text:
    Henry W. Gray, Resp't, v. George T. Green, App'lt.

      (Supreme Court, General Term, First Department,

      Filed December 16, 1892.)

    1. Pabtnebshif—Dissolution.
    In an action for an accounting of a partnership and a judicial dissolution, it appeared that on the dissolution of the partnership there was no agreement by which either partner was to have exclusive liquidation of the firm affairs, and that both joined in so doing. Defend- nt testified, that by a “tacit understanding ’’ plaintiff was to be the liqu dator, but it appeared that he drew money from the bank, signing checks with the firm name and paying firm debts, authorizing a foreclosure suit and making affidavits in support of the firm's claim against the government. Held, that there was no agreement with regaid to liquidation by which one partner was to be sole liquidator to the exclusion of the other.

      2. Same—Accounting—Limitation.
    It appeared that the liquidation proceeded peaceably, and that there was a “ tacit understanding to postpone the final accounting until the defendant could be credited with the collections made in the due course of such liquidation.”. Held, that the statute of limitations did not begin to run on the right of plaintiff to an accounting at the dissolution of the firm, and the cause of action on the final accounting did not arise until defendant had been given credit for his share of the collections made, and his indebtedness thereon ascertained.
    Appeal from a judgment entered at a special term, declaring the dissolution of the partnership between the plaintiff and the defendant, and stating and settling the accounts between the parties, and decreeing payment of the balance found due to the plaintiff, with costs.

      Whitehead & Suydam (Charles 0. Suydam, of counsel), for app’lt;

      Burrill, Zabrislcie & Burrill (J. K Burrill and George Zabrislcie, of counsel), for resp’t.
   Barrett, J.

I confess that when this case was before us on the last appeal, 25 St. Rep., 622, I had grave doubts upon the facts, as they then appeared, with regard to the question of the statute of limitations, and I concurred in the affirmance of the judgment only because I felt bound by the opinion delivered upon the first appeal, 41 Hun, 524; 4 St. Rep., 43. It was, therefore, with but little surprise that I observed the reversal of the judgment in the court of appeals, 125 N. Y., 203; 34 St. Rep., 732, and upon perusing the opinion of that court, I noted that the reversal was upon the very point which had seemed to me to be the difficult one in the plaintiff’s case as it was then presented. I make these observations the more freely because, upon the record as it now comes up, my previous doubts are removed, and I feel satisfied that, upon the facts as found by the learned judge upon the trial now under review, his conclusion that the statute had not run against the plaintiff’s claim is entirely correct. The keynote of the case, as it was presented to us and to the court of appeals on the previous hearing, was that by the agreement of dissolution the plaintiff was made the liquidating partner; that by this agreement he became the authorized agent of the partnership; that, as such, it was his duty to collect and realize its assets; that the claim against the defendant was an asset, and that consequently it became the plaintiff’s duty to the creditors, as well as to himself, to collect it. The cause of action to reduce this asset to possession was held to be independent of the right to an adjustment of partnership affairs as between the partners themselves, even though an accounting to ascertain the precise amount of the asset, namely, the specific sum due to the partnership, might well be involved in the liquidator’s action. The cause of action for a judicial dissolution and adjustment of partnership affairs as between the partners themselves, and for a final accounting, with an appropriate money judgment thereon, may, indeed, accrue upon dissolution ; but whether it does or not' must, necessarily, depend upon the facts of each particular case. The right of the liquidator. however, to proceed against one, be he partner or ordinary debtor, who is liable to the firm accrues immediately upon dissolution. This latter liability of the defendant was treated as in the nature of an overdraft, for which he was liable without regard to the general right to an accounting. In fact, it was thought that the accounting could more properly be had after the restoration to the firm and to its depleted capital of the amount of this overdraft. This is clear from the language of the opinion:

“Granting,” said Finch, J., “that the defendant’s interest in profits could equitably reduce his overdraft, and that the amount of profits, and so his interest in them, would be affected by the total of debts and the soundness of assets, and yet his overdraft remained due instanter to the partnership, which he was liable at once to pay, which he ought at once to pay which the liquidating partner, as such, was entitled immediately to realize and receive.”

The fundamental error upon the trial then under review was the finding of fact with respect to the' agreement of dissolution, and the appointment thereby of plaintiff as sole liquidator. This error was the result of some loose and inaccurate expressions on the part of the plaintiff, when he was previously examined, to the effect that by agreement with his partner he was to liquidate the business of the firm. The finding which followed this testimony was not inconsistent with the framework of the complaint, and it was, therefore, fatal to a recovery. It is also true that the pre-. sent finding of fact, that there was no agreement with regard to liquidation, is entirely consistent, as we shall presently see, with both the letter and the scope of the complaint, and such finding is the truth of the case. This finding of fact, that there was no agreement by which either partner was to be sole liquidator to the exclusion of the other, is amply supported by the testimony. Indeed, the evidence on the subject was all one way. The plaintiff on the present trial testified to facts, that is, to what actually transpired, and not, as upon the previous trial, to mistaken conclusions or impressions.

He testified that there was no agreement by which he 'was to have exclusive liquidation of the business; none that he was to liquidate to the defendant’s exclusion; none that the defendant was to liquidate to his exclusion; and that, as matter of fact, they both went on, “each of them, liquidating the business.” And this was the literal truth, whatever the plaintiff may have inadvertently said upon any other occasion. It is borne out by the subsequent acts of the parties, and by facts as to which there could be no dispute. Even the "defendant claimed nothing more than a “tacit understanding ” that the plaintiff was to be the liquidator; an understanding, however, which was directly opposed to his own acts; for we find him, too, liquidating, drawing money from the bank, paying debts therewith, signing checks “ H. W. Gray & Co., in liquidation,” as late as September, 1874, authorizing a foreclosure suit in July, 1884, and making affidavits in support of a claim against the government in May, 1873, and July, 1875. The defendant testified that the assets “ were liquidated to a certain extent” by him “in settlement of the affairs of H. W. Gray& Co.,” and on being asked how these assets were liquidated, he replied, “By sale of the securities." He also testified that he drew a great many checks on the account of the firm on the Bank of Hew York for the liquidation of the business of H. W. Gray & Co., although he denies that he drew such checks as late as September, 1874. It is claimed that all this occurred while the plaintiff was absent in Europe, and was necessitated by such absence, but it clearly appears that several of the specified acts were done while the plaintiff was here, and as to the others, the defendant acted freely, and without apparent regard to any contract limitation upon his right. The finding of fact, therefore, to which we have referred, was in precise accord with the evidence on both sides, and it is conclusive of the main question; for, if such finding be just as consistent with the averments of the complaint as was the opposite finding made on the previous trial, then plainly the cause of action is not that of a liquidator seeking to compel payment of a sum due to the firm, but an ordinary action between partners (partners who, without question or disagreement, have been severally liquidating the affairs of the firm, and who have completed such liquidation), for a final adjustment of accounts as between themselves.

Let us analyze the complaint, and see precisely what it contemplates. In the first place, it contains no averment that the plaintiff was to be the liquidator of the firm’s business. There is, in fact, no averment at all upon the subject of liquidation. Nor is there even a distinct averment of dissolution, although that may be implied from the language used In the first paragraph the partnernership is set forth, and its terms are specified. This is admitted in the answer. In the second paragraph it is averred that, prior to the commencement of the action, and on or about the 1st day of July, 1884, there remained outstanding and unadjusted certain copartnership transactions connected with the firm; that said transactions have never been settled or wound up, and could not be until on or about the date last mentioned; and that said transactions involve assets of the copartnership to the amount of $15,000, of which no account has been taken or had. Here, it will be observed, a distinct issue is tendered as to the possibility of settling or winding up the copartnership transactions prior to the 1st day of July, 1884. How is this issue met? We have searched the defendant’s answer in vain for a denial. He does not even deny the allegation that the copartnership transactions were outstanding and unadjusted on the 1st day of July, 1884. The answer on this head reads as follows:

“ (7) And, further answering, this defendant denies that any of the copartnership transactions which belong to the said copartnership of H. W. Gray & Company were outstanding and unadjusted on or about the 1st day of July, 1884 ; but he says that if there were any such transactions outstanding and unadjusted they were and are the property of the plaintiff herein, and became his sole and separate property on or about the 21st day of October, 1872, when the said partnership was dissolved.”

This is really no denial at all. It is but a supplement to the allegation contained in the sixth paragraph of the answer:

“ That upon the dissolution of the said firm, as aforesaid, in October, 1872, the whole of the assets thereof became and was the property of the said H. W. Gray, as representing the capital he had contributed to the partnership.”

The allegation of the complaint is that on the 1st day of July, 1884, “there remained outstanding and unadjusted certain co-partnership transactions connected with said firm." The denial is that any of the copartnership transactions which belonged to the copartnership of H. W. Gray & Co. were outstanding and unadjusted at that time; in other words, they were outstanding and unadjusted, but they did not belong to the copartnership, because they became the sole and separate property of the plaintiff when the partnership was dissolved. Thus there is no specific denial of what is alleged, but rather an evasion of the averment. Words are imported into the averment for the purpose of denying it as thus modified. The effect is an admission of the fact averred, coupled with an affirmative allegation that whatever copartnership transactions remained unadjusted on the 1st day of July, 1884, belonged to the plaintiff, and not to H. W. Gray & Co. But as to the averment that these copartnership transactions have never been settled or wound up, and could not be until on or about July 1, 1884, there is not even a qualified denial. The only reference to this crucial averment which we find in the entire answer is at the close of the eleventh paragraph thereof, in these words:

“ And he says that there were no accounts and transactions of the said firm outstanding after the said date (October 21, 1872) which would prevent such an accounting as the plaintiff demands in his complaint herein.”

