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    GEORGE C. RICHARDSON and others, Appellants, v. THE HOME INSURANCE COMPANY, Respondent.
    I. Evidence.
    I. WRITINGS, VARYING, &c., BY PAROL.

      (a) General rule that they cannot be contradicted or varied, &c. by parol, &c., not applicable.

    1. When it is designed to show that the writing does not represent the whole contract, but was executed in part performance only,
    or
    the purpose for which the writing was executed

      or
    that there was a conditional delivery or
    that the writings, though purporting to be a contract, were not intended, as such.
    2. When general indeterminate words are used, such as “owners,” “whom it may concern,” “trust property,” evidence dehors the writing is admissible to point and apply the words, so as to show to whom the words “owners ” and “ whom it may concern,” referred, and to what property the words “trust property ” referred.
    3. Where a party to an action, to sustain his side, rests on mere inferences arising from the letter of a writing, it is competent for the other side to repel the inferences by parol testimony.

      APPLICATION OF PRINCIPLE.

    II. Insurance.
    1. CONTRIBUTING POLICIES.
    (a) The plaintiffs, being general commission merchants, insured the goods of one of their customers, the Lowell Manufacturing Company, by four several policies taken out in the name of that company, also by five several policies taken out in their own name, attaching first to property belonging to said Lowell Company, and then to their own property, or property held by them in trust or on commission, but to the two latter only to the amount for which they, as agents, might be held liable to their principals, and to the advances madé on the same, both or either, and to attach to goods sold, but not removed from the store; they also took out three policies (termed in this litigation, for convenience of designation, “ general policies ”), the covering clauses of which were as follows:
    “ On merchandise, their own or held in trust or on commission, or sold but not delivered, contained in the brick and marble building Nos. 115 and 117 Worth Street, this city, comprising ary goods, foreign and domestic, in unbroken and unopened packages, including open sample packages, when the same shall not exceed ten per cent, of the stock, provided the said samples are not more than hazardous according to the classes of hazards.” One of these three was issued by the Traders’ Insurance Company of Chicago, and another by the American Central of St. Louis.
    The question was whether the general policies were contributing ones to a loss on the Lowell Company goods or not.
    Held, that

      although the words of the general policies were comprehensive enough to include the goods of the Lowell Company, jyet that evidence, outside of the policies, was admissible to show that they did not, in fact, and were not intended to cover these goods.

    1. Consequently.
    1. Evidence of payments by the Lowell Company for the insurances on the nine specific policies and for no other; of the payment by plaintiff for the insurance in the three general policies without contribution from the Lowell, or claim for contribution ; of no notification ever having been given to the Lowell Company of any insurance other than that in the nine policies, and of the non-adoption, by that company, of any other, is admissible; and as upon such evidence, together with the facts that plaintiff held, in trust, goods other than those of the Lowell Company, the referee might have found that the general policies were non-contributing to the Lowell loss; the final exclusion of the evidence was error calling for a new trial.
    HI. Appeal.
    1; MODIFYING JUDGMENT BELOW BY RAISING IT.

      (a) Necessary facts found.

    1. When the necessary facts on which a final judgment depends are found upon the record, and there is no valid exception to the process by which they have been found the general term may modify, otherwise not.
    Before Speir and Freedman, JJ.

      Decided February 7, 1881.
    Appeal by plaintiffs from judgment entered upon the report of a referee.
    The action was brought upon a policy of insurance, dated November 10, 1877, wherein and whereby the defendant insured the plaintiffs under their firm name of George C. Richardson, to the amount of $35,000, on merchandise contained in the stone and brick building, Nos. 115 and 117 Worth street, in the city of New York. On January 24, 1878, a fire occurred in the said building, whereby a large amount of property in the possession of the plaintiffs, in said building, was destroyed.
    The plaintiffs were general commission merchants, and had in their said building, at the time of the fire, the property of a number of consignors. Their names, the value of their property, and their losses sustained, were as follows:
    Goods in store. Loss.
    Lowell M’f’g. Co. (Carpets) . $113,287 23 $83,677 37
    Everett Mills (dry goods) . . 15,399 92 1,971 71
    Boot Mills “ . “ . . 13,190 79 1,713 77
    Mass. Mills “ “ . . 13,184 93 1,751 11
    Lawrence Mills (dry goods) . 9,729 28 1,245 75
    T. & Suffolk Mills “ 5,095 16 652 34
    York Mills “ 24,174 13 3,089 40
    Lewiston & Granite Mfg. Co.
    (dry goods) 34,188 42 9,091 26
    $225,249 76 ! $103,192 72
    These goods were covered by thirty-eight policies of insurance, and the aggregate of insurance was $342,500, as follows:
    Upon the goods of the Lowell Manufacturing Company, $90,000, of which $25,000 was by four policies in the name of that company, in this form : ■
    “ On carpets, their own or held by them in trust, or on commission, or sold, but not delivered. Loss, if any, payable to the treasurer.”
    And $65,000 by five other policies, of which the policy in suit is one, all in the name of the plaintiffs, in this form :
    ‘ ‘ On merchandise contained in the stone and brick building situate Nos. 115 and 117 Worth street, N. W. corner of Elm street, New York City, attaching first to property belonging to the Lowell Manufacturing Company, and then attaching to their own property, or property held by them in trust or on commission, but to the two latter only to the amounts for which they, as agents, may be held liable to their principals, and to cover advances made on the same, both or either, and to attach to goods sold but not removed from store.”
    These policies were procured by the plaintiffs, under the instructions of the Lowell Company, to keep their goods fully insured, were reported to that company as soon as made, as taken out to cover their goods ; the premiums were paid, in the first instance, by the plaintiffs, and immediately charged in account to the company, and paid by it. '
    Upon the goods of the Everett Mills, $30,000, by three policies in the name of the plaintiffs, in the same form last set forth, and the same facts existed in respect to them in the dealings between the plaintiffs and the Everett Mills, as above stated, in respect to the Lowell Company’s insurance. -
    Upon the goods of the Boot Mills, $12,500, by one policy in the name of the plaintiffs, in the same form last set forth, and the same facts existed in respect to it, in the dealings between the plaintiffs and the Boot Mills, as above stated, in respect to the Lowell Company and the Everett Mills insurances.
    The goods of the Lewiston and Granite Companies were held by the plaintiffs upon different terms. Upon these the agreement with those companies was that the plaintiffs should receive a guarantee commission for the sales to be made, and should insure them at their own cost, being themselves responsible, as insurers to; the owners, in case of loss.
    To cover these goods the plaintiff took out insurance by three policies in their own names, to the amount of $30,000, in this form :
    “ On merchandise not hazardous, their own, or held by them in trust or on commission, or sold but not delivered, contained in the brick and marble building situate Nos. 115 and 117 Worth street, N. W. corner of Elm street, this city: comprising dry goods, foreign and domestic, in unbroken and unopened packages, when the same shall not exceed ten per cent, of the stock, provided the same samples are not more than hazardous according to the classes of hazard.
    In respect to all the other goods in the store the plaintiffs had express instructions from the various consignors not to insure ; but the same were insured by the consignors for their own account, and in their own names, by twenty-two different policies, to the amount in the aggregate of $180,000.
    The plaintiffs had no goods of their own in store, and there is no evidence that they had made advances upon any of the goods of the various consignors.
    The consignors had, in respect of insurance, been divided into three classes by a long established and absolutely uniform course of business between the consignees and their respective consignors, viz.:

      First. The consignors who procured and paid for their own insurance in their own names.

      Second. The consignors whose goods were sold by the consignees on a del credere commission, which included the cost of insurance; the consignees being liable as insurers, and obtaining and paying for insurance in their own names.

