source: Caselaw Access Project

author: By the Court.—Freedman, J. Sedgwick, Ch. J., (concurring). 'Ingkaham, J., (dissenting).

license: Public Domain

text:
    CHARLES R. JOHNSON, Appellant v. THE UNION SWITCH AND SIGNAL COMPANY, Respondent.

      Option, or executed transfer—Contract, construction of as to—Promise to use, when not implied.

    Whether certain phrases used in a contract such as “ sells to, etc.”, or “agrees to sell, etc,” are to be regarded as importing an absolute sale or a mere agreement to sell is to be determined by the tenor and purpose of the whole instrument.
    In the case at bar a clause in the agreement between the plaintiff and defendant that in the event of the termination of the agreement the defendant “shall have a license to use all of the inventions, etc,” on the payment of a certain sum per year to be paid quarterly.

      Held, (1). That the phrase “ shall have a license” in view of the tenor and purpose of the whole instrument did not provide for an executed license but only for an option which the defendant might avail itself of upon paying the stipulated sum.
    (2.) That a complaint founded upon a claimed cause of action under the above mentioned clause, which did not allege that defendant had exercised the option and used the inventions or some of them was demurrable.
    (3.) That there being nothing in the agreement that indicated that defendant was bound to use the inventions, a promise to use cannot be implied.
    Before Sedgwick, Ch. J.,Fbeedman and Ingbaham, JJ.

      Decided April 7, 1890.
    Appeal from interlocutory judgment and order substaining defendant’s demurrer to complaint.
    The action was founded on the eighth clause in the following agreement: “ This Indenture, made the day of 1885, between Henry Johnson, of Flixton, near the city of Manchester, in the county of Lancaster, engineer, of the one part, and Charles Roberts Johnson, of the city of New York, in the state of New York, in the United States of America, engineer, of the other part.
    “ Whereas, the said Henry Johnson did obtain and now owns certain Letters Patent of the said United States for a Liquid Wire' Compensator which were issued and dated the 20th day of June, 1882, and are numbered 259, 865, and also Letters Patent of the Dominion of Canada for the same invention, which were issued on the same day, and are numbered 20,555, and also certain other Letters Patent of the said United States for a Railway Signal, which were issued and dated the 11th day of March, 1884, and are numbered 294,880, and also other Letters Patent of the said United States for a Rod and Pipe Compensator, which were issued and dated the 23d day of December, 1884, and are numbered 309,627.
    “ And whereas, the said Henry Johnson hath agreed to grant to the said Charles Roberts Johnson an exclusive license to make, use, sell and in any way deal with in the said United States and Dominion of Canada respectively, all and every the said several inventions or any and all other or further patents for improvements of or in any way relating to the said several patents now or to be hereafter obtained by the said Henry Johnson upon the terms hereinafter expressed.
    “ Now this indenture witnesseth, that in consideration of the reservations and covenants hereinafter contained, the said Henry Johnson, as beneficial owner, hereby grants unto the said Charles Rob - erts Johnson the sole and exclusive license and authority to make, use, sell, and in any way deal with all and every the said several inventions and further patents now to be hereafter obtained as aforesaid within the said United States and Dominion of Canada, to hold the same unto the said Charles Roberts Johnson, his executors, administrators and assigns, for all the remainder, now unexpired, of the term granted by the said Letters Patent, yielding and paying to the said Henry Johnson, his executors administrators and assigns on the usual quarter days in England in each year, one half part or share of the net royalties and of the net proceeds of sale received by him from sale or user of the herein-before mentioned patented inventions under and by virtue of the license hereby granted during the three months preceding each such quarterly payment. Provided, always, that in case the total amounts of the said quarterly amounts to be received by the said Henry Johnson from the sale or use of each of the said patented inventions shall in any year ending on the 31st day of December be less than the sums following, that is to say, five hundred pounds in any one year, then it shall be lawful for the said Henry Johnson, his executors, administrators and assigns, at any time after the discovery of such deficiency by notice in writing sent by post to the said Charles Roberts Johnson to his last known address, to put an end to the license hereby granted. And the said Charles Roberts Johnson hereby covenants with the said Henry Johnson that the said Charles Roberts Johnson, his executors, administrators and assigns, will pay the sums of money hereinbefore reserved and made payable at the times and in the manner aforesaid. And also will at all times keep correct and true books of account wherein shall be entered particulars of all machines manufactured, used, sold or disposed of in any way by him under and by virtue of these presents, the names and addresses of the persons or firms to whom the same have been sold or disposed of, and all other necessary particulars and of all sum and sums of. money received and paid by him, the said Charles Roberts Johnson by virtue of this license, and such books shall be open to inspection by the said Henry Johnson or any person by him authorized and that he, the said Charles Roberts Johnson, will at the end of each quarter aforesaid, furnish to the said Henry Johnson, his executors, administrators and his assigns, a true and correct account of all such sums received during the then preceding three months, and will also furnish to him or them all . such information as shall be required in order to test the accuracy of the said list, and will (if required) verify the same by statutory declaration : Provided always, that if default shall be made in payment- of the sum or sums of money payable under the foregoing reservation for the space of two months after the time hereby appointed for such payment, or if any breach shall be committed of the covenants hereinbefore contained, then and in éither of such cases the said Henry Johnson, his executors, administrators or assigns, may, by notice in writing given to the said Charles Roberts Johnson, his executors, administrators or assigns, or one of them, or sent to him or them by registered letter at his, their or one of their usual or last known place or places of abode in the said United States or Dominion of Canada, declare the license hereby granted to be void and the same shall be void accordingly. And also, that the said Henry Johnson, his executors, administrators or assigns, will not at any time during the continuance of these presents, exercise or use or authorize others to exercise or use the said inventions within the said United States or Dominion of Canada, without the consent in writing of the said Charles Roberts Johnson, his executors, administrators or assigns, first had and obtained: Provided, that if any infringement of the said patents shall be committed or threatened by any person or persons within the said United States or Dominion of Canada, and proceedings are taken against the person or persons so infringing or threatening to infringe the said patents, for the purpose of recovering damages or for the purpose of restraining such infringements as shall or may be reasonably required, they the said Henry Johnson and Charles Roberts Johnson, their executors, administrators and assigns, will pay all costs, charges and expenses attending or incidental to such proceedings as aforesaid in equal shares.”
    There was no allegation in the complaint that defendant, alter the termination of the contract in the complaint set forth, had used the patents and inventions theretofore used by it in its business, or any of them.
    The other facts sufficiently appear in the opinion.

      Miller & Savage, attorneys, and George W. Miller, of counsel, for appellant, among other things, argued :—
    The particular or real ground of demurrer urged was and is that the complaint did not allege “ that the defendant has used his privilege or any equivalent averment.” The court below seems to have treated the instrument as merely granting an option to defendant to use or not to use the inventions, etc. That is, this would seem to be so from the conclusion arrived at ; and the statement that the contract “ merely grants defendant a privilege.” Certainly it does grant a privilege. A privilege is a license. But when one party grants a license or a privilege to another for which the other agrees to pay a fixed sum, is it necessary to a recovery of that sum to allege or prove that the party has actually used his license or privilege ? It is respectfully submitted that such is not the law. Licenses to use patented inventions are often made in such a way as to necessitate the allegation and proof of use, and the extent of such use, in an action for royalties. That is the case where the royalty provided to be. paid is specific and made to depend upon the usé, and the extent of such use. But licenses of the other kind, such as the one in question, are equally common and lawful. They simply grant the right to use, and the payments or royalties to be paid do not depend upon the use nor the extent of the use. By the “ Third ” and “ Eighth ” clauses of the instrument defendant acquired an absolute executed license to use, etc., the inventions, etc., named, not merely an option to use if it elected or chose tó do so, and no payment to be made except when used. There is nothing in the writing which will bear such a construction. The only option is in the last part of the clause, that relating to purchase.
    It is submitted that the "words of the contract are plain and free from uncertainty ; but even if any uncertainty existed, it is a well-settled rule that, “ where there is any uncertainty in the words of a contract the court will not adopt that construction which puts one party at the mercy of the other.” Rupell v. Allerton, 108 N. Y. 288. “A contract is to be fairly and reasonably construed, with a view of carrying out the intent of the parties.” Crook v. Rindskop, 105 N. Y. 476. The only event in which it is specially provided that the license shall cease, etc., is found in the “ Tenth ” clause of the contract. If it is necessary to allege use by defendant, when and what use and during what time must the use be alleged to have been made ? The complaint does allege that both parties acted upon the entire contract up to March 1, 1888. It may very well be doubted whether the complaint would not have been quite sufficient if it had merely set forth the agreement and that the sum claimed, $1,625, had become due and payable and was unpaid for the Quarter commencing September 1, and ending December 1, 1888. Bogardus v. N. Y. Life Insurance Co., 101 N. Y. 337 ; Brown v. Champlin, 66 lb. 214. It seems almost useless to refer to authority to sustain the proposition that the instrument in question was' an executed license. Reference is made, however, only to Curtis on Patents, §§ 212, 213, and the same author at section 215, says : “If, by his agreement, the licensee has admitted that the process or thing which he uses is the patented process or thing, and he is afterwards proceeded against for not complying with, the terms of his agreement, he will not be permitted to show that he did not use that patented process or thing,” etc.

