text:
    Juliet M. Myers, App’lt, v. Commercial Travelers’ Mutual Accident Association of America, Resp’t.

      (Supreme Court, General Term, First Department,

      Filed March 15, 1895.)

    ^Evidence—Declarations of third party.
    The statements of a witness, who has no interest in the controversy, nor any right to speak for or represent the plaintiff, as to the general merits of plaintiff’s claim, is neither competent nor relevant, and the error is not rendered harmless by the answer of the witness that he does not remember making such statement.

      Appeal from a judgment dismissing the complaint, entered on a verdict in favor of defendant, and from an order denying a motion for a new trial.

      Wm. B. Hurd, for app’lt; M. W. Van Auken, for resp’t.
   Parker, J.

Defendant in November, 1889, issued to Egbert G. Myers, a certificate of membership, by which, among other things, it agreed that, in the event of his death by external, violent or accidental means, it would pay to this plaintiff the sum represented by the payment of $2 by each member of the association, but in no event to exceed the sum of $5,000. On the evening of July 26,1896, Mr. Myers was found dead, submerged in nine feet of.water, in the swimming bath of J. A. Payne, at 214 South Broad street, Philadelphia. The deceased had gone to Philadelphia from New York that morning, and was apparently in robust health. The bath was a pool thirty feet wide by 100 feet long. The sides and bottom were of stone and cement. The water was from three to nine feet deep; and there were spring boards and ladders from which swimmers could jump and dive, and ropes were fastened on the sides at a distance of three feet from each other, to which swimmers might cling for rest A few minutes before eight o’clock on that evening Myers entered the bathhouse, and at a quarter before nine he was found dead at the bottom of the pool. There were fifty or sixty persons in the water with him, which was at blood heat. Plaintiff’s theory of the case was that the insured, while swimming, dived in the water, and struck some hard substance at the side or bottom of the pool, with his head, rendering him unconscious, during which he drowned. On the other hand, defendant endeavored to establish that the insured had heart disease, and that his heart ceased to act while he was supporting himself by the rope suspended above the water, where he was last seen alive. Plaintiff in support of her theory produced laymen, who testified that his health always seemed to be good; that he was but twenty-three years of age; had not had since childhood any sickness, except trifling stomach or throat troubles ; his weight was 140 pounds; he was five feet eight inches in height; was a rosy-cheeked, ruddy-complexioned man, and always had been fond of and was active in athletic sports, which with him included base ball, lawn tennis, boating, and swimming.. She called two-physicians, one of whom had doctored him for tonsilitis about a month before his death. He testified that on that occasion he examined his heart, and found it apparently normal, with no indication of organic disease. Eight days before his death he was accepted as a first-class risk by the, Massachusetts Life Insurance Company, an examination being made by Dr. William Gray Yermilye, examiner in chief of the company ; the result being that he passed the deceased as a man of more than ordinary good health, with a “pnlse of seventy, soft and regular, who had no heart murmurs, and in whom there was ño indication of heart disease, and whose urine was normal.” Against this evidence the defendant presented the testimony of Dr. Sidebotham, who made the autopsy upon deceased. He testified that there was no water in the stomach; none in the lungs ; that the left ventricle of the heart was hypertrophied ; the walls of the heart soft, aortic opening admitting not quite two fingers, and valve thickened; that he discovered nothing to indicate that cause of death was drowning, and gave it as his opinion that death was caused by hypertrophy of the heart, with an aortic stenosis. Plaintiff further introduced testimony tending to show that a short time prior to his entering the water there was no lump or abrasion on his forehead or temple, but when his body was taken from the water there was a lump or abrasion. Whether there was a lump on his forehead when he was discovered at the bottom of the pool was regarded by both parties as an important circumstance, in view of the character of the evidence to which we have adverted. Defendant’s counsel conducted his side of the case throughout the trial on the theory that there was no such injury, discovered. The plaintiff called Joseph C. Leggett, who testified that he had known the dead man for twelve or fourteen years, and was his friend; that after his death he saw him first at an undertaking establishment on Eighth avenue, and that there “was then an abrasion on his head, on the temple.” On cross-examination the witness said he did not know Dr. Lyon, to his knowledge, but that he had been called upon within a few days after the death by a gentleman who made inquiries of him touching the death of Myers. Then this question was put:

“Q. Did you tell Dr. Lyon in one of these interviews that you had a talk with J. Weston Myers the night before, and that you did not think they had any claim against this defendant company? (Objected to as incompetent and irrelevant. Objection overruled. Plaintiff excepts.) A. I don’t remember that. I wouldn’t take my oath that I didn’t, but I have absolutely no recollection of it.”

The witness had no interest in the controversy. It had not then been made to appear, nor was it afterwards, that he had any right to speak for or represent this plaintiff, and clearly what witness thought or said of the general merits of the claim was neither competent nor relevant. The defendant’s brief puts forward, as the best answer to be made to an attack upon this ruling, that “it was competent for defendant to show any admission made by plaintiff or by her son or the witness Leggett, if followed by evidence connecting her with it; such testimony was also relevant. The witness’s answer, however, rendered evidence as to plaintiff’s connection with such admission unnecessary.” It will be observed that this answer concedes its incornpetency at the time it was admitted, but says, in effect, that he could have cured the error if the answer of the witness had been such as to have made it necessary. In other words, he says: “If the witness had answered, ‘Yes.’ it would have been necessary for me to have shown plaintiff’s connection with the witness; but, as the answer was of no consequence, it was not necessary for me to do.” We do not agree with him as to the effect of the answer, but think it may have been almost as damaging as though the answer had been in the affirmative. The reply, “I don’t remember that; I would not take my oath that I didn’t, but I have absolutely no recollection of it,” —may not unlikely have, persuaded some members of the jury that he had made such a statement to Dr. Lyon, and that such was the fact. Certainly its tendency must have been to raise a doubt in the minds of some of the jury whether he did not say it, and even that doubt may have had an important bearing in the disposition made by them of the issues submitted. As we cannot say that this error did not result in harm, it cannot be disregarded. The judgment should be reversed, with costs to the appellant to abide this event. All concur.


source: Caselaw Access Project

author: O’Brien, J.

license: Public Domain

text:
    The People ex rel. Bleecker Street and Fulton Ferry Railroad Company, Resp’t, v. Edward P. Barker et al., as Commissioners, etc., App’lts.

      (Supreme Court, General Term, First Department,

      Filed March 15, 1895.)

    Taxes—Corporations.
    The market value of the shares of a corporation is an erroneous basis for determining the amount of the capital stock of such corporation liable to taxation.

      Certiorari to review an assessment of relator’s personal property.
    This is a certiorari to review an assessment for taxation on the personal property of the relator upon a valuation of $133,050. The record consists of the petition for the writ and the return thereto, from which it appears that the relaror made application to the commissioners to have said assessed valuation corrected, and in support of such application, submitted a statement in writing upon a printed blank furnished by the commissioners, which is as follows :
    ■“Department of Taxes and Assessments, Commissioners’ Office, Staats Zeitung Building, Tryon Row.
    “Please state the full name of the corporation.
    “Statement made and delivered to the commissioners of taxes and assessments of the city and county of New York, for and in behalf of the Bleecker street and Fulton Ferry Railroad Company of the city of New York, showing its condition, for the purpose of assessment, on the second Monday of January, 1890.
    Total gross assets ............................ $
    Capital stock actually paid in, or secured to be paid
    in.........................................
    Amount of surplus earnings....................
    ‘Rate of dividend for last year, or last annual dividend.......................■...............
    “Is the company assessed by the state under chapter 361, Laws 1881, and the amendatory acts? Yes; paid by the Twenty-Third
    Street Railway Co.
    “Liabilities in detail, as follows:

      “The whole rights of this company are leased to the Twenty-Third Street Railway Company. The Bleecker Street Company has no assets and no real estate.
    “Assessed value of real estate, being foundation, roadbed, and superstructure; describing particularly by ward numbers.
    • Ward Map No. 2,010, ' 2d Ward.............. $ 7,000 00
    “ 1,502, 4th “ 4,000 00
    “ 1,303, 6th “ ........■...... 6,000 00
    “ 5,003, 9th “ 10,250 00
    “ 4,464B, 14th “ 6,100 00
    “ 4,002, 15th “ ......;....... 6,800 00
    “ 4,704, 16th “ 6,800 00
    $46,950 00
    Amounts invested in the stocks of other corpora-
    tions which are taxed upon their capital........ $ None..
    Amount invested in U. S. securities............. None.
    “(If the stock of the company is worth less than par, state the actual value, and give the facts under oath, which will justify such estimate of its value).
    “The highest price at which the stock has sold during the year is $25 per share, and most of the sales have been under that price.
    “The principal office or the place of transacting the financial business of the said corporation is situated in the Sixteenth ward of the city of New York., at No. 621 West Twenty-Third street.”

      David J. Dean, for app’lts; Thomas P. Wickes, for resp’ts.
   O’Brien, J.