      Third. The consignors whom the consignees were instructed to keep covered, for whom specific insurance was obtained (sometimes in the name of the consignors, and sometimes in the name of the consignees); these consignors being uniformly notified in the monthly statements made by the consignees of the insurance obtained and paid for them, and uniformly in the current month reimbursing the consignees the premiums so paid.
    The referee found, among other things:
    (1.) That of the thirty-eight policies all were specific but three.
    (2.) That the assured in the thirty-eight policies paid for all the insurance, except the insurance in the three general policies, all of which was paid for by the del •credere consignees.
    (3.) That the insured in the thirty-five specific policies were amply covered by them, the property therein at risk being of the value of $194,060.84, and the specific insurance thereon, $313,500.
    (4.) That the property of the two corporations cov-ered only by the three general policies was of the value of $31,188.42, and its only insurance the $30,000 in those policies.
    Of the thirty-eight policies on consigned property held by the plaintiffs, subsisting at the time of the fire, twenty-two belonged to the first class, and were held by the referee to be non-contributory. Of the remaining sixteen policies, three belonged to the second class, and were held by the referee to be contributory ; and thirteen belonged to the third class, nine of which are conceded and were held to be contributory to the Lowell loss. Of the four policies of the third class thrown out of contribution, and about which there is no controversy on this appeal, 'three were on the Everett Mills and one on the Boot Mills,
    'The loss of the Lowell Manufacturing Company was charged by the referee upon twelve policies as contributory, nine of which belong to the third class and are specific policies upon the Lowell, and three of which belong to the second class and are general policies issued to George C. Richardson & Co. on property “ their own, or held in trust.”
    A condition in each policy provides that in case of other insurance on the property, the insurer shall be liable on the policy only in the proportion which the sum thereby insured bears to the whole insurance on the property.
    The referee held, that the $30,000 of insurance in the three general policies, after reserving $10,306 on the losses of the Granite State, Lewiston, Everett and Boot Mills, must contribute to the Lowell loss in the proportion of the unexhausted balance of the insurance, viz., of $19,694; and that thereafter the Lowell loss was to be apportioned upon $109,694 of insurance, instead of upon the $90,000 of insurance contained in the nine third class policies specifically upon the Lowell Company, and that this defendant, on the basis of $109,694 of contributing insurance, is liable to the Lowell Company for $29,775.09 ; and that if the contribution had been upon the basis of $90,000 of insurance, the defendant’s liability would have been for $36,291.91, thus making a difference against the plaintiffs amounting to $6,516.82.
    The referee found as a fact, that the insurance in all the specific policies was paid for by the parties specifically insured; and that the insurance in the three general policies was paid for by Geo. C. Richardson & Co., without- contribution from the parties having specific insurance, and with no reimbursement except from their del credere commissions paid by the Granite State Mills and the Lewiston Mills.
    The “ proofs of loss” served for the Lowell Company’s loss did not recognize any insurance on its property except the nine specific policies for $90,000 ; Richardson & Co. made no claim on the three general policies except for the loss on the property of the Granite State and the.Lewiston Mills; but when that loss was paid, the controversy between the insurers respecting contribution having become known, R & Co. took a stipulation from the three companies (as they did from the insurers of the Everett and Boot Mills), that in case it should be held by the court of appeals that their policies are liable to contribute with other companies, R & Co.’s right to call for contribution should be saved.

      VanOott& Winslow, attorneys, and Joshua M. Van Colt, of counsel, for appellants.

      F. W. Hubbard, of counsel for the Traders’ and American Central Ins. Co., submitted points, in which he urged:
    I. The rule of evidence in regard to the variation of writings is limited to the immediate parties to the instrument, and has no application to a writing between other parties foisted into a case collaterally. In the matter of an extraneous document inter adiós acta, the truth may be shown, although conflicting with the letter of the writing. There is no doctrine of estoppel in the way. This equitable rule, which seeks the real fact, can work no injustice. It was invented to prevent the prostitution of a foreign instrument by a stranger to it to illegitimate purposes, which the authors of it never intended. This salutary principle in the law of evidence is too firmly rooted in jurisprudence to be disturbed. It has become elementary (Arnoudd Ins. 1315-1316; 1 Phillips on Ins. § 382; Angell on F. Ins. § 80; Wood on Ins. 190). In works on evidence it is recognized (Greenl. Ev. 279 a; Taylor, § 834; 2 Whart. Ev. § 923). And in adjudged cases: 55 N. Y. 233; McMasters Ins. Co. of North America; 37 Id. 79; Lee v. Adsit, 76 Id. 436 ; Harvey v. Cherry, 45 Id. 454, 460 ; 65 Id. 10, 14 ; 24 Id. 302; 19 Id. 182; 12 Pick. 317; 19 Blatchf. 122, 127; 38 Md. 382 ; Sansom, 48 ; 61 N. Y. 471; 59 Id. 521). The referee, it is submitted, was mistaken in his supposition that this wholesome rule of evidence was contravened by the decision in the Home Ins. Co. v. Baltimore Warehouse Co. (93 U. S. 527). The precise question here was not involved there. It was conceded in that case that the general policy to the bailee covered all the property in the warehouse covered by the specific policies issued to the respective bailors and assigned to the bailee. Ho evidence was offered to show that any construction should be given to the contract of insurance other than that which its letter provided. The defendant in error in that case held other policies, some issued to it directly, and others in the name of depositors of goods, loss made payable to it. These latter were to indemnify it against advances on property deposited with it as a warehouse-keeper. It was held, in the absence of proof aliunde,. that all the policies should be regarded as practically running to the same person, and upon the same interest, and that thereupon the defendant in error could recover for the entire loss, and was not limited to any special interest therein as bailee. The court also held, that all the policies, those taken out by the warehouse itself, and those taken out by the depositors of goods, were contributory, because covering the same property and interest—that substantially they were all for the benefit of all the several owners of the goods destroyed. It is thus seen that the case is not an authority here, as the precise question now under review was not then decided.
    II. It may be conceded that a bailee may insure the property of a bailor in his hands. But to make the policy effective for the bailor it must have been obtained by the bailee within the scope of his agency, and intentionally for the benefit of his principal. The three policies in question lack that essential element. Ifc was shown that the plaintiffs did not procure them in their capacity as agents or trustees of the Lowell Company. Under such circumstances it was not in the power of that company to have adopted or appropriated them against the will of the plaintiffs. The Lowell company was otherwise fully insured, and the plaintiffs had no trust interest in the property of that consignor or liability to be protected (Wood on Fire Ins. 484). It was upon the proofs on the trial impossible that those three policies should have any validity, except pertaining to the Lewiston and Granite Mills property. Every interest in all the other consigned property was fully protected by insurance.
    III. The policy in suit was obtained primarily for the benefit of the Lowell Company, based directly upon its property. This action must be regarded, therefore, as the action of that company, brought in the name of the plaintiffs as trustee of an express trust. In this view, it is submitted a double insurance could not be created by .the plaintiffs without the privity or consent of the Lowell Company, which they did not have. Their agency in that respect had been exhausted in the procurement of insurance as instructed. If they had assumed to extemporize a double insurance it could not have prejudiced their principals, because dehors their agency powers.

      Edward Patterson, attorney, and of counsel for respondent, among other things urged:
    I. There was double and contributory insurance respecting the general policies.
    The law on this branch of the case has been distinctly settled by the supreme court of the United States in Home Ins. Co. v. Baltimore Warehouse Co. (93 U. S. 527). In that case the owners of goods had taken out specific policies on their goods in the warehouse of the defendant in error. The Home Company had issued to the Warehouse Company a policy in these words: “Insure Baltimore Warehouse Company against loss or damage by fire to the amount of $20,000 on merchandise, hazardous or extra hazardous, their own, or held by them in trust or on commission, or in which they have an interest or liability, contained in” a certain warehouse. It was claimed that this policy must contribute with the special policies taken out by the owners, and although this same defendant strenuously resisted it, the court sustained that claim. It would be carious and very oppressive if, in an entirely analogous case, the rule that worked against it there should not operate in its favor here. This decision of the United States Supreme Court was put upon the broad ground that the policy (that is, the Home or the general policy, covered merchandise, and not interests in merchandise, held by the Warehouse Company. The court says (p. 543): “¡Nowhere is any less interest in the goods alluded to than the entire ownership. The words of the policy are not satisfied if their import be restrained, as the plaintiff in error seeks to confine it. The parties to whom the policy was issued were warehouse keepers, receiving from various persons cotton and other merchandise on deposit. It was at their option to obtain insurance upon the entire interest in merchandise, whether held by them or by the depositors. It is, undoubtedly, the law that wharfingers, warehousemen and commission • merchants having goods in their possession may insure them in their own names, and, in case of loss, may recover the full amount of insurance for the satisfaction of their own claims first, and hold the residue for the owners (the court here cites authorities). Such insurance is not unusual, even when not ordered by. the owners of goods ; and when so made it inures to their benefit. And such insurance we must hold the Warehouse Company sought and obtained by the policy of the plaintiff in error. The words ‘ merchandise-held in trust ’ aptly describe the property of the depositors.” The case at bar is on all fours with the case cited, as to the Richardson & Co. general policies. The whole property is covered ; the general policies inure to the benefit of the Lowell Company, for their goods were in the Richardson stores “on trust”—they were “merchandise ” or “property ” or “drygoods ;” and the plaintiffs were required to insure them.
    This is the test: Throw out of sight the group of $65,000, to which the Home policy in the case belongs. Would it be contended that the loss of the Lowell Company being $83,000, then that the general policies would not cover ? Suppose there was no other insurance than the Lowell policies direct and the general policies, and the same goods and the same loss as now appears, would it be claimed that the general policies were not broad enough to cover the Lowell carpets from the very phraseology of the general policies themselves? And if the general policies are broad enough to cover, they do cover by necessary consequence, for their terms control.
    II. The referee was right .in rejecting the parol evidence offered by the plaintiffs to show that the intention in taking out the general policies was to limit the insurance to be effected by them to the Lewiston .and the Granite State merchandise. Parol evidence -cannot be used to vary the several contracts of insurance before the court. There is no latent ambiguity in the clauses of the several policies descriptive of the risks assumed ; all the elements and factors necessary to ascertain what the underwriters agreed upon or what the parties intended are contained in those clauses. The question is merely one of construction. It has been decided frequently that what subject policies of insurance are intended to cover must be determined from “ the words of the contract which the parties have made” (Home Ins. Co. v. Baltimore Warehouse Co., 93 U. 3. 541 ; Loraine v. Tomlinson, Doug. 564; Astor v. Union Ins. Co., 7 Cow. 202; Murray v. Hatch, 6 Mass. 465 ; Levy v. Merrill, 4 Greenl. 480; Baltimore Fire Ins. Co. v. Lowrey, 20 Md. 36; Arnold on Ins. 1316, 1317, and notes; 3 Greenl. Ev. 377; Ruse v. Mutual Benefit Life Ins. Co., 23 N. Y. 519; Wilson v. Dean, 74 Id. 536). In all the cases relied upon below by the plaintiff where the extrinsic evidense was allowed, there was a latent ambiguity, and on that ground the evidence was received. In Forgay v. Atlantic Mut. Ins. Co. (2 Robt. 79), the policy of S. T. took out was “ on account of whom it might concern.” Parol evidence was clearly admissible there, but as the U. S. supreme court says, that rule cannot affect a case like the present. Lee v. Adsit (37 N. Y. 78), is not an authority in plaintiff’s favor. That was not an action between the assured and the underwriter, but between the consignee and the consignor; as between them the parol evidence of intention was admissible. The court expressly says (p. 94): “This is not an action against the insurers or upon the policies. The rule that parol extrinsic evidence shall not be received to contradict or vary a contract which is in writing, applies only in controversies between the parties promisor and promisee in such contracts. It is founded upon the just and rational presumption that the parties have made all the stipulations for the protection of their respective interests on which they have agreed, and have in language chosen by themselves placed such stipulations in a more certain form than mere oral discourse, for the purpose of excluding such loose and uncertain media of proof.” Here the suit is between the assured and the insurer (and is upon the policies), who appeals to the policies existing at the time on the property with express reference to which it contracts. It will be found upon examination of each of the other cases cited on the trial by plaintiff’s counsel, that the same distinction runs through them all, and that the relation of the parties and terms of the policies, all present cases of latent ambiguities where the contest is between the assured and the underwriters. In Bidwell v. Northwestern Ins. Co. (24 N. Y. 302), it is said, that when it is not contradictory of the terms of the policy, it may be shown “ whose property it was intended to cover,” &c. The text-books merely state the general rule that a policy issued to a particular person for account of “whom it may concern,” or some similar or equivalent clause, will be made applicable to the interest of whomsoever was intended to be covered, if the insurance is adopted by such person.

