author: “ McAdam, J. Per Curiam.

text:
    HENRY T. WEMPLE, Respondent v. PATRICK H. McMANUS, Appellant.

      Brokerage on procuring loan, when earned—Non-consummation of transaction, when right to brokerage not affected by—Evidence that other per- ' sons were interested with plaintiff in the brokerage, when inadmissible— Pleadings—General denial, what evidence inadmissible under.

    It appeared that defendant employed plaintiff to procure a loan for him ; plaintiff introduced the defendant to a certain insurance company, which after examination agreed to make the loan. The transaction was never consummated by reason of a subsequent disagreement between the company and the defendant as to the latter’s ability to comply with the terms '• of his application. The company was able, and on compliance with the ■; terms of the application willing, to make the loan. Held, that plaintiff upon procuring the insurance company to agree to make the loan earned his brokerage; and that the non-consummation of the transaction did not affect his right to recover it.
    On the trial defendant 'offered to prove that plaintiff was to divide the brokerage with three other persons. There was no plea of non-joinder • of parties plaintiff. Held, that the offer was abortive, for (l) if the • money was to be first received by the plaintiff and then divided, he had . ■ a right to bring the action in his own name; (2) if the three and plaintiff wrere to receive the money jointly, in the first instance, the failure to plead the non-joinder was fatal to the offer.
    Defendant offered to prove that he and plaintiff agreed that the loan might " be shifted to other property and that the plaintiff would charge no ' brokerage to defendant in consequence; also that subsequent attempts ■ were made between the insurance company and the defendant to modify • the contract. These matters were not specially pleaded either as pay- , ment or otherwise. Held, that the evidence was inadmissible under a general denial; and as to the attempt at modification between defendant and the insurance company, the plaintiff was not affected thereby.
    Before Sedgwick, Ch. J., and Freedman, J.

      Decided May 4, 1891.
    Appeal by defendant from judgment entered on verdict for plaintiff as directed by the court, and from order denying motion for new trial.

      On the motion for new trial the judge below wrote as follows:—
   McAdam, J.

There is much confusion in the evidence, but no conflict. The fa.cts are easily collated. The defendant employed the plaintiff to procure a builder’s loan of $180,000 on property in East Fourteenth street, and agreed to pay for procuring it $7,000, which was to cover brokerage, lawyer’s fees, searching title and all other expenses. The plaintiff, ■acting under this employment, introduced the defendant to the Metropolitan Life Insurance Company, the oEcers of which were well acquainted with the plaintiff.

A formal application, giving the details of the property and the contemplated buildings, was there prepared with great particularity and subscribed by the defendant. The company oEcially approved of the application and agreed to make the loan, of which the defendant had due notice. The insurance company, according to the uncontradicted evidence of .its officers, was able as well as willing to make the loan. The broker’s duty ended there. He did all it was possible for him to do in the matter—he could do no more. The ultimate failure to consummate the transaction was owing to some subsequent disagreement between the company and the defendant as to the latter’s ability to comply with the terms of his application—a misunderstanding that in no way concerned the broker.

“ The court, at. the trial, offered to allow the defendant to show, in defence, that the insurance company failed to keep its part of the understanding according to the written application and acceptance, and finally offered to send the case to the jury on the question whether the company had offered full performance, on its part, of the written compact, with an ability to comply. The defendant failed to give the proof and declined to go to the jury on the question. The offer by the defendant to prove that the plaintiff was to divide his brokerage with three other persons was abortive, for two reasons: (1) If the money was to be first received by the plaintiff and afterwards divided, the evidence offered would not have constituted a defence, for the plaintiff could not have made the necessary division until he received the money. He was entitled, to it in his own right and as a trustee for the others. (2) If the three other persons were, in the first instance, to receive the brokerage jointly with the plaintiff, the failure to plead the non-joinder of the other three was fatal to the offer (Barbour on Parties, 308 3 1 Wait’s Pr. 119 ; Karelson v. Sun F. I. Co., 45 Hun, 144 ; Fairmount C. & I. Co. v. Hashecht, 48 Ib. 206.) The defendant was also bound to plead payment if he intended to insist upon that as a defence. Such a defence must be specially pleaded (McKyring v. Bull, 16 N. Y. 297), except in the one exceptional instance where the non-payment must be affirmatively proved to establish the plaintiff’s cause of action (Knapp v. Roach, 94 N. Y. 329), and this case is not of that peculiar character. The subsequent attempted modifications of the- contract made between the insurance company and the defendant were not provable (1) because they did not effect the broker, and (2) if they did, they were not specially pleaded.

“ The general denial allowed by the Code permits a defendant to disprove anything the plaintiff alleges, or any fact the plaintiff must establish to show a cause of action, or to mitigate the damages, but not to. prove a defence founded on new matter (Code, § 500, subd. 2 ; Morrell v. Irving F. I. Co., 33 N. Y. 429; Weaver v. Barden, 49 Ib. 286 ; Brennan v. The Mayor, 62 Ib. 365 ; Clifford v. Dam, 81 Ib. 52). The rulings at the trial were in accordance with these views and are correct. The plaintiff did not seek to recover the contract price ($7,000) for his services, as this included expenses which were not made. He claimed and recovered the statutory rate allowed for such work, viz., one-half of one per cent, aggregating with interest, $967.50. No point was raised at the trial as to the propriety of this course. In conclusion, it is only necessary to say, that as the defendant declined to go to the jury on the only question of fact in the case, the verdict in favor of the plaintiff was properly directed, and the motion for a new trial must be denied.”

Thomas J. L. McManus, attorney and of counsel, for appellant, argued :—

I. The court erred in excluding evidence that plaintiff and defendant agreed that the loan might be shifted to other property and that the plaintiff would, charge no brokerage to defendant in consequence. (1) This was a new consideration, i. e., the change making a new state of facts ; or (2) It was in the nature of payment which was admissible under a general denial for the reason that the cause of action itself is one in which non-payment is a material fact to constitute a cause of action. Knapp v. Roach, 94 N. Y. 329. The question whether the plaintiff was the broker who was the procuring cause of the loan should have gone to the jury, and it was error to direct a verdict without submitting that question in connection with the one whether or not the company had failed to comply with the contract. Bonwell v. Howes, 1 N. Y. Supl. 435.

II. The plaintiff was bound to prove that he was the sole party in interest. If he had testified on the stand that he and other parties procured the loan, not having alleged that fact, his complaint would have been dismissed. Evidence that he was not the sole party in interest should have been admitted.

III. Under our form of pleading everything that controverts the position of the plaintiff may be offered under a general denial. Griswold v. Frost, 14 Barb. 536. It was error to direct a verdict because there was no proof that the loan was actually procured. A mere offer to loan is not sufficient. Crasto v. White, 5 N. Y. Supplement, 718. Mr. Justice Van Brunt, P. J., in .Crasto v. White uses this language : He has been, probably led astray by being unable to distinguish between a contract to procure a loan and a contract to procure a purchaser where the purchaser does not sub-, sequently take for some reason.” Here a distinction is made between a purchaser who refuses to take title and-, a borrower who refuses to take the money. The procurement and acceptance must be followed by the actual making of the loan. If it can be proved that the plaintiff and defendant are partners, it can likewise be proved that the plaintiff had a partner who was not defendant Healy v. Clark, 12 State Rep. 685.

The facts sufficiently appear in the above opinioiq and in the head notes.

Arnoux, Hitch & Woodford, attorneys, and Haley Fiske of counsel, for respondent, argued :—

■ I. The alleged defence of defect of parties plaintiff was waived by .failure to plead it., Code Civil Proc., §§ 488, 498, 499. Under these sections the defect, if it appears in the complaint, must be raised by demurrer ; if not, by answer; and if not thus raised is waived. But there was no such defect. The testimony intro-: duced by defendant was that plaintiff was to get the: money and divide with the others—the loan was to be through plaintiff. Under these circumstances plaintiff would be properly the sole party plaintiff as being a person in whose name a contract was made for benefit of others. Code Civ. Pro., § 449.

II. Under the answer no evidence was admissible that plaintiff released defendant from payment for-his services in the transaction in suit by reason of his being paid in another transaction by other parties., This was the effect of the evidence offered and excluded. It seems clear that whether the offered defence was, release or payment it would have to be pleaded. We shall not cite authorities on this point. The learned judge below cited several. There are none in conflict. The one cited by defendants (94 N. Y. 329) is not in point. That was an action in tort against a bank officer for making an unauthorized loan. Of course, if the unauthorized loan was paid by the borrower the plaintiff would be damnum absque injuria; and that was the offer. It was an offer to show that plaintiff had no cause of action, not that it had been satisfied.

