text:
    LEONARD HANGEN, Respondent, v. CHRISTIAN HACHMEISTER, Appellant.
    Infancy.— Chattel mortgage of infant, when voidable—where consideration must be refunded to avoid it.

    A chattel mortgage made by an infant in the course of his business, upon which he depends for support, and to enable him to carry on the same, is voidable only, and not void.
    Where one who has purchased, with notice, the mortgaged property from the personal representative of the infant, who died during his infancy, brings an action to recover damages for an alleged conversion of the ¡ property which was after said purchase, taken possession of by the . mortgagee under the mortgage, the amount advanced thereon must be refunded before it can be avoided.
    It is only where it affirmatively appears that the infant has squandered or lost the property during infancy, and is unable to refund, that the court will not compel him, or those claiming under him, to refund in a case of this character. •
    The principles and authorities in regard to acts of infants, and the rule in regard to executed and executory contracts made by them, reviewed at length by the court.
    Before Freedman and Russell, JJ.

      Decided December 30, 1882.
    Appeal by defendant from judgment in favor of plaintiff entered upon the verdict of a jury, and from order denying defendant’s motion upon the minutes for a new trial.
    The facts are stated in the opinion.

      Henry Daily, Jr., for appellant.

      Richard L. Sweezy and John H Glover, for respondent.
   By the Court.—Freedman, J.

—This action is brought for the wrongful conversion by the defendant of plaintiff’s property, consisting of the contents of the saloon No. 44 Clinton place in the city of New York, and valued at $700, and upwards. The complaint contains a second count for damages to the extent of $300 for loss of business, etc., occasioned by the conversion. The answer contains a general denial, and a justification of, the taking of the goods and chattels under and by virtue of a chattel mortgage. At the trial it appeared, that on November 1, 1876, one George A. Von Rauscher carried on the business of a lager-^iie^/saloon keeper at No. 44 Clinton place, and was the owner of the goods and chattels covered by the mortgage. On that day he executed a chattel mortgage on said goods and chattels to his brother August Von Rauscher, conditioned for the payment of the sum of $340, on or before November 1,1877, which said sum, according to the language of the mortgage, was further secured by a note made by Greorge A. Yon Rauscher to August Yon Rauscher payable on demand. The. mortgage was filed December 12, 1876.' By assignment dated April 28, 1877, August Yon, Rauscher transferred said chattel mortgage to Greorge Ringler & Co., of which the defendant was and is a member, and at the same time delivered to him the promissory note referred to. On October 19, 1877, Greorge A. Yon Rauscher' died, and thereafter the public administrator was appointed administrator of his estate. On October 27, 1877, the public administrator sold the said goods and chattels and the appurtenances of the saloon at public auction to the plaintiff, who thereupon entered into possession of the place and continued the business with the property thus purchased, and, as is claimed, with other property which he bought and added. On November 10, 1877, the defendant on behalf of the holders of the mortgage entered the premises, and, as it is claimed, took away the entire contents of the saloon.

In order to defeat the mortgage, the plaintiff gave evidence to show that at the time of the making of the mortgage, and also at the time of his death, Gieorge A. Yon Rauscher was an infant. .

The question of infancy was, with others, submitted to the jury, and in respect to it they were instructed in substance, that the mortgage was void, or at least voidable, if Greorge A. Yon Rauscher was not twenty-one years old when he made it, and that if they should find,, that as matter of fact, Greorge A. Yon Rauscher at that time was not twenty-one years of age, the plaintiff was entitled to a verdict for the' value of the goods, and that in such case it was not necessary for them to consider the other parts of the case.

The jury having rendered a verdict for the plaintiff for $800, coupled with a special finding, that the mortgagor was not twenty-one years of age when he made the mortgage, the exceptions taken by the defendant to the part of the charge referred to and to the refusals of the court to charge otherwise, present the following two questions, even if it be assumed that the special finding was correct upon the facts, namely : (1) Was the mortgage void or merely voidable ? (2) If voidable merely, could it be avoided without the restoration of, or at least an offer to restore the consideration received upon it % The right of the public administrator to avoid his intestate’s contracts on the ground of infancy, is co-extensive with, but not greater than the right which the intestate would have, if he were living.

As a general rule, most of the acts of infants are voidable only, and not absolutely void ; and it is deemed sufficient if the infant be allowed, when he attains maturity, the privilege to affirm or avoid, in his discretion, his acts done and contracts made during infancy. And though it may sometimes be, and perhaps frequently is, difficult to ascertain the precise line of distinction between void and voidable acts, and between the cases which require some act to affirm a contract in order to make it good, and some' act to disaffirm it in order to get rid of its operation; yet all the books are said to agree in one result, that whenever the act done may be for the benefit of the infant, it shall not be considered void, but he shall have his election, when he comes of age, to affirm or avoid it. This, says Parker, Ch. J., in Whitney v. Dutch (14 Mass. 457), is the only clear and definite proposition which can be extracted from the authorities. The leading case upon this point is Zouth v. Parsons (3 Burr. 1794), in which it was held by the K. B., after a full discussion and great consideration of the case, that an infant’s conveyance by lease and release was voidable only. The doctrine of this case, says Chancellor Kent, in his Commentaries; has been recognized as law in this country, and is not now to be shaken. And according to the same learned jurist, the tendency of modern decisions is in favor of the reasonableness and policy of a very liberal extension of the rule, that the acts and contracts of infants should be voidable only, and subject to their election,when they become of age, either to affirm or disavow them. For if their contracts were absolutely‘void, it would follow as a consequence that the contract could have no effect, and the party contracting with the infant would be equally discharged (2 Kent's Com. 10th ed. 268, *235).

It may, therefore, be confidently asserted that at the present day only such acts of an infant are absolutely void as are incapable of being legally ratified. This disqualification exists only to acts which cannot be for the benefit of the infant, and to acts as to which the disability of the infant must be maintained-upon grounds of public policy.

The case at'bar presents no such exceptional feature. On the contrary, there was sufficient evidence upon which the jury might have found, not only that the giving of the chattel mortgage may have been, but that it was for the benefit of the infant. George A. Yon Rauscher depended for his living upon the success of the business carried on by him. The money for which the note and chattel mortgage were originally given, seems to have been loaned to him by his brother August, for the purpose of enabling him to carry on said business. It also appeared that at the time of the transfer to George Ringler & Co., he was indebted to said firm in the sum of $333, for beer sold and delivered. He was unable to discharge that indebtedness, and yet wanted more beer, which George Ringler & Co. declined to furnish. To secure that indebtedness and also to induce future deliveries, the note and mortgage were at his request transferred by his brother August to George Ringler & Co., and upon the faith thereof the said firm continued to supply him with beer up to the time of his death. At that time his indebtedness had increased to $693. This evidence should have been submitted to the jury with the instruction that, if they believed it, the chattel mortgage was voidable only, and not absolutely void.

The next question then is, whether, in order to avoid it, it was necessary for the public administrator to restore, or offer to restore, the consideration.

The consequences or effects of the disaffirmance of the acts of infants are different, according as the contract is ex-ecutory on both sides, or executed on one side and executory on the other, or executed on both sides. The rules applicable to contracts remaining executory on both sides need not be considered here. As to the rules applicable to contracts partly or wholly executed, the following authorities may be profitably referred to.

In Bartholomew v. Finnemore (17 Barb. 428), the rule was laid down that, if an infant has executed a contract on his part, by the payment of money or delivery of property, he cannot afterward disaffirm it, and recover back the money, or claim a return of the property, without restoring to the other party the consideration received from him.

This doctrine was approved by this court in a later case involving the same question, and the rule stated as follows : “ The terms on which a rescission will be allowed are, a restoration of the property to the defendant, and the payment of such a sum as, with the payments made on account of the purchase, equals the deterioration of the property in value, caused by the plaintiff’s use of it” (Gray v. Lessington, 2 Bosw. 257).

And in another case, in the late court of chancery, where it appeared that the infant had purchased property and executed a mortgage upon it to secure the purchase money, it was held that, after the infant£ £ became of age he was at liberty to affirm or disaffirm the mortgage. If he affirmed it, he must pay the amount, or deliver the goods, according to its tenor. If he disaffirmed the mortgage, he must restore the goods or account for their value. He cannot affirm the sale and keep the property, and, at the same time, repudiate the mortgage” (Ottman v. Moak, 3 Sand. Ch. 431).

And in still another case, in the same court, the chancellor laid down the rule that, “an infant cannot retain property purchased by him, and at the same time repudiate the contract of purchase under which he received the property. And when the infant, after he becomes of age, repudiates the sale, the title to the property remains in the vendor, as between such vendor and the infant” (Kitchen v. Lee, 11 Paige, 107).

Chancellor Kent lays down the rule on the subject as follows: “If an infant pays money on his contract, and enjoys the benefit of it, and then avoids it when he comes of age, he cannot recover back the consideration paid. On the other hand, if he avoids an executed contract when he comes of age, bn the ground of infancy, he must restore the consideration which he had received. The privilege of infancy is to be used, as a shield, and not as a sword ” (2 Kent’s Com. *240).

Tyler on Infancy (p. 77), says the rule may be regarded ' as settled that “ if the infant has the property purchased, or consideration received, and it is capable of specific return, he must restore it to the adverse party if he disaffirms the sale.”

It is only when it affirmatively appears that the infant has squandered or lost the property or money during infancy, and is unable to refund, that the court will not compel him to make restitution. This principle was enforced in Green v. Green (69 N. Y. 553), and similar cases, but it is an exception to the rule, as stated above.