       See points of E. W. Hubbard for another class ot cases to which the general rule does not apply.

   By the Court.—Freedman, J.

The precise question involved in the appeal is whether the three general policies held by Richardson & Co. on property “their own or held in trust, etc.,” constitute other insurance within the meaning of the nine specific policies on the Lowell property, and as such are- chargeable with contribution. Substantially the question is presented by exceptions to the rulings of the learned referee who tried the cause, holding parol evidence incompetent upon this poitit and determining solely upon the language of the policies that the three general policies should contribute with the nine specific policies to pay the loss of the Lowell Company.

The contention on behalf of the Lowell Company . throughout, was (1) that R. & Co. obtained the nine specific policies on Lowell, and no other policies on account of the Lowell Company; (2) that R. & Co. had no authority to obtain insurance for the Lowell Company by general policies, mixing the interests of that company with the interests of other owners of other insured property, and that R. & Co. did not intend any insurance in the -three general policies to-be for the Lowell Company -; (3) that even if R. & Co. had so intended, the Lowell Company did not adopt it, but rejected it; (4) that the evidence received provisionally, of the course of the business, of the payments by the Lowell Company for the insurance in the nine specific policies, and for no other ; of the payment by R. & Co. for the insurance in the three general policies, without contribution from the Lowell, or claim for contribution and that no insurance except in the nine policies,, for the Lowell, had ever been notified to the Lowell Company, and that the company had never adopted any other ; was competent evidence, in respect of the extent of R. & Co.’s agency to obtain insurance, and of the extent and scope of the three general policies, as not covering the Lowell property and loss.

The general rule undoubtedly is, that a contract reduced to writing must be taken to be the repository and evidence of the final intention and understanding of the parties, and that when parties have deliberately put their engagements into writing, in such terms as import a legal obligation, without any uncertainty as to the object or extent of such engagements, it is conclusively presumed that the whole engagement of the parties and the extent and manner of their undertaking were reduced to writing ; and that in such a case all oral testimony of a previous colloquium between the parties, or of conversation or declarations at the time when it was. completed, or afterwards, must be rejected (Pohalski v. Mutual Life Ins. Co., 36 N. Y. Super. Ct. 234, and authorities therein cited, which was affirmed by the court of appeals in 56 N. Y. 640).

But the rule' is subject to some well established qualifications, or, more properly speaking, it does not apply w-here the facts do not bring the case within it.

Parol evidence is admissible lo show that the writing as executed does not represent the whole contract between the parties, but but was executed in part performance only (Hutchins v. Hebbard, 34 N. Y. 24 ; Barker v. Bradley, 42 Id. 316 ; Hope v. Smith, 35 N. Y. Super. Ct. 458 ; affirmed in 58 N. Y. 380). So a party may show the purpose for which the writing was executed (Cipperly v. Cipperly, 4 N. Y. Supreme Ct. [T. & C.] 342 ; Hutchins v. Hebbard, 34 N. Y. 24); or that there was a conditional delivery by which a locus pcenitentice was preserved (Dietz v. Farish 44 N. Y. Super. Ct. 190 ; affirmed in 79 N. Y. 520); or that the writings, though purporting on their face to be a contract, were not, in fact, intended by the parties as such (Grierson v. Mason, 60 N. Y. 394).

In case of uncertainty it may be laid down as a broad and distinct rule of law that extrinsic evidence of every material fact which will enable the court to identify the persons and things to which the instrument refers, must of necessity be received. If the language of the instrument be alike applicable to each of several persons, parcels of land, species of goods, or circumstances : or if the terms be vague and general, or have diverse meanings, parol evidence, says Taylor on Evidence, will always be admissible of any extrinsic circumstance tending to show what person or persons, or what things, were intended.

As has been well said by the learned counsel for the appellants, a policy, however general and comprehensive its language, covers only the party intended, and who has authorized or adopts it. General indeterminate words, such as “owners,” “whom it may concern,” “ trust” property, are equally comprehensive, and are broad enough to cover everything answering the description, and intended to be covered ; but the property and interests they are intended to cover must be averred and proved. Ho case holds that “ owners ” necessarily covers all owners; or “whom it may concern” necessarily covers all concerned in a loss; or property “in trust” necessarily covers all trust property. The parties insured by such general terms are only those for whom the insurance was intended, and it is so laid down in all the elementary authorities and all the adjudged cases. Evidence «to point and apply indeterminate words is held not to violate the rule which excludes extrinsic proof to vary writings. Lee v. Adsit (37 N. Y. 78) is directly in point and decisive.

In the case at bar the rule contended for by the respondent must either be a universal rule, irrespective of actual intention, or no rule at all; there is no middle ground. The trust clause must cover all trust property, without regard to intention, or only cover such as was intended; there is no other alternative. The learned referee seems to have held both ways ; he held it- not to be a universal rule, and threw out the twenty-two policies on proof of intention ; and he held it to be a universal rule, excluding proof of intention, and brought the three general policies into contribution.

The practical effect of his decision is to make the nine policies attaching first to the goods of the Lowell, Everett and Boot Mills, notwithstanding their secondary clause, specific policies on the goods of those particular mills, and expunging the secondary clause entirely, and to make the three general policies, which he deemed must, by force of their language, cover all the goods in the store alike, attach first to the goods of the Lewiston and Granite Mills, and then specifically to the goods of the Lowell, Everett and Boot Mills, exactly as if they were in form policies attaching first to the goods of the Lewiston and Granite, and then to those other goods by name. The net result to the companies liable on those three general policies is that they are to be made to pay nearly one hundred per cent, of the face of their policies, though the loss on the Lewiston, and Granite, which they were taken out to cover, was less than thirty-three per cent., and are made to pay the difference to the relief of the companies liable primarily on the loss of the Lowell, Everett and Boot goods. It also has the effect to discharge the companies whose policies, to the amount of $30,000, attached first to the goods of the Everett Company, of which there were but $15,399.92, from all liability under the secondary clause, which was left floating to the amount of at least $14,600.08.

The referee, in resting his decision upon the case of Baltimore Warehouse Co. v. Home Ins. Co. (3 Otto, 527), misconceived the bearing of the point decided by the supreme court of the United States. In that case the general policy to the bailee was conceded to cover all the property in the warehouse, and it was consequently held that extrinsic evidence could not be resorted to in order to show that insurance which, by the terms of the policy, was upon “Merchandise in the warehouse, their own, or held by them in trust, or in which they have an interest,” was intended to be simply insurance upon the interest of the Warehouse Company. In the case at bar the question is whether the general policies attached at all to the property of the Lowell Company. To the extent of determining this question extrinsic evidence may be resorted to. Thus in McMasters v. North America Ins. Co. (55 N. Y. 222), it was held by the court of appeals that the insured could himself testify that a collateral policy taken out by himself in another company did not cover the same property covered by the policy sued upon, though the description was comprehensive enough to cover it. Robbins v. Firemen’s Fund Ins. Co. (16 Blatchf. 122) does not help the respondent. In that case the general policy was held to be contributory with the specific policies, because it contained the trust clause, and the consignor’s property covered by the specific policies was the only trust property held by the consignee, and the only property therefore that could have been in contemplation in insuring trust property. It was this extrinsic fact which controlled, for Judge Shipman, in the course of his opinion, says that when the insured has property in trust or on commission belonging to two persons, one of whom is the actual beneficiary in the policy and the other is not, it is competent to show by extrinsic evidence whose property was actually intended to be covered by the insurance.

