author: O’Gorman, J.

text:
    THE LIVE STOCK ASSOCIATION OF NEW YORK (Limited), Respondent, v. DAVID LEVY, Appellant.

      Public policy—Restraint of trade—Contract betioeen two corporations— Collateral contract by stockholders with corporation—Ultra vires, what contracts are not—Estoppel against claiming that contracts are ultra vires.

    An agreement was made between a corporation, whose business was that of buying and selling sheep and lambs and buying and selling sheep and lambs on commission, and a corporation whose business was that of selling sheep and lambs on commission, that the stockholders of the former corporation (who were engaged in the business of butchering sheep and lambs for the New York market) should for the period of three years buy their sheep and lambs from members of the latter, and that the members of the latter should during the same period, sell sheep and lambs for the New York market to the stockholders of the former only; and a collateral agreement was made by the stockholders of the former corporation with it and with each other, that each of them should pay to the former corporation the sum of twenty-five dollars for each car load of sheep or lambs purchased by him from any individual or firm, member of the latter corporation after having been notified by the former corporation not to purchase. Eeld, that neither of said agreements were in themselves against public policy.
    It not appearing that the contracts made with the former corporation were directly or impliedly prohibited by the Act under which it was organized or by any statute of this state, or were beyond the powers ordinarily vested in corporations. Held, that they were not ultra vires.

    Defendant, one of the stockholders of the former corporation, consented to, and approved of the contract between the two corporations, and joined in the contract made between it and its stockholders, and between the stockholders themselves, had participated in the profits derived from a previous similar arrangement, and by consenting to the contract in question between the two corporations, and by joining in the contract in question between the former corporation and its stockholders and between the Stockholders themselves, had entitled himself to like advantage thereunder. Held, that he was estopped from claiming that the agreements were ultra vires.

    Before Sedgwick, Ch. J., O’Gorman, and Ingraham, JJ.

      Decided November 8, 1886.
    Appeal from an order made at special term granting plaintiff’s motion for judgment on the answer as frivolous.
    The facts appear in the opinion.

      Michael J. Kelly, attorney and of counsel for appellant, argued:
    I. The contracts set forth in the complaint were in restraint of trade. The contract between plaintiff and the sheep brokers, limited the defendant, to buying his sheep and lambs from such sheep brokers, but there is no obligation on the part of the sheep brokers to sell a single sheep or lamb to the defendant; and no remedy is given against them if they refuse to do so.
    The contract between the plaintiff and defendant prohibited him from buying sheep or lambs from any of the sheep brokers, whom the plaintiff should notify him not to purchase from. There is nothing to prevent the plaintiff from notifying the defendant not to purchase from any of the sheep brokers, and thus drive him out of business. The contracts are therefore void (Story’s Equity Juris. 292 et seq.; 2 Parsons’ Contr: 253 to 260; Chappel v. Brockway, 21 Wend. 157; Ross v. Sadgbeer, 21 Ib. 166 ; Hooker v. Vandewater, 4 Den.
      434; Stanton v. Allen, 5 Ib. 434; Dunlop v. Gregory, 10 N. Y., 241; Arnot v. Pittston & Elmira Coal Co. 68 Ib. 558; Mackinnon Pen Co. v. Fountain Ink Co. 16 J. & S. 442; Weller v. Hersee, 10 Hun, 431).
    II. The plaintiff was incorporated “ for the purpose of buying sheep and lambs, and buying and selling sheep and lambs on commission,” and had no power to make the contracts (which are still executory), referred to in the complaint (Morawetz Private Corporations, §§ 87, 209).

      Joseph C. Wolff attorney, and John E. Parsons of counsel for respondent, argued:
    I. The contract is not ultra vires; if it was, the defendant having consented to, and approved of the contract between the plaintiff and the Sheep Brokers’ Association, and received the benefit of it, is estopped from setting up ultra vires (Kent v. Quicksilver Mining Co., 78 N. Y., 159; Sheldon H. B. Co. v. Eiekmeyer H. B. Co., 90 Id., 607; Cheever v. Gilbert Elev. R. R. Co., 11 J. & 8., 478).
    II. The contracts are not in restraint of trade. By the contract with the sheep brokers, they were only limited in selling for the New York market, to sell to the stockholders of the plaintiff; they could sell everywhere else. That contract was virtually that the sheep brokers would sell all their sheep and lambs for the New York market to the stockholders of the plaintiff, and the stockholders of the plaintiff would buy all their sheep and lambs from the sheep brokers. Such a contract is valid (Van Marten v. Babcock, 23 Barb. 633; Arnot v. Pittston Coal Co., 68 N. Y. 558).
    III. There is no restriction as to the quantity of sheep or lambs the stockholders of the plaintiff should purchase, nor where they were to sell them.
    IV. The contract between the defendant, the other stockholders and the plaintiff was reasonable and necessary ; it was the only way to compel the sheep brokers to keep that part of ther contract not to sell sheep and lambs for the New York market to others than the stockholders of the plaintiff. In an action against any of the sheep brokers for the breach of that stipulation, it would be very difficult, if not impossible, to prove damages. There is nothing to show that the defendant could not purchase all the sheep and lambs he desired from the other brokers, and at the same rates as of Dillenbeck & Dewey.
    Y. There is nothing to show that the contracts were not entered into for a reasonable and honest purpose, or that the combination was other than an honest cooperation (see Marsh v. Russell, 66 N. Y. 288, and Phippen v. Stickney, cited at p. 293). Restraint of trade is sometimes beneficial and valid (Story’s Eq. Juris. [10th edx] § 292). An agreement by a physician to send his prescription to a particular druggist, held valid (Ward v. Hogan, 11 Abb. N. C. 478).
    An agreement by a saloon keeper to buy all his beer from a particular brewer, held valid (Ebling v. Bauer, 17 Week. Dig. 497). An agreement restricting the amount of business, held valid (Standard Oil Co. v. Scofield, 16 Abb. N. C. 372; See also Walst v. Master Stevedores, 2 Daly, 1; Diamond Match Co. v. Roeber, 35 Hun 421; Ontario, &c. v. Merchants, &c., 18 Grant [ U. C.] 540; Bowen v. Matthewson, 14 Allen [Mass.] 499, approved 121 Mass. 115; Carew v. Rutherford, 106 Ib., 14; Haywood v. Tillotson, 46 Amer. R. 377; Wiggins, Ferry & Co. v. Chicago, &c. 43 Am. 518; Jones v. North L. R. 19 Eg. Cases 426, [Eng. Rep.]829

   O’Gorman, J.

The facts on which the contention arose are these:

The plaintiff is a corporation formed under the law of this state, for the purpose of buying and selling sheep and lambs. The defendant is one of the stockholders of the corporation. On January 8, 1884, the plaintiff corporation, with the consent and approval of its stockholders, of whom the defendant was one, entered into an agreement in writing with a corporation called, “ The New York & New Jersey Sheep Brokers Association,” that the stockholders of the plaintiff corporation, should, for a period of three years thereafter, buy their sheep and lambs from members of the said Sheep Brokers Association only; that the members of the Sheep Brokers Association should, during the same period, sell sheep and lambs for the New York market, to the stockholders of the plaintiff only.

This was a renewal of a similar agreement, the term of which had expired, and during the existence of which, the stockholders of the plaintiff corporation had derived annual dividends of about one hundred and forty (140) per cent, on their investments.

For the purpose of enforcing on the stockholders of the plaintiff corporation compliance with the terms of this agreement of January 8, 1884, the stockholders of the plaintiff corporation, including the defendant, entered, on January 25, 1884, into an agreement with each other and with that corporation, that each of them should pay to the plaintiff corporation the sum of twenty-five dollars for each car load of sheep and lambs purchased by him from any individual or firm, member of the said Sheep Brokers Association after having been notified by the plaintiff not to purchase.

The defendant did purchase from a firm member of the Sheep Brokers’ Association after having been notified not to do so, and this action is brought to recover seventy-five dollars due by him to the plaintiff under the last mentioned agreement.

These facts are admitted, and the defendant’s contention is that the contract of January 8, 1884, was void as being ultra vires, and also in restraint of trade.

It is not alleged in defendant’s answer that that agreement was made with any intent, fraudulent or unlawful, or that it had for its purpose or effect the limiting or circumscribing the energies or productiveness, or usefulness to the public of either of these corporations.

The force of the contract was confined as to duration to three years, and as to the sphere of its influence to the New York market.

It does not appear that this contract was directly or impliedly prohibited by the act under which the plaintiff corporation was organized, or by any statute of this state, or that it was beyond the limit of powers ordinarily vested in corporations for the necessary promotion of their business and fairly implied in the act of incorporation.

The defendant was one of the stockholders who executed it. He, in company with the other stockholders, shared in large pecuniary advantages derived from a similar contract, which had previously existed, and by executing the contract the legality of which he now impugns, entitled himself to like advantages.

As far then as the contract was between him and the plaintiff corporation, defendant is estopped now from setting up that it was ultra vires. (Kent v. Quicksilver, &c., Co., 78 N. Y., 159 ; Sheldon, &c., Co. v. Eickemeyer, &c., Co., 90 Ib., 607 ; Whitney Arms Co. v. Barlow, 63 Ib., 69.)

It should be remarked also, that here the defendant contracted not only with the defendant corporation but with the other stockholders, and that contract was mutually binding. The objection then that the contract was not binding on defendant, as being beyond the power of the corporation to execute, is without merit.

Neither was the contract of January 8, 1884, void as being in unlawful restraint of trade. It cannot be successfully contended that that contract involves any restraint of trade on the part of either of the corporations.

As I have before stated, the contract is limited as to its duration, and its effective operation is confined to the city of New York.

There is no violation of law or of public policy in an agreement between two traders, that one should sell to the other all its commodities and the other buy from the former corporation alone (Chitty on Contracts [11th Am. Ed.], 982-3 and notes). A contract to sell exclusively to a particular person for a limited time is not invalid (Van Harter v. Babcock, 23 Barb., 633); nor a contract not to engage in a special business for a certain period (Curtis v. Gokey, 68 N. Y., 304).

The law will not presume an agreement to be void, as against public policy, when it is capable of a construction which would make it valid.

The order appealed from is affirmed, with costs.

