author: McGrown, J.

text:
    Max E. Weiss, Resp’t, v. Morris Bloch et al., App’lts.

      (City Court of New York, General Term,

      Filed February 8, 1893.)

    Partnership — Sale .
    In an action for goods alleged to have been sold to a firm, one of the defendants denied all the allegations of the complaint except the partnership of defendants. The other partner, W., testified that he bought the goods for the firm, and was corroborated by plaintiff’s witness; while the answering defendant testified that he did not purchase the goods, but they were put in as a part of W.’s capital stock, and that there were no goods purchased to his knowledge of these people. Held, that W. as partner had full power to purchase goods for the firm, and upon such purchase the firm became liable therefor; and that the court properly directed a verdict for plaintiff.
    Appeal from a judgment in favor of the plaintiff, entered upon the verdict of a jury by direction of the court, and from an order denying defendant’s motion for a new trial.
    The exceptions taken on the trial to be heard in the first instance at the general term, by order of the trial justice.

      M. A. Vosburgh, for resp’t; Goldfogle & Cohn, for app’lts.
   McGrown, J.

The action was commenced to recover $228 for goods alleged to have been sold and delivered to the defendants, as co-partners, doing business under the firm name of “ Bloch & Wise," on or about the 1st day of November, 1891.

Defendant Bloch, in his answer, denied each and every allegation in the complaint, excepting that the defendants were co-partners on the day alleged in the complaint, November 1, 1891.

The defendant Wise appeared, but made default in pleading.

Plaintiff’s witness, Joseph H. White, testified to the sale and delivery of the goods in question to the defendant, Simon Wise, and that the reasonable value thereof was the sum of $228.

The defendant, Simon Wise, called as a witness on the part of the plaintiff, testified:

“ That he was a member of the late firm of Bloch & Wise, and that said firm purchased the goods in question a few days after the partnership was formed, and that he told defendant Bloch that he, Wise, had bought the goods and that Bloch said we could use the braid.’’

Defendant Bloch in substance testified that he did not purchase the goods, but that the goods in question were put in as part of his, AATise’s, capital stock, and testified that he saw the goods in defendants’ store.

No other evidence was offered on the part of the defendant.

The defendants’ counsel asked that the case be submitted to the jury on the fact as to whether the co-partnership firm purchased the goods.

The court directed a verdict in favor of the plaintiff for the amount claimed, two hundred and twenty-eight dollars ($228.)

There was no error committed by the trial justice in directing the verdict, as there was no question of fact to be submitted to the jury.

The defendant Wise testified that he purchased the goods for the firm, and his evidence was corroborated by the witness. White.

Defendant Bloch testified that “there were no goods whatever purchased to my knowledge after Wise went in there, by Wise or by me, from these people.”

Wise, the defendant, as a partner, had full power to purchase goods for the firm of Bloch & Wise, and, upon such purchase, said firm became liable therefor.

The judgment and order appealed from must be affirmed, with costs to the respondent.

Van Wyok and Fitzsimons, JJ., concur.


source: Caselaw Access Project

author: McGown, J.

license: Public Domain

text:
    John Keck, Resp’t, v. Henry Sandford, Pres’t of Adams Express Co., App’lt.

      (City Court of New York, General Term,

      Filed February 8, 1893.)

    Negligence — Fast driving.
    The mere fact that a defendant’s wagon was being driven fast is not sufficient to support a finding of negligence on his part, unless it was driven at an unlawful rate of speed, viz.: a rate forbidden by law or by ordinance.
    This action is brought to recover damages for personal injuries alleged to have been sustained by the plaintiff, by reason of defendant’s driver running into the wagon of plaintiff, and was heard before the court and a jury.
    The jury rendered their verdict for the plaintiff on the 25th day of October, 1892, for the sum of five hundred dollars ($500).
    Judgment was entered thereon on the 26th day of October, 1892.
    An order was entered denying defendant’s motion for a new trial.
    From said judgment and order defendant appeals.

      John Fennel, for resp’t; Seward, Guthrie & Morawetz, for app’lt.
   McGown, J.

After the testimony had been closed, and the trial justice had charged the jury, defendant’s counsel made the following request:

“ Defendant's counsel: I would like your honor to charge the jury that the fact that the driver of the express company was driving fast, as has been testified to in this case, is not sufficient of itself to establish negligence, and to charge the defendant with the consequence of negligence.
“The court: I decline so to charge.”

The request was to charge that driving “ fast, as testified to on the trial,” was not sufficient to establish negligence.

The only evidence on the trial as to the rate of speed defendant’s driver was driving is that of the plaintiff, who testified “that he, defendant’s driver, was driving fast”

Ernest Deltz, a witness on the part of the plaintiff, testified that “the Adams express wagon was'being driven so rapidly as to attract my attention.” And “ I do not think it took me a second to get up to him; he was going at a pretty fair gait. Running, it would, take me about eight seconds to get from my house, 84 to 78. At the time of the accident I was where 78 is, on the ground, on the sidewalk; the first thing I saw was this Adams express wagon going by me at 86 ; I went to 78 and stood and saw the accident, and then ran after the Adams express wagon and stopped at opposite 76; I am certain of it; will swear to that.”

And “ that the Adams express wagon was not going very fast.”

“ Q. And at the time he struck, Adams express wagon was being driven rapidly ? A. Yes.”

Defendant’s witness, Henry Carey, testified that “ the rate of speed at which the Adams express wagon was going was nothing extra,” and on cross-examination, that “ the express wagon was travelling, not anything slow, but at a fair gait, too.”

Defendant’s witness, Charles O’Rourke, the driver, testified: “ I was going up Stanton street at a pretty slow gait.”

Henry Manning, a witness for defendant, testified that “ the express wagon was not going fast at all, but on an ordinary trot.”

There was no evidence to show that defendant’s driver was driving at an unlawful rate of speed.

We think that it was error on the part of the trial justice in refusing to charge as requested, and that the request was a proper one, as it bore on a material question in the case, namely, the negligence of the defendant’s driver, as evidence was given on the part of plaintiff as to the rate of speed defendant’s wagon was being driven, and we cannot say whether it did or did not mislead, but such refusal may have misled the jury, upon that particular point; inasmuch, if they believed the testimony of the witnesses as to the rate of speed the wagon was being driven, as such might have affected the minds of the jury, and led them to bring in their verdict in favor of the plaintiff.

Even had the evidence been clear that defendant’s wagon was being driven fast, that fact alone was not sufficient to support any finding of negligence on the part of the defendant, unless the wagon had been driven at an unlawful rate of speed, a rate of speed forbidden by law, or ordinance, in which case there would be a presumption of negligence on the part of the driver.

In Crocker, etc., v. Knickerbocker Ice Company, 92 N. Y., 652, the evidence was that the driver was driving the team at “a lively trot,” the court say: “ It cannot be held, as matter of law or fact, that merely driving at the rate of speed stated, in the streets of a city, is negligence. Persons driving in the streets of a city are not limited to any particular rate of speed; they may drive slow or fast, but they must use proper care and prudence so as not to cause injury to other persons lawfully upon the streets.” There was no proof in this case, or, at least, not sufficient proof for submission to the jury, that the team was driven carelessly or that the driver was negligent.”

The judgment and order, herein appealed from, must be reversed, and a new trial ordered, with costs to the appellant to abide the event.

Van Wyck and Fitzsimons, JJ., concur.


author: Fitzsimons, J.

text:
    The Bradley & Currier Co., Limited, Resp’t, v. James J. Lally, App’lt.

      (City Court of New York, General Term,

      Filed February 8, 1893.)

    Composition — Fraud—Secret advantage.
    Plaintiff refused to sign a composition deed entered into by defendant with his creditors, unless it should receive a note for $500 in addition to the compromise sum fixed in the deed, and, upon so signing, received from defendant such note with notes for its percentage, without the knowledge or consent of the other creditors. Held, that such transaction was fraudulent and permeated the entire series of notes, and that none of them were valid or enforceable.
    Appeal from judgment in favor of plaintiff, entered upon verdict directed by the court.

      Theodore H. Friend, for app’lt; George F. Alexander, for resp’t.
   Fitzsimons, J.

The defendant, a builder, in January, 1891, being insolvent, entered into a composition deed with plaintiff and his other creditors, whereby they agreed to accept from him twenty-five per cent of their respective claims, to be paid by his promissory notes, at stated periods, and released him from the balance of their respective claims.

The defendant was indebted to plaintiff in the sum of $2,109.11 at the time plaintiff signed the composition deed, January 14, 1891.

It received from defendant in addition to the notes provided for in the composition deed a note for five hundred dollars, so that plaintiff received notes representing twenty-five per cent of its claim against defendant in accordance with and by virtue of the composition deed, and in addition thereto a note for five hundred dollars not within said deed, and which increased the per cent received by it in notes to forty-eight per cent of its claim.

The giving of the latter note was not known or consented to by the other creditors of defendant.

The notes given under the composition deed were three in number, each one being for $175.76; one was paid; this action is brought to recover upon the other two notes and the five hundred dollar note above mentioned.