      Carter, Hughes & Cravath, attorneys, Paul D. Cravath and John W. Houston of counsel, for respondent, made the following points :—
    I. It cannot be contended that there is an express promise on the part of the defendant to purchase and pay for a license.
    II. There is no promise implied inlaw to purchase the license. There are, properly speaking, but few instances of covenants or promises implied in law. These few instances are where the law has, from the mere use of certain words in an instrument by a grantor, covenantor or promisor, imposed a correlative duty on the part of the grantee, covenantee or promisee to do or perform something on his part. Familiar illustrations are the words, “ give,” “grant ” and “ demise ” in deeds and leases. All of these words have a highly technical meaning, and the rules applicable to them do not apply to the ordinary language used in contracts.
    III. It is not neccessary to find an implied promise on the part of the defendant, in order to sustain or give validity to the contract. Hudson Canal Co v. Pennsylvania Coal Co., 8 Wall. 276,289.
    IV. The rule which favors construing language as a covenant or promise rather than as a condition has no application to this case.
    V. The promise of the defendant, if any, must be contained in the contract as a necessary inference, just as if it had been set forth expressly.
    VI. When a contract, as in this case, is technically and formally drawn, with recitals and separate covenants or promises, no covenant or promise will be implied unless the implication is clear and necessary. This rule is forcibly illustrated in Hudson Canal Co. v. Pennsylvania Coal Co., 8 Wall. 276 ; Aspdin v. Austin, 5 Q. B. 671 ; Dun v. Sayles, 5 lb. 685.
    VII. Even if the words used, standing alone, could, if unexplained, by some means be construed to imply a promise on the part of the defendant, the context clearly shows that a mere offer and nothing more was intended.
    VIII. The failure of section eight to fix any time during which the non-exclusive license therein provided for is to continue' shows that no executed license was intended.
   By the Court.—Freedman, J.

In construing the contract between the parties as a whole, the 8th section must be held to provide not for an executed license, but for an option of which the defendant may avail itself upon paying a mentioned sum. The fact that no time is fixed anywhere for the continuation of the so-called non-exclusive license, imperatively calls for that conclusion under all the circum - stances. There is no indication anywhere that it was the intention of the parties that the license should continue for the time the contract would have run, if it had not been terminated, and there is no logical connection between the duration of the license and the time fixed for the duration of the contract. In fact the license was not to come into existence until after the termination of the contract. Another difficulty is that there are quite a number of patents issued at widely different times and which consequently will expire at widely different times, and that in the absence of everything showing a meeting, of minds as to a certain period, it is not reasonable to suppose that the defendant agreed to pay $6,500 per year until the expiration of the patent last issued. The most reasonable construction is that section eight gave to the defendant merely the option to use the patents on the payment of the sum of $6,500 per year, and that the time during which such use and such license were to continue, was left for future consideration and negotiation. There being no express or implied promise to pay the $6,500 per year, and no ground for implying one, the plaintiff was bound to show in his complaint that the defendant exercised the option and used the patents, or some of them.

The judgment and order should be affirmed with costs.

Sedgwick, Ch. J., (concurring).

I agree with Judge Freedman and wish to make a few further observations.

The rule of construction given in Decker v. Furniss, 14 N. Y. 611, should be followed. It is “ There is no doubt that the phrase which stands at the commencement of the contract ‘ William H. Brown sells,’ etc., imports of itself an executed sale. But the books furnish abundant evidence that phrases of this kind are used in a very loose sense and that their literal signification is often overruled by the tenor and purpose of the whole instrument. So a party to a contract may say he agrees to sell and yet the intention be entirely manifest that the title shall pass immediately. Such phrases are quite inconclusive and are often made to yield to other terms of the contract evincing a different design.”

The covenant, leaving out words not involved in the controversy, reads: “ It is further mutually agreed, that in the event of the termination of this agreement, the said company (by reason of the expenditures that shall have been made during the continuance of this agreement) shall have a license (not exclusive) to use all of the inventions that may-have been used in carrying on the business of the company on the payment of $6,500 per year to be paid quarterly.”

It appears that the sole consideration of the grant • of the privilege to use, is indicated in the words “byreason of the expenditures that shall have been made during the continuance of this agreement,” and the words “ on the payment of $6,500 per year” do not refer to the making of the grant. The latter words are a part of the description of the nature of the grant. That grant is a license to use on the payment of $6,500. The general rule is that, nothing else forbidding, words that are relative must be held to refer to the last antecedent, that is, that the payment refers to “ to use,” and the further rule is that the antecedent being ascertained, it must be read in the relative clause, that is, that the payment is to be for the use.

It is not correct in my judgment to suppose that the relative clause refers to “ shall have a license,” etc. ; inasmuch as there had been, as has already been said, a consideration appropriated by the covenant to the granting of the privilege or license. This view does not combat the position that a promise to pay the $6,500 was implied, but it is used to show that the payment was to be made for the use. And the further question being was there an implied promise to use, I must say, that there is nothing in the covenant or the rest of the agreement that indicates that the defendant was bound to use the inventions.

'Ingkaham, J., (dissenting).

I am unable to agree with my associates in the conclusion to which they have arrived.

This action is brought to recover the amount due for one quarter under an agreement executed by the plaintiff and the defendant. I think that the true construction of this clause of the agreement is, that immediately upon the termination of the agreement of employment, the defendant did have a license to use all the inventions that may have been used in carrying on the business of the company. By operation of the agreement without any further act on the part of either the plaintiff or the defendant, the license was created. No other construction can be given to the clause in question without disregarding the plain obvious meaning of the words used. When an option was given the language used was very different; it was that the company should “be entitled to purchase ” but when a grant was intended the words were “ shall have a license.”

Such being the construction of the contract it is clear that there was an implied obligation to pay the consideration expressed.

In Booth v. Cleveland Rolling Mill Co., 74 N. Y. 21, Allen, J. says: “ There is no particular formula of words or technical phraseology necessary to the creation of an express obligation to do or forbear to do a particular thing or perform a specified act. If from the text of an agreement and the language of the parties, either in the body of the instrument or in its recital or reference, there is manifested a clear intention that the parties shall do certain acts, courts will enforce a covenant in the case - of sealed instruments or a promise if the instrument is unsealed for non-performance of which an action on covenant or assumpsit will lie.”

In the case of Barton v. McLean, 5 Hill, 257, plaintiff agreed to furnish what ore might be wanted in stocking a forge at a price not to exceed $5 per toil, and the defendant refused to take any ore. It was held that the defendant was bound to accept and purchase from the plaintiff so much ore as was necessary to stock the defendant’s forge.

In Richards v. Edick, 17 Barb. 263, the plaintiff agreed to sell his farm for and in consideration of $1,700 but there was no express agreement by defendant to buy or pay for the farm. It was held that “ when Richards agrees to sell his farm to Edick for $1,700, and two hundred and forty acres of land in Illinois, and Edick signs the agreement, there is a promise to purchase and pay for the farm; the consideration expressed is as clearly implied as though it were expressed in w'ords. It is not merely a promise made by one paity to the other, but it was an agreement made by both and binding upon both by every principle of law and morality applicable to the construction of contracts and this case is cited with approval in Baldwin v. Humphrey, 44 N. Y. 615, where the same principle is applied.

In the covenant in this case the same words are used.- The clause in question commences.

“It is further mutually covenanted and agreed.” What ? “ that the defendant shall have a license” on payment of $ 6,500 per year. To this covenant the words of Mr. Justice G-bidley in Richards v. Edick apply. “ When the defendant signed the agreement there was a promise to pay for the license ; the consideration expressed was as clearly implied as though it were expressed in words.”

The tenth clause of the agreement strongly confirms the view that this construction was the one intended by the parties. It is there provided, that in the “ event of the business of the company being terminated by circumstances over which the officers and directors have no control, this contract shall be null and void, and the license to use the inventions above referred to shall cease.” If the defendant had the option to use the invention or not as it pleased and was only obliged to pay when it used, it, the provision would be entirely unnecessary.

I am of the opinion, therefore, that the defendant was liable to the plaintiff whether it used the invention or not, and that the complaint set up a good cause of action.

I think, therefore, that the judgment should be erversed and judgment ordered for the plaintiff as demanded in the complaint.


author: By the Court.—Dugro, J.

text:
    STEPHEN R. FRAZIER, Respondent v. HENRY J. McGUCKIN, Impleaded, et al., Appellant.
    Trial—Defences not alleged in the answer when available—Lienor’s action against owner, what provable in defence—Evidence.

    Where a trial proceeds upon the assumption that the action is brought on a certain cause of action, which is not the cause of action alleged in the complaint, defences applicable to the causes of action upon which it is assumed that the action is brought, although not set up in the answer, are provable; .and if evidence tending to establish them is excluded under objection and exception it is cause for reversal.
    In an action brought by a lienor against an owner to recover for materials furnished to a contractor on the ground that at the time of tiie filing of the notice of lien there was a sum due by the defendant owner to the contractor, the defendant owner may show in defence, that the contractor had not completed the work and the amount of work uncompleted, the cost of completing the work and payments made to the contractor on account of the contract.
    Before Truax and Dugro, JJ.

      Decided April 7, 1890.
    Appeal from judgment entered on the report of a referee. The facts sufficiently appear in the opinion.