Ingraham, J., concurred in the result; Sedgwick, Ch. J., not voting.


source: Caselaw Access Project

author: By the Court.—Ingraham, J.

license: Public Domain

text:
    THEODORE BERDELL, et al., Appellants and Respondents, v. HARRY ALLEN, et al., Respondents and Appellants.

      Contract to sell stock at fixed price and, portion of profits on sale by vendee —Agreement by vendee to give third party interest in contract and profits —Agreement by third party with fourth by which fourth party was to pay for stock a fixed sum and one fourth of his profits—Effect of on accounting as to profits, between the parties to the original contract.—Stated account—opening as to certain items, effect of on other items.

    One holding a contract for the sale to him by another of shares of stock, entered into an agreement with a third party whereby he agreed to give to such third .person a half interest in such contract and in all net profits arising therefrom, such third party to give his time and attention to placing the shares of stock, and all profits arising out of the contract to be divided in equal portions between him and such third party. Held, that such agreement operated as an assignment of one half of the contract and of the profits arising therefrom—
    Consequently, when the contract of sale fixed the price.to be paid to the vendor at a stated sum per share and one half of the proceeds received by the vendee between that sum and the sum at which the vendee should sell the same after deducting all expenses and commissions, and subsequently such third party made an agreement with a fourth party (a stock broker) whereby such fourth party was to pay for the stock at a certain fixed sum per share and one fourth of the profits which he-should realize on a sale of the stock by him over and above such price. Held, that the original vendee on an accounting between him and the .original vendor, is chargeable as and for profits on a sale of the stock,. with the difference between the price per share fixed by the contract between them and the sum received by such third party from said fourth party, including the one fourth profits. This although the contract between them provided that the profits which by it were divisible were such as might accrue to the vendee therein “personally.” ■ Such one fourth is neither commission or expenses.

      Also held, that the original vendee was not chargeable with the three fourths profit retained by the fourth party, it being immaterial whether the latter was a purchaser of the stock at a fixed sum and one fourth of the profits, or whether he acted as a broker in making sales at a commission of three fourths of the profit over a fixed sum.
    Where an account stated is opened by the court, on the ground of á misstatement as to certain items therein, other items contained in the account stated which were agreed on and allowed at the time of the • stating thereof, and as to which there is no allegation of any false representations should on an accounting had under the judgment of the court, be allowed to the party to whom they are credited in the account stated, on the ground that there was no reason why the agreement allowing them should not be sustained.
    Before Sedgwick, Ch. J., and Ingraham, J.

      Decided November 8, 1886.
    Appeal by both plaintiffs and defendants from the judgment entered on the trial at special term.
    The facts appear in the opinion.

      Stickney & Shepard, attorneys, John E. Parsons &■ Edward M. Shepard, of counsel for plaintiffs, appellants and respondents.

      Sewell, Pierce & Sheldon, attorneys, and Robert

      Sewell, of counsel for defendants, respondents and appellants.
   By the Court.—Ingraham, J.

This action was brought to set aside an account stated between the parties, and for an accounting. The court below found that the settlement of February 14, 1883, was based on a representation made by defendants as to the amount for which the stock was sold; that such representation was false; and as a conclusion of law, the court found that the statement of the account between the parties, and the agreement based thereon, should be set aside.

This finding is amply sustained by the evidence, and it is only necessary on this point to say that we agree with the court below.

The account being opened, the main question arises under the final agreement of March 9, 1882. • To properly understand this agreement, it is necessary to state the relations which at the time it was made, existed between the parties to this action, and between the defendants and Reynolds and Abbott.

Under the contracts as they existed prior to March 9, 1882, defendants had purchased from plaintiffs a certain number of shares of the capital stock of The La Platt Mining and Smelting Co., and had the right to purchase the balance of the shares of the capital stock of the said company belonging to the plaintiffs, and were to pay therefor a price fixed, and in addition' to such price one half of all profits received by the defendants on the sale of the said shares. There is no evidence of any intention to form a copartnership between the parties hereto, and there is no agreement that the plaintiffs should be liable for any loss.

After the execution of this agreement between the parties hereto, the defendants made an agreement with William H. Reynolds, whereby the defendants agreed to give to said Reynolds a one half interest in said contract and in all net profits arising therefrom. Reynolds was to proceed to England and give his time and attention to placing the said shares of stock, and all profits derived, either directly or indirectly, out of the contract were to be divided in equal portions between Reynolds on the one part and the defendants on the other.'

It is clear that under this agreement between the defendants and Reynolds, the latter became an assignee of one half of defendants’ contract. It was defendants’ interest that was assigned, not plaintiffs’, and Reynolds was to have a share in the money made by defendants out of the agreement with the plaintiffs. By the agreements all expenses incurred in selling the stock were to be paid by the defendants, so that before there would be any money coming to Reynolds, all such expenses, including commissions, would have to be paid. The amount that would be due to Reynolds therefore, was neither an expense nor a commission, but was simply a share of the profits that the defendants would realize out of the contract after deducting the expenses and commissions; and whatever the relation that existed between the defendants and Reynolds, he could not be said to represent, in any way, the plaintiffs or to act for them. Reynolds went to London and subsequently made, with the assent of the defendants, an agreement with a London stock broker named Abbott, whereby Abbott was to pay for the shares of stock at a certain fixed price, and the profits that he realized on the sale of the stock over and above such price, were to be paid, three fourths to Abbott and one fourth to Reynolds, and any loss on the sale of the stock below the price fixed should be borne by Reynolds and Abbott in the same proportion.

On March 9, 1882, the agreement between the plaintiffs and defendants was modified. Up to that time, the only stock that had been sold by Reynolds or Abbott was the stock that had been purchased absolutely by the defendants and in which the plaintiffs had no contingent interest. The plaintiffs swear that at that time they had no knowledge of the terms of the agreement between defendants and Reynolds, although they had been informed that .Reynolds was acting for defendants and was to receive from them compensation.

The agreement of that date modifies the agreements theretofore made, as to the amount of stock to be called at the several dates, and the price which the defendants were to pay for the stock to be called, and provides that in respect to twenty thousand shares of stock which were to be called on or before April 19, 1882, the price to be received by the plaintiffs should be five dollars per share and one half of the profits received by defendants on the said twenty thousand shares between the price of five dollars and the price at which said shares should be sold, after deducting all expenses and commissions, and further agreeing that in all subsequent calls of shares which might be made in pursuance of the contracts, the price which should be received by plaintiffs should be five dollars per share and an equal division of the profits which might accrue to defendants personally, between the price of five dollars per share and the average price at which all the shares should be sold, after deducting the expenses and commissions.

Under this agreement, the plaintiffs’ stock was placed with a bank in London, and was delivered to Reynolds on payment by .him of five dollars per share, and the amount of five dollars per share was paid to the bank for account of the plaintiffs.

The court, below held that the defendants should be charged, as the profits on the sale of the stock, the difference between the five dollars per share paid to plaintiffs and the amount received from Abbott, including the one fourth of the profit on the sale of the stock paid to Reynolds by Abbott under his agreement, and that the amounts paid to Reynolds under his agreement with defendants were not to be credited to the defendants as an expense or commission.

It is clear that the amount paid to Reynolds.cannot be said to be an expense or commission. As before stated, Reynolds was not an agent of the plaintiffs or in any way acting for them. He was defendants’ associate, engaged with them in carrying out the contract and to receive one half of the profits that under the contract between the plaintiffs and defendants would accrue to the defendants. What was paid to him was paid as the assignee of one half of defendants’ interest in the contract. It is claimed however, that under this contract the amount received by Reynolds was not profit Avhich accrued to the defendants personally, under the provisions of the agreement that the plaintiffs shall be entitled to an equal division of the profits which may accrue to defendants personally between the price of five dollars per share and the average price at which all the shares should be sold.

The court found that the average price at which the shares were sold was eight dollars forty-two and eighty-eight one hundredths per cent. ($8.42^0) per share, which made the profits per share three and forty-two one hundredths dollars ($3.42). That was the profit between the price of five dollars per share and the average price at which the shares were sold. But did that accrue to the defendants personally ?

The relation that existed between Reynolds and the defendants must be clearly kept in mind in determining this question. He occupied the position of the assignee of one half of the contracts that had been made, and was to receive one half of the defendants’ interest in the contract; but before Reynolds was entitled to anything, there must be a profit that would accrue to the defendants on the contract. They must receive that profit. It must accrue to them before it could be paid to Reynolds, and the profit that was to be divided was the difference between the price of five dollars per share and the average price at which all the shares should be sold. Whether the profits were to be divided between two or three persons did not change their character. The difference between the price fixed and the average price at which the stock was sold was, by the terms of the agreement, to be the profits that were to be divided, and Reynolds was to have, under his agreement, one half of the amount made by defendants out of the contract. The fact that the defendants had agreed to divide the profits coming to them did not, as between the parties to the agreement of March 9, make the defendants’ share any greater or less, or make it any the less the profit that would accrue to defendants that was to be divided between the defendants and Reynolds. Before Reynolds was entitled to anything, there must be profits to which, under the agreement, defendants were entitled, and such profits, as between the parties to the agreement, would be profits which would accrue to the defendants personally.

There was considerable testimony on the trial as to the statements made and the negotiations which resulted in this contract of March 9. The defendants requested the trial judge to find that the terms of the contract between the defendants and Reynolds were stated to ¡plaintiffs, and that they had full knowledge of the same, but this request the trial judge refused.

The intention of the parties to this agreement is not clear, but I am of the opinion that the court was right in holding that the share of Reynolds was not a charge for commissions and expenses, and the defendants were properly charged in the account with that sum.

On the accounting before the referee under the interlocutory judgment, the defendants presented an account in which they claimed credit for certain payments made by them. It appears that, on the accounting between the parties on February 14, 1883, it was agreed that there was a charge against the plaintiffs arising out of the difference in exchange of money received by them of $2,900. This amount the referee allowed. It was also agreed that among the items to be charged to plaintiffs was one for $1,500, H. Allen’s London expenses. Instead of allowing the $1,500 at that time agreed upon, as the amount of Allen’s expenses to London, the referee allowed $391.. It was also agreed on February 14, the time of the settlement, that the defendants should be allowed $34.50 for cables under date of November 20, and that amount the referee also refused to allow. We think that these three sums should have been allowed to defendants.