Judgment was directed by the learned trial justice for plaintiff for the full amount claimed, with interest, $903.10.

The defendant at the trial testified that plaintiff refused to sign the composition deed unless the note for five hundred dollars was first given, which was done.

The plaintiff’s officers testified that defendant volunteered to give said note.

One of them testified that the note was executed and delivered just before the composition deed was signed by plaintiff; another officer said that it occurred just after the signing; but as I view the rule of law applicable to this case, it is entirely immaterial which statement is the true one.

The testimony of both plaintiff and defendant is to the effect that plaintiff would not sign the composition deed unless it received in addition to the compromise sum accepted by defendant’s creditors and fixed in the deed the five hundred dollar note in suit, thereby receiving a money benefit and advantage not accorded to or received by the balance of defendant’s creditors, and which was not known to them.

The dealings of plaintiff as above stated were unconscionable and the law stamps such acts as fraudulent.

In composite transactions a creditor who is party thereto is not permitted to make a secret reservation of part of his claim from the operation of the compromise or stipulation for a secret advantage over the other creditors.

The law exacts from all parties to a compromise the most scrupulous good faith.

It enforces a wholesome morality and inculcates the principles of honest and fair dealing by defeating any advantage attempted to be gained either by working upon the necessities of the debtor or by colluding with him. Almon v. Hamilton, 100 N. Y., 532.

In this case the plaintiff worked upon defendant’s necessities. It was one of his largest creditors.

It signed the deed after several other creditors had signed, and no doubt refused to do so unless the five hundred dollar note was first given.

Such a transaction was undoubtedly fraudulent, and affected, permeated and vitiated the whole transaction and all things done thereunder, so that not alone is the note for five hundred dollars not valid and enforcible against defendant, but because of the fraud related the other two notes given under the composition deed and unpaid, for one hundred and seventy-five 76-100 dollars each are tainted and corrupted by the fraud, and are also void, The Hanover National Bank v. Blake, 49 St. Rep., 433, so that the trial justice erred when he directed a verdict for the plaintiff.

Upon the testimony herein, it was his duty to have directed a verdict for the defendant.

It being apparent even from plaintiff’s testimony that it cannot hope to recover judgment herein a new trial would be useless.

The judgment appealed from is vacated, and judgment absolute for defendant ordered, with costs.

Van Wyck, J., concurs.


author: Van Wyck, J.

text:
    Erastus Crawford, Resp’t, v. Thomas M. Tyng, App’lt.

      (City Court of New York, General Term,

      Filed February 8, 1893.)

    Evidence — Opinion op appellate court.
    A counterclaim for professional services as attorney in the trial of an action for plaintiff and on appeals to the general term and court of appeals having been set up in an action on contract, the plaintiff claimed that such services were of no value because “ a lawyer who had the least skill could have decided that there was no defense ” to that action, and that defendant acted in bad faith in interposing a defense for him, and was permitted to read in evidence the opinion of the court of appeals in affirming the judgment, and to incorporate a large part of it in an hypothetical question to a witness. Held, reversible error.
    Appeal by defendant from judgment for plaintiff - entered on verdict of a jury, and from order denying new trial.

      Jacob Fromme, from resp’t; Alexander Thain, for app’lt.
   Van Wyck, J.

The plaintiff’s action is for the recovery of $1,000 on contract, and defendant counterclaims on contract for $1,000, the value of his professional services rendered as the attorney of record and counsel for this plaintiff in the action in the supreme court of Mayor, etc., v. Crawford, in which this plaintiff was the defendant. Defendant’s professional services were rendered at the trial of that case at circuit, the hearing on appeal at general term, and on the hearing of the final appeal in the court of appeals. The plaintiff’s most vigorous defenses at trial, to this counterclaim, were that the services were worth nothing because “ any lawyer who had the least skill could have decided that there was no defense ” to that action, and because this defendant “bad acted in bad faith ” in interposing a defense for this plaintiff in that action, and in continuing such defense on appeal first to the general term and then to the court of appeals, which affirmed the' judgment rendered at trial against Crawford.

The plaintiff, against defendant’s objection and exception, was allowed to substantiate these defenses to the counterclaim by reading in evidence the opinion of Judge Finch, of the court of appeals, upon the decision affirming the judgment in Mayor v. Crawford, and again,against the same objection and exception, his counsel was allowed to incorporate an extract of over 200 words from this same opinion into a hypothetical question put to a lawyer who was on the witness stand as an expert as to the value of services, and upon which he was asked to give his opinion as to the value of the services rendered by defendant. This opinion read in evidence, and the extract from the same incorporated into the hypothetical question, contained Judge Finch’s reasons for the decision, and these reasons as given in the opinion undoubtedly influenced the jury in the verdict returned against the defendant for the full amount claimed by plaintiff; and that they were so influenced it would seem to appear from the following extract of the record: “Defendant’s counsel: I ask you to charge that there is no evidence of bad faith on the part of Mr. Tyng in acting as counsel for Mr. Crawford. The court: I will leave that to the jury because of the opinion of the court of appeals. Defendant exce¡Dts. Defendant’s counsel: I ask your honor to charge, that the court of appeals make no suggestion of any bad faith on the part of counsel in defending the suit. The court: I will leave that to the jury. Defendant excepts.’’ This opinión, which was improperly admitted in evidence, is at best the declarations, secondary evidence, made by the court of its reasons for making the decision, and moreover, the judge writing an opinion in a given case is simply giving the reasons for his decision, and even if called as a witness will not be allowed to testify as to his reasons for reaching his decision, although he may be allowed, under certain circumstances, to testify as to what occurred before him; but the order or judgment entered on his opinion is the best evidence of the adjudication. The safest rule to follow is: That the whole record is the highest evidence of what the court decided and the record alone is binding, even if the opinion contains adverse expressions. Thus, if the opinion gives the best of reasons for holding with the plaintiff, but the judgment entered thereon is in favor of the defendant, it cannot be attacked collaterally and will ever remain as the highest evidence of the adjudication until it is vacated or reversed. The judgment and order appealed from are reversed and a new trial granted, with costs to appellant to abide the event.

McGown, J., concurs.


text:
    John P. Fogel, Resp’t, v. Samuel G. Derrickson, App’lt.

      (City Court of New York, General Term,

      Filed February 8, 1893.)

    Contract — Construction of.
    Defendant being engaged as attorney for one of the defendants in a foreclosure action, and wishing to be retained by the other defendants, engaged plaintiff to procure a retainer from such defendants, and executed a written contr ict, by which he agreed to pay him one-fourth of the compensation received by defendant which might accrue by reason of a surplus over and above a mortgage in said foreclosure action, naming the parties, and directing the referee to pay him said share. Thereafter defendant, on denial of a motion to have the land sold in parcels, obtained a stay of the foreclosure, and commenced partition, in which the lands were sold, and brought a large surplus. In an action to recover one-fourth of the compensation received by defendant, Held, that the contract applied only to the foreclosure action, and gave plaintiff no right to claim a part of any fee earned by defendant in any other action, and that the complaint should have been dismissed.
    Appeal from judgment in favor of plaintiff entered upon verdict.

      Henri Pressprich, for resp’t; Samuel G. Derrickson, for app’lt.
   Fitzsimons, J.

The heirs of one William Cooper, who died seized of certain real estate in Westchester county, New York, were parties defendant in a certain action brought to foreclose a mortgage which was a lien upon the real estate of said Cooper, deceased, Mitchell Valentine being plaintiff in said action.

The defendant herein, Derrickson, an attorney and counsellor at law, represented William C. Cooper, one of the defendants in the foreclosure suit, and wishing to be retained by the other defendants, he engaged the plaintiff to procure a retainer from such defendants in his, Derrickson’s, favor, and for that purpose entered into the following written contract with plaintiff:

“New York, February 13, 1891.
“ This is to certify that I, the undersigned, agree to pay the just and full one-fonrth of my compensation hereafter received from the heirs of William Cooper, deceased, with the exception of William C. Cooper, which may accrue by reason of a surplus over and above a mortgage indebtedness, and in an action wherein Mitchell Valentine is plaintiff, and Margaret Cooper and others are defendants, and I direct the referee therein to pay the same to the bearer, John P. Eogel, Esq., of No. 3369 Third avenue, in the city of New York, the said one-fourth of my share and charge the same to my account Excepting the said William 0. Cooper, whose one-fourth interest belongs to me absolutely, in which the said John P. Eogel does not participate therein; that the said John P. Eogel has rendered very valuable services in and to the estate of said Cooper, deceased, as well as to all of the heirs interested therein, and as a just recognition of such valuable services rendered I do hereby obligate myself as aforesaid.
“Samuel G-. Derrickson.
“ Signed in the presence of A. E. Colgan.”

The plaintiff, in pursuance of his employment under said agreement, procured the signatures of several of the defendants in said foreclosure action, in which they agreed to pay Derrickson for his services, as attorney therein, one-fourth of the surplus moneys realized upon the sale of the mortgaged premises after deducting all of the expenses, costs, etc., of said suit.