The error involved in the rejection of the extrinsic evidence under consideration becomes still more clear when it is borne in mind that the so-called general policies came into the case collaterally- The issue of contribution was presented by the defense, and upon this branch of the case the affirmative rested with the defendant. The burden was cast upon the defendant to show affirmatively all the details essential to it, the identity of the risk and interest, and also the availability of the alleged contributory insurance as an indemnity to the Lowell Company, for whose benefit the policy in suit was obtained. All the defense proved was the existence of the three policies claimed to be contributory, and then it rested upon the mere inference of identity of risk, interest and availability arising from the letter of the policies. If the defendant could rest on such inference alone,—a point not necessary to be determined here,—it certainly was competent for the plaintiffs to repel the inference by parol testimony, and to show the precise nature, character and purpose of the policies brought into the case by the defense. The objection of the parol testimony, therefore, clearly constitutes ground for reversal. The precise proving force of the rejected evidence it is unnecessary to detail or determine here. It is sufficient that upon it the referee might have found that in respect to the three general policies the contention on behalf of the Lowell Company was correct, and that the said policies never were intended to cover the goods of the said company.

It has been urged by the appellants that for the error complained of a new trial should not be ordered, but that the court, upon the facts before it, should modify the judgment by raising it to $36,2915 1, with interest. It is true that where the necessary facts on which a final judgment depends are found upon the record, and there is no valid exception to the process by which they have been found, the appellate court is in a situation to pronounce the appropriate final j udgment, and that in such a case it would be an act of supererogation to send the case back for a refinding of the facts, which have already been duly found. But the difficulty in the case at bar is that the facts have been neither duly found nor finally established, and that upon the point in dispute further evidence may perhaps be given upon a new trial on both sides. In the absence, therefore, of a stipulation or consent to the effect that the rejected evidence should be considered in connection with the other evidence, and that upon the whole case as then appearing all questions should be finally determined by us, the only disposition that can be made, is to order a new trial.

The judgment appealed from should be reversed, the order of reference vacated, and a new trial ordered, with costs to appellants to abide the event.

Speir, J., concurred.


source: Caselaw Access Project

author: By the Court.—Freedman, J.

license: Public Domain

text:
    GEORGE C. RICHARDSON, et al., Appellants, v. THE FIREMEN’S INSURANCE CO. of N. Y. City, Respondent.
    Before Speir and Freedman, JJ.

      Decided February 7, 1881.
    Appealed by plaintiffs from judgment entered upon the report of a referee.

      Van Oott & Winslow, attorneys, and Joseph H. Ohoate, of counsel, for appellants.

      Edward Patterson, for respondent.
   By the Court.—Freedman, J.

The facts of this case and the questions involved are in all respects the same as those of the case by the same plaintiffs against the Home Ins. Co., decided at the present term of court.

The judgment appealed from should be reversed, the order of reference vacated, and a new trial ordered,, with costs to appellants to abide the event.

Speir, J., concurred.


text:
    HORACE K. THURBER, and others, Appellants, v. WILLIAM HUGHES, Respondent.
    I. Consideration.
    1. Want of, when it does not arise.

      (a) Not when the purchaser gets all the bargain.
    1. Breach of conditions of sale or of a warranty does not constitute a want of consideration.

      II. Pleading.
    1. Defense of want of consideration.
    (a) What not admissible under.

    1. Evidence of breach of a condition of sale or of a warranty is not.
    in. Appeal.
    1. Error, when not cause for reversal.
    When evidence has been received without being objected to on the ground that it was inadmissible under the pleadings, that objection will not be entertained on appeal, if the case was otherwise fairly left to the jury.
    IY. Evidence.
    1. Contradicting or varying writing.

      (a) Hon-APPLICABILITY op rule that evidence tending to SUCH RESULT IS INADMISSIBLE.
    1. Where the writing refers to matters which are not incorporated in it, the writing is to be read and construed in connection with such matters, consequently evidence of them is admissible.
    Y. Application op above priniciples.
    1. A bill of sale was in terms as follows: “For value received we have hereby sold and have also delivered to W. H.,” the defendant, “ the stock and fixtures of store . . . as per terms of sale sold at auction July 39, and also sold all our rights in the lease from R. B. to J. R. on same premises, and sold by J. R. to J. H.”
    Signed H. K. T. & Co.
    Evidence was admitted as to what took place at the time of the auction. The plaintiff and defendant and their respective witnesses differed in their versions. Accoiding to the defendant’s version, 1-1. II. T. announced that the landlord (R. B.) claimed $1,000 to be due for back rent, but that there was only $500 due; that he was II. II. T., that everybody knew who he was and where he was to be found. There was evidence upon which the jury could iind that the defendant was compelled to pay $1,040. The jury found for the defendant. It appeared that defendant purchased the property mentioned in the bill of sale for $3,500. The claim of II. II. T. & Co., the plaintiffs, was $3,148.74. This defendant paid by cheek for $599.55, and his three notes for $514.07 each. The balance of the $3,500 was paid to the owner of the property upon a claim against whom held by them, II. It. T. & Co. made the sale. . Defendant paid the first two notes, but refused to pay the third, on the ground that there was no consideration for it, ns the sum he had to pay to the landlord for back rent over and above the $500, subject to "which only the lease was sold, was in excess of the amount of the noto. It also appeared that defendant got the stock and fixtures, and his title to them had never been questioned or interfered with.
    Held,
    1st. Evidence of what took place at the auction sale was admissible.
    2d. The jury must be assumed to have found in favor of defendant’s version of the announcement made.
    3d. That such announcement was part of the terms of sale, and amounted, in connection with a prior announcement that the place would be sold subject to a claim of the landlord for $500, to an undertaking on the part of H. K. T. & Co., that the purchaser should have an allowance for all he might eventually have to pay, over and above the sum of $500, or at least defendant might have so understood it.
    4th. That a breach of such undertaking did not constitute á want of consideration for the note sued on.
    5th. That it was questionable whether a breach of the undertaking could be availed of under a want of consideration.
    6th. That a question of pleading not raised below should not be entertained on appeal, if the case was otherwise fairly left to the jury.
    7 th. That a motion for the direction of a verdict in plaintiff's favor was properly denied.

    VI. False issue.
    1. New trials for.

      (a) Submission on theory not supported by the proof.

    Cause for new trial.
    (5) Irrelevant evidence tending to raise false issues.

    1. Its admission and the submission to the jury for their determination, the question on which it bears as being involved in the issue, when in fact it is not, calls for a new trial.
    1. In the action at bar the jury, by the charge, was left at liberty to find that the plaintiff pretended to sell a wholly unobjectionable lease standing in their own names, and that the defendant, if he had known all the facts, would never have given the notes in suit; and the question of the value of the lease was submitted to them, although it appeared that the defendant, by an arrangement with the landlord on the payment of the additional $540, got, without any interruption to his business, a lease in his own ■ name reserving the same rent as was reserved by the lease sold, and in all material respects equivalent thereto.

      Held,

    error.
    "VII. Lease, value of.
    l._ How determined.

      (a) By the value of the unexpired term less the rent reserved.
    1. Good-will as an element in estimating value.

    Before Speir and Freedmah, JJ.

      Decided February 7, 1881.
    Appeal by plaintiffs from a judgment entered against them upon the verdict of a j ury and from the order denying their motion upon the judge’s minutes for a new trial:
    The action was brought to recover the principal and interest of a note made by the defendant to the order of the plaintiffs, dated July 30, 1874, and payable eight months after date, for $514.74. The only defense pleaded is want of consideration.
    The note, with others, was given for the purchase of the contents of a liquor store and plaintiffs’ interest in the lease of the store. The plaintiffs, who had purchased the property at a sheriff’s sale under an execution, and also held a chattel mortgage on it for $3,000 that had been made by Joseph Hughes to John Riordan and assigned by the latter to the plaintiffs, on July 39,1874, proceeded to sell the same by auction. Th e sale was conducted by a clerk in their employ. The defendant, who is a brother of Joseph Hughes, attended, and the property was struck down to Mm for the sum of $2,500. A day or two thereafter the parties met to consummate the transaction, and the defendant executed and delivered to the plaintiffs his three promissory notes, dated July 30, 1874, and payable four, eight and twelve months after date, respectively, each for $514 and some cents, together with a check for $599.55, amounting together to the sum of $2,143.74, being the amount claimed by the plaintiffs for their interest in the property, together with certain expenses of sale, etc. On receipt of these notes and the check the plaintiffs executed and delivered, and the defendant accepted a bill of sale in the following language, viz. :
    1 ‘ For value received we have hereby sold and have also delivered to Mr. William Hughes the stock and fixtures of the store corner of Oak and Roosevelt streets, Hew York, as per terms of sale sold at auction July 29 th, and also sold our rights in the lease from Robert Boyd to John Riordan on same premises, and sold by John Riordan to Joseph Hughes.
    “ H. K. Thueber & Co.”
    The balance of the $2,500 bid, amounting to1 $356.26, the defendant paid over to his brother, Joseph Hughes, the mortgagor. He also took possession of the property sold and of the store immediately after the sale.
    The defendant subsequently paid the note at four months, and also the note at twelve months, but as to the note at eight months he insists that there was no consideration, though they were all given for the same, transaction. Other facts appear in its opinion.