At the time of the settlement of the account, the parties agreed upon the credits named. The accounting was set aside on the ground of a misstatement of the amount for which the stock sold. There was no dispute at the time, nor is it now alleged, that there was any false representations as to the amount of expenses to be charged to the plaintiffs for defendant Allen’s trip to Europe, or for the $34.50 for cables, and I see no reason why the agreement that such amounts should be charged against the plaintiffs should not be sustained.

In Carpenter v. Kent (4 East. Rep. 580), it is said by the court of appeals: “ Where an account has been adjusted by the parties, if any mistake is subsequently discovered, the whole account need not be opened, but the mistake can be corrected, and the rights of the parties be re-adjusted as to such mistake.”

The plaintiffs appeal from the refusal of the court to charge the defendants with the amount paid for selling the stock. By the agreement of March- 9, plaintiffs were to receive, in addition to the five dollars per share, one half of the profits after deducting the expenses and commissions. Whether there was a sale of the stock to Abbott, or whether Abbott was paid a commission of three fourths the amount realized over the price fixed in the agreement with him is not material. In neither case would defendants be chargeable with the amount paid to Abbott.

We agree with the referee in disallowing the other items, for the reasons stated by him.

The judgment should therefore be modified by deducting from the balance found due, the sum of $1,109, the difference between the $1,500, agreed to be allowed for defendant Allen’s trip to Europe, and the $391 allowed to him by the referee, and the sum of $34.50 for cables, making $1,143.50, and the interest on that sum from February 14,1883, to the date of the referee’s report, and, as so modified, the judgment is affirmed without costs of the appeal.

Sedgwick, Ch. J.. concurred.


text:
    NELSON GRIFFIN, Respondent, v. HENRY C. MINER, et al., Appellants.

      Order substituting referee—Irregularity of in allowing testimony taken by former referee to stand, how waived—Procedure %mder—Discretion of rejeree—Contract for labor and materials—Failure to complete—Partial payment, application of—Extra work, when recoverable—Counterclaim for non-performance, when not recoverable.

    An order appointing a new referee and providing that the testimony theretofore taken before a former referee should be received before the substituted referee as if taken before him, is unauthorized as to the . provision concerning the testimony. But if no appeal be taken therefrom, and it is stipulated that plaintiff will be produced for further cross-examination, if desired after defendant has closed Ms case, and thereupon defendant agrees to waive all question as to the regularity of the order, he thereby accepts its terms, and cannot object thereto; and it thereupon becomes the duty of the new referee to receive the evidence theretofore taken, as evidence in the action.
    Whether or not the witnesses may be re-examined is a question resting in the discretion of the referee, which discretion is not reviewable, except in case of its abuse; and a ruling that such re-examination cannot be had, except the witnesses are called to testify to new facts, is not such an abuse.
    In case of a contract to perform work and labor and furmsh materials, money paid to the contractor upon the principal contract goes on that alone, and cannot be set off or applied elsewhere; and notwithstanding the contract is not in all respects performed, and the balance unpaid on the principal contract is therefore not recoverable, the contractor may still recover the reasonable value of any extra work performed by him.
    Where the plaintiff, the contractor, may not recover the amount unpaid on the contract, by reason of his failure to complete, the defendant is not entitled to recover his counterclaim for damages caused by failure so to complete, it not appearing that the damage sustained was greater than the sum to be paid under the contract.
    Before Sedgwick, Ch. J., and Ingraham, J.

      Decided November 8, 1886.
    Appeal by the defendants from a judgment entered on report of a referee, directing the foreclosure of a mechanic’s lien.
    The facts appear in the opinion.

      A. J. Vanderpoel and Thomas F. Grady, for appellants.

      Abram Fling, for respondent.
   By the Court.—Ingraham, J.

The order of the special term entered October 28,1884, appointing a new referee and providing that the testimony theretofore taken in the action before a former referee, should be received before the substituted referee, as if taken before him, was unauthorized so far as it provided that such evidence taken before the former referee should be received before the substituted referee.

No appeal, however, was taken from that order, but it appears that on meeting before the substituted referee, it was stipulated and agreed by the counsel for the respective parties, that the plaintiff’s attorney would produce the plaintiff in the action for further cross-examination, if desired by the defendant after the defendant had closed his case, and thereupon the defendant agreed to waive all question as to the regularity of the order of refei ence.

By failing to appeal from the order of October 28, and by this stipulation, the defendant accepted the terms of the order, and it is too late for him now to object thereto.

It thereupon became the duty of the referee under the order and stipulation to receive the evidence taken before the former referee, as evidence in the action. The evidence of the witnesses for the defendant having thus been taken, whether or not the referee should permit such witnesses to be re-examined was a question resting in his discretion, and except in the case of .the abuse of such discretion, presents no question for review. The referee expressly held that if the witnesses offered to be produced by the defendants, were called to testify to new facts they could be sworn, but no such claim was made. Counsel for the defendants insisted on his right to give his evidence before the referee. The evidence of the witnesses being already before the referee, whether or not they should be allowed to testify again was, as' before stated, within his discretion, and his rulings cannot be reviewed.

The referee found that on June 15, 1883, a contract was made between the parties hereto, whereby the plaintiff agreed to perform certain work and labor and furnish certain materials for the defendants, for the sum of $1,984 j that the defendants paid to the plaintiff on account of such contract, the sum of $1,000; that the plaintiff failed to complete his contract; and that the plaintiff therefore was not entitled to recover for the balance due on the obligation of such contract.

The referee further found that subsequent to the making of the aforesaid contract, the plaintiff in consideration of the sum of $120, which the defendants promised and agreed to pay, agreed to perform work and labor and furnish materials, in painting the front of the building known as the Peoples’ Theatre, and the plaintiff duly performed the said contract.

The referee further found that the plaintiff, at the request of the defendants, performed certain work and labor in addition to the contracts above specified, and that said extra work, labor and materials are reasonably worth the sum of $1,633.64; and that plaintiff is entitled to recover from the defendants the price of $120, and the value of the extra work and materials furnished, $1,633.64, less the sum of $198.06, and orders judgment therefor.

We have examined the voluminous testimony in the case with care, and are of the opinion that there is evidence to sustain the findings of the referee.

The defendant Miner was present on the premises during the performance of the contract, and the plaintiff swears that when the work was about two thirds through, defendant Miner paid him $1,000, on account of this contract.

It was held in Woodward v. Fuller (80 N. Y. 315), that the money paid to the contractor upon the principal contract goes upon that alone, and cannot be set off or applied elsewhere, and that notwithstanding the fact that the contract itself was not in all respects performed, the plaintiff may recover the reasonable value of any extra work performed by him.

There is also evidence to sustain the finding of the referee that the work claimed as extra work was not included in the original contract, and that such extra work was reasonably worth the sum allowed by the referee therefor.

We also agree with the referee in his 13th finding, that there was not sufficient evidence to justify a finding as to the damage sustained by reason of the breach of the contract alleged.

It not appearing, therefore, that the damage sustained was greater than the sum to be paid under the original contract the defendant is not entitled to recover upon his counterclaim, under the authority of Woodward v. Fuller (supra), where it is said: If the plaintiff may recover for what he did under the contract, then those damages, as they are less than the amount that must in such case be allowed to him, will apply there. If he may not recover thereon for the lack of full performance, then the defendant may not have those damages of him at all.”

• On the whole case we are of the opinion that the judgment appealed from does substantial justice, and that no error requires that it should be reversed.

Judgment should therefore be affirmed with costs.

Sedgwick, Ch. J., concurred.


author: Per Curiam.

text:
    WILLIAM L. FLAGG, Respondent, v. HENRY P. COOPER, Appellant.

      Judgment standing as security final judgment within § 1240 Code—Execution to issue only as regulated by order permitting it to stand—Execution issued in conformity with terms of order is regular.

    A judgment having been entered by default, the default was, on defendant’s motion, opened and the defendant allowed to come in and defend, on the condition, among others, “ that the judgment stand as security, but no execution to issue thereon, until the determination of the action.”

      Meld, that the judgment entered by default was a final judgment under § 1240 of the Code of Civil Procedure, upon which an execution could regularly issue, the order opening the default merely regulating its actual issue.
    The defendant availed himself of the privilege given by the order opening default and interposed an answer, the issues arising on which were tried, and the trial resulted in a decision against him, and a judgment was entered thereon against him for a greater amount than that of the judgment by default.

      Meld, that the second judgment did not have the effect of vacating the first one; and that the period during which by said order no execution was to issue on the first judgment having expired, execution could regularly be issued thereon without further order of the court.

      Before Sedgwick, Ch. J., and Ingraham, J.

      Decided November 8, 1886.
    Appeal from order denying defendant’s motion to set aside an execution.
    On June 29, 1883, judgment was entered against defendant by default for $3,412.78, which was docketed July 3, 1883. On defendant’s motion the default was opened and he was allowed to come in and serve his answer and defend, on the condition among others, that the judgment stand as security, but no execution to issue thereon until after the determination of this action. Defendant came in and served an answer. The issues raised by the answer were referred to a referee to hear and determine, who reported in favor of plaintiff. Judgment was entered on the referee’s report on May 26, 1886, in favor of plaintiff against defendant, for $4,458.29. Execution against defendant’s property was issued on this judgment of May 26, 1886, to the sheriff of the county of New York, who on June 1, 1886, returned the same unsatisfied. On June 8, 1886, an execution against the property of the defendant was issued on the judgment of June 29, 1883, to the said sheriff. Under this last execution the sheriff advertised for sale all the right, title and interest which the defendant had on July 3, 1883, or at any time thereafter had had, or then had of, in and to a certain lease of certain premises in the city of New York made to him, dated April 26, 1879, for a term of ten years from May 1, 1879. The defendant had (it was claimed) on October 20, 1883, sold and assigned his interest and title in and to said lease.
    Defendant moved to set aside and vacate the judgment of June 29, 1883, and the notice of sale.
    The motion was denied, and from the order entered on such denial an appeal was taken.

