text:
    Catharine Kane, Appellant, v. Carlos Cortesy et al., Respondents.
    Where an order of General Term, reversing a judgnient entered on the report of a referee, omits to state that the reversal was upon the facts as well as the law, so far as the facts are concerned, it is for this court, on appeal from the order, simply to determine if there was any evidence sufficient in law to sustain the judgment.
    Where, in consideration of an agreement on the part of the owner of a mortgage to extend the time of payment of the mortgage debt, the mortgagor gave a chattel mortgage as additional security, held, that a clause in the chattel mortgage, giving to the mortgagee the right, in case she at any time deemed herself or the securities unsafe, to take possession of and sell the mortgaged chattels, applying the proceeds on the debt, could not defeat the operation of the extension as a release of sureties for the debt, or cause it to become due in the contingency mentioned.
    Also held, that even if the effect of said clause was to allow the owner of the mortgage, at her option, to foreclose either mortgage, as the sureties had no option to defeat the extension, it left the agreement to operate in full force ou their rights as such sureties, and it having been entered into without their consent, they were thereby discharged from liability.
    It appeared in such a case that the owner authorized an agent to procure additional security for the real estate mortgage, leaving it to his judgment to make the best arrangement he could for that purpose. Held, that the agent was authorized to make an agreement for a reasonable extension of time of payment, and the fact that the owner did not know of or assent to it did not affect the force of the agreement ad a release of the sureties.

      (Argued June 23, 1885 ;
    decided October 6, 1885.)
    Also held, that the owner by taking, holding and foreclosing the chattel mortgage, after she knew that the mortgagor claimed it was given in consideration of the agreement to extend the time of payment, must be deemed to have ratified the same even if the agent had not authority to make it.
    Also held, that oral evidence was competent to prove the agreement for extension of time.
    The owner began suit to foreclose the real estate mortgage; the mortgagor set up as a defense the agreement to extend time, but upon the trial gave no evidence to prove it, and j udgment of foreclosure was rendered. Held, that the sureties, as they were not made parties to said action, were not concluded by the judgment from claiming that there was a valid extension.
    Appeal from order of the General Term of the Supreme Court, in the third judicial department, made January 23, 1883, which reversed a judgment in favor of plaintiff, entered upon the report of a referee.
    This action was upon a guaranty by defendants of payment of a bond and mortgage executed by one Prentice. Defendants set up as a defense among others a release by means of an agreement made without their knowledge or assent between plaintiff and the mortgagor, to extend the time of payment in consideration of the giving by the latter of a chattel mortgage as additional security. The referee found that there was no valid agreement to extend the time. The order of reversal did not specify that it was both on the law and the facts.
    The material facts are stated in the opinion.

      M. M. Waters for appellant.
    The mere taking of collateral security, in the absence of an agreement beyond it, is not an extension of time for the payment of the original debt. (Cary v. White, 52 N. Y. 138 ; Remsen v. Graves, 41 id. 472 ; Williams v. Townsend, 1 Bosw. 411; Nat. Bk. v. Bigler, 83 N. Y. 53; Brandt on Suretyship, 431; Austin v. Curtis, 31 Vt. 64.) Matthews was only a special agent to get additional security for plaintiff; he had no power to extend the time of payment without the consent of plaintiff, and hence no agreement that he could make would discharge the sureties. (Craighead v. Peterson, 72 N. Y. 279, 283; Story on Agency, § 72.) An agent having authority to collect, or as in this case to get additional security, has no power to extend the time of payment. (Hutchings v. Munger, 41 N. Y. 155; Ritch v. Smith, 82 id. 627.) The chattel mortgage expressly recites that it is limited and given as collateral security, and this cannot be contradicted by oral evidence. (Cary v. White, 52 N. Y. 143; Cox v. Barker, 49 id. 107; Von Bokkelen v. Taylor, 62 id. 105.) Neither could the contract expressed in the chattel mortgage be enlarged by oral evidence. (Wilson v. Dean, 74 N. Y. 531; Unnsell v. Flood, 45 N. Y. Supr. 460 ; Odell v. Mulov, 11 Weekly Dig. 303 ; Ely v. Phelps, 20 id. 147.) The referee having found upon ample evidence that the chattel mortgage was made by the mortgagor under an express agreement and understanding that the plaintiff did not waive her right to foreclose her land mortgage, and that she would have the right to foreclose the same at any time she desired, the surety’s liability will remain, notwithstanding the arrangement between the creditor and the principal. (Morgan v. Smith, 70 N. Y. 545; Calvo v. Davies, 73 id. 217; Nat. Bk. v. Bigler, 83 id. 66 ; Palmer v. Purdy, id. 149 ; 73 id. 217.)

      Edmund O' Connor for respondents.
    After a breach of a sealed agreement, it may be modified in any respect or wholly rescinded, or the time of its performance enlarged by an executed paroi agreement founded upon a sufficient consideration. (Dodge v. Crandall, 30 N. Y. 308; Bangs v. Mosher, 23 Barb. 478; Brooks v. Wright, 13 Allen [Mass.], 12.) The chattel mortgage was not the contract between Prentice and the plaintiff. It was simply the consideration sustaining the agreement made to extend the time of payment to the original debt, and this fact may be proved by paroi. (Chapin v. Dobson, 78 N. Y. 74.) The stipulation extending the time of payment must be deemed to have been made “subject to the consent of the surety.” (Morgan v. Smith, 70 N. Y. 543; Calvo v. Davies,
      73 id. 217; Nat. Bk. v. Bigler, 83 id. 66.) The 'extension of the time of payment of the mortgage debt was such an alteration of the defendants’ contract of guaranty as discharged them from all liability thereon. (Hoffman v. Hurlbut, 13 Wend. 575; Bangs v. Strong, 7 Hill, 250 ; Murray v. Marshall, 91 N. Y. 611; Spencer v. Spencer, 95 id. 353; Lim. Bk. v. Mallett, 34 Me. 547; Gifford v. Allen, 3 Mete. [Mass.] 258; Wright v. Bartell, 43 N. H. 548; Peoples Bank v. Pearson, 30 Vt. 711; Myers v. First Nat. Bk., 75 Ill. 257.) The chattel mortgage was given on the express condition that the time for the payment of the mortgage debt should be extended ; and the plaintiff, by accepting the mortgage and appropriating the benefits thereof, is now estopped from denying that time was given. (Grinan v. Platt, 31 Barb. 328.) A ratification once made, upon full knowledge of all the material facts, becomes at once obligatory and cannot afterward be revoked or canceled. (Clark v. Van Remsdyck, 9 Crand. 153; Hazel v. Batcher, 44 H. H. 40; Bell v. Byerson, 11 Iowa, 233.) A principal who is informed of an unauthorized act done by an agent must give notice of his dissent within a reasonable time, or his assent and ratification will be assumed. (Cairns v. Bleecker, 12 Johns. 300; Jervis v. Hayt, 2 Hun, 269 ; Farwell v. Howard, 26 Iowa, 38; Law v. Cross, 1 Black [U. S.], 523; Williams v. Merritt, 23 Ill. 623.) The respondent is not confined in this court to the grounds upon which the decision below was based, but may show other grounds for sustaining it. (Simar v. Canaday, 53 N. Y. 298; Krekeler v. Thorne, 73 id. 608.)
   Earl, J.

If the order of the General Term had specified that the judgment entered upon the report of the referee was reversed, both upon the law and the facts, the case would have been free from doubt upon this appeal. But as the reversal was for error of law only, the evidence must be carefully scrutinized to see if there was any which in law was sufficient to sustain the judgment.

There were but three witnesses who testified — Prentice, the mortgagor, Matthews, plaintiff’s agent, and Griswold, the attorney who drew the chattel mortgage — concerning the alleged agreement'extending the time of payment upon the real estate mortgage, and we think their evidence establishes its existence beyond controversy. They testified four years after the transaction took place, and while they could not give the exact language used at the time, they gave the substance of it so as to legve no reasonable doubt as to what wasfintended. Prentice testified: “Matthews said she (plaintiff) felt as if she was not hardly safe, and wanted me to give some additional security; I told him I would, by having the time extended; I was to give him the chattel mortgage and pay him $250 in one year, and the other $250 in two years.” “ The substance of the conversation was that I would give a chattel mortgage if he would extend the time for payment of real estate mortgage — one-half one year, and the other half two years.” Matthews testified that he told Prentice that the plaintiff would give him further time upon the real estate mortgage if he would give additional security; that he and Prentice then went to Griswold’s office and explained to him what they had agreed upon, and requested him to draw a chattel mortgage covering the points, stating to him that the plaintiff “ held a bond and mortgage against Mr. Prentice, which was due, and Mr. Prentice did not wish to pay it at the present time, and that Mr. Prentice had consented to give a chattel mortgage as collateral to the real estate mortgage, and by doing so was to have the time extended as stated in the chattel mortgage” — one-half of the real estate mortgage to be paid in one year, and the balance at the end of two years. Griswold testified that Prentice and Matthews came to his office and the latter wished him to draw a chattel mortgage extending the time of payment of real estate mortgage, part for one year and part for two years.”

