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

text:
    ANDREW RANDALL, Appellant, v. JOHN B. REYNOLDS, Respondent.

      Parties to contract—Effect of settlement on rights of prior assignee—What particulars of instrument of settlement explainable.

    Where a contract provides for the payment to A. of commissions, if the sale of certain real estate be effected, and also provides that the purchaser may be found by A. or B., the agreement cannot be deemed an original contract with B., and he must recover, if at all, as assignee of A.
    A valid settlement of a claim for commissions, as above made, between the parties, for value, is binding on a prior assignee of the claim, where the debtor has not been notified and is ignorant of said assignment at the time of the settlement.
    A receipt may be explained as to the consideration part, when the explanation is not inconsistent with the instrument; but so far as it isa contract having a settlement or release for its object, it cannot be varied or explained verbally—and this, whether the paper be sealed or not.
    A paper acknowledging the receipt of $500 “ in full of all matters from the beginning of the world to this date,” is not to be limited to any particular claim, unless, in addition to the general words, a particular claim be specified.
    Before Sedgwick, Oh. J., and Truax, J.

      Decided June 1, 1885.
    Appeal by plaintiff from judgment dismissing complaint on the merits, entered on direction of judge at trial term before a jury.
    The complaint averred, and the answer admitted the making of the following contract, in writing : “If I sell my iron ore mine known as the McIntyre bed, in town of Livingston, Ool. Co., N. Y., to a party, through the efforts of Andrew or John L. Eandall, or to parties introduced by them, for $125,000, I hereby agree to pay to John L. Eandall, five per cent, commission on said sum, and I further agree to pay two and one-half per cent, (if I sell for a less sum), on the sum that I may sell at, it being understood that the said Eandall shall study my best interest, and communicate fully and freely with me during the negotiations. ”

      It was further averred that the plaintiff brought one Louis Snyder and the defendant together; that the defendant thereupon agreed with Snyder to sell, and convey the property to Snyder, or such person as he should designate ; and that, in consequence thereof, a conveyance was made to parties designated by Snyder, in consideration of $100,000 paid to the defendant ; that “the purchase and sale aforesaid was brought about and perfected by the efforts, negotiations, work and labor of the plaintiff and his assignor, hereinafter mentioned, and in pursuance of the said proposition in writing, executed and delivered by the said defendant; that on March 3, 1883, John L. Randall assigned all his right, title, and interest in and to said agreement to plaintiff, and he is now the only party entitled to commence and prosecute these proceedings, or interested therein.”
    On the trial, it appeared that on March 5, there was a settlement between John L. Randall and the defendant, of some matters indefinitely described by John L. Randall, as a witness on the trial. In consummation of that settlement, the defendant paid John L. Randall, $500, and the latter gave the following instrument: “ Received of J. R. Reynolds, $500, in full settlement of all matters between us, from the beginning of the world to this date, except San Juan matter and the letter sheet matter, under control of Y. Gr. G-askill and said Reynolds. John L. Randall.”
    The plaintiff gave testimony for the purpose of showing that he did what was intended by the contract to be the condition of payment to John L. Randall.
    At the end of plaintiff’s case, the judge dismissed the complaint, -delivering the following opinion :
   “Freedman, J.

The facts of this case are very peculiar. By the written contract set out in the complaint, and into which all verbal negotiations must be deemed to have been merged, the defendant promised to pay only to John L. Randall. It was within the contemplation of the parties that either Andrew Randall or John L. Randall might procure a purchaser, but in either event the compensation was to go only to John. Andrew, the plaintiff, can only recover, therefore, as the assignee of John. He proved an assignment to himself from John, dated March 3, 1883, but of this he gave no notice to the defendant, nor is there any evidence from which constructive notice could be found. Two days later, namely March 5, 1883, the defendant and John, between whom other matters were pending, effected a settlement. John received $500, and in consideration thereof he executed and delivered to the defendant a receipt in writing, acknowledging the receipt of $500 in full settlement of all matters between them from the beginning of the world to the date of the receipt, except two matters specially mentioned, of which the matter involved in the present suit was not one. •

Hugo Hirsh, for appellant.

Edward 8. Hatch, for respondent.

“This agreement binds the plaintiff, because he failed to give notice of the assignment to Mm (Finch v. Parker, 49 N. Y. 1; Van Keuren v. Corkins, 66 Ib. 77; Heermans v. Ellsworth, 64 Ib. 159). If such notice had been given, it is but fair to assume that the defendant would not have paid the $500.

“ Before arriving at this conclusion, I did not overlook that a receipt may frequently be explained." The rule is that it may be explained as to the consideration part, when the explanation is not contradictory to, but consistent with the instrument. So far as a receipt is in the nature of a contract, it falls within the general rules applicable to contracts, and its terms cannot be -varied by1 parol testimony, except in a proceeding to reform the instrument for fraud or mistake (Coon v. Knap, 8 N. Y. 402).

By the Court.—Sedgwick, Ch. J.

I am of opinion that the learned judge rightly dismissed the complaint on the ground taken by him.

It is argued in opposition, that the testimony of John L. Randall showed that the matter which was settled by the contract in the so-called receipt, did not comprehend any reference to the matter in action here. If any part of the receipt was a contract, or of that nature, having a settlement or release as its object, it could not be explained verbally. The words unambiguously referring to all matters between us,” are not to be explained verbally, and not to be restrained to any particular claim or claims, as they might be, if, in addition, a particular claim had been specified (Russel v. Rogers, 10 Wend. 413 ; Hoes v. Van Hoesen, 1 B. Ch. 380; Van Brunt v. Van Brunt, 3 Ed. 14). These cases refer to instruments under seal, but their principle is applicable to any composition or settlement based upon contract for consideration, where the parties have a difference that is not merely colorable.

The learned judge, in refusing to take the ground that the plaintiff had not shown that John L. Randall himself had ever had any cause of action, was too favorable to the plaintiff. This was, no doubt, due to mere intimation of important facts contained in a mass of testimony that did not sustain plaintiff’s case. The matter is clear when the testimony is examined in a printed form. The plaintiff was to show that he had brought about the sale, or had introduced the purchaser to the defendants. He testified that John L. Randall had not done anything towards either of these things. It is not necessary to give much of the evidence. The plaintiff put upon the stand all the witnesses whose testimony will be alluded to. It was clear that unless Louis Snyder represented in some way the parties who afterwards bought, or was an efficient agent in bringing about the sale, the plaintiff was not entitled to recover • for the whole that the plaintiff did was to bring Snyder in communication with the defendant, and assist in. negotiations between them. Snyder, as a witness for plaintiff, testified that he acted in the matter .by the instructions of E. S. Grant, and that he did not know whom. E. S. Grant represented. Hr. Grant, as a witness for plaintiff, testified that he directed Snyder to purchase the property for $40,000 or $50,000 if he could. He reported that he could not, and that ended the matter with the witness. He further testified that the property was subsequently purchased by no interest that he represented, and that it was purchased in the interest of the Hudson Eiver Ore & Iron Co., and he was not familiar with the details of the transaction. The plaintiff’s witness therefore proved that the plaintiff did not bring about the sale. There were many facts shown that created an expectation that further facts would be shown to cbnnect the efforts of Snyder with the sale, but these were not proved. Beyond this, the plaintiff’s brother testified to several admissions of defendant in conversation, that might have made it necessary to find what the admission proved, if the plaintiff had not, as he did, called as a witness in his own behalf the defendant, who so fully denied that he made the admissions in part, and explained the rest, that the jury could not have found for plaintiff on this part of the case. I intend to speak of this case only, and not to imply that there should be a similar result in every case where there is a conflict of the same general kind. In brief, the plaintiff showed no cause of action.

Judgment affirmed, with costs.

Tetjax, J., concurred.


source: Caselaw Access Project

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

license: Public Domain

text:
    THOMAS FOX, Respondent, v. MATTHEW BYRNES, Appellant.

      Contract for commissions on sale or exchange of real estate.

    Where a contract is made to pay a broker commissions on sale or exchange of real estate, a change of ownership in the property described in the contract, during the negotiations, followed by the exchange contemplated, does not necessarily release defendant, the contracting party, from payment of the commissions contracted for ; nor does the fact that the negotiations were not successful at first, and were declared by defendant to be terminated, provided they are continued by defendant and are successful. In the case at'-bar, at the time of the employment of plaintiff as broker, defendant owned real estate, the subject of the contract, and requested the plaintiff, who had found a person willing to bargain with defendant, to tell him who was his principal, and he (defendant) would attend to the balance himself, and would pay plaintiff his full commissions if he made the exchange. Plaintiff introduced to defendant one S., and defendant, after negotiations for the.exchange, which up to that point did not result in an agreement, told plaintiff that no exchange could he made; that it was all off, etc. Shortly thereafter, defendant with his son sought S. and told him that he had given his property to his son, and if he (S.), was for making a deal, he should make it with his son. Defendant actively participated in the negotiations, and a contract was drawn by him between S. and the son, and the matter consummated.

      JTeld, that the consideration for such a contract need not be a benefit to the promisor; it is enough if it is some detriment, expense, trouble to or service by another. Therefore, the fact that in the course of the negotiations the defendant gave the property to another, would be immaterial, the plaintiff having found a person who finally made the exchange through the negotiations of the defendant.

