y., 297.) Besides an action against Mrs. Graves personally upon a contract made by her after her husband’s death was proper. She alone incurred the obligation. (Austin v. Munro, 47 N. Y., 360.) Again, the assignment was a personal transaction, because it was not made in payment of any debt due from the estate. It was mainly to pay for the support of herself and her children. (Le Baron v. Long Island Bank, 53 How., 286.) And the lien may be- enforced in such case against the avails of the property in lieu of the property or money itself. (Hale v. Omaha Nat. Bank, 49 N. Y., 627; 3 Rom. Eg. Jus., § 1280.)

The inherent justice of plaintiff’s claim requires us to sustain it if consistent with the rules of law. After a careful examination we are convinced of the justness and truth of the various findings of fact, and that the conclusions of law founded thereon are well sustained upon principle and authority.

We think the judgment should be affirmed, with costs against the appellant.

Hardin, P. J., concurred; Eollett, J., concurred in the result.

Judgment affirmed, with costs against appellant.


author: Boakdman, J.:

text:
    THOMAS P. SAUNDERS, Appellant, v. WILLIAM W. GOLDTHRITE and JOHN BRUCE, Respondents.

      ■■.Costs — when the defendant is entitled to costs, upon the dismissal of the complaint, man action brought after the discontinuance of a former action upon a plea of title —Code of Civil Procedu/re, sec. 8285.
    Tlxe defendant having- interposed a plea of title in an action brought by the plaintiff in a Justice’s Court, the plaintiff commenced this action in the Supreme Court for the same cause of action, to which the same defense was Interposed. After issue joined the complaint was dismissed, with costs, by reason of the failure of the plaintiff to appear when the cause was reached.

      Held, that the court properly rejected a claim for costs made by the plaintiff upon the ground that it had not been certified that the title to real property came in question upon the trial, and properly awarded costs to the defendant.

      Gates v. Canfield (28 Hun, 12) followed.
    Appeal from an order denying a motion made by the plaintiff to ¡have the defendant’s costs stricken from the judgment.

      John Lansing, for the appellant.

      E. O. Emerson, for the respondents.
   Boakdman, J.:

In this action, originally brought in Justices’ Court, a plea of title was interposed by defendant so that the justice was, ousted of jurisdiction. The plaintiff thereupon began this action in the Supreme Court for the same cause of action and the same defense was interposed. After issue was so joined the cause was placed upon the calendar at the circuit and the plaintiff not ajipearing when it was reached, the complaint was dismissed with costs by reason of such default.

A motion to set aside the judgment for costs in favor of the defendant and for a retaxation of costs was made by plaintiff. The costs were readjusted, but the court refused to set aside the judgment. An appeal is taken from such order and the plaintiff contends that he is entitled to costs under section 3235 of the Code of Civil Procedure, because it has not been certified that the title to real property came in question upon the trial. The claim of the plaintiff must be rejected upon reason as well as authority. If sustained it would work a gross injustice upon the defendant in similar cases. The defendant could not compel the trial of the issue of fact and hence he would be punished by a judgment for costs whenever the plaintiff saw fit to suffer a default. No such injustice could have been intended. The precise question, however, is settled by authority in Gates v. Canfield (28 Hun, 12), wherein the learned presiding justice construes the above section of the Code and in precisely such a case holds that the defendant is entitled to recover costs. ¥e accept his views as just and satisfactory. No other question is presented by appellant’s brief.

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

Hardin, P. J., and Eollett, J., concurred.

Order affirmed, with ten dollars costs and disbursements.


author: Hardin, P. J.:

text:
    OSANDER BISHOP, Appellant, v. CALEB V. STEBBINS and Others, Respondents.

      Judgment creditor’s action — right of a debtor to prefer one creditor — to transfer all Ms properly to pay a bona fide debt — when a deduction of a fixed sum from the purchase-price, in consideration of an agreement by the purchaser to support a person whom the vendor is bound to maintain, is not fraudulent.