III. As to defendant’s contention that the question should have gone to the jury as to whether plaintiff “was the procuring cause of the loan,” we say (1) no. such request was made; (2) there was no conflict or confusion of evidence on the point—and (3) the court distinctly offered to receive evidence that some one else procured the loan, but the witness proved conclusively that Wemple did it. :

Per Curiam.

The judgment and order are affirmed, with costs, upon the opinion of the judge below, given on the decision of the motion for a new trial.


source: Caselaw Access Project

author: Per Curiam.

license: Public Domain

text:
    RICHARD DEEVES, Respondent v. RICHARDSON & BOYNTON COMPANY, Appellant.

      Contract, obligatory upon both parties—Mistake by one party in estimates that were the basis, does not change nor affect the contract-

      Held, that, in this case, there was a contract made and accepted, and obligatory upon both parties.
    After its execution defendant endeavored to withdraw the estimate on the ground that there had been a mistake, on its part, in calculating the number of feet of pipe that was to be furnished. The attempt of defendant to withdraw after the acceptance was ineffectual. The mistake did not refer to the form or terms of proposal and acceptance, but as, to the calculations of defendant in regal'd to the number of feet of pipe that it required, which was less than it had contracted for. If a mistake, it was not induced nor participated in by the plaintiff. Such a mistake is not good cause or ground for equitable interference, and the only question in the case is that of damages that the plaintiff is entitled to recover. Held, that the damages were incorrectly estimated and allowed in the .court below, and for that reason a new trial is ordered.
    Before Sedgwick, Ch. J., and Freedman, J.

      Decided May 4, 1891.
    Appeal by defendant from judgment entered on a verdict for plaintiff, and from an order denying motion for new trial.

      Arnold & Greene, attorneys and of counsel, for appellant, argued :—
    '• I. The trial judge erred in refusing to allow the defendant to show that the plans upon which the defendant’s estimate was based were so materially changed that the defendant’s agreement with the plaintiff could not be performed. The defendant’s contract ivas to furnish and set sixty-three lines of pipe of certain dimensions; its letter specified with great particularity exactly what it would undertake to do, and its offer was accepted as made. Under this contract the defendant could not be called upon, and was not bound to do anything different from what was specified in its letter. Cunningham v. Judson, 100 N. Y. 179, 189 ; Hill v. Blake, 97 Ib. 216; Welsh v. Gossler, 89 Ib. 540. It is of no consequence that the variation required might seem unimportant, or that it might involve less expense or time than the original arrangement. Giles v. Crosby, 5 Bos. 389; Cunningham v. Judson [supra). The principle of law applicable to this subject is very clearly decided in Giles v. Crosby [supra). In that case a bond was given by several persons by the terms of which they bound themselves to pay $10,000 on the completion of the opening of Canal street, and the widening of Walker street according to the plan now in the hands of the commissioners, etc. The plans were subsequently changed without the consent of the obligors in certain apparently unimportant respects, and the work was completed in accordance with the modified plans. It was held that the obligors were not liable on their bond, and that the question of their liability was not affected by the fact that the change of plan made the improvement less expensive. In the present case it appeared that the plans had been changed without the defendant’s knowledge or consent, so that it could not and was not permitted to carry out the contract as made, and it then rested entirely with the defendant to say whether or not it would do the work as modified, and, if it consented, for what price it would undertake it. It cannot surely be said, as a matter of law, that the substitution of 41 lines of pipe for 63 lines of different dimensions is an immaterial variation; on the contrary, the changes shown to have been made, of themselves, justified the defendant in withdrawing its estimate. The defendant, without its fault, was prevented from carrying out the contract that it made, and it cannot be held liable in damages for * not performing wholly different work which the plaintiff substituted.
    II. The defendant did not refuse to do the work that it agreed to do. The trial judge placed his refusal to admit evidence of the change in the work upon the ground that the defendant, previous to any change, had refused to carry out its contract. His ruling in this respect proceeded evidently upon the theory that the defendant, in the first place, absolutely and finally refused to perform its contract; that the plaintiff, in the next place, in consequence of this refusal, made a contract with the Mott Company to do the same work, and that after that, the requirements were changed and assented to by the Mott Company. But this theory is erroneous. The defendant did notify the plaintiff that, in consequence of a mistake in figuring upon the price, it withdrew its estimate, but on the same day, December 19, after receiving plaintiff’s letter, in which he said that he had made a contract based upon that estimate, and that he could not permit the withdrawal of the contract, and should want the pipes in two days, the defendant sent to the architects for the plans in order to begin the work, and then was informed that the plans were changed, but that the revision of the plans was not then ready. As the defendant’s representative did not then see the revised plans, he could not tell whether or not the changes were material; but two days after-wards he again called upon the architects, and then, for the first time, discovered the materiality of the changes. It was not until after this that the defendant sent its letter of December 21st, withdrawing all its estimates on the ground of a material change in the work required ; and it was after the receipt of this letter that the plaintiff applied to the Mott Company for an estimate, not of the work that the defendant had agreed to do, for that could not be carried out, but of the work specified in the plans as changed. This change had been made before the Mott Company made its estimate, and therefore that company, could not have assented to the change, as the trial judge supposed. The fact is that the Mott Company from the first, was asked to and did estimate upon wholly different work from that which the defendant agreed to, and the work that the defendant contracted to do was never done. The letter of defendant of December 19, taken in connection with the facts of the case, cannot be construed as a refusal by the defendant to perform its contract. The contract called for work and services to be rendered in the future. On the 19th of December the plans were not ready and the work could not be begun. The plaintiff refused to accept the defendant’s withdrawal of his bid, and notified it that he should expect it to go on with the contract, and thereupon the defendant did apply to the architects for the plans to enable it to proceed with its work, but was furnished with plans calling for materials and work materially different from those specified in its agreement. The plaintiff, or his agents, the architects, had, by changing the plans, made it impossible for the defendant to fulfill its contract, and it was then fully justified in withdrawing from the work. Dubois v. Hudson Canal Co., 4 Wend. 290; Crist v. Armour, 34 Barb. 378.

      Thornton, Earle & Kiendl, attorneys, and David Thornton of counsel, for respondent, argued :—
    I. The proof of the making and the acceptance of the contract sued on was very clear. It was in writing ; defendant admitted making the estimates; there was no dispute as to the terms of the coiitract. The defendant sought to show by way of defence : (1) A mistake on its part, a one-sided mistake not in any sense mutual, in making up its estimate. (2) That the plaintiff, because of the business in which he was engaged, knew, or should have known, the value of the pipe on November 21, 1889.. (3) That after the making of the contract by plaintiff with the Dispensary, based on defendant’s own estimate, and after the making of the contract by plaintiff with J. L. Mott Works, to put in 63 lines of pipe for $614, a change was made by the owners of the building or architects of the Dispensary, and 41 lines of pipe were put in the building in lieu of 63 lines. On these theories defendant claimed that no recovery could be had against it.
    II. The defence of mistake on the part of defendant is not available. It put in a bid for $208 at first, but corrected it the same day, and increased it to $248, before it was acted on by defendant. This latter bid being relied on by plaintiff, used by him in making his estimate, the contract to erect the building having been awarded to. him, and he having accepted the bid for $248, without any notice to him that there was any mistake, he had a right to rely upon it, and he having become bound by it, defendant must be bound. Otherwise, pretended mistakes by one party to a contract could and would be pleaded in making all contracts, and it would be useless to attempt to enforce any. The case cited by defendant’s counsel on the trial, in 4 Lansing, page 41, as bearing out his theory, had no application to this action. That was an action in equity, brought to relieve from a contract, on the ground of mistake of a material fact by one of the parties. The court, held that, no one being misled or injured by the mistake, it might be rescinded. But in this case it is undisputed that the plaintiff had used the defendant’s bid, made his own estimate based on it, had been given and entered into a contract, and had accepted defendant’s bid before he had any notice of any pretended mistake.
    III. It was clearly shown by the defendant that the plaintiff did not know the value of the pipe, November 21, 1889. Therefore on defendant’s own showing, even assuming such knowledge was a defence (which is denied), this line of defence failed.
    IV. The fact that only 41 lines of .pipe were put into the building, and size of pipes slightly lessened in some instances, in order to give better draft in flues, in place of 63 lines, the number plaintiff contracted to put in, the number he contracted with the Mott Works to put in at $614, and the precise number bid on by defendant for $248, the amount of the bid accepted by plaintiff, is immaterial. The plaintiff had nothing to do with this. It was nowhere shown that plaintiff consented to it. If the owner of the building or its architect did it, it was done to get better draft in the flues and was merely different construction. There is no evidence that the cost of doing it was more or less, or that plaintiff did not pay the Mott Works the full contract price for the sixty-three lines of pipe he had contracted with the owners to put in, and had agreed with the Mott Works to pay therefor, viz., $614. Even if it were less, then the amount of defendant’s bid of $248 for sixty-three lines would be lessened in the same way. The defendant would not be relieved from its contract. On the contrary, the proof offered by the defendant, by introducing the contract between plaintiff and the owners, expressly requires plaintiff to make to the owners an allowance for any diminution of the work or materials. Therefore he may be called on by the owners, when the building is finished, to make an allowance from his contract price for the number of pipes riot put in; in which case, if he has paid the Mott Works at that time in full $614, he will have suffered. If not paid in full, then the value, if any, for the change in the contract made by the owners, would be deducted by them, and plaintiff would be deprived of it. The fact that the Mott Works made a double bid, based on 41 and 63 lines of pipe, is immaterial. The 63 lines plaintiff had previously contracted with the owners to put in, and he in turn" had agreed with the Mott Works that they should put in the same number of lines for $614, and he was bound to them for this amount.
   Per Curiam.