The foreclosure action proceeded to judgment. Derrickson applied to have the mortgaged premises divided into lots and sold in parcels, as it was conceded by the defendants in said action that that was the best way to sell the land, that if the same was sold in bulk it would probably realize no surplus over the mortgage debt of $8,000 and incidental costs and expenses.

Derrickson’s application was denied, and the property was ordered to be sold in bulk.

Derrickson then had the sale under the foreclosure suit stayed, and commenced an action in partition for the same heirs whose signatures the plaintiff had obtained in the foreclosure suit retaining defendant therein.

The "partition suit was pursued to judgment, and sale thereunder was had, the premises being sold in parcels as suggested by Derrickson in the foreclosure action. The land sold in this manner for between $16,000 and $17,000.

The plaintiff states that the defendant told him he had received his share, one-fourth of the surplus, amounting to $2,500, and this suit is for $625, under the written contract first mentioned. The jury rendered a verdict for plaintiff for $500.

The written contract upon which the plaintiff relies for his right to recover herein is clearly based upon and relates only and solely to a fee or percentage which the defendant would'receive out of any net surplus arising on the sale in the foreclosure action, and it limits any claim which plaintiff may have against defendant under their agreement to the fee obtained by defendant for his services in such suit

Said agreement is not general in its terms; it does not invest in plaintiff a right to claim a part of any fee earned by defendant in any other action or proceeding.

Plaintiff’s claim against defendant is limited to the fee received by him from the sale in the partition action, which was not even thought of at the time of the execution of the agreement herein sued upon, and to sustain a recovery is, in my opinion, to make and create for the parties a contract never contemplated by them.

This action, if exercised by us, would be wrong and a usurpation of power, and not a function or privilege of ours.

Courts cannot make contracts for litigants; they can only construe and interpret contracts made by the litigants themselves.

As it is conceded that the defendant only received out of the foreclosure action $150, no part of which the plaintiff is entitled to, and that all the other moneys received came out of the sale in the partition suit, I believe that defendant’s motion to dismiss the complaint herein should have been granted, and that it was error for the trial justice to refuse to do so.

The judgment must, therefore, be set aside and the complaint •dismissed, with costs.

McGown, J., concurs.


text:
    William H. Lee et al., App’lts, v. Meyer Corn, Impl’d, Resp't.

      (City Court of New York, General Term,

      Filed February 8, 1893.)

    1. Arrest — Fraud.
    Where the allegations of fraud in plaintiffs’ papers are such that they will hear an interpretation consistent with defendant’s innocence, the arrest will be set aside for the insufficiency of plaintiffs’ papers.
    3. Same — Bar.
    A prior judgment for the price of goods sold is a bar to an action to recover damages for fraudulently inducing said sale, notwithstanding the fact that the fraud is discovered after the recovery of the prior judgment.
    Appeal by plaintiffs from the order vacating order of arrest.

      J. B. Marshall, for app’lts; Paul Wilcox, for resp’ts.
   Van Wyck, J.

This appeal is by Lee, Tweedy & Co., plaintiffs, from the order vacating an order of arrest granted October 5, A892, upon the affidavits of James Morris and Louis J. D’Auby, two of their employes, against Meyer Corn, one of the defendant co-partners, upon the ground that he, by false and fraudulent representations, induced plaintiffs to sell to his firm goods of the value of $1,024.19. The defendant, Corn, moved to vacate upon two grounds: 1. On the insufficiency of plaintiffs’ papers. 2. On affidavits showing that on June 11, 1892, in an action then pending in the supreme court these plaintiffs entered final judgment, still in force, against these defendants for the value of these same goods and in the very sum of $1,024.19. Now as to the first ground of objection, Morris in his affidavit avers that defendant, Corn, while he was negotiating with deponent for the purchase of the goods from Lee, Tweedy & Co., for Corn, Kaliske & Co., among other things, he made the following false and fraudulent statement as to the credit and financial standing of the firm of Corn, Kaliske' & Go. “ Owed other borrowed mone), $-none.”" That relying upon said statement and the truth thereof, and believing that said defendant’s firm owed, all told, for merchandise $27,500, to two banks $25,000 and that they owed no other borrowed money, as stated, deponent, for the firm of Lee, Tweedy & Co., sold and delivered to defendants between the 1st day of March and the 1st day of July, 1892, goods, wares and merchandise of the value of $1,024.19. That in truth and in fact deponent is informed and believes at the time that this statement was made defendants’ firm were owing for other borrowed money from ten to thirty-five thousand dollars, which indebtedness was in favor of Heyman Yogcl and Henry Vogel; * * * and that the sources of deponent’s information and the grounds of his belief as to the falsity of the statement made by Meyer Corn, as .aforesaid, are contained in the affidavit of Louis J. D’Auby, which said affidavit is hereto attached and made part of the moving papers herein.”

The only express averment in Morris’ affidavit of a positive statement made by defendant Corn is, that he stated that his firm “ owed other borrowed money, $- none.” However the affidavit says that Corn made this statement “ among other things,” but does not specify what these “ other things ” were. It is true that deponent says that he believed “ that said defendants’ firm owed, all told, for merchandise, $27,500, and to two banks, $25,000,” but he does not aver that Corn said that his firm owed, all told, for merchandise, $27,500, and to two banks, $25,000, and hence Be states no facts as the foundation of such belief on his part. But assuming only for argument that the averment had been that Corn stated that his firm owed, all told, for merchandise, $27,500, and to two banks, $25,000, and that they owed no other borrowed money, what positive proof is there that this statement was false ? Morris avers that Be is informed and believes that this statement was false, and that defendants’ firm, at the time this statement was made, were owing for other borrowed money from $10,000 to $35,000, which indebtedness was in favor of Heyman Vogel and Henry Vogel, but he further avers that the sources of bis information and the grounds of his belief in this regard are contained in the annexed affidavit of D’Auby, and hence in this later affidavit must be sought and found proof of the falsity of Corn’s assumed statement And D’Auby’s affidavit is in full as follows: “ That he was present in the special term of the city court, on 30th day of September, 1892, when Meyer Corn,, one of the defendants herein, testified in supplementary proceedings in which Julius Franklin and others were plaintiffs, and Meyer Corn and others were defendants, as follows:

Q. As near as you can tell, what is the largest sum your firm owed at any one time to Heyman Vogel? A. Between $40,000' and $50,000; the smallest sum was $10,000; I suppose firm was never out of his debt until confession of judgment was given.

Q As near as you can tell, what was the largest sum owed to Henry Vogel at any one time ? A. About $25,000. Smallest sum about $10,000.

Q. How long was your firm indebted to Henry Vogel in the sum of $10,000 or more ? A. Since shortly after the organization of defendants’ firm. And in all the foregoing no proof appears that this indebtedness of Corn’s firm to either Hey man or Henry Vogel was for money borrowed by his firm, and viewing the same in the most favorable light to plaintiffs’ contention as regards the amounts due from Corn’s firm to Hey man and Henry Vogel on March 27 and April 6, 1892, the days upon which the statements were made by Corn to plaintiffs’ employe, Morris, proof can only be seen of an indebtedness by Corn’s firm of $10,000 each to Heyman and Henry Vogel, and for all that appears in proof these two sums may have been owing for merchandise and may have been a part of the $27,500, which Morris says he believed was owing by Corn’s firm for merchandise. Thus is reached the conclusion that plaintiffs’ papers were insufficient to sustain the order of arrest. As to defendants’ second ground of objection against the continuance of the order of arrest, it would seem that it was plaintiffs’ duty as soon as they obtained knowledge that defendant was guilty of fraud in contracting or incurring the liability to first discontinue their supreme court action, in which the judgment had been obtained against the defendants for the purchase price of the goods, and then to commence this action upon the complaint alleging the fraud of defendant in contracting the liability for the purchase price of the goods. If a suit be discontinued at any stage, and the judgment vacated, then the adjudication therein concludes no one, and it is not an estoppel or bar in any sense.

The order appealed from is affirmed, with costs.

McGown and Fitzsimons, JJ., concur.


text:
    The United Building & Loan Bank, Resp’t, v. Frederick Bartlett, App’lt.

      (City Court of New York, General Term,

      Filed February 9, 1893.)

    Bill of Particulars — Inability to give.
    Where the defendant positively swears that he is unable to give the particulars called for, and the plaintiff does not show that defendant can give the information, a bill of particulars should not be ordered.
    Appeal from an order made on the 9 th day of December, A. D., 1892, requiring defendant to serve a further and additional bill of particulars.

      David Leventritt, for resp’t; Lardner & McAdam, for app’lt.
   McGown, J.

The complaint alleges that between and inclusive of the months of March and December, 1891, the plaintiff paid over to the defendant, and the defendant received and obtained from the plaintiff, the sum of three hundred and thirty-eight dollars and seventy-five cents ($388.75), which the defendant agreed to devote to, and to use in, the payment and discharge of certain expenses in the conduct of the business of the plaintiff, as the same might during said period accrue.

That the defendant, in violation of said agreement, did not devote said money, or use the same, or devote or use any part thereof, in the payment of any of the said expenses, but, on the contrary, he converted and appropriated the same to his use.