    A debtor has a right to prefer one or more of his creditors over the others, and so long as he exercises this right honestly and in good faith, his acts, whether the preference be created by sale or a pledge, are unimpeachable.
    The fact that the transfers cover substantially all of the property of the debtor is not conclusive evidence of a fraudulent intent, but is only a circumstance .to be weighed, among others, in determining the intent and purposes of the parties.
    Upon the trial of this action, brought by a judgment creditor to set aside as fraudulent a conveyance of real estate and a bill of sale of personal property, made in 1881, from one Caleb V. Stebbins of all bis property to bis son Andrew, it appeared that tbe vendor acquired title to tbe principal part of tbe land under tbe will of bis father, which directed that his executor and bis heirs should maintain, tbe testator’s son Warren according to bis rank and condition in life, provided tbe said Warren should remain with tbe executor during tbe said Warren’s natural life, but in case he should depart from tlie executor, then tbe latter was not to be accountable for anything on bis account. Stebbins entered into possession under the will in 1844, and assumed the care and maintenance of Warren, who continued to reside with him down to tbe time of tbe transfer of tbe property in 1881, and thereafter be resided with Andrew, tbe vendee, down to tbe time of bis (Warren’s) death, which occurred in 1883. At tbe time of the transfer Warren was about seventy-six years of age, and was of feeble health and required extraordinary care and attention.
    Andrew, in addition to tbe sum paid on tbe purchase, executed a bond to Caleb, agreeing to assume tbe responsibilities and liabilities of Caleb under tbe will, and to support and maintain Warren during bis life in consideration of tbe sum of $1,000 to be paid to him, which sum was taken out of tbe purchase-price.

      Held, that tbe sum retained was reasonable and that no fraud or fraudulent intent was evinced by the arrangement.
    Appeal from a judgment, entered upon the decision of the Special Term in' Oortland county.
    The action was brought by a judgment creditor of Caleb Y. Stebbins to set aside a conveyance of real estate and a hill of sale of personal property, on the ground that the transfers were fraudulent and void as to creditors of Caleb Y. Stebbins. The transfers were made on the 21st day of December, 1881. The plaintiff recovered a judgment against the debtor February 2, 1883, for $638.78, and issued an execution, which was returned wholly unsatisfied. Tbe debt upon which the judgment was recovered accrued January 6, 1880. The transfers were made on December 21, 1881, by Caleb Y. Stebbins to his son Andrew Stebbins, and covered all bis property, consisting of a farm of 169 acres, situated iu the town of Homer, for the sum of $5,920. The personal property was of the value and price of $987. The total sale, price and value amounted to $6,907.
    Upon the real estate transferred there was a mortgage in favor of H. O. Jewett for $1,550, which the purchaser assumed. One Chittendon held a promissory note of $158, made by the vendor and indorsed by the vendee, which the vendee assumed as a part of the consideration for the transfers and subsequently paid.

      The vendor derived the principal part of the farm through the will of his father, Titus Stebbins, of which will the vendor was appointed executor. The will contained in its seventh clause the following language: “ I order and direct that my executor and his heirs maintain my son Warren Stebbins according to his rank and condition in life, provided the said Warren shall remain with said executor during said Warren’s natural life, that is to say, in decent wearing apparel, board, doctoring, etc., but in case said Warren shall depart from said executor, then the said executor is not to be accountable for anything on his account. I constitute said executor a trustee for the above purpose under the above conditions.”
    The will of Titus Stebbins was admitted to probate April 18,1844, and Caleb, the vendor, entered into possession under the will, and assumed the care and maintenance of Warren Stebbins, who continued to reside with him, and was provided for by Caleb down to the time of the transfers in December, 1881, and subsequently by •Andrew, the purchaser, down to the date of his (Warren’s) death, which occurred in July, 1883. At the time of the transfer in December, 18S1, Warren was about seventy-six years of age, of feeble health and required extraordinary care and attention.
    Andrew, the purchaser, agreed to assume the responsibilities and liabilities of Caleb under the will, and to support and maintain Warren during his life in consideration of the allowance of $1,000, which Caleb agreed to allow. Andrew executed a bond to Caleb assuming the liability and agreeing to perform the provisions of the will in that regard, and $1,000 was taken out of the purchase-price of the property. April 1, 1863, Andrew had sold to Caleb four cows, two heifers, one yoke of oxen and fifteen sheep valued at $331, for which Caleb was to pay in the fall of 1863, and a note was given therefor in 1870. That note was taken out of the jmrchase-price. The Special Term found that in allowing that indebtedness the interest from 1863 to 1870 was improperly included, amounting to $139, and to that extent allowed the plaintiff to recover, and directed judgment accordingly without costs to either party.