This is simply an averment of a conclusion of law. It is not a denial, general or specific, of the averment of the complaint; nor is it a statement of new matter constituting a defense. The effect of the pleading, therefore, is that it amounts to a plea of the statute of limitations as against the admitted averments of the com- % plaint, namely, the averments that copartnership transactions of which no account had ever been taken or had remained outstanding and unadjusted on the 1st day of July, 1884, and could not have been settled or wound up prior to that date ; in other words, that the statute ran against an accounting notwithstanding the impossibility of completing the liquidation prior to the specified date. Thus the defendant meets the issue of fact tendered by the complaint in substance by the tender of an issue of law; and that issue necessarily amounts to thisthat the statute ran from the date of dissolution under any and all circumstances, and without regard to the special facts pleaded, admitted, proved and found. This is an extreme view, to which no countenance is given by the court of appeals, and it is in direct opposition to the great weight of authority. Gray v. Green, 125 N. Y., 205; 34 St. Rep., 732, opinion of Finch, J. (see paragraph quoted by the learned judge at special term); Riddle v. Whitehill, 135 U. S., 637. And see, also, cases cited in 17 Amer. & Eng. Enc. Law, p. 1283, note 3; Wood, Lim. Act., 430, § 210; 2 Lindl. Partn. (Ewell’s Amer. Ed.), 964; and cases cited in the opinion delivered at special term.

We now come to the third averment of the complaint. Here the plaintiff avers, in substance, that the defendant has received more money from the partnership funds and assets than belonged to him ; that is, more than his proper share of such partnership funds and assets. The facts thus pleaded in the second and third paragraphs are followed in the fourth paragraph by an averment that “ no final adjustment of the business of said firm, or accounting between said parties as said partners, has been had.”

The averment is not denied. Instead of a denial, we find an affirmative statement that “ the business and affairs of the said partnership were settled and adjusted at the time of the dissolution thereof by the transfer of all the assets thereof to the plaintiff herein, to wit, at or about the 21st day of October, 1872,” a statement, we may say, which was concededly inaccurate. Here the defendant does not, as in the instance already discussed, import the affirmative statement into the plaintiff’s averment, and then deny the latter as modified. He completely ignores the latter averment, and plants himself upon the alleged transfer as furnishing a sufficient reason why the final adjustment has not been had. The prayer for such final adjustment and accounting and for a judicial dissolution follows. This complaint, because of the averments contained in the third paragraph, was treated upon the last appeal as sufficient to sustain the supposed liquidator’s cause of action. If the defendant had become possessed of and retained assets of the partnership in excess of his partnership interest (as averred in this third paragraph), the liquidator had a right, and, indeed, it was his duty, to collect it immediately upon dissolution. But, now that the theory of a special liquidator is eliminated from the case, this third averment becomes an aid merely to the other averments of the complaint, and amounts to nothing more than a general statement that, upon the final adjustment and accounting prayed for, the balance will be found to be in the plaintiff’s favor. What have we, then, in the absence of any agreement on the subject of liquidation, but a cause of action for the final adjustment of the partnership affairs, as between the partners themselves,upon allegations (admitted, proved and found) that the very transactions which are to be embraced in such final adjustment remained outstanding until a late period, and could not have been settled or wound up at an earlier period? We think, therefore, that the cause of action stated in the complaint is in harmony with the findings of fact as now presented, and that certainly the statute did not run against such a cause of action at the moment of dissolution.

The learned judge has also found certain facts which negative the idea of any disagreement between the parties at the time of the dissolution, or any differences respecting their rights. The fifth finding is as follows:

“ Fifth. Bach of said parties in the settlement and adjustment of the affairs of said copartnership has acted faithfully, and without unnecessary or inexcusable delay; and no complaint has at any time been made by either party of any want of diligence on the part of the other in closing up said affairs, and neither has requested or notified the other to wind up or settle the affairs in any other manner, or in any shorter or other time, than was employed in winding up and settling the same; and the assets of said firm could not have been collected or realized sooner than they have been.”

This indicates that the liquidation proceeded peaceably, and without question, and that there was a “tacit understanding” to postpone the final accounting, upon which the defendant’s liability should be ultimately stated and fixed, until he could be credited with the collections made in the due course of such liquidation. That, under these circumstances, the statute did not run at the date of dissolution is abundantly established by the reasoning of the learned judge at special term, and we can add nothing to what he has said upon that subject. And this reasoning is sustained not only by what was said by Finch, J., in the court of appeals in this case, but also by the precise language used by Chief Justice Fuller, in the supreme court of the United States, in Riddle v. Whitehill, supra. There are, however, one or two addi: tional facts disclosed by the record which, we think, fortify this position. It appears that the partnership was continued for several purposes after what is styled “ dissolution.” The general business of the firm was undoubtedly terminated, but its subsisting engagements called for and received continuous service. Thus the defendant tells us that when the business terminated the firm was carrying certain securities, upon which it was necessary for them to borrow money, and they did so. “ Such loans,” he testified, “ were made in the months of October, November, and December, 1872, and January, February, March, April, May, June, and even in August, 1873.” If they had not made these loans from time to time, it is apparent that they could not have carried the securities for their customers or for themselves, if they, or i either of them, were interested in the transactions ; and the continuance of such transactions is consistent with the defendant’s testimony that he believed profits were made after the dissolution.

But these continuous transactions were not the only ones which, as matter of.fact, called for the continuance of the firm. A single illustration will suffice on this head: One of the claims, the realization of which was necessarily postponed, was that against the government for the return of certain taxes illegally imposed. The learned counsel for the appellant, in an elaborate “ note ” upon the sixth page of his points, contends that this claim was not a partnerership asset at all, but that “ it was money which had been charged to the account of customers, for whom it had been paid, and to whom, if collected, it rightfully belonged.” The facts are that these customers were in the main the parties themselves, and, consequently, the collection was divisible under the partnership arrangement It is true, however, that a part of the claim rightfully belonged to outside customers, as pointed out by the learned counsel. But what does this establish, except that, so far as this part of the claim was concerned, the parties were still partners for the purpose of serving their customers and performing duties which they still assumed, and assumed quite properly ? The learned judge at special term has stated with clearness the rule, and has fortified the statement with abundant citation of authority, that where parties are proceeding amicably to wind up the business without judicial intervention, the firm continues to exist for the purpose •of collecting, settling up, and distributing its assets, and performing its antecedent engagements. It will be perceived that in the present case this general rule is supplemented by the fact that some of these antecedent engagements were continuous, and that the partnership duties to customers, apart from the ordinary duties of liquidation, lasted certainly until the 25th of August, 1875, when the claim against the government was realized.

It is suggested that an action for an accounting and settlement might have been brought upon the dissolution of the firm, and that a receiver might have wound up the business, and sold such claims as the defendant admits could not have been realized in due course until long afterwards. Without considering the question discussed by the learned judge at special term, as to whether the claim against the United States was saleable under § 1910 of the Code of Civil Procedure, read in connection with § 3477 of the United States Statutes, we need only say that the parties were not bound to sacrifice these contingent and doubtful claims. It was, indeed, their duty to nurse them, and to realize all they could upon them for the benefit of their customers or of their creditors, and they also had a right to do as much for themselves-when their customers were settled with. With what propriety, for instance, could either of these parties have rushed into a court of equity while they were carrying the securities already referred to after the dissolution; that is, from that time down to August, 1873? Would it have been a proper performance of duty to leave these securities to the tender care of a receiver, and to trust to his borrowing money, from time to time, under authority of the court, to save such securities from being sacrificed? And would it not, as against their customers, have been a downright breach of trust to permit a receiver to sell at auction so nebulous a claim, for instance, as that against the government? So, too, as to the claims against Dauchy and Neill. Dauchy gave the firm a mortgage upon land in Connecticut in which he had a vested remainder, subject to a life estate in his father; and the defendant actually authorized and requested a New York attorney to employ a Connecticut attorney to foreclose this mortgage as late as July, 1884. Neill had no immediate assets, but he had a contingent interest in real estate in this city, liable to be defeated by his death before his mother. These examples serve to suggest the reason for the rule stated by Finch, J., that the right to an accounting and settlement may accrue upon dissolution, and does accrue when “ some material necessity exists ” therefor, and no other fact or circumstance bars or postpones the remedy; all of which is another and more illustrative way of expressing the general principle, which runs through all the cases, that the statute does not necessarily run immediately upon dissolution, and that the question whether or not it does run must be determined upon the peculiar facts of each case.