The evidence of these witnesses is very much confirmed by the .giving of the chattel mortgage and its form. Prentice was under no obligation to give the mortgage, and it is reasonable to suppose that the only inducement for giving it was the extension of time for the payment of the real estate mortgage. It is recited in the chattel mortgage that it was given to secure the same debt secured by the real estate mortgage, and it was conditioned to pay the real estate mortgage as follows: §250 and interest on the whole sum in one year, and the balance with interest in two years, in precise accordance with the paroi agreement testified to by the witnesses. Why was the chattel mortgage thus written unless the payments upon the real estate mortgage were thus deferred ?

The chattel mortgage contained this clause : “ In case the said Catherine Kane shall at any time deem herself or said real estate mortgage or this security unsafe, it shall be lawful for her to take possession of such property and to sell the same at public or private sale previous to the time above mentioned for the payment of said debt, applying the proceeds as aforesaid after deducting all expenses,” etc. This clause could not defeat the operation of the extension agreed upon, or cause the debt secured to become due in the contingency mentioned. Its only effect was to authorize the earlier sale of the chattels and the application of the proceeds upon the debt, and that could be done only at the option of the mortgagee. Itgave no rights to the defendants as sureties for the debt, and they could not by virtue of that clause pay the real estate mortgage and take an assignment thereof and enforce.the same before the extended time of payment had arrived. And as the extension of time was thus effectual against the sureties it discharged them, notwithstanding the clause mentioned.

After the chattel mortgage was executed, Matthews took it and delivered it to the plaintiff, and with it, he delivered to her a paper on which he had written as follows: “ A renewal of this mortgage must be made before the year from date of filing expires, in order to secure its validity for more than one year. The acceptance of this mortgage, with the times of payment mentioned, does not prevent foreclosing land mortgage at any time the mortgagee desires to do so, or deems herself unsafe.” This was written after the agreement for the extension of payment had been made and after the chattel mortgage was executed and delivered, and there is no claim that Prentice assented to it or had any knowledge whatever of it, and hence it can have no effect except possibly to discredit Matthews. It embodies his view of the law. He undoubtedly supposed that under the danger clause in the chattel mortgage the plaintiff could, at her option, foreclose either mortgage. Even if such had been the effect of that clause or of the agreement made, as the defendants had no option to defeat the extension, it left the agreement to operate in full force upon their rights as sureties.

There was nothing in the testimony of the plaintiff to weaken the force of the evidence thus far alluded to. She testified that she did not know of or consent to the extension of time of payment upon the real estate mortgage, and that she gave no authority to Matthews to agree to such extension. The extension may have been given without her knowledge and yet she be bound by it in consequence of the authority given to her agent and her subsequent conduct in ratification of his acts. The evidence of Matthews shows that he was expressly authorized by the plaintiff to extend the time of payment upon the real estate mortgage upon obtaining additional security; but as she denied this, that evidence may be laid aside. Prentice testified that the plaintiff told him that she had left her business as to the real estate-mortgage with Matthews, and that whatever arrangement he made with him would be all right, and Matthews testified that she said to him that she would leave it to his judgment to make the best arrangement he could for obtaining the additional security; and this evidence she did not as a witness controvert or dispute. It was sufficient to establish that Matthews had authority to make the agreement. But further, it is undisputed that the real estate mortgage with the bond' accompanying the same was placed in the hands of Matthews, and that he was authorized to obtain the chattel mortgage as collateral security for the debt secured by the real estate mortgage. There were no restrictions placed upon that authority, and it empowered Matthews to agree to any reasonable and ordinary terms and conditions requisite and proper to obtain the security, and under the authority we think he could agree to a reasonable extension of the time of payment of the debt secured. It cannot be supposed that she expected her agent would obtain the additional security without any consideration of advantage whatever to her debtor. If, however, the ' original authority to Matthews was not sufficient, the plaintiff must be held to have ratified the agreement made by him by taking, keeping and foreclosing the chattel mortgage. It is undoubtedly true that that mortgage was given in consideration of the agreement to extend the time, and she could not repudiate the agreement and yet retain its fruits. Having had the full benefit of the agreement made by her agent, she must • stand by the agreement, particularly as she foreclosed the chattel mortgage after she knew that Prentice claimed that it was given in consideration of the agreement for the extension of time to pay the real estate mortgage.

The paroi evidence as to the agreement for the extension of time does not come under the ban of the rule which prohibits paroi evidence to explain, vary or contradict written instruments. It does not contradict or vary the real estate mortgage. That was past due, and the time for its payment could be extended by any valid agreement. It does not contradict the chattel mortgage. That is complete in itself and was not intended to embody the agreement. Its sole purpose was to give the additional security. This was an independent agreement existing outside of the two mortgages. It was the occasion or condition inducing the giving of the chattel mortgage, and no rule of evidence was violated in allowing it to be proved by paroi.

The plaintiff commenced the foreclosure of her real estate mortgage in October, 1878, making the mortgagor and his wife only defendants. To that action the defendants therein set up as a defense this same agreement for the extension of the time of payment. But upon the trial of the action they gave no evidence and judgment went against them. It is now claimed that these defendants are concluded by that judgment from claiming that there was a valid extension of the time of payment. But the simple answer to the claim is that these defendants were not parties to that action, and hence are not estopped by any thing adjudicated therein.

Although the evidence adduced by the defendants may have been somewhat shaken by the cross-examination of their witnesses and by the introduction of the paper written by Matthews and delivered to the plaintiff with the chattel mortgage, yet the case of the defendants is so strong upon the face of the chattel mortgage, and the probabilities and circumstances surrounding the transaction, and their evidence in the main stands so firm and fair, that it was error of law to find that there was no valid or sufficient agreement for the extension of the time of payment of the real estate mortgage.

The order of the General Term should, therefore, be affirmed, and judgment absolute rendered against the plaintiff, with costs.

All concur.

Order affirmed and judgment accordingly.


source: Caselaw Access Project

author: Danforth, J.

license: Public Domain

text:
    Herman Simmons et al., Respondents, v. Isaac H. More et al., Appellants.
    (Argued June 24, 1885 ;
    decided October 6, 1885.)
    Where one, assuming to act as agent, executes a written contract in that capacity in the name of the alleged principal, a contract on his part is implied from the instrument that he had authority to make it in behalf of the person named as principal; and where the contract is entered into by the other party in reliance upon the assumed authority, in case the agent had not authority he is liable for the damages sustained by reason of the breach of his implied contract.
    Where a contract so made by an assumed agent is for the purchase of goods, and is sufficient in form to satisfy the provision of the statute of frauds, declaring void an executory contract for the sale of goods of greater value than $50, unless in writing, the fact that the contract is invalid as against the alleged principal does not make the statute a good defense in favor of the agent in an action for breach of his implied warranty of authority.

      Appeal from judgment of the General Term of .the Court of Common Pleas of the city and county of Hew York, entered upon an order made March 15, 1883, which affirmed a judgment in favor of plaintiffs, entered upon a verdict.
    This action was brought to recover damages for alleged breach on the part of defendants of an implied warranty of authority to execute a contract of purchase made by them ostensibly as agents for, and on behalf of, principals named.
    The material facts are stated in the opinion.