Also alleges demand, before the commencement of the action, made upon defendant to refund and repay same, and the neglect and refusal so to do, and that defendant has reserved and ap- * propriated the said sum to his own use, to plaintiff’s damage of three hundred and thirty-eight dollars and seventy-five cents ($338.75), for which amount it demands judgment.

The defendant, in his answer, denies the conversion, and denies that he has reserved and appropriated the said . sum for his own use; and admits the demand and his refusal to refund and repay same to the plaintiff, and alleges that he was appointed cashier of the said plaintiff, and was authorized to expend, out of the moneys to be furnished him, the sum of ten dollars ($10) in each and every week, for the expenses of, and attendance at, the office of the plaintiff; also, that during the time mentioned in plaintiff’s complaint plaintiff paid to him, as such cashier, for the purpose aforesaid, divers sums of money, amounting to said sum of three hundred and thirty-eight dollars and seventy-five cents ($338.75); that the same was, thereafter, and from week to week, during the time aforesaid, wholly paid out and expended by him for the purpose for which the same was furnished to him as aforesaid.

On or about November 19, 1892, in pursuance of a demand made by plaintiff’s attorney, defendant served upon said plaintiff’s attorney a bill of particulars (verified) of moneys expended by him as follows:

To paid to O. M. Muren, Esq., each week from March 23, 1891, to and including September 19,1891, for his salary and his disbursements, for postage, express charges, advertising and incidental expenses in the plaintiff’s business, the sum often ($10) dollars, in all, twenty-six payments of ten dollars each............ $260 00

To retained by F. A. Bartlett, this defendant, to him, for postage and for bis attendance at the office of the bank from September 19, 1891, to November 14, 1891......................................... '78 75

And for such labor and services.................... 200 00

On a motion made for a further and additional bill of particulars, and on an affidavit made by Hiram R. Hulse, the secretary of the plaintiff corporation, and upon the complaint, answer and reply herein, in support of said motion, and the affidavit of the defendant in opposition thereto, an order was made on the 9th day of December, 1892, and it was ordered, “ That the said motion be, and the same is hereby granted-, and the defendant is hereby ordered ‘and required * * * to furnish * * * a further and additional bill of particulars herein, m which bill of particulars shall be separately stated how much money was by the defendant paid to, or is claimed by the defendant to have been paid to, Gh M. Muren, Esq., for the salary of the said Muren in each week from the 23d day of March, 1891, to and including the 19th day of September, 1891, and separately how much was by the defendant paid to, or is by him claimed to have been paid by him in each week during said period to said Muren for the disbursements of said Muren, particularly setting forth separately each payment to said Muren for postage, express charges, advertising and incidental expenses, and specifically of what such incidental expenses consisted of, stating the amount of each separately, and giving the dates respectively of each of the twenty-six payments referred to in the first paragraph of the bill of particulars heretofore served herein.

“ And further, in which additional bill of particulars shall be stated separately, what sums the defendant retained for postage and incidental expenses, and of what said incidental expenses consisted, stating the amounts of each separately, and the dates respectively when the defendant retained each and all of said sums for postage and incidental expenses.

“And that on failure to furnish such further bill of particulars, he be precluded from giving upon the trial evidence of any matters contained in paragraph third of his answer, relating to payments of expenditures of the said sum of $338.75.”

From this order defendant appeals.

Defendant in his affidavit avers, that on or about February 3, 1891, he “ was appointed day officer or cashier of the plaintiff. That at a meeting of the plaintiff * * * on or about the 21st day of March, 1891, * * * it was,

“ Resolved that, the day officer be authorized to expend the sum of ten dollars per week, for the necessary expenses, attendance at and in the business of the office of the bank.”

That immediately thereafter, defendant, with the approval of the plaintiff, employed Mr. Muren; that he was employed during the times mentioned in his answer and in his bill of particulars.

That he “ understood said resolution to mean * * * * that the said sum of ten dollars had been appropriated to be paid each week for the clerk hire and incidental expenses of the plaintiff.”

That defendant, therefore, agreed upon no fixed salary to be paid to the said Mr. Muren, but arranging with Mr. Muren, that whatever remained of the ten dollars after paying for postage, ex-pressage and advertisements, and other incidental expenses of the office, should be retained by Mr. Muren as his compensation for his services; that deponent kept no account of such incidental expenses, but each week during the time that Mr. Muren was so employed by him, he paid Mr. Muren ten dollars and charged the same ten dollars to office expenses. “ That he is unable to give any itemized account of the incidental expenses of the plaintiff’s office during that time.”

That Muren left plaintiff’s employ on or about the 19th day of September, 1891. That from that date to the 14th day of, November, 1891, this deponent received the ten dollar weekly allowance from the plaintiff, paid the various incidental expenses of the office of the bank, and retained the balance, as he verily believed he was empowered by such resolution, and had a right to do.

“ That deponent kept no itemized statement of said incidental expenses. * * * That doponent is, therefore, unable to give an itemized statement of such incidental expenses during the period he was alone in the office.”

The complaint, paragraph 3, alleges conversion on the part of the defendant of the said sum of three hundred and thirty-eight dollars and seventy-five cents ($338.75).

The answer specifically denies the conversion.

Defendant’s inability to give the bill of particulars required by the order, at folios 10, 11 and 12, is positively sworn to by defendant in his affidavit at pages 12 and 13, and not contradicted by the plaintiff, and plaintiff does not in any manner show that the defendant can give the information-.

The law will not compel a party to do an impossible thing; to do that which he cannot do.

Should the order appealed from remain in force, then by reason of his inability to comply with the order he is precluded from giving any evidence whatever to sustain his defense as set up in his answer, or in defense to a charge of conversion, on which he can be subjected to imprisonment

If the defendant cannot give a more particularized bill than he has already given, then it certainly would not be in furtherance of justice to deprive him of his defense, and refuse him a hearing, when the case is brought on for trial.

The ordering of a bill of particulars is in the discretion of the court

It must be a sound discretion, and in furtherance of justice, and within the application of legal principles.

In Butler v. Mann, 9 Abbott’s New Cases, 50, Ingalls, J., says: “ The power to direct a bill of particulars thus conferred should be prudently employed. * * * This statute, if judicially enforced, will be of great value, otherwise it will prove mischievous and oppressive.” ,

In Ammidown v. The Century Rubber Co., 59 Superior Court, 460; 39 St. Rep., 350, the facts were almost identical with the case at bar. McAdam, J., in his opinion, at page 469, says:

“The rubber company, by the affidavit of its treasurer, proves this in effect, when he swears that ‘ he is utterly unable to furnish any particulars in the matter further than he has already furnished ; that he has made a thorough examination of his books, but he is not able to add anything to what the bills of particulars already served contain.’
“ If the rubber company cannot give a more particularized bill than it has already given, it is certainly not in furtherance of justice to strike out its defense, and refuse a hearing when the action is called for trial.

The law never requires a party to do an impossible thing, under the penalty of being denied a hearing in defense of its right to liberty or property.

For the reasons above stated, the order appealed from should be reversed, with costs to the appellant to abide the event Van Wyok and Fitzsimons, JJ., concur.


text:
    Charles R. Strebell, Resp’t, v. The J. H. Furber Co. Impl’d, App’lt.

      (City Court of New York, General Term,

      Filed February 9, 1893.)

    Contract — Answer—Bill of particulars.
    An answer in an action upon a building contract, which denies that plaintiff fully performed his contract “but, on the contrary thereof, alleges that he did not perform said contract in this, that he did not furnish and put up “ certain parts, “as required by the terms of said contract,” amounts simply to a general denial of full performance, and the case is not one for a bill of particulars.
    Appeal from an order made December 2, 1892, requiring the defendant, J. H. Furber Co., to furnish a bill of particulars.

      Charles A. Leavitt, for app’lt; Bartlett, Wilson & Hayden, for resp’t.
   McGown, J.

This action was brought to recover a judgment against defendants for the sum of fifty dollars balance alleged to be due on a contract made between the defendant, J. H. Furber Co., and the plaintiff, dated March 29, 1892, whereby plaintiff agreed to do all the mason work, brick work, stone work, plastering, fire proof partitions and iron work, and to furnish the materials necessary thereto, except bridle irons on the rear window guards of the first floor, in building No. 46 Baxter street, for the sum of $2,600, on which the sum of $2,550 has been paid as alleged, and also to recover the sum of $180 for extra work.

Plaintiff in the fifth paragraph of his complaint alleges:

“ That he has fully performed his contract,” and demands judg-, ment for the sum of $230 and interest.

Defendant J. H. Furber Co., in its answer, admits the making of a written contract on the 29th day of March, 1892, and in the third paragraph of its first separate defense of its answer:

It denies that the plaintiff fully performed his said contract * * * but on the contrary thereof, alleges that he did not perform said contract in this, that he did not furnish and put up fire escapes or furnish the brick work, or the plastering, nor did he clear out the building, or cart away the dirt as required by the terms of the said contract, nor furnish all the lath, plaster, lime and other materials necessary therefor.”