It is also suggested that even in an action strictly between partners the receiver need not sell contingent and doubtful claims, but that these claims could be reserved, and the rights of the parties adjusted, upon such a winding up as might be presently possible, making proper provision, however, for the future division of what might ultimately be realized upon contingent or doubtfui claims. This suggestion, however, is based upon the former theory of the action. Of course, when it was found as a fact that the plaintiff was suing as a firm liquidator, and that the defendant owed the firm a specified sum, a cause of action for that specific sum, or for an accounting to ascertain such sum, was shown. The defendant, upon that theory, was bound to pay that specified sum (or whatever sum might be shown upon an accounting to be presently due) without regard to future credits. But, under the present findings, the question is not what he owed the firm, or was bound to make good to the liquidator at the moment of dissolution, but what, upon a final adjustment, he owed the plaintiff as a partner. That depended, as the learned judge has found, upon his net indebtedness to the firm, namely, his gross indebtedness according to the books, less his proportionate share of all future collections; and, consequently, his indebtedness to the plaintiff upon a final adjustment could not be ascertained or estimated until the assets had been realized. The learned judge has found that the defendant was entitled, as against the specific sum which he owed the firm, to be credited with one-fifth of all sums which might thereafter be collected and realized from the assets of the firm, and this finding is not excepted to. How, what is the force of this finding? The defendant was certainly not entitled to these credits as against a liquidator in a liquidator’s action ; that is, not presently entitled to such credits. He was bound in such an action to respond for. his gross indebtedness, and for his credits he had to await future collections. If, therefore, he is entitled' to such credits in this action, it is because of the character of the action, because, in truth, it is an action, not by an authorized agent of the firm to collect, an overdraft, but an action by one partner to compel his copartner to pay him the balance due upon the first day of July, 1884, the date specified in the complaint as that upon which, for the first time, the partnership transactions as between partners could be adjusted.

In addition to this finding, and in connection therewith, the learned judge has specifically found that (we quote the language) “ the amount of defendant’s indebtedness to the plaintiff depended upon the amount of his indebtedness to the firm, and could not be ascertained or-estimated until the assets of said firm were collected or realized, and defendant’s account with the firm had been adjusted; and defendant has claimed to be credited with his share of said assets when collected or realized.” This latter finding is excepted to, but the evidence in support of it is, as we have seen, overwhelming. The parties acted upon this view of the defendant’s rights; and their understanding, as it may be gathered from their acts and methods of liquidation, plainly was that neither party should be precipitate, and that the defendant should have the full benefit of all collections before any final accounting between the parties as partners should be required. The fact is that there was no difference or disagreement between the parties upon the dissolution. There was nothing to go into a court of equity about. There were then no charges or counter charges. They simply proceeded, each of them, with the liquidation, in the manner and upon the principles found by the learned judge at special term. The first nominal divergence occurred in 1880 and 1881, when the plaintiff demanded a settlement; but the real divergence occurred only when the liquidation was completed, and the hour for final adjustment, accounting' and money judgment thereupon had arrived. It was then that the defendant put in his answer in this action, and for the first time alleged that the business and affairs of the firm had been settled and adjusted at the date of the dissolution by the transfer of all the assets thereof to the plaintiff; an allegation, however, which conflicted with his own subsequent testimony, and which he has been compelled to abandon.

The learned counsel for the appellant does not dispute that the liquidation was peaceable, nor does he contend that there was any special cause for appealing to the courts, or, indeed, any cause whatever save the inherent right, which he insists always vests eo. instanti upon dissolution. But he does contend that the precise action could have been brought by the plaintiff at once. It is really difficult to appreciate the force of this contention, and especially difficult to comprehend the meaning of the statement which follows, and upon which the contention is founded, namely, that, if such an action as the present had been then brought, the allegations of the complaint and the prayer for relief would have been identically the same as they are now.

How could the plaintiff have alleged in October, 1872, that there remained outstanding and unadjusted copartnership transactions on the 1st day of July, 1884, and that these transactions had never been settled or wound up, and could not be until the date last mentioned ? And how could the plaintiff, in October, 1872, as a sequence to this last allegation, further allege that no final adjustment of the business or accounting between the parties as partners ” has been had ? But, apart from this, the statute did not necessarily run even against such a cause of action as that set forth in this complaint, omitting these impossible averments, for clearly the parties could postpone the ordinary remedy for a reasonable time, or until such remedy, because of some new fact or future circumstance, became needful. Our conclusion is that, upon the pleadings, the proofs and the findings, this case, in its true aspect, comes within the principle to which we have already adverted, and we think, therefore, upon its own special facts, the statute of limitations did not run at the time of dissolution, which was the 21st day of October, 1872, nor certainly between that date and the 5th day of August, 1874, which latter date preceded the commencement of this action by ten years. This conclusion is all that is necessary to sustain this judgment, although we have no doubt, upon all the facts, that the running of the statute was deferred at least during the continuance of the partnership for partnership purposes. But, further than this, upon both principle and authority, the partners could postpone the right to an accounting as between themselves until the business had been peaceably liquidated, to the end that all payments and receipts might be embraced in such accounting, and it might thus be final. No reasons occur to us for doubting that partners may do this if they please, and that they have done so in a given case may be implied from their acts in proceeding severally with the liquidation without antagonism, each, as here, giving the other assistance from time to time in effecting realizations, and without cause for seeking judicial aid. We think, therefore, that the real cause of action stated in the complaint and found by the learned judge upon ample evidence was a cause of action for a final accounting, which had by mutual consent been postponed until the defendant could receive credit for his share of all collections, and until his net indebtedness thereon could be ascertained, and this cause of action did not arise until the date specified in the complaint when the partnership transactions could finally be wound up, namely, “on or about the 1st day of July, 1884.”

The judgment should, therefore, be affirmed, with costs.

Yan Brunt, P. J., concurs.


source: Caselaw Access Project

author: Pryor, J.

license: Public Domain

text:
    James Ridgway, App'lt, v. William R. Grace et al., Resp'ts.

      (New York Common Pleas,

      General Term,

      Filed February 6, 1893.)

    1. Promise—Consideration.
    The detriment to the promisee which suffices as a consideration for a contract must he a detriment on entering into the contract, not from the breach of it.
    0. Same.
    A promise by a party holding a fund as agent, made without the authority of his principal, to pay out of the fund a debt of the principal, is not, without more, upheld by a sufficient consideration’to support an action by the promisee, although from reliance on the promise he suffers injury.
    3. Same—Statute of frauds.
    Such a promise is within the statute of frauds; and it so appearing on the face of the complaint, the defense is available, though not pleaded.
    Appeal from judgment on trial by the court.

      Ira Shafer, for app’lt;

      William L. Turner, for resp’ts.
   Pryor, J.

As the case does not purport to contain all the evidence, we are confined, on this appeal, to a review of errors of law by the trial court. Meislahn v. Engelhardt, 49 St. Rep., 714.

Stating the case in the aspect most favorable to the appellant, it is: That G. W. Smith & Co., having a judgment against J. P. O’Sullivan as drawer of an unaccepted bill of exchange, assigned the draft and judgment to the appellant; that the appellant applied to the respondents to reserve out of a fund of O’Sullivan, coming into their hands as his agents, sufficient money to pay the judgment, and they promised so to pay the judgment; that O’Sullivan never authorized them to make such promise or payment; that in conseqence of such promise appellant forebore any effort otherwise to collect the judgment; that respondents received the fund on account of O’Sullivan, but instead of paying the judgment out of it, appropriated it to O’Sullivan himself and to the satisfaction of their own claims against him. The question is, whether the respondents by their neglect to pay appellant’s judgment, violated his legal right ? Or more directly, was respondents’ promise to pay the judgment of any legal force or effect ?

That to the existence of a valid contract a consideration is indispensable is an elementary principle; and equally elementary in our law is the other proposition, that a moral obligation, not surviving an extinct legal duty, is not such a consideration as will support an assumpsit. A consideration is a thing of some benefit or legal possibility of benefit to the promisor, or a thing of some prejudice or legal possibility of prejudice to the promisee. Mow, it is obvious beyond the chance of mistake, that neither the engagement to pay the judgment nor its actual payment by the respondents could be of any possible benefit to them. It is answered, however, that the neglect of the appellant to pursue the judgment debtor in reliance on the promise of the respondents was such a detriment to him as constituted a legal consideration for their °promise. Assuming that because of such reliance appellant miscarried in the collection of the judgment, and still no legal consideration is apparent to uphold the promise of the respondents. For the prejudice which avails as a competent consideration for a promise “ must be a prejudice on entering into the contract, not a prejudice from the breach of it; ” Broom’s Comm. on the Common Law, 315-316 (3d ed.); Gerhard v. Bates, 2 E. & B., 487-8; Crowther v. Farrer, 15 Q. B., 677, 680. It is clear that since, in accepting the promise of the respondents, the appellant did not engage to abstain from any effort or to forego any means to collect the judgment, he incurred no detriment on entering into the agreement; and that whatever inconvenience or injury he has suffered ensued only from a breach of the agreement Manifestly, the violation of a gratuitous promise may result in the ruin of the promisee relying on it, e. g., to take up the note of a friend; and yet, though great the disappointment and disastrous the consequence to the promisee, he can assert no right of action for the breach of such an engagement. This, upon appellant’s testimony, is precisely the case at bar. Belying, as he says, on the voluntary promise of the respondents, he relinquishes all effort to collect his judgment, and, in consequence, it is an irretrievable loss to him; and yet he has to blame, not any erroneous conception of the law by the trial court, but only his own misplaced confidence. We may compassionate, but cannot .redress his grievance.

As already stated, the argument proceeds on a concession of the facts as claimed by the appellant; but it is due to the respondents to add that the learned trial judge finds their promise, in legal effect, conditional on the consent of O’Sullivan, which was never given ; and that the evidence justified the inference that Mr. Grace himself made no promise nor knew of any on his behalf.

It being clear beyond question that the promise at the bottom of this action was a mere gratuitous undertaking of no legal force or effect, the judgment for the respondents was the necessary conclusion of law.