The case at bar does not fall within the exception last referred to. George A. Yon Rauscher, at the time of his death, left property which, even under unfavorable circumstances—namely, upon a public sale made by the public administrator in the face of the public protest of the mortgagees—brought more than sufficient to satisfy the chattel mortgage.

Nor does the case in connection with the question of infancy, and beyond the mere fact of infancy, disclose any equities affecting the validity of the mortgage, if, indeed, it was good under the statute of frauds. George A. Yon Rauscher died an infant. Hence, if the chattel mortgage, can be avoided by the public administrator, on the ground of the infancy of the deceased, under the plea that he represents other creditors, the claim of every one of such other creditors is liable to the same objection.

On the contrary, if the chattel mortgage was good under the statute of frauds, the case presents strong reasons why, under the authorities referred to, the plea of infancy should be made to depend upon a restoration of the consideration. George A. Yon Rauscher, though an infant, depended upon his business for a living. George Ringler & Co. assisted him. They did not know he was under age. The mortgage, in terms, did not purport to secure the payment of the note, but was conditioned for the payment of the sum of $340 on or before November 1, 1877. To further secure the payment of said sum the note was given. The note was made payable on demand. Upon the faith of the transfer of the note and mortgage, but relying principally, if not exclusively, upon the mortgage, George Ringler & Co. not only allowed their claim for $333 to .stand, but agreed to deliver more beer. Pursuant to such agreement they did make further deliveries, and on account of them George A. Yon Rauscher was indebted to them, at the time of his death, in the further sum of $360. No part of this or of the prior indebtedness has ever been paid. Nor is there any pretense that they ever collected anything upon the note. In every aspect, therefore, that can be taken, George Ringler & Co. parted with full value upon the faith of the mortgage.

Upon the facts, as they appeared, the jury should have been instructed, that if they believed the testimony herein-before referred to, and upon it found that, though George A. Yon Rauscher was an infant, the giving of the chattel mortgage was beneficial to him, the mortgage was voidable only, and not void; and that, if they further found that the mortgage was not invalid under the statute of frauds, and that George Ringler & Co., upon the faith thereof, parted with value, the public administrator could not avoid it without restoring, or, at least, offering to restore, the value so parted with, not exceeding, however, the amount specified in the mortgage.

For the reasons stated there was error in the charge and in the refusals to charge otherwise.

The questions arising under the statute of frauds as to the validity of the mortgage were properly submitted to the jury; but under the charge delivered, the jury may not have passed upon them, for they were expressly instructed that the plaintiff was entitled to a verdict for the value of all the goods taken, if, as a matter of fact, the deceased was not twenty-one years of age at the time of the making of the mortgage, and that in such case it was not necessary for the jury to consider the other parts of the case.

The judgment and order must be reversed, and a new trial ordered, with costs to the appellant to abide the event.

Russell, J., concurred.


source: Caselaw Access Project

author: By the Court.—Horace Russell, J.

license: Public Domain

text:
    CHARLES H. BOHDE et al. v. PETER FARLEY.

      Agreement of lease and conditional sale.—Waiver of right to take possession.

    Where the owner of certain chattels leases the same at a certain rent, the agreement providing that in case of non-payment at the times specified, the right of possession shall thereupon revest in the party of the first part, the owner, and also providing that if within a certain time a specified sum is paid, the chattels shall become the property of the party of the second part—the party of the first part still remains the general owner of the property, and may recover damages for a conversion thereof by a third party, though the right of possession be in the party of the second part.
    The mere receipt by the lessor of a part of an installment of rent after the same falls due, is not a waiver of his right to take possession; nor is a naked promise to ‘ ‘ not to ask further payments ” for a certain time, a waiver of the right to take possession under default theretofore made.
    Before Sedgwick, Ch. J., Freedman and Russell, JJ.

      Decided December 30, 1882.
    Exceptions ordered to be heard at general term on the dismissal of the complaint at trial term, at the close of the plaintiff’s case.
    The complaint alleged that the plaintiffs were the owners of a quantity of household furniture delivered by them to one Juliet Schoenrock on November 30, 1878, upon an agreement of lease and conditional executory sale, and that on July 12, 1879, the defendant wrongfully took and converted, and unjustly detains the same ; that Mrs. Schoenrock made default in the payment of the rent reserved for the use of the furniture, that the plaintiffs had not agreed to extend the time for the payment of the accrued rent, and were entitled to the immediate possession of the property ; that on July 30, and after Mrs. Schroenrock had made default, the plaintiffs demanded the return of the property to them, but that the defendant retains it to their damage, &c. There were similar allegations in regard to a quantity of furniture delivered to Mrs. Schoenrock by the plaintiffs on December 3. The plaintiffs also made a similar claim upon an assignment to them in relation to certain household goods delivered to Mrs. Schoenrock on November 23,1878, by one Stephen A. Spencer. The answer was a general denial.
    The agreement on which the furniture first described in the complaint was delivered to Mrs. Schoenrock, was as follows: “This agreement, made by and between Bohde Bros, of the first part, and Mrs. Ernest Schoenrock, daughter of Gen. A. G-ridley, of 244 West Fifty-sixth street, city of New York, county of New York, of the second part, witnesseth : The party of the first part hereby rents furniture and bedding, as per schedule, [then follows list] to the party of the second part, for the period of twelve months, from the date hereof, for the "consideration of one hundred and fifty dollars paid down and the sum of fifty or more dollars a month, payable promptly at the office of said Bohde Bros., 414 Sixth Avenue, corner of Twenty-fifth street, New York, on the first day of each month consecutively, during the continuance of said agreement, commencing on the nineteenth day of November, 1878. And the party of the second part agrees to use the said furniture with proper care, and pay for the use thereof, the said several sums above mentioned as there specified. In case the said party of the second part shall fail to make said payment on the days above named, unless by special agreement, or shall, in any way, violate any of the agreements hereto, the right of possession of the said furniture shall thereupon revest in the said party of the first part. And it is further agreed by and between said parties, that if the party of the second part shall at any time within three months from this date, pay.to the party of the first part the sum of $729.30, the party of the first part will, on receipt of said sum, deliver to said party of the second part all the articles mentioned in schedule as above, with a receipted bill of sale, and it is further agreed by and between said parties, that if full amount is not paid in the period of three months, the sum of $35 is to be added to the sum above named, and it is further agreed between said parties, that fifteen days grace will be allowed on each payment, and at the expiration of twelve months, if full amount is paid, to deliver the above goods with a receipted bill of sale thereof, but this further agreement is not to be understood as in any way affecting the agreement to rent the furniture as above ; which rented furniture is, and shall remain the property of said party of the first part, until he otherwise hereafter disposes of it, and is not to be removed from the present residence of the party of the second part, without full authority in writing from the party of the'first part hereto. In witness, etc.”
    The agreement of December 3 and the agreement with Spencer were in substance like the above, except that in the Spencer agreement Mrs. Schoenrock was to pay $50 down, and $50 a month, payable promptly at Spencer’s office on the 15th day of ea ch month, consecutively, during the continuance of the agreement, commencing on January 15.
    On the trial the plaintiffs proved the delivery by them to Mrs. Schroenrock of the furniture described in the first two counts of the complaint, and that she paid, at the time of the first delivery, $145; January 17, $50; April 4, $100 ; May 2, $25,—in all, $320 on account of the first contract. Hothing was paid on account of the second. On May 2, Mrs. Schoenrock told one of the plaintiffs that she and her husband were going to Europe; whereupon he said he would wait for further payments on her contracts with him until she got back, she stating that she would likely be gone some time, two or three months. The plaintiffs also proved the delivery by Spencer to Mrs. Schoenrock of certain furniture, and the subsequent assignment of his claim to the plaintiffs. Mrs. Schoenrock paid Spencer at the time of the agreement $50, and on April 4,1879, $25, and nothing thereafter. Spencer testified with reference to the transaction, “ I allowed the matter to run along different from the contract. I knew of her going to Europe about the time she went.” But both he and Mrs. Schoenrock testified that there was no agreement or statement on the part of Spencer that he would wait for further payment until her return from Europe.
    Mrs. Schoenrock placed this furniture in a French flat house, 244 West Fifty-sixth street, owned by the defendant. This flat had been rented from the defendant by her husband. She, with her husband,' went abroad on May 5, 1879, leaving this furniture in those apartments in charge of a servant. She returned July 26, 1879, and upon going to the apartments was denied admission, and ascertained that the furniture left there had been sold at auction by the defendant’s direction and bought in by him.
    On July 12, 1879, the defendant took possession of the premises and sold the furniture in question at auction, himself being the purchaser, for the sum of $144. There is a mention in the bill of sale that the sale was upon a chattel mortgage ; but there was in fact no chattel mortgage, although there had been some conversation between Mrs. Schoenrock and the defendant, before her departure for Europe, about giving a chattel mortgage to secure the rent which should accrue' during her absence. On July 29,1879, written demands upon the defendant were made by the Bohdes and by Spencer through their attorney for the return of the furniture in question.
    The trial judge dismissed the complaint at the close of the plaintiffs’ case, on the ground that “the plaintiffs have not made out a case, not having proved that they demanded payment of the installments from Mrs. Schoenrock and that sire refused to pay them; that, therefore, they had not shown that they are entitled to'possession.”

      Arthur Furber, for appellants.

      Barnum & Rebhan, for respondent.
   By the Court.—Horace Russell, J.

—[After stating the facts as above.]—The decision below was put entirely upon the technical ground that the plaintiffs were not entitled to the right of possession as between them and Mrs. Schoenrock, and, therefore were. not in position to maintain an action against a wrongdoer for the conversion of property of which they were the general owners.