The plaintiff was a mason-builder. He was about to make a bid for the building of the Eastern Dispensary. Before putting in that bid he procured from the defendant a proposal as to furnishing 61 lines of hot-air pipes to the building and setting them in its walls. The defendant wrote to the plaintiff that it would furnish and set hot-air pipes in the wall of the Dispensary for $208, which was after-wards competently changed to $248. Upon receiving this proposal the plaintiff accepted it in writing.

The defendant, for the purpose of making the proposal, had been referred, in order to know the quantity of work that was to be done, to plans and specifications, made by architects, for the building. When the proposal was made it was understood that 63 lines of' pipe were to be furnished.

After the acceptance of the plaintiff, the defendant endeavored to withdraw the estimate on the ground that there had been a mistake on its part in calculating the number of feet of pipe that was to be furnished.

There can be no doubt, that upon the plaintiff accepting the proposal, there was a contract obligatory-on both parties. The attempt to withdraw the estimate by defendant after the acceptance was ineffectual. If there was a question on this point the defendant did not ask that it be decided by the jury.

The defendant made a defence that the contract was to be set aside because of a mistake, made by it, in framing its proposal. The mistake did not refer to the form or words of the proposal, but in calculating, as asserted, the number of feet of pipe. Several things might be said of this. It may be sufficient to say that the so-called mistake was the result of inexcusable negligence which the plaintiff did not induce or participate in. Such a mistake is not the ground of equitable interference. The defendant withdrawing the estimate, and not performing, as they did not, the question remains as to the damages the plaintiff was entitled to recover.

The contract was special in its character and not one of purchase and sale.- This was known to both parties. The pipe was not to become the- property of the plaintiff, and it would become, when the contract was performed, the property of the owners of the dispensary. The benefit, as disclosed by plaintiff’s evidence, would be such as would accrue to the plaintiff, from his making his bid in part upon defendant’s estimate, and the bid being accepted by the dispensary, his being able to perform that part of the work at the expense of paying the sum fixed by defendant’s contract.

The plaintiff testified that, upon the defendant’s estimate, in part, he made his bid for the contract which was afterwards awarded to him.

The contract provided that the owner should be at liberty to make any alteration, addition or omission, in, to, or from the contract, and the same should in no way avoid the contract but would be added to or deducted from the contract by a fair and reasonable valuation.

The plaintiff recognized that what was furnished was to be furnished according to the architect’s plans and specifications. In accepting defendant’s estimate, he wrote, “ I hereby accept your estimate, etc., all to be done according to plans and specifications as made by Messrs. Rose & Stone, Architects, and to their satisfaction.”

From the nature of the benefit the plaintiff was to receive from defendant’s contract, it is manifest that if the work were done for a less sum than he was to pay the defendant, there would be no loss or damage, or if the work cost a greater sum, he would be compensated by receiving the excess of it beyond that to be paid to defendant. He was obliged to pay a greater sum, which entitled him to a recovery, but not for the sum of the damages awarded below.

After defendant’s breach the plaintiff procured the following estimate from the Mott Iron Works. “We will furnish for Eastern Dispensary, etc., 41 lines of square heating pipe, etc., as per flue section submitted by Róse _& Stone, Architects, for $402. If dispensary should be piped as per specifications of Mr. Richard Deeves, calling for 63 lines of pipe, the estimate will be $614.” In fact the architect had changed the plans so as to call for only 41 lines óf pipe, and these were furnished and set by the Mott Iron Works at a cost to plaintiff of the sum named in the estimate $402. He was, therefore, damaged only in the difference between this sum and the amount of defendant’s bid, viz., $248, and a due compensation to be assessed by the jury for trouble and work in obtaining the new bid. He was not entitled to a recovery on a basis of a cost of $614, made upon the specifications of the plaintiff by the Mott Iron Works. The sixty-three lines of pipe were not called for by reason of a, change made in the architect’s plans, as permitted by the clause of the plaintiff’s contract with the owners that has been cited. And the fact that defendant agreed to furnish more pipe than was actually used, and did not furnish it, did not injure plaintiff, for it did not affect the sum plaintiff received for building. It did not cause plaintiff to change his bid, and there was no proof of the effect, under the clause allowing the owner to change the work to be done, of 41 lines of pipes being used instead of 63 lines.

By the contract in suit, the pipes that might be furnished and set, or those not used, were not to be delivered to the plaintiff and to be his property. If the phrase in plaintiff’s acceptance “ all to be done according to plans, etc., of Messrs. Bose & Stone, Architects, and to their satisfaction,” were not inconsistent with defendant’s promise to furnish and set 63 lines, then the implication was that the plaintiff would see that an opportunity was given to the defendant to set 63 lines of pipe. An omission so to provide would be a breach by plaintiff. The change in the number that was made, was made, as we have seen, by a contract that existed at the time of plaintiff’s acceptance. The plaintiff cannot claim a loss on account of something that would be a breach on his part. That is, the defendant could not have set the excess of 21 lines of pipe by reason of [.he breach of the condition precedent to furnish a place and opportunity for them to be set.

For these reasons the plaintiff was not entitled to recover the difference between defendant’s bid and-.-$614, Nothing was lost by defendant’s breach beyond tile, difference between the bid of $248 and the bid of the Mott Iron Works, $402. The amount he would receive on his contract,. which comprised his whole interest, was not lessened except this difference.

As the contrary view was upheld at the trial there should be a reversal.

Judgment and order appealed from reversed and new trial ordered, with costs to abide the event.


text:
    In the Matter of the Voluntary Dissolution of THE VERTICAL TUBE BOILER COMPANY.

      Receiver, his rights, powers and duties in relation to creditors who had semred a lien upon property of the company before his appointment.

      Held, that.the petition and.motion of the creditors that the order of injunction in these proceedings be so modified as to allow them to enter judgment and issue executions in their actions in the city court, was properly denied.
    It clearly would not have been right nor proper to allow these creditors to proceed ex parte, and without such protection to the assets as the presence and power of the receiver afford. If the attachments in the actions are valid, there is a lien upon the property levied upon in favor of the creditors in those actions. That lien will be preserved and, so far as proper, satisfied in the administration of the assets by the receiver. There is no reason for the granting of any modification of the injunction at the present time. If, hereafter, there is any improper action or delay on the part of the receiver whereby the petitioning creditors shall suffer, it will be in time for them to move for protection, etc.
    Before Sedgwick, Ch. J., and McAdam J.

      Decided May 4, 1891.
    Appeal from order denying the motion of creditors who had filed a petition asking for a modification of the order of injunction and appointment of receiver.

      Bullard & Shannon, for appellant.