      Thomas H. Robinson, attorney, and Frank F. Van Derveer, of counsel for appellant, on the point decided, argued:
    I. No execution can issue on the judgment of July 23, 1883, which was opened July 24, 1883. Execution can only issue upon the subsequent final judgment of May 26, 1886. After such judgment had been opened, it was available only as a lien on defendant’s real estate. No execution can issue on a former judgment which has been opened to the defendant, and which is therefore no longer a final judgment. Executions can only issue on final judgments (§§ 1200, 1240, 1241, Code Civ. Proc. and notes thereto in Bliss, Throops and Parson’s Pockt. [1885] Code). The judgment must be one which, as it stands, is the final determination of the rights of the parties in the action (Code of Pro., § 245); and it is only actual final judgments that may be enforced by execution (Ib. § 286 ; 4 Wait’s Pr. 2). The words of section 1240, Code of Civil Procedure, are : “ In either of the following cases a final judgment may be enforced by execution.” A judgment which is so opened and permitted to stand as a security merely, is in no sense a judgment; it is a mere security or lien on real estate, nor can any final process or execution issue thereon (Mott v. Union Bank, 8 Bosw. 591; S. C. affirmed, 38 N. Y. 18 ; Holmes v. Busch, 35 Hun, 53 ; 3 Wait’s Pr. 669).
    > II. As under sections 1240j 1241, any other process or “ direction” for the enforcement of a judgment for the payment of money, except an execution, is illegal (People v. Riley, 25 Hun, 587), so any execution upon an opened or suspended judgment, which has been resolved into a mere collateral security, or upon any other than an absolutely final judgment, for at least the time being, is equally illegal.
    IH. There cannot be two parallel final judgments, and for different amounts, on which to issue two parallel executions in one and the same action. That were to allow the plaintiff to duplicate his judgments, executions, process and other proceedings in the cause. There was no application to, nor authority from, the court to enable the plaintiff to do what he attempted to do in this case. The procedure is wholly his own. Nor was it possible for the court, even, to authorize the second execution, as such, because the judgment on which it purported to have been issued was no longer a final judgment, on which alone can executions issue. The Code has made no provision whereby the court or the attorney can issue execution on what was once a final judgment, but is such no longer. Nothing in any of the cases warrants, in one and the same action, double judgments or double executions thereon, or countenances the anomalous procedure of the plaintiff herein. To obtain the benefit of collateral security there are other and more obvious means. No one would presume to issue execution on a mortgage, Us pendens or other lien on real estate, leases or real interests.
    Points were also submitted as to whether the judgment of June 29, 1883, was a lien on the lease or on any interest of the defendant therein.

      W. L. Flagg,

    respondent in propria persona, on the point decided, argued :—Judgment for plaintiff allowed to stand as security to present defence on the merits, although followed bfy judgment for plaintiff on the merits, remains of record unimpaired, until the judgment entered upon the verdict is in some legal form removed from the record (Hall v. Templeton, 4 Week. Dig. 120 ; Negley v. Counting R. Co., 2 How. Pr., N. S., 237, and cases cited). The court has power, if it sees that plaintiff’s security demands it, to require the judgment and execution to go as security (Wilson v. White, 7 Cow. 477). Where a judgment has been sued upon and a second judgment obtained, execution may issue upon both judgments (Freeman on Execution, § 19, pp. 22 and 23, and cases cited). The court’s order that the judgment oí June 29, 1883, should stand as security carries with it the right to enforce it.
    Points were also submitted as to the judgment of June 29, 1883, being a lien on the lease and on defendant’s interest therein.
   Per Curiam.

The judgment entered by default and docketed July 3, 1883, was a final judgment within the provisions of section 1240 of the Code, and an execution on such judgment was regular.

The defendant applied to the court for leave to defend the action and that application was granted, but the judgment as entered was not vacated, and as a condition for the favor granted, it was provided that the judgment stand as security, but no execution to issue thereon until after the determination of the action.”

The defendant having accepted the favor granted, was bound by the conditions imposed, and on the determination against him of the defense interposed under the provisions of the order, the conditions upon which the leave was granted became binding on him.

The subsequent judgment entered did not have the effect of vacating the original judgment. That stood under the terms of the order, and the period during which no execution was to issue having expired, we can seé no reason why the judgment originally entered should not be enforced in the way provided by law.

It is not necessary to determine whether the judgment is a lien upon the property advertised for sale. If the judgment is not a lien upon such property, no interest therein will pass under the sale, and the judgment and execution being regular, the plaintiff had the right to enforce the judgment against all the property upon which it is a lien.

The defendant having accepted the leave to defend granted by the order, it is too late for him to insist that the terms upon which such leave was granted were irregular

We think the order appealed from should be affirmed, with $10 costs and disbursements.


author: Truax, J. O’Gorman, J. (Concurring.)

text:
    AMERICAN EXCHANGE NATIONAL BANK v. GEORGE S. SEDGWICK, et al.

      Exchange of worthless cheeks with intent to defraud bank.—Fraud, what sufficient to raise presumption of in such case.

    Where it appears that the defendants exchanged checks between themselves, and that the check drawn by one of them came into the hands of plaintiff bank just in time to create an apparent balance to meet the check drawn thereon by the other, payable to the party whose check was so deposited; that the check drawn on plaintiff bank was paid by it; that the check deposited with it was dishonored for lack of funds; and that each of the defendants knew that at the time the checks were drawn neither one of them had the money in bank with which to meet his check,

      Held, sufficient to call for a submission to the jury of the question whether or not the defendants or either of them intended to defraud plaintiff; this though one of the defendants testified that he gave his check as an accommodation to the other, and without any fraudulent intent.
    Before Sedgwick, Ch. J., Truax and O’Gorman, JJ.

      Decided November 11, 1886.
    Motion on the part of the defendants for judgment on a verdict. The court below ordered the plaintiff’s exceptions to be heard in the first instance- at general term.
    The action was brought for money alleged to have been wrongfully obtained from the plaintiff by the defendants by means of a fraudulent trick or device, and under an alleged agreement which amounted to a conspiracy to defraud the plaintiff of his money by means of an exchange of' checks.

      Further facts appear in the opinion.

      L. B. Bunnell, for plaintiff:
    I. If Howland knew that Sedgwick intended to attempt to collect the check he had given to him, and that Sedgwick’s check was good for nothing, it was a fraud on his part to deposit it, and thus create a fictitious credit which would directly tend to deceive the bank. The issue thus raised presented a question of intent which should have been submitted to the jury.
    II. The ground upon which the court directed a verdict for the defendants was, that there was no proof that Sedgwick’s check was not good at the time he gave it. This ground was not good for (1) it was dated ahead and the presumption is, therefore that it was not. good, and (2) Sedgwick admits in his answer that it was not good.
    HI. It is not ¿necessary to prove that there was a verbal or written agreement that two persons set about deliberately to swindle another, when the course they pursued tended all that way. In the absence of a satisfactory explanation, a person is presumed to intend just the results which flow naturally and inevitably from the course he pursues. The conduct of these two persons was such as to imply fraudulent intent. So far as Sedgwick is concerned there cannot be the slightest doubt, and the course pursued by Howland tended directly to facilitate Sedgwick’s intent to fleece the bank. Sedgwick wished to be accommodated, and his dating his check ahead, advised Howland that he had no money, and good faith and honest intention on his part, required him to know that Sedgwick’s check was good before he put the bank in a position to be robbed. He had no reason to expect that Sedgwick intended to make his check good before the 9th. Fraud consists as much in suppressing the truth as in stating what is not true.
    IV. Howland was not in the position of a depositor, who deposits a check taken in the course of business. He knew that his check was on its way to his bank with nothing but Sedgwick’s check to meet it, and it was a fraud on his part, to have that check passed to his credit as cash until he knew that it was good,' and thus expose the bank to a swindler’s design.

      Samuel H. Lyman, attorney, and William H. Stanley, of counsel, for defendants:
    I. No evidence was given of the alleged agreement, nor of any conspiracy to defraud nor of any fraud. Fraud must be proved and will not be inferred from facts which are consistent with good faith (Morris v. Talcott, 96 N. Y., 100 ; Henry v. Henry, 8 Barb., 592; Ward v. Center, 3 Johns, 281; Jackson v. King, 4 Cow., 207; Nichols v. Pinner, 18 N. Y., 295; 23 Ib., 264; Wright v. Brown, 67 Ib., 9; People’s Bank v. Bogard, 81 Ib., 108).
    “ A condition of known insolvency on the part of an intending purchaser of property, accompanied with an intention to acquire the property of his vendor without paying for it, constitutes such a fraud as will make the vendee liable to arrest in an action for the debt; but the intention not to pay can no more be inferred from the mere fact of insolvency, than the fact of insolvency can be inferred from the existence of an intention not to pay. In either case it is essential that the necessary facts be.made out by competent evidence ” (Morris v. Talcott, supra).

    H. The defendant Sedgwick kept no account with and made no representations of any kind to the plaintiff, and owed to the plaintiff no duty or obligation whatever. There is no evidence that he had any knowledge that his check would be deposited with the plaintiff, nor that Howland had an account with the plaintiff.
    HI. The plaintiff passed the check of Sedgwick, which Howland had deposited with it, to the credit of Howland. It was optional with plaintiff to credit How-land with this amount on the strength of Sedgwick’s uncertified check.
    It is evident from the testimony of the plaintiffs themselves that the course pursued in respect to this check was unusual, and it can not be presumed that Howland and Sedgwick would have predicated their acts upon and “concocted” a scheme which, to have any chance of success, must have assumed that their checks would be treated in an unusual way.
    The plaintiff elected to pay Howland’s check for $350 before the $400 check of Sedgwick had been presented to the Trust Company for payment. It was entirely optional with plaintiff whether or not it would pay that $350 check before the $400 check had been collected. But having concluded to do so the transaction was at its risk and was in effect a mere loan to Howland of that amount in anticipation that Sedgwick’s check would be paid. But this action is not on that check, nor on contract, and plaintiff cannot in this action recover on that loan or check, but is limited by the allegations of its complaint to a recovery on an action for fraud and conspiracy.
   Truax, J.

The defendants admit in their pleadings that at the time the checks were drawn neither one of them had the money in bank with which to meet his ’ check. The defendant, Howland, in his testimony said that he knew his check was not good when he drew it, and also that he knew that Sedgwick desired to raise money, and that he, Howland, gave Sedgwick his check, because Sedgwick wanted to borrow money; and for that reason he must have known that Sedgwick at that time did not have the money in bank with which to meet his check.