      A. H. & W. E. Osborn, attorneys and of counsel for respondent, as bearing on the questions considered in the opinion, argued :—
    I. While the McGuckin-Douglas contract remained in force the plaintiff’s recovery for the value or price of the materials furnished was limited only by the amount which had at the time of filing the lien been earned by the contractor, remaining unpaid, whether then payable by the terms of such contract or not. Van Cleef v. Van Vechten, 48 Hun, 304; Wright v. Roberts, 43 lb. 413; Graf v. Cunningham, 109 N. Y. 369 ; Heckman v. Pinckney, 81 lb. 211. An amount had been in fact earned and remained more than sufficient to pay all the liens, and the plaintiff is entitled to recover.
    II. The referee was right in excluding all evidence of payment to other parties, and of the 'furnishing of material by other parties after the execution of the release by Frazier for Douglas. The defence was wholly outside of the issues raised by the answer. The answer did not set up, except by denial, the failure of ICirchner to complete; did not set up any finishing by the owner and moneys paid, laid out and expended on such finishing after the failure by Kir timer, nor that other parties furnished the material with the consent of Kirchner and of Douglas, and were paid with their consent; did not set up a breach of contract and damages and contained no offset, recoupment or counter-claim. The defendant relied entirely on his accord and satisfaction with Douglas, and the necessity of proving payments after the release to reduce the amount due never entered his mind ; plaintiff proved conclusively that the release was never intended to and did not affect their rights in the least. The proof offered was entirely new matter and should have been pleaded. The answer must contain a statement of any new matter constituting a defence to allow the introduction, of proof. Code, § 500. The words must contain are imperative. McKyring v. Bull, 16 N. Y. 297. The answer must allege all those facts which defendant must prove to defeat a recovery, when the allegations of the complaint are admitted or proved. Catlin v. Gunther, 1 Duer, 253, 266 ; Ayrault v. Chamberlain, 33 Barb. 229; Crane v. Forbes, 4 E. D. Smith, 448; Bliss Code, Vol. 1, p. 366. A defendant cannot give evidence of new matter not stated in his answer. Dieffendorf v. Gage, 7 Barb. 18 ; Kelsey v. Western, 2 N. Y. 501; Wright v. Delafield, 25 lb. 266; Truesdell v. Sarles, 104 lb. 167.

      Daniel P. Mahony, attorney and of counsel, for appellant, on the questions considered in the opinion, argued :—
    I. That the claim of a sub-contractor is subject to all equities between the original contractors is a principle, too well established in the law of mechanics’ liens to allow dissent. Carman v. McIncrow, 13 N. Y. 70. Denio, J., page 73; Smith v. Brady, 17 lb. 172 ; Lombard v. R. R. Co., 55 lb. 491. Grover, J., page 494 ; Crane v. Genin, 50 lb. 127. Folger, J. pages 130-131; Payne v. Wilson, 74 lb. 348; Kenny v. Apgar, 93 lb. 539; Gibson v. Lenane, 94 lb. 183 ; Morgan v. Stephens, 6 Abb. N. C. 256; McDougall v. Nast, 5 N. Y. St. Rep. 144 ; Lind v. Braender, 7 N. Y. Supplement, 664; Jenks v. Brown, 66 N. Y. 629.
    II. The right of enforcement depends upon the right of the contractor to recover in an action of assumpsit. Kneeland on Mechanics’ Liens (2nd ed.) § 60 et seq. In fact, this right must be first affirmatively proven before sub-contractors can claim the benefit of the act. Wait’s Actions and Defences, vol. 4, 327; Kneeland, § 75; Sheffield v. Loeffler, 20 State Rep. 890; Heckman v. Pinkney, 81 N. Y.
      211; Graf v. Cunningham, 109 lb. 369 ; Powers y. City of Yonkers, 114 lb. 145; Vann, J., page 153; Foster v. Schneider, 19 State Rep. 449; Larkin v. Mullen, 12 lb. 123; Grant v. Vandercook, 8 Abb. (N. S.) 455; Wright v. Roberts, 43 Hun, 413; Lind v. Braender, 7 N. Y. Supp. 664 ; Riggs v. Chapin, 7 lb. 765. The rulings of the referee in excluding evidence were erroneous. The recent case of Lind v. Braender [7 N. Y. Supplement, 664] decided by the general term of the Common Pleas, December, 1889, is directly in point.
   By the Court.—Dugro, J.

From the complaint, it seems, a recovery is sought by the plaintiff upon an alleged agreement, whereby the defendant,- McGuckin, assumed to pay the plaintiff’s claim; for, after alleging the mutual recission of the Douglas contract, under which the material was furnished, the complaint states that “ thereupon the said Frederick Kirchner was to assume and did assume the completion of said buildings under some arrangement between him and said Henry J. McGuckin ; the said Henry J. McGuckin assuming the payment of the balance due plaintiff of the price or value of the materials so furnished as aforesaid by this plaintiff.”

The cause of action, which the referee found to have been established by the evidence, was not that which is alleged in the complaint.

The action seems to have been tried upon the assumption that it was brought by a lienor to recover for materials furnished to a contractor to whom, at the time of the filing of the notice of lien, there was a sum due by the defendant owner.

If the action is to be treated as though it is such as the case presents, the defendant should have been permitted to show in defence (although not alleged in the answer), that the contractor had not completed the work; the amount of the work uncompleted; the cost of completing the work, and any payments made to the contractor on account of the contract. It seems evidence relevant to this defence was excluded by the referee. Notably is this the case in the exclusion of checks to and receipts from Frederick Kirchner, dated in September, 1886, and the sustaining of objections to the questions “ Did you furnish material for the trim-work of those buildings and if so what ? ” and other questions put to James MacKintosh.

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

Tbuax, J., concurred.


text:
    JACOB W. MACK, as Assignee, etc., Appellant v. ALEXANDER V. DAVIDSON, Sheriff etc., Respondent.

      Burthen, of proof—General assignment, attack on validity of on the ground of an improper and illegal preference—Unauthorized endorsement—Trial, conduct of, plaintiff s requests for a direction in his favor, when not waived by introduction of further evidence.

    Where the validity of a general assignment for the benefit of creditors is attacked on the ground that the assignors endorsement on a preferred note (they being liable only by reason of the endorsement) was unauthorized, the burthen of proof to establish that the endorsement was unauthorized is on the attacking party, whether he be plaintiff or defendant.
    Evidence which would sustain a finding that the endorsement was not shown to have been authorized is not enough to uphold a verdict invalidating the assignment. To invalidate the assignment it must be affirmatively shown that the endorsement was unauthorized.
    Where at the close of defendant’s case the plaintiff’s counsel moves for a direction of a verdict in his favor which motion is denied and he excepts to such denial, he does not deprive himself of the benefit of his exception by endeavoring through the introduction of further evidence to have the case presented to the jury most favorably for his client.*
    Note.—This must bo taken with the qualification that such further testimony does not disclose facts, or is not of such a nature as to require a submission to the jury.
    Before Tbuax and Dug-bo, JJ.

      Decided April 7, 1890.
    Appeal from a judgment entered on the verdict of a jury.
    This action is brought by the plaintiff as assignee under a general assignment for the benefit of creditors made by the firm of Bindskopf Brothers & Co., against the defendant, as sheriff of the city and county of New York, for the unlawful taking from the possession of plaintiff as such assignee divers goods and merchandise, part of the assigned property, and converting the same to his own use. The defendant justified under five executions issued to him upon judgments recovered against the assignors, alleging that at the time of the levy under such executions the goods levied on were the property of the assignors, or that they had an interest therein liable to levy and sale under execution, and also alleging that the assignment was made with intent to hinder, delay and defraud the creditors of the assignors of their claims, debts and demands, and that plaintiff had full notice thereof.
    On the trial the seizure of the property was conceded, and also that at the time of the seizure plaintiff was in possession thereof under the assignment. It was also stipulated that the -value of the ‘ goods levied on at the date of the levy was $76,400. and that the verdict, if any, for the plaintiff should be for that sum with interest from December 8,1884.
    The litigation was as to whether the assignment was fraudulent and void. All the grounds on which defendant claimed it to be fraudulent and void were ruled against him by the trial judge except one. That one was as to a preference in favor of one Max Nathan upon á note held by him for $25,000, made by James Thompson & Co., bearing the endorsement of Rindskopf, Bros. &Co., after it had been previously endorsed by R. Buchman. At the close of his charge the judge instructed the jury as follows : “if you find on all the facts of the case that it does not appear that Mr. R. Buchman was entitled to make the firms endorsement on the note in question, then you must find for the defendant. On the contrary if you find -that he was authorized, then you will find in favor of plaintiff for the sum of $81,791.53.” The jury rendered a verdict for defendant ; from the judgment entered on which this appeal is taken.
    The other facts sufficiently appear in the opinion.

      Stern & Meyers, attorneys and of counsel, for • appellant, in the questions considered'in the opinion, argued :—
    I. The court erred in denying the plaintiff's motion for the direction of a verdict at the close of the whole case. In denying that motion it proceeded on the doctrines involved in the following portion of its charge : “ The burden of proof in this case is upon the defendant to show that the assignment is fraudulent, which is not to be presumed in law ; but when they show the firm name was given in some matter in which the firm was not interested, they have shown enough to invalidate the assignment.” * * * “ Such assent or authority under the evidence in this case is an affirmative fact which the plaintiff is to prove by facts in the evidence which may come from either side.” The law has recently been laid down adversely to this doctrine by the Court of Appeals in the case of Bernheimer v. Rindskopf, et al., decided by the Second Division in December, 1889. That was an action brought by a judgment creditor to set aside the general assignment involved in the case at bar, on the charge that the same was fraudulent. In that case, as in this, the attacking creditor to make out a case, relied upon the preference of the James Thompson note above referred to, and after having introduced at the trial evidence that the firm’s endorsement was placed uponthe note by Buchman for the accommodation of his daughter, or the firm of James Thompson & Co., and that the note was not entered in the books, and that the assignor’s firm was insolvent when the note was endorsed, the plaintiffs in that case rested. The defendant put in no evidence. After deliberation the court dismissed the complaint upon the merits, which disposition of the case was in last November finally affirmed in the Court of Appeals. In that case, as in this, the question of the burden of proof was the question before the court.
    II. The introduction of evidence in rebuttal on behalf of the plaintiff after the denial by the court of plaintiff’s motion for the direction of a verdict did not affect the appellant’s rights. It is undoubtedly well settled that if the party having the burden of proof rests his case without adequate testimony, and the court denies a motion to dismiss, and the opposing party then introduces evidence which supplies the defects in the testimony offered by the other party, the appellate court will not sustain the, exception to the refusal to dismiss, because on all the evidence it would be clear that no injustice had been done. But such is not this case. After the denial by the court of plaintiff’s motion for the direction of a verdict and the taking of an exception thereto, the plaintiff introduced evidence to rebut the two points which the court said alone remained to be explained, namely, first, the coarse of dealing between the assignors and Buchman Bros. & Co.; and secondly, the validity of the preference of the James Thompson & Co. note. The evidence to rebut the first of these, to wit, the dealings with Buchman Bros. & Co., was so overwhelming that the court took that question away from the jury at the close of the case. The evidence in rebuttal upon the sole remaining question in the case, to wit, the validity of the preference of the James Thompson & Co. note, we think completely disproved the defendant’s contention in that regard. Certain it is that the plaintiff’s proof in rebuttal supplied no defect in the defendant’s proof.