On December 2, 1892, on motion made by plaintiff’s attorneys, an order was made :

“ That the attorneys for the defendant deliver to the plaintiff’s attorneys a bill of particulars of the claim set forth in paragraph three of the first separate defense of the said defendant’s amended answer to the complaint herein, that the plaintiff did not furnish the brick work or plastering, or furnish all the lath, lime and other materials necessary therefor, * * * within six days * * * or, on default thereof, that he be precluded from giving any evidence on the trial in support of said claim.”

From this order the defendant, J. H. Furber Co., appeals.

Section 531 of the Code, provides that: “ The court may, in any case, direct a bill of particulars of the claim of either party.”

The plaintiff alleges full performance ; this is denied by the defendant in the first portion of its answer, thus raising an issue upon the question of full performance on the part of the plaintiff, which full performance plaintiff is bound to prove before he can recover.

The defendant, in denying full performance, in addition alleges and points out in what particulars, and in what respect, plaintiff failed to perform.

It does not by so doing make any claim against the plaintiff for which plaintiff was entitled to a bill of particulars.

That part of defendant’s answer in which it points out in what particular respect plaintiff failed to perform, is not affirmative in its character, but amounts simply to a general denial of full performance, pointing out in what particulars plaintiff failed to perform.

The answer, in an expansive manner, contains simply a general denial, and, therefore, the case is not one for a bill of particulars. See Gray v. Shepard, Supreme Court, General Term, 36 St. Rep., 610.

The defendant, in its answer, virtually admits performance of the contract, with the exceptions stated in its answer; and the plaintiff would only be required to prove performance of the particular items mentioned in order to make out a prima facie case.

The defendant makes no claim against the plaintiff which would require any proof on its part, to sustain its defense, until plaintiff had proven full performance; when it could, to rebut any evidence showing full performance, introduce evidence to contradict any such evidence on the part of plaintiff.

In Goddard v. The Pardee Medicine Co., 52 Hun, 85; 22 St. Rep., 540, a similar question arose.

In that case, an action was brought to recover for advertisements alleged to have been made under a contract with the defendant

The complaint alleged performance of the contract

The defense was, “That the advertisement of the defendant was not published pursuant to said contract; that the said contract was not performed, and that the papers therein mentioned were not received, checked and verified as therein provided."

The plaintiff moved for a bill of particulars on the ground that he could not tell in what particulars the defendant intended to maintain that the advertisement was not published in accordance with the contract, or what papers therein mentioned were not received, checked or verified in accordance with the agreement.

The bill of particulars was refused on the ground that this was not a proper case in which a bill of particulars should be required.

Justice Bartlett, in his opinion at page 86, says: “The fourth defense in the answer is not affirmative in its character. It really amounts to nothing more than a denial of the plaintiff’s alleged cause of action. It adds no strength to the answer, and could be wholly stricken out without detriment to the rights of the defendant. Considering it, therefore, with reference to its legal effect, which is simply that of a denial, it cannot properly be regarded as setting up any such claim as to render it proper to require a bill of particulars. The plaintiff counts upon the contract and is bound to prove á performance thereof before he can recover in the action. * * * Such proof is essential to make out the plaintiff’s case, and he cannot avoid the obligation to furnish it because the defendant has put in its denial of due performance in a somewhat more specific form than was necessary.”

Justice Bartlett in his opinion distinguishes the case from Dwight v. The Germania Life Insurance Company, 84 N. Y., 493, cited by respondent in his brief, and referring to the definitions stated in above case says at page 87:

“ None of these definitions includes a mere denial of a statement of fact, which amounts only to such a denial, and which comprises nothing more than what the defendant could have shown if he had contented himself _ with a simple denial in form.”

See also Rafalsky v. Boehm, general term city court, October, 1892, 48 St. Rep., 641.

In this case an order sustaining a bill of particulars was sustained, inasmuch as the answer did not contain a general denial, etc. Kelsey v. Sargent, 100 N. Y., 603, also cited by respondent, is not in point

In that case, the action was brought to compel the surrender of certain stock, which the plaintiff alleged had been pledged by plaintiff to defendant as security for the payment of a promissory note, and also to save defendant from certain guarantees executed by him.

The complaint alleged payment of the note, and that defendant “ was made free and discharged from all his contracts as guarantor.”

The answer denied said averment and alleged “that the defendant has not been released from liability on said guarantees, and is still liable on three or more of such guarantees.”

An order was made requiring defendant to serve “a bill of particulars of the guarantees upon which he claims to be liable as alleged in the answer.”

The order was sustained on appeal In its Per Curiam opinion the court held that, “ in either case the plaintiff might require further information before trial, and whether it should be obtained from a more specific answer, or bill of ■ particulars, was for the supreme court to determine.”

The order for a bill of particulars was improperly granted, and should be reversed, with costs to the respondents to abide the event.

Van Wyck, J., concurs.


text:
    John C. McQuhae, Resp’t, v. Samuel Rey, App’lt.

      (City Court of New York, General Term,

      Filed February 15, 1893.)

    Husband and wipe — Services rendered to wife in proceedings for NON-SUPPORT.
    A husband cannot be held liable for legal services rendered to his wife in a proceeding brought by the People against him for non-support of his wife, in which she is merely a witness for the People.
    Appeal from judgment in favor of plaintiff.

      Fromme Bros., for app’lt; L. A. Gould, for resp’t.
   Fitzsimons, J.

The defendant, a married man, refused and failed to support his wife; she applied to and received from the commissioners of charities and correction of this county authority to proceed as complainant against the defendant for non-support.

After due proceedings were taken he was” required to give a bond as required by law for her support and maintenance by a police justice.

The plaintiff’s assignor rendered legal services in said proceedings, and the plaintiff now seeks to recover the value of such service upon the theory that they were necessaries supplied the wife, and consequently he is liable therefor.

A wife, it is true, has the right to procure necessaries, and her husband is bound to pay therefor, and it has been frequently decided that legal services rendered to the wile fall within that term, but an investigation of all such cases will show that the wife was a party as plaintiff or defendant in the action for which the husband was held liable to the attorney for the value of his legal services. Such services were rendered the wife in prosecuting or defending her marital relations, and for that purpose she was justified in procuring the services of a lawyer, and his services were deemed necessaries just as much as necessary food, fuel, shelter and clothing would be, but it is to that extent, and that extent only, that a husband is liable.

In the proceeding in which the legal services sued for herein were rendered, the defendant’s wife was not a party nor were her marital rights under consideration.

It was a proceeding prosecuted by the People against the defendant for his failure to provide for her, and thus causing her to be a possible charge upon the county, and such was the issue, and the only issue possibly involved therein.

She was only a witness therein, not a party thereto. She had no right to engage counsel in that proceeding.

The People had its legal representative in the person of the corporation attorney; if he was not actually present during the progress of said proceeding,- it was not because his presence was not necessary, he was present in the eye of the law; his absence, however, would not authorize the defendant’s wife to procure other counsel and cause him to be liable for legal services rendered.

All the authorities cited by respondent, and which he claims makes the defendant liable herein, are, as before stated, based upon the fact that the services for which the husband was held liable were rendered to the wife in civil actions wherein she was compelled for the purpose of protecting her status and rights as a married woman to call to her aid a lawyer.

None of the cases cited go so far as to say that a husband is liable for legal services rendered to his wife in a proceeding brought by the People against him for a violation or failure on his part to do a legal duty towards her, in which she was merely a witness for the People, and their rights only being violated or threatened.

The defendant would only be liable for the services rendered by plaintiff’s assignor upon the theory that the same were needed by his wife.

How could they be needed when she was not a, party, but only a witness, in the abandonment proceedings which are authorized by the Criminal Code, and for the purpose of preventing her from becoming a charge upon the county, and in which, as before stated, the corporation attorney is appointed by law to appear as counsel for the People, so that it is very apparent that she needed no counsel.

The legal services rendered her were not necessary, but entirely unnecessary, and, therefore, the husband is not liable therefor, no matter how valuable they were to the wife.

Under the circumstances above related, the plaintiff has no cause of action against defendant for the legal services rendered.

The ordering of a new trial would be a useless formality. The judgment herein is reversed and the complaint dismissed upon the merits, with costs.

McGrown, J. concurs.


author: Per Curiam.

text:
    William Spence, App’lt, v. Adolph Simis, Jr., Resp’t.

      (Court of Appeals,

      Filed March 21, 1893.)

    Reference — Compulsory—Long account.
    Plaintiff’s cause of action consisted of a bill for coal and wood sold upon fifteen different dates, amounting to $248. Defendant’s answer admitted the delivery of the coal and wood, but denied knowledge or information as to the quantity or value, or that he had promised to pay. Held, that this did not involve a long account within the meaning of the term as used in the law.
    Appeal from judgment of the city court of Brooklyn, general term, affirming order granting compulsory reference.

      Frank S. Williams, for app’lt; J. Newton Fiero, for resp’t.

       Reversing 49 St. Rep., 636.

   Per Curiam.