1 cannot agree to either branch of the proposition.

1. That the plaintiffs were the general owners of the property, there can be no question. The validity of agreements of lease and conditional sale, such as the one before us, has several times been under consideration by the courts' of last resort and everywhere recognized and upheld (Cole v. Mann, 62 N. Y. 1; Bean v. Edge, 84 Id. 510 ; Coman v. Larkey, 80 Id. 345; Ballard v. Burgett, 40 Id. 315; Austin v. Dye, 46 Id. 500).

In these cases the’title of the vendor, under agreements like the one before us, was held to be good as against bona fide purchasers for value. It would, then, certainly have been so as against a tort feasor.

I think the plaintiffs were entitled, even as between them and Mrs. Schoenrock, to the possession of the property, and that, if they were not, while they might not have been able to maintain the action of trover, under the old forms of pleading, they would have been able to maintain case.

The complaint complies with the rule established by the Code by stating the facts, and while it follows more particularly the old declaration in trover- it would, I think, have been good for trover, trespass, or case, and, except in its prayer for relief, for detinue and replevin. The old form» of pleading having been abolished, if the complaint and the proof given in its support entitled the plaintiffs to any relief, it should not have been dismissed. The extent of the old cases was, that while a general owner not entitled to possession could not maintain trover as against a wrongdoer, he could maintain case and recover as damages the value of his reversionary interest in the property (Gordon v. Harper, 7 Term R. 913; S. C., 2 Esp. 465; Hall v. Pickard, 3 Camp. 186; Golightly v. Ryn, Lofft. 89; Corfield v. Coryell, 4 Wash. C. C. 371; Fairbanks v. Phelps, 22 Pick.; Billings v. Tucker, 6 Gray, 368 ; Ayer v. Bartlett, 9 Pick. 156.; Forbes v. Parkhurst, 16 Id. 492).

In Ayer v. Bartlett, a well-considered case, which was twice before the supreme court of Massachusetts (6 Pick. 71; 9 Id. 156), A. sold a factory and machinery to S. upon an agreement that A. should continue the owner until S. paid certain promissory notes given for the purchase price, S., in the meantime, to have possession. Before the first note became due. the machinery was attached as S.’s property. A. brought an action against the officer containing declarations in trover and case. It was held that, although trover could not be maintained, case might be for the injury to A.’s reversionary interest, and that the measure of damages was the value of the property as it stood in the factory before removal.

So, a mortgagee may bring case against a person taking property on process from the possession of a mortgagor in possession, although the mortgage debt was not due at the time of such seizure, and in such an action may recover the value of his interest (Fairbanks v. Bloomfield, 5 Duer, 434).

2. But I think the plaintiffs were entitled to the possesssion of the property, even as against Mrs. Schoenrock.

By the terms of the first contract between them, dated November 19, 1878, she was to pay $150 down at the time the goods were delivered to her, and $50 a month thereafter at their office, on the first day of each month consecutively, and, in the event of her failure to make payments in accordance with that stipulation, the right of possession of the furniture was thereupon to revest in the plaintiffs. The evidence is, that Mrs. Schoenrock paid to the plaintiffs only $145 at the time the agreement was made; $50, January 17, 1879 ; $100, April 4, 1879 ; $25, May 2, 1879—in all, $320, on account of the first contract, and nothing upon the second.

On her agreement with Spencer she paid $50 at the time the agreement was made ; $25, April 4, 1879. Clearly, then, Mrs. Schoenrock was in default, and the plaintiffs, and Spencer, their assignor, were, for that reason, entitled to possession of their property unless they did something amounting to a waiver of that right and continuing to operate as such at the time this action was brought. So far as Spencer is concerned, the only evidence is, that he “allowed the matter to run along different from the agreement,” from which we might infer that he received the $25 paid by Mrs. Schoenrock, April 4, 1879, without acting upon his right to take possession upon default. The plaintiffs apparently did the same thing, and, in addition, told Mrs.' Schoenrock when she was about to go to Europe, that that they would wait for further payments on her contracts until she got back.

A mere extension of time is not a waiver of ’ anything. (Thompson, Ch. J., in Peterson v. Clark, 15 Johns. 204; see also Evans v. Thompson, 5 East. 193).

‘ A waiver to be operative must be supported by an agreement founded on a valuable consideration, or the act relied on as a waiver must be such as to estop a party from insisting upon performance of the contract or forfeiture of condition” (Mullin, J., in Ripley v. Ætna Ins. Co., 30 N. Y. 164—quoted, with approval, as the “true rule” by Earle, J., in Underwood v. Farmers’ Joint Stock Ins. Co., 57 N. Y. 506).

It can scarcely be claimed that there, was any new consideration moving from Mrs. Schoenrock to Spencer after her last payment to him. The receipt of $25 on April 4, by Spencer, long after it was due, cannot be regarded as such an act as should estop him from insisting upon forfeiture (Gardner v. Clark, 21 N. Y. 399, 404).

There can be no doubt whatever, then, that Spencer was entitled to take possession not only when he made an assignment of his claim to the plaintiffs, but'even at the time Mrs. Schoenrock went to Europe. The position of the plaintiffs as to the goods delivered by them to Mrs. Schoenrock differed from that of Spencer only by reason of the fact that they promised her not to ask further payments until'her return from Europe. She was then in default to them. There was no consideration for this promise. It was a mere promise to extend time, not binding in law either as a promise or as a waiver, so far as previous defaults were concerned. It was binding as a waiver by way of estoppel, so far as future defaults were. concerned, but the plaintiffs had the right to take possession at that time for the defaults which had already occurred, under the decisions I have quoted.

But, assuming that the plaintiffs legally waived their right until Mrs. Schoenrock returned from Europe, that waiver expired by its own limitation before this action was brought. The terms of the contract required Mrs. Schoenrock to make payment on certain days at the office of the plaintiffs. The extension affected only the time, not the place or manner of payment.

It cannot be still further extended by the court altering place and manner, and requiring plaintiffs to seek her out and make demand. The event by which they had fixed a new limitation of time had transpired. She had returned from Europe. The extension was thereby terminated, and no demand was necessary (Stacy v. Graham, 14 N. Y. 492; Bruce v. Tilson, 25 Id. 194; Adams v. Fort Plain Bank, 36 Id. 255; Mygatt v. Wilcox, 45 Id. 306; Foot v. Farrington, 41 Id. 164).

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

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


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

text:
    JAMES L. SHARP, Appellant, v. DAVID J. HUTCHINSON, Impleaded, etc., Respondent.

      Limited partnership—how .pleaded.

    Where the complaint in an action against partners for goods sold the firm, alleges a general partnership only, and seeks recovery against defendants as members thereof, and the answer of one of the defendants sets up a limited partnership, as to him, by way of avoidance, plaintiff on the trial may show the falsity of the statutory certificate as to payment of capital, etc., for the purpose of charging said defendant as a general partner.
    Whether, if defendant had not pleaded the limited partnership, such evidence would have been admissible, qumre.

    Before Sedgwick, Ch. J., Freedman and Russell, JJ.

      Decided February 5, 1883.
    Appeal by plaintiff from judgment dismissing complaint as ordered on trial before a jury.
    The complaint was for goods sold and delivered to the respondent and the other defendants as partners in trade. The answer denied each of the allegations excepting such as were thereinafter expressly admitted. It further alleged that, under the statute, etc., a limited partnership was formed, in which the general partners were the other two defendants, and he, the answering defendant, was a special partner and “was not otherwise interested in or related to said partnership or its business, and that said limited partnership continued at the several times, mentioned in the complaint.” The title of the firm was Hogg & Patterson. On the trial it was proven that the goods specified in the complaint were sold and delivered to Hogg & Patterson for the prices alleged. The plaintiff, then called as a witness, Andrew H. Hogg, one of the firm. He identified a certificate and affidavit which were read in evidence, and were the papers executed to form, under the statute, the limited partnership set up in the answer. These papers stated that « David J. Hutchinson (the respondent here) had contributed to the partnership the sum of $10,000. Plaintiffs’ counsel, then asked the following questions: Q. “ At the time of the verification of this affidavit, had Mr. Hutchinson actually paid $10,000 into the capital of the concern of Hogg & Patterson?” Q. 11 Was any actual cash, otherwise than a check for $8,000, contributed by Mr. Hutchinson to the copartnership formed ? ” These questions were objected to severally by defendant’s connsel as irrelevant to the issue. The objection was sustained on the ground that there was no issue which sustained the questions, as the complaint does not state the cause of action for which plaintiffs’ counsel claimed to recover. There was no other testimony as to the defendant being a partner, and on motion the court dismissed the complaint.
    There was no reply.

      Robertsons, Harmon & Cuppia, for appellants.

      George H. Forster, for respondent.
   By the Court.—Sedgwick, Ch. J.

—If, in this action, the defendant had not in the answer set up the existence of the limited partnership, it might have perhaps been necessary to determine whether an allegation of general partnership is supported by proof that the certificate or affidavit filed under the statute to form a limited partnership was false. One question would be, does the negativing the assertions of the certificate or affidavit tend to show that such facts as are essential to copartnership had an existence? Or does it tend only to show the liability as a partner, under the statute ? Another question would be, if it tend to show only the latter, must not the special facts, which under the statute create the liability, be pleaded ?