      Adolph L. Sanger for appellants.
    If defendant had no authority to contract, then the memorandum of sale was not signed by the “parties to be bound,” nor by their duly authorized agent, and the contract was void as being within the statute of frauds. (Stone v. Browning, 68 N. Y. 598; Heermance v. Taylor, 14 Hun, 149 ; S. C., 51 N. Y. 211; 2 R. S. 136, § 3.) The defendants are not required to plead facts, and advantage may be taken upon the trial of any evidence showing that a contract is within the statute of frauds, although the statute is not itself pleaded. (Haight v. Child, 34 Barb. 186 ; Morrell v. Cooper, 65 id. 512.) The denial of the making of the contract as alleged in the complaint is one of the methods of interposing the statute of frauds as a defense, and throws the burden of affirmatively establishing the agreement and its validity upon the plaintiffs. (Moak’s Van Santv. PL 555.) The effect of the denial in defendants’ answer is sufficient. (Calhoun v. Hallen, 25 Hun, 155; Allis v. Leonard, 46 N. Y. 688.) Assuming that defendants were acting as the agents of the Galveston merchants, defendants had authority to purchase the coffee. (Newman v. Sylvester, 42 Ind. 106; 2 Whart. on Ev. , § 1343 ; Aspinwall v. Torrance, 1 Lans. 381; Walker v. Bk. of N. Y., 9 N. Y. 582; Hall v. Lauderdale, 46 id. 74.) Whatever authority Steele had to make the purchase, when that was done his connection with the transaction virtually ceased. Ho declaration on his part could affect his principals. (Vail v. Judson, 4 E. D. Smith, 165; Martin v. Farnsworth, 49 N. Y. 555; Story on Agency, §§ 133, 136, 165; Wharton on Agency, § 530 ; Hall v. Lauderdale, 46 N. Y, 70 ; 1 Pars, on Cont. 65, note 1; Raynor v. Grote, 15 M. & W. 359; Thompson v. Davenport, 9 Barn. & Cres. 78, 86, 88 ; Aspinwall v. Torrance, 1 Lans. 381; Newman v. Sylvester, 42 Ind. 113.) The court erred in submitting to the jury to determine whether the plaintiffs were induced by their conversation with Steele to ship the goods to Galveston. (Claflin v. Lenheim, 66 N. Y. 301; 2 Kent’s Com. 644, 645, m. p.; Vail v. Jordan, 4 E. D. Smith, 165.) The defendants had the right to countermand the sale, and the goods having been shipped in spite of such countermand, the plaintiffs had no right to saddle their loss upon the defendants. (Dillon v. Anderson, 43 N. Y. 232.) They must so act as to make their damage as light as possible. (Parsons v. Sutton, 66 N. Y. 98; Hamilton v. McPherson, 28 id. 72; Clark v. Maretha, 1 Denio, 317; Miller v. Trustees, etc., 7 Greenl. [Me.] 51; 1 Sedgw. on Dam. [7th ed.] 164, 166, note; Hardin v. Dalton, 1 Carr. & P. 181; Smith v. Pettee, 70 N. Y. 13; Cohen v. Platt, 69 id. 348; Mather v. Butler Co., 28 Iowa, 253.)

      W. C. Beecher for respondents.
    Where the parties undertake to do any act as the agent of another, if they do not possess the authority which they assume, or if they exceed the authority delegated to them, they will be personally responsible therefor to the person so dealing with them. (White v. Madison, 26 N. Y. 117, 124; Baltzen v. Nicolay, 53 id. 467.) It does not relieve them from responsibility that they acted in good faith, and really believed that they were acting within their authority. (Noe v. Gregory, 7 Daly, 283 ; Story on Agency [8th ed.], § 264.) If defendants wished to raise the question whether' these contracts did or did not comply with the requirements of the statute, they should either have denied the making of the contracts set out or else have pleaded that they were invalid under the statute. (Marston v. Swett, 66 N. Y. 201; Dufy v. O’ Donovan, 46 id. 223 ; Graham v. Cozin, 2 Paige, 171, 181.) „ The allegation in the complaint that the defendants made the contract sued on, not being denied by the answer, is to be taken as true, and cannot afterward be questioned. (Code of Civ. Pro., § 522.) Exceptions raise no question on appeal where no specific grounds are stated for the objections. (Daly v. Byrne, 77 N. Y. 182; Schile v. Brockhahus, 80 id. 615 ; Harris v. Wade, 61 id. 630 ; Cushman v. U. S. Ins. Co., 70 id. 72; Tooley v. Bacon, id. 34 ; Wilkinson v. Gill, id. 63.)
   Danforth, J.

The trial court refused to nonsuit the plaintiffs, and so held that the case stated and proved by them was prima facie sufficient to make the defendants liable. That conclusion has been sustained by the General Term and we think properly. The evidence showed that the plaintiffs were coffee dealers in the city of Hew York, and the defendants brokers in the same place. The latter were in correspondence with other brokers (Turnley & Co.) of the city of Galveston, Texas, and prior to the 6th of March, 1882, received from them orders to buy a certain quantity of coffee for the firm of Marx & Kempner, and a certain other quantity for Moore, Stratton & Co. of Galveston. This was done, and bought-and-sold notes describing the contracts as between the plaintiffs and these firms respectively were signed by the defendants in their firm name as brokers. It was apparent, therefore, upon the face of the paper that they were contracting on behalf of others and could not be personally liable as purchasers (Fleet v. Murton, L. R., 7 Q. B. 126), but from such an instrument a contract is to be implied that they had authority to make it in behalf of the persons named (Fairlie v. Fenton, L. R., 5 Ex. 769), and on this the plaintiffs relied. They caused the coffee, to be procured and at once taken to the dock for shipment as directed to the Galveston merchants, but on arrival at that place it was refused by them on the ground that the delivery in point of time was not in conformity with the orders. It then appeared that the orders actually given by them to Turnley & Co. required in each instance a shipment on the 6th of March. This, however, was not communicated to the plaintiffs, nor made a part of the contract, nor was it in fact known to the defendants. They obeyed the order, as it was received from their correspondents, but they executed it in the name of the principals and so assumed the risk of its correctness.

First. The plaintiffs have no cause of action against the principals, for the order they executed was not their order. Hence it was given by the defendants in excess of authority, and there seems no reason why they should not make good all damages which the plaintiffs sustained in consequence of their belief that the authority assumed did in fact exist. (Baltzen v. Nicolay, 53 N. Y. 467.)

Second. The contract was admitted by the pleadings, and was, moreover, sufficient in form’ to satisfy the statute of frauds. The defendants are held liable, because they had no authority to make it, and hence, though sufficient in form, it cannot be enforced against the apparent principal.

Third. The damages recovered -were only those directly caused by the assertion of the defendants that they had authority. The amount was warranted by the evidence, and the question was submitted to the jury with proper instructions., Whether their verdict was excessive is not the proper subject for inquiry.

The order denying a new trial was not' appealed from, and the only questions properly before us relate to the correctness of the judgment. In that we find no error and thipk it should be affirmed.

All concur.

Judgment affirmed.


author: Ruger, Ch. J.

text:
    John H. Browning, Appellant, v. Oliver M. Marvin, Respondent.
    Under the provisions of the Revised Statutes (3 R. S. 388, § 71), and it seems under the provisions of the Code of Civil Procedure (§ 73), prohibiting an attorney from buying directly or indirectly, or being interested in the purchase of a thing in action “with the intent and for the purpose of bringing an action thereon,” when the purpose of such purchase is to bring an action, and is induced by the procurement of an attorney, it comes within the act, whether the transfer be taken in his name or that of another person, and no cause of action can arise out of a transfer thus prohibited.
    (Argued June 4, 1885;
    decided October 6, 1885.)
    Appeal from judgment of the General Term of the Supreme Court, in the first judicial department, entered upon an order made May 16, 1883, which affirmed a judgment in favor of defendant, entered upon a verdict.
    The nature of the action and the material facts are stated in the opinion.

      Nathaniel C. Moak for appellant.
    The only evidence as to the purchase being that of Domett, that Prentice conducted the negotiations for the purchase and witnessed the written assignments to plaintiff, and that of plaintiff himself, that he was the absolute owner of the claims, and the assignments being to plaintiff and in writing, he is the real party in interest, and this suit could not be defended on the ground that he is not. (Old Code, § 111; Code of Civ. Pro., § 449; Amy v. Steen, 93 N. Y. 661; Brown v. Penfield, 36 id. 473 ; Fish v. Jacobson, 2 Abb. Ct. App. Dec. 132; Sheridan v. Mayor, 68 N. Y. 30; Meeker v. Claghorn, 44 id. 349 ; Allen v. Brown, id. 228; Easton v. Alger, 47 id. 345; Foster v. Bullock, 17 N. Y. Week. Dig. 397; 30 Hun, 311.) "Under his answer which simply denied the transfer to plaintiff, defendant could show that the former owner had not transferred the claims, but not that he had transferred them to plaintiff for the benefit of some one else. Where it is claimed plaintiff is not the real party in interest the answer must allege who is. (Saunders v. Chamberlain, 13 Hun, 568; Plant v. Snyder, 4 Abb. [N. S.] 146 ; 7 Rob. 271.) The mere fact that Prentice purchased, even for his own benefit, if he took the assignment to plaintiff, would not prevent a recovery in the name of plaintiff, for by taking the assignment to plaintiff, Prentice would have made plaintiff his trustee of the claims for him, and that would have entitled him to recover as the real party in interest. ( Wetmore v. Hegeman, 88 N. Y. 69; ‘People v. Livingston, 79 id. 280; Prescott v. Tousey, 50 N. Y. Supr. 12; Mead v. N. Y., etc., 22 Daily Reg. 209.) Mere proof that Prentice, as the avowed agent for plaintiff, conducted the negotiations and took written transfers to plaintiff, did not justify a finding that Prentice was in fact the purchaser. (22 Hun, 548; Moses v. McDevitt, 88 N. Y. 62.) The court erred in not permitting the plaintiff to prove the extent of the interest of Domett in the firm assets' of Domett & Nichols. (Browning v. Marvin, 22 Hun, 547.) In the absence of a plea of non-joinder one of several tenants in common of a claim, suing alone, may recover his share thereof, and one of several joint tenants, of a claim so suing, may recover the whole "thereof. If the evidence admissible, under any other plea, whether a denial or otherwise, shows the plaintiff not to be the sole owner of the claim, such evidence does not go to wholly defeat or bar plaintiff’s recovery, but only in diminution of damages or recovery. (Dewey v. Moyer, 9 Hun, 473; Dickinson v. Vanderpoel, 2 id. 626; O’Toole v. Garvin, 1 id. 92 ; Guck v. Keneda, 27 Barb. 120 ; Abbe v. Clark, 31 id. 238; Merritt v. Walsh, 32 N. Y. 685 ; Zabriskie v. Smith, 13 id. 322.) No allegation in the complaint of an assignment, by Nichols to Domett, of Nichols’ interest in the claim was necessary in order to entitle plaintiff to give evidence, of the extent of Domett’s interest. (O’Brien v. McCann, 58 N. Y. 373; Prevot v. Lawrence, 51 id. 219 ; Peck v. Winne, id. 641; Johnson v. White, 6 Hun, 587.) If a contract be averred to be that of three persons; proof of a contract by two of them is admissible and is nob a variance. ( Williams v. Allen, 7 Cow. 816; Minor v. Mechanics’ Bk., 1 Peters, 73; Scott v. Shears, 9 Cush. 504.) The transfer from Nichols to Domett need not have been in writing to be valid, and if the court excluded the proof on the ground that a written transfer was necessary, it erred. (Doremus v. Williams, 4 Hun, 458.)

