author: O’BeieN, J.:

text:
    Philip B. Veiller, Respondent, v. Edward L. Oppenheim and Others, Appellants.

      Inspection of business boohs, to frame a complaint — form of the action — right to an inspection of a party interested in the profits ■ — • abuse of the privilege.

    £t is not to be assumed, from tbe mere statement that tbe action was brought for an accounting and settlement, in a plaintiff’s affidavit for an order for tbe inspection of tbe defendants’ books of account to enable him to frame bis complaint, that tbe plaintiff is about to commence an action in form for an accounting, when it is apparent from facts set forth in tbe affidavit that tbe plaintiff was employed by tbe defendants under an arrangement which gave him, in lieu of salary, a certain percentage of tbe profits of their business, which did not constitute him a partner and under which, consequently, he could not maintain a suit in equity for an accounting, but was left to an action at law.
    When a plaintiff has a direct interest in the profits and losses of the defendant’s business, through being entitled to a percentage upon the profits in lieu of salary, a, prima facie case is presented entitling the plaintiff to an inspection, when necessary, of the books of account containing a record of the common venture, and to all the information that can be derived from them; arid it is only where it is apparent that the application is made in bad faith that such inspection should be denied.

      It is not to "be assumed in advance that an abuse of the privilege of inspecting business books is intended, so as to warrant a modification of the order granting such inspection before facts arise which show an attempt to abuse the privilege or to make use of it for a purpose other than that for which it was granted.
    Appeal by tlie defendants, Edward L. Oppenheim and others, from an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the city and comity of New York on the 14th day of November, 1893, granting the plaintiff an inspection of the books of the defendants’ firm, to enable the plaintiff to frame his complaint in the action.

      Otto. Ilorwitz, for the appellants.

      Edward O. Perkins, for the respondent.
   O’BeieN, J.:

Little need be added to the opinion of the learned judge at Special Term, showing the reasons and necessity for the order appealed from. The appellant insists that the judge, though he concluded that the plaintiff was not a partner, overlooked the statement in the plaintiff’s affidavit alleging that his action was brought for an accounting, which he could not maintain in view of his relation to the defendants as an employee, or at best a co-worker. It is hardly just, however, to seize upon one expression in an affidavit, particularly where all the facts are presented to the court showing the character in which the plaintiff sues. ' The agreement with the defendants, which is set forth, shows that he was employed under an arrangement which would give him, in lieu of salary, a certain percentage of the nrofits of the business, which from time to time was increased.

In the leading case of Smith v. Bodine (74 N. Y. 30) it was held that unjler such an agreement, which did not constitute the plaintiff a partner, he could not bring a suit in equity for an accounting, but was left to his action at law. This circumstance, however, instead of being an obstacle, seems to us an additional reason why the inspection should be allowed. In an action at law it will be necessary for the plaintiff to state the amount which he seeks to recover, and unless such amount can be ascertained from an inspection of the books, plaintiff will not be in a position to know just what sum he is entitled to sue for. In such an action at law an account between the parties at some stage of the proceeding is practically taken, and this no doubt is what was intended to be expressed by the statement in the plaintiff’s affidavit that his action was brought for an accounting and settlement, because we cannot assume that he was to commence an action in form for an accounting which, under the case above cited, would not lie.

The suggestion that the application is made in bad faith, and is in the nature of a fishing excursion, we think is sufficiently answered by tlie opinion of the court below. In this connection, and upon the subject of the right to an inspection in general, we are referred to cases wherein it has been held that such motions should be granted with reluctance, and only in cases of necessity, and that it is the practice, except in a clear case, to deny such applications. We have no fault to find with such decisions, or with the proposition of law •thus appealed to, but we have had occasion frequently to say that in all these applications each must stand upon its own footing and be determined by the merits involved in the particular application. The Code is authority for the-right in a proper case to have an inspection, and a moment’s reflection will show that there are cases which may be divided into classes, in one of which such right is more readily granted, and in another more uniformly denied. As an instance of the former may be cited the usual action between partners for an .•accounting, in which an inspection is permitted almost as a matter ■of course. As an instance of ■ the latter class might be cited cases wherein the person suing has no ’relation to the defendant or his business, and has no right growing out of any relation to an inspection of his boohs. In such cases, unless it clearly appears either that the evidence sought is necessary for the purpose of framing a ■complaint, or is essential to the establishment of the plaintiff’s case upon the trial, and cannot be procured in any other way, such ajiplication will be denied.

