text:
    Charles I. Berg, Respondent, v. Henry Parsons, Appellant.

      Principal and agent — independent contractor — diligence required of the principal i!n selecting a fit person — proof of the habits of the contractor, admissible — opinion of a toitness— measure of damages fin' injury to real property.

    When a contractor takes entire control of a work, and the employer does not interfere therewith, and is not negligent in selecting the contractor, the employer is. not liable to third parties for injuries resulting- from the contractor’s negligence.

      Tie party wio employs the contractor must employ a competent and fit person, and must exercise reasonable care in ascertaining the character and qualifications of the person whom he employs as contractor.
    Where the evidence relative to the character and qualifications of a contractor is conflicting, and it does not appear that the employer made very exhaustive inquiries in the matter, the jury must determine whether the inquiries made were such as a man of reasonable prudence would make under the circumstances. Proof may be given of the habits of a contractor for the purpose of showing that he was an unfit person, and also for the purpose of calling upon the employer to show that he had used such care and diligence in ascertaining the character and capacity of the proposed contractor as would absolve the employer from any charge of negligence in that regard.
    A witness cannot testify to his belief that a contractor was capable of carrying out a contract and would use due care in so doing.
    While the usual measure of damages, in the case of in j uries done to real estate by carelessness in blasting, is the difference between the value of the premises uninjured and their value as injured, yet where the action is brought by the owner of an adjoining lot to recover for damages done to it caused by the careless blasting of a cellar on the defendant’s lot, the plaintiff may recover such an amount as is a reasonable sum for putting his premises in the same condition in which they were before the accident.
    Appeal by the defendant, Iienry Parsons, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of New York on the 20th day of May, 1895, upon the verdict of a jury rendered after a trial at the New York Circuit, and also from an order entered in said clerk’s office, bearing date the 9th day of May, 1895, denying the defendant’s motion for a new trial made upon the minutes.

      Alexander Thain, for the appellant.

      Charles W. Pierson, for the respondent.
   Yan Brunt, P. J.:

This action was brought to recover damages which the plaintiff claimed to have sustained by reason of the careless blasting done by a ■contractor employed by the defendant to blast out a cellar upon his premises which were adjacent to those of the plaintiff.

Hpon the trial the plaintiff gave evidence tending to prove that the work was of a dangerous character, and that the contractor was not a suitable and competent person to perform such work. The ■defendant also gave evidence tending to prove that, being aware of the dangerous character of the work, he had made inquiries such as a prudent person would make in regard to the capacity of the contractor and his carefulness in doing such work. There was evidence also given as to the amount which was paid by the plaintiff in repairing his premises after the injury, which amount was conceded to be á reasonable and fair sum for such repairs; but it was claimed that such expenditure was not the true measure of damage.

Upon the case being submitted to the jury, the jury found a verdict for the amount expended upon the repairs, and from the judgment thereupon entered, and from an order denying a motion for a new trial, this appeal is taken.

The rule seems to be well established that when any contractor or other special agent takes entire control of a work, the employer not interfering, and there being no negligence in the selection of the contractor, the employer is not liable to third parties for injuries to such parties caused by the contractor’s negligence. It is also well established that the party employing the contractor must employ a competent and fit person for the purpose of performing the work • or at least must exercise reasonable care in ascertaining the character and' qualifications of the person so employed.

In the case at bar there was evidence given tending to show that the defendant had made some inquiries in regard to the character and qualifications of the person he employed. But they certainly were not of a very exhaustive character, and there was a question left for the jury to determine as to whether they were such as a man of reasonable prudence would make under the circumstances. It was not by any means a question for the court to determine, because it would appear that there was some conflict of evidence upon this point, and different deductions might be drawn from the evidence which was offered. It is not necessary in the disposition of this appeal to rehearse the testimony upon this question. It is claimed* to be essentially different from that which appeared upon the previous trial, but we think 'that inferences of the same character could be drawn therefrom, and that there is no material variation in the testimony which would authorize the court in taking that question from the jury.

Various exceptions were raised to the exclusion arid admission of evidence, particularly in regard to the testimony as to the habits of the contractor. We think that this evidence was competent for the purpose of showing that he was a person not to be trusted with work of this description, and for the purpose also of calling upon the defendant to show that he had used such care and diligence in ascertaining the character and capacity of his proposed contractor as would absolve him from the charge of negligence in that regard.

There was also an exception taken to the striking out of evidence in regard to the general reputation of this contractor in April, 1892, some months after the happening of the accident in question. It seems to be sufficient to dispose of this exception to say that the witness did not seem to be testifying as to any general reputation whatever; he was only testifying to his belief that the contractor was capable of carrying out the contract and would use due care in' its execution.

In respect to the objection as to the measure of damages, although it is undoubtedly the rule that the difference in value between the premises injured and uninjured is the usual method of ascertaining the amount of damage, yet in the case at bar, there being no pretense that the premises were put in better condition by the repairs than they had been before the accident, and it being conceded that the amount paid was a reasonable sum to pay for putting them in the same condition in which they were before the accident, it does not appear that the defendant has suffered by reason of the application of the rule of damages adopted in this case.

We think that the judgment and order appealed from should be ■affirmed, with costs.

Eollett and O’Brien, JJ., concurred.

Judgment and order affirmed, with costs.


source: Caselaw Access Project

author: Van Brunt, P. ,J.:

license: Public Domain

text:
    John Dohn, Respondent, v. John Dawson and William Archer, Appellants.

      Negligence — proof of an injury by inference — risks assumed by an employee — employee of an independent contractor not a fellow-servant — evidence too remote.

    Upon the trial of an action, brought to recover damages for injuries resulting from the alleged negligence of the defendants, it appeared that the defendants were contractors for the mason work of a building and had erected scaffolding on the inside of the wall in which there were spaces for windows, and that at the time of the accident in question workmen were engaged in building a scaffold above an existing scaffold upon which there were bricks; that while the workmen were removing the planking of the lower scaffold in order to use it for the same purpose upon the upper scaffold, one of the workmen heard 'a brick rattling down from the scaffold and heard it strike something but did not know whether it went inside or outside of the wall, but, on going to a window and looking out, he saw the plaintiff upon the sidewalk holding his head. Another witness testified that something struck the plaintiff; that while he did not see the object strike the plaintiff he saw, when it bounced on the ground, that it was part of a brick.

      Held, that although there was no direct evidence that the damage was caused by a brick which -was permitted to fall upon the plaintiff through the negligence of the defendants’ workmen, yet that the inference might he indulged under the circumstances that such was the fact;
    That as the plaintiff, who was employed by an independent contractor, had a right to be upon the sidewalk and was there attending to his work, it was not one of the risks of the situation,.which an employee assumed, that he should be exposed to the fall of brick from a scaffold within the building caused by the negligence of persons who were not his fellow-servants.
    Upon the trial of the action the court offered to allow the defendants’ counsel to show, if he could, that there was a scaffold on the outside of the building at the time of the accident.

      Held, -that this was as far as the court was bound to go, and that a question put by the defendants’ counsel, “ Had there been ,a scaffold erected on the outside of this building?” was properly excluded as too remote and indefinite.
    Appeal by the defendants, John Dawson'and another, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of New York on the 15th day of April, 1895, upon the verdict of a'jury rendered after a trial at the New York Circuit, and also from an order entered in said clerk’s office on the ,1.5th day of April, .1895, denying the defendants’ motion for a new trial made upon the minutes.

      Charles M. Earle, for tbe appellants.