It is true Howland says that his check was given for Sedgwick’s accommodation, and that he believed that Sedgwick’s check would be good; but the whole transaction is of such a nature that it should have been left to the jury to determine whether there was, as a matter of fact, an intention on the part of the defendants, or either of them, to defraud the plaintiff.

The court below seems to have ordered a verdict for the defendants upon the ground that it did not appear from the evidence but that Sedgwick’s check was good when it was given; but, as before stated, Sedgwick admitted that his check was not good and, therefore, it was unnecessary to prove that fact.

Plaintiff’s exceptions are sustained, and the verdict is set aside, and a new trial is ordered, with costs to plaintiff to abide the event.

O’Gorman, J. (Concurring.)

The question here is whether evidence was given at the trial sufficient to sustain a verdict that the defendants had conspired to cheat the plaintiff. If there were such evidence the case should have gone to the jury.

In Morris v. Talcott (96 N. Y., 104), the authority on which defendants mainly rely, it is held tha,t a condition of known insolvency on the part of the intending purchaser of property, accompanied with the intention to acquire property of his vendor without paying for it, constitutes fraud; but this intention can no* more be inferred from the mere fact of insolvency, than that fact can be inferred from the existence of an intention not to pay.

In the case at bar, neither of the defendants had any reason to believe that either of the checks exchanged between them was good when made, although defendant Howland testifies that he believed that the check made by Sedgwick was good when made, and that he, Howland, was not party to any trick or device in the transaction, and had no intention to have Sedgwick wrongfully obtain money from the plaintiff.

On the other hand, there were circumstances and coincidents in the case, which indicated the existence of fraudulent intent on the part of both the defendants. and tended to shake confidence in the truth of How-land’s testimony.

The fact that, at the time the check was drawn by Howland dated June 7, for $350, on the plaintiff bank, he had only an actual balance of $7 to meet the check, and that Sedgwick’s worthless check for $400, payable to the order of Howland, came into the hands of the plaintiff bank on the morning of June 9, just in time to create an apparent balance to the credit of Howland sufficient to meet the $400 check payable to Sedgwick, which was then paid, is one of these coincidents, the explanation of which by Howland would be a proper subject for the consideration of a jury.

If they saw good reason to discredit the testimony of Howland, and it ceased to have any important effect in the case, then there was enough of evidence to support the inevitable inference that the whole transaction was tainted with a fraudulent intent, in which both defendants shared.

On the whole, I am disposed to agree with Judge Truax that there should be,a new trial.

Sedgwick, Ch. J., not voting.


author: By the Coitet.—Sedgwick, Ch. J.

text:
    JOHN W. LOVELL COMPANY, Appellant, v. HENRY C. HOUGHTON, et al., Respondents.

      Literary publication ; charges and statements concerning; actions in respect of, when in nature of actions for slander of title.—Malice necessary to support same—Evidence insufficient to show malice—Copyright and infringement, no power to pass on—Evidence; admission of justified by previous conduct of trial; error not affecting result.

    Defendants sent out a circular in which they charged that the publication by the plaintiff of certain books infringed a copyright which the defendants claimed still existed in later editions of Hyperion and Outre-Mer, re-issued by Longfellow after their first publication. They also advertised editions of those two works which they were about to publish, as follows: “They contain all the changes and revisions made by Mr. Longfellow in later years, and are the only authorized cheap editions in the market.” Plaintiff having published what it termed reprints of early editions of said works, printed respectively in 1835 and 1839, brought this action to recover the damages which it alleged it had sustained by reason of said circular and advertisement of defendants.

      Held, that the action was in the nature of an action for slander of title, and was to be determined by the rules that are to be applied in such an action; and therefore that to sustain the action actual malice in issuing the circular and publishing the advertisement must be shown.
    The plaintiff’s publications of the works in question were not exact reprints of the editions of 1839 and 1835, but that of Hyperion contained 183 variations of the edition of 1839, and that of Outre-Mer contained 24 variations of the edition of 1835, all of which variations were in defendants’ editions of those works published respectively in 1865 and 1869, which editions were published under agreements with Mr. Longfellow and in which he claimed a copyright.

      Held, (1) that it could not be assumed from this that defendants could not have believed that plaintiff’s publications were infringements; (2) that assuming that defendants’ claim to a copyright rested on the variations and that there could be no copyright therein, yet as the question as to whether they could be copyrighted was a question of law, and as tire statements contained in the circular issued and advertisement published by defendants were made in a claim of right in themselves, and were so made in mistake as to the law, they were not (nothing else appearing) malicious, and could not be found by a jury to be malicious.
    This court has no power to pass on what is copyright and what is an infringement of it.
    Plaintiff having undertaken to prove by a witness called by it that their edition of Outre-Mer was a reprint of the original edition, without producing that edition, precluded it from objecting to the same class of evidence without the production of the book, subsequently offered by defendants.
    The admission of the certificate as to the filing of the title of the book Hyperion, although erroneous, held not to be cause for reversal, as it did not bear on the question as to whether plaintiff had given any testimony tending to show malice, for the want of which testimony the judgment was affirmed.
    Before Sedgwick, Ch. J., Tjrttax and O’Gorman, JJ.

      Decided December 17, 1886.

      Appeal by plaintiff from judgment dismissing complaint entered upon direction of the judge at trial term.
    A statement of the case is contained in the opinion.

      Roger Foster, attorney, and of counsel for appellant, cited:—
    I. As to the jurisdiction of the court, Judiciary Act of 1875; 18 Statutes at Large, 470; 1 Supplement U. S. R. S., 173; United States v. Jones, 109 U. S. 513 ; U. S. R. S. § 629, as construed in Dudley v. Mayhew, 3 N. Y. 9 ; Hovey v. Rubber Tip Pencil Co., 57 Ib. 119; King v. Cornell, 106 U. S. 395 ; Hyde v. Ruble, 104 Ib. 407 ; Snow v. Judson, 38 Barb. 210 ; Albright v. Teas, 106 U. S. 613 ; Hartell v. Tilghman, 99 Ib. 547; Patterson v. Kentucky, 97 Ib. 501.
    II. As to the right of the plaintiff to sue, he cited Metropolitan Omnibus Co. v. Hawkins, 4 H. & N. 146; Shoe & Leather Bank v. Thompson, 18 Abb. Pr. 413.
    III. As to this not being an action of slander of title, he cited on the point that the publications complained of attacked the quality, not the title, of the plaintiff’s books and were also libelous per se, Hart v. Wall, 2 C. P. D. 146 ; Worthington v. Houghton, 109 Mass. 481; Steketee v. Kimm, 48 Mich. 322; Whittemore v. Weiss, 33 Ib. 348; Russell v. Webster, 23 W. R. 59 ; Tabart v. Tipper, 1 Campbell, 350.
    IV. As to the changes from the first edition copied by the plaintiff not being the subject of copyright, he cited Copinger on Copyright (2d ed., p. 102); Drone on Copyright, 147, 212; 3 Scotch Session Cases, 2d Series, 383; Black v. Murray & Son, 9 Ib. (3d Series), 341; Dicks v. Brooks, L. R., 15 Ch. D. 22, 36; Scribner v. Stoddard, 19 Am. Law Reg. 433.
    V. As to there being sufficient evidence of malice to entitle the plaintiff to go to the jury, he cited Halsey v. Brotherhood, 19 Ch. D. 386, 389, 390; Carpenter v. Bailey, 53 N. H. 590; Samuels v. Evening Mail Asso., 9

      Hun, 288, dissenting opinion of Davis, J., adopted by the court of appeals, 75 N. Y. 604; Gott v. Pulsifer, 122 Mass. 235 ; Garrett v. Gilbert, 6 Gray [Hass.], 94, 95; Hart v. Wall, L. R., 2 C. P. D. 146; Odger on Inbel and Slander, p. 276. “It is some evidence of malice that plaintiff and defendants are rivals in trade, or that they competed together.” The parties here are in competition as to their publications. Defendants not bringing suit for injunction shows malice. That they might have brought said suit appears by Roberts v. Meyers, U. S. C. C., Mass. 23 Law Rep. 396; Chambers v. Smith, 5 Fisher, 12.
    As to Hovey v. Rubber Tip Pencil Co. and the other cases affecting patent rights, counsel argued that they are widely different from the case at bar. Hovey’s case was decided at special term, the judge taking the place of the jury. With his inferences of fact the court of appeals could not interfere, as there was some evidence in support of them. Here, the court usurped the functions of the jury, whose province it was to draw these inferences from the testimony. In Hovey’s case it was proved that the defendant acted under the advice of counsel (See the case on appeal at the Bar Association). That was not done here. Moreover, there is a wide difference between a charge of the infringement of letters patent issued by the government, and a charge of the infringement of a copyright claimed to have been obtained. Letters patent are issued only after an examination by public officers into the facts and law affecting the exclusive rights thereby granted. A patent is prima facie evidence of all facts essential to sustain it. A patentee is therefore justified in relying upon its validity. A copyright, however, does not consist in a document issued by the government; but is a mere incorporeal right, which can be established only by proof of a strict compliance with all the statutory prerequisites (Wheaton v. Peters, 8 Peters, 591; Morrill v. Tice, 104 U. S. 557; Chase v. Sanborn, 6 Official Gazette, 932). All presumptions are against the validity of a copyright (Wheaton v. Peters, 8 Peters, 591). That very slight proof is sufficient to show malice in a charge of breach of copyright is shown by the case of the Hartley Sisters (2 C. P. D. 146). Here there was an entire failure to prove copyright in the later edition of Hyperion, for there was no proof of the date of its publication. Such proof is indispensable to proof of copyright (Chase v. Sanborn, 6 Official Gazette, 932).
    VI. The certificate of the Librarian of Congress was improperly admitted in evidence (Morrill v. Tice, 104 U. S. 557; Board of Water Commissioners v. Lansing, 45 N. Y. 19 ; Parr v. Village of Greenbush, 72 Ib. 463). Secondary proof of the plaintiff’s publication of revisions in Outre-Mer should not have been allowed without the production of the original books.