      Cochran & Clark, attorneys, and W. Boitrke Cochran of counsel, for respondent, on the questions considered in the opinion, argued:—
    I. The only question in the case having been submitted to the jury on the plaintiff’s consent, and the jury finding for the defendant, the judgment should be affirmed. Ross v. Colby, 3 Hun, 546; Barrett v. Third Avenue R. R. Co., 45 N. Y. 628-632; People v. Cook, 8 lb. 67-74; Appleby v. Astor Insurance Co., 54 lb. 253-261; Dillon v. Cockroft, 90 lb. 649-650. It may be claimed that the rights of the plaintiff were protected by the request for a direction of verdict; but it is plain that this direction cannot avail for the reason that no particular ground upon which such claim was based was pointed out to the court, it being a mere general motion, and there were a large number of issues presented by the evidence irrespective of the Thompson & Company note, involving the validity of the assignment, so that it would have been error for the court to have directed a verdict at that stage of the case. Whether the application was based upon some technical deficiency in the defendant’s proof, or whether it was based, as no doubt will be claimed here, upon the fact that the defendant had not produced any evidence overcoming the presumption in favor of the validity of the assignment does not appear, and the application cannot be availed of for the further reason that it does not appear that it was made at the close of the defendant’s case, or that it was made at any time prior to the charging of the jury. It appears to have been made, as far the record discloses, in the middle of the case, and therefore cannot avail for any purpose. Plaintiff waived his motion for a direction. But it is of no benefit to the plaintiff for another reason that he did not stand upon the same ; but, not being willing to risk the decision of the court thereon, or his rights upon appeal, proceeded to call witnesses in rebuttal, ostensibly, of course, to rebut facts which had been brought out by the defendant, or which he thought was necessary to make some question perfectly clear to the court and jury. Plaintiff never at the close of the whole case asked that a verdict be directed. It is clear, therefore, that the plaintiff, by putting in this testimony in rebuttal, and by acquiescing in the submission of the case to the jury, waived any rights that he had arising out of the request made to the court at an earlier stage of the case, for a direction. S. & S. Plank Road Company v. Thatcher, 11 N. Y. 102-112 ; Tiffany v. St. John, 65 lb. 314-317 ; Painton v. Northern Central R. R. Company, 83 lb. 7, and cases cited above.
    II. The decision of the Court of Appeals in the action to set aside the assignment is not conclusive here. That decision is not conclusive on this appeal, for that: 1st. The plaintiffs in that case were directly assailing the assignment, and they stood on their own case alone and did not introduce testimony. Here the defendant, having the physical possession of the property under legal process, was attacked and put in testimony. 2d. In the assignment case the court made findings to the effect that the preference of the note was valid and binding on the firm, and it also laid down the same proposition in its opinion, and this finding was binding in the Court of Appeals. Here the finding of the jury, on conflicting and different evidence, is the other way, and is equally binding on this court. 3d. The evidence in the assignment case is not the same as here. Nathan’s testimony was not the same in both cases, and Buchman, who gave the most valuable testimony for the defendant here, was not a witness in the assignment case at all. Furthermore, the same rule should not be applied as to the finding of a jury on the questions of this case, they having seen the witnesses and different witnesses from the trial judge, and especially as the issue here was narrowed to one question, whereas, Judge Van Brunt had several questions, and was judge of both the law and facts. 4th. The jury here decided the question on disputed and different testimony from that before the judge. 5th. In this case there is evidence that the firm did not authorize the endorsement, thus meeting the point of the opinion of the court of last resort.
    III. The rule laid down in the opinion of the Second Division of the Court of Appeals, in the case of Bernheimer v. Rindskopf, should not be extended. Without desiring to criticise the opinion of the court in that case, we feel that it has gone to a very great extent, and it should not be applied except where the facts of the case really bring it within its provisions. The authorities are very clear to the effect that where a partner signs or endorses the firm name on a promissory note given for the debt of a third party, or the debt of the individual partner, in which the firm has no interest and derives no benefit, that the firm in such a case is prima facie not liable when the note is in the hands of a person having knowledge of the transaction. We cite only a few cases on this subject : Atlantic State Bank v. Savery, 82 N. Y. 102 ; Union Nat. Bk. v Underhill, 102 lb. 236 ; Calkins v. Smith, 48 lb. 614 ; Lafferty v. Burr, 1st Wend. 529 ; Foote v. Sabin, 19 Johns. 154. Thecourt will observe that the complaint in this case was dismissed because of want of proof ; there was no evidence at all in the case upon the subject of the assent or non-assent of the other partners. Plaintiff’s claimed that the preference in the assignment was not any evidence as against the plaintiff of any liability, under the doctrine of—Moore v. Metropolitan National Bank, 55 N. Y, 41 ; Pringle v. Leverich, 97 lb., 181; Edwards v. Scoharie Bank, 47 lb. 46 ; affirmed in 114 lb. 620. The Court of Appeals affirmed that decision, and held that the burden of proof was upon the plaintiff to establish fraud in the assignment. Certainly, when the Court of Appeals says that the burden of proof is upon the plaintiff to establish fraud in the assignment, or fraud in any case where that is the issue, it does not mean that the fraud must really be established by witnesses called by the plaintiff; nor does it mean that in this case fraud in the assignment must be established by witnesses called on behalf of the defendant; it simply means that before a recovery can be had, there must be evidence in the case from which fraud can be presumed, or tending to establish fraud. And however that evidence is obtained, whether by witnesses of the plaintiff or that of the defendant, whether by direct or cross-examination, is of no materiality. The court here left only the question of the Thompson note to the jury. We did not agree with the court in such disposition of the case and desired other matters to be submitted, but the jury found upon a very careful charge the issue as to want of authority, in favor of the defendant. We, therefore, submit that this case is not within the provisions of the opinion in the case of Bernheimer v. Rindskopf ; the facts and the proof being entirely different, and there being no serious error committed upon the trial, and only questions of law being presented for review, this judgment should be affirmed,
   By the Court.—Dugro, J.

It seems that after the defendant had called and examined several witnesses the plaintiff moved for a verdict and excepted to the denial of his motion. The court theretofore made a statement, whereupon witnesses were called for the plaintiff in rebuttal. Nothing appearing in the case to the contrary it is fair to presume that the defendant had rested when the motion was made, and that the motion was for such a verdict as the parties had provided for by their stipulation theretofore made. The exception is, therefore, available. It seems to have been well taken, for no evidence appears in the case from which the jury could infer that the indorsement upon the Thompson note was unauthorized. The evidence would sustain a finding that the endorsement was not shown to have been authorized, but this is not enough. The burden was upon tho defendant, having assailed the validity of the assignment, to show the endorsement unauthorized.

It is claimed by appellant that Buchman’s evidence was sufficient to warrant an inference that he was unauthorized to make the endorsement, and particular reliance seems to be placed on the fact that Buchman stated to Nathan, in response to the latter’s request for the firm endorsement, that “it could easily be done, no doubt of it,” and after this sent the note to Nathan without the firm endorsement, and only after pressure indorsed the note as appears in evidence. Whether this evidence would be sufficient to permit an inference that there was a lack of general authority it is unnecessary to determine. It would certainly not warrant an inference that Buchman had not obtained special authority to act as' he did. Buchman’s statement that he would not be sure' that Rosenthal was present, but thought he was, on the occasion when he claims to have been specially authorized to endorse the note, falls short of evidence, warranting an inference that Rosenthal was not present.

The rule that the burden of proof is upon the attacking creditor to show the invalidity of the assignment is applicable in this case as in Bernheimer v. Rindskopf, 116 N. Y. 428. That in the one case the creditor is a plaintiff and in the other a defendant does affect the applicability of the rule. The defence in this action is an affirmative one. The appellant’s counsel makes a point as follows : “ the plaintiff by not insisting—and standing thereon—that there was no evidence which would justify the submission of- the case to the jury, is now estopped from claiming that there was no evidence to justify the finding,” andrefers to several cases as authority. None of these support his proposition. No estoppel arises under such circumstances. After plaintiff s exception to the denial of his motion for a verdict, he did not deprive himself of the benefit of his exception by endeavoring to have Ms case presented to the jury most favorably for his client.

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

Truax, J., concurred.


author: By the Court.—Truax, J.

text:
    FRANK W. MILLER, Plaintiff v. THE UNION SWITCH AND SIGNAL COMPANY, Defendant.

      Pleadings, admission in, effect of—Option to use after a certain event on a certain payment, effect of proof of use after that event—Matters overcoming such effect constitute an affirmative defence—Former adjudication, when not a bar.