      Henry C. Willcox for respondent.
    The record of the, proceedings in bankruptcy was admissible, as showing that the assignment to plaintiff transferred nothing, because of the firm of Domett & Nichols having been previously divested of all its title. (Bankrupt Act, §§ 5049-5054; Smith v. Brinkerhoff, 8 Barb. 552; affirmed, 6 N. Y. 305 ; Ayer v. Barstow, 5 L. R. 501; Amsinck v. Bean, 22 Wall. 403.)
   Ruger, Ch. J.

The complaint counted upon two causes of action, viz.: The first being for the recovery of money alleged to have been overdrawn — by the defendant in excess of his salary, while a clerk in the employ of Domett & Nichols, and the second being upon a note given by the defendant to said Domett for a partnership debt; both causes of action being claimed to have been assigned to the plaintiff. The answer alleged in substance that the claim described in the first count of the complaint had been paid by the defendant, and discharged, by an arrangement made between himself and Domett & Nichols before its transfer to the plaintiff, and as to both causes of action that they were purchased by an attorney at law, one Augustus Prentice, of Domett, for the purpose of bringing an action thereon, and denied that the plaintiff is the owner or holder of the note, or that it had been assigned to him. The evidence showed that the demands in suit accrued, if at all, to the partnership firm of Domett & Nichols prior to September, 1872, and if not extinguished by payment, remained their property until December, 1875, when they were transferred by Domett in form to the plaintiff. It also tended to prove that they were purchased by one Augustus Prentice, an attorney at law; that the purchase-price was paid by his check, and he stated that he wanted them to use against Marvin, because Marvin was suing him. The plaintiff testified that he never had any dealings with Domett, Nichols or Marvin, and that he did not know Marvin; that he never had the assignment to take charge of it, although he had had it in his hands to look at; that Prentice suggested the purchase to him, but that he, plaintiff, furnished the money to buy the claim, and Prentice had never repaid it to him; that Prentice was his cousin and his attorney in this and other matters. Suit was brought on these claims immediately after their purchase. The evidence also tended to show that by virtue of an arrangement made between Domett & Nichols and the defendant prior to December, 1875, the claim mentioned in the first count of the complaint was by the rendition of services by the defendant to Domett & Nichols settled and paid, and his liability therefor released by the firm. No questions except those arising on this evidence were left to the jury, and they were submitted under a charge unobjected to by the plaintiff ■ save in one respect hereinafter mentioned; and the facts were determined in favor of the defendant.

The verdict cannot now be disturbed unless some material exception was taken by the plaintiff to the charge or to the reception or exclusion of evidence.

We think that there is no such exception. . The statute in force at the time of the purchase of these claims forbade any attorney, counselor or solicitor from directly or indirectly-buying, or being interested, in the purchase of any bond, bill, promissory note, bill of exchange, book-debt or other thing in action with the intent or for the purpose of bringing any suit thereon. It also provides that no attorney, counselor or solicitor, by himself or by or in the name of any other person, either before or after action brought, shall lend or advance, or agree to lend or advance, or procure to be lent or advanced, any money or any bond, bill of exchange, draft or other thing in action, to any person as an inducement to the placing or in consideration of having placed in the hands of such attorney, counselor or solicitor, or in the hands of any other person, any debt, demand, or thing in action for collection.” A violation of these provisions is declared a misdemeanor. (2 Edm. Statutes at Large, 298, §§71, 72, 73.) Section 73 and those following of the Code of Civil Procedure are substantially reenactments of the former statute. When the purpose of such a purchase is to bring an action thereon, and it is induced by the procurement of an attorney it comes within the act, whether the transfer be taken in the name of the attorney or that of another person. (Arden v. Patterson, 5 Johns. Ch. 44.) The statute expressly forbids such a purchase when the prohibited purpose is attempted to be accomplished, either directly or indirectly, by the attorney in person or through the agency of another; and no cause of action can arise out of a transaction thus prohibited. ( Wetmore v. Hegeman, 88 N. Y. 73; Baldwin v. Latson, 2 Barb. Ch. 306.)

The evidence was sufficient to authorize the finding of the jury, and it necessarily passed upon the question of the intent with which the purchase was made. The purchase of both claims was consummated by one contract, and the purpose with which they were bought must necessarily have been the same. The court expressly charged the jury if it found that the purchase in question was made by Prentice for the purpose of putting the claims in suit, that a suit would not lie upon the claims thus purchased. This was the only defense to the note which was submitted by the court to the j ury, and its finding is conclusive as to the identity of the person buying, and the object with which the claims were bought.

The only exception taken to the charge by the plaintiff was to “that portion” “where the court instructed the jury that if the claim was purchased by Mr. Prentice the plaintiff could not recover.” It is a sufficient answer to this exception to say that the court made no such 'charge ; but even if the counsel had properly repeated what the court said, and had then excepted, it would have been unavailing, as the court correctly charged, for the reasons already stated.

The exceptions taken to the admission of the evidence showing Prentice’s agency in buying these claims and the intent with which they were bought are also unavailing for the same reasons.

Most of 'the other exceptions taken by the plaintiff to the admission and exclusion of evidence, relate to the proof affecting the extent of the interest which Domett had in the partnership assets of Domett & Hichols, after their insolvency, and dissolution, and seem to us to be either improperly taken, or entirely unimportant. Hone of them state the particular grounds upon which the .objections are made, and the evidence taken thereunder was all excluded from the consideration of the jury by the limitations, under which the same was submitted by the court.

Evidence was given by the defendant tending to show that he' had paid the note in suit by rendering services to Domett & Nichols after the dissolution and before its assignment to plaintiff. After this evidence was taken, without objection, the defendant offered to prove some of the circumstances accompanying the transaction, to which the plaintiff objected. No ground of objection was stated, and we think, under the circumstances, that the exception taken to the admission of the evidence was unavailing.

We have examined the other, exceptions referred to on the argument, and none of them seem to be óf sufficient importance to merit particular notice.

The judgment should be affirmed. <

All concur.

Judgment affirmed.


author: Finch, J.

text:
    Frederick Weyerhauser et al., Respondents, v. R. Graham Dun et al., Appellants.
    One who sighs or indorses a note in blank, to he used as a security, authorizes the person to whom it is delivered to fill the blanks in respects essential to the completeness of the note as such; but, in the absence of express authority or consent, no authority can be implied from the delivery, to insert a special agreement'not so essential.
    Where, therefore, in a note, which was indorsed for the accommodation of the maker, blanks were left for the date, the time the note was to run, the payee and the principal sum, field, that while the maker had authority to fill these blanks, the indorsement conferred no authority to write in the note an agreement that after maturity it should draw a special rats of interest, greater than the regular rate, although the law of the State where the note was made permits special agreements to be made for the rate specified.