We are of the opinion, furthermore, that the action cannot be maintained because founded on an oral promise to pay the debt of another. The argument, of Rapallo, J., in Ackley v. Parmenter, 98 N. Y., 425, 433, completely covers the case, and shows to demonstration that the statute of frauds is a defense to the action. If it be objected that the statute is not pleaded, we answer that it is apparent on the complaint that the promise was oral and collateral ; and so the defense is available though not pleaded. Porter v. Wormser, 94 N. Y., 431, 450; Wells v. Monihan, 129 N. Y., 161; 41 St. Rep., 409.

The plea of the statute of limitation presents a more difficult and doubtful question ; but, since the action fails for other fundamental defects, we are dispensed from the consideration of this-defense.

The claim that Smith & Co. assigned to appellant an interest in the fund in the hands of the respondents is invalid ; because Smith & Co. did not pretend to assign any such interest, and because they had no such interest to assign.

The ground upon which the learned trial judge placed his decision may also be fatal to the appeal, namely, that it being the duty of the respondents to pay the money over to their principal, O’Sullivan, any engagement between them and the appellant in fraud and defeat of that duty would be an illegal contract, and so not enforceable.

Judgment affirmed, with costs.

Daly, Ch. J., and Bookstaver, J., concur.


text:
    John H. Wright, Resp't, v. James A. Deering, Ex'r, App'lt.

      (New York Common Pleas,

      General Term,

      Filed February 6, 1893.)

    Bills and notes—Pleading.
    " A complaint on a note must allege nonpayment; but the absence of the averment will be supplied by unchallenged proof of the fact.
    Appeal from judgment of the general term of the city court affirming judgment on direction of a verdict.
    The opinion states the case.

      James A. Deering, for app’lt;

      James Taylor, for resp’t.
   Pryor, J.

Action on promissory notes by indorsee against maker. The complaint sets out the notes, alleges the making of them by the defendant, their, transfer to' the plaintiff and his ownership of them; but omits an averment of nonpayment or of indebtedness upon the notes.

Bv motion at the trial to dismiss the complaint for defect in substance, the defendant presented the point that it was insufficient for want of an allegation of nonpayment or present indebtedness. And so it was, beyond question.

Tested by the general rule that a complaint -must contain a statement of facts constituting a cause of action, the complaint under criticism was essentially defective in omitting an averment of nonpayment. “ The material allegations ” in an action on a promissory note “ are, the making, the transfer, and the nonpayment. Each of them is material, for without the concurrence of all the complaint would not show a cause of action.” Van Giesen v. Van Giesen, 10 N. Y., 316, 317 ; Lent v. R. R. Co., 42 St. Rep., 592, 595 (court of appeals); Witherhead v. Allen, 4 Abb. Ct. App. Dec., 634. Tested by the special rule in § 534 of the Code, the complaint is bad for not alleging an indebtedness on the notes. Broome v. Taylor, 76 N. Y., 564, 566; Lent v. R. R. Co., supra, 596.

As there is nothing in the answer to repair the defect in the complaint, we are to inquire if upon the unchallenged proof a cause of action appears.

By evidence without objection and uncontroverted, it is shown that repeated demands were made for payment of the notes, to which, on one occasion, the defendant responded by an offer of “ new notes.” This, in the absence of denial or explanation, was sufficient proof of nonpayment; and the defect in pleading being supplied by the evidence, we are not at liberty to review the refusal to dismiss the complaint. Lounsbury v. Purdy, 18 N. Y., 515.

Judgment affirmed, with costs.

Bookstaver and Bischoff, JJ., concur.


text:
    James D. Hallen, Resp't, v. William G. Jones et al., App'lts.

      (New York Common Pleas,

      General Term,

      Filed February 6, 1893.)

    Arrest—Action on undertaking
    An order, upon the consent of the parties, vacating an order of arrest, is not, without more, such a final decision against the right to the order of arrest as will support an action on the undertaking.
    Appeal from judgment of the general term of the city court affirming judgment on a verdict by direction of the court The opinion states the case.

      J. B. Berry, for app’lts;

      James D. Hallen, for resp’t.

       Reversing 48 St. Rep., 937.

   Pryor, J.

In an action by defendant Jones against the respondent an order of arrest issued, but was vacated by consent. Thereupon this action was brought against Jones and the sureties in his undertaking on the arrest; and from the judgment against them they prosecute the present appeal.

At the close of the case the defendants moved to dismiss the complaint, because of a defect of parties and insufficiency of proof; and to the denial of the motion they duly entered an exception. They are entitled, therefore, to the presumption that the lease contains all the evidence. Meislahn v. Engelhardt, 49 St. Rep., 714.

If there be a defect of parties it is apparent on the face of the complaint: and was waived by the failure to demur. Zabriskie v. Smith, 13 N. Y., 322; Maxwell v. Pratt, 24 Hun, 448.

In their zeal on the one side to establish, and on the other to invalidate, the proposition that the vacatur was a definitive determination against the order of arrest, the learned counsel overlook a -point decisive of the appeal; namely, that the order was vacated by consent

To the maintenance of the action it was incumbent upon the respondent to show a final decision against the right to the order of arrest. Code, § 559. The original action not having gone to judgment, he relied on the vacatur as involving such decision. But, the order vacating the order of arrest was entered by consent, and so is not a judicial determination that the plaintiff in the original action “ was not entitled to the order of arrest.” In the Apollinaris Co. v. Venable, 48 St. Rep., 848, the court of appeals say, that “ where the plaintiff ex parte and without the consent of the defendant enters ah order vacating the injunction and discontinuing the action, this is equivalent to an adjudication that the plaintiff was not entitled to the injunction ; ” but conversely, “ if the dissolution of the injunction and dismissal of the action proceed upon matter arising subsequent to the commencement of the action and having no relation to the merits.”

In the case before us neither was the action discontinued nor the vacatur ex parte, but the order was entered by common consent, and the action left depending. The order recites no other ground for vacating the arrest than “ the consent of the plaintiff’s attorneys,” and so, in the absence of explanation, demonstrates that it involved no judicial determination of the right to the order of arrest. Of a discontinuance by agreement between the parties, the court of appeals said: “ The action was never finally determined by judicial decision. * * * There was no judicial determination upon the merits of the action, or the rights of the plaintiff to the injunction order at the time when it was made.” And, adverting to cases cited contra, the court distinguishes them by the essential difference that, in none of them was the discontinuance a matter of agreement between the parties to the action.” Palmer v. Foley, 71 N. Y., 106, 111; Johnson v. Elwood, 82 id., 362, 365.

It appears by the papers upon which the plaintiff in the original action proposed to move to vacate the order of arrest, that it had been granted irregularly and in contempt of court. Thus, the consent to vacate may be an admission by the appellants, and the order of vacatur a decision by the court, that they were never entitled to the order of arrest; and if so, possibly the present action is well brought Palmer v. Foley, supra. And yet the appellants offered the papers in evidence, and they were excluded on objection from the respondent.

Judgment reversed and new trial ordered, costs to abide the event.

Bookstaveb and Bischoff, JJ., concur.


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    The Cochran Cotton Seed Oil Co., Resp't, v. Theodore Haebler et al., App'lts.

      (New York Common Pleas,

      General Term,

      Filed February 6, 1893.)

    Sale—Delivery.
    Upon a purchase of property abroad, to be delivered in the city of New York, the carrier is the seller's agent to make such delivery; but on the arrival of the goods at the carrier’s depot in the city, the carrier becomes the agent of the buyer to make actual delivery.
    Appeal from judgment of the general term of the city court, affirming judgment on a verdict directed by the court
    Action by vendor to recover the purchase price of fifty barrels of cotton seed oil, manufactured in South Carolina, and sold “ for October delivery in Hew York city.”
    Defense, no due delivery.

      Marshall P. Stafford, for app’lts;

      Robert B. Honeyman, for resp’t.

       Affirming 48 St. Rep., 33.

   Pryor, J.

We are of the opinion that the case was well decided by the court below.

The propositions are indisputable that, because of the plaintiff-vendor’s engagement to deliver the oil in Hew York city, the property did not pass until delivery; and that the carrier was the plaintiff’s agent to make the delivery. 2 Corbin’s Benjamin on Sales, § 1040; Magruder v. Gage, 33 Md., 344; 3 Am. Rep., 179; Hobart v. Littlefield, 13 R. I., 342 ; McNeal v. Braun, 53 N. J. Law, 617. But, upon the arrival of the oil in the city of Hew York, at the pier where the defendants knew the railroad company would discharge its freight, there was a delivery of the oil in conformity with the terms of the contract; and from that time forth the company became the agent of the defendants, and the plaintiff was absolved from all responsibility for its conduct. Pacific Iron Works v. The Long Island Railroad Co., 62 N. Y., 272. True, as contends the learned counsel for the appellants, in particulars the case varies from the one at bar; still, for the propositions in support of which it is cited, it is an explicit and decisive authority.

The oil arrived at the pier in the city of Hew York between four and five o’clock P. m., of the 31st October ; and as the plaint- - iff had to the last hour of the day within which to deliver, the delivery was seasonably made pursuant to the contract.

Our conclusion is that, as matter of law, the plaintiff performed I its agreement by due delivery ; but if a question of fact on the evidence, the parties consented, by motions for a verdict, that the judge should determine it, and we are not at liberty to review his decision.

Judgment affirmed, with costs.

Bookstaver and Bischoff, JJ., concur.


text:
    Charles Kummer, Resp't, v. The Christopher & Tenth Street Railroad Co., App'lt.

      (New York Common Pleas,

      General Term,

      Filed February 6, 1893.)