      JI. L. Bronson, for the appellant.

      B. II. Dwell, for the respondents.
   Hardin, P. J.:

Findings of fact have been made upon evidence warranting the conclusions stated, to the effect that the transfers and conveyances were made for the purpose of paying just debts due to Andrew Stebbins for services rendered and personal property sold, and for assuming the mortgage to Jewett and the debt to Ohittendon, and the liability by reason of the provision in Titus Stebbins’ will to support Warren Stebbins, and that the transfers were made without any fraud or fraudulent intent.

We are of the opinion that all the conclusions of fact in that regard were well supported by the evidence given upon the trial. The rule is that the determination of a question of fact will not be disturbed, on appeal, where there is no decided preponderance of evidence against the view adopted by the trial court. (Hoffman v. De Graaf, 23 Weekly Dig., 394.) It was lawful for the debtor to pay his debts by a transfer of his property. (Stacey v. Deshaw, 7 Hun, 449.)

A debtor has a right to prefer one or more of his creditors over the others, and so long as lie exercises this right honestly and in good faith, his acts, whether the preference be created by sale or a pledge, are unimpeachable. (Board of Chosen Freeholders of the County of Essex v. Lindsley, 5 Eastern R., 117.) The fact that the transfers covered substantially all the property of the debtor was not conclusive evidence of a fraudulent intent. It was a circumstance, among others, to be weighed in determining the intents and purposes of the parties. (Remington Paper Company v. O'Dougherty, 36 Hun, 79; Hale v. Stewart, 7 id., 591.) The plaintiff assumed the burden of establishing fraudulent intent on the part of the purchaser of the property. (Remington v. O'Dougherty, supra; Woodworth v. Sweet, 51 N. Y., 8; Dudley v. Scranton, 57 id., 424.)

To successfully attack the transfers it was incumbent upon the plaintiff to show a fraudulent intent on the part of Andrew Stebbins, the purchaser. (Remington v. O'Dougherty, supra; Parker v. Conner, 93 N. Y., 118.)

Titus Stebbins, in 1844, made a will appointing his son, Caleb Y. Stebbins, his executor, and in the will certain pecuniary legacies were given to parties named, and the executor was ordered and directed to maintain the testator’s son, Warren Stebbins, in the language embraced in the statement of facts, and following that language the will contained the following provision, viz.: I give and bequeath unto my son, Caleb Y. Stebbins, all the remainder of my real and personal property.” Under the will Caleb took the farm owned by his father, at the time of his death, consisting of about 127 acres, and immediately took upon himself and assumed the care and maintenance of Warren down to December 21, 1881. Caleb supposed by taking the farm that he assumed the maintenance of Warren. We think the burden was accepted by Caleb and rested upon him at the time of the sale in 1881 to the defendant Andrew. (Scott v. Stebbins, 91 N. Y., 606; Brown v. Knapp, 79 id., 136; McCorn v. McCorn, 100 id., 511; Bushnell v. Carpenter, 28 Hun, 19.) When Caleb sold the farm he supposed, and as we think correctly (Bushnell v. Carpenter, 28 Hun, 19; S. C. affirmed, 92 N. Y., 270), that the burden rested upon the farm and upon him, and he took care to have that obligation assumed by Andrew, and allowed and paid $1,000 for such assumption of his liability by Andrew, and to secure the performance of the obligation took the bond of Andrew conditioned to discharge such liability and to indemnify him against it.

We think the sum was reasonable and that no fraud or fraudulent intent was evinced by the arrangement. Warren was advanced in years, irritable and untidy in his habits and required unusual care, support, maintenance and management. His expectancy of life was about four and one-half years by the Northampton tables. He lived some eighty-one weeks after the obligation given by Andrew and was properly eared for, such care requiring valuable services and considerable expenditures.

We are satisfied with the view the trial judge took of that branch of the case. Morgan v. Potter (17 Hun, 403) does not aid the appellant. There it appeared the transfer was voluntary, no valid consideration upheld it, and that there was a fraudulent intent. Pond v. Comstock (20 Hun, 492) was unlike this case. There the conveyance was made with a fraudulent intent on the part of the grantor. The same is true of Union National Bank v. Warner (12 Hun, 306). Here the vendor sold his property for an adequate consideration and in good faith. Though he had no other property, the sale is not for that reason to be held fraudulent. (Hale v. Stewart, 7 Hun, 591; Remington v. O'Dougherty, supra; Panker v. Conner, supra.)