      (Argued June 24, 1885 ;
    decided October 6, 1885.)
    Also held, where a note so filled in was delivered by the maker in renewal of another note, and received by a collecting agent, authorized by the owner of the old note to renew it, that such authority did not justify the agent in the acceptance of the new and the surrender of the old note.
    But held, that where the agent acted in perfect good faith, believing he was obeying instructions, and relying upon a supposed authority in the maker to fill in the note, although he assumed to be a professional expert in his business, he was not liable to his principal for damages unless the defect might have been discovered by the diligent exercise of that professional skill he was bound to possess and exert.
    Such an agent is responsible to his principal for the negligence of an attorney whom he employs.
    Appeal from judgment of the General Term of the Supreme Court, in the first judicial department, entered upon .an order made March 20, 1883, which affirmed a judgment in favor of defendants, entered upon a verdict directed by the trial court.
    This action was brought to recover damages for the alleged conversion of a promissory note.
    In June, 1875, plaintiffs, who were the owners of a promissory note, executed to them by the Indianapolis, Bloomington and Western Railroad Company, indorsed by Benjamin E. Smith and C. B. Griggs, placed the same in the hands of defendants, who constituted a collecting agency, for collection. Defendants placed the note in the hands of A. E. Campbell, their attorney, who, with plaintiffs’ consent, as defendants claimed, arranged with A. P. Lewis, the secretary and treasurer of said railroad company, for a renewal of the note for four months, with the same indorsers.
    A new note was delivered by Lewis to Campbell, who thereupon surrendered the old note. The new note was not accepted by plaintiffs, they claiming that it had been altered after indorsement, by Lewis, without the authority or consent of the indorsers, and so was void as against them.
    The further material facts appear in the opinion.

      W. T. B. Milliken for appellants.
    The plaintiffs are to be regarded, for the purpose of considering the implied authority of A. P. Lewis, as the bona fide holders, without notice of any equities between the maker and the indorsers, and for value; and the delivery of the note by the indorsers to the maker in blanks, as to the amount, gave to the agent of the maker and. the indorsers an unlimited credit. (McGrath v. Clark, 56 N. Y. 34.) When by mistake a blank is left for the amount in a note, indorsed for the accommodation of the maker, the latter may fill it up for the amount intended, and the indorser is bound. (Boyd v. Brotherson, 10 Wend. 93.) And so as to blanks generally. (Page v. Morrell, 3 Keyes, 117; Redlich v. Poll, 54 N. Y. 234; Kitchen v. Place, 41 Barb. 465; Waggoner v. Millington, 8 Hun, 142; Bank v. Rising, 4 id. 793 ; Hardy v. Norton, 66 Barb. 527.) Even if regarded as an alteration, the words “ with interest at ten per cent after maturity” were not a “ material alteration.” (Troy City Bk. v. Lawrence, 19 N. Y. 477; Streeter v. Gillette, 12 Hun, 278.) If the amount and interest with which the blank was filled could be regarded as unauthorized by any agreement between the indorsers and A. P. Lewis, the agent, on the ground that the aggregate amount was greater than the sum intended to be inserted, yet the note is good in the hands of a bona fide holder. ( Van Duzer v. Howe, 21 N. Y. 531.) An exception to a direction for a verdict brings up the question, whether, on any construction of the facts, the jury would have been warranted in finding a verdict for the other party. (Miner v. Mayor, 37 N. Y. Supr. 171; Stone v. Flower, 47 N. Y. 566; Low v. Hall, id. 104.) Exception to direction to find a verdict is available without request to go to jury. (Frecking v. Rowland, 53 N. Y. 422; Wombourg v. Cooper, 2 Hun, 428.) There was conflicting evidence as to many of the material facts in this case, and the same should have been submitted to the jury. (Sherwood v. Merc. Mut. Ins. Co., 5 Hun, 115; Wombourg v. Cooper, 2 id. 428; Fish v. Davis, 62 Barb. 122; Stone v. Flower, 47 N. Y. 566.) The evidence was en to conflicting inferences, and should have gone to the p (Smith v. Coe, 55 N. Y. 678.) Conversion is a hostile inte* with the owner’s control, and Davies’ act on parting with the note was not conversion. (King v. Mackellar, 94 N. Y. 317; McMorris v. Simpson, 21 Wend. 610; 2 Greenl. on Ev., § 642; Salt Spring Bk. v. Wheeler, 48 N. Y. 492; Cairnes v. Bleeker, 12 Johns. 300 ; Canfield v. Murger, id. 347.) Negligent performance of duty is not conversion, and can only be redressed in an action on the case. (Dickenson v. Dudly, 17 Hun, 569; Sergeant v. Blunt, 16 Johns. 74; Laverty v. Smithen, 68 N. Y. 522; King v. Mackéllar, 94 id. 317.)

      Walter Edwards for respondents.
    The essentials of a promissory note are “ an absolute promise in writing signed but not sealed to pay a specified sum at a time therein limited, or on demand, or at sight, to a person therein named, or to his order or to the bearer.” (Byles on Bills, 4; Hall v. Farmer, 5 Denio, 486.) The insertion of either of these essentials in a note incomplete in that particular is not an alteration which, avoids the instrument. (Page v. Morrell, 3 Keyes, 117; Van Duzer v. Howe, 21 N. Y. 531; Crutchley v. Clarence, 2 M. & S. 90 ; McGrath v. Clark, 56 N. Y. 34; Kitchen v. Place, 45 Barb. 465.) But as a note is perfect without any promise to pay interest, the insertion by the holder, without the assent of the indorser, of the words “with interest” is an alteration which, as to him, renders the note void. (McGrath v. Clark, 50 N. Y. 34.) So as to words of negotiability. (Bruce v. Wescott, 3 Barb. 374; Nazro v. Fuller, 24 Wend. 374; Angle v. N. H. Ins. Co., 92 U. S. 339.) The note in question had been silent as to interest “after maturity,” six per cent would have been awarded by the law as damages. (South. Cent. Co. v. Moravia, 61 Barb. 180 ; Holland v. Hatch, 11 Ind. 497; Spitler v. James, 32 id. 202.) The ratification of an unauthorized act of an agent, in order to bind the principal, must be with a full knowledge on his part of all material facts in the case. (Seymour v. Wyckoff, 10 N. Y. 224; Keeler v. Salisbury, 33 id. 648 ; Rowan v. Hyatt, 45 id. 138; Baldwin v. Barrows, 47 id. 212; Ritch v. Smith, 82 id. 627.) The defendants wrongfully surrendered the old note to Lewis and so are liable for a conversion. (Laverty v. Snethen, 68 N. Y. 522; Potter v. Merch. Bk., 28 id. 642 ; Booth v. Powers, 56 id. 22.)
   Finch, J.

A possible view of the facts in this case is that the defendants were authorized by the plaintiffs to surrender the note, for the conversion of which they are sued, upon receiving in exchange the renewal note of the railroad company, drawing ten per cent interest, and with the same indorsers. The note which the agents of the defendants took was a printed form, indorsed by Smith and Griggs, while blanks for the date, the amount and the payees were left unfilled, and was one of a number placed by them in the hands of Lewis, the secretary and treasurer of the railroad company, for use in that company’s business. One of the indorsers, Smith, was president of the company, and so far as he is concerned, there was sufficient evidence in the case to have made possible a finding by the jury that he had authorized the insertion of the special clause making the note draw ten per cent interest after maturity. The law of Indiana, while fixing the normal rate of interest at six per cent, permitted special agreements for a higher rate, not exceeding ten per cent, and the debt of which the last note was an attempted renewal had drawn ten per cent interest from its origin. Smith must be presumed to have known and understood the fact, and Lewis swears that the president expressly authorized the final note to be given; while further proof indicates a ratification by Smith, who offered to settle the note by turning out bonds. But there are no such facts as to Griggs. The case does not show that he was in any manner connected with the company; that he knew the terms or amounts of the renewals; that he in any form recognized or ratified the note, or consented to the special agreement for interest. So far as he is concerned he stands simply as an accommodation indorser, delivering- the note in blank to Lewis, and conferring upon the latter no other authority than that which the law implies from such delivery.

The first question, therefore, presented by the appeal is whether the delivery of the note in blank authorized Lewis to add to it the clause fixing a rate of ten per cent interest after maturity. The general doctrine appears to be that one who signs and delivers a note in blank, to be used as a security, authorizes the holder to fill the blanks in respects essential to the completeness of the note as a note. The transaction implies that the indorser meant to become liable as such upon a completed and perfected note, and so far as the same is, at the time of his signature, an incomplete and imperfect instrument, he must be held to have authorized the filling of such blanks by the agent intrusted with the note for use. The date, the amount, the name* of the payee, and place of payment may be inserted in their appropriate blanks. (Page v. Morrell, 3 Keyes, 117; Vcm Duzer v. Howe, 21 N. Y. 531; Kitchen v. Place, 41 Barb. 465; Angle v. N. W. M. L. Ins. Co., 92 U. S. 339). But in all the cases cited there was a blank so left in the body of the note as to indicate to the eye of the indorser, when it left his hand, that something needed to be supplied which was necessary to be inserted to make the instrument operate as the note for which it was intended. The form of the note in question as signed by the indorsers gave no indication that it was to draw interest at all, and left no blank for that purpose. At its commencement, in the place usually occupied by a date, a blank was left between the word “ Indianapolis ” and the figifres “ 1875,” which the indorser would expect, and so authorize to be filled by completing the imperfect date. Another blank existed at the beginning of the note before the words “ after date.” The length of time the note should run before maturity was here indicated and properly filled by inserting the words “ four months.” The printed form ran on in the usual way until a remaining blank was left between the words “ to the order of,” and the word dollars,” which ended the body of the note. The words “to the order of ” indicated and so authorized the insertion of the name of the payee, and the word “ dollars ” permitted the prefix in the blank of the principal sum to be paid. In that blank, and between those printed words, nothing else was indicated or authorized. Nothing else can be said to have been within the intention or expectation of Griggs, or within his authority, he standing as a mere accommodation indorser, and ignorant of the particular purpose or precise debt to which the completed note was to be applied. To go further than that would be to break down prudent barriers and reach beyond any reasonable inference to be derived from the presence of the blanks. In this case, matter wholly foreign to the indicated words of completion, and needless for such completion was inserted and crowded in for want of sufficient room. Such matter consisted of a special agreement that the note from and after its maturity should draw ten per cent interest. That was a material alteration of the note from its terms as authorized by the indorsement and delivery of Griggs. It was a stipulation in no manner essential or necessary to the note as a completed instrument. It altered the legal rule as to damages for a breach; looked to a new liability beyond the maturity of the contract; and imposed upon the indorser an added risk and burden which nothing in the record shows that he ever contemplated or deemed possible. We think the courts below were right in saying that the alteration was material, and discharged the indorser not authorizing or ratifying it.