      Ed/wcvrd J. McGuwe, for tbe respondent.
   Van Brunt, P. ,J.:

The defendants were masons who had a contract from the city for the mason work of the Criminal Courts building. There were at the same time many workmen employed by others having independent contracts with the city. The plaintiff was employed by an independent firm of contractors who were delivering terra cotta at the building. On May 3, 1892, the exterior walls of the building had been constructed to about the fourth story on the Franklin street side. In the face -of the wall were spaces for windows. Inside the wall were scaffolds erected by the defendants for their workmen. On the date mentioned two of the defendants’ employees were engaged in building a scaffold above another scaffold upon which were a quantity of bricks, the planking of the lower scaffold being taken out for the purpose of putting it upon the upper scaffold, and the workmen removing the bricks from the lower scaffold and placing them upon the upper scaffold as the work progressed. One of these workmen heard a brick rattling down off the scaffold and heard it strike something, but did not know whether it went inside or out. He went to the window and, looking out, saw the plaintiff about fifteen or twenty feet from the corner of the building holding his head. Another witness testified that he was a fellow-workman of the plaintiff and . was unloading a truck, and the plaintiff was helping him to take off his load ; that the plaintiff was not there more than a minute or two when something struck him on the head; that the witness did not see the thing strike him, but when it struck it bounced on the ground, and the witness looked and saw that it was half a brick or a little over.

It was claimed upon the argument by the counsel for. the appellants, and is claimed upon his brief, that there is evidence that there were plumbers at work upon this wall who were cutting out brick, using cold chisels and hammer and tamping irons with which to tamp oakum into a waste-pipe joint that they were caulking. "We have examined the case with care for the purpose of finding evidence that any plumbers were cutting any channel into this wall. The evidence in regard to the plumbers is, that they were putting in a waste pipe, and that they had two cold chisels, a hammer and a tamping tool, and were at work in a recess that sets in the building, and that they were caulking. There is no evidence that they were cutting away any brick. The evidence in the case shows that the only persons who were working with brick were those employees of the defendants who were moving the scaffold.

It is urged that it is not shown that the defendants were guilty of any negligence and that it is purely a matter of inference that any.brick fell because of any action of the employees of the defendants. This is undoubtedly true. But in the case of a murder where a bullet is found in the body of the 'deceased and the accused is shown to have pointed a pistol at the deceased and to have fired it off, it is only a matter of inference that the bullet came from the pistol. So in the case at bar, we find that one of these workmen testified that a brick fell from the platform, and at about the same time the plaintiff was struck, and although no one saw the impact of the brick, yet as it bounded from his head it was seen by another witness. It does not require a very great deal of inference to come to the conclusion under evidence such as this, that the brick which was let fall by the defendants’ workmen was the one that struck the plaintiff.

It is further urged that the plaintiff took the risk of the situation at the time. We are not aware that, being upon the sidewalk, he took the risk of any falling brickbats that might be carelessly dropped down upon his head by the employees of the defendants. He had the right to be upon the sidewalk. He was there attending to his work, and lie had no reason to anticipate such carelessness upon the part of defendants’ employees.

It is urged that the plaintiff has not shown absence of contributory negligence, and that it cannot be inferred from the . proof of the accident and of negligence on the part of the defendants. This is undoubtedly true, but the facts were shown and the plaintiff has proved that he was where he had the right to be. He had no reason to expect, as already'suggested, that brickbats would be showered down upon his head.

The exception to which attention is called in respect to the building of the scaffold on the outside is untenable. The court said that it would allow the counsel to sliow, if lie could, that there was a scaffold there at that time. That was all that it was bound to do. It was not bound to permit the witness to go through all the different steps which are necessary to be taken to erect a scaffold.

The question was: “ Had there been a scaffold erected on the outside of this building ? ” It does not necessarily follow that if a scaffold is once erected on the outside of a building it exists forever. The question was too indefinite, too remote and clearly improper. •

The verdict undoubtedly was large, but we do not think it was so excessive as to call upon us to reverse the judgment.

The judgment and order appealed from should be affirmed, with costs.

Parker and O’Brien, JJ., concurred.

Judgment and order affirmed, with costs.


author: Yan Brunt, P. J.:

text:
    John C. Fogg and Gilbert H. Scribner, Jr., Appellants, v. The Suburban Rapid Transit Company, Respondent.

      Building contract — burden of proof as to mechanics’ liens — an objection that a condition pi'ecedent has not been performed need, not be taken by demurrer or by answer— waiver.

    In an action brought to recover for work, labor, services and material it appeared that the written contract under which the work was performed expressly provided that, before the contractor would demand or should receive his final pay- ' ment, he would furnish to the employer satisfactory evidence that all just liens and claims of his own employees, or upon the part of materialm'en, had been fully satisfied, and that all materials and work embraced in the contract had been released from all such liens and claims. Upon the trial of the action the defendant proved that mechanics’ liens existed against the work in question and against the moneys to become due thereon, which proof was objected to by the plaintiffs on the ground that such defense had not been pleaded.
    Upon an appeal from a judgment dismissing the complaint,

      Held, that under the language of the contract proof by the plaintiffs that no liens existed was a condition precedent to the plaintiffs’ right to recover, and that having failed to make such proof they could not recover;
    That the position taken by the defendant, that the plaintiffs had been paid in full, was not in any manner a waiver of the condition precedent that, befoz'e any payment was made, the plaintiff must show that no liens existed.

      'Appeal by the plaintiffs, John C. Fogg and another, from a judgment of the Supreme Court in favor of the defendant, entered in the office of the clerk of the county of New York on the 14th day of February, 1895, upon the dismissal of the complaint directed by the court after a trial at the New York Circuit before the court and a-jury.

      L.- J. Morrison, for the appellants.

      Brainard Tolies and. JvMen T. Davies, for the respondent.
   Yan Brunt, P. J.:

This action was brought to recover for work, labor and services and materials furnished by the .plaintiffs to the defendant. Three causes of action are set out — one for work, labor and services and material furnished under and pursuant to a written contract entered into between the plaintiffs and the defendant; the second and third, for extra work.

The plaintiffs, as part of their case, introduced in evidence the contract between the parties which provided for the performance of extra work, and also contained the following provision: “ The party of the second part further agrees that he will present to the party of the first part satisfactory evidence that all just liens, claims and demands of the employees of the said party of the second part, or of parties from whom materials used in the construction of the work may have been purchased or procured, are fully satisfied, and that the materials furnished and work done under this agreement are fully released from all such liens, claims'and demands before said party of the second part will demand or shall receive the sums due on final payment under this agreement.”

The plaintiffs also gave-evidence of the performance of the work and of the supply of the materials. At the end of the plaintiffs’ case the defendant moved to dismiss the complaint upon the ground that the plaintiffs had not complied with the condition of the contract above quoted, and had not presented any evidence upon the subject-,mentioned therein. This motion was denied. The defendant thereupon proceeded to prove that mechanics’ liens existed against the work in question and the money to become due thereon, which evidence was objected to upon the part of the plaintiffs upon the ground that it had not been pleaded and that the plaintiffs had had no opportunity to meet it. After certain evidence of this kind had been given under the said objection the defendant rested, and the court dismissed the complaint, but not upon the merits. From the judgment thereupon entered this appeal is taken. '

It is evident from the nature of the record that the court dismissed the complaint because of the existence of the mechanic’s lien of which evidence had been given.

It is urged that this was error, because no such defense was set up in the answer, and the admission of the evidence in question was, therefore, erroneous. It may be true that if it had been necessary to set up any such defense in the answer it would have been error to have admitted the evidence. But we think that the court would have been justified in dismissing the complaint unless affirmative proof was offered upon the part of the plaintiffs of compliance with the condition of the contract above mentioned.

It is urged that this condition of the contract was not a condition precedent, and that the defendant, not having pleaded the breach thereof, was not in condition to prove it. But by the express phraseology of the provision it is manifest that it was a condition precedent, because it says that this evidence is to be furnished to the party of the first part (the defendant) before the party of the second part (the plaintiffs) will demand or shall receive the sums due upon final payment under this agreement.” It would be difficult to see how a condition precedent could be expressed in more apt or appropriate terms. Such provisions in respect to architects’' certificates have always been held to be conditions precedent. And if we were in need of authority for the support of this proposition we have it in the case of Weeks v. O'Brien (141 N. Y. 199). In that case it is held that where a building contract contains a condition requiring an architect’s certificate of completion of the contract before payment of the last installment, it is essential, in an action upon the contract to recover that installment, to allege in the complaint performance of that condition, or to set forth facts excusing the plaintiff from performing the condition, and that in order to avail himself of it the defendant is not required to present it by demurrer or answer, but may raise it on the trial.