It is insisted upon this appeal that the writ of certiorari should be quashed, because it appears that none of the grounds specified in the petition were presented to the assessors, and those not specified must be considered waived, and because, upon the application to the assessors, the assessment as made was warranted by the facts disclosed. The question of the sufficiency of the petition and the return, we think, is disposed of adversely to the appellants by the case of People ex rel. Commercial M. Ins. Co. v. Tax Com’rs of City of New York, 144 N. Y. 483; 64 St. Rep. 60. As to the facts disclosed warranting the assessment, we think it therefrom appears that the method resorted to was erroneous, in that it was based upon the market value of the shares of the corporation, which, as held in the People ex rel. Union Trust Co. v. Coleman, 126 N. Y. 433; 38 St. Rep. 237, was an erroneous basis for determining the amount of the capital of the corporation liable to taxation. It was therein held that it is the corporate assets constituting the capital, and not the value of its shares in the hands of individual owners, that is the subject of taxation.

We think, therefore, that the order was right, and should be affirmed, with costs.


author: Parker, J.

text:
    Tyndale Palmer, Resp’t, v. Chicago Evening Post Company, App’lt.

      (Supreme Court, General Term, First Department,

      Filed March 15, 1895.)

    SeVICE AND PROOF—CORPORATION.
    The facts, in this case, were held to constitute the agent in this state of & Chicago newspaper company its a managing agent, within the meaning of § 482 of the Code.
    Appeal from an order, denying a motion to set aside the service of a summons on the ground that no valid service thereof had been made.

      Wagner Swayne, for app’lt; James R. Soley, for resp’t.
   Parker, J.

The question is whether Thaddeus B. Biker was managing agent of the defendant within the meaning of subdivision 3 of § 432 of the Code of Civil Procedure, which prescribes how personal service may be made upon a foreign corporation.It would be comparatively free from difficulty were it not that, appellant insists that the court of appeals in Taylor v. Association, 136 N. Y. 343; 50 St. Rep. 7, asserted what constitutes a managing agent, and that an abatement of one jot from the full measure of that rule takes him without the section.

It would be a difficult task to formulate an inflexible rule which should in each and every part present the true division line between managing and other agents, owning to the almost infinite variety of business carried on in this state by foreign corporations varying in character, and necessarily requiring officers, agents, or employes with varied capacities, powers, and duties. Some foreign corporations practically transact all of their business in this state, their incorporation elsewhere being for the.purpose of obtaining a more favorable charter or escaping taxation, while others, like this defendant, do the greater part of their business within the limits of the state creating them, but have a branch office in other jurisdictions, where business is solicited, contracted for, and paid for. The fact that no two cases are alike, and that each must depend on its own peculiar facts, has led. to the adoption of only the most general rules for their disposition. And it seems to us clear that the court did not intend to, and did not in fact, work out any change in the hitherto substantially uniform tendency of the decisions. What was decided was that the relation of attorney and client does not constitute such an agency. The facts were that the person served, as the managing agent of the defendant, had been employed by it to foreclose, and he had foreclosed, a mortgage owned by it, and had never been connected with the defendant in any other way. The question wRs not at all on the border line, and the court so treated it, referring only to Reddington v. Mining Co., 19 Hun, 405, and Sterett v. Railroad Co., 17 id. 316. We are thus brought to an examination of the decisions, which fully justify, as we think, the determination of the special term.

Hiller v. Railroad Co., 70 N. Y. 223, was not a case of service upon a managing agent, but upon one of the directors of a foreign. ■corporation while temporarily in this state in the pursuit of his own business. It is not therefore precisely analogous, but the reasoning which led the court to hold the service sufficient is in point and instructive. In delivering the opinion of the court, Judge Earl said:

“ Corporations are intangible, incorporeal existences, and service of process upon them" can only be made by service upon some one of their agents or officers. The legislature has power to determine how and upon whom service shall be made. It may determine that service shall be upon the board of directors while in session, or upon any of the executive or administrative officers, directors, or other agents. The object of all service of process is said to be to give notice to the party on whom service is made, that he may be aware of and may resist what is sought of him ; and it is a general rule that any service must be deemed sufficient which renders it reasonably probable that the party proceeded against will be apprised of what is going on against him, and have an opportunity to defend.”

In Palmer v. Pennsylvania Co., 35 Hun, 369, a motion to set aside service on grounds similar to those made in the present case was denied. The defendant’s affidavits showed that the alleged agent was appointed by another company, subject to discharge by that company, and wholly paid by that company, but that, as a matter of convenience in the transaction of certain details in connection with the business of the defendant, such as the transmission of reports, he was authorized to act for the defendant. The general term, in affirming the order of the special term, said:

There is no doubt that defendants hold Pollock [the alleged agent] out to the world as their agent in the city of New York. It is plain that he has a large authority, and within a wide field his acts are binding on defendant. The Code does not specify the extent of the agency required to bind defendants by service of process, except that the person upon whom the service is made must be managing agent. Were the rule to be established as contended by appellants, that the agent must have charge of the whole business of the corporation, the statute would be a dead letter, for such an agency seldom, if ever, exists. Every object of the service is attained when the agent served is of sufficient character and rank to make it reasonably certain that the defendant will be apprised of the service made. The statute is satisfied if he be a managing agent to any extent.”

It was held in Tuchhand v. Railroad Co., 115 N. Y. 437; 26 St. Rep. 440, that it is not necessary that the agent should have charge of every department of business of a foreign corporation carried on in this state in order to constitute him a managing agent within the meaning of the section of the Code under consideration. The court said:

■ “ The defendant, like other railroad corporations, necessarily has not only directors, a treasurer, and secretary, but other officers and agents. By these persons, or under their direction, by others, the business of the company is conducted. From the very nature of a body corporate, service of process cannot be personal, and at common law it was made by serving it on a proper officer, so that it might come to the knowledge of the company, and then further proceedings by distress. 1 Tidd, Prac. 121. Under the statute supra the same object was in view; and when the corporation has an office in this state, where a substantial portion of its business is transacted by a person designated by itself as a general agent, although followed by words indicating some one department, it may safely be assumed that the object of the statute will be accomplished. It, of course, intends a managing agent ’ in this state, and, where a corporation created by the laws of any other state does business in this state, the person -who, as its agent, does that business, should be considered' its managing agent; and more especially should that be so where the foreign corporation has an office or place of business in this state, and when that office is in charge of that person, and he there acts for the corporation. He is there doing business for it, and so manages its business. Such person is, in every sense of the word used in the statute, a managing agent.’ ”

In Brayton v. Railroad Co., 72 Hun, 602; 54 St. Rep. 763, the court observes that the requirement of the statute is, not that the service shall be made upon “ the ” managing agent, but only upon the division superintendent of an important division of the company’s road constituted a sufficient compliance with the statute.

The point of the decision in three of the cases cited supra may be stated as follows: In Palmer's Case the statute is satisfied if the person served be a managing agent to any extent. In Brayton's Case the person served need not be the only managing agent of the defendant. It is sufficient if he be a managing agent of an , important part of defendant’s road. And in Tuchband's Case, when a foreign corporation does any business in this state, the person who, as its agent, does that business, shou’d be considered its managing agent; and more especially should that be so when the foreign corporation has an office or place of business in this state, and when the office is in charge of that person and he there acts for it.

The facts touching the relations existing between Biker, the alleged managing agent, and the defendant, the Chicago Evening Post Company, as disclosed by the affidavits, may be briefly stated as follows: Biker was not employed by the defendant upon it salary, but was compensated by it byway of commission upon the business done. He occupied an office in the Tribune Building, upon which is the sign of the defendant, and he advertised in newspapers under the newspaper name of the defendant, the advertisement being signed by him as its “Eastern representative.” In November, 1892, plaintiE wrote a letter to the defendant at Chicago, asking for copies of certain numbers of said paper, and in reply received a letter saying that defendant had no copies of the issues described, and concluding: “ Mr. T. B. Biker, 50 Tribune Building, New York, is our Eastern representative.” The business of a newspaper agent in the city of New York, such as Biker, is the soliciting and obtaining of advertisements, and making contracts therefor upon a prescribed schedule of rates. If special rates were submitted to Biker for adoption or rejection, outside of the schedule of rates by which he was to be guided, it was his duty to submit such propositions to the defendant at its general office in Chicago. All of defendant’s business transacted in this state was conducted by Biker, subject to no other direction than such as he received from the central office of the defendant, a considerable part of the business being transacted by him under general directions only, the exceptions being special propositions for advertising below the rates which by his general directions he was authorized to accept. These facts, we think, constituted him a managing agent within the meaning of the statute as interpreted by the authorities to which we have referred. The order should be affirmed, with $10 costs and printing disbursements.

All concur.


text:
    Joseph B. Schram, Resp’t, v. Henry Werner et al., App’lts.

      (Supreme Court, General Term, First Department,

      Filed March 15, 1895.)

    Principal and surety—Contribution.
    The right of contribution does not exist, where the person, from whom contribution is sought, as cosurety, actually signed as a surety for the party claiming contribution, as well as for the principal, and such fact, if it does not appear in the writing, may be shown by paroi.
    Motion for a new trial on exceptions, ordered to be heard at general term in the first instance.

      Albertus Perry, for pl’ff; Nathaniel Myers, for def’t Werner; Joseph Fettretch, for def’t Strauss.
   Parker, J.