      J. C. O’Connor, Jr., for respondent.
   Per Curiam.

Before the appointment of the receiver the petitioning creditors had begun actions in the city court and had obtained orders of attachment which had been levied upon property of the corporation. After the appointment of the receiver these petitioning creditors presented their petition that the order of injunction against creditors be modified so as to allow the petitioners to enter judgment and issue executions in the actions in the city court.

The motion was denied on the ground that the receiver had not been made a party-defendant or substituted for the company or defendant in those actions.

It clearly would not have been proper to allow the creditors to proceed ex parte and without such protection to the assets as the presence of the receiver' would furnish. Under all circumstances, if the attachments were valid, there was a lien upon the property levied upon which would be preserved, and, as far as proper, satisfied in the administration of the assets.

The appellant’s counsel insists that at least the injunction-order should have been modified so as to allow the entry of judgment and the issuing of execution, unless the receiver should within ten days apply to be made party-defendant to the action, etc. Such a modification was not asked of the court below. There is no reason for granting it, at least, at this time. If, hereafter, there is any improper action or delay on the part of the receiver, it will be in time to have protection from the delay.

Order affirmed with ten dollars cost.


text:
    THE FIFTH AVENUE BANK OF NEW YORK, Respondent v. SAMUEL WEBBER PARKER, Appellant.

      Promissory note, defence that plaintiff is not the bona fide owner or holder of same.

    This action was against the defendant as the maker of a promissory note. The payee, after endorsing the note, transferred it to plaintiff. The only question in the case is, whether the plaintiff was incontrovertibly shown to have been the bona fide purchaser of the note.
    The defendant’s counsel did not claim, on the trial, that the jury should pass upon the credibility of the witnesses who testified to the circumstances of the discounting of this note. These circumstances did not disclose any notice to the plaintiff of any defect in the claim of payees and endorsers against the defendant. Plaintiff gave for the note its face value less interest to the day of its maturity.
    After a review of the testimony and facts in the case, in any way tending to establish the defence, Held, that the judgment should be affirmed.
    Before Sedgwick, Ch. J., and McAdam, J.

      Decided May 4, 1891.
    Appeal by defendant from a judgment entered upon a verdict directed by the court in favor of plaintiff.

      T. M. Tyng, attorney and of counsel, for appellant.

      T. S. Van Volkenburgh, attorney, and Charles Donohue of counsel, for respondent.
   Per Curiam.

The action was against the defendant as the maker of a promissory note. The payee, after-endorsing the note, had transferred it to the plaintiff. The only question upon the trial was, and upon the appeal is, whether the plaintiff was incontrovertibly shown to have been the bona fide purchaser of the note.

The defendant’s counsel did not claim that the jury should pass upon the credibility of the witnesses who testified to the circumstances of the discounting of the note. These circumstances did not disclose any notice to the plaintiff of any infirmity in the claim of the endorsers against the defendant. The plaintiff gave the face value of the note, less interest to the day of maturity.

Some particular facts on which appellant relies will be noticed.

It is said that plaintiff did not pay money on the faith of the note. The facts are to the contrary. Although the plaintiff’s president was content to take the note, without examination of the defendant’s responsibility as maker, it was not an admissible inference that he did not intend to rely and did not rely upon the defendant’s liability upon the note. It was certain that there was no purpose of excluding anything that might be, in any contingency, security.

It is further argued that the note was not taken in the usual course of business. This argument is based in part upon the fact that the note was discounted five days before its maturity. This cannot be an unusual instance ; for, when a note is to be discounted will de-: pend upon the desire of the holder to obtain money for it.. That desire may arise at the last part as well as at the first part of the running of the paper. The discounter would see nothing suspicious in the fact that the holder had not wunted money until the time he ap^ plied. But in accordance with the fact, it is said that it was not usual for the bank “ to discount a note five days before maturity for a party that has not got any account in the bank.” There is no inference from this that when a person not a depositor applied for a discount it would be out of the course of business to discount because such applications were not frequent.

After the discounting of the note, the plaintiff, at the request of the endorsers, omitted to sue them, but brought this suit against the maker.

It is supposed that this would permit a jury to infer, in some way, that the plaintiff had discounted the note with notice that the endorsers had no action upon it against the defendant.

If, as it has already been said, the plaintiff obtained title, it would not have been of any benefit to the defendant that he should have been sued jointly wTith the endorsers. The result in such an action would have been the same as the result in this action, namely, a judgment against the defendant. The fact that the endorsers were not sued indicated a friendly feeling to them. This may have existed at the time of the discount. The indulgence of such a feeling would not prevent the plaintiff gaining a good title free from defences, provided, otherwise, there was good faith and an absence of notice of defences.

The judgment should be affirmed, with costs.


text:
    JAMES H. JONES, Appellant v. THE METROPOLITAN ELEVATED RAILWAY COMPANY, et at., Respondents.

      Damages, insufficiency of, verdict set aside for—Costs of trial and of appeal when to be costs in the action and to abide the event—Easements, cosls, when title to is put in issue and the issue is material; a verdict for six cents for plaintiff carries costs.
    The plaintiff, an abutting owner, had for four years suffered annoyance from steam and smoke sent out by defendants’ locomotives, his light had ■ been out off, the percentage of which was proved by a competent witness, and evidence was given by a witness (his agent) as to loss of rentals; none of which matters were controverted; the jury under a correct charge rendered a verdict for the plaintiff for six cents damages. Held, ■ that the verdict should be set aside for insufficiency of damages and a new trial ordered.
    The charge being correct and the defendants not at default, Held, that the costs of the trial and of the appeal should be ordered to be .costs in .the action and to abide the event.
    The complaint alleged that the plaintiff had certain rights in Trinity Place and that those rights constituted an easement in the bed of the street which attached to his abutting property and that defendants had taken no steps to condemn the -easement. These allegations were denied by the answer. Held, that plaintiff’s title to the easement, which is real estate, was thus put in issue; which issue was a material one, and that ■ consequently a verdict for plaintiff of six cents damages carried costs.
    Before Sedgwick, Ch. J., and McAdam, J.

      Decided May 4, 1891.
    Appeal by plaintiff from a judgment in favor of defendants entered on a verdict for plaintiff for six cents damages * from an order denying plaintiff’s motion for a new trial on the ground that the verdict was for insufficient damages, and from an order refusing to allow the costs of the action to the plaintiff.
    The facts sufficiently appear in the opinion.

      Olin, Rives & Montgomery, attorneys, and G. L. Rives, of counsel, for appellant,
    on the question of the power of the general term to set aside the verdict, cited, Code Civ. Pro., § 1347; Victory v. Foran, 56 Super. Ct. 507; Hynes v. McDermott, 7 Abb. N. C. 98; Sackett v. Breen, 3 N. Y. Supp. 473.
    On the question as to the damages being so insufficient as to call for setting aside the verdict, they cited Clark v. Mechanics’ National Bank, 8 Daly, 481, 503 ; Collins v. A. & S. R. R. Co., 12 Barb. 492 ; Richards v. Sandford, 2 E. D. Smith, 349; Robbins v. Hudson River R. R. Co., 7 Bosw. 1; McDonald v. Walter, 40 N. Y. 551; Lough v. Bomaine, 36 Super. Ct. (4 J. & S.) 332 ; Platz v. City of Cohoes, 8 Abb. N. C. 392; Phillips v. S. W. Railway Co., 5 Queen’s Bench Div. 78; Cowles v. Watson, 14 Hun, 41; O’Shea v. McLean, 15 Civ. Pro. R. 69 ; Smith v. Ditman, 34 State Rep. 303 ; Lahr v. Metropolitan Elevated Railway Co., 100 N. Y. 288 ; Sedgwick on Dam. 7th ed. 610 ; Drucker v. Manhattan Railway Co., 106 N. Y. 157; Tall v. Metropolitan Elevated Railway Co., 121 N. Y. 119.
    On the question as to the plaintiffs being entitled to costs they cited § 3228, Code Civil Procedure ; Niles v. Lindsley, 1 Duer, 610; Dempsey v. Hall, 35 Supr. Ct. 201; Hubbell v. Rochester, 8 Cow. 115 ; Radley v. Brice, 6 Wend. 539 ; Powers v. Conroy, 47 How. 84; Dinehart v. Wells, 2 Barb. 432; Powell v. Rust, 8 Ib. 567; Kelly v. N. Y. & Manhattan Beach R. R. Co., 19 Hun, 363, affirmed in 81 N. Y. 233; Leprell v. Kleinschmidt, 112 N. Y. 364; Boyle v. Lawton, 3 How. N. S. 444; Horton v. Jordan, 32 State Rep. 920; DeGraff v. Hoyt, 4 T. & CD. 348; Green v. Canandaigua, 30 Hun, 306 ; Broadway v. Scott, 31 Ib. 378; Crowell v. Smith, 35 Ib. 182; Davies v. William, 13 Civ. Pro. R. 138; Dunster v. Kelly, 110 N. Y. 558 ; Shepard v. Manhattan Railway Co., 117 N. Y. 442 ; Mitchell v. Met. El. R. Co., 31 State Rep. 625; Dean v. Met. El. R. Co., 119 N. Y. 540; Bruen v. Manhattan R. Co., N. Y. Law Journal, 15 January, 1891. They then cited as showing the converse of the rule laid down in above cases, viz.: that where the allegation of title is immaterial .... no claim of title arises on the pleadings. Learn v. Currier, 15 Hun, 184; Moody v. Steele, 3 State Rep. 269; Bailey v. Daugler, 20 Ib. 549; Quinn v. Winter, 22 Abb. N. C. 462; reversed by general term City Court, 25 State Rep. 851, last decision reversed and special term decision affirmed by Court of Common Pleas in 28 State Rep. 178. . They then referred to and commented on Rathbourne v. McConnell, 20 Barb. 311; 21 N. Y. 466.
    Upon the question as to the terms of the judgment to be entered on granting a new trial they argued:

      The court may reverse the judgment below upon any one or more of the following grounds: (a) Error on the trial. (b) Inadequacy of damages, etc. (c) Wrong allowance of costs'. (A) If the judgment be reversed for error on the trial, then the ordinary rule should prevail and a new trial should be ordered with costs to abide the event. (B) If the court thinks the verdict should be set aside, it may, in its discretion adopt one or two courses. (1) It may order a new trial, and in that case the practice in this court and the Court of Common Pleas seems to be to direct costs to abide the event. Robbins v. H. R. R. R. Co., 7 Bosw. 1; Smith v. Dittman, 34 State Rep. 303. (2) The court may, instead of directing a new trial, affirm the judgment on condition that the defendant consent that damages be fixed at a sum deemed reasonable. This practice is declared to be proper in this state in Richards v. Sandford, 2 E. D. Smith, 349. This course is in analogy with the well-established practice where damages are decided to be excessive. In the present case, the court have all the facts before them and are constantly in the habit of deciding on the equity side precisely these questions of loss of rent. No moré proper case can be imagined for the exercise of th„e discretionary power alluded to. (G) If the court thinks the verdict should stand, but that the plaintiff ought to have been allotted costs, the judgment must be reversed with costs; and as the costs make up the judgment and it was necessary to appeal from the judgment in order to raise this question, we should have costs as on appeal from a judgment, and not merely the ten dollars costs of appeal from an order.

      Davies & Rapallo, attorneys, and Edward G. James of counsel, for respondents, on the question as to setting aside the verdict for insufficiency of damages argued:—

      The case on appeal will be read in vain to discover any testimony upon which the jury could or ought to have predicated a verdict for any definite .sum as net damages for the period in question, or upon which an appellate court can say with certainty that the verdict is erroneous. The amount of damages in these cases is peculiarly a question for the jury. The Court of Appeals has said: “ Such evidence as can be given, should be given, and facts naturally tending to elucidate the extent of the loss should not be withheld. But when all the proof which, in the nature of the case is fairly possible has been given, the good sense of a jury must provide the answer.” Drucker v. Man. Ry. Co., 104 N. Y. 164. If a plaintiff in cases of tort, does not furnish evidence of damages upon which a verdict can be predicated, without substituting surmise for judgment, the verdict must be nominal. Leeds v. Met. Gaslight Co., 90 N. Y. 26. Here it is plain that the plaintiff did not give “ all: the proof which in the nature of the case was fairly possible,” and upon the vague and indefinite evidence which he did furnish, the good sense of the jury has provided the only possible answer upon which twelve impartial minds could agree.
    Upon the question as to whether the verdict carried costs, they cited Rathbone v. McConnell, 21 N. Y. 466; Abendroth v. Man. Ry. Co., 22 J. & S. 417 ; affirmed, 122 N. Y. 1; Kane v. Met. El. Ry. Co., 34 State Rep. 876 ; Dunster v. Kelly, 110 N. Y. 558; Quinn v. Winter, 28 State Reporter, 178. And referred to and commented on Bruen v. Manhattan R. R. Co. decided by the Common Pleas: Dean v. Met. El. Ry. Co., 119 N. Y. 540; Kelly v. The New York and Manhattan Beach Railway Co., 81 H. 233.
   Per Curiam.

So far as a judgment may be affected for error upon the trial there is no reason for reversal.

The damages given by the jury were, according to the testimony, insufficient, and the plaintiff was entitled to a new trial upon his- motion. § 999, Code Civil Procedure.

The action was for damages to the rental value of plaintiff’s house, caused by the building and operation of defendants’ railway along that house.

The evidence in behalf of plaintiff was not contradicted. The defendants called no witnesses.

The structure was about forty feet wide, with three tracks and a track-walk on each side. It was floored over with strips of wood, with small spaces between them. The structure was distant from plaintiff’s premises at one point 20 feet and at the nearest 18.53 feet. The trains passed every few minutes, and such as ran to Rector street were switched in front of the premises. The locomotives sent out steam and smoke. It was proved that on damp days the steam sent out would occupy the entire width of the street and hug the buildings on either side of it.

It was proved by a competent witness what was the percentage of light cut off from the building by the structure and passing of the trains. The amount cut off was important. The light of the store was diminished by the structure and the trains, and the light of the floor above was diminished by the trains and the smoke and steam sent off by locomotives in front of the house.

A witness gave evidence as to the loss of rentals. Although he was an agent of the plaintiff his testimony was uncontradicted, and there was no reason to believe that he did not testify truly. His testimony included the statement of many and different sums and quantities. It was difficult to keep the testimony in mind and to make a rational deduction from it. In reality, guch a case is not one fit for submission to a jury, although the rules of law require that it should be tried by a jury.

It is to be further observed that no peculiar benefit was done by defendant’s railroad to the premises.

The jury, in finding that the plaintiff had suffered in four years but six cents damages from the annoyances that have been partly described, must have neglected their duty to give effect to the testimony however difficult and laborious the performance of the duty might be. The hardness of the task probably led to its not being thoroughly done, and the jury then must have thought that the plaintiff had not proved his case with certainty.

The motion for a new trial should have been granted, and as the charge was correct and the defendants not at fault (Robbins v. The Hudson R. R. Co., 7 Bos. 1), the costs of the trial and the costs of this appeal are ordered to be costs in the action and to abide the event. The order denying this motion is reversed and a new trial ordered, with costs as above stated.

Upon the entering of judgment the clerk refused to tax costs for plaintiff and taxed defendants’ costs and inserted them in the judgment. The correctness of the clerk’s action depends, under § 3228, Code Civil Procedure, upon whether “ a claim of title in real property arises upon the pleadings.” If it does the plaintiff should have the costs. If it does not the taxation was correct:

The sixth subdivision of the complaint is that the plaintiff has certain rights in Trinity place, and that those rights constitute an easement in the bed of the street which attaches to his said abutting property. The eleventh subdivision contains the averment, that the defendants have taken no proceedings to condemn the easement. The answer denies any knowledge or information sufficient to form a belief as to the allegations of the sixth paragraph of the complaint. This of course puts in issue the plaintiff’s title to the easement which is real estate.

This is a material issue. The right of defendants to use the streets as they do use, is valid, excepting that they have not given compensation to the owners of the easements that they have taken. They, therefore, are not liable to one not entitled to compensation, that is, to one who is not owner. This is true, while it is also true that the wrong-doing makes the defendants liable for damages, as trespasser. That is, they are so to one who is owner of the easement.

The motion for retaxation should be granted, and the order denying that motion be reversed, with ten dollars costs.


author: By the Court.—Freedman, J.

text:
    HENRY SIEFKE, Respondent v. THE MANHATTAN RAILWAY COMPANY, et al., Appellants.