It is claimed upon the part of the appellants that if compliance with the provisions of the written contract, in reference to proof' that no liens existed, was a condition precedent, compliance therewith was waived by the defendant, upon the ground that the position taken by the defendant was that the plaintiffs had been paid in full for tlie work done and materials furnished.

It would be a novel proposition to hold that an answer of payment could possibly be said to waive the performance of a condition precedent, which condition it was not necessary for tlie defendant to set up by answer, or, if the want of an averment of performance of such condition made the complaint defective, raise by demurrer.

It would seem, therefore, that the plaintiffs’ proof was fatally defective, and the judgment must be affirmed, with costs.

Parker and O’Brien, JJ., concurred.

Judgment affirmed, with costs.


text:
    National Shoe and Leather Bank of the City of New York, Respondent, v. Amelia F. Baker, Appellant, Impleaded with Robert B. Merritt.

      Creditors’ action under chap. 487 of 1889 — is referable notwithstanding allegation of fraudulent appropriation ■— the primgrry question is the fact of the indebtedness.

    Where in an action brought under chapter 487 of the Laws of 1889, by a creditor of a deceased insolvent debtor, to disaffirm a transfer, made in fraud of his rights as a creditor, tlie complaint alleges an indebtedness in a large amount, consisting, as appears by the pleadings, of a large number of charges and credits, the case is of a referable character.

      Mead v. Lozin, 31 Hun, 286 (not followed); Rowland v. Rowland (141 N. Y. 485), followed.
    The primary question in such case is whether an indebtedness to the creditor does exist upon the part of tlie estate of tlie deceased, and the whole proceedings depend upon the establishment of this issue iu favor of the plaintiff.
    The fact that the complaint alleges t-hat the indebtedness arose out of the fraudulent appropriation of money by the deceased does not make the action one which sounds in tort and, therefore, is not referable.
    Appeal by tlie defendant, Amelia F. Baker, from an order of tlie Supreme Court, made at tlie New York Special Term and entered in the office of tlie clerk of tlie county of New York on tlie 27th day of May, 1895, referring this action to a referee to hear and determine tlie same.

      B. F. Tracy, for the appellant.

      James L. Bishop, for the respondent.
   Yan Brunt, P. J.:

This action was brought pursuant to chapter 487 of the Laws of 1889, which provides that “ any creditor of a deceased insolvent debtor having a claim or demand against the estate of such deceased debtor exceeding in amount the sum of $100 may, in like manner, for the benefit of himself and other creditors interested in the estate or property of such deceased debtor, disaffirm, treat as void and resist all acts done and conveyances, transfers and agreements made in fraud of the right of any creditor or creditors by such deceased debtor, and for that purpose may maintain any necessary action to set aside such acts, conveyances, transfers or agreements, and, for the purpose of maintaining such action,'it shall not be necessary for such creditor to have obtained a judgment upon his claim or demand, but such claim or demand, if disputed, may be proved and established upon the trial of such action.”

The complaint alleges an indebtedness by the deceased insolvent, one Frederick Baker, in the sum of at least $100,000 for moneys received by him belonging to the plaintiff over and above the amount of any credits or set-offs to which he was entitled, and then alleges the purchase by the deceased insolvent of real estate, and the taking of the title thereto in the name of the defendant Merritt, and the delivery by Merritt to the deceased insolvent of a conveyance thereof, with the name of the grantee in blank, and with authority to insert the name of any person as grantee, and that the said deceased insolvent inserted in said conveyance the name of the defendant Baker. The plaintiff served a bill of particulars consisting of a very large number of items of charges and credits.

The deféítdant Baker thereupon answered, denying, upon information and belief, the indebtedness and the fraudulent character of the conveyance, and also setting up the Statute of Limitations.

A motion having been made to refer the case upon the ground that the trial would involve the examination of a long account, such motion was granted, and from the order thereupon entered this appeal is taken.

This order is attacked mainly upon the ground that there is no account the examination of which is the direct and immediate object of the action. In this we think the learned counsel for the appellant is in error. This action is of a dual character. First, it must establish the debt, and then the plaintiff will be entitled to the equitable relief. It is different from the ordinary creditors’ actions, because they are based upon judgments, and in such actions the question of indebtedness has been previously determined. But in the action in the case at bar the whole liability is open to discussion and investigation; and the first question to be determined is whether the deceased was indebted to the plaintiff, and if so in what amount. From the pleadings it is apparent that this will necessarily involve the examination of a large quantity of items both of charges and credits, bringing the case, therefore, within the ordinary rules applicable to referable cases. Merely because .there are other issues to be tried does not deprive the casé of'its referable character. It is oidy where there are questions of law of great intricacy that the court will refuse to refer an action, where a long account must necessarily be examined. In the case at bar there are no intricate questions of law. There are only questions of fact, the primary one being the fact of indebtedness upon the párt of the deceased, and the whole .proceeding depending upon the establishment of this issue in favor of the plaintiff.

It is urged that the amount of the indebtedness is of no moment —that -it makes no difference whether the amount claimed was $1,000, $100,000* or $1,000,000. But it is of some moment that some claim for some amount be established; and in order to establish a claim for any apiount it will be necessary to examine and substantiate the items of debit and credit referred to in the bill of particulars. The case of Read v. Lozin (31 Hun, 286) seems to be contrary to this view. But we think that that case is irreconcilable with .the case of Rowland v. Rowland (141 N. Y. 485), in which it is held that where an accounting is necessary, even 'in an action in ■equity, and no difficult question of law is involved, the court has a right to order a reference.

It is urged that the accounts not arising out of contracts between the parties, the action is not referable; and that actions sounding in tort are not referable. It is clear from the character of the complaint that1 there is no claim in the nature of tort. It 'contains simply an allegation of an indebtedness arising out of tlie fraudulent appropriation of money upon tlie part of the deceased. The plaintiff has the right to proceed as if upon contract.

The order should he affirmed, with ten dollars costs and disbursements.

O’Brien and Parker, JJ., concurred.

Order affirmed, with ten dollars costs and disbursements.


text:
    Edward Spencer Hall, Respondent, v. Herter Brothers, Appellant.

      Corporation — assumption of a firm contract — when letter of a derla employed by the corporation binds it.

    Upon the trial of an action brought to recover commissions, alleged to have been earned in procuring a contract and superintending its execution, it appeared that while the plaintiff was in the employ of a firm known as Herter Brothers, he procured a valuable contract for fitting and decorating a house, and entered upon the work of superintending its execution; and that (the form of the business having been subsequently changed from that of a co-partnership into that of a corporation styled “Herter Brothers ”) the corporation continued the performance of the contract and completed it, the work being done under the supervision of the plaintiff.
    There was evidence tending to prove that it was stated that the plaintiff should continue with the corporation exactly as lie liad with tlie firm.

      Held, that the j ury might infer that the corporation, in the matter of this contract, had assumed the obligations of the firm whose assets it liad acquired.
    The plaintiff offered in evidence a letter writen to him by the bookkeeper and confidential correspondence clerk of tlie corporation in relation to his claim, to the admission of which tlie defendant objected.

      Held, that the letter was competent evidence against the corporation;
    That when a party is clothed by a corporation with authority to answer for it, the corporation will be bound by any action of his coming within the ordinary executive duties pertaining to the transaction of the business of the corporation.
    Appeal by the defendant, Herter Brothers, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the cleric of the county of New York on the 25th day of April, 1895, upon the verdict of a jury rendered after a trial at the New York Circuit, and also from an order entered in said clerk’s office on tlie IStli day of April, 1895, denying the defendant’s motion for a new trial made upon tlie minutes.
    This action was brought to recover from Herter Brothers, a corporation, commissions alleged to be due the plaintiff under a contract made with the firm of Herter Brothers to whose business the defendant corporation succeeded.

      Julius II. Seymour, for the appellant.