In December, 1883, the plaintiff, who is the father of Samuel Schram, one of the members of the firm of I. Bfron & Co., trading also under the name of Bfron & Schram, executed and delivered to the Importers’ & Traders’ National Bank of this city his bond, by which he undertook to pay to the bank all present and future indebtedness and liability of Isadore Efron and Samuel Schram, and each of them, whether they, or either of them, should be alone liable or liable jointly with another or others on any amount up to $30,000, the liability to continue until terminated by notice. During the year 1887, and while the bond was in full force, I Efron & Co. drew three drafts on the defendants Werner and Strauss, trading under the firm name of Henry Werner, and the latter accepted the drafts without consideration, and for the mere accommodation of I. Efron & Co. These accommodation acceptances were made with full knowledge on the part of Werner and Strauss of the existence of plaintiff’s guaranty, and upon a full understanding and agreement between them and I Efron & Go. that the drafts were to be drscounted at the Importers’ & Traders’ National Bank, and that the plaintiff’s guaranty, as well as I. Efron & Co., were to protect the defendants Werner & Strauss from loss. Before the bank acquired the third acceptance, its cashier was informed by the defendant Werner that the acceptances were for the accommodation of I. Efron & Co. made in pursuance of an arangement with them that Werner & Strauss should only be liable after I. Efron & Co. and J. B. Schram, this plaintiff. After the maturity and dishonor of the acceptances, the bank, acting upon such understanding, brought an action in Wisconsin upon the bond given by J. B. Schram for the amount of the drafts, and therein obtained judgment and satisfaction. Thereafter plaintiff commenced this action against the drawers and acceptors of the drafts, claiming that the plaintiff as surety for I. Efron & Co., having been compelled to pay the same to the holder of the drafts, was entitled by subrogation to all the rights, remedies, and securities possessed by the bank as means of enforcing payment of the drafts, including the drafts and debts represented by them. The trial court was persuaded that this view was correct, and directed judgment for the full amount of the drafts against all of the defendants, including Werner and Strauss, the acceptors. The question is whether this ruling was right in so far as it affects the accommodation acceptors.

The doctrine of subrogation is correctly stated by the learned counsel for the appellant as follows:

“ When one has been compelled to pay a debt which ought to have been paid by another, he is entitled to a cession of all the remedies which the creditor possessed against that other.”

I. Efron & Co. were in this matter the principal debtors, and as against them the doctrine of subrogation can be successfully invoked. Had Werner and Strauss been, as upon the face of the acceptances they were seemingly, the principal debtors, the principle of subrogation would have been equally applicable to them ; or had the plaintiff, with knowledge of the fact that Werner and Strauss were the acceptors of the drafts, acted on that appearance, and without any other knowledge, then, as to him, Werner and Strauss would have been estopped from denying that they were such. But the facts were otherwise. The plaintiff had no knowledge of Werner and Strauss. He neither gave his guaranty on their account, nor permitted it to continue in force longer than he otherwise would, because information had come to him that they were the acceptors. When the drafts were discounted, there' came into existence at the same moment a liability on the part of both plaintiff and Werner and Strauss to pay them. Their liability grew out of separate instruments, but both became liable nevertheless, as sureties for I. Efron & Co. Whether they were co-sureties or successive sureties we must now inquire. If the former, they must equally divide the loss. If the latter, the one in the rear of the other must bear the entire burden. The obligation of cosureties to contribute to each other has grown out of that favorite rule of equity that equality is equity. It is not at all founded on the idea of contract between sureties, and may be invoked by the one as against the other when he has been compelled to pay for the principal debtor, although without any knowledge down to the time of payment or later that his cosurety had also •obligated himself to pay the same debt. Nor will their becoming sureties at different times and by different instruments, without the knowledge of each other, affect iheir liability to contribute one to the other as cosureties. If, then, there were no other facts than that Werner and Strauss became sureties for I. Efron & Co. by accepting the drafts for their accommodation, and J. B. Schram became their surety for the same indebtedness by virtue of the bond lodged by him with the bank, the plaintiff would be in a position to insist that Werner and Strauss were his cosureties for such indebtedness, and therefore bound to contribute to the extent of one-half of the amount paid by the plaintiff. But the defendants Werner and Strauss undertook to become sureties for I. Efron & Co. and the plaintiff, not with the plaintiff. Their understanding with I. Efron & Co. was that they should respond only in the event that both they and their guarantor, Schram, could not pay, —an event which I. Efron & Co. assured them could not possibly happen, because J. B. Schram was such a very rich man. The question now presented is whether this agreement operated to make J. B. Schram and Werner and Strauss successive sureties.

In considering that question it should be borne in mind that in no manner whatever, either by appearance or otherwise, did the defendants induce the plaintiff to give his bond to the bank, or to refrain from terminating his liability thereunder by notice. Both his acts of commission and omission were without reference to or knowledge of Werner and Strauss, and he imposed no limitation whatever on his liability. On the other hand, when Isadore Efron and Samuel Schram requested the defendants Werner and Strauss to become sureties for them,they were informed of the guaranty of this plaintiff, and of his ability to respond for the amount of the drafts should I. Efron & Co. fail to pay them. The question propounded to them was whether they would accommodate their friends, who needed still another surety. It being a mere matter of accommodation, they were at perfect liberty to decline or accede to the request; and, if granted, to impose, as a condition of their becoming sureties, that they should not be cosureties with the plaintiff, but should be sureties for I. Efron & Co. and the plaintiff. This condition was insisted upon and assented to by the principal debtor. Had the condition been incorporated in the drafts, it would not be for a moment questioned but they had accomplished what was intended, and had made themselves in fact sureties for the plaintiff as well as for I. Efron & Co.; for the rule is that the surety at the time of entering into the obligation of suretyship may make such stipulation as he sees fit in regard to his liability, so long as it is done in good faith, and his signature is not permitted to seem to be what it is not, so as to mislead others, and induce them to become sureties upon the belief that he is a cosurety for the principal, when in fact his liability is restricted. This rule is followed in Harris v. Warner, 13 Wend. 400, where a principal and four sureties executed a note as makers. Opposite each of the names of the first three sureties was written the word “surety,” while the fourth wrote opposite his signature “surety for the above names.” The principal failing to pay, the first surety was compelled to, and sought contribution against all the others, including the fourth surety; and it was held that from him there was no right of contribution, because he had refused to sign as co-surety with the other sureties, and. had a right to qualify his contract, as he pleased, within the rules of law. To the same effect is Sayles v. Sims, 73 N. Y. 551. Other cases in which the rule has been referred to and applied might be cited, but it is deemed too well settled to call for a further citation of authority. But if the fact be that a person from whom contribution is sought as co-surety actually signed as a surety for the party claiming contribution, as well as the principal, i.t may be shown, although it does not appear in the writing by which he became bound. The contract may rest in paroi, and, if it does, it may be shown, whereupon it will be given the same effect as if it were contained in the writing. This proposition is recognized in Wells v. Miller, 66 N. Y. 255, where the court, in discussing the question of contribution between sureties held that there will ndt be contribution if one surety stipulates for an advantage over the other. The court said:

“It is not sufficient that both parties are sureties. * * They must occupy the same possition in respect to the principal,, and have no equities between themselves, giving an advantage to-one over the other. And it is competent to prove by paroi the relation of the parties, and that one surety agreed to indemnify another, or any extrinsic facts affecting the equities between them.’’

In Chapeze v. Young, 87 Ky. 476, Chapeze had offered to become surety at the bank for one Gleason. The bank requested another name, whereupon Gleason applied to Young. The latter said to Gleason, not to the bank, that he would become surety “on the condition and with the agreement that he was binding as a surety only of Gleason and Chapeze.” Chapeze was ignorant of the fact that Young’s name, was on the paper until the failure of Gleason to pay. The action was by Chapeze for contribution after payment of the paper, and Young had judgment. The existence of the agreement by which Young was restricted in his-liability did not appear on the paper, but the court held, on reasoning entirely satisfactory, that the existence of such agreement, between Young and Gleason, the principal debtor, could be shown, paroi. In Adams v. Flanagan, 36 Yt. 400, there were four makers-of a promissory note. Opposite each of the names of the last two-the word “surety” was written. The first surety-paid-the note, and brought the action against the others to compel contribution. "Upon the trial it appeared that the second surety signed upon the express understanding with the principal debtor that he signed as= surety for the plaintiff, and not as co-surety with him. In denying his right to contribution the court said:

“As between the makers and the payee, the note excludes all paroi evidence; but, as between the signers to it, was not made or intended to be the exclusive proof of their agreement and relations. It is well settled that it is open to paroi evidence to show the contract relations of the signers, and the real nature of the contract between them.”

It follows from these authorities that Werner and Strauss established by competent evidence the existence of an agreement by which their liability was restricted to that of sureties for the principal debtors and the other surety, J. B. Schram, this plaintiff. And, as there are no facts present which cause such restriction to be inequitable, as against the plaintiff they must be held to be successive sureties, and the plaintiff in the rear of the defendants Werner and Strauss, and therefore not entitled to recover as against them.

The exceptions should be sustained, and a new trial ordered as to the defendants Werner and Strauss, with costs to abide the event. All concur.


text:
    State Bank of Lock Haven, Resp’t, v. James W. Smith et al., Impleaded, etc., App’lts.

      (Supreme Court, General Term, First Department,

      Filed March 15, 1895.)