Ve think, however, there is a third class, of which the present is a good illustration, in which, while the relation between the parties may be that of employee and employer, or co-workers, in one or more aspects it takes on the character of a co-partnership. Here the plaintiff had a direct interest in the profits and losses of the business, his percentage being fixed upon the profits, which he was entitled to receive in lieu of salai-y. Where such relation is admitted, .as in this case, whether such relation constitutes the plaintiff a partner-, or a principal bringing business to the firm, or an employee entitled to a share of the profits, or a co-worker with them in the general business, we think, as argued by the respondent, that “ so long as the plaintiff in one manner or another, under one name or .another, was entitled to a portion of the proceeds of the common venture,” a prima faoie caséis presented entitling those interested ■in that venture to an inspection, where necessary, of the books of account containing a record thereof, and to all the information that •can be derived from them, and it is only where it is apparent that the application is made in bad faith that such inspection should be ■denied.

It is insisted, however, tliat the order, if not refused, should be modified by limiting the number of assistants whom the plaintiff might employ, to the end that it might not result in an abuse of the privilege granted to him by the court, in overrunning the defendants’ office and interfering with their business. In the order itself the alternative is given of depositing the books in court, but as the defendants would probably prefer to retain them in their own custody the court granting the order would at all times see to it that the privilege was not abused, and upon the facts showing any attempt to abuse it, or to make use of it for other than the purpose for which it was granted, namely, to furnish information to the plaintiff, it would be withdrawn. As we should not assume that the plaintiff intends to abuse the privilege, we do not feel warranted in modifying the order, it being within the defendants’ power, if their fears should be realized, to secure relief from the court.

"W"e think, therefore, that the order should be affirmed, with ten dollars costs and disbursements.

Van Brunt, P. J., and Follett, J., concurred.

Order affirmed, with ten dollars costs and disbursements.