    Appeal—Judgment based upon fabricated case.
    It is tlie right and duty of the general term, on appeal from an order denying a new trial, to reverse the order when, in its opinion, upon the evidence, the case of the respondent is a fabrication.
    Appeal from judgment on a verdict, and from order denying a new trial.
    The opinion states the case.

      Merrill & Rogers, for app’lt;

      Herbert T. Ketcham, for resp’t.
   Pryor, J.

On appeal from an order denying a motion for a new trial, it is the right,, and for that matter the duty too, of the court at general term to review the evidence and to set aside the verdict if believed to be unsustained by credible proof and contrary to the justice of the case. Hamilton v. R. R. Co., 53 N. Y., 25, 30; Hynes v. McDermott, 7 Abb. N. C., 98; Engel v. Schoolherr, 12 Daly, 417. Otherwise there would be no relief from a judgment unaffected by legal error, though resting upon a verdict itself infirm from a defect of evidence satisfactory to the reason and conscience of the court. And, in view of the prevalent disposition of juries, in cases of personal injury, to award damages against corporations upon slight or equivocal evidence, we conceive it an imperative duty not to relax that supervision of their determinations which the law exacts of us in the interest of public justice.

The case before us is an instructive illustration, at once, of this reckless inclination on the part of juries, and of the necessity of the corrective power in the appellate tribunal.

Here is a judgment of $3,000 against the defendant corporation, and upon what evidence?

Two witnesses appeared for the plaintiff; he and his son. The plaintiff testified: “ Then he (the conductor) came back again and took me behind here, and threw me down behind the car. Before he did that he wanted me to pay the fare ; I had the. five cents in my hand, and wanted to hand the five cents, and he would not take it. Then he threw me down behind the car. I was standing on the platform crowded with passengers, and, after the car had stopped, the conductor came around and asked me for my fare, and when I offered it to him, without saying a word, he picked me up, lifted me out from the passengers, in front of my son, and threw me on the street * * * My son did not try to do anything ; there was nobody standing between me and my son. * * * There were other people on the platform. * * * I did not see anybody offer to pay his fare except myself at the time the driver threw me off; as far as I saw I was the only person who offered to pay his fare and yet I was the only person the driver assaulted. * * * I did not say anything to the driver except to pay my fare; he did not say anything to me, except to ask me to pay the fare ; * * * there had been no hard words between us.” The son testified: “He said, ‘Ain’t you going to pay your fare?’ with that my father says, ‘ I will pay my fare;’ he pulled out five cents, which he had in his hand. * * * So he caught hold of my father and threw him across the rail of the track. The only person who offered to pay his fare was the person whom the driver picked up and threw on the street. * * * Hone of the passengers gave me their card or their names; my father did not cry out; I did not cry out.”

Upon this story no motive whatsoever is apparent for the alleged assault by the driver. The fare was offered; why was it rejected, and the plaintiff assaulted? And why should this old man alone, of the many who refused or failed to pay their fare, be selected for ejection from the car? There had been no hard words between him and the driver; against him the driver had no cause of complaint; why then should he be assaulted without pretense of provocation, while the offending others were let go with impunity ? Then, too, neither the plaintiff nor his son made any outcry; but submitted to the outrage in silence. Hor did they appeal to the passengers to bear witness to the wrong; nor did the son, twenty-four years old, or any. passenger, offer to defend or to succor this outraged old man. The story is contrary to all probability; it is incredible. But still further to discredit it, if possible, it was shown without contradiction that, to the ambulance surgeon, who was called to take the plaintiff to the hospital, he said “ he had fallen and hurt his hip; I asked him several times subsequently, and he said he had fallen from the car; the plaintiff did not at any time, either then or while in the hospital, state to me that the driver or anybody had thrown him off from the car; he said he had fallen on his hip; he did not say at all, except he had fallen from the car on his hip.” The driver of the ambulance corroborates the surgeon, and adds: “ I heard him say in the hospital the same thing; he fell off the car, and he never said in any way to me, or in my presence, that anybody threw him off the car.” These, be it remarked, are absolutely disinterested witnesses ; the only disinterested witnesses in the case. They were not contradicted by the plaintiff; nor did he offer any explanation of his statements that he had fallen from the car, or of his omission to say that he had been thrown off. It is to be borne in mind, too, that not till the commencement of this action, after an interval of five months, does it appear that the plaintiff ever claimed to have been thrown from the car.

Here, then, we have a story which in itself baffles belief; which is supported only by persons with the profoundest interest in the litigation, and which is discredited by the plaintiff’s own contradictory statements when he was exempt from the influence of a suit for damages.

We are not unmindful that the credibility of a witness is peculiarly for determination by the jury ; but this is in case of conflicting testimonies, when to decide between the respective claims to credence significance is attached to the demeanor of the witnesses on the stand. Chaffee v. Morss, 67 Barb., 252. Here is no conflict between competing testimonies nor comparison of the bearing of opposing witnesses; but simply a question of the credence due to a story in itself improbable, and discredited, not only by the contrary statements of the witness, but by all the conceded circumstances of the case. Whether a statement be in itself incredible, and whether and how far it is exploded b}*the contradictory admissions of the witness, are problems which we are as competent to solve as the jury who tried the case. The question is not as to the credibility of the witnesses, but as to the credibility of the story.

The burden of proof was upon the plaintiff. A mere scintilla of evidence was not enough to establish his case; but he was bound to produce proof sufficient “ to reasonably satisfy the jury,” and upon which they could “ properly proceed to find a verdict.” Dwight v. Germania Ins. Co., 103 N. Y., 341, 359; 3 St. Rep., 115.

Upon the evidence, our undoubting conviction is, that the plaintiff's case was a fabrication, and that the verdict is against truth and justice.

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

Bookstaver and Bischoff, JJ., concur.


author: Prior, J.

text:
    Oscar Compton, Resp't, v. Norman T. M. Melliss, App'lt.

      (New York Common Pleas,

      General Term,

      Filed February 6, 1893.)

    Statute of frauds—Substitution of third person as purchaser.
    When, after a contract for the sale of personalty, the seller, buyer and a third person agree that such person shall become the purchaser instead of the original buyer, such substituted agreement is not within the statute of frauds as an engagement for the debt of another.
    Appeal from judgment of the general term of the city court, affirming judgment on verdict.
    The opinion states the case.

      Abram Kling, for app’lt;

      Hyland & Zabrishie, for resp’t.

       Affirming 46 St. Rep., 563.

   Prior, J.

We are asked to reverse the judgment because, as contended, the statute of frauds is fatal to the recovery; but how, upon the pleadings, can we give effect to the defense ? The action is for goods sold and delivered, the answer a denial only; and, thus, the defense being neither pleaded nor apparent on the complaint, is unavailable. Wells v. Monihan, 129 N. Y., 161; 41 St. Rep., 409; Porter v. Wormser, 94 N. Y., 431; Crane v. Powell, 46 St. Rep., 668. Nevertheless, the benefit of it was accorded to the appellant on the trial, and his defeat was due only^ to his failure to establish it. Out of abundant indulgence to him we have examined the record to ascertain if any error of law vitiates the verdict

The evidence was sufficient to show that the merchandise in question was sold and delivered to the Carr & Hobson Company; that the vendor, informed of the insolvency of the company, threatened to replevy the goods for fraud in the purchase; that thereupon the sale to the company was rescinded and the goods sold afresh to the defendant. By his charge, the learned trial judge presented the case to the jury upon the hypothesis of this predicament of fact; instructing them expressly that, unless they found that, with the consent of the company, the appellant made a new contract for the purchase of the goods himself, he would not be responsible. So directed, the jury must have found that the appellant became a substituted buyer instead of the original vendee, who was discharged from his obligation ; and this being the case, the engagement of the appellant was primary and absolute, not secondary and contingent. A contract of novation is not within the statute of frauds. Cox v. Weller, 6 Thomp. & C., 309. The authorities adduced by the appellant are inapplicable to the facts as found by the jury; and the exceptions are tenable only upon a theory of the case not submitted to their determination.

As the appeal is from the city court and the case does not purport to present all the evidence, we are precluded by a double difficulty from canvassing the evidence in support of the verdict.

Judgment affirmed, with costs.

Daly, Oh. J., and Bischoff, J., concur.


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    William P. Roome et al., Resp'ts, v. Frederick C. Jennings et al., App'lts.

      (New York Common Pleas,

      General Term,

      Filed February 6, 1893.)

    1. Deceit—When action fob, does not lie.
    A vendor who rescinds a contract of sale for fraud of the vendee and retains the property sold, cannot maintain an action for deceit against the vendee.
    2. Same.
    Fraud without damage is insufficient to support an action of deceit.
    Appeal from general term of the city court, affirming judgment on a verdict.
    The opinion states the case.

      James L, Bishop, for app’lts;

      F. A. Thomson, for resp’ts.

       Reversing 46 St. Rep., 894.

   Pryor, J.

It is impossible to sustain this judgment.

The pleading is peculiar, but in effect the action is by a vendor to recover damages for a fraudulent representation in the purchase of a chattel. The complaint states a cause of action for deceit and for nothing else; the case was tried as an action for deceit; and the argument on the appeal still treats the action as for deceit

But, the complaint alleges a rescission of the contract of sale by the plaintiffs, because of the defendant’s fraud; and, on the trial the rescission was established by uncontroverted and conclusive evidence. How, then, can plaintiffs maintain an action for fraud in the contract?