It follows that the defendants ought not to have accepted the new note and surrendered the old one, and that in so doing they did not, in truth, obey their'instructions. But it was not a conscious deviation. - Acting in perfect good faith, they took what appeared to be, and what they believed to be, the note which they were authorized to take, and which only proves to be not such by reason of the defective authority of a third person upon whom they .relied. Where there is thus entire good faith, and an apparent and supposed obedience to instructions, are they liable to the principal for an unknown and concealed defect which thwarts and vitiates their action? We think that question depends upon the further inquiry whether . the defect which existed was one which might have been discovered by the diligent exercise of that professional skill which they were bound to possess and exert. They were not insurers, but they were, and held themselves out to be, professional experts in the business which they assumed to do. They undertook to make collections at all points in the country through local agents and attorneys whom they employed and represénted as skillful and reliable. They took this note for collection, and so became responsible for the negligence of the attorney whom they employed upon terms known only to themselves. (Bradstreet v. Everson, 72 Penn. St. 124.) Was, then, Campbell negligent ? Did he supply the professional diligence and skill due to his employers, and did the injury happen without his fault? The question may take another form. Could the defendants, through Campbell, their agent, by due diligence and the exercise of the skill of good practitioners (Wharton, § 596) have obtained a new note with the valid indorsement of both the old indorsers; and did the injury result from that want of skill or diligence, or both ? It-is quite plain that here we have a' question of fact. Very much may be said on both sides. Campbell sent to Lewis a new note to be signed and indorsed. Lewis sent back the printed note with the blanks filled. This fact, coupled with the known residence of both indorsers out of the State, would naturally suggestto a very moderate professional skill that the indorsers had signed before the blanks were filled, and that Lewis had inserted the special agreement in the absence of Smith and Griggs. Two cases in his own State might have suggested to Campbell the very doubtful result of Lewis’ act, (Holland v. Hatch, 11 Ind. 497 ; Spitler v. James, 32 id. 202); and an inference from these facts might be drawn unfavorable to the attorney’s skill or diligence. On the other hand, there is evidence that the plaintiffs, through their banker, Robinson, put Davies, aiid through him Campbell, into communication with Lewis as the person representing both the company and the indorsers; that the bulk of the correspondence was shown to Robinson, and especially the letter from Lewis which inclosed the new note, and m which he writes: “ I have drawn note, with interest at ten per cent after maturity,” and that the precedent forbearance had been at the same rate.

From these facts it is argued that the plaintiffs taught Campbell to rely on the authority of Lewis and trust to his action, and did so themselves. On both sides there were contradictions, and the facts above stated were involved in more or less of controversy. We cannot, therefore, say as matter of law that the defect in the indorsement of Griggs, growing out of the special agreement, .should have been discovered by Campbell, and proves his want of skill or his negligence. It was a question which could not be taken from the jury without the assent of the defendants. The latter first took the note for collection. That did not bind them absolutely to collect. It did bind them to make the effort with good professional skill and with faithful diligence. When, with the plaintiff’s consent, if indeed that was given, they undertook to get a new note with the same indorsers, it did not bind them absolutely to secure that result.' It did bind them to use competent skill and due diligence in the • effort, but if, notwithstanding that, the result was not reached from any cause not within their control, they incurred no liability, and cannot be held to have converted the old note which they delivered up. If it be said that in either event—that of failure to collect or to obtain the requisite note — a duty of the defendants yet remained to return the old note on demand, it seems to us a just answer that such return became impossible through the surrender of the note to Lewis, and the only debatable question is whether that impossibility arose out of the want of due professional skill or of proper diligence on the part of defendants and their agents. That question is not without difficulty, but it is one of fact upon which we express no opinion, and which must be left to the judgment of a jury. The case, therefore, was improperly treated as involving only a question of law.' The defendants excepted to that ruling, and while they did not ask to go to the jury, they did not concede that none but questions of law were involved by themselves asking judgment in their favor at the hands of the court.

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

Miller, Earl and Danforth, JJ., concur; Huger, Ch. J., and Rapallo, J., concur in result; Andrews, J., not voting.

Judgment reversed.


author: Rapallo, J.

text:
    Henry Winchell, Appellant, v. Stephen Winchell et al., Respondents.
    (Argued June 24, 1885;
    decided October 6, 1885.)
    In an action to compel the specific performance of a paroi agreement for the sale of lands, plaintiffs testimony was to the effect that in 1859 defendant agreed to sell him sixteen acres of land for a price stated, a portion of which was paid by plaintiff at the time, and he agreed to pay the balance when defendant gave him a deed. Plaintiff went into possession, made improvements, and the land was assessed to him by defendant’s direction. In 1875 it was agreed between the parties that plaintiff should surrender six acres of the land in satisfaction of the balance of the purchase-money. Defendant, as a witness in his own behalf, while substantially admitting the agreement, denied that he had ever received any payment. On cross-examination he denied that he had told &., who had tendered to him a deed for execution on behalf of plaintiff, at the time of such tender, that plaintiff had paid him for the land. G. was called as a witness by plaintiff, and asked if defendant had not so stated to him. A general objection was interposed. Plaintiffs counsel stated the testimony was offered by way of contradiction ; the objection was sustained. Held error; that the question as to the payment of the purchase-money was material, as if plaintiff’s version was true, it, with the other circumstances, made out a case for the relief sought; that plaintiff was not barred from demanding such relief by the fact that defendant had in some manner, without plaintiffs consent, regained possession; that assuming the court had discretionary power to reject the testimony as evidence in chief, because not offered before plaintiff rested, it was competent in rebuttal to contradict defendant.

      Haight v. Child (34 Barb. 186), distinguished.
    The exclusion of the evidence was sought to be sustained here on the ground that plaintiff’s right to relief was barred by the statute of limitations. Held, that as the decision below did not rest upon this ground, to make it the foundation for excluding legitimate testimony it should be decisively established, and plaintiff was entitled to the most favorable construction of the evidence, and as there was evidence to the effect that the first refusal of defendant to deliver a deed was within six years of the commencement of the action, the point was not tenable.

      Appeaí from judgment of the General Term of the Supreme Qourt, in the fourth judicial department, entered upon an order made April 14, 1883, which affirmed a judgment in favor of defendants, entered upon a decision of the court' on trial at Special Term.
    The nature of the action and the material facts are stated in the opinion.

      Louis Marshall for appellant.
    The defendant having upon cross-examination denied that he had admitted to Mr. Greenfield that the purchase-price or a part thereof had been paid to him by the plaintiff, plaintiff had a right in rebuttal to contradict him upon this point, and a refusal of the court to permit such contradiction was error. (Stephens on Ev., art. 131; Gilbert v. Sage, 5 Lans. 287; Brigg v. Wheeler, 16 Hun, 583 ; Height v. People, 50 N. Y. 392; Schell v. Plumb, 55 id. 592; Stape v. People, 85 id. 390; Weeks v. Fox, 3 T. & C. 357; Crowley v. Paige, 7 C. & P. 789.) The burden of showing that no injury could result from an erroneous ruling rests upon the party in whose favor such ruling was made and, therefore, a view of the evidence should be taken which is most favorable to the plaintiff. There is a presumption of harm where there is error. (Foote v. Beecher, 78 N. Y. 155; Ray v. Smith, 2 Hun, 597; Baird v. Daly, 68 N. Y. 547.) To permit the defendant, under the circumstances, to allege the invalidity of the contract on the ground that it was not reduced to writing, and to refuse to perform it according to its conceded terms, would be a judicial indorsement of a fraud, and would make the statute, intended to prevent the perpetration of fraud, a powerful instrument in aiding its consummation. (Taylor v. Luther, 2 Sumn. 232; Hill, on Trustees, 52; Freemam v. Freeman, 43 N. Y. 34; Parkhurst v. Van Courtland, 14 Johns. 15.) " When a contract for the purchase of land has been entered into, which is void by the statute of frauds, but which has been in part performed by one of the parties, who has altered his position to his disadvantage in consequence of such contract, and who, in case it should not be enforced, would have no adequate remedy, a court of equity will specifically enforce it. (Malins v. Brown, 4 N. Y. 403; Freeman v. Freeman, 43 id. 34; Miller v. Ball, 64 id. 286; Parkhurst v. Van Courtland, 14 Johns. 15 ; Lowrie v. Tew, 3 Barb. Oh. 407; Bigelow v. Armes, 108 U. S. 10.) Various acts conjoined have been deemed sufficient by the authorities to justify equitable interference, although none of them singly might be sufficient for that purpose. (Parkhurst v. Van Courtland, 14 Johns. 15; Lowrie v. Tew, 3 Barb. Ch. 407; Malins v. Frown, 4 N. Y. 403; Freeman v. Freemam, 43 id. 54 ; Favill v. Roberts, 50 id. 532; Miller v. Fall, 64 id. 20 ; Wetmore v. White, 2 Caine’s Cas. 109.)