    Where certain rights or privileges are by a contract to arise on its ter- . mination, and the complaint in an action founded on such rights or privileges alleges the termination of the contract, which allegation is not denied by the answer, it is unnecessary for the court to determine what kind of a termination was contemplated by the contract. The admission in the pleadings preclude litigation of that question on the trial.
    Where under a provision of a contract one has an option after a certain event to use certain inventions of another upon payment to that other of a stipulated annual sum, -to be paid quarterly, and there is proof tending to show that after that event he used the invention, the plaintiff makes out a prima facie cause of action for the stipulated sum. Is the defendant claims that under other provisions of the contract he was entitled to use the inventions in performance of contracts made before the happening of the event upon the happening of which the option is given, that, if a defence, is an affirmative one and must be proved by him to avoid his prima facie liability.
    Where a contract provides that one of the parties thereto shall be employed by the other as a manager at a stipulated salary, and also that he shall be paid for the use of certain inventions a certain annual sum, payable quarterly, and shall also receive in addition to such a compensation a certain proportion of net profits, and provides that on the termination of the contract the employer shall have an option to use said inventions on the payment of a certain annual sum, to be paid quarterly, a judgment in favor of the employee for damages for his discharge as manager, and for the salary and profits due him at the time of his discharge, and for the sum then due for the use of the inventions, is not a bar to an action brought under the option clause to recover for the use of the inventions subsequent to the discharge and the termination of the contract the sum stipulated to be paid therefor.
    Before Truax and Dugro, JJ„

      Decided April 9, 1890.

      Exceptions ordered to be heard in the first instance at general term.
    This action is brought under the eighth clause of an agreement made between Charles R. Johnson and the Union Switch and Signal Company (which clause and agreement were considered in the case of Charles R„ Johnson against that company, ante page 59; for the agreement and clause in question see that page) to recover the quarterly payment for the use. of the inventions referred to in the clause for the quarter ending September 1, 1888, which quarterly payment was assigned to the plaintiff by Johnson.
    Defendant read in evidence the judgment roll in an action brought by Johnson against the company. From the judgment roll it appeared that that action was brought to recover a sum due under the contract in question to Johnson for salary as manager; also for a sum due him under the contract for royalties for January and February, 1888 ; also for a sum due him on account of profits earned by the company ; also for damages for his discharge on March 1, 1888, as manager, and that Johnson recovered a judgment.
    The other facts sufficiently appear in the opinion.

      Miller & Savage, attorneys, and George W. Miller of counsel, for plaintiff.

      Carter Hughes & Cravath, attorneys, and Charles E. Hughes and John W. Houston of counsel, for defendant.
   By the Court.—Truax, J.

The action was brought by the plaintiff as the assignee of one Charles R. Johnson, to recover the sum of $1,625 as an installment of royalties claimed to be due and payable for the three months ending on the first day of September, 1888, under a contract entered into on the 20th clay of September, 1886, by the said Johnson and the said defendant. The contract is set forth in full in the complaint.

It was provided in the 8th clause of said contract “that in the event of the termination of this agreement, the said company,”—that is, the defendant, “by reason of the expenditures that shall have been made during the. continuance of their agreement, shall have a license, not exclusive, to use all the inventions that may have been used in carrying on the business of the company, on the payment of $6,500 per year, said sum to be paid quarterly.”

It was alleged in the complaint that said contract was terminated by the defendant on the first day of March, 1888, which was before the time provided in the contract for its termination. This allegation is not denied in the answer, and therefore it is not necessary for us to determine what kind of a termination of the contract was contemplated in the 8th clause of the contract. It is true there was an attempt to litigate this question on the trial, but a party will not be allowed to litigate on the trial a question admitted by the pleading.

It was also alleged in the complaint and denied in the answer that the defendant “ had used-and was, on the said first of March, 1888, still using, and has since that time still continued to use, manufacture and sell to others to use ” the inventions referred to in the contract of the 20th day of September, 1886.

It has been held by a general term of this court that the plaintiff must show, in order to sustain his cause of action, that the defendant has used since the termination of said contract some of the inventions mentioned in the contract and in the complaint. The plaintiff did offer evidence that tended to show such use, but the defendant contends that it had the right, during the countinuance of the said contract, to make contracts for the delivery and sale of the inventions mentioned in said contract, and that it was not shown that such inventions were not used under contracts made prior to the termination of the contract between plaintiff and defendant. This defence, if it be a defence, is an affirmative one and should have been shown by the defendant affirmatively on the trial. It is also to be noticed that it is not within the letter of the contract.

The judgment roll offered in evidence is not a bar to this action. The plaintiff’s right to royalties began after the termination of the contract and then only on the defendant’s using the inventions men-, tioned in the contract. That is, the mere breach of the contract did not give the plaintiff’s assignee a cause of action for royalties.

The defendant’s exceptions are overruled and judgment is ordered for plaintiff' on the verdict, with costs.

Dugbo, J., concurred.


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

text:
    MYRA L. WADSWORTH, Respondent v. THE JEWELERS’ AND TRADESMEN’S COMPANY OF NEW YORK, Appellant.

      Mutual Insurance Associations—Beneficiary, right to have applied to payment of loss, fund on hand at time of death of the member in respect of whose death the loss is payable and if that be insufficient then to have the deficiency made up from monies realized to such fund from an assessment therefor to be made and paid so far as such money will go.

    The certificate of membership in this case provided for the payment to plaintiff upon the death of Elbert E. "Wadsworth of the sum of $4,000 from the death fund of the defendant at the time of such death, or from- any money that should be realized to the said fund from the next assessment to be made as thereinafter set forth, and also provided that in case the death fund should be insufficient to meet existing claims by death an assessment should be made on the members according to certain rates designated therein, and the net amount of such assessment should go into the death fund. Elbert E. Wads-worth was a charter member, and he with others at the time of receiving their certificates of membership paid what is variously called “ first assessment” or “ first death assessment.” The amount thus paid less-20 per cent aggregated $1,798.35 which amount was on hand at the time of the death. Elbert E. Wadsworth’s death was the first death. After his death the Secretary of the company sent to the members thereof a notice, headed Mortuary Call Number 1, setting forth among other things the death of Wadsworth and stating “ The amount of is now due and payable within thirty days from date of this notice in order to maintain your certificate in force.” In each notice the blank was filled in with the amount assessable on the member to whom it was addressed. Under this call there was realized to the death fund the sum of $1,749.07.
    The constitution of the association provided, among other things, as follows: “ Article 4, Sec. 3. In case a death claim is proven while a single assessment is insufficient to pay the said claim in full, there shall be paid in full satisfaction of such claim a sum pro-rata of the membership and benefits in force at the time of the death of such member.” “Sec. 4. Any member may pay advance dues or assessments subject to the approval of the Executive Committee.”

      Held, (1) That plaintiff was entitled to recover the sum of $3,547.42, being the aggregate of the two sums of $1,798.35 and $1,749.07.
    (2) That the clause as to the payment of a sum pro rata was meaningless, or at the best vague and indefinite, and not applicable to facts shown by testimony.
    Before Sedgwick, Ch. J., Freedman and O’Gurman, JJ.

      Decided May 5, 1890.
    Appeal by defendant from judgment entered upon findings and conclusions of law made by a judge sitting by consent of parties without a jury. The facts sufficiently appear in the opinion and the head note.