      Action to obtain injunction relief against the maintenance and, operation of defendants' elevated railway in front of plaintiff's premise's, and damages sustained therefrom, etc ■ 1

    Upon the trial plaintiff sought to recover not only damages to the prop- . erty during his ownership of the same, but also damages sustained by his father, as former owner, between April and October, 1882, which had been assigned to him. The defendants insisted throughout the trial, that these assigned damages were not incidental to plaintiff’s equitable cause of action; and that, as to them, they had a right of trial by jury. The trial judge overruled the objections of the defendants, and, against their exceptions, determined to plaintiff such assigned damages.

      Held, that this ruling constituted error. The principle and rule that permits past damages to be assessed in actions of this character as incidental to the relief granted, cannot be so extended as to permit a plaintiff to purchase an outstanding claim from another person that is enforceable only at law and to write it with a claim of his own for equitable relief, and thus deprive defendants of the right to a mode of trial which would have been secured to them had the claim been put in suit by the original holder.

      Held, also, that, upon the pleadings and the evidence on the trial, the award of past damages and the assessment of damages to the fee value should not be permitted to stand. The award of damages must be founded upon a fair and reasonable construction of the evidence, in view of all the facts and circumstances disclosed, and the probabilities deducible therefrom according to common experience, and such a construction of the evidence in this case does not sustain the relief granted. The amounts awarded are unwarranted by the evidence, as well as in excess of the amounts demanded in the complaint.
    Before Sedgwick, Ch. J., Freedman and McAdam, JJ.

      Decided June 1, 1891.
    .Appeal from judgment entered upon the decision of a judge upon a trial at special term.

      Davies & Rapallo, attorneys, and Julian T. Davies and Brainard Tolles of counsel, for appellants, argued :—
    The amounts awarded as past damages and permanent damages are in excess of the amounts demanded in the complaint, and are wholly unwarranted by the evidence. The judgment exceeds the amount demanded. The complaint demands $5,000 past damages, and $12,000 damages to fee value. The judgment awards $14,500 past damages and $26,900 damages to fee value. It is well settled that damages cannot be awarded in excess of the amount demanded in the complaint. If judgment is rendered for an amount in excess of what is demanded in the complaint, it will be .reversed on appeal. The complaint cannot be amended after verdict by increasing the amount demanded. Corning v. Corning, 6 N. Y. 105 ; Knapp v. Roche, 37 N. Y. Super. Ct. 375, 406 ; Pharis v. Gere, 31 Hun, 443; Decker v. Parsons, 11 Ib. 295 ; Coulter v. Express Co., 5 Lans. 67 ; Barber v. Rose, 5 Hill, 76 ; Graves v. Hunt, 8 N. Y. St. Rep. 308, 310; McIntyre v. Clark, 7 Wend. 330 ; Fish v. Dodge, 4 Den. 311; Curtiss v. Lawrence, 17 Johns. I11; Dox v. Dey, 3 Wend. 356 ; Palmer v. Reynolds, 3 Cal. 396 ; Davenport v. Bradley, 4 Conn. 309. The report of a referee or the decision of a judge stands on the same footing, in this respect, as a verdict. Bowman v. Earle, 3 Duer, 691; Annis v. Upton, 66 Barb. 370. The Code of Civil Procedure has not changed the rule, as is expressly declared in Coming y. Corning (supra). The Code provides that the rules governing the amount of damages recoverable shall be the same as before its enactment. Code of Civil Procedure, § 1208.

      William Allan, attorney and of counsel, for respondent, argued:—
    I. The plaintiff has fully and clearly proved every allegation of his complaint, and the evidence more than sustains the amounts awarded in the judgment.
    II. A court of equity will grant whatever relief the evidence warrants. The motion to increase the damage claimed, was properly entertained by the trial judge. Whatever damage the plaintiff has proved he is entitled to recover, and the court should allow a recovery for damages down to the day of the trial. Barrick v. Schifferdecker, 48 Hun, 355 ; citing Madison Ave. Bapt. Ch. v. Baptist Ch. in Oliver St.. 73 N. Y. 95, and Henderson v. N. Y. C. R. R. Co., 78 Ib. 423. In Kenkele v. Manhattan R. R. Co., 55 Hun, 400, Van Brunt, P. J., says: “ Of what time is the value of these easements to be ascertained ? Clearly as of the time of the trial. * * The permanent damage is to be determined as of the time of the trial.”
   By the Court.—Freedman, J.

The action was brought to obtain, and by the judgment appealed from the plaintiff did obtain, injunctive relief against' the maintenance and operation of defendants’ elevated railway in front of his premises. Upon the trial the plaintiff attempted to recover besides damages to the property during his own ownership, damages sustained by his father as former owner between April 17, 1882, and October 18, 1882, and which had been assigned to the plaintiff. The defendants, from the start and throughout the trial, insisted that these assigned damages were not incidental to plaintiff’s equitable cause of action, and that as to them they had a right of trial by jury. The trial judge overruled the objections of the defendants in this respect and, against their exceptions, determined and awarded such damages. This constituted error. The principle which permits past damages to be assessed in actions of this character as incidental to the relief granted, is exceptional. Its purpose is to prevent the necessity of the plaintiff’s bringing two actions upon his own grievances. But it ought not to be so extended as to permit a plaintiff to purchase an outstanding claim of another person enforceable only at law, and to unite it with a claim of his own for equitable relief and thus to deprive the defendants of the right to a mode of trial which would have been secured to them by the constitution and the laws of the state had the claim been put in suit by its original holder. The precise point has been determined by the general term of the Supreme Court, first department, in Sommer v. The N. Y. Elevated Railway Co., and another, 60 Hun, 148, in accordance with the foregoing views.

• I am also of the opinion that the award of past damages and the assessment of damages to fee value should not be permitted to stand. The premises, with respect to which this action was brought, consist of a lot of land on the northeasterly corner of Sixth avenue and West Third street, having a frontage on Sixth avenue of 25 feet, and on West Third street of one hundred feet. Upon said premises there are erected four small buildings. The corner building has been used as a liquor store, and at least two of the others as houses of prostitution, but it is not necessary to stop to consider the •question of illegal use. The facts which stand forth in bold relief are that the premises in question were sold in 1866 to Ignatius Flynn for $20,000 ; that in 1867 they were sold to Henry Siefke, plaintiff’s father, for $21,500 ; that in 1882 plaintiff’s father conveyed them to the plaintiff for $15,000; that the complaint demanded $12,000 for permanent loss of fee value, and that the trial judge awarded $26,900 for such loss. For past damages the complaint demanded $5,000, and the trial judge awarded' $14,500. The evidence is too voluminous and complicated to be discussed in detail, and I have to content myself with the statement that a careful and thorough examination of it has satisfied me that it does not support the conclusions of the trial judge above referred to. It is quite true that in consequence of the maintenance and operation of the elevated railway upon two sides of the premises, namely, on Sixth avenue and West Third street, the plaintiff sustained a greater injury than any other owner of an abutting lot of equal size and similarly affected upon one side only, but, after all, the award of damages must be founded upon a fair and reasonable construction of the evidence in view of all the facts and circumstances disclosed and the probabilities properly deducible therefrom, according to common experience, and such a construction of the evidence in this case does not sustain the relief granted. The amounts awarded are, therefore, unwarranted by the evidence as well as in excess of the amounts demanded in the complaint.

The judgment should be reversed and a new trial ordered, with costs to the appellants to abide the event.

Sedgwick, Ch. J., and McAdam, J., concurred.


author: By the Court.—McAdam, J.

text:
    MAX GENTILLI. Appellant v. ACHILLE STARACE, Respondent.

      Action on contract for sale and delivery of 168 cases wine in good merchantable order, etc.—Question of warranty involved.

    The contract of sale in this case was in writing, in the form of a bought and sold note, and contains the following provisions: ‘ ‘ All to be in good merchantable order. Delivery on steamer’s dock. The said goods to be approved by buyer within three days after delivery. Terms, payment by notes, for one-half the amount each at 60 and 90 days respectively.” The defendant took possession of the wine the day after the contract was signed. Two days at least were occupied in carrying the wine from the steamer’s wharf, where it was delivered to the defendant, on his premises. Five days after the wine had been delivered to and received by the defendant the notes mentioned in the contract were made and given to the plaintiff. The plaintiff was not the manufacturer and knew nothing about the quality of the wine at the time the contract was executed. At the time of the delivery of the wine the agent and attorney in fact of the defendant examined it. He drank some of the wine, but from how many different cases he is unable to say, and he found the wine in good condition. The first of the notes was paid at maturity, and this action was brought to recover the second note.
    The defence was a breach of warranty, and a counter claim of $654.69 over and above the note, which is $1,515, and the referee, before whom the case was tried, gave judgment to the defendant for the entire counter claim less $30.69.