A party cannot be permitted to deprive his adversary of atrial by jury unless it affirmatively appears, with reasonable certainty, that the hearing of the case will require the examination of a long account. Code, § 1013. It is not sufficient to uphold a compulsory order of reference to demonstrate that there is a possibility that, in the course of the trial, the investigation of the correctness of such an account may become necessary. Thayer v. McNaughton, 117 N. Y., 111; 26 St. Rep., 843. Facts must be disclosed either by affidavit, or upon the face of the pleadings, from which the conclusion can be fairly drawn that so many separate and distinct items of account will be litigated on the trial that a jury cannot keep the evidence in mind in regard to each of the items, and give it the proper weight and application when they retire to deliberate upon their verdict.

The plaintiff is a dealer in coal and wood, and the main cause of action set forth in the complaint consists of a bill for coal and wood furnished the defendant during a period of three years, upon fifteen different dates, and which, it is alleged, were worth, and for which the defendant promised and agreed to pay, the sum of $248. The defendant, in his answer, admits the delivery of coal and wood, but avers that he has no knowledge or information sufficient to form a belief that it was of the quantity or value alleged in the complaint, or that he promised to pay the amount specified. The affidavit upon which the motion for a reference was made contains no additional facts, which is not strange, inasmuch as the defendant had alleged in his pleading that he had no knowledge or information sufficient to form a belief upon the subject

. It is plain that there is not involved here a long account within the meaning of the term as it is used in the law, and as it has been construed and defined in the practice of the courts; and the defendant is unable to express even a belief that its establishment will require more than the brief examination of a single witness, who may have sold and delivered the goods to him. It is evident that the real controversy between the parties relates to the defendant’s counterclaim, which is for attorney’s services and disbursements in four different suits in the supreme court and justice’s court, none of which constitutes a long account of such a character as to authorize a reference. Randall v. Sherman, 131 N. Y., 669; 43 St. Rep., 923.

The orders of the general and special term must be reversed, with costs in all courts, and motion denied, with ten dollars costs.

All concur.


text:
    Murray N. Ralph, App’lt, v. Loren D. Eldredge et al., Resp’ts.

      (Court of Appeals,

      Filed March 24, 1893.)

    Guaranty — Collection.
    Plaintiff and defendant E. having dissolved partnership, E. took the goods and fixtures and plaintiff certain notes, accounts and claims of the firm. E. and one S. gave a bond conditioned that they would pay plaintiff one-half of the amount of the notes, accounts and claims that should “ prove to be uncollectible.” Held, that it was not necessary for plaintiff to prosecute such claims to judgment and have executions returned unsatisfied, in order to enforce the conditions of the bond.
    Appeal from judgment of the supreme court, general term, third department, affirming judgment of referee in favor of defendants.

      John C. Keeler, for app’lt; V. P. Abbott, for resp’ts.

       Reversing 34 St. Rep., 191.

   Per Curiam.

Plaintiff and the defendant Bldredge had been co-partners, and, upon a dissolution of the co-partnership Bldredge took over the stock of goods and fixtures, and plaintiff took a transfer of certain notes, accounts and claims belonging to the firm. A bond was given to plaintiff, upon which Bldredge was principal and the defendant Seymour was surety, and which was conditioned as follows:

“The condition of this obligation is such, that if the above bounden Loren D. Bldredge, his heirs, executors or administrators, shall and do well and truly pay or cause to be paid unto the above-named Murray iST. Ralph, his certain attorney, executors, administrators or assigns, one-half of the amount of notes, accounts and claims of the late firm of Bldredge & Ralph, assigned by the said Bldredge to Murray 3ÑT. Ralph, that shall prove to be uncollectible, if any such there be, with interest in the amount thereof from the date hereof without fraud or delay, then the preceding obligation to be void, otherwise to remain in full force and virtue.”

This action was upon the bond, to recover one-half of what plaintiff alleged had proved uncollectible of the choses in action transferred to him. Upon the trial, the referee excluded evidence offered by the plaintiff to show the financial condition of the various debtors, and that they were not, and had not been since the assignment of the claims, of financial ability to pay the dernands upon them. He held that no right of action accrued to the plaintiff against the defendants before the prosecution of the claims to judgment, and the issue and return of executions unsatisfied. This view has been sustained by the general term, and the bond was there construed as a strict guaranty of collection.

This construction is based upon the meaning attached to the ( words “ prove uncollectible,” which seemed to the court to contemplate some legal process to determine that a claim was uncollectible. We think that the rule of construction has been too strictly applied in this case. In such an instrument its construction and its force must depend upon the apparent and reasonable intentions of the parties to it, and they, in this case, do not seem to require that the plaintiff should exhaust all his legal remedies against the various debtors. The absence of the word “ guaranty ” has some significance, and taken with the circumstances under which the obligation was entered into, we think it was not the intention of the obligors that the plaintiff should go to the expense of reducing all these claims, varying in amounts from insignificant to large sums, to judgment The purpose was that the plaintiff should receive as a consideration for the transfer of his interest in the stock in trade to Bldredge the outstanding claims due to the firm, and if he found any which were uncollectible he was to be paid one-half of their amount by his former partner. The obligation was not a guaranty of the debt; it was against the debts turning out to be valueless. It cannot reasonably be inferred that the arrangement of the parties upon dissolution and settlement contemplated the. assumption by plaintiff of a series of litigations, with all their attendant expenses. The obligation does not cover, by its terms, anything but the half of the claims assigned which should be ascertained to be uncollectible, and to construe it as it has been construed below would be to import into it the intention that it was to work as the ordinary guaranty of the collection of a debt Neither the language nor the circumstances warrant a construction which would work so harshly and inequitably upon the plaintiff’s rights.

We think that the judgment should be reversed and a new trial ordered, with costs to abide the event

All concur.


author: Peckham, J.

text:
    Joseph Beran, Resp’t, v. The Tradesmen’s National Bank of the City of New York, App’lt.

      (Court of Appeals,

      Filed March 21, 1893.)

    1. Assignment — Rights of assignee of suit on settlement.
    _ Pending action against the defendant bank, D., the plaintiff therein, assigned a portion of the claim, to one K., plaintiff’s assignor, by an instrument which provided that the suit should proceed in the original plaintiff’s name to judgment or settlement, and that the sum assigned should be paid to the assignee immediately upon payment or settlement, and D. authorized his attorney to make such payment. After notice of the assignment the bank paid a sum of money in settlement of the claim against D., but without notice to the plaintiff in this action. Held, that the bank had a right to pay the money over to D. after a notice of the assignment of a part of the claim, as the assignment contemplated its payment first to D. and by him to K.
    2. Same — Evidence—Settlement.
    The court should have received evidence tending to show that the payment by the bank was not in settlement of any claim which D. was presenting against it, but that it was for the purpose of buying its peace and to terminate a litigation with an insolvent claimant, in order that the jury might say whether such payment was in settlement of an acknowleged liability or was for the other purpose alleged.
    Appeal from judgment of the supreme court, general term, first department, affirming judgment of special term in favor of plaintiff.

      William W. Niles, for app’lt; Henry Johnson, for resp’t.

       Reversing 45 St. Rep., 807.

   Peckham, J.

Michael Duffy claimed to have a valid demand against the defendant bank to the extent of some forty thousand dollars. The details of that demand are not here important To collect it, Duffy had commenced an action against the bank, which was pending when the circumstances now to be mentioned occurred. In order to pay a debt which he owed to one Klaber, Duffy assigned to him a portion of his, Duffy’s, demand against the bank, to the extent of ten thousand dollars. This assignment recited the existence of the suit by Duffy against the bank, and after assigning the amount of ten thousand dollars thereof to Klaber, it continued in the manner following:

“ The said suit is still to proceed in my name and at my expense to final judgment or settlement, and without any charge or expense to said Klaber.
“ If I recover from said bank or compromise my claim against said bank for a sum less than thirty-four thousand dollars ($34,000), then said Klaber is to accept the sum of $9,000 in full payment and discharge of said claim for the sum of $10,000 and of all his claims and demands now in suit against me.
“ The said sum so assigned by this instrument to said Klaber shall be paid to him immediately upon the payment or settlement by said bank, and I authorize and empower my attorney, who is conducting said suit, or whoever may act for me on the settlement or payment by said bank, to pay to said Klaber immediately upon the receipt of said money the amount due and assigned to him by and under this assignment.”

The instrument was signed and sealed by both parties on the 27th of May, 1880. Subsequently Klaber assigned all his interest under this assignment to the plaintiff.

The plaintiff, on June 10, 1880, notified the bank in writing of the assignments and stated therein that “ in any verdict against you or any adjustment made, that $10,000 thereof are to be paid to me and on my receipt,” and this notice was signed by the plaintiff and received by the bank.

Upon the trial of this action the court found as a fact that on the 22d of October, 1882, the bank made an agreement with Duffy for the settlement of the claim and suit, and the action of Duffy against the bank was thereafter, and on the 27th of October, 1882, settled and in pursuance of the agreement discontinued by order of the court and by the procurement of the bank, but without the knowledge or consent of the plaintiff, and without notice to him or regard to his rights, of which the bank had due notice, and that the bank paid in settlement of the claim of Duffy the sum of $6,500, one thousand thereof to attorneys and referee and for expenses incident to the suit, and $5,500 directly to Duffy. The court, as conclusion of law, found that there was due the plaintiff from the bank the sum of $5,500 with interest from October 23, 1882, amounting in all to the sum of $8,167.50, for which sum, together with costs, the court ordered judgment

Upon appeal to the general term the judgment was affirmed and from the judgment of affirmance the bank has appealed to this court»

Two questions arise in this court upon this appeal.