      Allen W. Hearts, attorney, and he and Joseph H. Choate, of counsel for respondents, argued:
    I. The plaintiff failed to make out any malice on the part of the defendants, or any purpose on their part of injuring the plaintiff in causing the publications and making the statements complained of, and cannot, therefore, maintain this action, and the direction of a verdict for the defendants was correct and must be sustained (Wren v. Weild, Eng. L. R., 4 Q. B. 730; Hovey v. Rubber Tip Co., 57 N. Y. 119 ; Celluloid Mfg. Co. v. Goodyear Co., 13 Blatchford, 375; Halsey v. Brotherhood, 19 Ch. P). 386; affirming s. c. below, 15 Ib. 514; Decker v. Gaylock, 35 Hun, 584; Dodge v. Colby, 37 Ib. 515).
    II. Objection was made to the introduction of the certificate of the Librarian of Congress as to the 1869 copyright, and to the compilation made by Mr. Whittier of the differences in the editions of Outre-Mer. The certificate was properly admitted under the provision of the Code § 944. The compilation was hut a condensation of what the witness was competent to testify to at length, and is a familiar mode of introducing evidence in such cases. But whether the introduction of this evidence was right or wrong is of no consequence here, because the plaintiff was bound to make, out a malicious intent and has failed to do so.
   By the Coitet.—Sedgwick, Ch. J.

The learned judge below was of opinion that this áction was to be determined by the rules that are applied in actions for slander of title, and cited Hovey v. The Rubber Tip Pencil Co. (57 N. Y. 125). He further said that the matter complained of was at least a privileged communication, and that the complaint must be dismissed, because the plaintiff had not proved malice in fact. A supposed slander of title is one kind of privileged communication. Its subject matter is, as in the present case, a claim of right, in the nature of property, antagonistic to a right claimed by the plaintiff.

The learned counsel for plaintiff claims that the circulars sent out by defendants charge that the publication by the plaintiff of the books in question infringed a copyright which the defendants claim still existed in later editions of Hyperion and Outre-Mer, revised by Longfellow after their first publication.”

The testimony disclosed that the defendants had made agreements with Mr. Longfellow under which they published the books ; that Mr. Longfellow claimed that he had copyright in the books; and that on Hyper ion when published in 1869 by defendants, there was a claim of copyright; Outre-Mer was published in 1865. The plaintiff claimed the right to publish its editions of the books, because as it claimed, they were reprints of the early editions of the books, printed in 1835 and 1839, the copyright in which had expired with the forty-two years thereafter. The plaintiff knew, before it published, the nature of defendants’ claim as to Hyperion, for in order to ascertain what was the edition of 1839, it compared a copy of defendants’ edition of 1869, which claimed a copyright, with a copy of the edition of 1839, that was in the library at Cambridge. The comparison was imperfect, and the plaintiff published in its edition 183 variations of the early edition. These variations were in defendants’ edition of 1869. The plaintiff seems to have been mistaken in the assertion of its circular of April 13, 1882, that “We obtained a copy of the 1835 edition of Outre-Mer and a copy of the 1839 edition of Hyperion and ours are exact reprints of these two editions.”

In Like v. McKinstry (4 Keyes, 409), the court declared : “ It is however not enough that the words spoken were injurious and were untrue. It must also be shown that they were malicious. It is entirely clear that if a person have or believe that he has a claim to property offered for sale to third persons, and in order to prevent their purchasing, he in good faith discloses his claim according to its true import, no action will lie against him. ... It must therefore appear that he acted with malice in asserting that he had title.” In the same case in the supreme court (41 Barb. 190), Judge Miller had held that the plaintiff must show that the words were false and that they were uttered maliciously.

In Kendall v. Stone (2 Sand. 284), the court said, “ The plaintiff assumes the burthen of proving not only special loss but actual malice.”

In Gerard v. Dickenson (2 Co. R. 309), it ivas resolved that a defendant was not liable for saying that she had an interest in a manor in fact the property of the plaintiff. “ For if an action should lie when the defendant herself claims an interest, how can any make any claim or any title to any land, or bring any suit, or seek advice and counsel, but he should be subject to- an action? which would be inconvenient.” But it was also resolved that an action did lie, if the plaintiff alleged and proved that the defendant knew that the interest she claimed depended upon a deed, which she knew to be forged. In such a case malice would be proved.

And so in the present case, if the plaintiff had given evidence to show that the claim made by defendants was groundless and known by them to be groundless, there would be room to assert that the evidence tended to show malice. More than the mere falsity of the claim would appear. The jury might find that the defendants had intended to stop the sales of plaintiff’s books by means of falsehood.

The plaintiff’s case assumes that it is impossible that the publications of the original editions of Hyperion and Outre-Mer should be an infringement of the copyright of books of the same names published after the expiration of forty-two years, and that the defendants could not have believed that such publications were infringements. In fact however, speaking now only of Hyperion, the plaintiff did not publish only the original edition. Their publication contained the 183 variations referred to. These had been made by Mr. Longfellow. They were part of the ground of his claim of copyright. The defendants’ claim as to copyright relied upon these variations. The counsel for plaintiff argues that there can be no copyright in such variations, inasmuch as is asserted they do not affect the substance of the original work. I refrain from passing upon this position, to avoid incidentally passing upon what is copyright and what is an infringement of it, when the court has no power to pass upon such matters directly. I prefer to say that the issue at this point turns upon a matter of law, and that a mistake as to the law, when made by one in a claim of right in himself, and appearing to be only a mistake, is not malicious, and could not be found by a jury to be malicious.

In Mildmay’s case (1 Co. 421), it was held that in slander of title for declaring that a third person had a lease of 1000 years of the plaintiff’s land, when the lease was void at law, it is no defence that such a lease was actually made. The notevto the case observes that the words were spoken by a person not interested in the property, and the case itself gives as the reason of the decision, that the defendant had taken upon himself the knowledge of the law, meddling with a matter that did not concern him.

There was no testimony tending to show that any part of the defendants’ claim in respect of Hyperion was not made honestly, or that the defendants knew or believed that the claim was without validity.

As to Outre-Mer, the defendants proved that- the edition published by plaintiff contained twenty-four variations from the original edition, and which were in defendants’ edition. The witness who spoke to this was allowed to put in evidence a written list of these variations, without producing the books that had been compared. The counsel for plaintiff objected to the list as secondary evidence, maintaining that the books should first be placed in evidence. The objection does not appear to be valid. The plaintiff had previously undertaken to prove, by a witness called by it, that its edition was a reprint of the original edition without producing that edition. This justified evidence from the defendants on the subject, without their production of the books. The alleged libel as to Outre-Mer was in part an advertisement by defendants that their edition was the only revised copyright edition. What has been said of defendants’ claim as to Hyperion applies to their claim of copyright in Outre-Mer. The plaintiff gave no testimony tending to show that the defendants were malicious in making their claim.

The defendants also advertised of editions of Hyperion and Outre-Mer, which they were about to publish as follows : They contain all the changes and revisions made by Mr. Longfellow in later years, and are the only authorized - cheap editions in the market.” The plaintiff claims that the latter statement was false, as to the republication by plaintiff of the original edition. Still bearing in mind that the plaintiff published in- its edition changes and revisions that had appeared in the editions of defendants, published by Mr. Longfellow’s authority, there was no proof that the claim of defendants as to sole authority was malicious.

In my opinion the admission of the certificate, as to the deposit of the title of the book Hyperion, by the Librarian of Congress, was erroneous. That does not call for a reversal, as the admission does not affect the question here discussed, of whether the plaintiff had given any testimony tending to show malice. Because it did not, the judgment appealed from should be affirmed with costs.

Truax and O’Gormar, JX, concurred.


author: By the Court.—Truax, J.

text:
    WILLIAM H. ZIEGLER v. JAMES A. FLACK, et al.

      Assessment for improvements, when void for non-publication of ordinance —Validating acts—Effect upon leases made on sales under void assessments.

    The corporate authorities of the city of Xew York having wholly failed to appoint newspapers in which corporation ordinances should be published as required by § 20 of the Charter of 1870, an assessment for an improvement authorized by an ordinance passed while such charter was in force is void.
    Assuming that the legislature can validate such assessment, it can only validate it from the time of the passage of the validating act; therefore if, after the passage of a validating act, a sale is made for the amount of such assessment and for the interest thereon for a period prior to the validating act, such sale is invalid, and a lease given pursuant to it void.
    Before Sedgwick, Ch. J., Truax and O’Gormar, JJ.

      Decided December 17, 1886.
    Exceptions ordered to be heard at general term.

      Action in ejectment to get possession of three lots of land situated on the Southeast corner of Madison Avenue and Fifty-seventh street in the city of New York.
    On June 30, 1871, an assessment on the said lots for paving Fifty-seventh street was confirmed. That assessment was not paid. On October 14, 1875, the said lots were sold at public auction for the lowest term of years at which any person or persons offered to take the same in consideration of advancing the said assessment, together with interest thereon from the time of its confirmation to the time of sale, together with the charges of the sale. On June 15, 1883, a tax or assessment lease from the corporation of the city of New York was given to the purchaser at said sale.
    On the trial the court directed a verdict for the plaintiff, and ordered the exceptions to be heard in the first instance at the general term.

      John Townshend, attorney, and of counsel for plaintiff, argued :
    That the ordinance authorizing the work for which the assessment was laid was not duly advertised was an irregularity only. The legislature might have authorized an assessment without any publication of the ordinance ; the legislature has therefore the power to validate retrospectively an assessment made without any publication (2 Desty on Taxation, 617 ; Cooley on Taxation, 229 ; Tifft v. City of Buffalo, 82 N. Y. 210; People v. MacDonald, 69 Ib. 368 ; People v. Mitchell, 35 Ib. 551; Browne v. Mayor, 63 Ib. 239; Lennon v. Mayor, 55 Ib. 361; Astor v. Mayor, 62 Ib. 580). (a) The assessment was confirmed June 30, 1871, and the legislature, by Laws 1872, ch. 580, § 7, amended by Laws 1874, ch. 313, validated such assessment and the sale was October, 1875.