      Further held, that the gift of the property to the son, before the compiletion of the exchange, did not incontrovertibly prove that the exchange was not such as was contemplated by the contract, since it might have been the intention of defendant to procure for him through the efforts and service of the plaintiff, the additional advantage of a profitable exchange.
    Before Sedgwick, Oh. J., and Freedman, J.

      Decided June 1, 1885.
    Appeal by defendant from judgment entered on verdict for plaintiff, and from order denying motion for a new trial made upon the minutes.

      The action was for compensation promised to be paid by defendant to plaintiff, for procuring a person willing to exchange real estate, under a special contract.
    The facts appear in the opinion.

      William, I-L Arnoux, for appellant.

      Samuel A. Noyes, for respondent.
   By the Court.—Sedgwick, Ch. J.

There was testimony in the case which would uphold a verdict, that the following facts existed: The defendant employed the plaintiff as a broker to find a person who would buy or exchange real estate for real estate that was specified. At the time of the employment, the latter real estate was owned by the defendant. The plaintiff found Mr. Spaulding, who, he believed, would finally make a bargain with defendant. The defendant said to the plaintiff, “Any trade you make for me I will pay you full commissions, the usual commission.” He asked who the plaintiff’s principal was. He wanted the plaintiff to tell him who the principal was and he would attend to the balance himself ; he would attend to it, and pay the plaintiff full commissions. The plaintiff introduced Mr. Spaulding to the defendant. Afterward, the defendant and Mr. Spaulding carried on negotiations as to the exchange, which, up to a certain point, did not result in an agreement. The plaintiff took no part in them. The defendant met the plaintiff and said to him, “ Oh, I will have no more to do with that— you cannot make a trade—won’t touch it at all—won’t have anything to do with it.” During much of the negotiation between Mr. Spaulding and defendant, the son of the defendant was present. At the point referred to, tho defendant, while his son was present, said to Mr. Spaulding, “It is all off. I cannot make a trade.” A clay or two afterwards, the defendant and his son went to the house of Mr. Spaulding. The defendant then said that he had given his property to his son, and if Mr. Spaulding “was maldng any deal, I should make it with his son.” At once negotiations as to an exchange proceeded, in which the defendant actively participated. A conclusion was reached that night. The contract for the purchase was drawn by the defendant.

Undoubtedly, if the contract had been made while the property remained in the defendant, he would have been liable for the commission of plaintiff. Now, was it an impossible thing that the defendant should be bound by a promise to pay commissions to plaintiff, if the latter should find a person willing to take the property in exchange, the defendant not being, nor ever having been an owner of the property, the defendant undertaking to carry on the negotiations with the person found by the plaintiff ? To sustain a contract a consideration need not be a benefit to the promisor, and it is sufficient if it be a detriment or some expense to the promisee. If such were the nature of the contract, it would be immaterial that, having been owner, the defendant, in the course of the negotiations that finally led to the exchange, gave the property to another. The condition would be complied with ; the plaintiff would have found a person that through the negotiation of defendant, exchanged finally property for the property described in the contract of employment.

The fact of the defendant giving the property to his son, did not incontrovertibly prove that an exchange while in the hands of the son was not such as was contemplated by the contract of employment. It may have been within the intention of the defendant, besides giving the property to the son, to procure for him, through the efforts of the plaintiff, the additional advantage of having an opportunity to make a profitable exchange.

There was enough evidence, under the views that have been expressed, to take the case to the jury. The court was not in error in refusing to dismiss the complaint.

The counsel for defendant excepted to that part of the charge of the court which submitted to the jury whetherthe plaintiff found a purchaser for the property of the defendant, because the undisputed evidence of Mr. Spaulding and of the defendant and his son was that they declared the contract off. The exception does not seem to have been well taken, for, whatever the declarations of these gentlemen may have been, the statement of fact shows that the jury could have found that the negotiations went on unbroken, as substantially carried on by the defendant, until the final exchange.

The following exceptions should be considered. One was to a refusal to charge that if the deed to the defendant’s son was executed and delivered to him on May 13, and no previous agreement had been made, meaning undoubtedly no agreement for an exchange, plaintiff cannot recover. If what has been said as to the liability of the defendant not depending upon his having remained owner, if the contract of employment did not contemplate " that he should, be correct, the court was right in refusing the request.

The same is true of another request, that unless the jury find that the transfer to defendant’s son was a device or trick, their verdict cannot be for defendant. The defendant may have contracted to be bound for the finding of a person willing to exchange for the said property conveyed to him by his father, bona fide.

The defendant’s exceptions as to the ruling of the court, in admitting or rejecting evidence have been particularly examined. Ho testimony injurious to defendant was improperly admitted, and none that would have been of advantage to him, was improperly excluded.

Judgment and order appealed from, affirmed, with costs.

Freedman, J., concurred.


text:
    THERESA SALOMON v. BRYAN LAWRENCE.

      Specific performance of contract for purchase real estate. —Will, construction of—trusts—words “ request ” and “ confidence.”
    A clause in testator’s will read as follows : “I give, devise and bequeath to my beloved wife, Theresa King, all my estate, both real and personal, of every nature and kind whatsoever, and wheresoever situated, to home and to hold the same to her and her heirs in fee, having full confidence that my said wife will make proper and suitable provision for our son, Henry A. King. And 1 request that out of the estate hereby devised to my said wife, she will not only thoroughly educate and maintain my said son Henry A. King, but that upon his arriving at majority, she will establish him in business out of the estate hereby devised to her. I appoint my said wife the guardian of my said son, and of his estate during his minority.”

      Held, that whether or not the language creates a trust, it was not the intention of the testator to limit the power of his wife to dispose of the ' real estate devised, but it was his intention that she should have the same power to sell that any owner of property in fee has.

      Further held, that defendant’s assignor, having contracted with her to purchase the property, judgment should be in her favor for specific performance.
    Before Sedgwick, Ch. J., Freedman and Truax, JJ.

      Decided June 1, 1885.
    Submission of an agreed state of facts, under section 1279 of the Code of Civil Procedure.
    Theresa Salomon and one Cohen made a written contract for the sale and purchase of real estate. Theresa Salomon was by it to make a conveyance to Cohen or his assignees, “ of the fee simple of the said premises, free from all incumbrances.” Cohen assigned to Bryan Lawrence. On the day for performance Theresa Salomon tendered performance to Lawrence. Lawrence declined to receive the performance tendered, on the ground “ that under the last will and testament of Anthony King, the said Theresa Salomon did not take, a complete and absolute title in fee simple in and to the premises described in the contract aforesaid ; inasmuch as Henry A. King, had a vested right or interest in said premises, and the same were charged for his proper and suitable provision, education and maintenance, and establishment in business at his majority, and that under the said will a trust arose in favor of said Henry King.”
    The facts to which this objection referred, were as follows : Theresa Salomon, being then a married woman, claimed title under the will of her former husband, Anthony King. Henry King was the only child of Anthony and Theresa. The parts of the will that relate to the controversy are as follows : “I give, devise and bequeath to my beloved wife Theresa King, all my estate, both real and personal, of every nature and kind whatsoever, and wheresoever situated, to have and to hold the same to her and her heirs in fee, having full confidence that my said wife will make proper and suitable provision for our son, Henry A. King. And I request that out of the estate hereby devised to my said wife, that she will not only thoroughly educate and maintain my said son Henry A. King, but that upon his arriving at majority, she will establish him in business out of the estate hereby devised to her. I appoint my said wife the guardian of my said son and his estate during his minority.”
    The court was asked to determine whether there should be judgment in favor of Theresa Salomon, that Lawrence specifically perform the contract according to its terms, or judgment for Lawrence that Theresa is not entitled to specific performance, and also that she pay him §500, an amount paid on the contract at its signing and delivery.

      Julius J. & A. Lyons, for Theresa Salomon.
    I. It being a rule of law that any devise or gift which may be repugnant to a former devise or gift must fail and give way to the first devise in fee, the expressions of “ confidence” and “ request,” contained in the said will of Anthony King, do not create a trust in favor of said Henry A. King, nor do they divest the plaintiff of her title to the property devised to her in fee (Parson v. Best, 1 S. C. R. T. & C. 211; Foose v. Whitmore, 82 N. Y. 405; Re Hutchinson, tenant, L. R. 8 Ch. Div. 540; Clark, Exr., v. Leupp, Imp., 88 N. Y. 228; Mackett v. Mackett, L. R. 14 Equ. Cas. 49. See also Campbell v. Beaumont, 89 N. Y. 464; Helmer v. Shoemaker, 22 Wend. 137; Cohen v. Cohen, 4 Redf. 49 ; Jackson v. Bull, 10 Johns. 19 ; Colton v. Stenlake, 12 East, 514 ; Downey v. Bordon, 36 N. J. L. 460 ; McKenzie’s Appeal, 41 Conn. 607; Hurler v. Jenks, 43 Penn. 445 ; Kerbert v. Thomas, 3 Ad. & L. 123 ; Sale v. Moore, 1 Simons, 534 ; Webb v. Wools, 2 Simons N. S. 267; Gebler v. Chapin, 19 Conn. 342 ; In re Pennock’s Est., 20 Penn. 268).
    H. If any trust in favor of Henry A. King was created by the will of Anthony King, we claim it is void, as it is uncertain, indefinite and ambiguous; while the object and purposes thereof may be expressed, the amount or portion of the estate to be so expended for support and maintenance are not. It is not shown whether the income or capital is to be used therefor, and as to the establishment of said Henry in business, there is no direction as to what portion, if not all of the estate, is to be so used. The absence of these necessary directions show that it was not the intention of the testator in any way to limit his wife’s title in fee, for, in both instances where he suggests and requests, he repeats that he has given and devised the estate to her.
    III. Whatever cases there may be when a request has been converted into a trust the former estate has been a life estate, and not one in fee.