The first relates to the proper construction of the assignment, and the second relates to the alleged error of the court in rejecting certain testimony tending to prove that the bank never paid any money in acknowledgment, settlement or satisfaction of the alleged claim of Duffy against it, but simply for the purpose of getting rid of an expensive litigation with an insolvent party, the expense of which would, in any event, fall chiefly upon it, or, in other language, that the so-called settlement was nothing but “the purchase of its peace ” by the bank.

First. What is the proper construction of the language of the assignment? Did the bank have the right to pay the money to Duffy after notice of the assignment of a part of the claim ? Taking the whole assignment together it seems as if it had.

The last clause of the instrument contemplates that the payment to Klaber is to be made after the bank has itself paid the money. It is assumed that the assignor is to have the right to settle or compromise the claim, and provision is specially made for the continuance of the pending suit in his name and at his expense to final judgment or settlement, and in case Duffy recovers or compromises his claim for less than a named sum, then Klaber is “ to accept ” the sum of $9,000 in full payment and discharge of his claim for $10,000 and of all his claims and demands against Duffy. From whom is Klaber “ to accept ” $9,000 ? It would seem to be from Duffy. It is to be in full payment of his claim against Duffy, and it is upon condition that Duffy recovers or compromises his claim against the bank for less than $34,000.

The sum so assigned to Klaber is to be paid to him immediately upon the payment or settlement by the bank, and it would seem to be the natural meaning of the language that the payment spoken of was a payment to Duffy the owner of the claim, and immediately upon the payment to Duffy, the sum assigned to Klaber was to be paid to him. If the payment to be made to Duffy was not made to him, provision is made for its payment to others, as Duffy authorizes or empowers his attorney, or whoever acts for him, on the settlement or payment by the bank, to pay Klaber, immediately upon receipt of the money, the amount due and assigned to him.

Would not the bank under this language have the right to pay the claim to the attorney for Duffy, or to whoever acted for him upon the settlement?

The money is to be paid Klaber immediately upon the payment or settlement by the bank. This does not mean that the money is to be paid by the bank to Klaber immediately upon the settlement, but it means that when the settlement has been made and the money paid by the bank, then the amount coming to Klaber is to be immediately paid to him. It means that it is to be paid to him by Duffy, if he is acting for himself, and if not, and. his attorney, or some one else, is acting for him, then Duffy authorizes such person, when he has received the money, to immediately, pay Klaber’s share of it to him. The assignment in Fairbanks v. Sargent, 104 N. Y., 108; 5 St. Rep., 531; S. C., on second appeal, 117 N. Y., 320; 27 St. Rep., 411, had no such language in it as is set forth in the last clause of this instrument. And it is the last clause which is the important matter in thiscase, and which shows precisely what was contemplated by the parties. That clause, it seems to us, controls the matter as to the right to receive payment from the bank, and shows that Duffy did not part with his right to compromise, and to himself receive payment from it The question is asked, why assign at all, if Duffy were to still retain the right to himself receive payment, for if he received it he could then pay it over as well without as with an assignment? He could do so, very likely, if other rights or equities had not in the meantime intervened in favor of some other creditor. But an advantage was certainly secured by the assignee, even upon the assumption of Duffy's right to receive the money in the first instance. The assignee would have an advantage over other creditors by virtue of such assignment, and that assignment would count for a good deal where the assignor was financially irresponsible.

Unquestionably, the assignment specially, and in terms, provides for the contingency of the money being paid by the bank to Duffy’s attorney, or to any one authorized by Duffy to act for him, and in such event, it authorized the attorney or other person acting for Duffy to pay the amount due under the assignment to the assignee.

' I do not think it is a reasonable construction to say that Duffy’s attorney, or anyone authorized by Duffy, would have the right to actually receive the money from the bank while Duffy himself would not Upon a careful examination of the whole instrument, I think the assignee «onfided, and meant to confide in the honesty of Duffy, and in his willingness, in case he received the money, to pay over to the assignee the amount that would be due him under the assignment. This view is strengthened by the fact that Duffy retained the right to compromise and settle as he thought fit. We do not say such language would necessarily leave the right with Duffy to receive the money, but taken in connection with the last clause, it strengthens and supports what seems to us to be the meaning of the instrument.

The notice given by the plaintiff to the bank of the existence of the assignments, and of his rights under them, as claimed by him, does not enlarge those rights as evidenced by, and springing from, the original assignment. If by that instrument Duffy retained the right to receive the money from the bank, the plaintiff could not limit that right by a mere notice, or make the payment by the bank a wrong as against the assignee.

Second. We are also of the opinion that the court should have received the evidence tending to show that the payment by the bank was not in settlement of any claim which Duffy was presenting against it, but that it was for the purpose of buying its peace and to terminate a litigation with an insolvent claimant, which, however successful in the end, would in any event result in large expense to it, w hich it could not recover against the other party to the litigation because of his insolvency. A party to a suit most certainly has the right to pay money to stop an expensive litigation carried on against him at his own expense by reason of the insolvency of his adversary. When he does so, it cannot be said that he necessarily recognizes or admits the validity of the demands against him up to the amount he is willing to pay to secure a termination to the controversy from which he can reap no benefit, however successful may be his defense. This seems to us very plain, and no amount of notices or assignments can take away such right from a party against whom a claim is made.

The court below found that the defendant agreed with the assignor Duffy for a settlement of the suit and claim. It is said this fact appears by the wording of the order of discontinuance of the suit brought by Duffy against the bank, and which the bank procured to be entered after the payment of the money. The order recites that “ this action having been settled,” on notice it is ordered, etc. Of course the action was settled. That was the very purpose of the bank, even if it be assumed that the bank was buying its peace. That is the meaning of the term itself. Something is to be settled, and the party receiving the money is to cease to sue, harrass, or further annoy the party paying on account of the alleged claim or demand. The question is, whether the party paying cannot, while making the payment and providing for the cessation of further proceedings, at the same time wholly deny the existence of any real claim whatever ?

The assignor could not assign to another a claim which, in truth, had no real and valid existence. He assumed to assign part of what he alleged was a valid claim, and if that claim were acknowledged to any extent and a payment made or a compromise agreed upon as an extinguishment, or as an accord and satisfaction of such claim, then, by the terms of the assignment, the assignee was to be entitled to a certain amount of the proceeds of such settlement

Unless there were some acknowledgment, actual or implied, of the validity of the claim, or unless there had been some payment on account and in extinguishment of an admitted indebtedness to some amount, the plaintiff made no cause of action by merely proof of the payment of money to Duffy by the bank. Now, whether there was such payment was a question at issue in the case, and the language used in the order was not at all conclusive on that point. The evidence offered should have been admitted and submitted to the jury in connection with the other evidence upon this point, to the end that the jury might say, in the light of all the facts, what, in truth, was the nature of the payment; was it in settlement of an acknowledged liability, or was it for the other purpose, as alleged ? If for the latter, the plaintiff had no legal right to prevent its payment by the bank to Duffy, or to insist that it should be made to him.

We are, therefore, wholly unable to agree with the claim set forth in the court below, that if the bank did nothing but buy its peace in settling with Duffy, yet even in that event the payment by the bank, by reason of which the suit was discontinued, was a settlement within the meaning of the assignment. And if the assignment were intended to include such a payment as within its meaning, I think it was in such case wholly ineffectual as regards the bank.

The possibility that a person may thereafter choose to pay money to another to rid himself of a then existing litigation with an insolvent opponent, and not by way of acknowledgment of any real and valid demand, is not so far the subject of an assignment by the party to whom the money may possibly be paid as to render a payment to such person wrongful after knowledge on the part of the person making the payment that such assignment had been executed.

The case of Fairbanks v. Sargent, already alluded to in discussing the first ground, in this opinion, is again cited to show that it makes no difference upon the question now under discussion whether the party paying the money disputed the debt or not. We think that case holds no such doctrine. N"o such question arose. The debtor, Zabriskie, had disputed the indebtedness which Underwood alleged against him, yet he subsequently settled that indebtedness by a compromise, by the terms of which he gave up certain bonds in satisfaction of such indebtedness, and in that way, and to that extent, acknowledged its validity. There was no pretense set up that in making the payment Zabriskie was. only buying his peace. The bonds were surrendered to Sargent by reason of an assignment from Underwood to him. Fairbanks also claimed an interest in the bonds by virtue of a prior assignment from Underwood of a certain interest in the claim of the latter against Zabriskie. The question of validity of Zabriskie’» payment did not arise, and no question was made as to its being a purchase of his peace instead of a compromise and acknowledgment of the claim made by Underwood against him. Nothing was discussed or decided other than the conflicting interests of Fairbanks and Sargent in the bonds, assuming them to have been a valid payment in compromise of the claim of Underwood against Zabriskie.

We think, on both grounds discussed, there should be a new trial, and for that reason this judgment must be reversed.