      Nelson Smith <& Leavitt, attorneys, and of counsel,, for appellants, upon the questions considered by the court,'urged:

    First. The court erred in refusing to direct a verdict for the plaintiffs as requested by their counsel at the close of the evidence.
    I. It is error fora judge to submit a question to the jury where there, is no evidence to sustain a finding thereon ; and it is for a similar reason correct to refuse to submit a question unsupported by evidence (Algur v. Gardiner, 54 N. Y. 360, 364, 365 ; Shirley v. Vail, 38 How. Pr. 406 ; Corning v. Troy Iron & Nail Factory, 44 N. Y. 594; Benson v. Southard, 10 Id. 236 ; Herring v. Hoppock, 15 Id. 413 ; Godin v. Bank of Commonwealth, 6 Duer, 76 ; Pray v. Garcelon, 17 Me. 145 ; Pollock v. Pollock, 71 N. Y. 153).
    II. The only defense set up in the answer was failure of consideration. There was no evidence to sustain that defense.
    III. There is no failure of consideration when the purchaser gets what he purchased, even though it turns out to be valueless (Johnson v. Titus, 2 Hill, 606 ; Chapman v. Speller, 14 Q. B. 621; Oakley v. Boorman, 21 Wend. 588-596 ; Horner v. Wood, 15 Barb. 371, 373).
    IY. A purchaser with knowledge that the goods purchased are claimed by a third person, or that such person has a claim upon them, and he voluntarily pays the price, or any part of it, to such third person, cannot afterwards, when sued by the vendor for the price, set up want of title in the vendor (Vibbard v. Johnson, 19 Johns. 77). The plaintiffs were not obliged to prove any title in themselves to either the stock, fixtures or lease (Fitzpatrick v. Kaplin, 4 E. D. Smith, 365). Want of title in the vendor of personal property is no defense to an action for the purchase price, when there has been no recovery by the owner against the purchaser (Case v. Hall, 24 Wend. 102; Bardwell v. Collie, 45 N. Y. 496).
    Y. There was no evidence of any warranty by the plaintiffs as to the amount of rent in arrear. 1. The written bill of sale was the contract between the parties. All that occurred at the auction sale is presumed to have been inserted in that contract (Van Ostrand v. Reed, 1 Wend. 424; Pollin v. Leroy, 30 N. Y. 549 ; Johnson v. Mackintosh, 31 Barb. 267; Mumford v. McPherson, 1 Johns. 414; Highland Chemical Co. v. Matthews, 11 J. & S. 41; Wilson v. Dean, 74 N. Y. 531). 2. Thurber’s statement that he was responsible was no warranty that the rent in arrear did not exceed $500. It was - no warranty of anything. The subsequent writing is presumed, to embrace all that occurred (Ib.).

      Second. The court erred in overruling the plaintiffs’ objection to the question put to the defendant: — “What was the value of the use and occupation of those premises under the lease of ten years, in 1874, seven years and some months to run ?”
    I. The value of a lease is to be determined by the value of the unexpired term, less the rent reserved (Trull v. Granger, 8 N. Y. 115 ; Dean v. Roesler, 1 Hilt. 420).

    II. The witness answered he believed the lease to be worth $1,000. This improper evidence prejudiced the plaintiffs with the jury, and especially so in view of the fact that the court called attention to it in his charge (Ray v. Smith, 5 T. & C. 702; Warrall v. Parmley, 1 N. Y. 519).

      Third. The court erred in its charge modifying the plaintiffs’ fourth request. The court there said: — “The value of the lease for a term embraces in it what seems to have been considered a certain good-will or privilege of carrying on business there.” That was . error, and the exception to it was well taken. And as we have so often said, the value of a lease is to be determined by the value of the unexpired term less the rent reserved. The statement of the court that the value of the lease and term embraces in it, what seems fo have been considered a certain good-will or privilege of carrying on the business was misleading to the jury and erroneous.

      Fourth. The exception to the charge of the court: “ That it is for you (the jury) to determine whether, if the defendant had known this, the landlord’s rights, he would have given his notes,” was well taken. There was no dispute but that the defendant knew all about the landlord’s rights. The evidence of Thurber, Campbell, and of all the witnesses, shows that the defendant went out on the sidewalk with the landlord and Mr. Thurber and Mr. Campbell, and had full notice of the landlord’s rights. The charge was calculated to mislead the jury, and was erroneous. In fact the landlord had no claim, except for the $500 as claimed by Mr. Thurber.

      Fifth. The exception to the charge of the court which states “ that there has been testimony that the lease and good-will were worth $1,000,” was well taken. There was no evidence as to what the lease or goodwill was worth—no legal testimony, we mean. The only testimony admissible to show what the lease was worth was testimony to show the value of the unexpired term less the rent reserved. The defendant’s own testimony shows that the rent reserved in the lehse was more than use of the premises was worth. Hence there could be no testimony that the lease was worth $1,000, and as to the good-will there was no testimony whatever, and in the nature of things could not be, as goodwill is intangible and not subject to computation in dollars and cents. Besides, the defendant enjoyed the ,good-will, whatever it was. •

      Sixth. When the charge of the court is uncertain as to' what rule the judge intends to give the jury in determining any question submitted to them, or misapprehends the case, it is ground for granting a new trial, though no exception was taken (Oviatt v. Pond, 29 Conn. 486; Standard Oil Co. v. Amazon Ins. Co., 79
      N. Y. 506-510). The charge oí the court here, in view of the fact that there was no warranty by the plaintiffs, or that, if there was, there was no breach shown, the whole amount of rent due to the landlord being only §500, as appears by the record of the summary proceedings in his favor, shows that the case was submitted to the jury through a mistake or misapprehension of the court as to the questions involved ; and hence a new trial should be granted on that ground, if for no other.

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

      Frederick Smythe, attorney, A. J. Yanderpoel, of counsel, for respondent, on the questions considered by the court, urged:

    First. None of the plaintiff’s exceptions to the admission or exclusion of evidence were well taken. We proceed to consider these exceptions seriatim, (a) The question : “ What was the value of the use and occupation of those premises under a lease of ten years in 1874, seven years and some months to run?” was properly admitted ; no ground for the objection was stated. The witness testified: “That he owned real estate in that neighborhood ; that he rented houses down there,- and knew what property of that sort rented for.” This was certainly a sufficient foundation for his opinion as to the value of this unexpired lease, if the objection had been placed on that ground. The evidence was perfectly competent. This was a proper method of proving its value. The witness had already shown himself peculiarly qualified by his experience and knowledge to testify to his opinion (See Clark v. Baird, 9 N. Y. 183, 196). (b) Plaintiff’s objection to defendant’s answer to a question was improperly made .(Platner v. Platner, 78 N. Y. 90). Poggek, J., says : “ The answer, let it be conceded, was improper. The office of an objection is to stop an answer. When the question is proper, and has been put, and the witness answers that with proper and responsive matter, and of his own head adds something irrelevant, an objection does not check it. The improper part of the answer is to be met, and its effect taken away by motion to strike out, or request for instruction to the jury that they disregard. Though the court sustain the objection, the improper evidence is on the record. A motion made to strike out removes it therefrom.” Even though the objection in form be properly made, the answer of defendant was complete and responsive.. In the case of a written contract, if a person has been induced to enter it by false representations they may be proved by parol (Dobell v. Stevens, 3 B. & C. 623 ; Lysney v. Selby, 2 Ld. Raym. 1,118 ; Eakins v. Tresham, 1 Keb. 510 ; Wright v. Crooks, 1 Scott N. R. 685 ; Clermont v. Tasbaugh, 1 Jac. & W. 112; Irwin v. Saunders, 1 Cow. 249; Van Valkenburgh v. Roun, 12 Johns. 337 ; Creery v. Holly, 14 Wend. 26 ; Johnson v. Miln, Id. 195 ; Farmers’ & Manufacturers’ Bank v. Whinfield, 24 Wend. 419).

      Second. The charge was in all respects correct. The court correctly and fully met each of the requests of the plaintiff’s counsel. 1. For the reasons already stated, the court properly refused to instruct the jury to disregard the parol testimony tending to show what the negotiations between the plaintiffs and defendant were prior to the execution of the bill of sale. 2. The good-will of the business, which was by means of the lease to be carried on by the defendant on the demised premises, constituted an element of their value. Such good-will was inseparable from the lease (Williams v. Wilson, 4 Sandf. Ch. 380 ; Dayton v. Wilkes, 17 How. Pr. 110 ; Cartwell v. Lee, 17 Vesey, 224 ; Martin v. Van Shaick, 4 Paige, 480). In Dougherty v. Van Nostrand (1 Hoffm. Ch.), Vice-Chancellor Hoffman says, at page 70: ‘ ‘ Upon a sale the good-will, of course, enters in the value of the lease, and enhances the purchase money. In truth, in the lease of a trading establishment it constitutes a large part of the value ” (See Mitchell v. Reed, 61 N. 7. 123). 3. There is sufficient evidence in the case to authorize the jury to find that the value of the term in the lease mentioned in the plaintiff’s bill of sale to the defendant was more than the rent reserved therein.