Such an action proceeds upon an affirmance of the contract; seeks damages for the fraud in its concoction ; and the measure of damage is the injury ensuing from the operation of the contract. On the other hand, the rescission of a contract annuls it ab initia, and places the parties in the positions they would have occupied if it had never existed.

Upon the discovery of fraud inducing a contract, the injured party has an election; namely, he may either rescind the contract or stand to it. If he rescind, he may assert his title to the property lost by the contract, and recover it by replevin or its value in trover. If .he affirm the contract, his only redress, as here, is an action or counterclaim for the damages sustained by reason of the fraud in its concoction. But he cannot do both ; he cannot affirm and disaffirm; he cannot repudiate the contract as rescinded and demand restitution of what he has lost, and, at the same time, treat it as subsisting, and recover the damages he has suffered by reason of it. When he reclaims what he lost by the fraudulent contract, he obtains in law complete reparation; or, if in fact this be not so, it is the effect of his own folly in not abiding by the contract and claiming compensation for the damage he sustained by incurring the obligation of the contract. An election once made between these alternative remedies is irrevocable; so that by rescinding the contract the party is precluded from recourse to any relief implying its continuing obligation.

These principles are elementary, and yet possibly it may not be amiss to recall some authorities in illustration of their effect. Degraw v. Elmore, 50 N. Y., 1, 3; Kinney v. Kiernan, 49 id., 164; Miller v. Barber, 66 id., 558, 564; Whitney v. Allaire, 4 Denio, 554; Masson v. Bovet, 1 id., 69; Lindsley v. Ferguson, 49 N. Y., 623, 625; Schiffer v. Dietz, 83 id., 300, 308; White v. Seaver, 25 Barb., 235, 241; Strong v. Strong, 102 N.Y., 69; Krumm v. Beach, 96 id., 398; Bowen v. Mandeville, 95 id., 237. “A party defrauded in a contract may stand by it, and recover damages resulting from the fraud; or he may rescind the contract and recover back what he has paid or sold." 5 Waits Actions & D., 515; 3 id., 454.

The fact is conceded that, upon the pretense of the fraud, the plaintiffs refused to deliver the property. The contract having been rescinded and the property retained by the plaintiffs, they are estopped by their election from maintaining an action against the defendants for fraud in .the purchase. Taussig v. Hart, 49 N. Y., 302.

Another insurmountable bar defeats the action, namely: that the fraud, if any, was of no damage to the plaintiffs.

The fraud alleged is, that the defendants induced the plaintiffs to contract by the false representation that the sale was to' another; whereas the purchase was by the defendants themselves. ■ It is not pretended that the goods could have been sold to another for a greater sum, and the defendants offered to pay the contract price; bow then were the plaintiffs damaged ? Indeed, it is inconceivable that a vendor induced to sell by fraud can sustain damage when he cancels fhe sale and retains the property, i. e., when he does not sell.

But, it is immemorial law that fraud without damage will not support an action. Taylor v. Guest, 58 N. Y., 262, 266; Wemple v. Hildreth, 10 Daly, 481, 484.

The judgment is probably untenable upon other grounds; but enough is already shown to require its reversal.

Judgment reversed and new trial ordered, costs to abide event.

Bookstaver and Bischoff, JJ., concur.


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    Henry Morgenthau et al., App'lts, v. Elizabeth H. Walker, Resp't.

      (New York Common Pleas,

      General Term,

      Filed February 6, 1893.)

    Witness—Credibility.
    The testimony oí a witness who is found to have intentionally sworn falsely on a material issue in the action, is of no legal force or effect as to another matter in respect of which he is contradicted and is not sustained by corroborative evidence; and a judgment resting on such testimony-alone will be reversed as wholly without evidence.
    Appeal from judgment and order of the general term of the city court, affirming judgment on dismissal of the complaint by the referee.
    The opinion states the case.

      Samson Lachman, for app’lts;

      Alexander Thain, for resp't.

       Reversing 48 St. Rep., 937.

   Pryor, J.

As brokers, the plaintiffs sue to recover an agreed commission for the sale of defendant’s property. The negotiation with the plaintiffs was conducted by the defendant’s husband; and the learned referee finds that he was duly authorized to sell the property and to employ plaintiffs for that purpose; that, in fact, he did employ them, and did promise to compensate them for the service. But the referee finds also, that the purchaser produced by the plaintiffs refused to accept defendant’s offer; and that, as a legal consequence, they were not entitled to judgment. Accordingly the complaint was dismissed on the merits.

Hence, the only question before this tribunal is, whether the record exhibits any evidence to support the referee’s finding; for, if there be such evidence, however unsatisfactory to us, we have no jurisdiction, as a court for the review of errors in law only, to disturb the judgment below.

Upon an attentive examination of the evidence, we are clearly of opinion that it was sufficient, if believed, to justify the finding that the terms of the defendant’s offer of sale were never accepted by the intending purchaser. Undoubtedly the plaintiffs produced cogent evidence of such acceptance; but, then, the witness Walker gave testimony to the contrary; and if he is to be credited, there was a conflict of evidence upon which the decision of the trial court is obligatory on us.

But, appellants contend that the testimony of Walker was of no legal force or effect, and for these reasons; that he was the husband of the defendant, and so a hostile witness whom they called from necessity; that his testimony was prevaricating and inconsistent with conceded facts; that it was contradicted by adverse evidence of cumulative and impressive character; and especially that, by the findings of the referee on other material issues, he was convicted of intentional false swearing. Nevertheless, however, if his evidence was of any legal value, the credibility of the witness and the truth of his testimony were still problems for solution by the trial court only, and after affirmance of its decision by the general term we are powerless to discredit the evidence.

Upon the application and effect of the maxim falsus in uno falsus in omnibus, the adjudications by the courts of this state are in irreconcilable conflict. Dunlop v. Patterson, 5 Cow., 243; Dunn v. People, 29 N. Y., 523; Lee v. Chadsey, 3 Keyes, 225; People v. Evans, 40 N. Y., 1; Pease v. Smith, 61 id., 477; Place v. Minster, 65 id., 89; Wilkins v. Earle, 44 id., 172; Butler v. Truslow, 55 Barb., 293; Brett v. Catlin, 47 id., 405; Warren v. Haight, 62 id., 490. In a subsequent case, Deering v. Metcalf, 74 N. Y., 501, an attempt was made to evolve from these discrepant rulings a consistent principle of decision, namely : “the fact that the testimony of a witness is shown to be untrue in some particular does not, as matter of law, where it is not made plain that the testimony was corruptly given, require his testimony, as to other matters, in which it is not contradicted, to be disregarded. A court of review, therefore, cannot, as matter of law, hold that a finding based solely upon such uncontradicted testimony is without evidence to sustain it.” The court then queries whether the rule would be different when it conclusively appeared that the witness was corruptly false in testimony which was contradicted. The precise point adjudged in the case was; that where a witness (defendant in the action), who had sworn to two items in an account, was believed by the referee as to one item and disbelieved as to the other in respect of which he was contradicted, it was not error in law to find the one item on his unsupported testimony. It will be observed, however, that the court conditions the credibility of the witness as to the fact found, upon the postulate that, as to that fact, his testimony was uncontradicted; whereas here the testimony of the witness as to the fact found was overborne by persuasive evidence to the contrary.

And not that alone. His testimony to the fact that the defendant's offer was not accepted, that an agreement to sell was not concluded, was inconsistent with the conceded facts that he permitted a formal contract to be drawn up in his presence, that he took it to the defendant for execution, and that he delivered the abstract of title to the plaintiffs with instructions to make the search and prepare the deed. Nor is this all. His testimony to the point is in conflict with an implied admission of the defendant, who, after the contract was shown her, rejected it by this note to plaintiffs: " I have decided not to sell the property. If you have incurred any expense, kindly send me the bill’’

Here is no repudiation of the terms of the contract; no rejection of the proposed purchase because not in accordance with her offer, but only because she had “ decided not to sell the property." Expressio unius exclusio dlterius. Placing her refusal to execute the contract solely upon the ground that she had concluded not to part with the property negatives the inference that the terms were not in conformity with her offer.

But still more destructive of the testimony in question is the finding of the referee upon other matters. In discredit of evidence by the witness directly to the contrary, the referee finds i that he had authority to sell the property, and to employ plaintiffs for the purpose; that he did employ the plaintiffs, and did agree to pay them, the commission. Now these were facts of which the witness, in the nature of things, must have been personally cognizant; so that, by necessary implication, the referee found him guilty of intentional false swearing.

It results, therefore, that the case is not within the rule enunciated by the court of appeals in Deering v. Metcalf. Nay more, the court expressly leave open the question whether the corrupt false swearing alone as to some matter would not, in law, totally invalidate the evidence of the witness; but here we have the added circumstances of discredit just recited. It is impossible to resist the conclusion that, upon the facts of the present case, the court of appeals would reject the testimony of the witness as of no legal value or efficacy.

It may be answered, however, that, upon the language of the court in its opinion, it was for the referee to determine whether the witness had intentionally sworn falsely; to which the obvious reply isthat the referee must have so found, for, to disbelieve a witness as to a fact of whiph he necessarily has personal lcnowl-. edge, and makes positive oath, is, beyond escape, to convict him of corrupt false swearing. But, even though we construe the findings of the referee as not convicting the witness of corrupt false swearing, still the court of appeals plainly intimate that if, in their judgment, such was the fact, they would not affirm a judgment resting upon his uncorroborated testimony.