      John E. Develin, for Bryan Lawrence.
    The words in the devising clause of the will, viz.; “ having full confidence that my said wife will make proper and suitable provision for our son Henry A King, and I request that,” limit the general words of the gift and devise to her, and engraft a trust upon it. (a) The cases are numerous in which the words “having confidence,” “I request,” or words similar in substance, following a devise, have been held to create a trust (1 Jarman Wills, 680 ; Perry Trusts, § 112; Story’s Eq. Juris. §§ 1068-1068 (a) ; Wright v. Atkyns, 17 Ves. 255 ; Vandyck v. Van Beuren, 1 Cairnes, 84; Massey v. Sherman, Amb. 520). (6) To give effect to a direction of this description all that is required by law is that the language employed to express it shall indicate it to have been the intention of the testator that it should certainly be observed and carried into effect (Lawrence v. Cooke, 32 Hun, 126). (c) Added to this, it may be said that the person and object of the trust should be certain (Wright v. Atkyns, supra; Burt v. Herron, 66 Penn. 400).
    II. Both the person and object are here plainly pointed out. The person was his son, the object, the education and maintenance of this son, and his establishment in business after arriving at age. The latter object may or may not be too general, but the former (education and maintenance) are direct and certain and could be enforced by the court. Every implication is in favor of the heir, and all parts of the will, even where some may be invalid, are to be taken and considered together, to facilitate its interpretation and ascertain the intention of the testator (Van Kleeck v. Dutch Church, 20 Wend. 469 ; Tucker v. Tucker, 5 N. Y. 408). ■ The confidence and request do not form an independent clause inconsistent with, but give direction to the devise. They form part of the substance of the devise, and the case is thus taken out of that class of decisions which hold that an absolute devise in fee may not be diminished or limited by subsequent clauses in the will which merely cast a doubt upon it, such as Clark v. Leupp, 88 N. Y. 228, 231 ; Campbell v. Beaumont, 91 Ib. 464, 468 ; Freeman v. Coit, 96 Ib. 63, 69. The case under consideration does not differ from a will by which an estate is devised in fee with the additional and positive words immediately following: “In trust nevertheless,” &c. Here, instead of formal words being used, the trust is created by informal but sufficient words (1 Perry Trusts, §§ 83, 112, 114). The words of the will, the surroundings of this case, of the reason and of the object of the testator’s “ request,” his duty to his offspring as well as his natural affection, and the implication of law in-favor of the heir and against his disherison, all unite in bringing the case within the decisions, which hold that the phraseology here used creates a trust.
   By the Court.—Sedgwick, Ch. J.

In such cases, when the determination depended alone upon the force of the use of the words “ confidence ” and “request,” it has been held that they impose an obligation upon the devisee as to the property devised, in favor of the person contemplated by the testator. There are several matters in the present case, that tend to such a result. Henry King was the only child of the testator, whose will made no other provision for him than is made by the provisions now under construction. It is, moreover, within the range of the considerations appropriate to such a case, to inquire whether the testator, in referring to the “ estate ” of his son, of which, during his minority, he made the mother and devisee the guardian, did not refer to such an estate as the son might have if the devisee responded to the confidence and performed the request of the testator. Of course, before finally determining that there was what is called a trust, it would be necessary to examine other things which look in a different direction. Arguments that by themselves are favorable to the position that there is a trust for the son, have been alluded to to prevent any supposed implication from this decision of an opinion that the son has no interest in any form ; and on the other hand there is no intention to intimate what is the nature or form of that interest, if it exists, excepting so far as it may be. necessary to say, that whatever it is, it is not inconsistent with the capacity of Theresa Salomon to convey a fee of the real estate. Such a result would follow an ascertainment that the testator intended that in keeping his confidence and performing his request, the wife should have legal capacity to sell the fee.

The testator did not describe the method of applying the property to the advantage of the son in the respects specified by the will. Generally, where there is a trust created by giving the legal title of property to a trustee for a cestui que trust, there is a provision made for selling the specific property, and substituting in its place the proceeds. If such a provision were not made, the result would be, that only the property itself or the income from it, could be applied to the benefit of the cestui que trust. To give the power to sell it is not necessary that express words be used. It may be implied from circumstances, and the object of the exercise of the power (1 Hill on Trusts, 686 ; 2 Spencer Eq. 366 ; Morton v. Morton, 8 Barb. 18 ; Dorland v. Dorland, 2 Ib. 63 ; Bogert v. Hertell, 4 Hill. 492).

The object of the favorable intention of the testator in reference to the son, could be accomplished without making the estate in fee in the devisee inalienable. So far as the expression went, it could be accomplished by devoting a necessary part of the personal estate, or the proceeds of a sale of the real estate. Whatever might be supposed to be the interest of the son as to any part of the estate, the devisee had an absolute fee simple in the rest, unincumbered with any trust. The devisee would, from the nature of the acts expected of her, towards her son, be meant to have some discretion, as much as a parent would have in applying her means to the education and maintenance, and the setting up in business of a son. The kind of disposition of the estate to the 'wife, implies that she was not to be limited to keeping the property devised to her in fee, in the form in which it was upon the testator’s death.

I am, therefore, of opinion that it was not the intention of the testator to limit the devisee’s power of disposition, and it was the intention that she would have the same power to sell that any owner of a fee has.

The judgment should be in favor of Theresa Salomon for specific performance. The form of the judgment is to be settled upon notice.

Freedman and Truax, JJ., concurred.


text:
    CHRISTOPHER B. KEOGH, et al., v. STEPHEN A. MAIN, Appellant, and THOMAS MULRY, et al., Respondents.

      Stipulation—when may be set aside on motion.

    When a stipulation given in an action has the force of a contract between the parties, it should not be set aside, except upon such clearly disclosed equitable grounds as would authorize the amendment of any contract.
    Before Sedgwick, Ch. J., Freedman and Truax, JJ.

      Decided June 1, 1885.
    Appeal by a defendant from an order setting aside a stipulation made between him and a co-defendant.
    The facts appear in the opinion.

      Junes & Roosevelt, for appellant.

      William P. Mulry, for respondents..
   By the Court.—Sedgwick, Ch. J.

The defendant Main was the owner of a house and lot in the city. This proceeding was begun to foreclose an alleged mechanic’s lien upon that real estate. The Mulrys were made defendants as claiming a mechanic’s lien upon the property. After this proceeding was begun, there was pending in the .marine court a personal action against Main, brought by one Leslie, for work, labor and materials done by the Mulrys for Main, as alleged. This work, &c., was the same for which the Mulrys claimed a mechanic’s lien in this proceeding. Before the defendant Mulrys had interposed an answer claiming a mechanic’s lien against defendant Main, the following stipulation was made : “It is hereby consented, on the part of the co-defendant Main, that service of a copy of the answer of the defendants Thomas Mulry and Thomas M. Mulry on this date, or before trial, be deemed sufficient under the Code of Civil Procedure, and a failure to file lis pendens not to vitiate said co-defendant’s right to a foreclosure, under the acts for enforcement of mechanics’ liens, in case of his success in the case at bar on the merits and on the law, said defendants to abide the event of success or failure in this action with respect to their said claim, and the action of Leslie v. Main is hereby discontinued on this basis.”

There was a trial, in which the defendants Mulry were successful, but the judgment was afterwards reversed. The subsequent proceedings are very vaguely described in the papers below, but in substance, the result was, that on the trial between the defendants, the learned judge held that the defendants Mulry were not entitled to proceed against defendant Main, because the plaintiff could not maintain the proceedings, either from a want of merits or because he had discontinued the action. Before judgment to this effect was entered, the defendants Mulry made the motion to set aside the ■ stipulation. In the affidavit for the motion, it was said that those defendants proposed to enter an order of discontinuance.

The stipulation had the force of a contract, and could not be set aside except upon a clearly disclosed ground that would call for the annulling of any contract. The only ground that is given in the notice of motion, or referred to in the moving affidavit, is “ that there has been no determination of success or failure as to said claim in their action, either upon the merits or the law.” It is said in the affidavit that the “ defendants have neither succeeded or failed in this action.” If the ground be correctly stated, it is clear that the stipulation protects all the rights of the Mulrys. The fact that it does not injure them, is no ground for setting it aside. The affidavit does not allege that the defendants were surprised, or acted hastily or inadvisedly, nor that the defendant Main did or omitted to do anything which misled them to making the stipulation. In short, it states no equitable ground for setting aside a contract. On their position, they are as free to bring an action as they were before this proceeding. was begun. Yet it would appear that they have no interest in the consequences of the stipulation. So far as facts are stated, it would appear that they are not the owners of the personal claim against , defendant Main, for defendant Main shows by affidavit that the action in the marine court was brought by the assignees of the Mulrys. This is not denied, although they say the action was brought on their behalf, and that they mean to bring an action. They do not say that Leslie has re-assigned to them.