That a debtor may prefer a creditor has been repeatedlj' held, or may pay a bona fide creditor even when insolvent, and even if it require the sale or transfer of all his property to satisfy an honest debt or liability. (Remington v. O'Dougherty, supra; Auburn Fxchange Bank v. Fitch, 48 Barb., 344.) The evidence given upon the trial presented a question of fact as to the note of $331. The facts appear from interested witnesses. Some of the evidence was vague and contradictory. We cannot say that the finding in regard to the note is not supported by sufficient evidence properly interpreted. The credence to be given to the witnesses speaking in regard to it was considered and passed upon, and according to settled authority we ought not to disturb the result. (Michigan Carbon Works v. Schad, 38 Hun, 71.)

Andrew Stebbins bought the property in good faith, in December, 1881, for a full and fair consideration with no knowledge of or participation in any fraud, and he acquired by such purchase a good title, and his rights and equities in it (except as allowed by the trial court), are superior to those of the plaintiff. (Starin v. Kelly, 88 N. Y., 418; Zoeller v. Riley, 100 id., 108.)

After weighing all the evidence and considering all the circumstances disclosed at the trial, we are of the opinion that the trial judge reached the proper conclusions of fact, and that those conclusions accord with the preponderance of the evidence, and that his decision upon the facts and law of the case should stand.

The judgment should be affirmed, with costs against appellant.

Boardman and Follett, J’J., concurred.

Judgment affirmed, with costs against appellant.


author: By the Court :

text:
    MARY A. BLASHFIELD, as Administratrix of POLLY BLASHFIELD, Deceased, Appellant, v. H. WILSON BLASHFIELD, Respondent.

      Costs — when allowed to a defendant where the court has held one of the causes of action in the complaint to he barred by the statute of limitations and stricken out the evidence in respect to it, and the plaintiff has obtained a verdict sustaining another— Code of Civil Procedure, sec. 3234.
    The complaint in this action set forth in separate counts two causes of action, one on a note for $200, and the other on a note for $100.13. The statute of limitations was pleaded as a defense to each note. At the close of the plaintiff’s evidence the court granted a motion to strike out the evidence as to the $200 note, upon the ground that it was barred by the statute of limitations. The jury rendered a verdict in favor of the plaintiff upon the other note, upon which a judgment was entered. The clerk having taxed costs in favor of the defendant, pursuant to section 3284 of the Code of Civil Procedure, a motion was made by the plaintiff to have them stricken out. • .«■ < -