      J. F. Neville, attorney, and Porter & Kilvert, of counsel for defendants :
    Cited as to the effect of the failure to appoint corporation newspapers, the case of Burmeister, 76 N. Y. 174; Westfall v. Preston, 49 Ib. 353 ; Brevoort v. Brooklyn, 89 Ib. 133 ; Merritt v. Port Chester, 71 Ib. 312; Potter's Dwarris Statutes, 225; note Clarke v. Crane, 5 Mich. 154 ; Torry v. Milbury, 21 Pick. 67 ; Dillon on Municipal Corp., 1 ed., § 643, and numerous cases cited.
    As to the effect of the failure to publish corporation ordinances, cited Matter of Douglass, 46 N. Y. 42 ; Matter of Smith, 52 Ib. 527; Matter of Astor, 53 Ib. 617; Lennon v. Mayor &c., 55 Ib. 361; Matter of Philips, 60 lb. 16; Matter of Anderson, 60 Ib. 457; Matter of Burke, 62 Ib. 224; Matter of Levy, 63 Ib. 637.
    As to effect of subsequent acts claimed to be healing acts, they cited “An Act in relation to frauds in assessments for local improvements in the city of New York,” April 17, 1858; Act of 1870, ch. 383, § 27 ; Act of 1872, May 7, ch. 580, § 7 ; Chapters 312, 313, Laws 1874; Consolidation Act, §§ 809, 897, 898, 899 ; Blackwell on Tax Title, 3d ed., pp. 447, 448 ; Tax Laws by Lawrence, p. 179, § 6 ; Cooley on Taxation, 324; Sharp v. Speir, 4 Hill, 76 ; Doughty v. Hope, 3 Davis, 599 ; 1 N. Y. 79 ; 5 Ib. 366 ; 2 Ib. 66 ; 43 Ib. 117 ; 47 Ib. 457 ; 49 Ib. 349 ; 51 Ib. 610 ; 48 Ib. 487 ; 69 Ib. 75; Manhattan Railway case, Daily Register, May 15, 1886.
    As to the effect of a tax deed or lease as distinguished from other deeds or grants, Blackwell on Tax Titles, § 3, p. 363 ; Hilton v. Bender, 69 N. Y. 75; Lawrence Tax Laws, 161. In defending our property against an action that seeks to divest us, for a thousand years, of its possession and use, we are protected by the constitution in every defense (Lennon v. Mayor, 55 N. Y. 366).
   By the Court.—Truax, J.

The evidence shows that the corporate authorities wholly neglected and failed to appoint newspapers in which corporation ordinances should he published as required by section 20 of the charter of 1870.

For this reason the original assessment was invalid (In re Douglass, 46 N. Y. 42 ; Lennon v. Mayor, 55 Ib. 364). And the only question is, was the invalidity of the assessment cured by section 7 of chapter 580 of the Laws of 1872, as amended by chapter 313 of the Laws of 1874 (See also §§ 897, 899, chap. 410, Laws 1882).

It has never been determined in this state whether the legislature can render valid, assessments which were void when made. But it was determined in the Lennon case that if the assessment in question has not been made valid, the defendants may resist its collection or may dispute the title of any purchaser who may claim by virtue of a sale had under it.

It was also determined in that case that even if the legislature could render valid such an assessment, it could only render it valid from the time of the passage of the validating act, for it must be upheld, if at all, as an exercise of the power of taxation.

In this case, there was no valid assessment and no authority to sell the property, or any interest therein, until after the passage of the Act of 1872, which was on the seventh day of May in that year. But the sale was made in consideration of the assessment and the interest thereon from the time of the confirmation of the said assessment to the time of the sale. Now if the assessment was valid only from the day the Act of 1872 was passed, then the interest should have been only from that day and not from the day when the assessment was confirmed.

The sale then was made for more than was justly due, and for that reason it is not a valid sale (Blackwell’s Tax Titles, p. 159 et seq).

The defendants’ exceptions should be sustained, and a new trial ordered with costs to the defendants to abide the result.

Sedgwick, Ch. J., and O’Gorman, J., concurred.


text:
    EFFIE ELLSLER, Appellant, v. JOSEPH BROOKS, et al., Respondents.

      Damages for breach of contract—opinions of witnesses as to, and profits derived from prior contract, inadmissible on question of—Costumes, fact of purchase of, does not prove damages—Nominal damages, effect of right to, on dismissal of complaint.

    The opinions of witnesses as to the damages resulting from a particular transaction are not evidence, although the witnesses may have knowledge of the subject matter; nor are the opinions of' experts as to what the plaintiff could have made if allowed to fulfil the contract, such opinions being unsupported by any facts.
    Evidence as to the receipts by plaintiff under an agreement made with a third party four or five years prior to the one "with the defendants which required the rendition by her of services similar to those to be rendered under the contract with defendants, is inadmissible on the question of damages for the breach of her contract with defendants.
    The fact that plaintiff purchased certain costumes to be used by her in the business to be carried on under the contract between her and the defendants, it not appearing from the agreement that she was under any obligation to make the purchase, or that she suffered any loss from such purchase—is not an element of damages.
    That the plaintiff is entitled to nominal damages is not cause for reversing a judgment dismissing the complaint.
    Before Sedgwick, Ch. J., Truax and O’Gorman, JJ.

      Decided December 17, 1886.
    Appeal from judgment entered on the report of a referee, dismissing the complaint on merits.
    The action was brought by the plaintiff to recover damages claimed to have been sustained by her by reason of an alleged breach by the defendants of a contract, by the terms of which they agreed to employ the plaintiff as an actress for the period of three years from September, 1883.
    Under the agreement the plaintiff was to receive in place of a fixed salary, one half of the general profits of the business, in addition to her hotel and travelling expenses, and the salary and hotel and travelling expenses of a maid. The evidence showed that after making the agreement the plaintiff and the defendants, in compliance with the agreement, presented certain plays at different places in this country at a loss ; that after a few weeks the defendants refused to proceed further under the agreement.
    It appeared in the evidence that Bartley Campbell had an engagement in 1877 with plaintiff, by which she was to sustain leading characters and he was to receive fifty per cent, of the profits, under which engagement they played in Cleveland, and one week in Detroit and two weeks in Philadelphia, which ended the season.

      Marshall P. Stafford, attorney and of counsel for appellant, on the questions considered in the opinion, argued :
    I. Plaintiff’s evidence established that she sustained damages by the breach of the contract. (a) The mere breach of the contract entitled the plaintiff to damages in some amount, in addition to any special or exact damage susceptible of proof in precise figures (Wakeman v. Wheeler & W. Co. 33 Abb. L. J. 166). The fact that no profits were made in the business up to the time of the breach is immaterial (Gifford v. Waters, 67 N. Y. 83).
    II. The referee erred in excluding evidence offered to prove damages. Three witnesses who had been engaged in theatrical business for many years and were familiar with its profits and hazards, stated that they could estimate the value of the plaintiff’s interest in the contract. When asked to make such estimate and state such value, their evidence was objected to and excluded as guess work, to which ruling plaintiff excepted. This was error (White v. Miller, 71 N. Y. 118 ; Taylor v. Bradley, 39 Ib. 144). The plaintiff herself was not incompetent to express her opinion of the value of the contract because of being a party to the suit (Nourry v. Lord, 3 Abb. Ct. 392 ; Dickinson v. Fitchburg, 13 Gray, 555). The prospective value of a contract like the one now under consideration is a matter for expert testimony. In such a case it is allowable for experts to give opinions as to value (Brill v. Flagler, 23 Wend. 354; Teerpenning v. Corn Ex. Ins. Co. 43 N. Y. 282). In effect and purpose, the contract was one to secure to defendants the professional services of plaintiff. The value of such services is peculiarly a matter for expert evidence, and in giving such evidence it is entirely competent for experts to express an opinion as to value (Clark v. Baird, 9 N. Y. 183 ; Reynolds v. Robinson, 64 Ib. 594).
    The witnesses whose evidence was excluded were competent experts. They were not asked as to the amount of damage sustained, but as to the value of such a contract. Their evidence on this point was competent, and its exclusion was error. It is only by evidence of this kind that it is possible to furnish any facts from which the damage caused by a breach of such a contract can be estimated or approximated. Such a case forms an exception to the general rule as to the admissibility of a witness’s opinion of value and renders such evidence competent (Teerpenning v. Corn Ex. Ins. Co., 43 N. Y. 281; Taylor v. Bradley, 39 Ib. 144 ; Scattergood v. Wood, 79 Ib. 265).

      Howe & Hummel, attorneys and of counsel for respondents :
    On the question of the admissibility in evidence of opinions of experts as to what might have been the earnings of a star actress, cited Hamilton v. McPherson, 28 N. Y. 72 ; Cassidy v. LeFebre, 45 Ib. 562 ; Medbury v. N. Y. & E. R. R. Co., 26 Barb. 564 ; Freeman v. Clute, 3 Ib. 424; Homer v. Wood, 16 Ib. 386 ; Skinner v. Tinker, 34 Ib. 333 ; Sanders v. Fisher, 5 Lans. 236 ; Washburn v. Hubbard, 6 Ib. 11; Ferry v. N. Y., 8 Bos. 504; Academy of Music v. Hackett, 2
      Hilt 217; Greene v. Waggner, 2 Ib. 297; Cook v. Soule, 56 N. Y. 420.
    On the question as to reversing a judgment of dismissal of the complaint on the ground that plaintiff was at all events entitled to nominal damages, they cited Stevens v. Wider, 32 N. Y. 351; Cady v. Fairchild, 18 Johns. 129.
   By the Court.—Truax, J.

There can be no question as to the right of the plaintiff to recover some damages for the breach of the agreement. Loss in a legal sense may be sustained though performance would have been a positive injury to plaintiff (Chamberlain v. Parker, 45 N. Y. 569).

The only difficulty in the case is as to the amount of the damages. Under the agreement entered into between the plaintiff and the defendants, the plaintiff was to receive in lieu of a stated salary, a sum equal to one half the profits of the undertaking, after deducting all the expenses.

The measure of damages for dissolving a partnership before the time fixed in the articles of co-partnership is the prospective profits (Bagley v. Smith, 10 N. Y. 489). The usual way of showing these prospective profits is by showing what profits have already actually been made in the undertaking.

In this case there was no evidence of any past profits. The plaintiff attempted to show her loss by producing witnesses who were theatrical managers, and by asking them generally, from their experience as theatrical managers and from their knowledge of the business, what they would say would be a fair valuation of the plaintiff’s half interest in the contract entered into between, the plaintiff and the defendants. This evidence was incompetent; the opinions of witnesses as to the damages resulting from a particular transaction are not evidence although the witnesses may have knowledge of the subject matter (Teerpenning v. Corn Exchange Ins. Co. 43 N. Y. 279).