There being no ground for setting the stipulation aside, I am of opinion that each party should have been left to litigate their claims under it in any court, where it should be introduced by either party. •

Order ■ reversed with $10 costs, and motion denied without costs.

Freedman and Truax, JJ., concurred.


text:
    GEORGE KINNER, Respondent, v. THE DELAWARE & HUDSON CANAL Co., Appellant.

      Evidence—contradicting witness—statements as to facts and circumstances inconsistent with direct testimony.

    Where a witness, on his cross-examination, denies having made a statement as to a fact or circumstance, which is or may be argued to the jury to be within his knowledge, and which is inconsistent with matters material to the issue to which he has testified on the direct examination, the time when, place where and person to whom such statement was made being seasonably called to the attention of the witness, it may be proved, in contradiction as affecting his credibility, that he did make the statement.

      Before Sedgwick, Oh.. J., and Freedman, J.

      Decided, June 1, 1885.
    Appeal by defendant from judgment entered upon the verdict of a jury and from order denying motion for new trial made upon the minutes.
    The plaintiff was the servant of another corporation than the defendant. In the course of his service he was working upon a certain railroad track, awaiting the coming of a car for the purpose of coupling to another by which he stood. It was alleged that the defendant’s servants were negligent in moving the car coming towards plaintiff, and that it moved so fast, that while plaintiff was in the act of coupling, his hand was hurt.

      Matthews & Bapallo, attorneys, Edward S. Bapallo and Howard Townsend, of counsel for appellant, on the questions considered in the opinion, cited:
    Thallheimer v. Brinckerhoff (4 Wend. 394); Luby v. Hudson R. R. R. Co. (17 N. Y. 131); Anderson v. Rome, Watertown & Ogdensburgh R. R. Co. (54 N. Y. 334); Chapman v. Erie Railway Co. (55 N. Y. 584); Dean v. Ætna Life Ins. Co. (62 N. Y. 642); Johnston v. Thompson (23 Hun, 90); Combs v. Winchester (39 N. H. 1); Howard v. City Fire Ins. Co. (4 Den. 502); Great Western Turnpike Co. v. Loomis (32 N. Y. 121); Stokes v. People (53 N. Y. 164); Eames v. Whittaker (123 Mass. 342); Horner v. Everett (91 N. Y. 641); Carpenter v. Ward (30 N. Y. 243).

      C. D. Rust, attorney, and Chauncey S. Truax, of counsel for respondent.
   By the Court.—Sedgwick, Ch. J.

The defendants called as a witness a workman named Kelly, employed by them. On his direct examination he said he was shoving over cars that were to go down the track where the plaintiff was, when he was hurt. One car was stiff ; the grease was hard, and they could not get it to run. The witness and another man had to get pinch bars and pinch the car down on the track referred to. Then it went down quite easily, and no faster than if a man stood at the brake. It was not necessary for a man to be at the brake, as the car was going so easily. He went down the track along side of the car and at the end of it, ready to step on it. The car was going at the usual rate of speed, that enabled a coupler to safely couple the car to the one ahead of it.

By other testimony it appeared that the plaintiff was on the track at the end of another car, for the purpose of coupling to it the moving car referred to by the witness Kelly.

The witness further said in substance, that as he was moving the car he referred to, he did not know that the plaintiff was on the track ready to couple. When he got within about forty feet of the cars ahead of the one he was moving, he hallooed to know where Kinner, the plaintiff was, to see if he was ready to couple that car. He got no reply ; then he let the car go with the others. He turned back to get another car, when Kinner came down along the cars with his hand hurt. He said that the car he was going down with struck the other car it ran into, no harder than it would if a man had been at the brake regulating its speed.

On cross-examination by plaintiff, Kelly was asked if he had not said certain things, and he in effect denied that he had said them. The declarations, as supposed by the questions, were such as they assumed to have been made to the plaintiff immediately after the accident. This does not affect the principle on which this appeal on this point will be decided. In rebuttal, the plaintiff took the stand, and was asked several questions tending to show that Kelly had said the things which he had denied. The defendants took exceptions to the admissions of these questions. The ground of the objection is that the questions to Kelly related to matters that had not been brought out upon Kelly’s direct examination, and referred to matters which were not evidence against the defendant, as the declarations of Kelly would not be testimony against them.

It seems to me that the assumption that the declarations pointed at by the questions did not refer to Kelly’s direct examination, is not sustained by that examination. The rule that the declarations of a witness as to matters as to which he has testified, they being material to the issues, can be shown to affect his credibility after he has denied that he has made them, is not confined to the immediate things he testified to, but extends to circumstances within his knowledge, or which it may be argued to the jury are within his knowledge, inconsistent with the things he has testified to, or which would call for a modification of his testimony (Sloan v. The New York Central R. R. Co., 45 N. Y. 126).

Some of the questions asked for the purpose of contradicting Kelly, referred to whether he had said that he saw the plaintiff go on to the track to make the coupling, but thought he had made it. This related to his direct examination, for the inference from that would be, naturally, that he had not seen the plaintiff. Other questions referred to whether Kelly had said, what he had denied saying, that there was no brakeman on the car because it was a cold morning, and the car was so stiff that he thought it would not run fast enough to require a brakeman. This referred to that part of his direct examination as to the actual cause of there being no brakeman on the car, which was relevant to the issue of defendant’s negligence. Another question referred to whether Kelly had admitted that if he thought the plaintiff was going to get hurt, he could have run down close enough to have shouted to him to look out for himself. This referred by implication to facts that the jury might have considered in finding whether their existence was consistent with the precaution that Kelly swore he took by shouting out, under the circumstances that Kelly testified to.

I therefore think that the exceptions should not be sustained.

After examining .the testimony, I find in it facts that were properly submitted to the jury on the questions of negligence and contributory negligence.

The judgment and order appealed from should be affirmed, with costs.

Freedman, J., concurred.


text:
    ROBERT W. FORBES, Respondent, v. BERNARD SPAULDING, Appellant.

      Proceedings supplementary to execution—effect of return of proceedings to sell real estate under execution.

    The sheriff, ninety days after an execution was issued to him, made the following return : “ In pursuance of the demand of plaintiffs attorney, I make the following return to the within execution: I have collected nothing under, and have not found any personal property out of which the said execution, or any part of the same can be made, but I have thereunder levied upon the real estate mentioned in the annexed notice of sale, and have advertised the same for sale as in said notice provided. I have found no other property out of which to satisfy the same.”

      Held, that the execution was returned unsatisfied within the meaning of section 2485 Code, and that plaintiff was entitled thereunder to an order for defendant’s examination in supplementary proceedings.
    The effect of such a return is not modified by the statement of the sheriff, that it was made at request of pilaintiff’s attorney.
    The proceeding to give notice of sale of real estate in execution of the statutory power for sale of real estate under a judgment, is not a satisfaction, because the real property remains in the debtor and in his possession.
    Before Sedgwick, Oh. J., and Freedman, J.

      Decided June 1, 1885.
    Appeal by defendant from a order' denying his motion to vacate an order for his examination in proceedings supplementary to execution.
    The ground of the motion to vacate was that the execution had not been returned unsatisfied. The execution was delivered to the sheriff on October 21, 1884, and returned by him February 5, 1885. The return was in the following words : “In pursuance of the demand of plaintiff’s attorneys, I make the following return to the within execution : I have collected nothing under, and have not found any personal property out of which the said execution or any part of the same can be made, but I have thereunder levied upon the real estate mentioned in the annexed notice of sale, and have advertised the same for sale as in said notice provided. I have found no other property out of which to satisfy the same.” To this was attached a copy of the notice of sale.

      Alex. Thain, for appellant.

      John H. Kitchen, for respondent.
   By the Court.—Sedgwick, Ch. J.

The sole question is whether the execution was returned wholly or partly unsatisfied, within the meaning of section 2435 of the Code of Civil Procedure. If it were, the right of the plaintiff to the order of examination is clear. The general rules that relate to the right of a creditor to bring an action to apply equitable assets to the satisfaction of a judgment, in lieu of which, to a certain extent, supplementary proceedings were allowed, may be adverted to for the purpose of construing'the statute, when construction is permitted, but not where the statute is unambiguous.

The effect of the return is not modified by its statement that the return was made at request of plaintiff’s attorney. It was the duty of the sheriff to have made the return at a much earlier day.

It appears on the face of the return that the execution was unsatisfied, unless the statement that there was a levy upon real estate, and notice of sale under it, intimates that there was a satisfaction. Strictly, the levy of an execution upon real estate is now unknown to the law (Wood v. Colvin, 5 Hill, 228 ; Colt v. Phoenix Fire Ins. Co., 54 N. Y. 595.) The performance of the mandate of the process is an execution of a power to sell, under the statute (Wood v. Colvin, supra). But the proceeding to give notice of sale in execution of that power, is not a satisfaction, because the real property remains in the debtor and in Ms possession. Therefore it is held that such a proceeding is not satisfaction (Shepard v. Rowe, 14 Wend. 260 ; Taylor v. Banney, 4 Hill, 619).