      IIeld, that the motion was properly denied, as thp defendant was, entitled to the costs allowed him.
    Appeal from an order, entered in Cortland county, made at tbe Chemung Special Term denying a motion, to set aside the taxation of defendant’s costs herein.
    The following opinion was delivered by Judge Martin on deciding the motion:
    Martin, J.:
    This was a motion under section 32(55 of tlie Code of Civil Procedure for a new taxation of costs. • The action was brought to recover tlie amount of two promissory.notes made by tbe defendant. One was for $200, dated January 18, 1888; the other was made January 18, 1872, to secure the payment of $100.13. The complaint alleged the making of the notés; the death of the payee; that the plaintiff was duly appointed as the representative of the deceased payee; that she was then the owner and holder of the said notes and demanded judgment for the amount of both notes, with costs. The answer set up the statute of limitations as a defense to each of said notes. On the trial, at the close of the plaintiff’s evidence, the defendant asked “ that the two hundred dollar note be stricken out and eliminated from the(case, on the ground that-there is no evidence upon which the plaintiff can recover on such note. That the note is barred by the statute of limitations.” This application was granted.
    The judge, in his charge to the jury, said : £iThe defendant puts in a defense to this action on these two notes, that they are barred by the statute of limitations, and that is the issue which is brought here for trial. Now, upon that issue the larger of the two notes I find to be outlawed, and the plaintiff cannot recover, and I have stricken that out of the case, leaving the only question for you to determine in regard to the smaller note of the two.” There was no certificate that the substantial cause of the action was the same upon each issue, as provided in section 3234 of the Code of Civil Procedure. Upon a retaxation of the costs by the clerk of Cortland county, the defendant was allowed to tax costs against the plaintiff, on the ground that tlpe defendant recovered upon the issues of fact joined as to one of the causes of action set forth in the complaint. The correctness of this determination by the clerk is the only question involved on this motion.
    Section 3234 of the Code of Civil Procedure provides that “ in an action specified in section three thousand two hundred and twenty-eight ox this act, wherein the complaint sets forth separately two or more causes of action, upon which issues of fact are joined, if the plaintiff recovers upon one or more of the issues and the defendant upon the other or others, each party is entitled to costs against the adverse party, unless it is certified that the substantial cause of action was the same upon each issue, in which case the plaintiff only is entitled to costs.”
    In Kilburn v. Lowe (37 Hun, 237, 240), Mr. Justice Follett, delivering the opinion of the court in that case, in commenting upon this provision of the statute, says : “ The apparent design was to give both parties costs in a case in which the complaint sets forth more than one cause of action, provided both parties recover upon one or more of the causes of action.” (See, also, Seymour v. Billings, 12 Wend., 285; Shannon v. Howell, 36 Hun, 47.) It seems to me that,such was the obvious intent of the statute.
    The complaint in this action sets forth, separately, two causes of action, upon which issues of fact were joined. If, however, it were otherwise, and such causes of action were not separately stated, still, as tlie complaint clearly contained two separate causes of action, as to one of which each of the parties succeeded, each would be entitled to costs if the defendant recovered upon one of the issues within the spirit and meaning of that section. (Seymour v. Billings, Shannon v. Howell, Kilburn v. Lowe, supra.)

    Did the defendant recover upon the issue raised by the pleadings as to the $200 note ? That he succeeded in his defense to that note is manifest. That the jury actually found a verdict in his favor upon the issues made in regard to-it is-not pretended. When the plaintiff rested, on the defendant’s motion, the court, in effect, held that under the evidence, as a matter of .law, it was barred by the statute of limitations. It decided that the plaintiff could not recover thereon. If this had been the only cause of action it would have entitled the defendant to costs.’ Does the fact that the court determined this question, instead.of directing the jury to find for the defendant upon it, change the result, so far as this question of costs is concerned? The court in effect held, as a matter of law, that the plaintiff could not recover upon the issue joined in that cause of action. Would it have been more than such a holding if it had directed the jury to find for the?.defendant ?
    In Williard v. Strachan (3 Civ. Pro. R., 452), where there were two separate counts in a complaint, to w;hich the answer was a general denial, and on the trial the compMnt'was dismissed as to the first count, because it appeared that the note therein sued upon was given for the individual debt of. the. .partner of the defendant, which defense was not specially pleaded, and the plaintiff had a verdict in 1ns favor on the second count, held that the point on which the complaint was dismissed was not the substantial • issue in the case, and the clerk under the circunjstanees properly refused to tax costs in defendant’s favor; that the plaintiff, having obtained the only verdict rendered by the jury, was entitled to the costs of the action. Section 3234 of the Code applies only to cases where the defendant had a verdict on the separate count.
    In Cooper v. Jolly (30 Hun, 224; affirmed, 96 N. Y., 667), in an action to recover on twenty-three causes of action for penalties for adulterating milk, the answer was a. general denial. On the trial evidence was given tending to establish thirteen. A verdict was rendered “'for two counts, at fifty dollars each, amounting to one hundred dollars.” The defendant claimed costs. It was held that the claim was not well founded, as the defendant had not recovered upon any of the issues within the meaning of section 3231. In delivering the opinion in that case, Haight, J., says: “ It thus appears that under the statute (2 R. S., 616) the rule was that in order to entitle the defendant to recover costs there must be a verdict or finding in his favor upon one or more of the counts set forth in the declaration ; that where there was a general verdict in favor of the plaintiff and no separate verdict rendered for the defendant, he could not recover costs. Applying the same rqle to the section of the Code under consideration, and it follows that there must be a separate and distinct recovery on the part of the defendant in order to entitle him to costs.”
    In Barlow v. Barlow (35 Hun, 50) the complaint set forth two causes of action: The first, 'upon a promise made by the defendant to pay an agreed price for work and labor performed by the plaintiff prior to March, 1868; the second, upon an implied promise to pay for work and labor performed and rendered by him after that time and prior to 1880. Upon the trial before a referee she recovered upon the first, but not upon the second cause of action. The court directed that the defendant’s costs be taxes and set-off against the plaintiff’s judgment. Held, that this was error; that the defendant was not entitled to recover costs, as the substantial cause of action was the same upon each issue within the meaning of those terms as used in section 3231 of the Code of Civil Procedure, and because the defendant had not recovered upon any issue within the meaning of the said section.
    It is contended by the plaintiff that the foregoing authorities are decisive of the question under consideration. I do not think so. In the Williard case the defendant did not succeed upon the substantial issue in the case. The ground upon which the action was dismissed was not pleaded. In the Cooper case it was held that the defendant had not recovered upon any of the issues, because there had been no verdict or finding in his favor. In the Barlow case it was held that the cause of action was substantially the same on each issue. In none of these cases was the question under consideration in this case directly involved. While there may be expressions in the opinions of those cases which might be regarded as sufficiently broad to include the question involved in this, still I cannot believe that they were so intended, or that they should be so construed. In this case two causes of action were contained, and separately stated in the complaint. The defendant tendered as issues that each was barred by the statute of limitations.
    At the close of the plaintiff’s evidence it appeared conclusively that this issue as to the $200 note must, as a matter of law, be decided in the defendant’s favor. The court so decided it, instead of directing the jury so to find. The fact that it was decided by the court, instead of by the jury under the direction of the court, is not, I think, controlling upon this question. ' There was certainly a finding in favor of the defendant upon that issue. The court must have found that the evidence conclusively established the defense interposed by the defendant. The defendant, I think, possesses the same right to costs that he would have possessed had the court directed a verdict for the defendant on the cause of action on the $200 note. There was in this case a substantial determination of the issues in both causes of action set out in the complaint. One was determined by the court in favor of the defendant, the other in favor of the plaintiff by the jury. The plaintiff recovered upon one of the issues, defendant upon the other. Hence, I am of the opinion that the taxation of costs by the clerk was correct, and that this motion should be denied, with costs.”