       The reporters do not understand the court to have passed on the question whether the good-will of a business carried on upon demised premises is to be considered, when the question of the value of the demise arises, as constituting an element in determining the value.
      See points of counsel. •

   By the Court.—Freedman, J.

If the bill of sale embraced the whole of the contract between the parties, the defendant apparently received all he purchased, and if he did in fact, he should be held concluded by his bargain, though it may not have turned out as good as he imagined it was. For, as a general rule, an obligation cannot be defeated in whole or in part on the-mere ground of the inadequacy of the consideration, and there is no failure of consideration when a purchaser gets what he purchases, even though it turns, out to be valueless.

The defendant certainly got the stock and fixtures-absolutely, and his right and title to them has never been questioned or interfered with.

As to the lease in respect to which the real contention is, the bill of sale only calls for -whatever rights the plaintiff's had in it. Upon this point the bill of sale is explicit, and should be held to be the best evidence. The weight of the other evidence, however, points to the same conclusion. Horace K. Thnrber, Nason, the clerk who conducted the sale, and Wiley, ' another clerk also present, all testified that plaintiff's* interest only was sold. The defendant himself so testified, both on his direct and cross-examination, when first placed upon the stand, though, when recalled at a later stage, he sought to qualify it. But even then he did not retract the admission made on his first cross-examination in respect to the correctness of the writing. Moreover, he seems to have perfectly understood throughout that the lease was not held by the plaintiffs in their own names. Upon the question, therefore, relating to the nature of the lease, the plaintiffs were entitled to a ruling that they sold only what rights they had.

But the written bill of sale evidently does not express the whole of the contract between the parties. It shows upon its face that the sale took place upon ■certain terms, which are not set forth therein. Parol evidence was therefore admissible to show what these terms were.

The controversy between the parties arises out of a claim of the landlord of the premises for unpaid rent and a statement made by Horace K. Thurber at the auction sale in reference to such claim. There were present at the sale Horace K. Thurber, one of the plaintiffs, and two of his clerks ; William Hughes, the defendant; Mr. Riordan, the lessee named in the lease ; Joseph Hughes, the brother of the defendant and assignee of the lease from Riordan ; Mr. Boyd, the landlord ; Mr. Campbell, the attorney of the landlord, and a number of others. Mr. Thurber, in opening the sale, referred to the lease as an unexpired term of a ten years’ lease, having seven years and some months to run, and that plaintiffs’ interest therein would be'sold, subject to a claim of Mr. Boyd for rent, amounting to $500. In point of fact the lease was then virtually at an end, in consequence of á judgment obtained by the landlord in summary proceedings instituted to recover the possession, for two months rent in arrear from Joseph Hughes, but which judgment had not yet been enforced. This is not important, however, as the landlord and Joseph Hughes stood by and acquiesced, and the landlord was ready and willing to concede to the purchaser a right of redemption upon payment of the rent unpaid. In respect to that the landlord claimed, however, that in addition to the two months owing by Hughes there was due to him from Riordan a further sum, amounting to about $540; and through his attorney he gave public notice to those present that he would enforce his entire claim against the purchaser. Thurber, after consultation with the landlord and his attorney, directed the sale to proceed, and it is at this point that the most important conflict in the testimony arises. According to the version given by Thurber and some of the witnesses, he then announced that there was a dispute between him and the landlord as to the amount of rent due ; that he, Thurber, claimed that but $500 were due, that the landlord claimed $1,040, and that under the circumstances the place would be sold subject to whatever claim the landlord had. According to the version given by the defendant and some of the witnesses, Thurber announced that while the landlord claimed about $1,000, there were only $500 due ; that he was H. K. Thurber; that everybody knew who he was and where he was to be found, and that he was responsible.

If the fact was as claimed by the defendant, and Thurber’s statement amounted to a warranty that only $500 were due, or to a condition that the purchaser should have an allowance for all he might eventually have to pay over and above the sum of $500, it constituted one of the terms upon which the sale was made, and there being evidence upon which the jury could find that the defendant was compelled to pay $1,040, the case, aside from the question of pleading, was one for the jury, and no error was committed in denying plaintiffs’ motion for the direction of a verdict in their favor.

The jury having found for the defendant, the announcement, for the purposes of the present appeal, should be assumed to have been made as claimed by the defendant. The question then arises as to what legal effect should be given to it. It did not establish- or tend to establish want of consideration in the note sued upon, for the defendant got all, he purchased; and if treated as a warranty or condition it is ques.-tionable whether the defendant could avail himself of it without having pleaded it. But the question of pleading was not raised, and should not be entertained now, if the case was otherwise fairly left to the jury. Upon much reflection, and not without hesitation, I have come to the conclusion that under the circumstances the announcement made by Thurber, as the jury must be deemed to have found it, should be held to have been part of the terms upon which the sale proceeded, and amounted, in connection with the prior announcement that the place would be sold, subject to. a claim of the landlord, for $500, to an undertaking on the part of the plaintiffs that the purchaser should have an allowance for all he might eventually have to pay over and above the sum of $500, or that at least the defendant might have so understood it.

But here a new difficulty arises. The case was not submitted to the jury upon this theory, but they were left at liberty to find that after all the plaintiffs pretended to sell a wholly unobjectionable lease standing-in their own names, and that the defendant, if he had known all the facts, would never have given the note in suit. This mode of submission must have greatly prejudiced the plaintiffs. But this is not all. There was also testimony which had been improperly admitted, and which the jury were allowed to consider. The defendant, to whom the affirmative of the issue had been awarded on his motion, was allowed to testify on his direct examination, against plaintiff’s objection and exception, that the lease in question, if it had seven years and some months to run, was worth $1,000. This testimony was not based, as it should have been, if the inquiry had been material and relevant, on the value of the unexpired term, less the rent reserved, but solely on the opinion of the witness. No foundation had been laid for it, and on his cross-examination the witness admitted that he could not tell what it was worth, and that when he named $1,000, he had in view the good-will of the business. The testimony was also irrelevant to the issue to be tried and tended to raise a false issue. The defendant got not only all the rights of the plaintiffs under the lease, whatever they may have been, but under an arrangement made with the landlord, upon payment of the $1,040, and without any interruption in the business, he got a lease in his own name, reserving the same rent as was reserved by the lease sold, and in all material respects equivalent thereto, and as a consequence he did secure the good-will of the business, if that was sold to him, which is also a disputed question. The question to be tried, therefore, was not what was the value of either the lease or the good-will or of both combined, but upon what terms the defendant had purchased them. But the question of value was submitted to the jury, and their attention was called to the testimony complained of as proof of the value of the lease and good-will combined, which the defendant, in a certain aspect of the case, had a right to get. Such admission and submission, therefore, constituted error, for which a new trial must be ordered.

Having arrived at this conclusion, it is unnecessary to consider the remaining questions presented by the exceptions. Most of these exceptions, if not all, I have no doubt can readily be obviated when the case comes to be re-tried in conformity with the views above expressed.

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

Speir, J., concurred.


text:
    SARAH DERHAM, as Admr’x, &c., Respondent, v. JOHN LEE, Appellant, and JOHN P. SUNDERLAND, Respondent.

      Judgment against co-defendant—when ordered.—Irregularities—cannot be taken advantage of on appeal.—Jury trial—waiver of.— Evidence—books of foreign corporations, when admissible.— Code Civil Procedure—sections 507, 531, 939, 930, 931, and 1,304.
    Where, in an action to recover for services, &c., an order of revivor was entered directing the prosecution thereof by the administratrix of the deceased plaintiff, and also directing that on’e who had purchased the claim pendente lite, be made a party defendant, and that after joinder of issue upon the supplemental pleadings, the trial proceed before the referee theretofore appointed by consent, no appeal from such order having been taken, and the trial having proceeded without objection, and the merits of the controversy determined, no question of irregularity can be heard for the first time on appeal from the judgment, e. g., whether the referee could regularly render a decision- in favor of the assignee of the claim against his co-defendant; nor can the original defendant’s right to a trial of the issues by jury be asserted for the first time on such appeal.
    Under sections 531 and 1,304 of the Code, the referee had power to grant affirmative relief to such assignee against his co-defendant.
    Under sections 939, 930 and 981 of the Code (the notice therein required having been given), a duly verified copy of defendant’s account in the ledger of a foreign corporation,'is competent evidence to show the amount of work done by defendant for such corporation, the action being for the recovery of commissions on the amount which defendant was entitled to recover for such work; but it seems that such record would not be competent evidence, in favor of the foreign corporation, if the issue were between it and the parties who had rendered the services.