    Principal and surety—Loss of collateral security.
    Where notes, discounted by a bank, were made by defendants for the accommodation of the payees, who were also indebted to its president, the fact that the president, in effecting a settlement of the bank’s claim against the payees, procured a prior lien for his individual claims on their property, does not render the bank chargeable with the amount of such preference as for property negligently lost, which might have been applied in satisfaction of the note on which defendants were liable as accommodation makers.
    Appeal from a judgment in favor of plaintiff, and from an order granting an extra allowance.
    It appears from the pleadings and findings that the plaintiff is, and for many years has been, a banking corporation organized under the laws of Pennsylvania, and doing business at Lock Haven, in Pennsylvania; that the defendants James W. Smith and Wilbur F. Smith, during the same time, were co-partners, doing business under the name of J. W. & W. F. Smith, in Brooklyn, in this state; and that the nominal defendants Chandler P. Wainwright and Willis Bryant were co-partners, doing business under the firm name of Wainwright & Bryant in Philadelphia. The twelve notes held by the plaintiff on October 24, 1889 (of which the notes in suit are merely renewals), were dated from June 21, 1889, to September 17, 1889, and were made by the defendants Smith to the order of the defendants Wainwright and Bryant, indorsed by the latter, and discounted by the plaintiff. It was found by the referee that, at or shortly prior to the times when defendants Smith made and delivered to Wainwright & Bryant these twelve notes, said Wainwright & Bryant made and delivered to defendants Smith their twelve notes of like date, ten- or, and terms, and for like amounts, and payable to the order of of J. W. & W. F. Smith; the notes made by Wainwright & Bryant being sent to the Smiths in letters, which in each case say substantially : “Inclosed please find our note [describing it], for which please send us duplicate and the Smiths then returning their own notes as requested. It was also found that these notes were thus exchanged pursuant to an arrangement made in the latter part of 1884, at the request of Wainwright & Bryant, they promising the Smiths to send to them, upon the maturity of the notes, an amount of money equal to the face of the notes, unless said Smiths should have given notice that they had used any of the notes made by Wainwi'ight & Bryant; each party to have the right to use any of the exchanged notes. It appears that, after this arrangement was made, defendants Smith and Wainwright &' Bryant began exchanging their paper thereunder, and so continued to do up to about October 24, 1889. The notes so made by Wainwright & Bryant and.sent to the Smiths were payable in Philadelphia, and the notes so made by defendants Smith and sent to Wainwright & Bryant were payable at the Smiths’ office in Brooklyn. Wainwright & Bryant were accustomed to and did send to defendants Smith money for the notes as agreed, and defendants Smith were accustomed to and did thereupon return Wainwright & Bryant’s paper to them, except in a few instances-in which defendants Smith made use of Wainwright & Bryant’s paper by procuring the same to be discounted. The Smiths in variably paid all the notes made by them according to their tenor, at their office until after the failure of Wainwright & Bryant; and Wainwright & Bryant paid, according to their tenor, at. their office, such, notes of theirs as the Smiths had had discounted, an for the remaining notes sent the cash to the Smiths up to the time of their failure. At the time of Wainwright & Bryant’s failure (October 24, 1889), the plaintiff held the twelve notes, of which these in suit are the renewals ; the defendants Smith held eleven of the counterpart notes made by Wainwright & Bryant; and the remaining note, one dated August 6, 1889, for $1,143.13, was held by the Eleventh Ward Bank, which had discounted it for the defendants Smith. The Smiths afterwards took up the note. At the request of the defendants Smith, the plaintiff has three times renewed the twelve notes held by it; the Smiths each time paying the interest or discount for such renewal, each renewal note being made and indorsed in the same form as the original note.
    One William A. Simpson was the president of the plaintiff bank, its largest stockholder, and practically its manager. He was also, and had been for several years, the financial backer of Wainwright & Bryant. He had loaned them $50,000, and was the accommodation indorser on their paper to the extent of from $85,000 to $135,000 more. He received from them a royalty or definite payment, called “stmnpage,” on each load of timber cut, ostensibly as compensation for advice given in the management of their business. When Simpson loaned them the first $50,000 in November, 1884, they gave him a judgment note therefor, dated November 14,1884, due one day afterdate, and containing a warrant of attorney, which, under the laws of Pennsylvania, enabled Simpson to entered judgment against them at any time. Eor subsequent indorsements, Simpson got two other judgment notes,—one dated January 14, 1885, for $60,000, and another dated August 19,1887, for $75,000,—each payable one day after date. In addition to these obligations to Simpson, Wainwright & Bryant, on the 24th day of October, 1889 (which was the day of their failure), had paper to the extent of $122,313, including that made by the defendants Smith, discounted in the plaintiff bank. On October 24, 1889, Simpson, with one Corss, the attorney for the plaintiff bank, met Wainwright & Bryant in Philadelphia, and it was there determined that they were unable to continue in business, and that they should give to the bank a judgment note as security for the paper that had been discounted by the bank for Wainwright & Bryant, and which bore their indorsement. A list of the notes discounted in the bank was called off. Those indorsed by Simpson were omitted, because he already had a judgment note to secure them. A judgment note for $122,813 was then and there given to the bank, dated that day, payable one day after date. The judgment note was given as security for all the paper, including that made by defendants Smith, indorsed by Wainwright & Bryant, and then lying in the plaintiff bank, except the paper indorsed by Simpson. Simpson then had judgment notes several years old in his possession, and was president of the bank, and acted for it. There were no directions given as to the application of the avails of the judgment notes. Simpson said that he was going to enter judgment on the bank’s notes ; nothing was said about his own. On the 26th of October, Mr. Simpson, through Corss, the attorney, caused judgments on the three notes already held by him and the note handed to him for the plaintiff to be entered, putting his own three judgments first, and issuing execution upon them first; so that they obtained a priority under the laws of the state of Pennsylvania as to the personal property of Wainwright & Bryant, but shared pro rata with the judgment in» favor of the plaintiff as to the real estate. According to the law of Pennsylvania, judgments entered on the same day participate equally in the avails of funds realized through execution against real property. As to personal property, the execution first issued takes precedence. At the sheriff’s sale had in the month following, under these four executions and another for a small amount, Simpson bought in a large part of the personal property, and practically all the real estate; the personal property being sold for $74,698.50, and the real estate for $26,490. The proceeds of this sale of the personal property, after deducting fees, etc., were paid to Simpson by crediting the amount to him on account of his purchase at the sale; and the proceeds of the real estate were disposed of by taking Simpson’s receipt as president of the bank for $12,000 thereof, applied upon the execution upon the plaintiff’s judgment, and by crediting the balance to Simpson on account of his purchase. An execution upon plaintiff’s judgment was also issued to Philadelphia, and certain property there was bought in by the plaintiff for $150, and was after-wards resold by it for $5,000. In addition, Simpson received certain cattle stock, which was afterwards sold for $5,000. To enable Simpson to close his purchase with the sheriff without paying cash, a formal assignment of the plaintiff’s judgment was made to him; but, by agreement between Simpson and the bank, it was provided that, after payment of his own claim, he would pay the full amount of the indebtedness of Wainwright & Bryant as drawers and indorsers of notes discounted by the bank, and not otherwise paid or secured to be paid.

      Abel E. Blackmar, for app’lts; Frederick H. Man, for resp’t.
   O’Brien, J.

The causes of action were upon twelve promissory notes made by the defendants Smith to the order of Wainwright & Bryant, and by them indorsed and delivered to plaintiff. There was no contest as to the making and delivery of the notes, or as to the title of the plaintiff to the same; but it was contended that the defendants Smith were accommodation makers, and that the notes were made for the accommodation of Wainwright & Bryant. It was further contended that Wainwright & Bryant placed certain securities with the plaintiff to secure the payment of these notes with others; and that the plaintiff had realized certain sums of money upon said securities, and had negligently wasted and destroyed a part thereof; and that the defendants were entitled to have the amounts realized by the plaintiff on such securities applied to the payment of these notes pro rata with others ; and also that the value of the securities wasted by the plaintiff should be credited on these notes. The referee found, against the contention of plaintiff, that all the notes except one were accommodation paper; that the plaintiff had received $22,000 applicable to the payment of these notes with others; and directed that $3,389.48 be credited pro rata upon the principal of the notes. The plaintiff does not appeal, but the defendants do, claiming that they were entitled to a larger credit, and that all the notes were accommodation paper.

In holding that eleven of the twelve notes were accommodation notes, the referee reached a conclusiqn most favorable to the appellants, and with such conclusion we understand no fault is found, it being insisted, however, that the twelfth note also should have been included in the same category. In excluding it, we think, the referee was clearly right. Tinder the terms of the agreement, the defendants had a right to use the notes sent them by Wainwright & Bryant in exchange for notes of similar amount and tenor which they had loaned to that firm. If they had availed themselves of this privilege, and had used the notes, there can be no doubt, upon authority, that they would be regarded as business notes, because given in exchange for other notes, and used for the purpose of raising money. ,Where however, but one was used, and the other eleven retained, we find no reason for relieving the defendants from liability as makers of business paper. It appearing then, as to one of the Wainwright & Bryant notes,—i. e. the one dated August 6, 1889, for $1,154.13,'—-that the defendants, for their own benefit, had it discounted at the bank, the referee was right in holding that the counterpart note given to Wainwright & Bryant, which was discounted by the plaintiff, was in- ' eluded among the twelve notes sued upon, and, unlike the other eleven, was not an accommodation note.