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

All concur.


author: Finch, J.

text:
    The Madison Square Bank, Resp’t, v. Warham N. Pierce, App’lt.

      (Court of Appeals,

      Filed March 21, 1893.)

    Bills and notes — Part payment by indorser.
    The holder of commercial paper may collect the entire amount against the maker, although a part payment has keen made by the indorser, receiving so much of the proceeds as represents such part payment as trustee-for the indorser. This doctrine, however, has no application to accommodation paper.
    (Maynard, J., dissents.)
    Appeal from judgment of the supreme court, general term,, first department, affirming judgment recovered at circuit on trial before the court.

      David Keane, for app’lt; John Delahunty, for resp’t.

       Affirming 43 St. Rep., 832.

   Finch, J.

We have a novel and interesting question before us on this appeal, although its apparent importance will lessen as we pass from first impressions to some slower reflection. It arises upon facts which are very brief and simple and may at once be stated. The defendant, Pierce, made his promissorv note payable to his own order, and indorsed it to the Bates Co., Limited, which indorsed it to the plaintiff bank; the latter discounting it and paying the proceeds over to the immediate indorser. Thereafter the Bates Co. became insolvent and passed into the hands of a, receiver, who paid to the bank, upon the liability of the indorser, seventy-three and one-quarter per cent of the amount secured by the note. Later, the bank sued Pierce, the maker, and recovered judgment for the full amount of the note in spite of the proof showing the payment made by the receiver, and in disregard of the claim asserted by the defendant that he should only be held liable for the balance remaining unpaid. That judgment has been affirmed by the general term, Judges Daniels and Barrett each writing very strong and valuable opinions in support of their doctrine, and relying upon the authority of Jones v. Broadhurst, 9 M., G. & S., 177; 67 Eng. Com. L., 175, which fully warrants their conclusion. The question does not seem ever before to have arisen in this country, and we are left at liberty to examine the English rule and to follow it or not as we approve or disapprove its logic and its consequences.

We are not to regard the note as being accommodation paper, but must assume its transfer for value. The form of the transaction is equivalent to what it would have been if the Bates Co. had been named as payee, and loses none of its force by the intervention of the maker as first indorser. That indorsement, in the form adopted, was needed for the regular transfer of title, but does not change or affect the nature and character of the maker’s liability. He remains the ultimate debtor, the person who ought to pay the debt, in preference to and in exoneration of all the other parties to the paper, who, in some form or other, are entitled to have final recourse to him. And it is to the case of such a maker of the note, or such an acceptor of the bill of exchange, that the English rule alone applies; and it is explicitly declared inapplicable where the indorser or drawer is the real debtor, although in form only secondarily liable.

Pierce, therefore, was the ultimate debtor, and the party who ought to pay the note, both in discharge of the obligation to the holder and in exoneration of the indorser. When the bank sued on the note, it was the legal holder and the legal party in interest Upon production of the paper and the usual proof, judgment against the maker for the full amount was inevitable, unless some defense should be interposed. The only possible one for Pierce was part payment, and he was compelled to assert, and his counsel are compelled to argue, that the money paid by the indorser to the holder inured to the benefit of the maker as a payment on his debt. But that doctrine cannot prevail for very obvious reasons. The indorser’s payment did not, in the least, lessen or satisfy the maker’s debt He owed it all exactly as before. What had happened possibly changed somewhat the real creditor, but left the whole debt due and unpaid. To whom he should pay might become a new question, but how much he should pay in discharge of the note was not made doubtful in any degree. What the receiver advanced to the holder is familiarly described as a payment; but it was such relatively to the indorser’s liability alone. While relatively to the obligation of the maker, it was an equitable purchase instead of a payment That view of it was taken in a very early case, the decision of which depended necessarily upon it.

In Callow v. Lawrence, 3 Mau. & Sel., 95, it appeared that one Pywell drew a. bill upon Lawrence to his own order, which Lawrence accepted. The drawer indorsed the bill to Taylor, who discounted it and thereafter indorsed it to Barnett. It was protested for non-payment The drawer paid Barnett the full amount and .took the bill, and, striking off the indorsements of Taylor and Barnett, transferred the bill to Callow, who sued the acceptor upon it. The latter claimed that the bill was paid and extinguished, which the court denied, saying that the drawer “ became the purchaser of the bill ” when he paid and took it up out of Barnett’s hands; that it was not paid by the drawer, animo solvendi, in order to extinguish it, but only to redeem himself from the situation in which he stood. That must always be true of payment by indorser to holder, where the maker is the ultimate debtor. To the extent of the money paid, the indorser becomes equitably entitled to be substituted to the rights and remedies of the holder, and becomes, pro tanto, the beneficial owner of the debt; so that the maker’s obligation to pay the note in full, at first due to the holder solely in his own right, becomes, after the part payment by the indorser, still wholly due to the holder, but partly in his own right and partly as trustee for the indorser. A court of law cannot split the note into parts, and must act upon the legal interest and ownership.

In the present case there was no privity between maker and indorser as it respects the action of the latter. He paid not as the agent of the maker, not at his request, not for his benefit, and under no duty to relieve him, but independently, upon his own obligation, to lessen his own responsibility, and not at all to discharge the ultimate debt which it was the maker’s duty to pay. It seems very clear, therefore, that the maker cannot utilize for his own benefit a payment which, as to him, is not a payment upon the debt It becomes, as I have said, merely a question to whom he shall pay and who may sue for and collect the whole unpaid sum. In that question the maker has no concern beyond the inquiry whether he may become liable to different persons for the same debt, and encounter the danger of _ paying it twice. I can discover no such peril. The judgment in favor of the holder is a bar to any other suit on the same note, and payment to the holder discharges the note utterly. Ordinarily, the indorser cannot recover except upon the note, and as holder, and in accordance with the law merchant. If he ever has any other right of action against the maker, it is either in equity or by force of some facts beyond the bare relation established by the paper. And where the note is merged in the holder’s judgment, or paid in full to him by the maker, the indorser’s only right is through the judgment or against the proceeds, if he has made a partial payment to the holder. That does the indorser no wrong. If he is not content that the holder shall collect to some extent as his trustee, he may prevent it by payment in full to the holder, and so entitle himself to the possession of the note on which to sue, or if judgment has been obtained, to be subrogated to all of the rights of the plaintiff therein.

I think this result is clearly indicated by our own decisions. In Mechanic's Bank v. Hazard, 13 Johns., 351, the maker of the note had been arrested in an action upon it, and his bail sought to relieve themselves by force of a payment made by the indorser to the holder, but such effect was denied to it; the court saying that it was not a payment by or on behalf of the maker, or of which he or his bail could avail themselves. And in Guernsey v. Burns, 25 Wend., 411, where the suit was by the holder, representing the legal title and interest, it was said to be no defense to the maker, and no concern of his that some property in the note was in another.

It thus becomes apparent that there is no very great importance in the question which method of securing payment from the maker is adopted, since the same result follows from each, and that it narrows down to the inquiry whether as matter of correct doctrine and of convenience in practice the holder may recover the whole debt against maker or acceptor for himself and as trustee for the indorser to the extent of his acquired interest; or whether he shall take judgment only for the balance, leaving the indoi-ser to sue in some way and on some theory, which apparently could not be upon the note because already merged in the judgment, but might be for money paid for the use of the maker since he gets the benefit of it in the reduction of the judgment, as was held in Pownal v. Ferrand, 6 B. & Cress., 439, where the holder deducted the indorser’s payment from the levy against the maker. The former seems to me to be the logical and convenient method, and so I think we should follow the English doctrine.

I have not underrated the assault made upon it by the appellant He asserts that Jones v. Broadhurst is contrary to the earlier cases, and has been criticized and shaken by the later ones. I have examined them all, with some wonder at the amount of learning and ingenuity expended upon the subject. Pierson v. Dunlop, Cowper, 571; Walwyn v. St. Quintin, 1 Bos. & P., 652; Bacon v. Searles, 1 H. Bl., 88; Hemming v. Brook, 1 Car. & M., 57; Randall v. Moon, 12 C. B., 261; Cook v. Lister, 13 id., 543; Solomon v. Davis, 1 Cahabe & Ellis, 83; Thornton v. Maynard, 10 Com. Pl., L. R., 695. The prior cases were very fully and carefully reviewed by Baron Cresswell in the opinion rendered-in Jones v. Broadhurst, and of the subsequent cases I deem it only necessary to say that, along with some criticism and occasional doubt, the doctrine has remained substantially unshaken, and the case last cited was declared by Lord Coleridge to be the accepted law.

It must not be forgotten, however, and I may prudently repeat, that the doctrine has no application to accommodation paper, and rests wholly upon the actual and ultimate indebtedness of maker or acceptor as the party who ought to pay. In such a - case as that, which correctly describes the one now before us, and where no disturbing facts affect the relations of the parties as fixed by the paper itself, I think the holder may sue and recover the full amount, receiving so much of the proceeds as represents a part payment by the indorser as trustee for him.

It follows that the judgment should be affirmed, with costs.

All concur, except Maynard, J., dissenting.