      Before Speir and Freedman, JJ.

      Decided February 7, 1881.
    Appeal by defendant, John Lee, from a judgment entered against him on the report of a referee, in favor of the defendant, John P. Sunderland, as the assignee of the claim in suit.
    The facts are fully stated in the opinion.

      Jones, Roosevelt & Carley, attorneys, and Charles Jones, of counsel, for appellant, urged:
    I. Plaintiff proved that she was administratrix of the former plaintiff, Michael W. Derham, and that the claim in suit had been transferred by Michael W. Derham on December 4, 1874, to John P. Sunderland. The defendant, John Lee, asked for the dismissal of the action, which motion was refused, and he excepted, (a) This being a strict common law action, containing no equitable claims in favor of any one, the only judgment the court could render was one in favor of the plaintiff for the amount due to her, or in favor of the defendant, dismissing the complaint. Section 1,204 (274 of old Code) contains the only provision of the Code which furnishes even a suggestion on which an argument can be made in favor of a judgment in favor of one defendant, and against the other, in a common law action. That section has been repeatedly passed on by the courts, and the construction given to it has been that it is intended to apply to such actions as foreclosure, partition, and the like, where the parties are interested in the thing in issue, and to authorize affirmative relief in any action to the defendant against the plaintiff (Wells v. Smith, 7 Abb. 261; Tracy v. N. Y. Steam Faucet Co., 1 E. D. S. 349; Stephens v. Hall, 2 Rob. 674; Livingston v. Mildrum, 19 N. Y. 440 ; Mechanic’s, &c., Inst. v. Roberts, 1 Abb. 381 ; Norbury v. Seely, 4 How. 24 ; People v. Albany, &c. R. R. Co., 5
      Lans. 25). But even under that section the defendant claiming relief was bound to prepare some paper in the form of a statement of a cause of action, or a pleading setting forth his claim against his co-defendant, and serve the same on his co-defendant (Decker v. Judson, 16 N. Y. 439). In courts of equity, formerly, when such relief was granted by and against defendants, it could only be on pleadings and proof (Jones v. Grant, 10 Paige, 348 ; Elliot v. Pell, 1 Id. 263). In the present case there is nothing to show the service of any paper or pleading by Sunderland upon defendant Lee. Section 521 of Code does not help the claim that a decision and judgment can be given in favor of Sunder-land against defendant Lee. It does nothing but provide for the service of a copy of an answer in cases “ where” (by some other provisions of the law) “ the j udgment may determine the ultimate rights of two or more defendants as between themselves.” It applies simply to those equity cases to which reference has been made. Not only does it not appear that the answer of Sunderland was served on defendant Lee “ ten days before the trial,” as required by section 521, but it appears conclusively that it could not have been so served, for it was not made till October 5, 1878, while the trial was commenced on March 18, 1875. (5) The only matters referred to the referee, or which he had before him, or could consider, were the issues between the plaintiff and defendant Lee. This case is not referable except by consent. It is a common law action, and does not involve the examination of a long account, and, therefore, the court has no power to order a. reference. And this action was referred by consent. As all or any of the issues in an action can be referred by consent, the consent to. refer determines what has been referred. ■ The consent here was made February 26, 1875, when the only parties to the action were Micháel W. Derham and John Lee, and was that the action and the issues existing February 26,1876, be referred ; and the order was made March 3,1875, on that consent. Doubtless, under such a consent, if a party dies, the court has a right to revive the action in the name of that party’s successor in interest, and when the action is so revived the referee can go on and try the issues referred ; but the court has not a right to import new issues into the action, nor to say, that because a defendant has waived a jury trial on certain■ issues, he has waived it on every possible issue. If the defendant Sunderland had any claims against Lee of a common law nature, he was. bound to bring Lee into court, and the court was bound to give Lee a trial by jury. Besides, the order which allowed Sunderland to be made' a defendant, did not direct that any new issues should be brought before the referee, or be tried by him, nor did it in' any manner direct or authorize Sunderland to try out any claim he might have against Lee before the referee, (c) The J. P. Sunderland mentioned in the order of February 25, 1878, could not have been made a defendant for the purpose of trying out any questions between him and Lee, the defendant, because the court had no power to make him a defendant for that purpose, under sections 122 of the old Code, and 452 of the new Code. As to section 122 (old Code), see Finck v. Allen (36 Super. Ct. 350); Newman v. Marvin (12 Hun, 236) ; Webster v. Bond (9 Hun, 437) ; section 452 of the present Code takes the place of section 122, and there is no change in that part of the section, “ but where a complete determination of the controversy cannot be had without the presence of other parties, the court must direct them to be brought in.” So the decisions cited apply to that part of section 452. In People v. Albany & V. R. R. Co. (15 Hun, 126), the court says, the views expressed in Webster v. Bond (supra), in regard to the application of section 122 of the old Code, should apply
      to section 453 of the new. The change in the language ~ which has been made in section 452 is found in the second sentence, “and where a person not a party to the action has an interest in the subject thereof, or in real property,” &c. Section 122 of the old Code read, “ And when, in an action for the recovery of real or personal property, a person not a party,” &c. In either case such a person, on application, may be made a party. Section 452 may be broader than section 122, but the person must still have an interest in the subject thereof, and he must be made a party on his application to the court. Neither of those elements exist in this case. The present case is a strict common law action for recovering the value of certain services. The only party who, by any possibility, could bring a bill of interpleader, is Lee, and he simply insists that he does not owe any one, not that he owes a debt and is doubtful as to the payee. Sunderland claims that he owns the claim of plaintiff ; if he does, then he can sue defendant Lee. "He is not in the least a necessary party to the settlement of the litigation between plaintiff and Lee. If Sunderland’s theory is correct, then . the plaintiff has not such an interest as would enable her to sustain the action. A complete determination of the controversy between Derham and Lee could be had without the presence of Sunderland. Sunderland has no interest in the “subject” of the action between Derham and Lee, nor is the present action one in which he could have such interest. The section plainly refers to an action when specific personal property is involved. And above all Sunderland has made no application to the court to be made a party, without which he could not be made a party (§ 452 of present Code). He was made a party (if at all) on a motion to revive the action, (d) The provision of the Code as to judgment is found in section 1204, which is a repetition of section 274 of the old Code. Under section 274 the defendants can have relief against each other only in a case in which they have appeared and answered in reference to the claim made against them by the plaintiff, and as a part of the adjustment of that claim, and it must be based upon the facts involved in and brought out by the litigation and investigation of that claim (Kay v. Whittaker, 44 N. Y. 565 ; Fink v. Alien, 86 Super. Ct. 350).
    "if. The counsel on the trial relied upon sections 929, 930, 931 of the Code as changing the rule then existing, in regard to entries upon books of account as evidence. JNo such effect was intended or can be given to these provisions. Their only object was to enable parties to read, in evidence, the contents of such books of foreign corporations, when admissible, not to make them admissible absolutely. If there had been any intention to change the rules of evidence, the provision would have been made applicable to all corporations, domestic as well as foreign. The difficulty was in proving, by commission, the contents of books, and this mode was devised to meet the difficulty. Besides, the book or books may be used to prove “an act or' transaction” of a foreign corporation. This may well be to prove user or any other act or deed, but not to make entries of Its dealings with other persons evidence against such person. Suppose there are entries of money paid, can it be supposed for a moment that those entries are admissible of themselves from the fact, when such entries in the books of an individual or a domestic corporation are inadmissible? This would be in contravention of the universal rule that declarations, written or verbal, of a party are not admissible in favor of the party making them.

      P. <fe D. Mitchell, for respondent Sunderland.
   By the Court.—Freedman, J.

This action was commenced June 7, 1872, by Michael W. Derham, as assignee of William B. Jackson, to recover for services rendered by Jackson to the firm of Lee & Dolan, of which the defendant Lee is the surviving partner. J udgment was entered by default, and on December 4, 1874, the said j ndgment was duly assigned to J ohn P. Sunderland. Subsequently Lee had the default opened and put in an answer, which was a general denial. The issues were referred by consent to a referee to hear and determine the same. During the trial the plaintiff died, and the proceedings became suspended in consequence thereof. On February 25, 1878, an order was made and entered reviving the action, and directing that it be prosecuted before the referee by Sarah Derham, as administratrix, &c., of Michael W. Derham, deceased ; that she make and serve a supplemental complaint; and that John P. Sunderland be made a party defendant. A supplemental complaint was accordingly made and served, based upon the original cause of action. Lee again answered by a general denial. Sunderland, by his answer, admitted the allegations of the complaint, but claimed to be entitled to judgment thereon against Lee, as the real owner of the claim. The trial of the action then proceeded again. The referee found Lee liable upon the cause of action set forth in the complaint, and that Sunderland, as assignee, was entitled to judgment thereon against his co-defendant Lee, and judgment was entered accordingly, from which Lee appealed.-