      Held, that the only warranty alleged or proved is that supposed to be contained in the contract, namely: that the goods were to be delivered in merchantable order, a phrase which means that at the time of the delivery the goods were saleable and fit for market. The contract gave to defendant three days within which to approve or reject the goods. If he rejected them within three days there was to be no sale, and if he failed to reject within that time the sale was to be binding. The so-called or supposed warranty of quality, did not survive the final approval and acceptance of the wine. The contract was conditional upon the delivery of the wine in merchantable order. The defendant had three days to inspect it, and if found unmerchantable to reject the same, and at the end of that time if the wine had not been rejected, the defendant was to be concluded as to its merchantable character. This was the intention of the parties, as is evident from the phraseology of the contract as well as the acts of the parties, viewed from the light of the surrounding circumstances. There was no warranty, express or implied, in the case, and the judgment must be reversed, etc.
    The rules governing vendor and vendee, bargain and sale, and warranty in like cases considered, and the cases fully reviewed in the opinion of the court.
    Before Sedgwick, Ch. J., Freedman and McAdam, JJ.

      Decided June 1, 1891.
    Appeal from judgment entered in favor of defendant for $615, with interest and costs, on report of referee •to whom the case was referred to hear, try and determine the issues.

      William J. Weldon, attorney and of counsel, for appellant.

      Coudert Brothers, attorneys, and F. R. Coudert and John N. Lewis, of counsel, for respondent.
   By the Court.—McAdam, J.

The plaintiff, through a broker, sold to the defendant 169 cases of Prosperi’s Chianti wine, which had just arrived, and was to be delivered on the steamer’s dock. The contract is in writing, in the form of a bought and sold noté, and contains the following provisions : All to be delivered in merchantable order. The said goods to be approved by buyer within three days after delivery. Terms, payment by notes, for one-half the amount each at 60 and 90 days respectively.” The goods were delivered, and five days afterwards the defendant gave the notes called for thereby, the first of which was paid at maturity. The present action is on the second note, and the defence is breach of warranty, and a counterclaim of $654.69 over and above the amount of the note sued upon, which is $1,515. The referee adopted ■the defendant’s theory of the case, and gave him a judgment for the ' entire counter-claim, less $30.69. The only warranty alleged is that supposed to be contained in the contract, i. e., that the goods were to be delivered in merchantable order, a phrase which means that at the time of delivery the goods were saleable and fit for market. Web. Dic. ; Hamilton v. Ganyard, 34 Barb. 204; Benjamin on Sales, § 983 ; Notes by Corbin. The defendant was not to be concluded on this subject by the mere delivery, receipt or inspection of the goods, for the contract gave him three days within which to approve or reject them, that is to satisfy himself in any manner he desired, whether the goods were merchantable ■ or not. If he rejected them within the three days there was to be no sale, and if he failed to reject within the specified time, the sale was to become binding. Story on Sales, § 249 ; Benjamin on Sales, § 911; Notes by Corbin. The so-called warranty of quality, did not survive the final approval and acceptance of the goods, and this was the intention of the parties to the contract.

As the contract was made before the defendant had an opportunity to examine the goods it was conditional upon their delivery in merchantable order, and the law would have implied this, if the contract had been silent upon the subject. The defendant upon receiving the goods, whether this condition was expressed or not, was entitled to a reasonable opportunity to inspect them, and if found to be unmerchantable reject them. The evident purpose of the contract was to limit the time to three days, so that unless the goods were sooner rejected, the defendant was to be concluded as to their merchantable character. The time was definitely fixed as . the reasonable period within which the defendant was to ascertain, by tests or otherwise, whether the goods delivered were equal to the description of them given by the contract, in which case the defendant would be bound to accept if they did answer it, whether he was satisfied in other respects or not. Clark v. Rice, 46 Mich. 308. That this was the intention is evident from the phraseology of the contract,. as well as the acts of the parties, viewed in the light of the surrounding circumstances. The plaintiff was not the manufacturer of the goods and presumably only knew of them as any one engaged in selling similar goods might reasonably be expected to know. It will not be inferred, therefore, that he intended to warrant against latent defects of which he had neither knowledge nor notice, in the absence of language clearly indicating that he did so intend. In order to give rise to a warranty, the buyer should not have knowledge of rehibitory defects at the time of the contract. Bennett v. Buchan, 76 N. Y. 386. The examination afforded in this case, was to give the defendant the opportunity of obtaining all the knowledge respecting the merchantable condition of the goods and their rehibitory defects that it is possible for a dealer or persons other than the manufacturer to discover, and this examination was to precede the sale. The term warranty is riot used in the contract, nor is there any positive information or representation as to the quality contained therein. In short, there is nothing but a mere executory agreement to deliver in merchantable order, and that the defendant have three days to determine whether the goods answer that requirement or not. Properly interpreted the various provisions of the contract mean substantially this. The plaintiff was to deliver to the defendant 169 cases of wine, and it was left to the latter to determine within three days whether it was in merchantable order. If he decided it was not, he was at liberty to reject the wine and there was no sale, and if he did not decide that the wine was unmerchantable, within the time specified, the transaction was to be regarded as an executed sale, with an acceptance of the property at the vendee’s risk. The contract fixed the price, mode of delivery and all other details with particularity, and there was but one subject left open, and that was the merchantable character of the wine, which could be rejected, but only on the ground of being unmerchantable. The plaintiff evidently did not mean to leave the question of merchantable order of the goods to the decision of the defendant, and then insure or warrant the correctness of his decision. A vendor may obligate himself in that unbusinesslike manner, but he should riot be held to have done so, except where the intention so to do definitely appears, and it does not so appear in this case. It was not the sale of a commodity in respect to which the vendor possessed any knowledge, which the defendant could not by his examination have readily obtained. The plaintiff and defendant are both merchants and dealers in the commodity, so that neither possessed any advantage over the other in respect to the subject matter of the sale, both stood on the same footing, and the contract indicates that the examination afforded the defendant was to be the crucial test as to whether there was to be a sale or not. The thing sold was not' a patented, complicated or intricate device of which the plaintiff had special knowledge, but an ordinary article of trade, the merchantable character of which is discoverable by familiar tests employed by those engaged in the business, by means of which transactions of like character with “ merchantable condition ” as the basis, are consummated almost daily in this city.

The decision or the question of merchantable order was left wholly to the defendant to be determined in any manner most satisfactory to himself. There was no fraud or concealment on the part of the vendor, and he made no effort to influence the defendant in coming to a conclusion.

Sixty days after the approval of the goods, the defendant voluntarily paid the first note given for half the purchase price, and by the judgment rendered in his favor, he avoids the second note (the one in suit), and recovers back $615 of the amount paid on the first ■ note, and keeps the goods as well. There are cases holding that a warranty of quality, even where the vendee has the option of returning the goods, unay survive their acceptance. While some of the distinctions drawn are narrow, it is nevertheless apparent in those cases from the phraseolgy of the contract, and: the nature of the transaction, that a continuing warranty was intended, and the court simply gave effect to the evident intention of the parties. Day v. Pool, 52 N. Y. 416, cited by the defendant, was the case of an executory contract of sale with an express warranty intended to survive the acceptance of the goods, and is, therefore, inapplicable to the facts disclosed here. In a subsequent case, Dounce v. Dow, 64 N. Y. 411, which is more like this than Day v. Pool [supra], that case was cited and distinguished. The goods delivered here answered the description called for by the contract, and if the defendant wished to guard against any supposed secret or hidden defect or infirmity not discoverable by ordinary examination, he should have obtained an express warranty in respect thereto that might have survived the acceptance of the subj ect matter of the sale. The description of a thing is sometimes an implied warranty that the article delivered shall correspond with the description, but this role is generally applied for the purpose of affording the purchaser. a more enlarged remedy by rescission them he would have on a simple warranty. In Victor v. Stroock, 25 St. Rep., at p. 745, the court even modified this rule by holding that where the vendee examined a particular lot of goods prior to the sale, and the goods delivered were those examined and purchased, it was immaterial by what name they were called, especially where both parties were on an equality having equal skill in the business. There was every opportunity to inspect in this case. Indeed there was no sale until after the defendant had examined the property, and approved of its merchantable condition.