From the most careful scrutiny of the evidence, it is our conviction that the judgment stands only on the contradicted and uncorroborated testimony of a witness conclusively shown to have intentionally sworn falsely as to material facts in the case.

Judgment reversed, and hew trial ordered, costs to abide the event.

Bookstaver and Bischoff, JJ., concur.


text:
    Joseph Naylor, App'lt, v. Frank McSwegan, Resp't.

      (New York Common Pleas, General Term,

      Filed February 6, 1893.)

    Warranty—Express agreement not necessary.
    It is not necessary to a warranty of chattels that there should he an express agreement oí warranty. A positive affirmation of quality or condition, as a fact and not an opinion, accepted and relied upon by the vendee as a warranty, suffices to constitute a warranty.
    Appeal from judgment on verdict, and. from order denying new trial.
    The opinion states the case.

      George W. McAdam, for app'lt;

      Johri S. Davenport, for resp’t.
   Pryor, J.

The action is upon a warranty in the sale of an elevator engine. In his charge the learned trial judge assumed the fact of the warranty and its terms as expressed in the instrument of sale ; and he submitted to the jury the issues of a breach and consequent damages. He did more. On the suggestion of plaintiff that the scope of the written warranty was subsequently enlarged by paroi, he left to the jury the question of a modification of the original agreement, and, if any, whether it was broken and what the damages. Upon sufficient evidence, the jury found all the issues in favor of the defendant; and we are concluded by the verdict as to the facts in litigation.

The question is whether the record exhibits error available for reversal of the judgment.

The appellant asserts an oral warranty prior to the written agreement; and he complains that the court excluded it from consideration by the jury. But, manifestly, the written proposal tendered by the defendant and accepted by the plaintiff contains the terms of a consummate contract, and so merges all previous parley between the parties. Chapin v. Dobson, 78 N. Y., 74, decides only that the rule forbidding paroi evidence does not apply “ where the original contract was verbal and entire and a part only was reduced to writing, nor to a collateral undertaking.’’ Here the instrument constitutes the contract of sale, and it embodies the reciprocal stipulations of the parties, including the warranty. In Brigg v. Hilton, 99 N. Y., 517, the paper was a mere memorandum, and not the contract itself. Our adjudication in Lamson Consolidated Co. v. Hartung, 46 St. Rep., 191, is conclusive of the question in controversy.

In relation to the alleged oral warranty subsequent to the written contract, the judge charged that “ if it were loose talk, mere representation without an agreement, it amounts to nothing and is not a guaranty. * * * In order to make this a proper guaranty, it was not necessary to have any express form of words, but it was necessary for the plaintiff to prove to your satisfaction that the defendant intended by what he said that this machine was ! to work as well as the other. * * * It is incumbent upon the plaintiff to show to your satisfaction that a warranty was agreed to between the parties, and not loose words. * * * If it did not, in your judgment, amount toan agreement, mere representation of what a thing will do is nothing, but it must amount to what, in your judgment, is an agreement between the parties.”

Due exceptions by appellant challenge the correctness of the law as thus propounded by the learned trial judge; and we are of the opinion that it is not in accordance with the rule laid down by the court of appeals in Hawkins v. Pemberton, 51 N. Y., 198, namely: “ In order to constitute a warranty upon a sale, it is not necessary that the representation should have been intended by the vendor as a warranty. If the representation is clear and positive, not a mere expression of opinion, and the vendee understands it as a warranty, and, relying upon it, purchases, the vendor cannot escape liability by claiming that he did not intend what his language declared.” To the same effect is Fairbank Canning Co. v. Metzger, 118 N. Y., 260; 28 St. Rep., 775.

In any event, though the language of the learned judge be not clearly in conflict with the authorities, yet is it still so misleading that we cannot doubt that its effect on the jury was prejudicial to the interests of justice.

Judgment reversed and new trial ordered, costs to abide the event.

Daly, Ch. J., and Bischoff, J., concur.


text:
    Frederick Haas, Resp't, v. Pietro Altieri, App'lt.

      (New York Common Pleas,

      General Term,

      Filed February 6, 1893.)

    1. Replevin—Estoppel.
    Where the drawer delivers a cheque to a third party upon his promise to deliver it to the person for whom it was intended, such party becomes a bailee for such person; and in replevin by such person for the cheque, such party is estopped to assert a right in himself to the cheque.
    2. Same—Pleading-.
    In replevin in the detinet a general denial puts in issue the property and the right of possession.
    Appeal from judgment of the general term of the city court affirming judgment on a verdict.
    The opinion gives the case.

      Franklin Pierce, for app’lt;

      Samuel Greenbaum, for resp’t.

       Affirming 47 St. Rep., 121.

   Pryor, J.

The action being replevin in the detinet, the general denial puts in issue as well the title of the plaintiff as the wrongful detention by the defendant. Griffin v. R. R. Co., 101 N. Y., 348; 1 St. Rep., 56.

It is not to be doubted that replevin lies for the possession of a cheque. Goshen Nat. Bank v. Bingham, 118 N. Y., 349; 28 St. Rep., 702; Barnett v. Selling, 70 N. Y., 492. It must beso, upon principle; since replevin may be brought for any personal chattel susceptible of description and seizure; and that a cheque is property is a self-evident proposition, equally with a note, or draft, or bill of lading. Nichols v. Mase, 94 N. Y., 160, held only that a lease in custodia legis is not the subject of replevin; and Barnett v. Selling, supra, that neither is a cheque “ paid and returned as a voucher to the maker.” It is inconceivable that value may be predicable of a cheque so irrecoverably extinct.

Tim real question in controversy is whether the plaintiff had such title to the cheque as would sustain the action.

It is elementary that to support replevin the plaintiff must have such an interest in the chattel as gives him the right of immediate possession. And the title must be a legal title, not a right enforceable only in equity. Pettibone v. Drakeford, 37 Hun, 628; Fulton v. Fulton, 48 Barb., 581; Deeley v. Dwight, 132 N. Y., 59; 43 St. Rep., 409.

What was plaintiff’s title to the cheque?

A thousand dollars was payable to plaintiff by Lovell. For this sum Lovell drew the cheque in controversy to the order of defendant’s firm and by them indorsed to plaintiff, and gave it to defendant for delivery to plaintiff. Instead of so delivering it, defendant erased the indorsement to plaintiff, and deposited it in his own bank. Meanwhile, however, discovering that defendant would not deliver the cheque to plaintiff, Lovell countermanded its payment. Upon this state of fact, why did not the legal title to the cheque vest in the plaintiff ? Lovell, the drawer, had passed it to defendant for delivery to the plaintiff, and the defendant, by his indorsement to plaintiff, had transferred to him the property with the right of possession. Thus Lovell had parted with the possession and dominion of the cheque, with the intent to transfer both to the plaintiff. Why was not this concurrence of act and intent sufficient and operative to vest title in the plaintiff? The answer is, first, that a delivery to plaintiff was indispensable to the transfer of title; and, secondly, that the erasure of the indorsement to plaintiff defeated that effect. But, the delivery was to defendant as a mere intermediary between Lovell and plaintiff, and so, in legal effect, the delivery to defendant was a delivery to plaintiff. Nor could the defendant, by a mere wrongful erasure of the indorsement, intercept the passage of the title to plaintiff, any more than by the destruction of the cheque he could accomplish that result. Such destruction, of itself, would have constituted a conversion.

But wherever, in fact, the title may have resided, the defendant was precluded from saying that it was not in the plaintiff.

The facts, as found by the jury under the charge were: That Lovell gave the cheque to the defendant as the property of the plaintiff and for delivery to the plaintiff; that the defendant accepted possession of the cheque as the property of the plaintiff and upon an express promise to deliver it to him. By what right could the defendant deny the title of the plaintiff and assert an adverse interest in himself? Upon every principle of estoppel he was precluded from assuming any such position. He took upon himself the character of bailee for the plaintiff; as such, was bound to deliver the cheque to the plaintiff; and by all authorities and the plainest principles he will not be heard to say, as against the plaintiff, that the cheque is his property, nor that he has any interest in it in hostility to the plaintiff’s title and right of possession. 41

For the purposes of the action, then, the title of the plaintiff was irrefragable.

But, it is urged that the stoppage of payment of the cheque made it valueless. Not so, however, since the stoppage was not against the plaintiff; and, at all events, he still had a right of recourse against the drawer.

As a ground of dismissal it was insisted that the return pendente lite of the cheque to Lovell sufficed to defeat the action; but in truth this was a substantive and independent wrong on the part of the defendant, and of itself subjected him to liability. It is fundamental that a right of action once vested can be extinguished only by release or satisfaction.

It is further contended that Lovell was the proper person to sue; but as owner of the cheque the plaintiff was the real party in interest

As to the point that the jury applied an erroneous rule of damages in allowing plaintiff the face value of the cheque, we answer that this is the prima facie measure of compensation, Booth v. Powers, 56 N. Y., 22; Western R. R. Co. v. Bayne, 75 N. Y., 1, and that defendant failed to reduce the apparent amount of recovery.

An examination of appellant’s exceptions to the charge and the evidence satisfies us that they are not of merit.

Judgment affirmed, with costs.

Daly, Gh. J., and Bischoff, J., concur.


author: Macomber, J.

text:
    Francis C. Lathrop, Resp't, v. Orator F. Woodward, App'lt.

      (Supreme Court, General Term, Fifth Department,

      Filed January 18, 1893.)