In a creditor’s action the fact that the debtor had property which might have been taken by legal process, was not a defense in the action. It was enough if the complainant-had in good faith used the only power he had over the debtor’s property, by issuing the legal process and awaiting its return.

• In the present case, the appellant is not aided even by a presumption that the sale would result in the plaintiff’s receiving any money under the judgment.

Of course, if the judge below had been satisfied that the same matter had been previously determined between the parties in favor of the defendant, he would have followed the first decision. It was not clearly shown that the same matter had been previously determined.

Order affirmed, with $10 costs and disbursements to be taxed.

Freedman, J., concurred.


text:
    JULIUS CATLIN, Jr., et al., Appellants, v. GEORGE F. VIETOR, et al., Respondents.

      False representations—when sufficient as basis of action—reliance on essential to action founded on.

    Defendants’ broker offered for sale to plaintiffs several notes, amounting to about $7,000, owned by defendants, made by P. L. Freneau & Co., customers of theirs, and the broker stated as a reason for defendants’ desire to sell, that they had a large amount of orders waiting for delivery to the makers of the notes, but they were unwilling to deliver until they parted with the paper. Plaintiffs, not being satisfied with this, sent a clerk to defendants to obtain information. The clerk, without disclosing that he desired the information in regard to the plaintiffs having been offered notes belonging to the defendants, asked various questions, the answers to which were, in substance, that defendants had no information concerning P. L. Freneau & Co., other than what could be got from mercantile agencies; that they had no statement from them, but they sold them freely, and had several thousand dollars ready for delivery to them. This conversation was repeated to plaintiffs, and they bought the notes. One of the plaintiffs testified that he told the broker the next day that he did not like the statement of the makers of the notes, but thought they would pull through that season, as the defendants were going to deliver the goods, and the delivery would guarantee the payment of the notes. He also testified that the reason that actuated him was the fact that the defendants were going on to deliver their new goods through the season beginning with this particular purchase, and if they delivered this bill of $8,000 or $10,000 they would probably deliver another one.

      Held, on appeal from a dismissal of the complaint, that as it was not proved either that defendants had not sold goods freely, considering the vague meaning of that term, or that they had not on hand ready for delivery a large amount, or several thousand dollars’ worth of goods, and as they were not apprised of the expediency or duty of being exact, and as the statements as to those matters being the only ones which formed the basis of the reasons on which alone plaintiffs relied in purchasing the notes, as testified to by one of them, an action for false representations would not lie.
    Before Sedgwick, Oh. J., and Freedman, J.

      Decided June 1, 1885.

      Appeal by plaintiffs from judgment for defendants entered upon a direction at trial term before a jury, that the complaint be dismissed.
    The action was for damages from fraudulent concealment and false representations, alleged to have been made in respect of the credit and means of Freneau & Co., the makers of certain promissory notes which the plaintiffs bought of the defendants.
    The facts appear in the opinion.

      Martin & Smith, attorneys, Aaron Pennington Whitehead and M. W. Divine, of counsel for appellants, argued :
    I. Fraud renders all contracts voidable ab initio, both at law and in equity. No man is bound by a bargain into which he has been deceived by a fraud, and a buyer may, if he has paid the price, recover it back on offering to return the thing purchased (Benjamin Sales, § 636 ; Bank of Georgia v. Higginbottom, 9 Pet. 48 ; Baker v. Lever, 67 N. Y. 304; Pence v. Langdon, 99 U. S. 578; Kimball v. Cunningham, 4 Mass. 502 ; Coolidge v. Brigham, 1 Met. 547 ; Perkins v. Bailey, 99 Mass. 61 ; Waters’ Patent Heater Co. v. Smith, 120 Mass. 444).
    II. Plaintiffs were induced .to buy the worthless notes of P. L. Freneau & Co. by false and fraudulent representations made by the defendants. The plaintiffs made out a clear prima facie■ case of fraud, and the court ought to have allowed the jury to pass upon the question. The representation that defendants were selling P. L. Freneau & Co. freely was clearly false. Again, it was very material to the credit of P. L. Freneau & Co., and to their ability to pay the notes, which had a very short time to run, in all very little over six weeks, that a house was about to deliver them a large amount of goods and was selling them freely. The effect of the delivery of a large amount of goods would be to strengthen their standing and put them in funds for the proceeds of these goods and to enable them to go on. Any device, and any representation, whereby the seller causes the purchaser to labor under a deception on a point which the purchaser thinks material, is a fraud and entitles the purchaser to the return of his money (Hill v. Gray, 1 Stark. 434 ; Duke of Norfolk v. Worthy, 1 Camp. 337 ; Bexwell v. Christie, 1 Cow. 295 ; Tapp v. Lee, 3 B. & P. 367).
    III. The fraud need not be the sole inducement or even the predominant motive; it is enough that the representations had material influence upon the plaintiffs, although combined with other motives (Morgan v. Skiddy, 62 N. Y. 319 ; Hubbard v. Briggs, 31 Ib. 518 ; Safford v. Grout, 120 Mass. 20 ; Hersey v. Benedict, 15 Hun, 282; People v. Haynes, 11 Wend. 557; People v. Herrick, 13 Ib. 87 ; Clarke v. Dickson, 6 C. B. [N. S.] 453).
    IV. On proof that representations are material, the burden is upon the party making them to show that they were not relied on by the other party (Kerr Fraud & Mistake, 75 ; 2 Benjamin Sales, 556 ; Smith v. Kay, 7 H. L. Cas. 750 ; Nicols’ Case, 3 De G. & J. 404 ; Holbrook v. Burt, 22 Pick. 546).
    V. In any view of this case, it should have been passed upon by the jury.

      Seward, Da Costa & Guthrie, attorneys, Charles M. Da Costa and William D. Guthrie, of counsel for respondents, argued:
    I. There is not the slightest evidence in the case of any intent to deceive on the part of the defendants or any one representing them. The courts lean more strongly now than ever before against inferring such intent without proper evidence (Morris v. Talcott, 96 N. Y. 100 ; Leffler v. Field, 52 Ib. 621; Salisbury v. Howe, 87 Ib. 128 ; Frisbee v. Fitzsimmons, 3 Hun, 674).
    II. The evidence is equally wanting to prove that what defendants or their representatives said was “ either false or known to be false,” within the language of the authorities. Yet neither of these elements can be wanting to constitute a case of fraudulent representation (Oberlander v. Spies, 45 N. Y. 175).
    III. The elements of influence by and reliance on the alleged representations are essential (Leffler v. Field, 52 N. Y. 621; Taylor v. Guest, 58 Ib. 266 ; Dudley v. Scranton, 57 Ib. 428 ; Smith v. Chadwick, L. R. 20 Ch. D. 27 ; Macullar v. McKinley, 49 Super. Ct. 5). These were ' totally absent.
    IV. The utmost, however, that the plaintiffs can by any possibility claim is, that the jury would, on the evidence, have been warranted in finding, that when Riley and Shaw, on January 30 and 31, stated that the defendants had goods ready to deliver to Freneau & Co., they (the defendants) then intended not to deliver them on February 1, or thereafter. In other words, that the defendants then, viz.: on January 30 and 31, promised to do in the future, viz.: on February 1 and thereafter, what they never intended to do. But for a breach of such a promise, no action, grounded in fraud, will he. In other words, no such action can be based on what may be termed a promissory fraud. It has its sole foundation in the falsity of the representation of an existing fact, made for the purpose of inducement (Gray v. Palmer, 2 Robt. 500 ; aff’d, 41 N. Y. 620 ; see 2 Barb. 500; Ex parte Fisher v. New York Common Pleas, 18 Wend. 608 ; Farrington v. Bullard, 40 Barb. 512 ; Lexow v. Julian, 21 Hun, 577 ; affirmed, 86 N. Y. 638 ; Lynch v. Dowling, City Court Rep. 163 ; Gallager v. Brunel, 6 Cow. 346 ; Sawyer v. Prickett, 19 Wall. 146).
    Precisely the same distinction- exists in the law of estoppel in pais. To constitute an estoppel in pais there must be a representation of an existing fact. An equitable estoppel can never be grounded on a mere promise (White v. Ashton, 51 N. Y. 280; Musgrave v. Sherwood, 54 How. Pr. 338).
    Under no aspect of the case is the view tenable that defendants withheld information which they were bound in duty to give (People’s Bk. v. Bogart, 81 N. Y. 101).
   By the Court.—Sedgwick, Ch. J.

The plaintiffs’ alleged cause of action is that they were induced, by fraudulent concealments and by false and fraudulent representations, on the part of defendants, to buy from them certain promissory notes to the amount of about $7,000. The alleged concealments and representations concerned the pecuniary responsibility of the makers of the notes, and also facts which it is argued for plaintiffs, the defendants affirmed existed, and the existence of which they represented to be their reason for offering the notes for sale.