This was not a question that called for the opinion of experts. The loss sustained by the plaintiff was to be ascertained as a fact. The opinions of experts as to what plaintiff would have made if she had been allowed to fulfill her contract, unsupported by any facts are immaterial and irrelevant (Wakeman v. Wheeler & Wilson Manf’g Co., 101 N. Y. 206).

Neither was it error to exclude the evidence of one of the witnesses as to what the receipts by the plaintiff from her half interest in an agreement entered into with one Bartley Campbell, some four or five years prior to the making of this agreement, had been. This is not evidence from which the profits under this contract could be fairly estimated. Gifford v. Waters (67 N. Y. 80), is not like this case. The plaintiff in that case was to receive a certain portion of the profits of the business as salary. It was also agreed that he should receive on account of his "salary, thirty-five dollars per week. All he recovered on the trial was this thirty-five dollars per week. There was no proof of profits. The court of appeals held that as the damages could not be based upon proof of profits, and as the contract fixed the minimum estimate of the value of plaintiff’s services, this furnished a criterion from which plaintiff’s damages could fairly be estimated. In the case at bar no such means of judging plaintiff’s loss are furnished.

Plaintiff proved that she purchased certain costumes to be used by her in the business mentioned in the agreement between the parties hereto. It does not appear from that agreement that she was under any obligation to make such purchase; but even if she were she did not prove that she suffered any loss from such purchase.

At the most, plaintiff is only entitled to nominal damages, and it is well settled that a judgment will not be reversed simply to give the plaintiff nominal damages (Reading v. Gray, 37 Super. Ct. 79 ; McConihe v. N. Y. & Erie R. R. Co., 20 N. Y. 495).

Judgment is affirmed with costs.

Sedgwick, Ch. J., and O’Gorman, J., concurred.


text:
    WILLIAM KAYTON, et al. v. AARON BARNETT, et. al.

      Sale.—Undisclosed principal, when not liable.

    There can be no recovery of the price of goods sold, against parties as undisclosed, principals, with whom the vendors at the time of the sale expressly refused to contract.
    Accordingly, where as in this case, the vendors at the time of the sale asked the party who bought the goods if he was buying for defendants, stating that if he were they would not sell to defendants, and such party replied that he was not buying for defendants but for himself— Held, that defendants could not be held liable as undisclosed principals, though it appeared that the buyer was in fact acting for them on the sale.
    Before Sedgwick, Ch. J., Truax and O’Gorman, J.

      Decided December 17, 1886.
    Exceptions ordered to be heard at general term in the first instance.
    The judge who presided at the trial term dismissed the complaint upon the evidence presented by the plaintiffs, and directed that the exceptions be heard at the general term in the first instance, judgment in the meanwhile being suspended.
    Action to recover for goods sold and delivered to the defendants. The defendants denied the sale and delivery, and alleged that the goods were sold and delivered to a certain other person named Bishop.

      Sullivan & Cromwell and George Carleton Comstock, for plaintiffs.
    I. The defendants are held responsible as principals to the plaintiffs, the vendors; these plaintiffs, if they so elect, may recover from the defendants as principals, although credit is given to the agent alone (Meeker v. Claghorn, 44 N. Y. 351; Wharton on Agency, §§ 464, 469; Pentz v. Stanton, 10 Wend., 271; Thompson v. Davenport, 9 B. & C. 78 ; Story on Agency, 267, 446, 447, 423; 1 Am. L. C. 776, Hare & Wallace). This rule, however, is subject to two exceptions. (a) The principal must not be damnified, that is, the accounts between the principal and agent must not become changed (Rowan v. Buttman, 1 Daly, 412; Cheever v. Smith, 15 Johns. 276; Rathbone v. Tucker, 15 Wend. 498 ; Bank v. Topping, 9 Ib. 278). There is no evidence, however, in this case to show that the principal was damnified; on the other hand, the evidence clearly shows that the goods in question were delivered to the principal, and that unless he can be made liable in this case he will have paid nothing whatever for their value, (b) Exclusive credit must not have been given to the agent as such, that is, the vendor, with the full knowledge of all the facts and of the relations existing between the principal and the agent, treating with the agent as an agent of some principal and not as a principal, if he then debits the goods to the agent and relies wholly upon the agent’s credit he cannot afterward look to the principal for payment (Thompson v. Davenport, 9 B. & C. 78; Patterson v. Gan de Sequi, 15 East 62; Addison v. Gan de Sequi, 4 Taunton, 574; cited in 2 Smith’s L. C. 309; Wharton on Agency, § 70; Thompson v. Davenport, supra ; Hood v. Cochrane, 1 Bell’s Com., 7th ed. 537; Southard v. Sturtevant, 101 Mass. 390; Coleman v. Bank of Elmira, 53 N. Y. 388; Rowan
      v. Buttman, supra ; Butler v. Evening Mail Assoc., 34 Super. Ct. 62). The plaintiffs dealt with Mr. Bishop as a principal, and having- some suspicion that he might be acting for the defendants as their agent, put the question, when he expressly denied that he was acting as their agent or otherwise than as a principal. It cannot then be said that the plaintiffs knew Bishop as the agent of defendants or that they had knowledge of the relation of principal and agent which existed between .Bishop and the defendants, so that they could intelligently refuse the credit of the defendants, and in lieu thereof rely exclusively upon the credit of Bishop as agent of the defendants (Lish v. Wood, 4th E. D. S. 329; 1 Am. L. C. [Hare & Wallace], 770; Wharton on Agency, § 464, p. 302).
    II. An election to hold responsible either a principal or an agent when such relation exists cannot take place unless accompanied by two or 'more things from which to select; in other words, unless the relation of principal and agent is known at the time the credit is given, there cannot be said to be any election. The fact that plaintiffs expressed an opinion at the time of the sale that they would not sell to the defendants could not be an election unless they knew that Bishop acted as agent for defendants, inasmuch as it was expressly stated that there was but one person in the transaction, and that person Bishop ; there was nothing from which to elect; if held otherwise it would have to be said that the mind acted upon the possibility of a state of facts; such mental action in law is not an election, but a mere opinion; practically it would be absurd to suppose that if the plaintiffs had thought or known that Bishop was acting simply as an agent for defendants that they would have taken his credit in preference to that of the defendants. Bishop had nothing but his honor, while the defendants were known by plaintiff to be rich men (Thompson v. Davenport, supra; Southard v. Sturtevant, supra; Coleman v. First Nat. Bank of Elmira, supra; Rowan v. Buttman, supra).

    HI. Even had there been an election it could onlv «y be pleaded by the defendants by way of estoppel; in order to plead an estoppel it is necessary to sIioay some damage suffered. Defendants have received the goods, paid nothing for them as yet, and should not be allowed to plead an estoppel, even were they otherwise in a position to do so, which they are not, no election having been shown.
    Townsend, Dyett & Einstein and A. R. Dyett, for defendants.
    No case can be found where the seller, for any reason, declines or hesitates to sell to the principal, be he merely suspected or suggested, or a possible principal being suggested or suspected, the seller deliberately refuses to sell to him—if he exist-—and intelligently and expressly asserts that he Avill sell to the agent on his credit, and to him and on his credit only, and the seller, Avhen he afterwards discovers that he has been outAvitted by a clever ruse practiced on him, and that the agent, his purchaser by preference, has become insolvent, can then turn around and allege that he sold the goods to the principal. A fortiori Avhere, as in this case, the sellers inquire into the responsibility of the purchaser, the agent, before selling, and then expressing themselves satisfied, deliberately sell to him personally. A sale is a contract, and the minds of the parties must meet. -This is elementary. But they never met in this case. The mere fact that the principal Avas not disclosed, nothing being said upon the subject one way or the other, does not prevent a meeting of the minds of the contracting parties. But in tins case, Avhere the plaintiffs expressly stated in substance that if the defendants Avere the purchasers, the plaintiffs avouM not sell to them at any price, the minds of the plaintiffs and defendants could not meet on a sale by the former to the latter. In the present case, in the face of the plaintiffs’ declaration that they would not sell the property to the defendants at any price, how idle it would he to talk of a “ natural presumption that the credit was given to the principal (the defendants) rather than the agent (Bishop).” Yet in all cases of recovery against undisclosed principals such a presumption is the very foundation of the defendants’ liability (Meeker v. Claghorn, 44 N. Y. 351).
   By the Court.—Truax, J.

The action w.as brought to recover from the defendants as undisclosed principals. The evidence shows that the plaintiffs asked Bishop, the person who, as a matter of fact, bought the goods, if he was buying for the defendants, and stated to him that if he was buying for the defendants, plaintiffs would not sell the goods to them. Bishop said that he was not buying for the defendants, but that he was buying for himself.

It was testified on the trial, and for the purposes of this appeal it must be taken as the fact, that Bishop was buying the goods for the defendants.

Where an agent acts for an undisclosed principal, the third party on discovering the principal, may sue him and recover (Meeker v. Claghorn, 44 N. Y. 351), provided that in the meantime the principal has not in good faith paid the agent (Armstrong v. Stokes, 7 L. R. Q. B. 253 ; Rowan v. Buttman, 1 Daly, 412), and provided that the credit has not been given to the agent as agent (Meeker v. Claghorn, supra; Coleman v. First Nat. Bank of Elmira, 53 N. Y. 388).

In each of these cases there must be an agency which was unknown to the plaintiff. But in the case before the court the plaintiffs refused to contract with the defendants. There was no reciprocity of action between the plaintiffs and the defendants; if the plaintiffs had refused to complete the contract, the defendants could not have sued them for damages (Humble v. Hunter, 12 Q. B. 311; Winchester v. Howard, 97 Mass. 303; Robson v. Drummond, 2 B. & Ad. 303).

In this case the plaintiffs did not give credit to the agent as agent, because they did not know that Bishop was acting as agent for the defendants.

The plaintiffs’ exceptions are overruled and judgment is ordered for the defendants dismissing the complaint with costs.

Sedgwick, Ch. J., and O’Gorman, J., concurred.