The other eleven notes being accommodation notes, the referee held that the ultimate duty of paying them rested on Wainwright & Bryant, and that any payments made by the latter or securities given by them inured to the benefit of the defendants Smith, whose obligation was that of sureties. To the extent to which they were entitled to the benefit of the security thus given, which consisted of the judgment note for $122,313, covering these and other notes of Wainwright & Bryant, the referee allowed the pro rata amount realized under the judgment upon the sale of the real property, and $10,000 in addition, realized from two other sources, making up the amount of $22,000, which he held was applicable to the payment of the notes. The defendants claim, however, that they were entitled to a greater credit, and that, in addition to the proceeds of the real estate, there should have been applied upon the notes the pro rata share of the proceeds of the personal estate of Wainwright & Bryant which the plaintiff should have realized upon the judgment given to it to secure the notes. Whether this contention is right depends entirely upon the determination of the question as to whether, under the law, Simpson, who was president of the bank, and to whom Wainwright & Bryant were indebted in a large sum of money, for which he held their judgment notes, violated a duty, which as president of the bank he was chargeable with, towards the defendants, in giving himself a preference out of the avails of the personal property. It was in the,power of Simpson to seize all of Wainwright & Bryant’s property at any time during a long period prior to the giving to him of the judgment note for the bank. Had he reaped the advantage of bis position by so seizing the property, the defendant, as against him, would have no legal right to complain. It may be that, considering his relation to the bank and the use that he had made of their funds, it might compel him, in some way or in some form of action, to make good the loss which under his management the bank sustained. Without, however, discussing the right of the bank, it is clear that no third party, situated as the defendants are, could successfully assail Simpson’s right'to obtain, were he so disposed, a preference in respect to Wainwright & Bryant’s property over all other creditors. It must be remembered, too, that, in the disposition of their property among their creditors, Wainwright & Bryant selected Simpson as the person who was to make it, and constituted him their agent for that purpose; and they had a right to instruct him, had they seen fit, .as to the manner in which the property should be applied; or they could leave it, as they did, to his discretion, in exercising which the defendant would have no more right to complain than if the disposition had been made by Wainwright & Bryant themselves. As correctly said, therefore, by the referee:

“In the absence of proof, the act of Simpson may be considered to be just what Wainwright & Bryant intended. Hence the bank cannot be held to stand as having received in payment of the Smith notes that which Simpson managed to apply to his notes through the instrumentality of Wainwright & Bryant.”

As urged by the respondent, the bank owed no duty to the Smiths .requiring it to take the judgment note at all, or to enter judgment thereon, or to endeavor to thrust aside Simpson’s security, which was prior in equity and in point of time, even if it had the power to do so. The question here raised is not as to what rights the bank might claim against Simpson on the facts disclosed, but solely whether the Smiths, as so-called “accommodation makers” of the motes held by the bank, for which it had paid full value, can hold the bank liable for something which it neither did nor permitted, It is well established that the holder of negotiable paper loses no right against the surety thereon by merely remaining passive. First Nat. Bank v. Wood, 71 N. Y. 405, 411; Smith v. Erwin, 77 N. Y. 466. We do not think that the act of Simpson and Corss, although they were the president and the attorney, -respectively, of the bank, in permitting Simpson to obtain a priority upon the personal property, made the bank liable for a breach of duty, and chargeable, as though lost, with the amount that would have been realized had the bank’s judgment attached equally with Simpson’s-upon the personal property:

Another grievance assigned by the appellants consists in the refusal of the referee to find that the bank had realized $20,000 on the execution against the real property, and finding, instead, that it had realized only $12,000. Mr. Simpson, the president of the bank, testified that $20,000 was realized on the real property, but that this statement was made from memory, and that it was incorrect, is evident from the original documents, which include the receipt of Mr. Simpson and the sheriff’s return. Besides, it appears that the real estate was sold for $26,490; and, regard being had to the amount of the four judgments, the bank’s pro rata share of the proceeds would be about $12,000,—the amount found by the referee. There being a conflict between the oral testimony and these written documents, we think, upon consideration, that the referee was right in following latter, as against the statement of the witness.

Although the referee has charged the plaintiff with $22,000 as-having been realized upon the bank’s judgment, there is a serious question whether the entire value of the collateral security, including the judgment note, and the entire amount with which it is-chargeable in favor of the defendants, was more than $12,150. The $22,000 found by the referee was made up of $12,000, the proceeds of the execution issued on the bank’s judgment to the' sheriff of Jefferson county, and of $5,000, which he charged to the bank as-being the amount realized on the resale by it of the property sold under the execution issued to the sheriff of Philadelphia, and which it bought in at such sale for $150, and of $5,000, the amount realized from the sale of certain cattle stock which Wainwright & Bryant had given to Simpson at the date of their failure. The amount, of $150, realized on the sale of the Philadelphia real estate, would seemingly be the proper credit which the bank was entitled to allow, because any profits realized on the resale thereof could no-more be reached as a security in defendant’s favor than would a loss, had it been made upon such resale, have been chargeable to it;, and the referee, instead of charging the bank with $150, has charged-it with $5,000, in defendants’ favor. The $5,000, proceeds of the cattle stock, as testified to by Bryant, was given by him to Simpson as he understood, individually for his indebtedness. This amount, however, was appropriated bv Simpson to the bank, under their agreement, pro tanto on the Wainwright & Bryant notes, and the referee allowed the payment. It will thus be seen that the referee-reached upon these items a conclusion most favorable to the defendants.

The remaining question urged upon this appeal is in regard to the order granting to the plaintiff an allowance, in addition to costs, of $386.07. In view of the amount and the character of the questions involved, this cannot be regarded as an excessive allowance. It is insisted, however, by the appellants, that they should not be pun ished, by way of an allowance granted against them, for having interposed equitable defenses which in part have been sustained. The answer to this seems to us apparent. It is true that the plaintiff asked a judgment for the full amount of the notes, upon the theory that they were business paper, and that the defendants took the opposite view, that they were accommodation notes ; and, while the former demanded the full amount, the defendants insisted that the complaint should be dismissed. While the plaintiff' did not obtain the entire relief demanded, we do not think it can be claimed that it has not succeeded in the action. Apart from, this, if the defendants desire to limit their liability for costs, the Code provides a way by permitting a person to make an offer of judgment, which, if not accepted, would place the liability for costs upon the other party. This the defendants did not do, but litigated the question of plaintiff’s right to any recovery ; and the plaintiff having recovered and been awarded costs, in view, as already said, of the difficulty of the questions involved, we think it was entitled to the allowance made.

In concluding, we think it proper to say that we might well have let this appeal rest upon the clear and satisfactory opinion of the referee; but as the appellants, with much force and earnestness, have pressed the questions again upon our consideration, we feel that a brief reference to all the questions presented upon the appeal was proper.

We think the conclusion reached by the referee was right, and that the judgment and order should be affirmed, with costs.

All concur.


author: Per Curiam.

text:
    Wood Gibson, Resp’t, v. Samuel G. Blakley, Individually and as Administrator, etc., Impleaded, App’lt.

      (Supreme Court, General Term, First Department,

      Filed March 15, 1895.)

    1. Parties—Executor.
    An action may be maintained against a defendant to recover against him personally and as administrator, in case he is liable in both capacities.
    3. Same.
    A defect of parties defendant was held, in this case, not to be apparent on the face of the complaint.
    Appeal from an interlocutory judgment, overruling a demurrer to the complaint.

      Abram Kling, for app’lt; David Keane, for resp’t.
   Per Curiam.

April 24, 1867, Wood Gibson, Sr., recovered a judgment against his son, Wood Gibson, Jr., for $23,300.11, which became a lien on the interest of the judgment debtor in No. 295 "West Eleventh street. November 2, 1869, the judgment debtor ■conveyed his interest in said premises to James Blakley, who in consideration thereof executed and delivered to the grantor (the plaintiff herein) a contract, of which the following is a copy:

. “Whereas, I, James Blakley, of the city of New York, have purchased from Wood Gibson, Jr., of said city, his interest in the property, in the city aforesaid, known by the number 295 West Eleventh street, as appears from his certain deed (in which Elizabeth J. Guión and Clement Guión join) to me, conveying said property, which deed bears even date herewith ; and whereas, the consideration of the said conveyance to me by the said Wood ■Gibson, Jr., is the sum of fourteen hundred dollars ($1,400,) which sum I have not yet paid to the said Gibson by reason of the existence against him of a judgment in favor of his late father: Now, therefore, I, the said James Blakley, do hereby covenant and agree that upon the cancelment of the said judgment, or upon the release from the lien thereof of the property aforesaid, I shall, upon demand, pay to the said Wood Gibson, Jr., the sum aforesaid of fourteen hundred ($1,400) dollars, with lawful interest ■from the date thereof. This covenant to apply to and bind the lawful representatives of myself and of the said Gibson.
“ [Signed] James Blakley.'
“Dated November 2, 1869.
“In presence of [Sgd] Chas. Coudert, Jr.”