It is a necessary part of such a cause of action to show that the plaintiffs, relied upon the statements, or were induced by them to part with the money. Perhaps this can be proved circumstantially or by presumption from the nature of the transaction. In the present case, one of the plaintiffs who acted for both, specifically stated upon what part of the alleged representations he relied. His testimony was so explicit and of such a form that the jury would not have been at liberty to find that he relied upon the other parts of the representation or upon the existence of anything that it was alleged the defendants fraudulently concealed.

The plaintiffs had procured from the makers of the notes a statement as to their property and liabilities. The broker for defendants who had presented to plaintiffs the notes for sale, had said to plaintiffs that the reason the defendants wanted to sell the notes was, “ that they had a large amount of merchandise on orders waiting delivery to the makers of the notes, and that they were unwilling to deliver the goods until they parted with the paper.” The plaintiff, who testified on the trial, was not satisfied with this, but sent his clerk to the defendants’ store. This clerk saw a clerk of defendants, and had a conversation with him, in presence, as plaintiffs’ clerk testified, of one of the defendants. Plaintiffs’ clerk had been told to go to defendants’ store and ask one of them about the paper in question. The conversation was as follows: Plaintiffs’ clerk said, “Good morning, Mr. Eiley. I have called to see if you can give Mr. Gatlin any information about Freneau & Go.” After a slight pause, Mr. Eiley replied, “We have no information about P. L. Freneau & Oo. that M. Catlin cannot get from the mercantile agencies.” After another slight pause, plaintiffs’ clerk said, “I presume Mr. Catlin wants to know in regard to paper, as I saw Mr. Shaw (who was defendants’ broker) in there just before I came away—whether for himself or the bank, I do not know. You have no statement from them ?” After ' another slight pause, Mr. Riley replied, No, we sell them freely, and have several thousand dollars ready to deliver them now.” After another slight pause, the clerk of plaintiffs said, Good morning. I am sorry to trouble you. I thought you could have told me more.” This conversation was repeated to the plaintiffs. The next day the plaintiff who testified, saw the broker of the defendants, and said he did not like the statement of the makers of the notes, but that he thought they would pull through that season, as defendants were going to deliver the goods, and the delivery would guarantee the payment of the notes. He "testified that that reason operated upon his mind in taking the notes; that is, that they had the goods ready and would deliver the goods. Finally, as the exact description of the operation of his mind, he testified, “The reason that actuated me was the fact that the defendants were going on to deliver these new goods through the season, beginning with this particular purchase, and if they delivered this bill of $8,000 or $10,000, they would probably deliver another one.” The substance of this consisted of a conjecture of what the defendants would do, in the future, in their dealings with the makers of the notes. The defendants or their broker had not referred, in any way, to future dealings. The only fact that they or their broker had "stated, which might be thought to be the starting point of this conjecture, was that they had sold to Freneau & Co. freely, and had on hand, for delivery to them, a large amount of goods, or several thousand dollars’ worth of goods. It was not proved that the defendants had not sold goods to Freneau & Co. freely, in consideration of the vague meaning of such a term. Nor was it shown to be untrue that the defendants had on hand, ready for delivery, a large amount of goods, or several thousand dollars’ worth of goods, unless it could be shown that the defendants intended that the words used on this subject should be understood in their strict sense, that is, ready fox: delivery forthwith, the defendants having definitely determined to deliver forthwith. But the plaintiffs knew there was some question on this point, for they had been told that the goods were not to be delivered, unless the notes were sold. They did not inform the defendants that they desired information, with a regard to the plaintiffs having been offered notes that belonged to the defendants. The plaintiffs’ clerk said merely that he presumed the plaintiffs’ inquiry related to some paper of Freneau & Co., generally, because he had seen the broker in plaintiffs’ store, and the answers he received must be constraed as given by a pei’son not appxised of the expediency or duty of being exact. There was no statement, at any time, that the goods in question were of the value of $7,000 and more, as the plaintiffs assumed, and in fact there was on hand, ready for delivery, so far as the bargaining between the parties went, goods to the amount of $1,800.

I think it is apparent that the clerk of defendants who talked with plaintiffs’ clerk, declined, substantially, to make statements upon which plaintiffs shoxdd act, for the latter were informed that the defendants knew nothing which the plaintiffs could not learn from the mercantile agencies. They, so far as the testimony shows, omitted to obtain information from the agencies, and should not now hold the defendants for fraud for a vague and casual remark made subject to the direction to get information elsewhere.

Judgment affirmed, with costs. •

Freedman, J.,' concurred.


text:
    HERMAN WRONKOW v. HENRY CLEWS, et al.

      Stock transaction—“stop order” usual meaning—meaning in broker's letters.

    The phrase 11 stop order ” means that the broker has received and is bound by a direction of his principals to sell at a price described, when that price is reached in the market. The price may be described by referring to contingencies and conditions.
    But the phrase in a letter to his principal by a broker with discretion to sell stock bought by said broker on account of such principal, on a margin, stating the price at which the stock was then selling, calling for more margin to be put up on receipt of the letter, and adding, “ In the meantime we enter stop order,” means that the broker would stop entirely in everything and fix the transaction in statu quo until the principal should be heard from. If it could be regarded as being used in the ordinary sense, it could only mean that the broker imposed on himself an obligation to sell at a price lower than that mentioned in his letter. In either event (the stock having subsequent to the letter been sold by the principal’s order, and bringing less than the rate mentioned in the letter), the principal cannot charge the stock against the broker at the rate mentioned in the letter.
    Before Sedgwick, Oh. J., Ereedman and Trttax, JJ.

      Decided June 1, 1885.
    ■ Plaintiff’s exception to a dismissal of the complaint at trial term before a jury, ordered to be heard in first instance at general term.
    The defendants were the stockbrokers of plaintiff, who had deposited with defendants certain securities in a transaction in which defendants had bought for plaintiff shares of railway stock. The plaintiff tendered to them an amount as due by him upon the sale, and demanded the securities deposited by him. The defendants refused to deliver on the ground that the plaintiff owed more than he had tendered. .

      Melville H. Begensburger, attorney, "and of counsel for plaintiff.

      Abbott Brothers, attorneys, and Albert A. Abbott, of counsel for defendants.
   By the Court.—Sedgwick, Ch. J.

The defendants bought on account of plaintiff, six hundred shares of the stock of the Northwestern Railway Company, agreeing to hold it for him so long as he should give them a sufficient amount of security. He was about to go to Europe. The defendants held $15,000 as security. The plaintiff furnished as security, in addition, thirty shares of Central Pacific Railway stock, and thirty shares of Pennsylvania Railroad stock. It was agreed that in his absence, the defendants should act for him in their discretion. He went to Hamburg. On May 12, the defendants sent to him by the post-office, “We are compelled to call upon you for additional margin on your stock at present prices, which are as follows : No. West. 105%, Cent. Pac. 41%, Penn. Cent. 56. You will see that you only have about 3 per cent, margin in our hands ; please, therefor, send us a cable on receipt of this letter, for $5,000. In the meantime we enter stop order.”

The plaintiff received this letter at about 8 o’clock in the morning of May 24. He immediately telegraphed to defendants, “Sell all North Western. Keep Central Pacific, Pennsylvania. Settle on my return.” At about 2 o’clock in the afternoon of the same day, he received from the defendants the following telegraphic message : “ Cable $10,000. North West. 97, answer,” and at about 4 o’clock “ Sold all 95.”

The plaintiff, on his return to New York, assuming that the defendants were bound to sell the North Western stock at 105-|, as the price at which it stood on May 12, according to the letter of that date, tendered to the defendants the amount that would be due to them upon such a sale, and demanded delivery to him of the stock that had been kept as security. This was refused on the ground that the plaintiff owed the defendants $6,000.

The action is for conversion in not delivering the stock on the demand that has been referred to.

It may be assumed that the defendants were entitled to retain the security, if the plaintiff, in demanding it, tendered less than was due by him to defendants. He tendered an amount that would have been due if the defendants had sold at 105-f. The plaintiff claims that they were bound to sell at that price, because they had so undertaken by the letter of May 12, in entering the stop order, as the letter called it.

It is agreed that usually a stop order signifies that the broker has received and is bound to obey a direction of his principal to sell at a price described, when that price is reached in the market. A stop order may, however, describe the price by referring to contingencies and conditions. To be a stop order it is not essential that a definite figure as the price be named. In the present case, no stop order was in fact made. It did not come from the principal, and the brokers had been empowered to act in their discretion. If used in the ordinary sense in the letter, it means that the defendants have resolved or imposed upon themselves the obligation to sell at a price. This, however, could not mean that the price was to be 105f, for that price had been reached, and had that price been intended, there would have been an immediate sale. It must have referred to a price lower than 105-f, and if it did, it is clear that the plaintiffs did not tender an amount that would be due at any price less than 105f.

In reality, however, the words were not used in their ordinary sense. ’ Take all the letter and the circumstances, the controlling fact was that the transaction was not to be closed until the plaintiff had an opportunity to answer by cable the letter that was sent by mail, and the words “in the meantime, we enter stop order,” were intended to describe what the defendants would do to keep the transaction open, that is, to stop entirely in everything, and to fix it in statu quo, until the plaintiff should answer. This was done by defendants, and the plaintiff thereupon gave a direction by cable, which permitted the defendants to proceed, and as they sold as requested by plaintiff, he is bound by the result.