      G. F. Bovee, Jr., and Frederick B. Campbell, for the respondent,
   Yan Brunt, P. J.:

William Baumgarten and William Gh Nichols were, for a number of years prior to the month of January, 1891, partners doing business as manufacturers of furniture and decorators under the firm name of Herter Brothers. The plaintiff had been in their employ for a number of years, and in January, 1890, he entered into an oral contract with them, by which he was to receive five per cent commission for obtaining and supervising the execution of contracts in the line of business in which the firm was engaged. The plaintiff was given a guaranty of $3,500 or $4,000 per year, any excess of commissions to be credited to him at the end of the year, but such commissions only to accrue when the work on the respective contracts was finished and completed. During the year 1890 the plaintiff entered into negotiations with one Elkins, of Philadelphia, for fitting and decorating his house. The plaintiff prepared estimates for doing the work, which called for $68,860, which estimate was subsequently reduced by Baumgarten to $63,860, and the contract finally taken in May, 1890, for that sum. There were subsequent contracts for additional work, making the aggregate due on the contract $127,225, which amount was in due course paid to the corporation. ■ In January, 1891, the form of the business was changed from a co-partnership into a corporation entitled “ Herter Brothers,” Baumgarten and Nichols being the principal stockholders and officers of the corporation. There was no change in the personnel of the business after the corporation was formed. To this corporation were transferred all the assets of the partnership, but the instrument which transferred these partnership assets did not contain a promise to pay the partnership debts. The work upon the Elkins contract was superintended by the plaintiff, and commissions were paid upon this contract by the defendant corporation to the amount of two and one-half per cent; and this action was brought to recover the remaining two and one-half per cent.

There were two issues presented upon the trial, one that the plaintiff was only entitled- to two and one-half per cent, and the other that the defendant never promised to pay the firm’s indebtedness to the plaintiff.

It is. sufficient to say in regard to the first proposition that there is a fiat contradiction in the evidence; and, although admissions of the plaintiff to the effect that he had agreed to cake two and one-half per cent were offered in evidence, the jury found against the defendant upon this issue, and we see no reason for interfering with their conclusion.

In regard to the claim on the part of the defendant, that it never promised to pay the firm’s indebtedness to the plaintiff, there seems to be more ground for the defendant’s contention. It is true that there is no direct evidence of the defendant’s assumption of this liability, but .the jury had the right to infer that it was the intention and understanding of the parties that the defendant would be answerable to the plaintiff for the commissions upon this contract which it was doing and completing, aud which the plaintiff was supervising as its employee. There was evidence tending to prove that the plaintiff was continued by the new corporation under the same agreement, and that it was stated that he should continue with the new corporation exactly as he did before, and that he was to continue under the old arrangement with the new corporation and continue with tlie-same contracts lie had on hand under the same conditions. The defendant had assumed the Elkins contract, carried it out and completed it. The’plaintiff supervised the execution of the contract the same as he had done for the firm, and upon its completion he demanded of the defendant his commissions. We think, as was stated upon the previous appeal, that there was evidence from which the jury might and could property infer that the defendant upon this contract assumed the obligations of the film whose assets it had acquired.

It is not n'ecessary to discuss at length these questions, because they are virtually the same as were before the court upon the previous appeal (83 linn, 19), at which time the court held that there, was a question sufficient to go to the jury.

Certain exceptions were taken to the admission of evidence, only one of which it is necessary to notice, and that is a letter written on the 11th of January, 1892, by one Be Costa, who was the bookkeeper and confidential correspondence clerk of the corporation,, which position he had filled in the firm for years. It appears that the plaintiff made an application to the corporation for a settlement, and that the letter in question was sent to him in reply. This letter, coming from the source from which the’ correspondence of the corporation ordinarily emanated, was undoubtedly competent evidence as against the corporation. In these trading corporations, whose business is necessarily conducted much the same as that of a firm, it certainly cannot be necessary for every person who has dealings with the corporation to show a resolution of the board of directors of the corporation for everything which is done in and about the business of the corporation when it is attempted to bind the corporation by the action of its officials. In these days, when corporations may be formed for the transaction of any business, where a party is held out by the corporation as occupying a position to answer for the corporation, as it appears beyond question that this correspondent was, the corporation will be bound by any action of his coming within the ordinary executive duties pertaining to the transaction of the business of the corporation; and no resolution of the board of directors will be necessary to clothe with vitality every word that he utters or letter that he 'writes. If a contrary rule were to be adopted, then these- corporations would be mere traps for the purpose of deceiving the unwary and be the means of arsing the charters conferred by the State as an instrument of fraud.

The judgment and order appealed from should be affirmed, with costs.

Eollbtt and Parker, JJ., concurred.

Judgment and order affirmed, with costs.-


author: Yan Brunt, P. L :

text:
    In the Matter of the Application of Lizzie Ryan O’Connor to Compel the Payment to her of a Legacy Contained in the Last Will and Testament of Mary A. Edson, Deceased. Lizzie Ryan O’Connor, Respondent; Margaret B. Edson, Individually and as Executrix, etc., of Marmont B. Edson, Deceased, Appellant.

      Legacy — ■pending litigations against an estate do not ha/t' the payment of a legacy to a legatee.

    A legatee under the will of one Mary A. Edson applied to the surrogate for the payment of her legacy, when the executrix of Marmont B. Edson, who had in the first instance contested the will of Mary A. Edson, appeared and submit- „ ted an affidavit showing that there were litigations pending against the estate 'of Mary A. Edson, one of which was brought by the executrix to establish a mutual will formerly executed by Mary A. Edson, and that if this will were established it would dispose of all her estate, and the will admitted to probate, under which the legatee claimed, would be inoperative.
    The executors of Mary A. Edson admitted that they had sufficient assets, over and above all debts and liabilities, to pay the legatee.

      Held, that the legatee was entitled to payment.
    Appeal by Margaret B. Edson, individually and as executrix, •etc., of Marmont B. Edson, deceased, from a decree of the Surrogate’s Court of tlie county of New York, entered in tlie office of said Surrogate’s Court on tbe 27 th day of May, 1895, directing the payment to Lizzie Ryan O’Connor of a legacy contained in tbe last will and testament of Mary A. Edson, deceased.

      P. B. Dean and Treadwell Cleveland, for the "appellant.

      John M. Perry, for the respondent.
   Yan Brunt, P. L :

The will of Mary A. Edson, deceased, together with three codicils "thereto, was admitted to probate by the surrogate of New York county on January 14, 1891, and letters testamentary thereon were issued on tbe 20th of January, 1891. By one of tlie codicils to the will tlie respondent was left a legacy of $10,000. The executors ■admit that they have in their hands sufficient assets over and above ■all debts and liabilities to pay tbe respondent’s legacy in full, but they decline to do so because the attorneys for Margaret B. Edson, as executrix of Marmont B. Edson, by whom the will of Mary A. Edson was contested, have notified them not to do so.

This proceeding was commenced on the 24th of April, 1895, by the respondent, a legatee under the will of Mary A. Edson, deceased, to obtain payment to her of said legacy. Margaret B. Edson, as executrix of Marmont B. Edson, deceased, appeared on the return day of the citation issued in said proceedings, and submitted an affidavit showing that there were three pending litigations involving the estate of said Mary A. Edson, and that the second of these litigations was brought by her as executrix to establish a mutual will theretofore executed by Mary A. Edson; and that if this mutual will of Mary A. Edson should be enforced it would dispose of all the assets of the estate of Mary A. Edson, and the will as probated and under which the petitioner holds, would be inoperative.

Upon this state of facts the feurrogate made an order directing the payment of the legacy. It seems to be assumed upon the part of the appellant that an intention to appeal operates as a stay of proceedings. "We are not aware that any such intention, no matter from what source it may emanate, has any such potent effect. In fact if the appeal itself were pending it .would not necessarily stay the proceeding in reference to the estate, and thus coñipel the residuary legatee to pay interest upon legacies which were due and should be paid.

The order should be affirmed, with costs.

O’Brien and Parker, JJ., concurred.