      Rudd & Hunt, attorneys, and James M. Hunt of counsel, for appellant, argued :—
    I. All organizations incorporated under chap, 175 of the laws of 1883, as amended by laws of 1887, chap. 285, raise the money paid to the beneficiaries of deceased members by means of assessments. The majority of such organizations wait until a death occurs before levying an assessment.to make the payment to the beneficiary, and then such'payment cannot be made until the assessment be levied and collected. But if the assessment should be made and the money collected before the death to be provided for occurs, so that a death fund should be on hand, then the payment in a given case could be made immediately upon receipt of proof of death. The latter plan is expressly sanctioned by the language of the statute, viz : “ assessments or any of them collected, or to be collected from the members thereof.” § 3 of chap. 175 of the laws of 1883. And this latter plan is the one adopted by the defendant, and accordingly each member upon joining the organization was obliged to pay his “ first death assessment,” in order that there might be a “ death fund,” from which payment to the beneficiary of the member who should first die could be promptly made. Under this plan, it was obviously necessary as soon as a member died to levy an assessment and place the proceeds in the “ death fund ” to provide for the payment which it would be necessary to make upon the occurrence of the next ensuing death.
    II. Plaintiff is entitled to receive only the proceeds of the first assessment, (a.) Elbert A. Wadsworth upon becoming a member of defendant, agreed that if he should be the first member to die, his beneficiary should receive nothing in addition to the amount realized to the “ death fund ” from the “ first death assessment.” The constitution and bylaws, which constituted a part of Wadsworth’s agreement, contained the provision that if a death should be proven “ while 'a single assessment is insufficient ” to pay same in full, there should be paid “ in full satisfaction of such claim ” a certain proportion of that assessment: As Mr. Wadsworth’s death was the first death to occur among the members of defendant, the “ single assessment” referred to in the above mentioned section of the constitution was the assessment paid by all members upon joining as the “ first death assessment,” The only possible construction that can be placed upon the above provisions is that Wadsworth; in making that contract, agreed that if his death should be the “ first death ” to occur among the members of the defendant, the amount his beneficiary should receive would be confined to the amount that should be in the “ death fund ” contributed by members upon joining as “ first death assessment.” As, therefore, Wadsworth’s death was “ the first death ” to occur among the members of the defendant, his widow, the plaintiff, is entitled to nothing beyond “ the first death assessment ” which had been turned into and constituted the “ death fund ” at the time of Wadsworth’s death, (b.) Under the contract made, only one full assessment can be applied to the payment of a single death claim. Wadsworth in his lifetime stood in a like position with every other member of the defendant organization. If Wadsworth in his lifetime or any surviving member of defendant could successfully resist an attempt to levy two assessments and apply the full proceeds thereof to the payment of a single death claim, then, as defendant is organized for the mutual benefit of its members, two full assessments could not be applied to the payment of the claim arising on Wadsworth’s death. There is no authority to levy and collect but a single assessment for a single death. It cannot be claimed that Wads-worth’s agreement was in any respect different from the agreement of every other of defendant’s members. The court below has found that by that agreement, upon the death of a member, á single definite sum should be paid by each member—i. e., a single assessment. The amount of this single assessment is fixed with definiteness and' precision by the schedule of rates of assessment, which schedule is carefully set forth in the application for membership in the constitution and bylaws and upon the certificate of membership. According to that schedule, had some other member died on October 12, 1888 and had Wadsworth lived, then to replenish the “ death fund ” so that the next occurring death claim could be paid, Wadsworth would have been called upon to pay an assessment, and, as he then would have been 43 years old his rate per $1,000 would have been $1.54, and his ben-' efit subscribed for being $4,000, the amount of his assessment to meet the second death would have been $6.16. In like manner, the assessment of each member to meet a death claim is computed, and no authority can be found for levying more than one assessment for one death. Furthermore, section 3 expressly states that only a single assessment can be applied to a single death claim. Nothing which contradicts or neutralizes the above provisions is contained in section 2 of article 5, of constitution and by-laws. It should be noted that while the defendant was a young and small organization when Wadsworth died, yet its constitution and by-laws were necessarily framed to provide for the contingencies which would arise when defendant became an. older and larger organization. While defendant ■ should remain young and small, deaths among the members would not occur so rapidly but that an assessment could be levied and collected between the payment of one death claim and the occurrence of the next ensuing death. But when the membership should become large, it required no prophetic eye to see that two dr more deaths might occur during the thirty days required to collect an assessment. Plainly it was to meet the requirements of such emergencies that the language found in section 2 of article 5 was used. Note the words—“ a death claim or claims.” The same construction is applicable to the language of the certificate of membership. The provision there is to pay $4,000, not absolutely, but “ from the death fund of the company,” etc., “or” from the proceeds of the next assessment. The word “ or ” is here used for a definite purpose. Had the word “and ”been used there might have been some foundation for the claim that both the existing death fund and the next assessment were applicable to the plaintiff’s claim. But the use of the word “ or” in this connection indicates that not both, only one or the other is applicable ; if the death fund shall contain a full assessment, and no other death has occurred demanding payment therefrom, then the death fund alone is applicable ; but if the death of the given certificate holder occur so rapidly, ensuing upon other death or deaths, that an assessment cannot be levied and collected upon each individual death before the next occur, then the meaning of the word “ or ” becomes significant, and recourse can be had to the proceeds of the next assessment to be levied “ as hereinafter set forth.” Note the words “existing claims by death.” But “ no claims shall be otherwise due or payable ” except from one or the other of the above described funds—i. e., either the “existing death fund or” the proceeds of the next assessment. There is no principle of law any better or more thoroughly well-established than this : In construing a written contract such a construction, if possible, must be adopted as will give some force and effect to every part of such contract. Wood v. Sheehan, 68 N. Y. 365, 368 ; Ward v. Whitney, 8 lb. 442, 446 ; Hamilton v. Taylor, 18 lb. 358. Any construction of the contract made between Wadsworth and defendant which permits two full assessments to be applied to the payment of plaintiff’s claim, gives no force or effect whatever to sec. 3 of art 5, and the provisions relative to the schedule of assessment rates upon each death. But the construction above indicated gives force and effect to every part of the contract, and creates repugnancy in no part. It follows therefore that only one assessment was applicable to plaintiff’s claim, and as Wadsworth’s death was the “ first death” among the members, the “first death assessment ” which made up the death fund at the time of his death -was alone applicable to the payment of plaintiff’s claim by reason of his death. It should be noted that in neither O’Brien v. The Family Fund, 46 Hun, 426, the Darrow case therein referred to, nor in any other reported- case against a Mutual Benefit Society, has any decision been made which is in any particular at variance with the construction of this contract herein contended for. The plan of assessment disclosed in those cases contemplated no assessment until the actual occurrence of the death to be provided for. But the plan under which the defendant herein makes its assessments contemplates the levying and collection of the assessment prior to the occurrence of the death to be provided for, so that there shall always be on hand, except when the same is rendered impossible by the two frequent occurrence of deaths among its members, a death fund from which a death claim may be paid promptly upon receipt of proofs of death.
    III. The plaintiff was entitled to receive only the amount of the check which has been paid to her. It should be borne ’ in mind that the defendant is a Mutual Benefit Society organized for the mutual benefit of all its members. As has been already shown, during the earlier existence of such a society there cannot be members enough to pay by assessment at the rates adopted by the society upon its organization, death claims in full to the amount specified in the certificate issued to a deceased member. But at each assessment the member whose certificate reads $2,000 pays only one-half as much as the member whose certificate reads $4,000, and only two-fifths as much as the member whose certificate reads for $5,000. This difference in assessments is perfectly equitable, if the member paying the larger assessment should secure payment to his widow, upon his death, of an amount proportionately larger than that which would be secured to the widow of the member who pays the smaller assessment. Unless there were any other provision in the constitution therefor, while one assessment yields to the death fund less than $2,000, the beneficiary of a $2,000 certificate would realize as much as the beneficiary under a $5,000 certificate, although the $2,000 member has paid only two-fifths as much as the $5,000 member. It was, therefore, to remove this -patent inequality, and make. the benefits realized while the society be small, proportionate with the amount of assessment paid, that section 3 of article 5 of the constitution was adopted. This section was much criticised by the counsel for the plaintiff before the courb below, and perhaps it is open to criticism in that its meaning is not expressed with the clearness and accuracy which should and does usually distinguish legal documents; But the charter members of this society, of whom the deceased Wadsworth was one, themselves framed their constitution and by-laws without the aid of a lawyer. We submit, however, that the meaning which this section 3 of article 5 was intended to express is perfectly clear. Certain it is that this section can have no other meaning than that already outlined, and that its sole purpose was to remove the inequitable difference that would otherwise have existed during the early days of the society between assessments paid and amounts realized by beneficiaries. It was evidently intended that the beneficiary under a $2,000 certificate whose decedent had paid only two-fifths as much as the $5,000 member should not receive just as much as the beneficiary under a $5,000 certificate. And as one member might have had issued to him upon application a certificate for $2,000, and another certificate for $3,000, upon the death of such member a death claim for $5, 000 would arise, although no $5,000 certificate had been issued, therefore instead of saying in this section that the sum paid should be according to the proportion which the amount named in the certificate of the deceased member should bear to the amount named in the largest certificate issued, these charter members used the expression “pro rata of the membership and benefits in force,” intending thereby to include the total amount of benefits in certificates issued to a single member. This is certainly the meaning, and the only meaning of this section 3, as is alleged in the sixth paragraph of the answer herein. It is respectfully submitted, therefore, as the certificate to Mr. Wads-worth was for $4,000 while benefits for $5,000 .had been issued to other members, there became due and payable upon the death of Mr. Wadsworth only four-fifths of the amount in the death fund at the time of his death, i. e. four-fifths of $1,798.35, viz : $1,438.68.