The plaintiff’s exceptions are overruled, and judgment directed to be entered that complaint be dismissed with costs.

Freedman and Truax, JJ., concurred.


text:
    JOHN M. FISHER, Appellant, v. THE CHARTER OAK LIFE INSURANCE Co., Respondent.

      Demurrer — want of jurisdiction over foreign corporation—facts stated not authorizing relief ashed.—Agreement to apportion and pay—Cause of action on. —Foreign corporation—-no interference with internal administration.

    The jurisdiction of the superior court is to be presumed. A demurrer is not well taken unless the facts showing want of jurisdiction appear on the face of the complaint. Therefore, a complaint in an action against a foreign corporation, upon contract, which does not show when the contract was made, executed or delivered, nor when nor how the summons was served, is not demurrable for want of jurisdiction, either of the person or the subject matter.
    A demurrer on the ground that the complaint does not state facts sufficient to constitute a cause of action is well taken, if the facts stated do not authorize the judgment prayed for, although they may authorize some other relief.
    In case of an agreement to apportion and pay the amount apportioned, apportionment is necessary before an action will lie for a money judgment. Therefore, a demurrer to a complaint in an action brought on such an agreement before apportionment, demanding a money judgment, is well taken. But upon proper proof an action will lie to compel the making of an apportionment.
    The courts of this state will not interfere with the internal administration of the affairs of a foreign corporation, its officers, books and assets not being within.their jurisdiction. Therefore, there is no cause of action in this state against such corporation to compel it to perform its agreement to make apportionment of moneys to be received by it. '
    Query, whether a complaint alleging facts claimed to constitute such a cause of action against such foreign corporation, and praying for the equitable relief that it make apportionment, is demurrable as showing want of jurisdiction of the subject matter ?
    Before Sedgwick, Oh. J., Freedman and Truax, JJ.

      Decided June 1, 1885.
    Appeal from judgment in favor of defendant, upon demurrer to complaint.
    Defendant demurred to the complaint on the following grounds : First.—That the court had not jurisdiction of the person of the defendant: Second.—That the court had not jurisdiction of the subject of the action ; Third.— That the amended complaint did not state facts sufficient to constitute a cause of action.
    The demurrer was argued before, and decided by Ingraham, J., who delivered the following opinion :—
    “As to the first and second grounds of the demurrer, it is sufficient to say that the defects do not appear upon the face of the complaint.
    “ By subdivision 7 of section 263 of the Code, a superior city court has jurisdiction where an action is brought by a resident of that city against a foreign corporation, to recover damages for breach of a contract, or a sum payable by the terms of a contract, when the contract was made, executed or delivered within this state, or where the summons is served by the delivery of a copy thereof within that city to an officer of the corporation, as prescribed by law. By section 266, it is provided that the jurisdiction of a superior city court, in an action or special proceeding, must always be presumed, and when the defendant appears in the action, the want of jurisdiction is waived by appearance, unless it is pleaded in defense.
    “This is an action on contract; it does not appear on the face of the complaint that the contract was not made, executed or delivered within this state, nor that the summons was not served on an officer of the defendant within the city, as prescribed by law, and it therefore does not appear on the face of the complaint that the court has not jurisdiction of the person of the defendant, or of the subject of the action.
    “As to the third ground of demurrer. The action must, I think, be deemed an action at law for the recovery of a specific sum of money. The only relief demanded in the complaint is a money judgment against the defendant. No other or different relief is asked for, and if plaintiff is not entitled, on the facts alleged in the complaint, to judgment for a specific sum of money against the defendant, the demurrer must be sustained (Edson v. Girvan, 29 Hun, 422).
    “The agreement on which the action is brought provides, that 6 whereas, a portion of the assets of the company (defendant) are of uncertain value, and cannot be made available as a part of the reserve of the company, and it has become necessary to reduce the liabilities of said company, the plaintiff agrees to reduce the amount of the policy payable to him, two-fifths, viz : from $2,000 to $1,200, and the defendant agrees that when the said company shall realize from .said uncertain assets any divisible surplus, which may properly be divided among the holders of policies so reduced, said company will from, time to time apportion to the said policy . . its fair and equitable proportion of said divisible surplus, by adding to said policy or otherwise, which dividend shall continue upon such reduced policies after they become due and are settled, as well as upon those which remain in force.’
    “ This is an express obligation of the defendant, on the realization from the i uncertain assets of a divisible surplus, which may properly be divided among the holders of policies so reduced.’ When a divisible surplus shall have been realized, the company is bound to apportion to said policy its fair and equitable proportion; no discretion is vested in the company. It is not provided that the company may apportion, but it agrees it will apportion. That agreement is founded on a valid consideration, and is one which the court can and should enforce. Cases cited by defendant, that when a board of commissioners are vested by statute with a discretion to apportion, such discretion will not be controlled by the court, do not apply to a case where one of the parties to a contract agrees to apportion. In one case, the statute expressly vests such discretion in third parties, in the other the party to the contract agrees to do a particular act.
    “ The complaint alleges that since the execution and delivery of the said agreement, defendant has realized from the uncertain assets referred to in said agreement,' a divisible surplus which under the terms of the said agreement, may properly be divided among the holders of reduced policies, to such an amount that the defendant may and can now properly apportion to said policy issued to this plaintiff, and reduced by the terms of the said agreement,the full amount of the difference "between the amount paid to this plaintiff thereon as aforesaid, and the original amount of said policy, to wit, the sum of $800, and may and can properly and legally pay that amount to this plaintiff as provided by said agreement. Are the allegations sufficient to give the plaintiff a right to a money judgment for $800, or any other sum ?
    “ It will be noticed that the agreement is not to pay the policy-holder any sum he is entitled on any divisible surplus being realized from the uncertain assets, but to have apportioned to said policy its fair and equitable proportion of such divisible surplus. He is entitled to his fair and equitable proportion, and before that can' be ascertained, it must appear what its fair and equitable proportion would be, and the defendant must then be required to apportion such a sum to the plaintiff. The word apportion means to ‘ divide and assign in just proportion/ cto distribute among two or more a just part or share to each/ and this is what the defendant has agreed to do, and such proportion must be ascertained before a judgment can be given against the defendant for a sum of money.

      “ The case of Boarman v. Lake Shore & Michigan Southern R’y Co. (84 N. Y. 157), is instructive on this point. That was an action brought to compel the defendant, a foreign corporation, to pay dividends on certain preferred stock. By the certificate of stock it was provided that said stock is entitled to dividends at the rate of ten per cent, per annum, ‘payable semi-annually, and the payment of dividends as aforesaid, is hereby guaranteed.’ In affirming a judgment in favor- of the plaintiff requiring the defendant to pay dividends to him, and restraining defendant from paying dividends on its common stock until the claim of plaintiff was paid and satisfied, the court says, at page 180 : ‘ While, as a general rule, courts of equity will not exercise visitorial powers over corporations, and its officers are the sole judges as to the propriety of declaring dividends, and in this respect the court will not interfere with the proper exercise of their discretion, yet when the right to the dividend is clear and fixed by the contract, and requires the directors to take action before it can be asserted by an action at law, and a restraint by injunction is essential to maintain the rights of the stockholder, the interposition of a court of equity is a proper exercise of its power, and should be upheld. . . . The judgment here requires a specific performance of the contract, and such relief could not be obtained by an action to recover the dividend.’
    “ The relief here would be for a specific performance of the agreement, viz.: to ascertain the divisible surplus and apportion it among the holders of reduced policies; but such relief is not asked for in this action, and as the defendant did not answer, but demurred, plaintiff is not entitled to such equitable relief (Edson v. Girvan, 29 Hun, 422).
    “ There is another objection to the complaint, which I think is well taken. The complaint does not state facts; the allegations are simply conclusions. ‘ That a divisible surplus has been realized which may properly be divided among the holders of reduced policies to such an amount that said defendant may and can properly and legally apportion to said policy held by this plaintiff,the full amount of the difference between the amount paid and the full amount’, are simply conclusions. The Code requires that the facts should be stated from which the conclusions are to be drawn.
    “ The demurrer must therefore be sustained, and judgment ordered for the defendant on the demurrer, with costs, with leave to plaintiff to amend within twenty days, on payment of costs.”
    From the order entered in conformity with this decision, the plaintiff appealed to the general term.

      William Settle, attorney, and of counsel for appellant, argued:
    I. When the contingency provided for in the agreement, to wit, the realization occurred, the right to the balance became fixed, and existed independent of any act of the corporation or its officers (Boardman v. Lake Sho. & Mich. So. Ry. Co., 84 N. Y. 178). In that case the court held that the action was properly brought for specific performance, because the action was not brought to recover the dividends alone, but to compel the defendant to' do certain other acts, without which there would be no power to pay the dividends, thus intimating that if it was an action for dividends alone, no accounting would be necessary. In the case at bar the action is brought to recover the fixed amount (dividends) remaining unpaid upon the policy. The agreement is that the company will apportion to the policy in question its fair and equitable proportion, etc.; not such an amount as they may think proper, but “its fair and equitable proportion.” If the company is able to pay the whole of the balance unpaid on the policy, then that is its fair and equitable proportion, and the complaint alleges that it is able so to do, and the demurrer admits it.
    II. If an accounting is necessary, the plaintiff should have been allowed it under the complaint. The complaint states sufficient to entitle plaintiff to an accounting ; that being so, the complaint should not have been dismissed, even though no accounting was demanded therein (Sternberger v. McGovern, 56 N. Y. 12). In that case the court held that when the complaint sets up a claim for legal and equitable relief, the plaintiff has a right to have both tried. It is true that by section 1207 of the Code, where no answer is interposed, the judgment shall not be more favorable to the plaintiff than that demanded in the complaint—but would a judgment for an accounting be more favorable ? the demand in the complaint is for a fixed sum of money, $800—under no circumstance could plaintiff recover more than that amount under an accounting, and hence the judgment would not be more favorable, and section 1207 of the Code, and Edson v. Girvan (29 Hun, 422), cited by Judge Ingraham in his opinion at special term, have no application.