But when the defendant, to a complaint of general partnership, avers the making of the limited partnership, the ground of the exclusion of the questions on the trial in this case cannot, in my judgment, be sustained. The ground was that, to show the falsity of the certificate or affidavit was not relevant to any issue in the case, as the complaint did not state a cause of action based upon the falsity. There was, however, an issue arising from the answer to which the questions were relevant, and which required their admission, unless they had been excluded on an objection which was not taken, and which perhaps would not be held to be sound, that is, that the testimony should not be called for until the defendant had given his case. Section 532 o’f the Code of Civil Procedure declares that allegation of new matter in an answer is to be deemed controverted by the adverse party.

I do not see how the defendant in this case can' avoid the effect of Stone v. De Puga (4 San. 681), so far as it goes, for the pleading in this case follows the determination there made. It does not seem that the state of the code then in force, that made a reply to new matter in the answer necessary, if it were to be controverted, affects the question. The present Code (§ 516) is, that when an answer contains new matter constituting a defense by way of avoidance, the court may, in its discretion, on the defendant’s application, direct the plaintiff to reply to the new matter. This is an answer to the suggestion that unless the complaint state the special facts under the statute the defendant may not be notified of the facts on which the plaintiff intends to rely.

Or it may be further suggested that such new matter in answer is not a defense by way of avoidance. It seems, however, to be set up as avoidance, because it pre-supposes that the plaintiff would have a right to show facts, from which an inference of general partnership might be drawn, • but which would be avoided by proof of the defense.

' I am of opinion that the judgment should be reversed and a new trial ordered, with the costs of the appeal to the appella'nt to abide the result.

Freedman, J., concurred.


text:
    MARIE PRESCOTT, Respondent, v. SINCLAIR TOUSEY, Appellant.

      Appeal—waiver of by recognition of judgment.

    Where the defendant pleads as a defense that the damages sought to be recovered were embraced in a judgment obtained in a former action, “ which judgment still remains in full force and effect, ” and_subsequcntly and before the time to amend as of course expires, serves a new answer omitting such defense, this will not be held inconsistent with, or a waiver of, a right of -appeal from said judgment in such former action.
    Before Sedgwick, Ch. J., Traux and O’Gorman, JJ.

      Decided February 5, 1883.
    Motion by respondent to dismiss appeal.
    The plaintiff brought this present action for libel, and recovered judgment. From this judgment defendant took the present appeal. The plaintiff, after the entry of judgment, brought another action for libel against the defendant. The defendant served an answer, in which he set up, as a defense, that the damagós sought in that action were embraced in the recovery in this action, the answer alleging, in due form, the recovery of the judgment, and that “ said judgment still remains in full force and effect.” To this defense there was a demurrer. The plaintiff served a notice that the demurrer was withdrawn, and it was not argued within twenty days from service of the demurrer, the defendant served an amended answer, which omitted the defence as to the judgment in the present action.' This amended answer was returned, but on motion the court at special term held that it was properly served.
    The ground of the present motion is, that the defense, in the original answer, was inconsistent with this appeal, one asserting a right under it, as if it were final, and valid, and the other seeking to reverse it.

      Marshall P. Stafford, for motion.

      William Fullerton, opposed.
   By the Court.—Sedgwick, Ch. J.

—My opinion is, that for the purpose of examining the ground in which this motion is urged it should be held that the original answer, setting up the recovery of damages in this action, was not an absolute and definitivé proffer of an issue on which the defendant intended to rely, but as to the issue in the seeond / case it was conditional upon the non-exercise of the right to amend it once, as of course. It was the same as if the defendant had had the power to express such a condition in the answer itself. Upon the amended answer being served, the first answer went for nothing ab origine, save as otherwise provided by section 542 of the Code of Civil Procedure. That provides that the amendment must be without prejudice to the proceedings already had. This refers only to proceedings in the action, and, of course, does not refer to the intrinsic qualities of the answer allowed to be withdrawn, and its effect as to rights claimed outside of the action itself. If this consideration be correct, then, it is not necessary to deny that if the defendant had, for any purpose or any length of time, taken an advantage from the judgment, as if it were valid, he could not retract, and the ¿lection would be final. The position is, that the advantage, it is alleged he could have, would be such as would arise from his setting it up to defeat the claim in the action, and that he does not set it up, substantially, until his power to change it has passed from him.

I am of opinion that the motion should be denied, with $10 costs.

Truax and O’Gorman, JJ., concurred.


text:
    WILLIAM H. RUTTY, Appellant, v. AUGUSTINE E. PERSON, et al., Respondents.

      Special issues—when motion for premature—when not granted.—Reference by the court.

    An order requiring that the special issues be framed and tried by jury, will be reversed on appeal where it appears that the motion was noticed before the plaintiff’s time to reply or demur to the counter-claim set up in the answer had expired.
    Though the granting of such a motion in a proper case is in the discretion of the court, yet where it appears that the issues as framed are so minute and numerous, and so grouped that confusion and mistake by a jury may be expected, the appellate court will reverse the order.
    At any stage of an equity case to be tried by the court without a jury, when it, becomes manifest that a reference will serve the ends of justice, the court will order one.
    Before Sedgwick, Ch. J., Truax and O’Gorman, JJ.

      Decided February 5, 1883.
    Appeal by plaintiff from order granting motion by defendant that special issues be framed and tried by jury. The complaint prayed for an accounting
    The answer was served November 25, 1882, and contained a counter-claim. The notice of motion to settle issues was served November 25, 1882, upon the same day as the service of the answer and before the reply was served; but the pleadings, including the reply, were before the court on the hearing of the motion.
    Further facts appear in the opinion.

      Eugene H. Pomeroy, for appellant.

      Ludlow Fowler, for respondents.
   By the Court.—Sedgwick, Ch. J.

—In the first appeal the order below must be reversed on the ground, that the motion was made before the time to reply or to demur to the counter-claim had expired. It is expedient to hold to the practice of having all the issues in the action joined before noticing such a motion.

The merits of the motion, however, call for some observations. The complaint and answer show that the issues of fact do not relate to a few differences of controlling importance % but in respect to what was the agreement of the parties, each side averring an agreement consisting of many details and provisions, and modified from time to time. In my judgment, no special issues could be framed, the verdict as to which by a jury would be of special benefit in arriving at a judgment as to the rights of the parties. The issues that were framed are so minute and numerous, yet grouped under questions twenty-seven in number, that confusion and mistake by a jury may be expected. Under the pleadings and proofs, a court or referee, by protracted attention, might find the plaintiff right in part and the defendant right in part, discriminating between material and immaterial allegations, rejecting surplusage, and considering the pleadings as amended in the proper exigencies. But the special issues are to be propounded to the jury as if they were to. answer Yes or No each question. Perhaps they would have power to answer each question partly Yes, and partly No. It would seem impracticable to obtain from the twelve men a unanimous consent to each of these possible modifications and limitations.

I am therefore of opinion, that it appeared to be a case where special issues should not be framed for a jury.

The order appealed from should be reversed, with $10 costs.

Appeal by plaintiff from order denying his motion, that a referee be appointed to hear and determine.

As to the second appeal, which was from an order denying plaintiff’s motion for a reference, I am of opinion that the court properly exercised its discretion. At any stage in the case, as it is an equity case to be tried by the court without a jury, when it becomes manifest that a reference will serve the ends of justice, the court will direct one. At present, it is expedient that more light should be had as to what is proper to -be tried by- the court and what by a referee.

The order is affirmed, with $10 costs.

Truax and O’Gorman, JJ., concurred.


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    CORNELIA D. EARLE, Appellant, v. WILLIAM P. EARLE, Respondent.

      Guaranty companies—justification as sureties.

    The corporations which, under chapter 486 of the Laws of 1871, are vested with authority to guarantee bonds and undertakings in judicial proceedings, need not possess the qualifications required of sureties by the Code, though the manner of justification is the same; but it is the duty of the judge to whom the undertaking or bond is presented for approval, to exercise his discretion in each particular case as to whether the actual statement of the company’s business justifies an approval.
    Before Sedgwick, Ch. J., Truax and O’Gorman, JJ.

      Decided February 5, 1883.
    Appeal by plaintiff from order approving an undertaking given by the defendant on an appeal from the general term to the court of appeals.
    The undertaking was signed by the defendant. No sureties were given, but the performance of the. undertaking was guaranteed by a corporation called the Fidelity and Casualty Company. This guarantee was claimed to be valid for the purpose, under the provisions of an act to facilitate the giving of bonds required by law (Laws 1871, chap, 486), which enacted: “Section 1. Whenever any person who now or hereafter may be required or permitted by law to make, execute, and give a bond or undertaking with security conditioned for the faithful performance of any duty, or for the doing or not doing of any thing in said bond or undertaking specified, any head of department, surrogate, judge, sheriff, district attorney or any other officer who is now or shall hereafter be required to approve the sufficiency of any such bond or undertaking, may, in the discretion of such officer, accept such bond or undertaking and approve the same whenever the conditions of such bond or undertaking are guaranteed by a company duly organized or authorized tc do business under the laws of this State, and authorized to guarantee the fidelity of persons holding positions of public or private trust; and all such corporations are hereby vested with full power and authority to guarantee such bonds and undertakings ; but this act shall not prevent a justification on the part of such company through its officers as required by law of other sureties.
    “ § 2. It is further provided that the guarantee of any such company shall not be accepted by heads of departments, or others, as provided in section one of this act, whenever its liabilities shall exceed its assets, as ascertained in the manner provided in section three of this act.
    “§ 3. Whenever the liabilities of any such company shall exceed its assets, the superintendent of the insurance department shall require the deficiency to be paid up within sixty days, and if it is not so paid up, then he shall issue a certificate showing the extent of such deficiency, and he shall publish the same once a week for three weeks in the State paper, and thenceforth and until such deficiency is paid up, such company shall not do business under the provisions of this act. And in estimating the condition of any such company under the provisions of this act, the superintendent shall allow as assets only such as are authorized under existing laws at the time, and shall charge as liabilities in addition to eighty per cent, of the capital stock, all outstanding indebtedness of the company, and a premium reserve equal to fifty per' centum of the premiums charged by said company on all risks then in force, nothing herein contained shall apply to bonds given in criminal cases.
    “ § 4. This act shall take effect immediately.”
    It was admitted by the parties, that if the rule of the Code applicable to the justification of sureties, to wit: that the surety must be worth double the amount of the bond over and above all existing and contingent liabilities, be applied in this ease, the undertaking was insufficient.
    > The court approved the undertaking by an order, from which plaintiff appealed.