July 19, 1869, Wood Gibson, Sr., died leaving a last will and testament, which was duly admitted to probate, September 8, 1869, and letters testamentary thereon were duly issued to said James Blakley, who was nominated as an executor therein. The testator bequeathed one-fourth of his estate to said James Blakley in trust for the following purposes: (1) To pay the aforesaid judgment; (2) the remainder of the fourth to be invested, ■and the income therefrom paid to Wood Gibson, Jr., during his life. The executor received from said estate moneys properly applicable to the payment of the judgment, to an amount more than sufficient to pay the same, but the judgment has never-been canceled of record. June 25, 1888, James Blakley died, leaving the defendant, his son, his only heir and next of kin, who was duly appointed the administrator of his said estate. These facts are set forth in the complaint, and it is also alleged that no part of the $1,400 promised to Ire paid by said contract has been paid, and it is also alleged that the defendant has received assets from his father’s estate in an amount more than sufficient to pay said sum. The complaint closes with a prayer that the judgment be canceled of record, and that the plaintiff have judgment .against the defendant as administrator for $1,400, with interest thereon from November 2, 1869. It is more than 27 years since this judgment was recovered, and more than a quarter of a ■century since the defendant's intestate received from the plaintiff a ■conveyance of the premises. Presumptively the judgment has long ceased to be a lien on the real estate, or even an enforceable ■claim against the judgment debtor personally, and a good cause of action is set out as against the defendant in his representative capacity. It is insisted that facts sufficient to constitute a cause of action against the defendant individually are not set forth in the complaint. In considering this question, it must be borne in mind that this action is not against devisees or legatees, nor is it against one of several next of kin, or of one of several heirs, and many of the facts which are necessary to be alleged in such cases are not necessary to be in this action. In so far as this is a personal action, it is against a sole heir and next of kin, who has received the whole- estate of his ancestor, subject to the liability to pay the debts of the ancestor in so far as the defendant has received sufficient assets, and sufficient facts are alleged to constitute a cause of action against the defendant individually. An action may be maintained against a defendant to recover against him personally and as an administrator, in case .he is liable in both -capacities. Code Civ. Proc. section 1815. It does not appear on the face of the complaint that there is a defect of parties defendant. It is not alleged that an administrator with the will annexed or a testamentary trustee for the estate of Wood Gibson, Sr., has been appointed, and, for aught it appears, the estate may have been settled and the trust terminated.

The judgment should be affirmed, with costs.


author: Van Brunt, P. J.

text:
    Charles C. Mayer, Resp’t, v. Emanuel Frankfeld, App’lt.

      (Supreme Court, General Term, First Department,

      Filed March 15, 1895).

    1. Parties—Partnership.
    Where there is a dormant partner, a party bringing an action against the firm, must make such dormant partner a party, if he knows of his existence.
    3. Same.
    In an action on a contract signed by defendant in his individual name, he may show that he and others were partners under such name, of which fact the plaintiff had knowledge, and that the contract is a firm contract.
    Appeal from a judgment entered on a verdict in favor of plaintiff, and from an order denying a motion for" a new trial.

      Leo G. Rosenblatt, for app’lt; C. De H. Brower, for resp’t.
   Van Brunt, P. J.

This action was brought to recover upon a contract made by the plaintiff with E. Frankfeld. The defendant by his answer, among other things, set up a defect of parties alleging that E. Frankfeld was the name of a firm consisting of Emanuel, Louis, and Benjamin Frankfeld, who were living and residing within the city of New York. Upon the trial the defendant sought to prove that prior to the entering into this agreement the plaintiff had notice of the fact of the copartnership, and that the business was done under the name of E. Frankfeld, and that the contract was made for the purposes of that business. This evidence was excluded by the court upon the apparent ground that the contract upon its face was an individual contract of E. Frankfeld, and that evidence to show that E. Frankfeld was the name of a firm was incompetent for the purpose of showing who the real contracting parties were. Upon this "appeal. this ruling is sought to be upheld by the respondent on the ground that, E. Erankfeld having executed this contract in his individual name, he will be held personally liable as contracting agent, whether he is shown to be an agent or not. We think that the principle relied on has no application whatever to the case at bar. It was a question of fact as to whether E. Erankfeld executed this contract individually or in the name of the firm. Simply because the names coincided, he was not precluded from giving such evidence. There being an individual E. Erankfeld, and a firm E. Erankfeld, there was a patent ambiguity upon the face of the contract, to eliminate which paroi testimony was competent. It is a familiar principle in cases against copartnerships that any one of the copartners, if sued alone, may plead a defect of parties, and that this is a good plea, when sustained by proof. In the dose at bar the defendant pleaded defect of parties, giving the names of the absent parties and alleging that they were residing in New York. His plea being good in form, he offered to prove it, which was denied. The ruling of the court seems to have proceeded upon the theory that, where there are dormant partners,—that is, where there are partners whose existence is not disclosed by the title of the firm, even in the collective form of “ & (Jo.,”—a party bringing an action against such firm may take as party.defendant the individual whose name appears in the title of the firm, although he he may know of the existence of other partners. That this rule is erroneous seems to be clear from the opinion of the court in. Marvin v. Wilber, 52 N. Y. 272, where the rule is recognized in respect to dormant partners that they need not be sued if the-plaintiff did not know of their existence ; the converse of the proposition being equally true, that if he knows of the existence of of a dormant partner he must make him a party. In the case at bar evidence to prove that the plaintiff had knowledge of the existence of the other partners at the time of the making of this contract was excluded, which was error.

As for the contract being an individual contract of the defendant sued, it does not so appear upon its face. It is apparent from the paper as originally drawn that it was the understanding that the plaintiff was contracting with a copartnership. He made a mistake in the copartnership name, and the only alteration was in giving, the true copartnership name.

The claim which is presented, that the affidavit verified by the defendant, and filed in the building department, estops him from asserting that the contract with the plaintiff was a firm obligation, does not seem to have any foundation in law. There is not the slightest evidence that the plaintiff acted upon this affidavit, or that it was made for the purpose of his taking any action upon itr and therefore no elements of any estoppel prevail. It seems to be manifest that no other rule except such as has been stated in reference to this matter can obtain.

The firm of E. Erankfeld claimed to have a counterclaim aris-. ing out of this contract, and this counterclaim was excluded, upon the ground that the right of action for the counterclaim connected with the doing of this work rested in the firm, whereas the obligation to pay for it rested in the individual. It seems to be apparent that error was committed, and that the judgment, therefore, must be reversed, and a new trial ordered, with costs to appellant to abide the event. All concur.


text:
    Alice B. Bullock, Resp’t, v. Thomas S. Bullock, App’lt.

      (Supreme Court, General Term, First Department,

      Filed March 15, 1895.)

    1. Bill op particulars—Divorce.
    The issue of marriage in an action for divorce can he raised by a denial of the allegations of the complaint in respect thereto, and a bill of particulors is not necessary to enable the defendant to make and serve his answer.
    2. Same.
    The denial of a motion for a bill of particulars before answer does not establish the fact that the defendant is not entitled to such bill, in order to prepare for the trial.
    Appeal from an order, denying a motion for a bill of particulars.

      B. H. Bristow, for app’lt; W. Moore, for resp’t.
   Van Brunt, P. J.

This action was brought by-the plaintiff to obtain absolute divorce. The complaint contains an allegation of marriage at the city of New York, and also an allegation that the parties thereafter cohabited together as husband and wife. The defendant, before answering, moved for a bill of particulars showing specifically when, where, and by whom such pretended marriage was solemnized, or, if she claims that such marriage took place without a marriage ceremony, what particular facts, acts or doings the plaintiff relies upon as establishing such marriage; when and at what particular place such facts, acts, and doings happened, and when, where, and under what circumstances, and in, what building or place, she claims that she and defendant cohabited as husband and wife; what was plaintiff’s maiden name; by what name she was known at and immediately preceding and since the time of said alleged marriage to defendant; and whether or not she had been previously married, and, if so, to whom. The defendant alleged that he could not properly prepare his defense herein or safely go to trial without the plaintiff furnishing a bill of particulars upon the points above mentioned. The learned court denied the motion upon the ground that it did not appear that the bill of particulars was necessary in order to enable the defendant to make and serve his answer, and we see no reason to interfere with this conclusion. It is apparent that all that the defendant needs to set up to raise the issue of marriage is a denial of the allegations contained in the complaint in respect thereto. But it by no means follows, because a motion for a bill of particulars is denied before answer, that the defendant may not be entitled to such bill of particulars in order to prepare for the trial. He may be entitled to know the time when and the place where this marriage took place; if a ceremonial marriage is claimed, by whom it was celebrated ; and, if a marriage without any witnesses present but the alleged marriage bed, the time when and the place where such- contract was entered into. It does not seem, however, that the defendant would be entitled to a bill of particulars of the. alleged cohabitation, because no amount of cohabitation can make a marriage. Under certain circumstances, although no direct proof of the marriage can be given, from cohabitation an inference may be drawn that at some previous time a contract of marriage had been entered into between the parties. But the weight of such evidence, even in such a case, depends very largely upon its character or want of character. It is a maxim as old as the common law that “consensus non concubitus facit matrimonium.” It is the contract, and not the cohabitation, which makes the marriage. The books are full of cases holding that, in order to establish a marriage, it must be proved that such a contract was entered into per verba depresentí, and that cohabitation can never make a marriage. In other words, that there is no such thing as an implied contract of marriage. The actual existence of the contract must be established by precisely the same class of evidence by which other civil contracts are established. In the case at bar, cohabitation may or may not be corroborative evidence, depending, as has already been stated, upon its character or want of character, and the evidence of the plaintiff cannot be required tobe furnished by a bill of particulars. We think, therefore, that the order should be affirmed, but, in order that there may be no question as to the power of the court, after issue joined, to make an order for a bill of particulars, leave should be given to renew such motion after issue. The order should be affirmed, with $10 costs and disbursements. All concur.


text:
    Jacob Ringle et al., Resp’ts, v. Wallis Iron Works, Impleaded, etc., App’lt.