Order affirmed, with costs.


text:
    National Park Bank of New York, Plaintiff, v. The Eldred Bank, Defendant.

      Bills and notes — a raised draft — when a collecting l>anlc represents itself as owner — its liability to repay — diligence in notifying the drmoee of an alteration.

    In an action brought to recover money paid upon a raised draft it appeared that on the seventh of July a person calling himself Frank Saxton purchased from the First National Bank of Wallingford, Conn., a draft drawn upon the plaintiff bank for the sum of eight dollars, and on the fifteenth day of July a person representing himself to be Frank Saxton presented the draft to the defendant and requested its collection, the draft having been’previously changed from §8 to §1,800. The defendant undertook the collection and indorsed the draft as follows: “Pay S. G-. Nelson, cashier, or order, for collection, for account of the Eldred Bank, Eldred, Pa. P. O. Heasley, cashier.” The draft was forwarded to the Seaboard Bank', of which S. G. Nelson was cashier, reaching there on the sixteenth, and on the seventeenth it was presented by that bank to the plaintiff, and was paid on the eighteenth.
    The defendant was informed by the Seaboard Bank that the plaintiff had paid the sum of §1,800 on the draft, and on the twenty-fifth the defendant paid this sum to Frank Saxton. About three weeks later the plaintiff learned from the drawer that the draft had been altered,_ and immediately notified the Seaboard Bank and the defendant, and demanded repayment.

      Held, that when the defendant directed the collection of the draft for its account it assumed the character of principal, so far as the plaintiff was concerned; that as the plaintiff had made payment of the draft to the defendant as to the owner thereof, and as it had not been guilty of any negligence, it could recover the mone3’’ from the party to whom it was paid.
    Motion by the defendant, The Eldred Bank, for a new'trial on a ease containing exceptions ordered to be beard at the General Term in the first instance upon the verdict of a jury rendered by direction of tlie court after a trial at the New York Circuit on the 29th. day of November, 1893.

      Robert D. Murray, for the plaintiff.

      Herman Aaron, for the defendant.
   Yan Brunt, P. J.:

Upon the trial of tliis action the counsel agreed upon the following facts:

On the 7th of July, 1885, a person, calling himself Prank Saxton, purchased from the First National Bank of Wallingford, Conn., a draft, whereby said First National Bank of Wallingford requested the plaintiff to pay to the order of Saxton the sum of eight dollars. Tlie defendant is a banking corporation located and carrying on business in the town of Eldred, in tlie State of Pennsylvania. On tbe 15th of July, 1885, a man, who represented himself to be Prank Sax-ton, came to tlie defendant’s bank and presented the draft above mentioned with the request that the defendant collect the same for him. When tlie draft was thus ¡presented to the defendant it had been fraudulently altered or raised by changing tbe amount, both as to words and figures, from §8 to §1,800. In all other respects the draft was unchanged, and was in the same form as originally drawn. The defendant received the draft for collection and gave said Sax-ton a receipt for the same. Saxton then indorsed the draft in blank, and'on the same day the defendant indorsed the said draft as follows:

“Pay S. G-. Nelson, cashier, or order, for collection; for account of the Eldred Bank, Eldred, Pa. P. O. HEASLEY,
“ Oashier.”

S. G. Nelson was the cashier of the Seaboard Bank. The draft was then forwarded to the Seaboard Bank, which it reached on July sixteenth. On the following day it was presented by the Seaboard Bank to the plaintiff for payment and was paid. On the ■18th of July, 1885, the defendant 'was informed by the Seaboard Bank that the plaintiff had paid the sum of $1,800 on said draft, and on the 25th of July, 1885, the defendant paid the sum of $1,800 to Prank Saxton, so called, after deducting a small fee for collection. On the 15th of August, 1885, the plaintiff learned for the first time from the First National Bank of Wallingford that the draft had been altered as to the amount from $8 to $1,800, and on the same day, and immediately upon receiving said information the plaintiff notified the Seaboard Bank and -the defendant of the fact, and demanded the repayment of the difference between $1,800 and 88, the genuine amount of said draft, together with interest. This request was refused and this action was brought to recover said amount.

It is to be observed that the plaintiff brought an action against the Seaboard Bank to recover the amount paid upon the same draft which is now sued upon, and was defeated in that action because the Seaboard Bank was merely’the agent of the Eldred Bank for the purposes of collection, and it paid over the proceeds to its principal, such agency appearing upon the paper itself. In the case at bar, however, the draft in question was indorsed absolutely to the Eldred Bank and it directed its collection for its account, thereby assuming the place of principal as far as the plaintiff was concerned. If it was acting as collecting .agent only, as it now claims, such agency was not disclosed to the plaintiff at the time of the transaction, and it had the right to rely upon the responsibility of the defendant as owner of the draft in paying the same.

Such being tlie relation of tlie parties, the distinction between the case at bar and that of the present plaintiff against the Seaboard Bank seems to be apparent. In tbe case of tbe Seaboard Bank, as has already been observed, tbe agency was disclosed. In tbe case of tbe defendant it was not. In tbe presentation of tbe draft for collection tbe defendant represented itself to be tbe owner of tbe draft and tbe payment was made by tbe plaintiff under those circumstances. It does not seem to need tbe citation of authorities to show that where money is paid upon a raised draft without any negligence upon tbe part of tbe person paying tbe same, it can be recovered from tbe party to whom it was paid.

Tbe exceptions .should be overruled and judgment ordered upon tbe verdict, with costs of tbe court below and of this application.

Parker and O’Brien, JJ., concurred.

Exceptions overruled, judgment ordered on verdict, with costs of court below and of this application.


author: Van Brunt, P. J.:

text:
    The National Wall Paper Company, Respondent, v. Robert F. Hobbs, Appellant.

      Contract, in restraint oj Prade, when legal — a person cannot avoid the contract xohile enjoyixig its benefits.

    An agreement by which a person promises that he will not directly or indirectly engage in,' or become associated with, any business of manufacturing, buying or selling wall paper, decorations, furnishings, or merchandise of a similar character, either as principal, agent, employee, or in any other relation or capacity, or as stockholder, director, trustee, agent, officer or employee of any corporation, other than one specified, in any State or Territory of the United States, except the State of Washington, is not illegal as in general restraint of trade.
    A person who is a party to an instrument by which, for a valuable consideration, he has agreed not to enter into a certain branch of business anywhere in the United States, except in the State of Washington, cannot, while he retains, the fruits of the contract, allege as a defense to an action brought to restrain him from violating the agreement that the instrument was part of a corrupt • and wicked conspiracy against the law and the public policy of the State, in that it was a combination by manufacturers designed to increase the price of. goods and to lower the price of wages.

      Appeal by the defendant, Robert F. Hobbs, from an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the county of New York on the 17th day of June, 1895, continuing a preliminary injunction theretofore granted in the action.

      A. jB. Boardman, for the appellant.

      Samuel Untermyer, for the respondent.
   Van Brunt, P. J.:

This action was brought for the purpose of restraining the defendant from the violation of an agreement which it is alleged that he entered into with the plaintiff, whereby he agreed, for a consideration received by him, that he would not directly or indirectly engage in or. become associated with any business of manufacturing, buying or selling wall paper, decorations, furnishings or merchandise of a similar character as principals, agents, employees, or in any other' relation or capacity, or as stockholders, directors, trustees, agents, officers or employees of any corporation other than the plaintiff, in any State or Territory of the U nited States, except the State of Washington.

It appears and is conceded upon the part of the defendant that he was making preparations to enter as employee into the business of a rival corporation. The injunction obtained herein was continued upon motion, and from the order continuing the injunction this appeal is taken.

Since the decision of the case of The Diamond Match Company v. Roeber. (106 N. Y. 473) such a contract as above referred to cannot be held to he illegal as in general restraint of trade.