      Carlisle Norwood, Jr., for appellant.

      John M. Martin, for respondent.

      Moore, Low & Sanford, for The Fidelity and Casualty Co.
   By the Court.—Sedgwick, Ch. J.

—My construction of the act is as follows : If a bond or undertaking is proposed which is to be secured by the guarantee of the company, the party opposed may require “ a justification on the part of such company through its officers as required by law of other sureties.” If it should appear on such justification that “ its liabilities exceed its assets, as ascertained in the manner provided in section three of this act,” the act forbids the acceptance of the guarantee. The alternative is is not that the court shall approve absolutely and under all circumstances. As stated in the first section, the court must exercise its judicial discretion to determine whether the financial condition of the company would justify an approval. I do not think that the act implies that the company must possess the qualifications required of sureties, although the manner of justification is to be same as when sureties justify. The nature of the business makes it clear that the Legislature knew that such qualifications could not exist. If the Legislature intended that the company should show such qualifications, it was not necessary to provide anything further on the subject, and especially to prohibit the approval of the undertaking if the company’s condition did not reach the standard specified by the third section. But although the company may be in the condition described by section three, it is the duty of the judge to exercise his discretion in each particular case, as to whether the actual state of the company’s business justifies ari approval of the undertaking.

It may be, that in the present case the court did not exercise the discretion referred to. If it did not, the general term should make the order, that would be called for by the particular circumstances. In my opinion, the circumstances called for an approval of the undertaking, which was actually approved below. There should be no costs on the appeal to either party.

Order affirmed, without costs.

Truax and O’Gorman, JJ., concurred.


author: By the Court.—Sedgwick, Ch. J. O’Gorman, J.—[Concurring.]

text:
    JAMES S. FLYNN, Respondent, v. THE NEW YORK ELEVATED R. R. CO., GEORGE A. WILLIAMS and JOHN TWINAME, Appellants.

      .Negligence—interference with the highway.—Evidence—declaration of servant, when admissible against master.

    Whenever a natural person or a corporation is authorized by way of duty or privilege, to disturb the surface or bed of a highway, in the exercise of the right,due diligence must be used to prevent accidents to wayfarers.
    This obligation is independent of the obligation to do the work skillfully, and is not lessened by the fact that the right to. interfere with the highway is exercised by means of a contract with other persons. The duty is imperative, so long as the interference with the highway exists, and no notice thereof is necessary to charge the party exercising such, right.
    In an action against defendants to recover for damages from an accident happening through a breach of such an obligation, evidence to show that on the night of the accident a watchman employed by defendants, stated “ that it was his last night as watch, and he didn’t think it worth while to put lamps out on the holes,” is inadmissible against said defendants, and its reception is error, demanding a new trial.
    Before Sedgwick, Ch. J., Truax and O’Gorman, JJ.

      Decided February 5, 1883.

      Appeal by defendant The New York Elevated Railroad Company, and a separate appeal by the other defendants jointly, from judgment entered on verdict for plaintiff, and from order denying motion for new trial made upon the minutes.
    The action was for damages from the alleged negligence of the defendants. The New York Elevated Railroad Company was a corporation duly authorized by statute to make excavations in the streets of New York, for the purpose of building its road as authorized by statute. It was alleged, that at a certain point on its line, an excavation had been made by it, through contractors, viz.: its co-defendants, Williams and Twinamé; that though the excavation had been partly filled up, the pavement, which was of stone in blocks, had not been replaced ; that the other defendants were the contractors who had made the excavation and had omitted to replace the stones; that the excavation not being guarded in any way or lighted, was dangerous to passers by; that the plaintiff was passing by in a wagon, in a prudent manner, that one of the wheels sunk into the excavation, ‘which caused the plaintiff to be thrown to the ground and injured.
    On the trial it was held, under the allegations of the complaint, that the verdict should be for defendants, unless the testimony was sufficient to show that the defendants Williams and Twiname were responsible for negligence in respect of the condition of the excavation.
    The jury found for plaintiff.
    Further facts appear in the opinions.

      R. E. Deyo, for appellants, The New York Elevated R. R. Co

      W. R. Spooner, for appellants, Williams & Twiname.

      Louis J. Grant, for the respondent.
   By the Court.—Sedgwick, Ch. J.

—The liability of all the defendants was made at the trial to turn. upon the verdict of the jury as to whether the defendants Williams and Twiname were liable. They could not be liable unless the evidence showed that they had not replaced the pavement at the place where the accident happened, after they had finished the other work which they had done under their contract with the railroad company. In my opinion, the clear preponderance of evidence in the whole case, was that they had finished the work, replaced the pavement, and were no longer under any responsibility as to anything to be done. For this reason, I think the the motion to dismiss the complaint and also for a new trial should have been granted.

I also am of opinion, that the objection to the question as to a witness’s conversation with a watchman should have been sustained. The question was intended to and did call out testimony that the watchman, on the night of the accident, but before its occurrence, said it was his last night on watch, and he didn’t think it worth while to put lamps out on the holes. It was shown that the watchman was employed by the defendants Williams and Twiname, but such a declaration by their servant was not evidence against them.

The fundamental obligations of the defendants were not much discussed upon the argument of the appeal. The argument that was made requires some attention. It would not, I conceive, be denied by any of the learned counsel, that whoever, a natural person or corporation, is authorized to disturb the surface or bed of a highway, whether by way of privilege or duty, must in doing it use ordinary diligence to prevent accidents to wayfarers from the impaired condition of the road. For instance, to guard against persons or vehicles falling into the hole, if such be the kind of work, fencing must be made or notice given by lights ; or rather, due diligence must be used to give such kind of protection to passers by.

The giving this kind of protection is a thing separate from the doing of the work that disturbs the highway. The obligation to do the work skillfully and not negligently ■ would not involve the obligation to warn passers by of the fact that the work-was going on. They would be injured by falling into an excavation skillfully made as much as if it were negligently made.

Therefore, when the defendant, the company, exercised its right of making the excavation in question, if proof should show that it did make it, independent of that was their obligation to use due diligence in respect to passers by. The fact that the right is exercised by means of a contract made with other persons, does not lessen the obligation referred to. The obligation is imperative so long as the excavation exists; and, therefore, notice.that it is not sufficiently protected is not a condition of legal responsibility ■for injuries from the excavation.

For the reasons that have been given, I am of opinion, that the judgment should be reversed and a new trial ordered'with the costs of the appeal to the appellants, severally, to abide the event, and also that the order denying the motion for a new trial should be reversed with §10 costs to the appellants, severally, to abide the event.

Truax, J., concurred.

O’Gorman, J.—[Concurring.]

—This action was brought to recover damages from the defendants, or some of them, for injuries inflicted on the plaintiff, on the evening of November 26, 1878, by reason of the insecure and dangerous condition of Third avenue between One-hundred and Qnehundred-and-third streets in this city.

The complaint charges as against The Elevated Railroad Co. that they were engaged then in the construction of their railroad between One-hundred and One-hundred-and-third' streets on Third avenue, and had employed the other defendants Williams and Twiname to. make excavations thereon; that these excavations were made without due precautions ; that the plaintiff while driving a loaded truck on Third avenue between said streets was thrown from his seat and seriously injured by the wheel of his truck slipping into one of such excavations. The gist of this action is the negligence of the Elevated Railroad Co. by the negligence of tlieir employees Williams and Twiname, in' making the excavation and leaving it unprotected and in an unsafe condition and without lights' to warn passengers of the danger. At the close of plaintiff’s testimony, motions were made to dismiss the complaint on the part of the mayor, etc., of New York, because no notice to them of the unsafe condition of the avenue had been proved; on the part of the Elevated Railroad Co. because (1) no such notice to them had been proved; (2) because it was not shown that they or their agents had made the hole or excavation in question, or caused it to be made ; and on the part of Williams and Twiname, because there had been no evidence produced to hold them. These motions were denied by the court except as to the mayor, etc», of New York, as to whom the complaint was dismissed. At the close of the case, similar motions were made on the part of the Elevated Railroad, and also on the part of Williams and Twiname, which motions were denied. The jury rendered a verdict for the plaintiff against the Elevated R. R. and also against Williams and Twiname, and motions were then made on behalf of the defendant to set aside the verdict as against the weight of evidence, on the ground that the damages ($5,000) were excessive, and on exceptions taken by defendants to the refusal of the judge to charge as requested by them, which motions were also denied. Exceptions were also taken by defendants to the admission of testimony in the course of the trial.