      (Supreme Court, General Term, First Department,

      Filed March 15, 1895.)

    1. Mechanic’s lien—Foreclosure—Judgment.
    The provision of ch. 342 of 1885 authorizes a judgment, in an action to foreclose a mechanic’s lien, for items which were not due when the action was commenced.
    2. Trial—Discontinuance.
    The entry upon the clerk’s day calendar of the special term, opposite the title of the cause, of the word “discontinued,” in the absence of any order or direction by the court, is not sufficient to show a discontinuance of the action.
    Appeal from a judgment in favor of plaintiffs.

      W. G. Wilson, for app’lt; T. C. Ennever, for resp’ts.
   Van Brunt, P. J.

This action was brought to foreclose a. mechanic’s lien filed by the plaintiffs, as subcontractors, against certain property belonging to the defendant the Terminal Warehouse Company, known as “ Pier No. 57 North River,” to secure a sum of money claimed to be due and owing from the defendant and appellant, "the Wallis Iron Works, to them: Notice of plaintiffs’ lien was filed on the 16th of February,' 1892; and this action was begun as to the appellant, the Wallis Iron Works, on the 5th of May, 1892, by summons dated April 26, 1892. On the 1st of April, 1892, upon the Wallis Iron Works giving a bond, an order was made discharging and canceling the lien of record. It is claimed that on the 6th of March, 1892, this action was discontinued as to the Terminal Warehouse Company, because of an entry upon the clerk’s day calendar of the special term, opposite the title of the cause, of the word “Discontinued." It is difficult to see how this action could have been discontinued on-the 6th of March, 1892, when the summons was not issued until April, 1892. The defendant the Wallis Iron Works answered on the 20th of May, 1892, and the issues presented by the complaint and answer of the Wallis Iron Works were tried at the special term, and a judgment rendered in favor of the plaintiffs ; and from the judgment thus entered this appeal is taken.

The grounds which are alleged on this appeal are, first, that no-foundation was laid for awarding a lien for any specific sum ; that the plaintiff in the action could recover nothing except the amount actually due under this contract at the time of the commencement of the action. This point is embraced in the second objection raised, to the effect that the court erred in holding that the lien could be enforced for what was not due at the time of filing the notice of lien or at the time of bringing the action. The court held that as there was something due on this contract at the time the action was begun, and as it was for the foreclosure of a mechanic’s lien, assimilating in practice to the foreclosure of a mortgage, judgment goes for the entire amount due at the time of the trial.

The first error into which the learned counsel for the appellant seem to have fallen is in not recognizing the fact that a mechanic’s lien can be filed under a contract for work to be done or materials to be furnished. Upon an examination of the mechanic’s lien law (chapter 342, Laws 1885,) it will be seen that statute expressly authorizes a lien to be filed in anticipation of work to be done or materials to be furnished. It further expressly provides that an action must be commenced to foreclose the lien within a certain period after the lien has been filed ; and, if a party has been unable to complete his contract within that time, he might lose the benefit of his lien if he could not commence an action and recover for that which was subsequently to become due.

It is urged that the learned court was mistaken in attempting to assimilate the practice in lien cases and the practice in foreclosure cases, to the extent of giving in action to foreclose a mechanic’s lien all the remedies which are given in the foreclosure of a mortgage. It is said that the foreclosure of a mortgage is an equitable proceeding, where the equitable rights of the parties are to be considered, and their equities controlled the decree; while the foreclosure of a mechanic’s lien, on the contrary, has been held to be and is a strictly statutory proceeding, where the only things to be considered are the strict legal rights of the parties to the controversy. And it is further urged that in foreclosure suits the commencement of the action is not at all necessary to the continuance of the lien; the lien rests upon the mortgage which continues to be valid, whether an action* is commenced thereon or not. Upon a consideration of the rights of parties in mechanic’s liens and liens-obtained by mortgage, it will be seen that in almost all respects they are the same. In the case of the mechanic’s lien an action must be commenced or the lien extended within a short period. In the case of a mortgage the action must be commenced in a longer period; but, if it is not commenced within the period allowed by law, the lien of the mortgage, precisely the same as the mechanic’s lien, ceases to exist by lapse of time. There was an evident intention in the statute to assimilate the practice in the foreclosure of a mechanic’s lien to that of a foreclosure of the mortgage. It was not in the contemplation of the legislature that a mechanic should lose his lien because he was obliged to commence his action before the whole amount of the contract had become due. As in the case of a mortgage, he might commence his action and recover -all that was due at the time of the decree. It would seem, therefore, under these circumstances, that the learned court was entirely right in holding that the plaintiffs in this action were entitled to foreclose therein, if anything was due at the time of the commencement of the action, and recover all that had become due up to the time of trial.

It is further urged that the notice of lien contained false statements, which rendered it invalid. The notice of lien stated, that at the time thereof, there was justly due and owing to the claimants the full contract price. This point, however, does not seetn to have been raised upon the trial, although it is suggested in the defendants’ answer. In the brief of the appellant, our attention is not called to any part of the case in which any such question was presented upon the trial, and we have been unable to find any exception or motion which raises the same.

It is further urged that no judgment can be rendered for a lien after the discontinuance of the suit as against the Terminal Warehouse Company. There does not seem to have been any evidence in the case that the action had been discontinued as to the Terminal Warehouse Company. If we were to overlook the discrepancy in dates, still it does not appear that any order has been made or any direction of the court given for such discontinuance. The mere entry on the special term clerk’s-day calendar (which is notin any respect a record of the court, but a mere memorandum arranging the business to be transacted in the court) cannot be construed into an order of the court. A direction of this kind, even when entered upon the clerk’s minutes, has been repeatedly held not to be equivalent to an order of the coilrt. In the case of a motion for a new trial, although the denial of the motion may appear upon the minutes of the court, yet an order is necessary to bring the same up on appeal. But in this case there does not seem to have been even any entry upon the clerk’s minutes, or any record whatever made because the day calendars do not form any part of the records of the court.

Judgment should be affirmed, with costs.

All concur.


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    In the Matter of Prospect Avenue. Celina Dodin, a Property Owner, App’lt.

      {Supreme Court, General Term, First Department,

      Filed March 15, 1895.)

    1. Attorney and client—Substitution.
    An unconditional substitution will not, it seems, be granted, unless such misconduct on the part of the attorney is shown as will deny him the protection which the court will otherwise afford him for his fees, or for any other lien that he may have.
    i). Same.
    In any other case, a client, subject only to the payment of the attorney’s fees in a proper case, or securing them if they cannot then be fixed and determined, has the right, without assigning any cause, at any point in a suit or proceeding, to change his attorney.
    3. Same—Setoff.
    Upon such application, an indebtedness on the part of the attorney to the client sought to be removed will be set off against the fees to which the attorney is entitled.
    Appeal from an order, denying a motion for the substitution of attornies.
    One Celina Dodin applied for a substitution of attorney. She is a widow, upward of fifty years of age, owning property on Prospect avenue, in this city, for the widening whereof proceedings were instituted by the city of New York. She alleged that for the purpose of procuring proper awards for her property which it was intended to take, she retained an attorney,with whom she had been acquainted for several years, and who had acted for her as legal adviser in many matters during that period ; that for some reason unknown to her, the attorney directed his clerk to appear as attorney in such proceedings, and he did so appear; that she now desires to sever the relation between them, and to have another attorney appear for her, for the reason that the person selected and now acting for her induced her to make him a loan of $3,000 upon a promissory note, and upon the representation that it would be paid at maturity; that, as the result of her confidence in him and her relationship to him, she did loan the money; that the note was not paid at maturity, and she was obliged to bring an .action, wherein the clerk, who as stated, had appeared for her in the proceedings, acted for her attorney; that she obtained judgment and issued execution, but the latter was returned unsatisfied, and up to the present time she has been unable to realize anything upon her judgment; that she believes her present relationship to her attorney is such that it is improper for him to represent her as attorney or otherwise, either in his own name or in that of his clerk; and she asks that other attorneys be substituted in their place and stead. In answer, the attorney, without denying the client’s statements, claims that by virtue of a written power of attorney, which is set forth in full, she constituted him her attorney in fact, and agreed, for the services to be rendered, to pay him certain compensation which was contingent upon his success; that is to say he was to received twenty-five per cent, of the amount of any decrease of assessments or increase of awards, or both, from the amount of assessments and awards established in the first instance by the commissioners appointed in the proceeding, and, in the event of the proceedings being discontinued after any assessment should be fixed by tlie commissioners, he was to receive ten per cent, of such assessment, and, in the event of no increase of awards or the setting aside of the proceedings, he was to receive no compensation whatever

      Earley & Prendergast, for app’lt; Edmond Huerstel and William J. Gilroy, for resp’t.
   O’Brien, J.