In Reed v. Randall, 29 N. Y. 358, it appeared that the plaintiff sold and agreed to deliver to the defendant a certain crop of tobacco to be delivered “ well cured and boxed and in good condition.” In an action for the purchase money, the defendant contended that the tobacco delivered was not “ well cured and in good condition.” The court held that the terms used in the contract did not constitute a warranty, and that the defence amounted to an allegation of mere noncompliance with the contract declared on.

The court further held that the retention of the property is an admission on the part of the vendee that the contract has been performed, that the vendee cannot accept the delivery of the property under the contract, retain it after having had an opportunity of ascertaining its quality, and recover damages, if it be not of the quality or description called for by the contract. To the same effect are the Dutchess Co. v. Harding, 49 N. Y. 321, and Jones v. McEwan, 16 South Western R. 81. In McCormack v. Sarson, 45 N. Y. 265, it appeared that the defendant purchased all the lumber in the plaintiff’s mills at an agreed price per 1000 feet for the “ prime,” another price for the “ merchantable,” and other price for “ refuse,” and the lumber having been delivered after opportunity for examination, the plaintiffs gave a receipt for so much lumber, describing it as above. The action was for the price, and the defendant offered to prove “ that all the lumber for which the action was brought as prime, and a large portion of that claimed as merchantable, was not prime or merchantable, but only refuse, and of a' vastly inferior quality to prime or merchantable.” The trial judge refused to receive the evidence, and the Court of Appeals, in sustaining the ruling of the trial judge, said : v< The evidence before the court proved that the lumber had been delivered to and accepted by defendant’s agent as of the qualities claimed. The contract had been executed. The testimony offered did not propose to contradict that. In fact it was entirely in harmony with that evidence. It said virtually : I had an opportunity of examining this lumber; I did examine it, and accepted it as prime, but afterwards I ascertained it was not prime ; I changed my opinion and judgment; the fact was otherwise. This will not do. If he accept it after examination or after an opportunity for examination, as fulfilling the contract, he is bound by such action.” Coplay Iron Co. v. Pope, 108 N. Y. 232, was an action by a manufacturer. There was no collateral warranty or agreement as to the quality of the iron, further than the description of the article which was to be delivered in the future, and the court held that the defendant having accepted the property, without any offer to return, was deprived of any right to make complaint of inferior quality. There was no collateral warranty or agreement here further than that to be inferred from the description of the article to be delivered, and the defendant haying accepted it after full examination is bound to pay for it. The maxim of the common law, caveat emptor, is the general rule applicable to sales, so far as quality is concerned, and the buyer, in the absence of fraud, purchases at his own risk, unless the seller has given an express warranty, or unless a warranty be implied from the nature and circumstances of the sale, and none can be implied here, because the sale was not by the manufacturer, and the buyer purchased after full examination and approval. Even in a sale by the manufacturer, he is liable only for any latent defect in the process of manufacture, but the implied warranty does not extend to a latent defect in the materials used, unless it be proved or can be fairly inferred, that the vendor knew of the defect. Hoe v. Sanborn, 21 N. Y. 552. There was no express warranty by the vendor in this case, and none can be implied which survived the acceptance of the goods. Moses v. Mead, 1 Den. 378. There being no express warranty as to quality, and no fraud, it matters not whether the defects were latent or patent, the defendant accepted the goods in performance of the contract, and has no right to complain now that he made a mistake as to their quality. If the defendant wanted a warranty against latent defects he should have applied' for it, and then the vendor would have decided whether he would assume such an obligation or not. He did not enter into any such undertaking and that ends all controversy concerning it. In Hamilton v. Ganyard, 34 Barb. 204, the contract was to deliver a crop of corn in “ merchantble order,” and the trial judge held (p. 205) that the vendor was obliged to deliver “ sound and ripe corn,” and that the vendee was not bound to receive any other. This ruling was affirmed. The same construction would apply to a contract for apples, peaches or the like, which are not marketable, unless sound and ripe or nearly ripe and having a tendency to ripen after being taken from the tree. That case is cited by the defendant, but contains nothing instructive on the questions involved here. The defendant was under no obligation to accept the plaintiffs goods, if not merchantable, but he passed on this question when he accepted and made them his own. It will not do to approve of goods to obtain possession of them, and disapprove of them afterwards either to avoid paying for them, or for purpose of reclamation. Where an executory contract for the sale of material to be manufactured into articles of merchandise is with warranty of its fitness for the purpose intended, the vendee upon receipt is not bound to apply tests before using; but if defects, not open and visible, are thereafter discovered, which amount to a breach of the warranty, he has his remedy thereon, Dounce v. Dow, 57 N. Y 16, and a vendor who gives such a warranty is subject to the same rule, Milburn v. Belloni, 39 N. Y. 53, but no such warranty accompanied the sale of the wine in this case, and, as a necessary sequence, the rules announced in those cases have no application.

' It has been urged that the defect in quality was hidden and buried in the wine, and therefore not discoverable, and that the effect of the examination therefore simply relieved the vendor from defects that were open and visible. Day v. Pool, 52 N. Y. 416; Parks v. Morris Ax. & T. Co., 54 Ib. 586 ; Birdseye v. Frost, 34 Barb. 367. This is undoubtedly the rule applicable to warranty of quality or of fitness where the defects are of a recondite character. There are two reasons why it is not applicable here. First: The objection to the wine; is that it wras not ripe and was bottled before it had effectually gone through the proper process of fermentation, in consequence 6f which it became vinegary and sour. The chemist produced by the defendant made an analysis in July, 1887, of three small samples of the wine, and as a result pointed out the defects stated. He testified that, in his opinion, the germs of secondary fermentation could have been discovered as far back as the date of the contract (April 28th, 1887) by any person accustomed to drinking wine, as it must have been at that time insipid and flat. It is clear, therefore, that even if the defect was occult, it was at once perceivable to the taste of an experienced person, and as tasting is the most common method of testing wines, an examination, with a view to purchase, would at once have disclosed the defect complained of, and if three small samples furnished sufficient to condemn the bulk of the wine in July, 1887, it ought to have furnished enough to condemn it three months before, so it is manifest that the defect was not of the latent character which survives acceptance. But the defendant insists that the wine was not “ripe ” and, therefore, not merchantable ” at the time of sale, within the meaning of that term as applied in the corn case, supra. In that case the vendee refused to receive the corn because it was not ripe and sued the vendor for not delivering the commodity he agreed to deliver, and that is what the defendant here might have done, if he exercised the care the vendee in that case did, and such as ordinary business men generally do. The defect required no especial skill or chemical analysis' to detect, for it might have been discovered by any one examining the wine with a view to purchasing it. The defect was imputable to the manufacturer and not to the vendor, but might have been warranted against by him in a manner that would have survived the acceptance, but no such warranty was exacted or given. Second : The so-called warranty is, as the court in Reed v. Randall, supra, and kindred cases, held, nothing more or less than an agreement to deliver a certain commodity. If the vendor undertakes to deliver anything else, the vendee may refuse to accept, and sue the vendor for non-performance of his contract. If, however, the vendee chooses to accept the thing delivered (if there be no fraud, latent defect, or it does not require skill to detect the difference) the vendee has by his acceptance concluded himself by his own act, and cannot thereafter be allowed to make reclamation against the vendor. This seems business like and proper. The defendant did discover from the examination he made that some of the casks were stained with wine marks, and the plaintiff allowed for breakage $23 before the condition of the goods was approved. If the defendant had at the same time discovered the defect now complained of, and he ought to have done so, the plaintiff might have made reclamation on the manufacturer, and some satisfactory deduction to the defendant, and the controversy now going on might have been avoided. Business men must pursue business methods with ordinary care and intelligence, or take the consequences and charge the loss to experience. Under our interpretation of the contract, and the rights and obligations of the parties thereunder, it becomes unnecessary to consider any of the other questions presented on the appeal, for it follows that the judgment must be reversed, the order of reference vacated, and a new trial ordered, with costs to the appellant to abide the event.

Sedgwick, Ch. J., and Freedman, J., concurred.