      M. M. Waters for respondents.
    The contract alleged in the complaint, proved by the evidence and found by the referee is one for the sale of an interest in land, and absolutely void by the statute. (2 R. S. 135, § 8 ; Cagger v. Lansing, 43 N. Y. 550.) The equitable cause of action accrued at the making of the contract before demand (Bruce v. Tilson, 25 N. Y. 194), April 1, 1859, and the action was not commenced until June 27, 1879, more that twenty years after the cause of action accrued. The ten years statute of limitations applies. (Peters v. Delaplaine, 49 N. Y. 362; Girard’s Tit. to Beal Estate, 483.) Ifo court of equity would or should ever enforce specifically such a contract after such a delay under the circumstances of the case, independently of the statute of limitations. (Bruce v. Tilson, 25 N. Y. 202.) The paroi performance in this case is not one which brings the contract within the class of cases in which the court will compel specific performance, the rule being that the court will compel specific performance in such as would operate as a fraud upon the plaintiff, causing him irreparable injury unless the specific performance be enforced. (Story’s Eq. Jur. § 759.)
   Rapallo, J.

The appellant claims that the judgment in this action should be reversed for error in the exclusion of evidence offered on the trial.

The action was brought to compel specific performance of. a verbal contract for the sale and conveyance of land, the plaintiff, who is the father of the defendant, claiming that there had been such a part performance of the contract as to entitle him to relief in equity. He testified, among other things, to the payment of the purchase-money by him to the defendant, and the defendant, on his direct examination as a witness in his own behalf, while substantially admitting the making of the verbal contract, denied that he had ever received any payment upon it. On his cross-examination he denied that he had ever told any person, at any time, that his father had paid him for the land or any part of it. He was then asked whethér he had not told Mr. Greenfield so at the time he tendered a deed of the land for execution by the defendant, and he answered the question in the negative. The plaintiff afterward called Mr. Greenfield and asked him whether, at the time the deed was presented by him to the defendant, he said that the plaintiff had paid him-any thing, and if so, what? A general objection . to this question was sustained by the court. The plaintiff’s counsel then stated that the evidence was offered by way of contradiction of the defendant, but the court excluded it. Exceptions were duly taken to these rulings. The trial-judge found that the verbal contract was made as alleged in the complaint, but stated in his findings that it was not established to his, satisfaction that any part of the purchase-price was ever paid, and he dismissed the complaint.

Ho ground of objection to the evidence offered was specified at the trial, and upon what ground it was excluded, does not appear in the case. As the testimony stood before the trial judge, it seems to us that the question whether or not the plaintiff had paid to his son the purchase-price of the land was a very material issue. The evidence on the part of the plaintiff showed that in the spring of 1859 the defendant verbally agreed with the plaintiff to sell to him sixteen acres of swamp land, embracing the ten acres now in controversy, at the price of $20 per acre; that plaintiff paid defendant at the time, $207 in cash, and agreed to pay him the balance, $113, when defendant should give him a deed. Plaintiff afterward went into possession, and in 1861 put down posts and fenced in the lot with boards, cut and carried away the timber, cleared the lot and pastured his cattle thereon. By direction of defendant to the assessor the lot was assessed to plaintiff in 1859, and for sixteen years thereafter plaintiff paid the taxes thereon. In or about 1875, according to the plaintiff’s testimony, by agreement between him and defendant, a ditch was built crossing the sixteen acres so as to leave ten acres on- the north side and six acres on the south side of the ditch, and it was mutually agreed between them that the plaintiff would surrender the six acres on the south side in satisfaction of the balance of $113, still remaining due to the defendant for the contract-price of the sixteen acres, and that this ditch should be the division line between them, and the expense of digging this ditch was shared between plaintiff and defendant. These facts were corroborated by the testimony of the men who dug the ditch.

If this testimony was true, it showed a part performance of the verbal contract of sale and purchase, which entitled the plaintiff to equitable relief, notwithstanding the provisions of the, statute of frauds. The payment of the purchase- money was not of itself sufficient; but coupled with possession by consent of the vendor, putting improvements on the land, and the payment of taxes for many years, a strong ease was made out for the application for the equitable rule as to part performance.

On these points the case of Miller v. Ball (61 N. Y. 286), is a direct authority. There cau be no doubt that the payment of the purchase-money was an important element to be considered in determining the equities of the plaintiff, nor can it be questioned that the admissions of the defendant were competent evidence in chief to prove such payment.

The objection that the evidence was offered at too late a stage of the trial to entitle the plaintiff, as matter of right, to introduce it was not made, and the court did not place its rejection on the ground that its admission was matter of discretion. But assuming that such discretionary power may now be set up, the evidence was clearly admissible in rebuttal for the purpose of contradicting the testimony of the defendant to the effect that no payment had been made, and impeaching his credibility.

The General Term in its opinion conceded that the evidence was competent for the purpose of contradicting the defendant, but sustained the judgment on the ground that its exclusion was harmless, inasmuch as the plaintiff would not have been entitled to a decree, even if he had paid the whole purchase-price.

The court held that though the circumstances shown, if accompanied by full payment of the purchase-money, would have been sufficient to take the case out of the statute, provided the plaintiff had continued in possession, yet that it was proved and found that the possession was in the defendant before suit and at the time the suit was begun. That in what way he gained possession did not appear, and, therefore, the presumption was that his possession was rightful and with the consent of the vendee, and on that assumption the rejected evidence would not have tended to make out a case for specific performance, and as authority for this proposition the learned court cites the case of Haight v. Child, (31 Barb. 186). That was an action by the vendor against the vendee to compel the specific performance of a verbal agreement to purchase land. The "contract, as set up in the complaint, was denied and a different contract was set up in the answer, and in respect to the point now under consideration it was held that the taking of possession by the defendant was not a basis for a specific performance, because the possession had been surrendered by the defendant and received by the plaintiff before the commencement of the action.

ISTo such facts appeared in the case now before us, nor is there any thing in the circumstances to justify the presumption that the defendant obtained possession with the consent of the plaintiff. On the contrary, the plaintiff appears to have continued to exercise acts of ownership for many years and to have several times demanded of the defendant a deed of the premises, and the plaintiff testified upon the trial that after the ditch was built, his son returned to the possession of the six acres, but that he, plaintiff, had never given up possession of the ten acres, and that the first time the defendant refused to give him a deed of the ten acres was about five years before the trial, which took place in 1880, this action having been commenced in June, 1879. Upon this state of the evidence, it could not properly be assumed that the plaintiff had voluntarily surrendered the possession, and such an assumption could not be made the foundation of a ruling by which competent evidence was excluded. The admissibility of the evidence offered depended upon its bearing upon the issues on trial at the time, and not upon the conclusions of facts subsequently reached by the court. If such a part performance had been shown, as, coupled with the payment of the purchase-money, would have entitled the plaintiff to relief, he was not barred from demanding such relief by the fact that before the commencement of the action the defendant had in some unexplained manner ' obtained possession of the land in controversy.

On the argument in this court the exclusion of the evidence was sought to be sustained, on the ground that the plaintiff’s right to relief was barred by the statute of limitations.

On this question, the plaintiff is entitled to the most favorable construction of which the evidence, on his part, will admit. Neither the judgment nor the opinion of the General Term rested on this ground, and, to make it the foundation of excluding legitimate evidence, it should be established in the most decisive manner. If that had been the issue determined, the plaintiff would have been entitled to have the facts passed upon as proved and attempted to he proved by him, and there was testimony on his part tending to show that, by the original agreement of sale in 1859, the deed was to be delivered when the balance of the purchase-money, $113, should be paid; that the plaintiff continued in possession till somewhere about 1875, when the ditch was built, and the original agreement was then modified by the defendant agreeing to accept the surrender of the six acres in payment of the balance then owing of the purchase-price, and that it was not until after that, and within six years before the commencement of the action, that the defendant first refused to deliver a deed, and caused the property to be reassessed to himself. Of course, these facts depend upon the credibility of the witnesses respectively, as to which there was a controversy on the trial, but that question cannot be determined for the purpose of judging of the correctness of a ruling as to the admission of evidence.