It is urged, however, upon the part of the defendant, that the .contract which was entered into by his firm and himself with the plaintiff was void because it was part of a corrupt and wicked conspiracy against the law and public policy of this State, in that it was a combination of manufacturers for the purpose of putting up the price of goods and down the price of wages. In view of the fact that the defendant retained the price which was paid for his corrupt and wicked agreement, it is difficult to see how he can claim that he •should be absolved from its obligations, or how he can claim, being •a party to the instrument aiid having received that which he considered an adequate consideration for the restraint which was quit upon his volition, that such restraint should be removed and he be permitted to enjoy the fruits of what he claims to be his unlawful agreement. We do not think that the defendant is ill a position to .attack this contract, certainly not with its fruits in his pocket.

The order should be affirmed, with ten dollars costs and disbursements.

O’Brien and Parker, JJ., concurred.

Order affirmed, with ten dollars costs and disbursements.


author: Yan Brunt, P. J. :

text:
    Hannah Nirdlinger and Others, Plaintiffs, v. Meyer A. Bernheimer and Others, Respondents; Augusta Nirdlinger and Others, Appellants.

      Partnership — one partner not hound to show affirmatively that Ms purchase of the interest of his co-partner ivas fair.

    One partner cannot take any secret or unlawful advantage of liis fellows, but in bis dealings with them in reference -to co-partnership property there is no presumption of fraud, and he is not compelled, in order to sustain a transaction, to show affirmatively that it is just and fair, as is the rule in the case of a trustee and a cestui que trust.

    One partner has the right to buy out the interest of his co-paftner in a joint enterprise, and, unless he misleads or deceives him in some way, the fact that he has made a good bargain will not avoid the transaction.
    Appeal by the defendants, Augusta Nirdlinger and others, from so much of a judgment of the Supreme Court in favor of the plaintiffs, entered in the office of the clerk of the county of New York on the 12th day of October, 1891, as confirms the report of a referee.
    Also from so much of said judgment as overrules, as to the defendants, the widow, heirs and administrator of Jacob Nirdlinger, the objections made by said widow and heirs, by their attorney, to the accounting of Isaac Bernheimer, and the supplemental account of the defendants, his executors.
    Also from so much of said judgment as passes, confirms and proves the said account and supplemental account, as filed with the said referee, as to the said defendants, the widow, heirs and administrator of Jacob Nirdlinger, deceased.
    Also from the following portion of said judgment, and each and every part of said portion :

      Third. That the sale and assigiiment by the said Jacob Nirdlinger to the said Isaac Bernheimer of the one undivided half of the said Jacob’s interest by contract, under seal, on the 9th day of June,-1887, and his deed to said Bernheimer dated the 27th day of July, 1887, and his release in said contract and assignment of all claims and demands against said Bernheimer growing out of said Jacob’s interest aforesaid, were made and delivered for a good, valuable and sufficient consideration, without fraud, misrepresentation or deceit, and are valid and effective for the purposes in said instruments stated, and the defendants, the widow, heirs and administrator of Jacob Nirdlinger, are bound and estopped by said contract and deed.”
    Also from so much of said judgment as adjudges that the defend- • ants, the executors and heirs of Isaac Bernheimer, have no power or right to partition the lands in controversy, nor could any such partition, by their action, be now validly executed.
    Also from tire following portions of said judgment, and each and every part of said portions :
    “ Tenth. That all charges and allegations of fraud, deceit, conspiracy, convei’sion and wrongdoing made by the * * * heirs and widow of Jacob Nirdlinger, deceased, as set forth and alleged in the pleadings and in the notice and demand of rescission delivered to said Bernheimer on or about the 25th day of January, 1892, by the administrator, widow and heirs of said Jacob Nirdlinger, touching the said contract and deed referred to fin the third clause hereof, and touching the so-called Dawson sale, and the sale of the so-called Prairie farm, and all allegations attacking or impeaching the agency and trust reposed in said .Bernheimer in the said joint interest and venture and the management thereof mentioned in the pleadings, are adjudged to be unfounded and untrue.

      “ Eleventh. That the supplemental answer of the defendants, the heirs and widow of Jacob Nirdlinger, deceased, served upon Isaac Bernheimer, deceased, in pursuance of the order of this court made on or about the 20th day of February, .1893, be, and the same is, dismissed upon the merits, as to the defendauts, the executors and heirs of Isaac Bernheimer, and the issues raised by the said answer are adjudged and determined against the defendants, the widow, heirs and administrator of Jacob Nirdlinger.”
    Also from so much of said judgment as adjudges that the defendants, the executors and heirs of Isaac Bernheimer, recover against the defendants, the widow, heirs and administrator of Jacob Nirdlinger, them costs and allowances, and orders and directs the executors of the last will and testament of Isaac Bernheimer, deceased, to reserve and repay themselves out of the fund of $7,801.28, the sum of $1,500, the amount of the referee’s fees paid by them herein to take up the report of the referee, and to pay to their attorney George H. Yeaman, $498.10, his taxed costs herein, and $1,000 additional allowance made him herein by the court, amounting in all to the sum of $1,498.10.
    Also from so much of said judgment as adjudges that upon payment of the sums specified in said judgment, including said sums of $1,500 and $1,498.10, the defendants, the executors of the last will and testament of Isaac Bernheimer, deceased, and his heii’S, are and shall be acquitted and discharged of and from all liability, obligation and responsibility to the defendants, the widow, heirs and administrator of Jacob Nirdlinger, deceased, for or on account of said sum of $7,801.28, and of all matters and things in the pleadings mentioned, and in said account and supplemental account stated, except as specified in the conclusion of said judgment, with notice of an intention to bring up for review upon sirch appeal an order made at the New York Special Term and entered in the office of the clerk of the county of New York on the 14th day of September, 1894, granting an additional allowance of costs to the attorney for the defendants, the executors of Isaac Bernheimer, deceased, payable out of the fund found and stated by the referee to be in the hands of the said defendants, and ordering that the defendants, the executors of Isaac Bernheimer, deceased, retain to themselves out of said fund the sum of $1,500, the amount of the referee’s fees paid by them to take up his report herein, and that the final judgment to be entered in the action should provide for such payments out of said fund.

      James IF". Hawes and L. M. Ninde, for the appellants.

      George II Heamcm, for the respondents.
   Yan Brunt, P. J. :

Prior to December, 1855, Mayer Arnold, the firm of Bernheimer Bros., composed of Isaac Bernheimer, Herman Bernheimer and Simon Bernheimer, and the firm of Arnold, Nusbaum & Nirdlinger, composed of Simon "W. Arnold, Ernst Nusbaum and Jacob Nirdlinger, purchased certain lands in Minnesota, the said Mayer Arnold and the said two firms having a one-third interest each in the enterprise. The title was taken partly in the name of Isaac Bernheimer, partly in the name of Simon W. Arnold and partly in the joint names of the two. The title subsequently, and before the commencement of this action, became vested solely in Isaac Bernheimer.

On the 21th of December 1855, the parties interested in this enterprise entered into an agreement for the purpose of avoiding any doubts or uncertainties in regard to the rights of the several subscribers in the said lands and to make the same secure to all the subscribers, their heirs and assigns. In that agreement Isaac Bernheimer and Simon W. Arnold declared that they held the said lands and premises in trust for the purpose of superintending, managing, selling and conveying the same, and any part thereof, from time to time, and upon such terms as in their judgment should seem best ; and for the purpose of collecting and receiving the rents and profits thereof, which they were to divide and pay over together with the proceeds arising from such sales among the several subscribers in the proportions mentioned; and also for the purpose of making partition and division of the said premises among the subscribers, and of granting and conveying by good and sufficient deed of conveyance the part or portion set off and allotted to each subscriber individually, their heirs and assigns, or otherwise, as might be agreed upon by the parties.

"While Jacob Nirdlinger was a member of the firm of Arnold, Nusbaum & Nirdlinger at Philadelphia, Frederick Nirdlinger was a sub-partner with Jacob, but was not a member of the firm. ■

On the lltk of January, 1859, the partnership between Jacob Nirdlinger and Frederick Nirdlinger was dissolved, and thereupon they executed an instrument in writing declaring that the said Frederick Nirdlinger and the said Jacob Nirdlinger were equally interested in said Minnesota lands.