      S. F. Kneeland, attorney and of counsel, for respondent, argued :—
    One of the points of contention between the parties to this action arises out of the construction which is to be placed upon section' 3 of article 5 of the constitution, hereinbefore quoted, the defendant claiming under it that a $5,000 certificate should form the basis of computation upon which the defendant should pay the beneficiary, to wit : that the term “ pro rata of the membership and benefits,” means the ratio between the Mortuary Fund and the maximum certificate issued by the company upon the life of any one person. The plaintiff contends that section 3 does not warrant any such conclusion or authorizes the defendant to adopt any such arbitrary basis of computation. Nothing appears in the constitution, by-laws or proofs in this case making a $5,000 certificate a basis for any purpose or computation. Defendant might as well make $10,000 or any other sum a basis for computation. The burden is cast upon the defendant to show its authority- for assuming this arbitrary basis. The only purpose of that section, we assert, is to limit the amount to be paid in cases where the amount which would be received from a single assessment, would not be equal to the amount stated in the certificate, and this, like all limitations, should be construed strictly against the insurer and in favor of the insured. Conditions and provisions in policies of insurance, if of doubtful meaning, are to be construed against the insurer. Hoffman v. Acton F. Ins. Co., 32 N. Y. 405, 413, 414; Breasted v. Farm. Loan & Trust Co., 4 Seld. 305 ; 61 N. Y., Opinion, 575 ; Ripley v. Lamourk, 56 Barb. 21. All words, whether they be in deeds or statutes, or otherwise, if they be general, 'and not express and precise, shall be restrained unto the fitness of the matter and person. Bacon's Law Maxims, Reg. 10. It is a rule of law, as well as of ethics, that where the language of a promisor may be understood in more senses than one it is to be interpreted in the sense in which it was understood by the promisee. Potter v. Ontarion Ins. Co., 5 Hill, 149, and cited with approval in 32 N. Y. 413. And this rule has been uniformly applied to conditions and provisions in policies of insurance. Yeaton v. Fry, 5 Cranch, 341 ; Pity v. Royal Ins. Co., 1 Burrows, 349 ; Livingston v. Sickles, 7 Hill, 255 ; Catlin v. Springfield Ins. Co., 1 Sum. 434 ; Cropper v. Western Ins. Co., 32 Penn. St. 351. The ambiguity of the words “pro rata of the membership and benefits in force at the time of the death of such member ” is such as to render the section referred to entirely unintelligible, and furnishes no definite mode of ascertaining what sum shall be paid in case the death claim is proven while a single assessment is insufficient to pay the claim in full, while section 1 of article 5 provides that the amount of the assessment to pay death .claims, and the condition of the payment of the same shall be stated in the certificate of membership.
    The most favorable construction to the defendant that can be placed upon section 3 of article 5 would be to construe the words “pro rata ” to be equivalent to the word “ average ” and if this shall be adopted then this section, standing by itself, would be construed to mean that the sum to be paid should be the average of the benefits in force at the time of the death of the member, or, in other words, the ratio between the number of certificates in force and their aggregate amount. The defendant, however, cannot limit the amount payable under its construction, as it has riot shown the number of the membership or the amount of the aggregate benefits in this company, which it would be required to do as a part of a defence restricting our claim to less than the amount named in the policy. If, as plaintiff contends, section 3 shall be disregarded and article 5 sections 1 and 2 and 3, and the certificate of membership furnish the true guide by which the amount of the death loss to be paid, is to be determined, the constitution and certificate contemplates the payment in full of the amount specified in the certificate itself. - The court can see that the material sections, if the views are to be adopted, are sections 1 and 3 of article 5, section 1, providing that the board shall determine the amount necessary to pay the death claim, and the conditions of payment of same, which shall be stated in the certificate of membership ; section 2, providing “ that when the Mortuary Fund is insufficient to meet the death claim, the Board of Directors shall levy an assessment for such sum as the Executive Committee shall deem sufficient to pay such claim,” and further providing that the assessment shall be apportioned among the members, according to the “rates specified’in the certificate of membership, and that the net amount received from the assessment, less 20 per cent, for the Reserve Fund, shall go into the Mortuary Fund, for the payment of the death claims.” The well established rule applicable to the construction of the statutes should be applied in this case.” We must read the constitution as a whole, and if it cannot be harmonious, the inharmonious portion must be rejected, so that the constitution may exist, unless the rejection of this inharmonious portion will entirely defeat the purpose in view. We claim that the rejection of section 3, article 5 would in no manner defeat the purpose in view as expressed by the sections heretofore quoted and the certificate of membership itself. Upon the construction and rules applicable thereto we call the attention of the court to the following authorities : Where the ambiguity of the language is apparent the construction is to be that most favorable to the insured. 10 N. H. 305 ; Pelly v. The Royal Ex. Ass. Co., 1st Burr, 341-348 ; Blackett v. The Royal Ex. Ass. Co., 2 Cramp & Jar. 244 ; Yeaton v. Fry, 5 Cranch, 355 ; Palmer v. Warden, 1st Story, 360. Niblack on Mutual Benefit Societies, p. 206 ; N. W. Mutual, etc., v. Hazelett, 105 Ind. 212 ; Burkhard v. Travellers’ Ins. Co., 102 Penn. St., 262.
    This certificate itself is a contract upon its face to pay $4,000, and if the mortuary fund is insufficient to pay such sum then to add to it for such purpose, all moneys realized to the fund from the next assessment, less 20 per cent, for the reserve fund as hereinbefore set forth. From this statement of law and facts we submit (a) That the plaintiff was entitled to payment of her claim in full. That it was the duty of the defendant through its directors to assess a sum sufficient with the amount on hand in the mortuary fund to answer that purpose, and on their refusal so to do the defendant was liable in damages as for a breach of contract in the entire amount insured. Fitzgerald v. Equitable Res. Fund, etc., N. Y. Supplement of July 25th, 1889, p. 837 ; Freeman v. Society, 42 Hun, 252. (b) In case the court had decided the above theory to be incorrect then the defendant was manifestly liable to pay the amount then in the mortuary fund, which was $3,547,42. The defendant attempted to controvert this by two propositions, each of which was untenable, to wit: (1) That the assessment in this case was made before his death by requiring each member as they joined to pay a certain sum to start a mortuary fund which by the receipt given was designated a first death assessment. This being a first death (there is no proof to that effect) no further assessment could be made. We answered this as follows : The voluntary contribution, however designated, formed when made the nucleus of the “ Mortuary Fund ” in existence at the time of Wadsworth’s death. This being insufficient to pay the claim, the policy says that “ the next assessment,” after his death shall also go into that fund and be applicable to the payment of the claim. In this connection the notice of assessment on account of this death is a material factor. It is termed “ Mortuary call No. 1 ” and is issued as stated for the reason “ that proofs of death of the following named member (Wadsworth) having been this day received and found satisfactory, the Executive Committee has ordered a Mortuary call on all who were members on October 12th inst.” (2) The remaining claim by the defence was that if the new assessment applies to this claim it must be taken in full payment, leaving the previous mortuary fund intact. To this we say the policy also provides that this next assessment shall “ be made as hereinafter set forth,” then follows a provision in subdivision 1 that where ‘1 the death fund is insufficient to meet existing claims by death an assessment shall be made and the amount thereof less twenty per cent.11 shall go ”—not to the sole payment of the claim but—11 into the death fund.” It is nonsensical to claim that after it has got in there it must be •immediately separated from the rest of the fund and applied to the exclusion of the balance as the only payment upon the death claim in question. The clear intent and meaning of the constitution and policy of insurance, taken together is, that the amount stated shall be paid in full from the death fund and if that is not sufficient at the time of the death it shall be augmented for that purpose by a new assessment. The word 11 or ” as used in the policy simply refers to this contingency and cannot be construed to limit the otherwise necessary effect of the constitution and agreement of insurance.
    It is a well-settled rule of law that 11 the apparent intention, as collected from the whole instrument must always control particular expressions ” and that for this purpose the word 11 or ” may be construed as meaning “ and ” and vice versa, Roome v. Phillip, 24 N. Y. 463 ; People v. Van Rensselaer, 8 Barb. 189 ; Van Vechton v. Pearson, 5 Paige, 512 ; Miller v. Philip, 5 lb. 573 ; Jackson v. Topping, 1 Wend. 388. Under this rule the term 11 $4,000 from the death fund of the company, at the said death, or from any moneys that shall be realized to said fund from the next assessment,” may be construed to mean “and” from any moneys, etc. The promise in either event under this section, is to pay $4,000 without deduction.
   By the Court.—Sedgwick, Ch. J.

The defendant was a mutual company constituted to make insurances upon the'lives of such persons as should become members. They issued a certificate of membership to the husband of the plaintiff, which declared that within sixty days after the receipt of satisfactory evidence of the death, etc, “there shall be payable to Myra L. Wadsworth * * $4,000 from the death fund of the company at the time of said death or from any moneys that- shall be realized'to the said fund from the next assessment to be made as herein after set forth, and no claim shall be otherwise due of payable except from the Reserve Fund as hereinafter provided.

I see no reason to doubt that a claim was entitled to be satisfied out of the death fund existing at the time of death, and if that death fund did not satisfy the claim, the part not satisfied was to be paid as far as possible out of the fund to be made by the collections from assessments after the death.

The certificate provided if the death fund is insufficient to meet existing claims by death, an assessment shall then be made upon every member whose certificate is in force at the date of the death last assessed .for, and the net amount received from such assessment, (less 20 per cent to be set apart from the reserve fund) as provided in the constitution and by laws of said company, shall go into the death fund.

Section 2 of article 5 of the constitution, and which regulated assessments, was whenever the Mortuary Fund is insufficient to meet a death claim or claims, the Board of Directors shall cause to be made upon the members, etc., an assessment for such a sum as may be by the executive committee deemed sufficient to pay such claim or claims, the same to be apportioned among the members according to the age of each member and at the rate specified in the certificate of members, etc.

It seems to be plain that any valid claim was to be satisfied not from a single fund but from the death fund on hand at the time of the death, and if that were insufficient then from the amounts of collections of assessments made to increase the first fund. The result would be that there would be a single fund called the death fund. As there was no provision for the company creating a death fund except by assessments to be made to meet death claims, the consequence would be, that there would be no death fund until after the first death, and the first claim would have no death fund on hand to resort to. Evidently this would be an injustice to the first death claim which should have a right to resort to a death fund on hand as the other members would have. So, without authority from the by-laws or constitution, but by the assent of persons as they become members, the company required each person proposing to become a member to pay a certain sum under what they called a first death assessment. In this instance the member paid what is called in a receipt given to Mm “ first death assessment, $6. ” If it be considered that such an assessment was not of a kind to be made under the articles of the constitution, certificate of membership or the by-laws, and the testimony leaving to inference what was the origin and purpose 'of the so called first death assessment, it must be inferred that the assessment was made to create a fund or death fund that should be in existence at the time of the first death, and the obligation of the company would be to treat the collections so to be made as constituting the death fund at the time of the first death. It was the right of the first claimant, by the terms of the policy, to have that death fund if not sufficient to pay the claim, increased by an assessment to be made. A provision of the certificate that has already been cited, is that the collections of the assessment shall go into the death fund.

In this case, the claim was the first death claim. At the time of the death there was on hand collections from the assessments made before the death. This was the death-fund. The company made assessments afterwards to meet the claim. The assessments were specifically made, as appears by the notice, to meet the claim of the plaintiff, because it declares that proof of the death of the following-named member having been this day received and found satisfactory, a mortuary call is made, and then the name given was Elbert E. Wadsworth, who took the certificate of membership in this case. I am of opinion that the learned judge below was right in holding that the claim was not satisfied by paying the amount of the death fund on hand at the time of the death, and that the funds that came from the assessments made to meet that claim should be appropriated to the full satisfaction of the claim.

An argument was made that the plaintiff was entitled to receive, less than the plaintiff’s claim, under the provisions of section 3, article 5, of the constitution. That section was, that in case a death claim is proven while a single assessment is insufficient to pay the said claim, there shall be paid in full satisfaction of such claim, a sum pro-rata of the membership and benefits in force at the time of the death of such membership. These expressions have to my mind no meaning and are at the best vague and indefinite and not applicable to facts shown by testimony. The terms of the contract, if there be inconsistency, should control.

The judgment is affirmed with costs.