The first subject of inquiry is, whether, on the whole case, there was enough of competent evidence to go to the jury in proof of the negligence of the defendants The Elevated Railroad Co., or their agents Williams and Twiname. The material facts as they appear' in evidence are as follows : When this accident to the plaintiff occurred it was quite dark, and there was no light at or near the hole in Third avenue into which the wheel of his truck slipped. The depth of the hole is variously stated at from two to three inches, or from six to seven inches, or the depth of one of the Belgian pavement blocks. The exact locality of! the hole was about twenty or twenty-five feet south of One-hundred-and-second street, on the east side of the avenue. In the center of the hole stood one of the columns of the Elevated Railway, and this column was then in position in its abutment, and the girder and superstructure, excepting the rails, were built above. The paving stones at the time of the accident had been removed for a space of about fourteen to sixteen inches all round the column. There is evidence that this hole existed two days before the accident. The columns, at the time of the accident, were fixed in their bases, which were large castings of iron made to receive the columns. In these iron castings were sockets into which the columns had been fitted, and this work had all been done so that the columns were then firm and the laying of the girders above them had been begun. These columns were at the time so set on both sides of the avenue from One-hundredth street to One-hundred-and-twenty-ninth street. The defendants Williams and Twiname entered into a written contract with the Elevated Railroad Co., on June 25, 1878, by which they agreed to make the necessary excavations for, and to build foundation piers along Third avenue between One-hundred and One-hundred-and-twenty-ninth streets, and to put in the piers the iron bases for the columns, which were to be furnished by the Elevated Railroad Company, and to provide all necessary guards, railings, lights, and watchmen, that might be necessary for public safety. The setting úp of the iron columns in the sockets, however, and the pinning them and leading them and removing the pavement for the purpose of pinning and leading them and the re-laying of the pavement after that work was done, was not a part of1 the work which Williams and Twiname were bound to do under their contract, but was provided for in another contract made between the Elevated Railroad Company and the .¿Etna Iron Company, which contract also bears date June 25, 1878. This latter company contracted to deliver ready for use the column bases on Third avenue between One-hundred and One-hundred-and-twenty-ninth streets, and to pin the columns according to the specifications, to make excavations and remove the pavements around the columns for the purpose of tightening them, and after that work had been done to re-lay the pavement in a perfect manner true to the street grade as directed by the Inspector of the Board of Public Works, and to repair and make good all imperfect or settled pavement re-laid by him during a period of six months after the completion of the work. There is no direct evidence showing by whom the hole into which the plaintiff’s wheel slipped, was made, or when it was made. There is evidence that Williams and Twiname had finished all their work on the Third avenue between One-hundred and One-hund'red-andthird streets and as far as One-hu>ndred-and-twenty-ninth street before the accident took place, and that their work of re-filling and re-paving was completed to One-liundred- and-third street on the east side of the avenue, on November'9.

The plaintiff in order to sustain his action against Williams and Twiname was bound to prove by a preponderance of evidence that they had been guilty of negligence which caused the injury to the plaintiff. Such evidence is not to be found in this case unless it can be inferred from certain testimony offered on the part of the plaintiff and admitted by the trial judge against the objection of defendants.

The witness Connelly testified to a conversation had on the night of the accident and relating to the hole in question with a night watchman named Smith, whom he, Connelly, had been in the habit of seeing' there every night, and whose duties, as far as the witness knew, were to put red lamps out at the hole and see that no accident occurred. Witness further testified that Smith told him that it was his last night on watch and he did not think it worth his while to put lamps out on the holes. This testimony was hearsay and incompetent, and, although Smith, when called as a witness for defense, contradicted Connelly as to the alleged conversation, yet the admission of this testimony at the stage of the case when it was admitted might have prejudiced the plaintiff’s case with the jury and materially influenced their verdict. A similar question arose in Eccleson v. Columbia Turnpike Road (82 N. Y. 279, 282), and because of the admission of such testimony the judgment was set aside and a new trial ordered. See also Pinney v. Orth (88 N. Y. 447, 453).

The relations between the Elevated Railroad Company and Williams and Twiname were such as would have made the former legally responsible for the negligence of the' latter in regard to this excavation which caused the injury to the plaintiff. Williams and Twiname had been unable to carry out their written contract with the Elevated Railroad Company, and at the time of the accident and for some months previous they had acted under another and more indefinite arrangement with the company, retaining, however, the right and exercising the power to employ and dismiss their own servants as they pleased in the performance of their work. But the nature of. the work itself done for the Elevated Railroad, Company in making these • excavations in the public streets was dangerous, and the company could not escape responsibility for putting the street in a condition dangerous to travel at night by interposing any contract which they had made for doing the very thing which caused the damage (Storrs v. Utica, 17 N. Y. 108; Burmeister v. Elevated R. R. Co., 47 Super. Ct. 267; Worster v. Forty-second street R. R. Co., 50 N. Y. 205).

The jury rendered a verdict against both defendants, the Elevated Railroad Company and Williams and Twiname ; and as we do not think that such a- verdict is sustained by the evidence, the judgment for the plaintiff should be reversed and a new’ trial ordered.


text:
    GEORGE CRAWFORD, Appellant, v. WEST SIDE BANK, Respondent.

      'Banks and banking—payment of altered check—when bank not entitled to charge against depositor.—Laches.

    The plaintiff, a depositor with defendant, intending to leave town, drew a check on April 20, payable to the order of A., his clerk, dating it the 22d, with instructions that if he did not return on that day A. should draw the money and give it to plaintiff’s foreman for the purpose of paying workmen. On the 21st A. altered the check by erasure so that the date read April 21, indorsed it, presented it to to the defendant, who paid him its amount. A. absconded with the money. In this action to recover the sum named in the check,—Held, that such amount should not have been charged against the plaintiff; that the taking of the.check afterwards by the plaintiff for the purpose of prosecuting A., did not ratify the alteration, or estop him from bringing this action; and that the plaintiff was not guilty of laches in leaving the check with his clerk, nor in making it payable to his clerk’s order.
    The bank was bound, as against plaintiff, the depositor, to ascertain that the check was genuine in all" respects, and when the date was forged, the check ceased to be the order of plaintiff. ♦
    Susquehanna Bank v. Loomis (85 N. Y. 207); Hall v. Puller (5 B. & G. 750), distinguished, upon the ground that in the case at bar, there never was in existence a genuine instrument which could have justified the payment on plaintiff’s account, on the day payment was made. White «. Continental Bank (64 N. Y. 819); Marine National Bank v. National , City Bank (59 N. Y. 67); and National Bank of Commerce ®.-National Mechanics’ Banking Ass. (55 N. Y. 211), distinguished, upon the ground that the rule there laid down obtains only between the acceptor and the person to whom the bill is.paid.
    Before Sedgwick, Ch. J., Truax and O’Gorman, JJ.

      Decided February 5, 1883.
    Appeal by plaintiff from judgment entered upon decision of a judge, trial by jury being waived.
    The plaintiff was a depositor with defendant. One Morgan was plaintiff’s bookkeeper, and had the key of the safe. On April 20, 1882, the plaintiff, intending to leave town, drew his check for $700, dated April 22, 1882, payable to Morgan, and instructed Morgan, that if he, plaintiff, were not back by noon of Saturday, April 22, he, Morgan, should then take the check, go to the bank, draw the 'money, and give it to plaintiff’s foreman, for the purpose of ¡laying workmen. The check was left in plaintiff’s checkbook, which was placed in the safe. On the next day, April 21, Morgan took the check, altered it by erasure,.so that the date read April 21, indorsed it, presented it to the defendant, who paid to Morgan the amount. Morgan absconded with the money. The bank charged the amount against the plaintiff in his account.
    On April 24, the plaintiff went to the teller of the defendant, and, stating that he wished to arrest Morgan, asked the teller for the check, that it might be used in the prosecution. It was given to him, and he gave to the bank another paper on which was written the form of the altered check. The plaintiff took the altered check to a police magistrate, and as the basis of an application for a warrant, sworn to an affidavit that Morgan forged the check with intent to cheat and defraud "the plaintiff, “ and deponent was cheated and defrauded out of the said seven hundred dollars.” The court below found that the check given to the bank was given only as a receipt or voucher to the bank for the altered check.
    The question before the court was, whether the defendant could lawfully charge the amount paid by it to Morgan to the' account of plaintiff. The judgment was for defendant, from which plaintiff appeals.