On the 1st of February, 1859, the parties to the instrument pf the 24th of December, 1855, executed another instrument in respect to certain portions of their land, defining their interests, etc., therein. Frederick Nirdlinger died intestate in 1873 before the commencement of this action. In November, 1882, this action was commenced by the plaintiffs, as his heirs and widow, to establish their right in the lands in question. Isaac Bernheimer never seems to have been apprised of the interest of Frederick Nirdlinger in the portion which he supposed to belong to Jacob Nirdlinger, except just prior to the commencement of this action. In July, 1887, Jacob Nirdlinger and wife conveyed his interest in the lands in question to Isaac Bernlieimer for the consideration of $9,000. On the 19th of November, 1889, judgment ivas rendered in this action holding that Frederick Nirdlinger had an interest in the property and assets, and that to ascertain what that interest was the plaintiff's had a right to an accounting as against Bernheimer. From that interlocutory judgment Bernheimer appealed to this court, where it was reversed. From such reversal the plaintiffs appealed to the Court of Appeals, and in April, 1892, the Court of Appeals reversed the judgment of the General Term, and sustained the referee.

Jacob Nirdlinger, one of the original defendants, died intestate on the 16th day of August, 1887, leaving him surviving the defendant Augusta Nirdlinger and eight children, his only next of kin and heirs at law, and the defendant Julius Heyn was thereafter appointed administrator of his estate by the Probate Court of Lucas county, Ohio, of which place the deceased was a resident at the time of his death, and thereafter ancillary letters upon such estate were granted to Iieyn by the surrogate of the county of New York. Thereafter Augusta Nirdlinger and the eight children and Julius Heyn, as administrator of the estate of Jacob Nirdlinger, were made parties defendant to this action.

In February, 1893, the appellant Augusta Nirdlinger and others served a supplemental answer, claiming relief as against their co-defendant Isaac Bernheimer, the object of this answer being to set aside and vacate the deed of Jacob Nirdlinger to Isaac Bernheimer, and to hold him responsible for large sums of money alleged to have been realized from sales by him of the lands in question and converted'to his own use, and for fraudulent concealment of the real amounts alleged to have been received by him. Bernhfeimer replied, and the issues raised by these pleadings as between the defendants were the main issues which were disposed of before the referee. Isaac Bernheimer having died, the action was revived as against Myer A. Bernheimer and two others, executors of his will, and against his next of kin, heirs at law, legatees and devisees, who-were made parties defendant in his place.

The grounds upon which it was sought to set aside and vacate the deed from Jacob Nirdlinger to Isaac Bernheimer were, that it was obtained by fraud and that Jacob Nirdlinger was incapable of the transaction of business at the time of the making of the deed.

Upon the trial before the referee,, of the issues raised by the supplemental answer, the same was dismissed upon the merits, and the issues raised by the said answer were adjudged and determined against the appellants, the widow and heirs and administrator of Jacob Nirdlinger. The referee also passed the accounts of Isaac Bernheimer and his executors. From the judgment entered on his report this appeal is taken.

The main question presented upon this appeal is as to the correctness of the referee’s ruling in refusing to find the contract of sale and the deed of conveyance made by Jacob Nirdlinger to Isaac Bernheimer for one-lialf of his original interest in the money and lands belonging to said triist, to be fraudulent and procured by Bernheimer from Jacob Nirdlinger by fraudulent representations and concealment, and that the same were unfair, inequitable and unjust, and ought in equity to be set aside.

After an examination of the evidence pertinent to this issue contained in this voluminous record and a careful consideration of the arguments and briefs of counsel submitted upon the hearing of this appeal, we might very well rest our decision upon the grounds stated by -the referee in his opinion. It-seems to us that the whole structure which has been built up by the appellants rests upon a false assumption of the relations which existed between Jacob Nirdlinger and Isaac Bernheimer. They are likened to those existing between a trustee and cestui que trust strictly speaking. Upon an examination of the relations of the parties to this enterprise, it will be seen that the sole relation which existed between them was that of partners in this real estate enterprise, and that the sole duty which each partner owed to the other was that of fair dealing. One partner could not take any secret or unlawful advantage of the situation to the detriment of the others. But in his dealings with the others in reference to the co-partnership property, there is no presumption of fraud, neither is he compelled to show affirmatively, in order to sustain the transaction, that it was just and fair as in the casé of a trustee and a cestui qioe trust. One partner has the right to buy out the interest of his co-partner in the joint enterprise, and unless he misleads him or deceives him by some action upon his part, the fact that he has made a good bargain will not avoid the transaction. We think that when these principles are applied to the transaction between Jacob Nirdlinger and Isaac Bernheimer in regard to the purchase by Bernheimer of Nirdlinger’s interest, there is no difficulty in coming to a conclusion. There is no evidence whatever of the suppression by Bernheimer of a single fact from the knowledge of Nirdlinger. He threw open his books to Nirdliuger and his agents, one of whom was an. expert accountant. Nirdlinger had independent advice; he employed his own counsel. Bernheimer refused to fix a price, and refused to make any representation in regard to the lands, and it was only at Nirdlinger’s repeated solicitations that Bernheimer finally made the purchase.

It is also to be observed that Nirdlinger made his own investigation in regard to the value of this land. It is true that it is claimed on the part of the appellants these investigations were originally made some time before the sale was actually completed, and that there had been a change in the condition of these lands during the intervening period. But he sought information again after the expiration of this time and before the transfer was made.

It is also claimed that prior to the transfer the're were sales made of which Jacob Nirdlinger was ignorant. But these transactions were spread upon Bernheimer's books, and Nirdlinger’s agent had access to these books and must have been aware of those sales. If Bernheimer was procuring a sale of these lands at a price so much below their value, why could not Nirdlinger have sold them to some one else ? There was nothing ih the way, if this was so desirable a bargain and these lands were of such great value, to prevent him from finding other purchasers than Bernheimer.

It is sought to impeach this sale by expert testimony in regard to the value of these lands where the whole title could be acquired by the purchaser, which character of evidence is of but little weight in determining what was the value of a small undivided interest in those lands.

We might discuss in detail the evidence which has been offered, but it would servo no useful purpose. Upon this general question we can only state the impressions which the facts appearing upon the record have made upon our minds, and we can but repeat that Bernheimer owed no active duty to Nirdlinger, and that there is no presumption of fraud because of their relations. They were simply partners in this enterprise, and Bernheimer had as much right as any stranger to purchase from Nirdlinger his interest in the lands if the latter desired to sell it. There is no evidence to be found throughout this record that Bernheimer was anxious to purchase. It was Nirdlinger who was urging him to purchase, Bernheimer refusing to make any representations, and finally acceding to the reiterated urgent appeals upon the part of Nirdlinger that he should buy.' We are not aware that, under such circumstances, a partner purchasing his associate’s interest in the partnership stock can be branded with fraud.

Upon the question which is presented to us in respect to the accounts of Isaac Bernheimer and his executors, as passed by. the referee, we see no reason to differ from .the conclusion arrived at by him.

Upon the whole case we are of the opinion that the judgment appealed from should be affirmed, with costs.

Follett and O’Brien, JJ., concurred.

Judgment affirmed, with costs. ■


author: Yan Brunt, P. J. : O’Brien, J.

text:
    Andrew L. Fennessy, Respondent, v. William F. Ross, Appellant.

      Contract — cm agreement that a purchaser of stock shall hold office in a corporation — when void as against public policy.