Freedman and O’Gorman, JJ., concurred.


text:
    GEORGE SCHUCHMAN, Respondent v. SOLON WINTERBOTTOM, et al., Appellants.

      Contract to manufacture, when non-conformity to the contract affords no defence to contract price, or ground for damages—Immaterial evidence, exclusion of questions tending to elicit, not error.

    Where articles manufactured under a contract are delivered to and received and used by the party for whom they are manufactured and no return or offer to return is made, they being of such a character as to be capable of being returned, the conclusion is that they were accepted as manufactured in accordance with the contract, and the party receiving them is concluded from claiming they do not conform to the contract and is liable for the contract price and is not entitled to any damages for a claimed non-conformity. The court deemed it unnecessary to consider as to a qualification to this rule, that where the defect complained of is not discoverable until after use or close inspection, a retention without complaint after the lapse of a reasonable time in which to discover the defect must occur before an acceptance as in conformity with the contract will be presumed, because the proof showed that' one of the defendants had full knowledge of what was claimed to be defect before the delivery of the articles.
    To sustain a counterclaim for 51 days delay in delivery, defendants put in evidence their books containing entries of the actual delivery; connected with these entries were blue lines; a witness testified that the entries were made long before the blue lines. Held, that it was immaterial to ascertain from the witness what the meaning of the blue marks was.
    Before, Sedgwick, Oh. J., Freedman and O’Gorman, JJ.

      Decided May 5, 1890.
    Appeal by defendants from judgment entered upon the verdict of a jury. The facts sufficiently appear in the opinion.

      Hayis & Greenbaum, attorneys, and Samuel Greenbaum of counsel, for appellants, argued:—
    I. One of the principal points relied upon by the defendants was the fact that the vans were not delivered on time, and in view of the clause fixing the damages per diem, it was of great importance to the defendants to show precisely when the vans were delivered respectively. The defendants’ warehouse had been entirely destroyed by a conflagration and it was of the utmost importance that the vans should be gotten out as quickly as possible. It was upon the express understanding that the plaintiff would build the vans quicker than anybody else that the contract was given to him, and the forfeiture clause was accordingly inserted. The defendants had shown that as soon as a van was received a memorandum of it was made by the person receiving it at the establishment of defendants in a book which was in the nature of a blotter. Yarious witnesses were examined with respect to the receipt of the vans by the defendants, and they testified to the receipt of the vans upon certain dates from the blotter in question. Upon cross-examination of one of these witnesses, Yan Benschoten, the plaintiff’s counsel, asked the witness as to whether one of the entries testified to by him was put in before certain blue lines which appeared upon the book were written or drawn upon the page, to which the witness answered that the entry was written in, before the blue lines were drawn, and that the blue lines were written across there long after. Referring to another entry (that of September 6th,plaintiff’s counsel, on cross-examination, asked whether that.entry was not written in, since that date, to which witness testified that it was not. Counsel for defendants then asked witness to make an explanation in reference to the blue crosses, and to explain what the blue crosses thereon shown indicated. To this question plaintiff objected, and, the question being excluded, defendants’ counsel duly excepted. Defendants also, upon examining Eugene A. Furber, who is the cashier of the defendants, and who also made entries in the blotter, asked what the meaning of the blue checks appearing opposite these entries was, and the question being objected to by the plaintiff, the objection was sustained and the defendants excepted. Defendants then sought to explain what their object was in showing these entries, and the court would not permit defendants’ counsel to state what the object was, to which the defendants duly excepted. Defendants. then sought to show by this witness the practice as to whether any charge is made in the ledger of an entry of the character ref erred to, to which the plaintiff objected, the objection being sustained, and the defendants duly excepted. It thus appears that the plaintiff was enabled to give the jury the impression that the entries testified to as having been made were as a matter of fact made' at some subsequent time, and the defendants were not permitted to explain the meaning of the checks in blue lead pencil, which gave the suspicious character to the entries referred to. It is respectively submitted "that such a ruling ing by the learned trial judge was error and the court is referred to the case of Harrison v. Kulke, (38 Super. Ct. 399). From the foregoing fact it is evident that an explanation of the blue marks was very important to defendants, and it seems to be clear that the learned trial judge was in error in excluding any evidence tending to explain the meaning of these blue marks.
    II. At the conclusion of the judge’s charge defendants’ counsel requested that the judge charge the jury that it was the duty of the plaintiff to show that he substantially complied with the terms of the agreement as to the manner of construction and materials to be used, and that the plaintiff cannot recover unless the inferior character of construction or materials could have by ordinary diligence been discovered by defendants. The court refused so to charge and the defendants duly excepted. Defendants’ counsel made a further request to charge, showing that it was a condition precedent on the part of the plaintiff to maintain his action to prove performance of his contract, and this was refused, and the defendants excepted. It is respectfully submitted that the learned trial judge erred in his refusal to charge as requested. It is a well settled rule of law in this state that where performance is made a condition precedent, performance must be shown to entitle the party to recover, Smith v. Brady, 17 N. Y. 173 ; Philip v. Gallant. 65 lb. 264. When the builder has in good faith intended to comply and has substantially complied with the contract, although there may be slight defects caused by inadveríance or intentional omission, he may recover the contract priceless damage on account of such defects. Johnston v. De Peyster, 50 N. Y. 666 ; Glacius v. Black, 50 lb. 145 ; Philip v. Gallant, 62 lb. 264 ; Nolan v. Whitney, 87 lb. 649. Instead of this the court even refused to charge the jury that the plaintiff must" show a substantial compliance and evidently confused the case, as heretofore shown, with the case of the breach of warranty upon the sale of chattels under the rule laid down in the case of White v. Miller, 71 N. Y. 118. It may also be said that the defendants were not even given the benefit of the rule which the learned Justice said was the rule applicable to the case, on the groundthat the defendants had not shown how much less the vans were worth in the condition as delivered from what they would have been worth if they had been delivered as agreed upon. It is respectfully insisted that the learned Justice was in error in this respect. It had been shown that there was a diference in value between the paneling used and that which should have been used which alone amounted to $162,50. There was thus specific evidence of the difference of value. This fact alone would be sufficient to show the learned trial judge did not give the defendants even the benefit of the rule which he had in mind as applicable to the case.

      John P. Schuchman, attorney and of counsel, for respondent, on the questions considered in the opinion, argued:—
    I. The acceptance of the vendee of articles manufactured for him under an executory contract, after an opportunity to examine them, estops him from thereafter claiming damages for any visible or discernible defects and imperfections, whether discovered or not. Studer v. Bleistein, 115 N. Y. 316, 319. Defendants had ample opportunity for a whole year to examine the vans and having made no objection thereto, they are estopped from making any claim for damages. Hopkins v. Appleby, 1 Stark, 388 ; Day v. Pool, 52 N. Y. 416, 420 ; Pierson v. Crooks, 115 lb. 539, 547.
    II. The exceptions to the rejection of evidence were mostly all obviated by allowing the evidence to go in ou modified questions.
   By the Court.—Sedgwick, Ch. J.

The action was for a balance of moneys to be paid to plaintiff by defendants under the provision of a contract. The contract was that the plaintiff should build certain vans and deliver them to defendants, for which the defendants were to pay certain sums. The defence was that the vans were not made in the manner provided by the contract. The respect in which they were claimed not to be in accordance with the contract was that the panels of the vans were not sufficiently thick or as thick as panels were ordinarily made for vans of such' a size. And on this ground the defendants claimed that the plaintiff had not shown performance on his part.

The testimony showed beyond doubt that the defendants had received the vans and had used them for a long time, and that they were still used without any return or offer to return. The conclusion from the testimony was that the defendants had accepted the vans, as built in accordance with the contract. Part of the testimony on this subject were certain entries in the defendants’ books in their business which were statements of the time when the vans were received. On the books, near these entries, were blue marks like checks. A witness who had made the entries was asked on behalf of defendants to explain these marks. The form of these questions was irregular and the overruling of them by the court was correct for that reason. But if the testimony, in explanation of which the questions were asked, was stricken from the case, the remainder of the evidence showed that the vans had been accepted without any claim by defendants that they did not fulfil the contract. Under these circumstances the plaintiff was entitled to payment of the contract price. Reed v. Randall, 29 N. Y. 358; Studer v. Bleisten, 115 lb. 325 ; Pierson v. Crook, lb. 547.

It is argued that this result is not a proper one here because the defect of which defendants complain was latent and not discoverable by a reasonable degree of observation at the time of the receipt of the vans or during a long time after. I do not think it is necessary to examine the law of the conditions claimed to exist, because it is in evidence from one of the defendants, that before the vans were completed he had- observed the manner in which they were built and specifically the thickness and construction of the panels.' That witness had been at plaintiff’s shop during the work. He was there every few days. He took charge of them personally. He made several complaints. He attended to the outside. He told the plaintiff that the panels ought to be put in lengthwise instead of up and down. 1 ‘ Q. In other words, the grain instead of running up and down should run lengthwise. A. Yes, sir, the panels should be made in one piece.” It is clear that the defendants retained the vans knowing the condition of the panels and their size.

The defendants could not assert that the vans were not in accordance with the contract, after the acceptance with knowledge of the facts, and were not entitled to any damages on account of the condition of the panels.

It is claimed that, it was error not to allow a witness who made the blue marks, that have been already referred to, to explain their meaning. The defendants for the purpose of establishing that they were entitled to an allowance of ten dollars a day for fifty-one days on account of delay in delivery under a provision of the contract, put in evidence their books which contained entries of the times of actual • delivery. On cross-examination, the witness who made the entries was asked, if the entry was made before the blue lines were, and the answer was in the affirmative, and long before. Upon this affirmation of the witness it was immaterial to ascertain what the meaning of the blue marks was.

The judgment is affirmed with costs.

Fbeedman and 0’Gorman, JJ., concurred.