      D. M. Porter, for appellant.
    —I. The alteration of the check from the 22 to the 21, by R. J. Morgan, was a mateterial alteration, inasmuch as the check was wholly filled up in the plaintiff’s handwriting, and the figure “2d” was erased and “1st” written in over the erasure, which erasure and alteration were visible and were made before the check had any inception (Eastman v. Shaw, 65 N. Y. 522; Cowing v. Altman, 71 Id. 435; Marvin v. McCullum, 20 Johns. 288; Hall v. Wilson, 16 Barb. 548). That is, no value was ever received by the plaintiff for it or any part of it; the alteration was a forgery, which made it utterly void before it was presented to the defendant for payment (McGrath v. Clark, 56 N. Y. 34). It was a forgery, because the change of date was a material alteration. 1 ‘ A check postdated is not, like a bill of exchange, payable on a particular day: the only effect of its being post-dated is, that it is' payable on demand on or after the day on which it purports to bear date” (Mohawk Bank v. Broderick, 10 Wend. 304; S. C., 13 Id. 133; Salter v. Burt, 20 Id. 205). The payment, by a bank of a post-dated check before the day upon which it is dated, is a payment in its own wrong, and the money so paid remains to the credit of the drawer (Godin v. Bank of Commonwealth, 6 Duer, 76). “A note, bill or check maybe ante-dated or post-dated, without affecting its legal character, as an obligation, but the date determines the time when it becomes payable (Parsons v. North, 13 East, 516; Brewster v. McCardle, 8 Wend. 478). The alteration was material and avoided the check (Miller v. Gilleland, 9 Penn. St. 119; Kennedy v. Lancaster County Bank, 18 Id. 347; Bank v. Penick, 5 T. B. Monroe [Ky.] 25; United States Bank v. Russell, 3 Yeates [Pa.] 391; Henderson v. Wilson, 6 Howard [7 Miss.] 65; Hervey v. Harvey, 15 Maine, 357; Hocker v. Jamison, 2 Watts & Sergt. [Pa.] 438; Humphreys v. Guillow, 13 N. H. 385; Chitty on Bills, 12 Am. ed. from London 9th ed. 208, 209 (182*); Shepherd's Touchstone, 68; Master v. Miller, Smith's L. C. part 2, 7th Am. ed. 1254; S. C., 4 T. R. 320; S. C., 5 Id. 367; S. C., 2 H. Black, 141; Outhwaite v. Luntley, 4 Campbell, 179 [180]; Hall v. Fuller, 5 B. & C. 750 [757]; Adair v. Saunderson, 14 Rep. 144 [Supr. Ct. of Iowa, April, 1882]; Wood v. Steele, 6 Wall. 80; Suffell v. Governor & Co., Bank of England, 47 L. T. R. N. S. 146; S. C., 26 Alb. L. J. 406; Bruce v. Westcott, 3 Barb. 374). It is the banker’s duty to see that the check is genuine in all respects (Smith v. Mercer, 6 Taunt. 76).
    II. The plaintiff was not negligent. The check was complete, and no change could be made without erasing a part of it, and plaintiff had no reason to believe such a crime could be committed, and was not bound to presume it (Lehman v. Central R. R. & B. Co., U. S. Circuit Ct. M. D. Alabama, June, 1882, MSS.; Baxendale v. Bennett, note to Knoxville Bank v. Clark, 33 Am. Rep. 137; Bank of Ireland v. Evan’s Charities, 5 House of Lords Cases [Clark] 389).

      John C. Shaw, for respondent.
   By the Court.—Sedgwick, Ch. J.

—My opinion is that the judgment appealed from should be reversed.

The plaintiff having deposited money with the defendant, the latter was authorized to pay out on account of plaintiff the amount deposited as ordered by plaintiff’s checks. This relation of the parties involved obligations of the kind that rest upon contract, and it was the contract of the defendant that it would not charge the plaintiff with the amount of a payment made upon a check that was not drawn by plaintiff. Therefore, the inquiry in this case' is, was the amount in controversy, that the defendant charged to plaintiff, paid upon a check drawn by plaintiff.

The plaintiff had drawn an instrument in the form of a check upon the defendant, for $700, and as of the date of April 22, 1882. After giving attention to what, as matter of law, is identity of choses in action, it is clearly seen to be the fact that the instrument referred to was never presented to the bank for payment.

Morgan, who was named as payee in it, changed April 22, on the paper, to April 21. Beyond controversy, this was a material alteration. The effect was that from the time of the alteration the instrument ceased to be the act of the plaintiff and was void against him. When the defendant, after paying the amount written in it to Morgan, charged the sum to the plaintiff, as the payment was not made upon the order of the plaintiff, the charge' was not justified by the contract between the parties.

As a part of the argument of the learned counsel for respondents, it was urged that the defendant was bound to know only the signature upon the check.. The leading case of Hall v. Fuller (5 Barn. & Cress. 750), is that the banker is bound to ascertain that the check is genuine in all respects. Bankers cannot charge checks paid by them that have been forged as to their amounts, or to holders that claim through a forged indorsement of the payee. The principle of this is that, the money was not paid upon the depositor’s order. The instance of a date being changed is not an exception to the rule. When the date is forged, the instrument ceases to be order of the depositor. In this respect checks are like notes and bills. The well-known text of Chitty on Bills (181) is: “ If a bill of exchange or promissory note be altered without the consent of the parties in any material part, as in the date, sum, or time when payable, or consideration, or place of payment, such alteration at common law, and independently of the stamp acts, renders the bill or note wholly invalid, as against any party not consenting to such alteration, and this although it be in the hands of an. innocent holder,” citing the leading case of Marler v. Miller (4 T. R. 320; 1 Smith’s L. C.).

It was also argued that the bank is entitled to charge it against the account of the maker, for the correct amount, and at the true time he made it payable. This implies, as I understand, that the bank had a right to keep the check, as it did in fact, until the day of the true date, and then to charge its amount against plaintiff’s account. This does not appear to me to be correct in principle, or to regard the nature of the transaction.

The check, if unaltered, could not legally be paid out of the funds of the plaintiff, on presentation for such payment before the true day, of April 22 (Godin v. Bank of Commonwealth, 6 Duer, 76). Any one acquiring the check before that day would have, in the implied obligation of the drawing of the check, a «promise of the drawer that the bank would pay upon presentation, on or after the date of April 22. The bank on which it was drawn, that is, the present defendant, would have no further right. If the bank had cashed the check, unaltered, but on April 21, and on that day the whole of the account had been assigned, or paid out, so that the bank had been driven to an action upon the check, of course it would recover judgment. But the chéck being forged as to its date, the answer of the plaintiff, that the check was void as to him, that is, that it was not his check, must have prevailed. The defendant by keeping the forged check one day could not transform the promissory instrument that was invalid to bind the plaintiff to see that the check was paid upon demand, into an instrument valid to justify such a payment upon demand.

Some cases were cited to support the propositions advanced for the respondent. For instance, in Susquehanna Bank v. Loomis (85 N. Y. 207), Danforth, J., says: “It must be conceded that the Plainfield Bank was at least en-entitled to have refunded to it the difference between the true sum. for which the draft was drawn, and that to which the check had been altered. The Plainfield Bank was the drawer of the draft, and the citation says in effect, that it could not be charged by the drawee with the amount of the draft to the extent that it had been increased above the amount which was originally and justly due upon it.” This, it may be here said, is the opposite of asserting that against its depositor the bank is only bound to look to the genuineness of his signature upon the check. The citation may imply, in connection with the further citation of Hall v. Fuller (5 B. & C. 750), that the Plainfield Bank could properly be charged with the genuine amount of the draft before it was feloniously increased. And Hall v. Fuller did so hold. In both cases it was either the fact or was considered to be the fact, that at some time previous to his payment upon the forged instrument, there had been issued by the drawer to the payee a genuine instrument, which would have authorized the payment of the genuine amount by the drawee. Under the circumstances, it was in effect held, that although of course, the genuine instrument was destroyed, nevertheless the obligations and rights under it passed by the transaction. Strictly, of course, the forged, instrument was a nullity as to any obligation upon itself, and could not transfer rights under a genuine instrument. In favor of an innocent party, it might legally be evidence of a circumstance which was relevant to the .rights and devolution of rights under the genuine instrument. When, physically, the forged instrument was the same as the genuine instrument, excepting the alteration of some words or figures, it would be difficult to describe the transaction concisely, unless by referring to the payment of the amount of the genuine instrument as being made upon the forged instrument. Such a description of the facts would not be meant to assert the validity of the forged instrument in any respect. The law justified the payment to the less amount, as made under rights springing from a genuine instrument that had been destroyed, which if not destroyed but presented at the time of the actual payment, would have been effectual against the drawer.

In the present case, at the time of the actual payment, there was no't and never had been in existence a genuine instrument which would have justified any payment out of plaintiff’s credit, with defendant (Godin v. Bank of Commonwealth, supra). The defendant would have bought "a past dated check if it had not been altered. It having been altered, they must abide the consequences appropriate to the fact, that they bought a forged chose in action. If they, should be allowed to charge its amount against the plaintiff, because they had the power of keeping it until the next day, and then using the forgery, instead of treating it as void, they would at least, use a power that belonged solely to the plaintiff as drawer of creating a genuine instrument- to bind him.

It may be argued that, if after altering it, Morgan had presented it on the 22, the defendant would have had a right to charge its amount to plaintiff. The proposition presents on the probable speculation that Morgan would forge, with no object. But, I do not assent to an inference, that the present case is like the hypothesis. 'The fact that it was altered and presented before the day of its true date has significance in favor of the plaintiff. The plain tiff, by making the day of presentation the 22, secured, except as against forgery, that perhaps he might be at home and pre- ^ vent the necessity of Morgan using the check, or that Morgan would not use it until a time when there would exist the strongest probability that the proceeds could not be misapplied. The foreman would be looking for the money on that day, and would arrange with Morgan, when and where to receive it. Tlie testimony of the foreman and his brother in this case, illustrates this. The earlier payment of the check asserted, unintentionally, Morgan’s fraud, and deprived the plaintiff of the benefit of those circumstances that would have tended to prevent Morgan’s attempting to defraud on the 22, of this the defendant took the risk (Cowing v. Altman, 71 N. Y. 442).

In White v. Continental Bank (64 N. Y. 317), the plaintiff was the drawee of a sight draft, its amount was unlawfully increased, and it was then presented to the plaintiff, who accepted it and afterwards paid the increased amount upon it to the defendant. The action was to recover back'the money. When, therefore, the court said that “ the plaintiffs as drawees of the bill, were only held to a knowledge of the signature of their correspondents as drawers ; by accepting and paying the bill, they only vouched for the genuineness of such signatures, and were not held to a knowledge of the want of genuineness of any other part of the instrument, or of any other names appearing thereon, it gave the rule of obligation, between the acceptor, and the person to whom the bill was paid. It does not touch the obligation between the drawee as acceptor and the drawer. The second rule of the case contains something pertinent to that, • and relevant here, when looking upon the defendant as a holder of the check on the 21, seeking to charge it on the 22. If as against the drawer, the drawee was held only to ascertain the genuineness of the signature, there would be no reason why, if the drawee paid, he could not be authorized to charge the drawer, and then, why he should be allowed to recover the amount over again, from the person to whom the acceptance was paid. The same distinction exists in the cases of Marine National Bank v. National City Bank (59 N.Y. 67); National Bank of Commerce v. National Mechanics’ Banking Association of N. Y. (55 N.Y. 211).