      Alexander & Oreen, attorneys, and Charles B. Alexander, of counsel for respondent, argued:
    I. Unless the plaintiff can, on the facts disclosed, show himself entitled to money damages in an action at law, the demurrer must be sustained. The prayer for relief taken in conjunction with the averments of the complaint, is conclusive upon the plaintiff that this is an action at law for damage in a case where a demurrer has been interposed (Kelly v. Downing, 42 N. Y. 71; Alexander v. Katte, 63 How. 262 ; Taylor v. Charter Oak L. I. Co., 9 Daly, 489 ; Edson v. Girvan, 29 Hun, 424; Murtha v. Curley, 90 N. Y. 372 ; Covert v. Henneberger, 53 How. Pr. 1). Where an answer is interposed, the plaintiff can have any relief consistent with the case made by the complaint and embraced within the issue (Murtha v. Curley, 90 N. Y. 372). Of course, where an answer is not interposed, this would not be the case; and for the purposes of section 1207, a demurrer' is not an answer (Kelly v. Downing, supra).

    II. The averments of the complaint do not entitle plaintiff to a money judgment. 1. An apportionment must take place before anything becomes due to the plaintiff, and Sthis has never been made. Apportion is a word of well-understood meaning both in literature and law. It is derived from the Latin words ad and portio. It is defined by Webster as meaning to divide and assign in just proportion. The word has had careful judicial definition and consideration (Haight v. Day, 1 John. Ch. 18 ; Clarke v. Brooklyn Bank, 1 Edw. Ch. 368 ; 1 Story’s Eq. Jur. 475 a; Walker v. Devereaux, 4 Paige, 253 ; Le Roy v. Corporation of N. Y., 4 Johns. Ch. 356), 2. The apportionment not having been made, the action will not lie to recover what might be the result of such apportionment, if such apportionment was had (Del. & Hud. Canal Co. v. Pa. Coal Co., 50 N. Y. 250 ; Scott v. Avery, 5 H. L. Cas. 811; United States v. Robeson, 9 Peters, 319 ; Perkins v. U. S. Electric Light Co., 15 The Rep. 680 ; Milnes v. Gery, 14 Vesey, 400 ; Scott v. Corporation of Liverpool, 3 De Gex & J. 334; Hood v. Hartshorn, 100 Mass. 117). 3. Ho action can be sustained, because by the contract and by the complaint, the suit is brought for a dividend, and no action at law will lie to obtain a dividend until it is declared by the body charged with the duty of declaring it (Meeker v. Wright, 76 N. Y. 272 ; Davis v. Mayor, 14 Ib. 506 ; Chase v. Vanderbilt, 37 Super. Ct. 334 ; Webb v. Vanderbilt, 39 Super. Ct. 9 ; Prouty v. Michigan Southern R. R. Co., 4 T. & C. [Sup. Ct.] 241 ; Williams v. Western Union Tel. Co., 93 N. Y. 192).
    III. If this action is to be treated as a suit in equity, then there is no cause of action pleaded. Equity will only interfere where willful abuse of discretion is alleged. The most striking case on this point is Karnes v. Rochester & Genesee Valley R. R. (4 Abb. N. S. 107). The complaint alleged the existence of an enormous surplus applicable to the payment of a dividend, and ¡irayed an accounting and division. Defendant demurred, and the court sustained the demurrer on the principle above stated. See Verplanck v. Mercantile Ins. Co. (1 Edw. 84); Luling v. Atlantic Mut. Ins. Co. (45 Barb. 510); Ely v. Sprague (1 Clarke, 351); State of La. v. Bank of La. (3 La. 771); Pratt v.
      Pratt (33 Conn. 446); Scott v. Eagle Fire Co. (7 Paige, 198); Williams v. Western Union Tel. Co. (supra); Goodwin v. Hardy (57 Me. 143); Minot v. Paine (99 Mass. 101); Granger v. Bassett (98 Mass. 462); Phelps v. Farmers’ Bank (26 Conn. 269); Hyatt v. Allen (56 N. Y. 553); Jones v. Terre Haute & Richmond R. R. Co. (57 N. Y. 196); Brundage v. Brundage (1 Supm. Ct. [T. & C.) 82).
    IV. This court has no jurisdiction of the person of the defendant. The defendant is a Connecticut corporation. The plaintiff does not appear to be a resident of Hew York (Code, § 263, sub. 7.)
    V. The court has no jurisdiction of the subject of the action. The courts of this state will not exercise jurisdiction on their equity side to compel the declartion of a dividend. This rule applies to all courts, and not alone to the supreme court (Chase v. Vanderbilt, supra; Whitehead v. Buffalo & Lake Huron Ry. Co., 18 How. 218 ; Howell v. Chicago & N. W. R. R. Co., 51 Barb. 382 ; Smith v. Mutual Life of N. Y., 14 Allen, 336 ; Landers v. Staten Island R. R., 14 Abb. N. S. 346 ; Thornton v. St. Paul & Chicago R. R., 45 How. Pr. 426; Williston v. Mich. Southern Railroad, 13 Allen, 400 ; Merrick v. Van Santvoord, 34 N. Y. 222 ; Eaton v. Aspinwall, 19 N. Y. 119 ; Buffalo & Allegany R. R. Co. v. Cary, 26 N. Y. 75 ; Reiner v. Marquis of Salisbury, L. R. 2 Ch. Div. 378 ; Matthaei v. Galitzin, L. R. 18 Eq. R. 340 ; Doss v. Secretary of State, L. R. 19 Eq. 534 ; Ogdensburgh R. R. v. Vermont R. R., 16 Abb. Pr. N. S. 250). The objection to the jurisdiction is not waived by the appearance of defendant (Wheelock v. Lee, 74 N. Y. 498).
   By the Court.—Sedgwick, Ch. J.

For the reasons given by the judge below, I agree with him that the issue upon the demurrer was whether the plaintiff was entitled, upon the averments of the complaint, to the judgment demanded by it. The demand was for a judgment against the defendant, in a specified amount. I also agree that under the terms of the contract, in advance of an apportionment to the policy, of its fair and equitable proportion of the divisable surplus referred to, the plaintiff would have no right to demand a money judgment. If the failure to apportion be decreed a breach of contract, there is no possible mode of assessing damages. For the amount of the apportionment can be fixed only through the exercise, in fact, of a discretion by the officers of the company, in view of present circumstances and future contingencies. A court or jury could not exercise that discretion, even if the agreement did not, as it does, contemplate that the officers should exercise it'in trust for the whole body of the holders of policies.

The result is that the demurrer was properly sustained.

If nothing more be said, there may be an application to amend, by changing the demand for judgment in the complaint, to a demand for an accounting, as it was called, on the agreement, or perhaps for a judgment that the defendant proceed to apportion it.

The allegations in the complaint that would be relied upon as the ground of the new demand, show that for sufficient consideration, the defendant has contracted to apportion, &c. This contract has modified whatever would have been the implication as to the right of the company to refrain from making dividends, if the relations between it and the plaintiff were the same as if the plaintiff were a shareholder merely. The plaintiff would have a right to the enforcement of the contract, upon making proper proof.

The performance of the contract by defendant would involve the doing of such things by its officers as would be done by them, if they were proceeding to ascertain if a dividend of profits should be declared in a case where profits could be divided among shareholders. The defendant is a foreign corporation. This court has no facilities or processes sufficient or fit to compel a foreign corporation to take the proceeding described. It cannot bring the officers .or the books or the assets of the corporation within its jurisdiction. It must enforce such a judgment, if at all, by proceedings for contempt, and yet there are no persons here whose action can direct the proceedings of the company. Under such circumstances, it is said that a court of equity will refrain from proceeding to a judgment, and that the court of equity will not interfere with the internal administration of the affairs of a foreign corporation (Cumberland Coal Co. v. Hoffman Coal Co., 30 Barb. at p. 171; Howell v. Chicago & North Western Ry. Co., 50 Barb. at p. 383; Chase v. Vanderbilt, 37 Super. Ct. at p. 356, and cases cited).

The learned counsel for respondent takes the position now referred to, under that ground of the demurrer that states that the court has no jurisdiction of the subject of the action. If this be not formally correct, and it is unnecessary to pass upon this, it is true that there is no cause of action here in this state, as the law does not give any remedy here for the things complained of.

Judgment affirmed, with costs.

Freedman and Truax, JJ., concurred.