      FrcmTc Pieroe, Jr., for the appellant.

      Oliver Porter, for the respondent.
   By the Court :

The order allowing defendant a bill of costs for successfully defending one of two causes of action upon promissory notes, should be sustained. The defendant interposed the statute of limitations to such cause of action, and the court held as a matter of law, upon the evidence, that the statute was a bar. While, therefore, the plaintiff, who was successful as to one cause of action, was entitled to a bill of costs, the defendant who was equally successfully as to the other cause of action, was also equally entitled to costs under section 3234 of the Code.

The later authorities relating to this section are: Cooper v. Jolly (30 Hun, 224; affirmed, 96 N. Y., 667); Barlow v. Barlow (35 Hun, 50); Ackerman v. De Lude, (36 id., 44); Williard v. Strachan (3 Brown, C. P. R., 452), and Kilburn v. Lowe (37 Hun, 237).

The order should be affirmed, with ten dollars costs and printing disbursements on opinion of Mr. Justice Martin at Special Term.

Present — Hardin, P. J., Follett and Boardman, JJ.

Order affirmed, with ten dollars costs and disbursements on opinion of Martin, J., deliyered at Special Term, and memorandum of Boardman, J.


author: Boardman, J.:

text:
    GEORGE S. DADA, Appellant, v. GILES S. PIPER, Respondent.

      Libel —presumption that a complaint drawn and signed by an attorney is a privileged communication.

    The plaintiff brought this action for libel against the defendant, the libelous matter alleged being contained in the complaint in a former action brought by one Cataline against this plaintiff to have a judgment recovered against Cataline set aside and declared void, upon the ground that it was obtained by the false and perjured evidence of this plaintiff. The defendant herein acted as the attorney for Cataline and as such signed the complaint in that action, upon the trial of which the complaint was dismissed on the ground that no cause of action was stated therein.
    Upon the trial of the present action the said complaint having been put in evidence, and no other evidence having been offered, this action was dismissed upon the ground that the complaint was a privileged communication.