In denying the motion for a substitution, the learned judge below stated that he did not “think that the moving party is entitled to substitution, as a matter of right, in this case. Some misconduct should be shown on the part of tlie attorney.” If what had been here sought was an unconditional substitution, the conclusion thus arrived at would have been right. The application, however, was for an unconditional substitution, but for a substitution, and this the court had the right to grant upon such terms as were just. The question presented is, then, was the client,, upon the showing made, entitled to any relief?

As held by this court in the case of Pierce v. Waters, 10 W. D. 432 (headnote):

“Upon an application by a party for substitution of another attorney in place of his attorney of record, ordinarily the court, will see that the attorney is protected as to his fees; yet, where the attorney’s conduct has been improper or neglectful, the court will deny this protection, and direct an unconditional substitution, leaving the attorney to his action for his fees.”

This clearly points out what we think is the distinction to be observed upon motions of this character. If an unconditional substitution is asked for. this will not be granted unless such misconduct on the part of the attorney is shown as would deny him the. protection which the court would otherwise afford him for his fees- or for any other lien that he might have. Upon this application even though we do not go to the extent of holding that the act of the attorney in borrowing from his client, a widow, without security, and without having, as shown by the results, the ability to-pay, the sum of $3,000, necessitating on her- part a resort to remedies to collect the judgment, was so wrongful as to amount to misconduct and bad faith, yet we think it clear that the delicate and confidental character of the relations which should exist between attorney and client were by such act necessarily destroyed, and that the client, under, the circumstances, was entitled to some relief. We think, apart from the question of misconduct or bad faith, that a client, subject only to the payment of the attorney’s fees in a proper case, or securing them if they cannot then be fixed and determined, has the right, without assigning cause, at any point in a suit or proceeding, to change his or her attorney. And this view, we think, finds support in the cases of Ogden v. Devlin, 45 Supr. 631; Prentiss v. Livingston, 60 How. 380; Texas v. White, 10 Wall. 483. In Ogden v. Devlin it was held that a client has the right, of his own volition, to change his attorney of record, and this, though no complaint is made against the attorney, and though the object for which the benefit of his services was required has been accomplished; but that the condition of granting substitution in such a case is the payment or securing in full for liis services as such attorney and counsel. And as said in Texas v. White :

“The relation between counsel and client are of. a very delicate . and confidential character, and, unless the utmost confidence prevails between them, the client’s interest must necessarily suffer.”

While, therefore, the client has a right to a substitution at any time upon payment or the securng of the attorney’s fees,—which is but another way of saying that such right is conditional,—there is the other right, arising from the misconduct of the attorney, which, when shown to the satisfaction of the court, is unconditional. In one case a substitution is granted as a matter of course, upon terms; and in the latter, for misconduct, the substitution is unconditional

There is no force in the suggestion of the respondent that the written power constituted him an attorney in fact with an interest, and that, therefore, the client could not upon any terms substitute another in his place. There is nothing in the power itself which states or indicates that he was to be the attorney in fact; and the fair construction of the instrument is that he was retained and given all the power that an attorney ordinarily has in such a proceeding, the purpose of it being definitely to fix the amount of his compensation, which could have been provided for justas well by paroi, but which the parties, for greater certainty, reduced to writing. In other words, the right to receive the compensation mentioned in the retainer is nothing more than the ordinary right which an attorney at law has by way of a lien upon the case and papers and money received for his costs and compensation. The. fact that such attorney directed his clerk to appear for him in the proceeding does not prevent the client obtaining any relief, because there was no authority given him to delegate to another the right to appear for Mrs. Dodin in the proceeding ; and, upon his authority ceasing, that of the clerk would fall with it, there being no obligation upon the part of Mrs. Dodin to pay the clerk.

We think, therefore, that, without assigning any reasons, Mrs. Dodin was entitled to a substitution. We do not decide that, by reason of the misconduct of the attorney in borrowing from her, she is entitled to an unconditional substitution, but that, subject to proper provision to be made in the order for the compensation to which he may be entitled, the order should be reversed, and the application for a substitution granted. We cannot, however, overlook the fact, which is not denied, that the attorney has $3,000 of her money, which is represented by the judgment she obtained against him, and to that extent he is secured. We think that the provision in the order should be that either party should have leave to apply for a reference, now or hereafter, to determine the amount of the attorney’s lien, as against which she should have the right to offset the $3,000 borrowed from her, she only being-required to pay him any additional amount that may be found to be due him ; and, if the amount due him for compensation is less than the amount of the judgment, that he should be credited with that sum upon the judgment.

Order reversed accordingly, and the application for substitution granted, with $10 costs ana disbursements.


text:
    Charles W. Packard, App’lt, v. Alphonse J. Stephani Resp’t.

      (Supreme Court, General Term, First Department,

      Filed March 15, 1895.)

    Attorney and client—Authority.
    Where the person, who is seeking to recover upon the implied or presumed authority which grows out of the client's relation to the attorney, is notified that the attorney has no right to incur the expense, he cannot hold the client responsible.
    Motion for a new trial on exceptions, ordered to be heard at general term in the first instance.

      Roger Foster, for pl’ff; Nelson S. Spencer, for def’t’s guardian ad litem.

   O’Brien, J.

This action is brought to recover upon a quantum meruit the reasonable value of the services of John H. Packard, a physician of Philadelphia, for testifying as an expert witness before a commission appointed to examine into the sanity of the defendant, and upon the trial of the defendant for murder. It appears that, in 1885, Dr. Packard had examined the defendant, and subsequent to that period, when passing through Mew York, had seen him for a moment, and his testimony was required and practically directed to showing the mental and physical condition of. the defendant in 1885. Such testimony as he gave was upon the request of the counsel in the case, who, deeming it important, procured the attendance of the doctor upon the commission and at the trial. On both occasions the question at issue was the sanity of the defendant, and in the employment of counsel, and the necessary expenses attending these proceedings, it would appear that the mother of the defendant, as well as the defendant himself, took part in arranging for the presentation of his case. Hearing that he was to be a witness, the mother wrote to the doctor as follows: “ It is but right for me to advise you that, in case you are called, I cannot be responsible for any charges or expenses you may incur.” It is not claimed, nor is there any evidence to show* that the defendant requested his attendance; on the contrary, it appears from the testimony that he did not desire the doctor’s attendance. Assuming, therefore, the view most favorable to the plaintiff, that he was called as an expert, and not as an ordinary witness, to give testimony to facts within his knowledge,—which it would seem from the record was what was required from him,— the question is, can he recover for such attendance? If he can, the question of the value of his services would be one for the jury. The single question presented upon this appeal is whether, in the absence of any request by the defendant or his mother, and in the face of the expressed unwillingness of both one of whom communicated the fact to him, there is sufficient in the action of the counsel in obtaining the presence of the doctor, and placing him on the stand, from which a request and a consequent obligation on the part of the defendant to pay him can be implied. There can be no doubt of, the authority of an attorney in' the conduct and management of his client’s case to make such necessary and proper disbursements as the case shall require. This authority can be implied merely from the relation between attorney and client, from which a request on the part of the latter would be presumed. And we think it equally true that, however necessary the services might be regarded by the attorney in the client’s interest, the latter has a right to refuse to incur them, and the attorney could not charge the client, except in favor of some one who acted upon the presumed authority with which such attorney was clothed. Where, however, the person seeking to recover upon the implied or presumed authority which grows out of the client’s relation to the attorney is notified that the attorney has no right to incur the expense, lie cannot hold the client responsible. Were it otherwise, an attorney might compel the client to pay any and all sums, however much beyond the means or inclination of the client in a particular case, and notwithstanding the person towards whom the obligation was incurred had notice of the restricted or questionable right of the attorney. It will be noticed that we have discussed the question as though it were the attorney, whereas in this case it was the counsel, upon whose request the doctor came and gave his testimony ; but for the purposes of this appeal we have treated it as though the counsel possessed all the power and authority of a regularly retained attorney, which we doubt. We think, in view of the notice which the doctor received, and which was sent him by the mother of the defendant, acting on her own behalf and representing her son, the question of whose sanity was involved, there was sufficient to call in question the right of the counsel to bind her or her son, and it was a matter which the doctor could have set at rest by requiring for his attendance the request of the defendant or his mother. Notwithstanding the notice which he had, however, he did nothing in the way of ascertaining the defendant’s wish, but at the request of counsel catne to Hew York, for which he now seeks to charge the defendant. We do not think that upon this evidence there was sufficient to justify the submission of the question to the jury as to whether or not the counsel had implied authority, it appearing that neither the mother, who was acting for the defendant, nor the defendant himself, desired the doctor’s attendance, and in the letter from which we have quoted, which the doctor admits he received, the mother expressly stated that if he came it must be at his own expense. We think the disposition made by the trial judge was right, and that the exceptions should be overruled, and the motion for a new trial denied, with costs.

All concur.