The appellant insists that upon the facts stated, the only decision which the referee could give, and the only judgment which could be directed or entered, was one dismissing the complaint. This objection is not well taken. The order reviving the action and directing Sunderland to be brought in as a party defendant, and that after the joinder of issue upon the supplemental pleadings, the trial proceed before the referee, theretofore appointed by consent, not having been appealed from, and the trial having proceeded without objection until the merits of the whole controversy were determined, no question of irregularity can be heard on appeal for the first time. Questions of regularity and practice should be raised by motion. For the same reasons Lee’s present claim to a right of trial by jury cannot be listened to, because not made before or at the trial. The only question left, therefore, upon this branch of the case, is one of power, and upon that sections 521 and 1,204 of the Code of Civil Procedure are a sufficient warrant for the decision and judgment. These sections are not to be limited by mere construction to actions of foreclosure, partition, and similar actions of a purely equitable character, for the great feature of that Code is, as it was of the prior Code, that but a single form of action is provided for the enforcement of all private rights, and that a defendant may set forth, in his answer, as many defenses or counter-claims, or both, as he has, whether they are such as were formerly denominated legal or equitable. The former requirement that such defenses or counterclaims must not be inconsistent with each other, was stricken from section 507 by the amendment of 1879. So may a defendant claim affirmative relief against a co-defendant, where, by the judgment, their ultimate rights, as between themselves, may be determined. Of course the Code prescribes certain limitations within which these rights must be exercised, but among them I can find none which would justify the conclusion that the referee exceeded his power under the circumstances. Nor is there anything in the facts themselves which constitutes a bar to a recovery by Sunderland against Lee. Sunderland became the real owner of the claim after the commencement of the action, and it was perfectly consistent for him to assert, in his answer^ his rights under the cause of action set forth in the complaint, both against the plaintiff and the defendant Lee.

The appellant also insists that the complaint should have been dismissed for want of sufficient proof, and that the report of the referee is against the weight of the evidence. After a careful examination of the whole case, I have come to the conclusion that the appellant’ s exceptions upon these points are untenable. There was sufficient evidence, if no error was committed in its reception, to sustain the referee’s findings and judgment, and I fully concur in the reasons assigned by the referee in his opinion for his conclusions.

The questions remaining to be considered relate to the admissibility of evidence. Upon this branch of the case it is claimed that the referee erred in admitting in evidence the copy of an account of Lee & Dolan as it appeared in the ledger of the New Haven, Middletown & Willimantic It. R. Co. The claim in suit was for a commission of William B. Jackson, in negotiating a contract between Fielder, Spencer & Co. and Lee & Dolan. The commission, as found by the referee, was two per cent, on the amount of moneys which Lee & Dolan should receive, or be entitled to, on said contract, and the copy of the account was offered to prove the amount of work done by Lee & Dolan on the road, for which they received credit. The exhibit was proved to be a copy of the account of Lee & Dolan for work done by them on the road, as it appears in the ledger of the company. The counsel for the appellant, .at the trial, waived any objection for want of proper verification and for not having received proper notice ■of the intention of the adverse party to use such evidence on the trial, as prescribed by sections 930 and :931 of the Code, but objected to it on the ground that it was immaterial and incompetent, for the reason that .there was no proof when or by whom the entries were made or that they were correctly made. The objection was overruled and exception taken. The evidence had an important bearing upon the issues to be determined, and hence was not immaterial. Upon the question of competency, the objection, in the absence of the preliminary proof insisted upon, would be well taken, if the issue had been between the railroad company and Lee & Dolan, and the company had offered the copy, or even the ledger itself, as evidence in its favor. In such event the case would have fallen within the principles laid down in Bank of Monroe v. Culver (2 Hill, 531); Brewster v. Doane (2 Id. 537); Burke v. Wolfe (38 Super. Ct. 263), and Ocean Nat. Bank v. Carll (55 N. Y. 440). But the controversy was between third parties, and the railroad company having been shown to be a foreign corporation, the case fell within the provisions of sections 929, 930 and 931 of the Code, by which, in such a case, the books oí a foreign corporation, or a copy thereof, or a copy of an entry therein, verified in a certain way, are made presumptive evidence for the purpose of proving an act or transaction of the corporation. The legislative intent expressed in these provisions is, that in case of the production of an original book, the contents of the book shall be received as presumptive evidence, without preliminary proof of correctness ; but that if the original book is not produced, a copy thereof or a copy of an entry therein may be admitted with the like effect, provided it is verified in a certain way and a certain notice is given. Any objection for want of proper verification or proper notice having been waived, the copy of the account was properly received as presumptive evidence of the amount of work done by Lee & Dolan for the company, and for which they had received credit, and the burden of establishing a contrary or different state of facts then rested with the appellant.

There were other objections to the admission of testimony, but they are clearly untenable, and not of sufficient importance to be specially noticed.

The judgment should be affirmed, with costs.

Speir, J., concurred.


text:
    GOLDSCHMIDT, Respondent, v. GOLDSCHMIDT, Appellant.

      Appeal—from judgment in action for divorce ente/red upon failure to answer.— Code Civil-Procedure—sections 963, 964, 994, 998, 1214, 1215, 1229, and 1294.
    A motion to dismiss an appeal upon the ground that no case, or case containing exceptions has been made or filed, will not be granted if appellant is otherwise entitled to be heard.
    Defendant in an action for divorce, who has failed to answer, has no right of appeal from the judgment therein, though he appeared by counsel who attended upon the trial and cross-examined the witnesses, and filed exceptions to the referee’s report, and was heard upon the motion for judgment. Such a judgment is deemed to be rendered upon default, and within the provisions of section 1294 of the Code.
    Before Speir and Freedman, JJ.

      Decided February 7, 1881.
    Appeal by defendant from judgment of divorce on the ground of adultery.
    Motion by plaintiff to dismiss appeal on the ground that no case was made and filed.
    The facts appear in the opinion of the court.

      W. J. Butler, for appellant.

      Wilson & Wallis, for respondent.
   By the Court.—Freedman, J.

The motion to dismiss the appeal on the ground that no case or case containing exceptions has been made or filed, must be denied, if the appellant is otherwise entitled to be heard. If she had answered in the action, it is clear that even without a case she would be at liberty to raise such questions as appear on the face of the judgment roll, and might formerly have been raised on a writ of error (Brown v. Hardie, 5 Robt. 678 ; Berger v. Dubernet, 7 Id. 1).

The action is for divorce on the ground of adultery. The defendant appeáred, but did not answer. Upon the reference to take the proofs, her counsel appeared, cross-examined the witnesses, and took exceptions, and upon the service upon him of the referee’s report, he filed and served exceptions thereto. Upon the hearing of plaintiff’s motion for the confirmation of the report and of defendant’s exceptions, the case was referred back to the referee. Upon the second hearing before the referee the testimony of about nine witnesses was taken, and they were cross-examined. The referee again reported in favor of the plaintiff. The report was again excepted to, but the court confirmed it after a full hearing and granted judgment, from which the defendant appealed. It is important, therefore, to determine her standing before the general term.

Section 998 of the Code of Civil Procedure provides that it .is not necessary to make a case where a party intends to appeal from a judgment entered upon a referee’s report, or a decision of the court upon a trial without a jury, and to rely only upon exceptions taken as prescribed in section 994. The exceptions referred to are exceptions filed, after the trial of an issue of fact, to the conclusions of law reached by the referee or court.

In the case at bar there was no trial of an issue of fact, nor was there any reference for such a trial, because no issue had been raised by the service of an answer. True, no judgment for divorce will be granted solely for the want- of an answer. The policy of the law is against it, and hence provision has been made for requiring full and detailed proof of the service of the summons and complaint, and for the ascertainment of the truth of all the material allegations of the complaint, and of the existence of any cause for which judgment may be withheld, notwithstanding the fact of defendant’s adultery. But the inquiry into all these matters does not constitute the trial of an issue of fact. An issue of fact arises only upon the pleadings of both parties, when a fact is maintained by one party and controverted by the other (§§ 963, 964). Where there is a default in pleading for want of an answer (the case not being one in which the clerk can enter final judgment) the plaintiff may apply to the court for judgment (§ 1,214), and the court must thereupon render the judgment to which the plaintiff is entitled (§ 1,215), which, however, is not done until the proofs have been collected by a reference, as prescribed by sections 1,215 and 1,229, and the rules.

The case at bar falls within section 1,294, which cuts off the right of appeal of a party aggrieved, where the judgment complained of was rendered upon his default. By this provision the decision of the court of appeals in Flake v. Van Wagenen (54 N. Y. 25), was incorporated into our statutory system of practice. The adjudications under the preceding Code upon this point were not entirely uniform, and to remove all doubt, provision was made in express language, and the provision includes all actions without distinction or reservation.

Throughout the proceedings below, the plaintiff was held to strict practice. The defendant had all the benefit that could accrue to her therefrom, but having refused to answer the complaint, she is not in a position to prolong the litigation by an appeal from the judgment. But even if her right of appeal were not cut off, she could, in the absence of an answer, raise only such questions as go to the jurisdiction, and appear upon the face of the judgment roll, and in that case the completeness of the record would be a sufficient answer. There was personal service, and consequently jurisdiction over her person as well as of the subject-matter, appearance by counsel, default in pleading, notice of and representation upon all proceedings, and evidence from which the court could and did find every material fact necessary for pronouncing judgment.

The appeal should be. dismissed.

Speib, J., concurred.