      Held, that as it was admitted that no publication of the complaint other than, that which was incident to the ordinary conduct of the action had been made, the ruling of the court below should be affirmed.
    That the judgment dismissing the complaint in the first action, upon the ground that it did not set forth a cause of action, did not necessarily show that the plaintiff therein had in fact no cause of action, as the pleading itself might have been defective, and essential facts might have been omitted therefrom.
    That in the absence of evidence showing that the defendant-acted with express malice and was using the judicial forms in bad faith for the purpose of assailing the plaintiff’s character, it would be presumed that the complaint was a privileged communication.
    Appeal from a j'udgment, entered in Oswego county upon an order dismissing the plaintiff’s complaint made upon the trial of the action.

      3. JY. Dada, for tlie appellant.

      Mead & Stranahan, for tlie respondent.
   Boardman, J.:

This is an appeal from a judgment dismissing the complaint. The parties are attorneys. The action is for libel, the libelous matter being in a complaint in an action brought by one Cataline against the plaintiff and Charles Holden’s assignor, to set aside and declare void a judgment obtained by said Holden’s assignor against Cataline, by the alleged false and perjured evidence of the present plaintiff, in which action the defendant was the attorney for Cataline, and as such signed the complaint. That complaint was dismissed upon the trial on the ground that no cause of action was stated therein. On the trial of the present action the aforesaid complaint was put in evidence as proof of the libel. No other evidence was offered. The defendant admitted that such publication was made of the alleged libel as was incident to the ordinary conduct of the action, in which it was made and to the trial; and the plaintiff admitted he did not expect to show any other publication. The complaint was thereupon dismissed on the ground that the publication and complaint were privileged.

There is nothing in the case to show that plaintiff offered to make any additional proofs, or that he was prevented from so doing. The plaintiff must, therefore, stand upon the only proof given, and he cannot now insist that his right to make further proof was cut off by the dismissal of his complaint. He should have made the offer, and, if rejected, he should have taken an exception. Then it would have presented a legal question for review.

The power of a Court of Equity to set aside and avoid judgments, when procured by fraud or perjury, is undoubted. (N. Y. C. R. R. v. Harrold, 65 How., 89; Huggins v. King, 3 Barb., 616; Dobson v. Pearce, 12 N. Y., 156; 1 Story Eq. Jur., § 252.) Under what precise conditions equity will assume'td act has been the subject of frequent discussion. Besides the cases already cited, reference may be had to Ross v. Wood (70 N. Y., 8); Borden v. Fitch (15 Johns., 121); Stilwell v. Carpenter (59 N. Y., 423); Mather v. Parsons (32 Hun, 338).

It was adjudged that Cataline’s Complaint did not set forth a cause of action for setting aside the judgment against her. But it by no means follows that she had no cause of action. The pleading may have been defective, and essential facts may have been omitted. It does not, therefore, follow that the facts stated were not pertinent or material to a cause of action and hence malicious. Nor can it be inferred that a defective complaint is evidence of malice on the part of the pleader. That would carry the doctrine of presumptive malice to a dangerous extent for attorneys. The court had jurisdiction of the subject-matter and of the parties to the action. The dismissal of the complaint was an incident in the action, which did not take away its character of a judicial proceeding. Until it is shown that the defendant acted with express malice and was using the judicial forms in bad faith for the purpose of assailing plaintiff’s character, the presumption must be extended to the defendant that the complaint was a privileged communication. It was and is conceded by the appellant that the court must determine whether the communication was privileged. In the present case the learned justice at the circuit held this complaint to be within the privilege, and that, without evidence of express malice, a cause of action was not made out. In this, we think, there was no error.

The principle seems quite elementary. (1 Stark on Sl., chap. 10; 2 Green. Ev., § 421; Moak’s Underhill on Torts, p. 152; Marsh v. Ellsworth, 50 N. Y., 309; Klinck v. Colby, 46 id., 427, 433; Newfield v. Copperman, 48 How., 87, 88; Hastings v. Lusk, 22 Wend., 410.) The plaintiff should have gone further than proving a complaint in a judicial proceeding, because that, in the present case, was privileged. He should have shown, in addition, that the defendant knew that what he alleged was false; that he was actuated by malice or that he made use of legal proceedings in bad faith as a cloak to his libelous utterances. Having failed to do this his cause of action was not made out, and his complaint was properly dismissed.

The judgment should be affirmed, with costs.

Hardin, P. J., and Follett, J., concurred.

Judgment affirmed, with costs.