    Limitation—Payment.
    Defendant being indebted to plaintiff in 1882, paid half the amount and received the notes held by plaintiff, but the latter retained a life policy held by him as security until 1890 and paid the premiums thereon. It was not contradicted that defendant promised to pay the balance of the debt when able to do so. In 1890 plaintiff assigned the policy to defendant on his agreement to pay the amount paid for premiums and interest and to pay the balance of the debt in instalments and payment of the premiums and interest thereon. Seld, that the assignment of the policy was a sufficient consideration for the promise to pay the debt, although the statute had run against it, and that the payment made was sufficient to take the remaining half of the debt out of the operation of the statute.
    Appeal by the defendant, Orator F. Woodward, from a judgment of the supreme court, entered in Genesee county, February 18, 1892, on the report of a referee.

      TS. A.' Washburn, for app’lt;

      T. P. Heddon, for resp’t.
   Macomber, J.

— Upon evidence entirely satisfactory, the learned referee has found as a fact, that on the 24th day of July, 1882, the defendant was indebted to the plaintiff in the sum of $2,870.66, represented by four promissory notes, executed by the defendant, in all being $2,200, and certain cash items of moneys theretofore advanced by the plaintiff for the benefit of the defendant. On that day the defendant paid to the plaintiff one-half of such indebtedness; and thereupon the plaintiff surrendered the four notes, and executed and delivered to the defendant receipts acknowledging payment in full of the cash items. This payment and the return of the commercial paper to the defendant was made in pursuance of a compromise of the indebtedness owing by the defendant to the plaintiff. No other consideration for the return of the notes, or for giving the receipts, is shown in the case. At this time the plaintiff was the holder, by assignment, of a policy of life insurance upon the life of the defendant in the sum of $3,000, the policy being issued by the Mutual Life Insurance Company of New York. This assignment, though in form absolute, was in fact intended as collateral security for the payment by the defendant of his indebtedness to the plantiff.

The plaintiff testified that, at the time of this compromise, the defendant agreed to pay to the plaintiff the remaining fifty per cent, of his indebtedness when he should be able to do so. This testimony is not contradicted by the defendant. It throws much light upon the subsequent transactions of the parties, and, in our judgment, is quite decisive of the case upon the mooted questions of fact presented. It appears that the plaintiff did not surrender or reassign the life insurance policy to the defendant at the time of the compromise, but retained it till the 16th day of May, 1890, and continued to pay the premiums thereon down to that time, all of which was done with the full knowledge and consent of the defendant. At the last named date, the defendant requested the plaintiff to reassign the policy, and then promised that, if the plaintiff would do so, he would pay to the plaintiff the amount so advanced by him for premiums, with interest thereon, together with the unpaid balance of the original indebtedness; the amount of premiums and interest thereon to be paid at once, and the balance of the principal and interest of the original indebtedness in future instalments commencing in December, 1890, and continuing thereafter at the defendant's convenience, with interest thereon from the 16th day of May, 1890. Such is the case presented by the plaintiff’s evidence, and which was disputed by the defendant. But, in arriving at the' conclusion of fact in this regard, we think that the learned referee followed the directions given by the evidence. Many circumstances existed to show that the contention made by the plaintiff was the correct one, and that the defendant was in error in regard thereto. For instance, they both agree that, on the 16th day of May, 1890, the entire amount of interest was computed and ascertained on the one-half of the original indebtedness still unpaid, as well as upon the several premiums advanced by the plaintiff since the year 1882. At the request of the defendant the computations were put upon separate pieces of paper by the plaintiff and handed to the defendant; an entirely senseless proceeding had the defendant then been standing upon the claim now made by him in his answer, that there existed no indebtedness owing by him to the plaintiff which had accrued within six years next preceding the beginning of this action.

No part of this remaining indebtedness, aside from the premiums and interest thereon, having been paid, this action may, we think, under the circumstances stated, be maintained for the recovery of such unpaid balance. The true ground of such recovery is that, on and after the arrangement made on the 24th day of July, 1882, the parties did not regard their financial transactions as terminated. And the plaintiff, on the 16th day of May, 1890, holding the policy of life insurance, whether absolutely or collateral security for the indebtedness is an unimportant matter, had in his possession tangible property of value, and the surrender of this to the defendant was a good and sufficient consideration for the promise then made by the defendant to pay the remaining one-half of the original indebtedness, although the statute of limitations had passed against it.

Under the circumstances disclosed, we think that the contention of the defendant, that the sole consideration for the reassignment of the life policy by the plaintiff to him was the payment of the unpaid balance of premiums advanced by the plaintiff, and interest thereon, is untenable. The payment, therefore, of the sum of $481.50, on the 16th day of May, 1890, must be deemed to have been a payment upon the entire indebtedness owing by the defendant to the plaintiff, and was sufficient to take the remaining one-half of the original indebtedness existing in 1882 out of the operation of the statute of limitations.

It follows, therefore, that the judgment appealed from should be affirmed.

Judgment appealed from affirmed.

Dwight, P. J., and Lewis, J., concur.


author: Macombeb, J.

text:
    William P. Colvin, Resp't, v. The United States Mutual Accident Association, App'lt.

      (Supreme Court, General Term, Fifth Department,

      Filed January 18, 1893.)

    Insurance (Accident)—Reinstatement.
    A policy of accident insurance having lapsed for nonpayment of dues, the company notified the insured that if he would remit his check for a certain amount, with exchange, the company would reinstate him and carry the policy to September. The insured immediately mailed his check for the amount named, with exchange, and was injured the following day and before the check reached the company. Held, that the contract was complete on the mailing of the letter containing the check, and that the defendant was liable under the policy in respect to the injuries so sustained.
    Appeal by the defendant, The United States Mutual Accident Association of the city of New York, from a judgment of the supreme court, entered in Monroe county, July 21,1892, in favor of the plaintiff on the verdict of a jury at the circuit, directed by the court, and from an order denying the defendant’s motion fora new trial made upon the minutes of the court.

      M. W. Goolce,afor app’lt;

      Norris Bull, for resp’t.
   Macombeb, J.

The defendant, by its policy of insurance, on the 4th day of May, 1889, insured the plaintiff against personal bodily injuries which might be received through external, violent and accidental means, in the sum of twenty-five dollars per week, for a time not to exceed fifty-two consecutive weeks, provided such disability wholly disabled him from transacting any and every kind of business pertaining to his occupation, immediately and continuously after the receipt of such injuries. This policy lapsed July 20, 1889, through the omission of the insured to pay the dues or premiums required as a condition of its existence. But on the 5th day of August, 1889, the plaintiff received from the defendant a letter stating that though it had so lapsed on the day above mentioned, yet, if the plaintiff would remit to the defendant his check in the sum of four dollars, with exchange, the company would reinstate the plaintiff and carry his policy until September. In the same letter the plaintiff was requested to return to the defendant the same letter, with the check. At 11.30 o’clock in the evening of August 5th, the plaintiff duly mailed his check to the defendant, dated that day, drawn upon the Merchants’ Bank of Rochester, payable to the order of the secretary and manager of the defendant, in the sum of $4.15, being the amount of the sum demanded by the defendant for reinstating the plaintiff, together with fifteen cents exchange thereon. This check was received by the- defendant on August 7,1889, and was duly collected in the regular course of business, and the money has since been retained by the defendant. The injury to the plaintiff happened at two o’clock in the afternoon of August 6, 1889, while this remittance was on its way to New York by post.

The argument made by the learned counsel for the defendant is, that the deposit of the letter in the post-office at Rochester, on the night of August 5th, was not a payment, and that the plaintiff was not reinstated to membership in the defendant’s company until the actual receipt of such check, namely on the 7th day of August, 1889. If this contention be upheld, there can be no recovery in this case, because under one of the by-laws and regulations of the company to which the plaintiff subscribed, there could be no indemnity obtained against the defendant for injuries or loss of time sustained between the time of the forfeiture and the reinstatement of the member. But we do not deem the position taken by counsel tenable. The letter itself written by the defendant on the 5th day of August was not produced upon the trial. It had been returned by the plaintiff to the defendant in pursuance of the latter’s request. Hence, the defendant refusing to produce it, secondary evidence of its contents was given. The substance of the letter so given by oral testimony was as follows; “ Your certificate of such a number lapsed July 20th, and if you will remit us your check for four dollars, and exchange, we will reinstate you and carry your policy in force until some day in September.”

We think that the deposit in the post-office wa§in pursuance of the direction given by the letter, and was an acceptance by the plaintiff of the terms of the proposition made by the defendant for reinstatement The word 11 remit ” means to send back, and, in the absence of any specific direction as to the mode of sending the check, there would necessarily be implied a direction to send it in the usual way, namely, by mail. The contract as contained in this letter was not that upon the receipt and payment of the check the company would reinstate the plaintiff to membership but it was that if the plaintiff would remit to the defendant his cheek for four dollars, with exchange, such reinstatement should take place. He did remit it and he was thereby, in our judgment, effectively reinstated as a member. Ho further act by either party was required to complete the fact of remittance. The contract was complete upon the mailing of the letter containing the check, and hence for the injuries received while the letter was in transit, and before it reached the defendant, an action may be maintained. This doctrine is elementary as applied to contracts in general when made by mail. But for authority when applied to this particular description of contracts, see Tayloe v. Merchants’ Fire Ins. Co., 9 How., U. S., 390.

It follows that the judgment and order appealed from should be affirmed.

Judgment and order appealed from affirmed.

Dwight, P. J., and Lewis, J., concur.