    Contracts entered into by directors and officers of a corporation for the purpose of trading upon, or attempting to barter away, tlie interests of a corporation for their private advantage, are void as against public policy.
    The complaint in an action alleged that the plaintiff and the defendant entered into an agreement by which the plaintiff agreed to deliver to the defendant, for a sum fixed, certain sjiares of the capital stock of three corporations; that the defendant, having failed to pay the sum agreed upon, the plaintiff sold the stock for the defendant’s account, and for the loss sustained thereby the plaintiff sought to recover. It appeared from the agreement which was annexed to the complaint that, besides the delivery of the stock, the plaintiff had made a proposition, to which the defendant agreed, that the defendant should have the management of the three companies at a certain salary, and that, after the expiration of one year, he should have a larger salary; that he should have an equal representation in the board of directors of the three ’companies, and should be made vice-president and general manager of them.
    The contract contained a-further provision that in case either party should desire to sell his holdings of stock in the three companies lie should give the other party the first opportunity to purchase at not to exceed a price named.
    Upon appeal from an interlocutory judgment sustaining a demurrer to tlie complaint,

      Held, that the contract was an attempt to barter away the offices and management of the corporations, and was void as against public policy.
    O’Brien, X, dissenting.
    Appeal by tlie defendant, William F. Ross, from an interlocutory judgment of tlie Supreme Court in favor of the plaintiff, entered in tlie office of tlie clerk of the county of New York on tlie 29tli day of IVIay, 1895, upon tlie decision of the court rendered after a trial at the New York Special Term overruling tlie defendant’s demurrer to tlie plaintiff’s complaint.

      John A. Barhite, for tlie appellant.

      liignal JD. Woodward, for tlie respondent.
   Yan Brunt, P. J. :

Tlie complaint in this action alleged that on the 12th of October, 1891, the plaintiff and defendant entered into an agreement, in writing, a copy of wliicli was annexed to the complaint, whereby the plaintiff agreed to deliver to the said defendant 899 shares of the par value of $100 each of the capital stock of the Greenbush Water Works Company of Greenbush, N. Y., and 865 shares of the par value of $50 each of the capital stock of the West Troy Water Works Company of West Troy, N. Y., and 287 shares of the par value of $100 each of the capital stock of the Green Island Water Company of Green Island, N. Y., on or before the 20th day of December, 1894, for and in consideration of the sum of $6,695, which The defendant agreed to pay.

The complaint further alleged that the defendant failed to fulfill his agreement and failed to pay said sum to the plaintiff although the plaintiff was able, willing and ready to- deliver to said defendant the stock mentioned, and to carry out the provisions of said agreement by him to be performed, and that thereafter the plaintiff sold the stock at public auction for the account and at the risk of the defendant, after due notice to the defendant, for the sum of $2,025, after deducting expenses, and that by reason of the failure of the defendant to buy said stock at the time designated and to carry out said agreement, the plaintiff has been damaged in the sum of $4,670,. which said defendant had failed to pay, and judgment was then demanded for that sum.

The defendant demurred to this complaint upon the ground that it did not state facts sufficient to constitute a cause of action. This-demurrer beiug overruled, from the interlocutory judgment thereupon entered this appeal is taken.

Upon an inspection of the agreement annexed to the complaint it appears that, in addition to the delivery of the stock above mentioned, upon payment by the defendant of the sum stated, the plaintiff had further agreed that the defendant should have the management of the three companies in said agreement referred to, and should receive as compensation for such management for the period of one year, the sum of $1,500, payable monthly, and that the-purpose and intent of this clause was that at the expiration of one year a new contract would be made at a greater sum than $1,500-a year, and that the defendant should have an equal representation in the board of directors of the three companies above referred to with the plaintiff, and should be made vice-president and general manager of the three companies, and the defendant agreed to accept the said equal representation in the board of directors and the said •offices of vice-president and general manager of the three companies, .and to accept for the first year $1,500 per annum, payable monthly, ■as compensation for his services as such general manager. The agreement contained the further provision that, in case either party should desire to sell his holdings of stock in the three companies, he should give the first opportunity to purchase said holdings to the •other party at a price not to exceed $10,000.

It is urged upon the part of the defendant that this agreement in respect to employment and to representation in the board of directors and officerslnp in these corporations was against public policy, and, therefore, rendered the contract void. It is urged upon the part of the plaintiff, however, that the contract does not fall within the rule, but is sustained by the reasoning of the court in Barnes v. Brown (80 N. Y. 537). Upon an examination of this case, however, it seems to us that it fails to support the contention upon the part of the plaintiff. As a part and parcel of the bargain for the .sale of the stock referred to in the complaint in this action, there was a bartering away of the offices and managment of the corporations and representation in their boards of directors. The case at bar differs radically from that of Barnes v. Brown (supra), in that in Barnes v. Brown the plaintiff sold his stock, and thereafter, •ceasing to have any interest in the corporation, was naturally called upon to resign and to give the purchaser the representation to which his ownership of stock in the company entitled him. In the case •at bar it nowhere appears what the interest of the plaintiff was, or whether he was enhancing his own private interests at the expense of the corporations or not. But it does appear that for a money consideration he was selling representation in the companies and positions in their management. We do not think that a contract of this description can be upheld.

It does not appear that the plaintiff in this action was the sole .stockholder, or that he owned a majority of the stock. And even ■if this latter fact appeared, it might not be sufficient to justify a director or an officer of the corporation in selling its offices and management for money which he places in his own private pocket. As already stated, in the case at bar it does not appear but that the plaintiff was sacrificing tlie interest of the other stockholders in these corporations for a money benefit to be derived by himself alone. It seems to us, therefore, that the attempted sale of stock connected with such conditions is necessarily against public policy and cannot be enforced.

Our attention has been called to no case where any such principle has been upheld. On the contrary, wherever there has been an attempt at bartering away the interests of the corporation by one of its stockholders or directors, contracts tending to that result have always been held to be against public policy. The case of Barr v. N. Y., L. E. & W. R. R. Co. (125 N. Y. 263) is no authority for the contrary proposition. Nor is the case of Barnes v. Brown, already cited. The courts have always held contracts, where directors and officers have been trading upon the interests of corporations for their own private advantage, to be void where they have been attempted to be enforced. In the case at bar, as already stated, the plaintiff was selling out representation in these companies and in their offices and management, for a consideration which he was placing in his own pocket.

The judgment should be reversed, with costs, and the demurrer sustained, with costs, and with leave to the plaintiff to amend upon the payment of costs in this court and in the court below.

Follett, J., concurred.

O’Brien, J.

(dissenting):

The vice claimed to be inherent in the contract sued upon is the agreement by the plaintiff that the defendant should have the management of the three companies and receive compensation for such management and an equal representation in the boards of directors of the three companies, a portion of the stock in which the agreement provided should be sold to the defendant, this action being brought to recover damages for defendant’s failure to pay the purchase price of such stock.

If it had been made to appear that this was an attempt to barter away the interests of the corporations by one of their stockholders or directors for a money benefit to be derived by the plaintiff, then undoubtedly it would be against public policy, and the contract could not be enforced. In this case, however, I fail to see how any sncli inference can be drawn or presumption indulged in. It has always been held that a stockholder had the right to sell his stock, •and if in the sale it was coupled with an agreement by which the person buying was to take an active interest in the affairs of the corporation, I do not see why, in the absence of anything to show that this was done in bad faith or contrary to the real interests of the corporation itself, it should not be upheld. The difference between my view and that presented in the prevailing opinion is in respect to the presumptions to be drawn from the contract, which is entirely silent upon the question as to whether the transaction would or would not inure to the benefit of the corporations. If, under such conditions, the presumption is to be indulged in, in the absence of any evidence to support it or facts appearing to warrant it, that such an arrangement is inimical to the interests of the corporations, then the conclusion reached would be right. But as a presumption should favor good faith and honesty rather than the reverse, I do not sde why the contract is not susceptible of the view that it was made in good faith, without design to injure the companies, but, on the contrary, to bring in as a stockholder, and as an equal representative in the workings of the companies, a new man who was to take an active interest in their affairs, and who, for the work, was to receive a compensation agreed upon for the first year, and which was thereafter to be fixed.

Upon the ground, therefore, that there is nothing to show that in the contract made the plaintiff was trading upon the interests of the corporations for his own private advantage, and for the further reason that the presumption that he was so trading seems to me to be entirely gratuitous, I dissent from the conclusion reached, and think that the judgment should be affirmed.

Judgment reversed, with costs, and demurrer sustained, with costs, with leave to plaintiff to amend on payment of costs in this court and in court below.