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

All concur.

Judgment reversed.


author: Andrews, J.

text:
    J. Warren S. Dey, Appellant, v. Emelie Nason et al., Respondents.
    (Submitted June 17, 1885 ;
    decided October 6, 1885.)
    The parties entered into a contract by which defendants agreed to sell and convey to plaintiff certain lands described as lying and being in L. 0. county, Texas ; in exchange for which plaintiff agreed to convey certain lands in this State. It was stipulated that T., an agent for plaintiff, should go to Texas and examine the lands there, to ascertain if they were as represented by defendants; deeds were to be executed and left in escrow to be delivered in case T. approved of the purchase and the titles were found correct, etc. The agreement stated that it was made upon the express- agreement that in case T. did not approve of the exchange after such personal examinations the contract was " to become and be null and void.” T. proceeded to Texas and there ascertained that defendants owned no such lands as they described in their deed. In an action to recover T.’s charges for his services and expenses, no fraud was imputed to defendants, but it was substantially conceded that they were innocently mistaken. Held, that the plaintiff’s right to recover must rest either upon fraud or warranty; that no warranty on the part of defendants of ownership of the lands described could be implied; and, as no fraud was claimed, that no legal wrong had been suffered by plaintiff; and that the action was not maintainable.

      Appeal from order of the General Term of the Court of Common Pleas in and for the city and county of Few York, made March 15, 1883, which reversed a judgment in favor of plaintiff, entered upon a decision of the court on trial without a jury.
    This action was brought to recover damages for an alleged breach of contract for the sale of land.
    By the contract the parties agreed to sell and exchange lands as follows: Defendants agreed to sell and convey to plaintiff lands described as “ lying and being in the county of Live Oak and State of Texas, known and distinguished as French, formerly Barton Bancli, situate on the Bio Fences' and San Piedras.” Plaintiff agreed to convey in exchange certain premises in the city of Few York. Deeds of the respective lands were to be executed and left in escrow, to allow the plaintiff “to have the aforesaid ranch examined to see and ascertain the fact of its being as represented, and the purchase approved by Isaac Shelby Tevis Esq.,.of Kentucky” who, the contract provided, was to visit the premises and examine the same personally. The agreement then contained this clause:
    “ And this agreement is made and executed upon the express condition that it shall not be binding upon the said party of the second part unless confirmed and approved by said Isaac Shelby Tevis, Esq., after a personal examination made and had by him, and in case the said Tevis shall approve of such purchase and exchange, then this agreement to convey the hereinbefore mentioned premises shall be and become binding" upon said party of the second part, his heirs, executors and assigns, otherwise to become and be null and void.”
    Mr. Tevis went to Texas, but after diligent search failed to find any such lands as were .described in the contract located in Live Oak county, and upon the trial defendants conceded that they had no lands in that county. Texas rendered to plaintiff an account of what he had discovered, with a bill for his services and expenses, which plaintiff sought to recover in this action. Fo fraud on the part of the defendants was proved or claimed.

      Gilbert O. Hulse for appellant.
    The agreement was a valid and legal obligation, though it contained a clause by which plaintiff could renounce it. (Chit. on Oont. 8, 14 [11th Lond. ed.]; Add. on Oont. 40; Eskridge v. Glover, 9 Ala. 264 [old series] ; Humphrey v. Caravalho, 16 East, 44; Hussey v. Horne-Payne, 4 Abb. Oa. 311, 321 [H. of L.]; Gray v. Central R. R. Co., 11 Hun, 70; Heron v. Davis, 3 Bosw. 336; Ellis v. Mortimer, 4 B. & P. 257 ; Aiken v. Hyde, 99 Mass. 183 ; Williams v. Edwards, 2 Sim. 78.) The defendants will not be permitted to declare the agreement null and void, when they are in default and thus take advantage of their own wrong to the damage of the plaintiff. (Rochner v. Knick. L. Ins. Co., 63 N. Y. 160 ; Brogden v. Marriot, 2 Bing. N. C. 473; Chit. on Cont. 6, 7, 14 [11th Lond. ed.]; Add. on Cont. 17 [8th ed.].) The agreement was binding upon the defendants, viewing it as a mere proposal until retracted by them, which could not be done after Mr. Tevis had visited Texas. (Add. on Cont. [8th ed.] 17; Chit. on Cont. [11th Lond. ed.] 12.) A proposal once made is always open for acceptance until it is withdrawn to the knowledge of the other party, and such other party has the option of accepting the proposal until the moment when he receives notice of withdrawal. (Byrne v. Leon Van Tienhover, 49 L. J. C. P. 316; Stevenson v. McLean, 5 Q. B. Div. 346.) If there had been a mutual abandonment or cancellation .of the agreement, yet the defendants would be liable because the expenses were incurred before the rescission or abandonment. (Roe v. Conway, 74 N. Y. 201; Scofield v. McGregor, 63 id. 638.) The liability of the defendants for the expenses incurred would not be altered, whether the agreement contained the objectionable provisions or not; inability of the defendants to perform does not excuse them from liability to the plaintiff for expenses incurred by him in his efforts to perform the contract. (Pratt v. Ellis, C. R., 45 Geo. 3, reported in the appendix to Sugden on Vendors, No. 7; Jones v. Dyke, id.; Leggett v. Mut. L. Ins. Co., 53 N. Y. 394; Cockroft v. N. Y. & N. H. R. R. Co., 69 id. 201; Bigler v. Morgan, 77 id. 320; Norwood v.
      Barcalow, 6 Daly, 117; Holland v. Eyre, 2 Simmons & S. 194; Chit, on Cont. [11th Lond. ed.] 12.)

      James L. Bishop for respondents.
    No contract for the sale of the Texas lands was concluded. (Chit, on Cont. [11th ed.] 20; Cook v. Oakley, 3 Term R. 653; Routledge v. Grant, 4 Bing. 653; Brogden v. Marriott, 2 Bing. N. C. 473; Eskridge v. Glover, 5 S. & P. [Ala.] 264; Warner v. Willington, 3 Drew. 523 ; Potts v. Whitehead, 5 C. E. Green, 55; 8 id. 512; Lester v. Jewett, 12 Barb. 502; Tucker v. Woods, 12 Johns. 190 ; Dickinson v. Dodd, L. R., 2 Ch. Div. 463.) The approval of Tevis was a condition precedent -to the binding obligation of the contract. (Stow v. Wadley, 8 Johns. 124.) The contract by its terms became null and void, and cannot support an action. (Henry v. Root, 33 N. Y. 537; Williams v. Edwards, 2 Sim. 78.) The contract was rescinded." (Hildreth v. Buell, 18 Barb. 107; Scofield v. McGregor, 63 N. Y. 638.) As it is conceded that defendants were free from fraud, plaintiff can recover only actual expenses occasioned by the breach. (Cockroft v. N. Y. & N. H. R. R. Co., 69 N. Y. 201.)
   Andrews, J.

By the terms of the written contract the plaintiff was not to be bound, unless the exchange was approved by the plaintiff’s agent, after inspection of the Texas lands described in the contract. It provided, that if Tevis did not approve, the plaintiff’s agreement to convey his premises should become null and void. There were no lands owned by the defendants, answering the description in the contract. It must be assumed that the defendants entered into the contract under a mistake as to the location and description of the Texas lands. The plaintiff on the trial disclaimed any fraud on the part of the defendants, or that he was entitled to any relief on the ground of deceit. It is inferable from the evidence that the defendants had a paper title, at least, to lands in Texas, but they were not located as described in the contract, or in the same county with the lands therein mentioned. The plaintiff’s right to recover the- expenses incurred by him must rest upon one of two grounds, fraud, or warranty. Fraud is not claimed. There is no warranty in terms that the defendants owned the lands described in the contract, and none, we think, can be implied. The plaintiff’s agreement was conditional and not absolute. Doubtless both parties acted upon the belief and supposition that the defendants owned land in . Texas, as described. In this they were mistaken. The plaintiff has been subjected to trouble and expense. But this alone gives no ground of action. The subject to which the contract related had no existence, but it must be assumed upon the case as presented, that the defendants were innocently mistaken in respect to it. If the defendants had owned the land described in the complaint, Tevis might not have approved of the exchange, in which case the same expenses might have been incurred by the plaintiff, and the same loss sustained of which he now complains. There- was no wrong intended, 'and no legal wrong suffered by the plaintiff.

We 'think the order should be affirmed and judgment absolute ordered for the defendants on the stipulation, with costs.

All concur.

Order affirmed and judgment accordingly.