I am of opinion, therefore, that the plaintiff should have had judgment on the case as presented, unless it appeared that the plaintiff was guilty of such laches in respect of the forgery, that he should suffer rather than the defendant. The plaintiff so wrote the date of April 33, that the forgery was accomplished by erasing the second figure. The figure 1 that was placed instead, of the erased figure, was not written in a blank space, which a person to whom the check might be presented, would have a right to believe would be filled up by the maker when drawing the instrument, or by his authority afterwards. The circumstances presented to the plaintiff and to the defendant, the same consideration that would apply to the erasure of the amount of a genuine check. The plaintiff gave no facility for the accomplishment of the forgery. The trust he placed in the forger led to the forgery or caused or aided it, in no other sense than that it was one circumstance of the many that must exist to render the crinie possible. It is usual to have employees, and usual to believe that they will not forge. The fact that he made the check to the order of his clerk was an act of prudence rather than of negligence, in respect of the course the check might take in general. But he was not bound to entertain the likelihood of such a forgery as did take place. No one would think of .it as being likely to be perpetrated. The general honesty of men,„and the improbability of dishonesty of the clerk in such a respect, the restraints of conscience, and of the penal laws, would prevent a business man entertaining the idea that such a forgery was probable if it came into his mind casually.

I am therefore of the opinion, that the amount of the check should not have been charged against the plaintiff.

On the findings of the court below, I also think that the plaintiff’s action in taking the custody of the check for the purpose of prosecuting Morgan, did not ratify the alteration or the charge or estop him from bringing this action.

Judgment should be reversed and a new trial ordered, with the costs of the appeal to the appellant to abide the event.

Truax and O’Gorman, JJ., concurred.


author: By the Court.—O’Gorman, J.

text:
    THE CAMERON COAL CO., Appellant, v. JOHN H. EMANUEL, Respondent.

      Specific performance of contract to receive stock for bonds, when not decreed. —.Evidence.

    The aid of the court to enforce specific performance of a contract is not a matter of right, but rests always within the judicial discretion of the court, guided by the rules of equity as applied to the circumstances of each particular case, and it will not be granted when it will produce hardship or injustice to either of the parties.
    In an equitable action of such a nature the court should receive all. parol evidence which may be offered to show mistake' or fraud, whereby the written contract fails to express the actual agreement, and to prove the modifications necessary to be made therein, either as limiting the scope of the instrument or enlarging it.
    Accordingly, where defendant as executor, owned bonds of a certain company, and together with other bondholders, agreed in writing for a consideration, to surrender the same and receive in return stock of a new company to be formed under a scheme of re-organization, said bonds being then and at the time" of bringing this suit, held by a third person as security for a claim against defendant’s intestate, the amount of which claim was disputed by defendant and was in issue between the parties, and defendant having demanded the return of said bonds, which was refused, etc.,—of all which facts as appear from letters and conversations in evidence, plaintiff (the company) was aware, and it was understood orally^ between plaintiff and defendant at the time of the execution of the instrument, that present delivery was waived till defendant should obtain possession of the bond, and that the execution of the contract by defendant was conditional,—Held, that specific performance should not be decreed.
    Before Sedgwick, Ch. J., Truax and O’Gorman, JJ.

      Decided February 5, 1883.
    Appeal from a judgment dismissing the plaintiff’s complaint on the merits.

      Action, for specific performance.
    Certain conversations and letters were received in evidence “ágainst plaintiff’s objection and ■ exception,” tending to show that the execution of the contract in suit by defendant was understood to be conditional, etc., and also tending to show knowledge by defendant that the bonds referred to in the contract were owned by defendant, as executor, and were at the time of the execution of the contract and when this suit was brought, held by a third person as security for a claim against defendant’s intestate.
    Further facts appear in the opinion.

      Simpson & Warner and A. J. Vanderpoel, for appellant.
    —1. It is only in case of reformation that explanatory parol evidence can be received. Reformation cán only be had, however, where every party in interest is before the court (Smith v. Howard, 20 How. 151). That the co-contractors were influenced by the fact of the defendant’s signature is-clear, for it appears that the transaction was only to be consummated, upon all the bondholders contracting to give up all of their bonds, aggregating the entire issue of §250,000. Defendant cannot shield himself from performance by showing a verbal understanding between plaintiff and himself existing at the time of the signature and undisclosed to his co-bondholders who signed. It would be placing a premium upon fraud (Breck v. Cole, 4 Sandf. 79; Harloe v. Foster, 53 N. Y. 385). Again, the defendant is estopped by the declarations subscribed by him (Breck v. Cole, 4 Sandf. 79; Jackson v. Parkhurst, 9 Wend. 209). He is in consecutive order the sixteenth person to sign this absolute and unqualified statement, and upon the strength of his and the other fifteen signatures preceding, twelve more bondholders were induced to join, thus apparently getting in all the bonds.
    Chambers, Boughton & Prentiss, for respondent.
   By the Court.—O’Gorman, J.

—The action was to compel a specific performance by the defendant of his written contract to surrender a certain bond of the Cameron Coal Company as in said contract provided. The contract is as follows : ‘‘In consideration of the services rendered, and to be rendered by Solomon L. Simpson, in the reorganization and improvement of the Cameron Coal Company, of Cameron, Pa.,we, the undersigned bondholders, of said Cameron Coal Company, hereby agree with said Solomon L. Simpson, and with each other, to surrender to said company, to be canceled, the number of bonds of said company set opposite our names respectively, and hereby consent to the satisfaction and cancellation of the mortgage securing the same, and agree to receive in place thereof, and in full payment therefor, stock of the said company as reorganized, of the par value of $50 per share equal in amount to bonds held and surrendered by us as aforesaid ; and we hereby deliver 'said bonds to said Simpson and authorize him to make the cancellation and exchange aforesaid.” This contract was signed by twenty-eight persons and firms, the defendant being the sixteenth on the list and signing for a bond of $1,000 in amount.

It appears by the findings of the trial judge that the defendant had not either when he signed this contract or at any time since then, this bond in his possession or under his control, but that it was then a part of the estate of defendant’ s deceased father, of which estate he was the executor, and that the bond was in actual possession of one Henry Hart, who had received it from defendant’s testator as collateral security for an alleged indebtedness of him to said Hart, and that the amount of that indebtedness was disputed by the defendant as said executor, and is now a question at issue between said Hart and him.

It also appears in evidence and the trial judge so found, that at the time of the signing of this agreement by defendant, the present delivery of the bond was waived and it was understood between plaintiff and defendant that the execution and delivery thereof to plaintiff was conditional, and that the same was not to be considered to be executed or delivered or in force against defendant until he should have obtained possession of the bond from said Hart. The trial judge also found that defendant had repeatedly requested said Hart before the commencement of this action to deliver up said bond to the plaintiff to be exchanged on the terms stated in said agreement, but said Hart refused so to do, unless said disputed claim was first paid. The trial judge also found as matter of fact that the defendant prior to the commencement of the action was and ever since has been unable to deliver the bond in suit to the plaintiff, and that such inability arose from no fault of the defendant.

We see no reason to differ from the learned trial judge in his findings of fact.

There was some conflict of testimony between the witnesses for the plaintiff and the defendant, .which it was within his province' to adjust and reconcile, or to decide thereon according to what was, in his judgment, the weight of evidence. The question remains, whether, on such a state of facts, the plaintiff is entitled to the relief claimed in this action.

The aid of the court to enforce specific performance of a contract is not a matter of right, but is always within the judicial discretion of the court, guided by the rules of equity as applied to the circumstances of each particular case. It will not be granted when it will produce hardship or injustice to either of the parties (Willard v. Taylor, 8 Wall. 565-567).

In the case at bar, the trial judge found as a matter of fact that the plaintiff was aware before the commencement of the action that the bond was not owned by defendant personally, but was the property of the estate of which he was executor. The defendant, as. executor, is unable to perform this contract or to obtain possession of the bond until the dispute as to the amount legally due by his father’s estate to said Hart has been determined, and the object of this action is to compel the defendant to do forthwith an act, which it is impossible for him to perform.

To require of Mm now as executor to procure delivery of the bond to Mmself by payment of any greater sum than is legally due to said Hart by the estate, would be manifestly unjust to the estate, and to compel defendant to procure the bond by paying out of his own pocket a sum of money not legally due to said Hart, would be a manifest injustice to defendant personally.

The exceptions to the admissibility of certain letters and of parol evidence were properly overruled by the trial judge. In an equitable action of this nature the court is justified in receiving all evidence which may be offered to show mistake or fraud, whereby the written contract fails to express the actual agreement, and to prove' the modifications necessary to be made therein either in limiting the scope of the writing, or in enlarging it (Abbott's Trial Ev. 730; Beardsley v. Duntley, 69 N. Y. 580; Briggs v. Partridge, 64 N. Y. 360).

The judgment of special term should be affirmed, with costs.

Sedgwick, Ch. J., and Truax, J., concurred.