       The opinion rendered at Special Term is as follows :
      Barrett, J. :
      The plaintiff was not a partner in the defendants’ firm, but he was not an ordinary employee. He was an important co-worker with the defendants, and his interest had a direct relation to the profits of the firm. This interest was increased by the profits and decreased by the losses. As to the speculative account, it was expressly provided that he should have a specific interest in the profits, and be responsible for a specific percentage of losses.
      It is apparent, therefore, that ho is entitled to an inspection of the firm books, provided he has made out a prima facie case for the reopening of the accounts or statements furnished to him from time to time.
      Such a prima facie case is, I think, clearly set forth in the rebutting affidavit used upon the previous motion, and made (with other papers) the direct basis of the present motion. Several grave inaccuracies — to use the mildest expression — are pointed out, and, while the defendants seek to explain the plaintiff’s charges in some particulars, their explanations are not entirely satisfactory. They are certainly not conclusive against the application. One charge in particular is not met at all. I refer to the item of interest. By the agreement, the plaintiff’s percentage of profits was to be ascertained by deducting from the gross profits interest on cash capital at the rate of five per cent, together with interest at the same rate upon the sum of §30,000 representing the approximate value of the defendants’ seats in various exchanges.
      It appears that after the new firm was formed on the 1st of May, 1891, the defendants privately arranged to credit themselves with six per cent upon this $30,000. They also arranged to withdraw their capital, as firm capital, and to credit such capital to their individual accounts as in form a loan to the firm, at six per cent. Tliese interest charges were credited monthly, thus practically effecting compound interest. The defendants make no satisfactory explanation of this wrongful breach of their contract. Indeed, they seem to have concealed their acts in this respect from the plaintiff, and when he accidentally discovered what they had done, and taxed them with it, they vouchsafed no explanation, but simply intimated that it was no affair of his how they arranged their business interests as between themselves. Indeed, this is the position which they deliberately assume upon the present application, for Mr. Edward L. Oppenheim declares in his affidavit that: “The plaintiff has no concern whatever in the interest on the capital account to which in his affidavits he refers.”
      This position is quite untenable. It is true that the plaintiff has no concern with the private arrangements of the defendants, but he has every concern with their bringing their private arrangements into the accounts between him and them, and thus unjustly reducing his interest. -I do not desire to comment harshly upon these acts, but I must say that, unless they were inadvertent, it is hard to see how they could have been in intention fair. Certainly, settlements based upon their concealment could not be permitted to stand.
      It is sufficient, however, for the purpose of this application that the acts charged — those just pointed out and others specified in the papers — justify the inspection (in part) which the plaintiff seeks. And it is no answer to such an application, founded upon such facts, to say that the plaintiff has had from time to time an opportunity to examine the books. He is not an accountant, and he is not to be deprived of an expert examination merely because he has at times looked into the books. The inspection is to enable him accurately to frame his complaint. He might, possibly, without an inspection, frame some sort of a complaint, but not such a complaint' as the courts approve of. A complaint founded upon such an examination as he has already made, or might have made, would be a very general and imperfect statement of his case — a statement which might well be attacked as indefinite and uncertain. He is not precluded from an inspection merely because in general terms he might aver certain broad facts justifying a prayer for an accounting. He has a right, and it is indeed his duty, to set forth tlie specific wrongs of which he complains, and to fortify his prayer by distinct allegations as to each matter which may he tlie subject of adjudication.
      The examination should, however, be limited to the period commencing May 1, 1891. That was the date of the formation of the new firm, and the plaintiff, at or about that time, gave the old firm a general release except as to certain specific matters referred to in the dissolution agreement. No case is presented justly questioning this release, even prima facie Whatever wrong is pointed out specifically, relates to the new firm, not to the old.
      Nor is a case made out for the inspection of Mr. Oppenheim’s private letter book. On the contrary, it clearly appears tfiat that book has no real relation to the subject of the present discovery.
      The motion should, therefore, be granted so far as to permit an inspection by the plaintiff, and such expert accountant as he may select, of the defendants’ books containing the transactions of the firm between the 1st day of May, 1891, and the 15th day of April, 1893, including all the accounts which, under the dissolution agreement of the old firm, were carried over to the new, and which were excepted from the release given by the plaintiff to such old firm.
      Costs to abide the event. Order to be settled on two days’ notice.


source: Caselaw Access Project

author: PoLLETT, J. t

license: Public Domain

text:
    The People of the State of New York, Respondent, v. John Eichler, Appellant.

      Blackmail — attempt to extort money by a letter threatening to accuse of a crime — belief that the crime imputed had been committed.

    It is no defense to a charge, under section 558 of the Penal Code, of sending, for the purpose of extorting money, a letter threatening to accuse a person of a crime, that the defendant believed that the person was guilty of the crime charged.
    When the defendant, on the trial of an indictment for sending such a threatening letter, has been permitted to show, upon the issue as to the intent with which the letter was sent, that, as attorney for the person upon whom the crime of rape referred to in the letter was alleged to have been committed, ho brought a civil suit against the person threatened, to recover damages arising from the crime imputed, the prosecution may bo permitted to show by the complaint and bill of particulars the cause of action for which such suit was brought, for the purpose of discrediting the defendant’s testimony of good faith and of his belief in the truth of the charge made.

      The threat, in a letter sent to extort money, “to proceed against you criminally,” is equivalent to a threat to accuse the person of a crime, and will support a conviction for a felony under section 558 of the Penal Code.
    Evidence of what the defendant said, at an interview had pursuant to such a threatening letter, is competent to explain the meaning of the letter.
    Appeal by the defendant, John Eichler, from a judgment of the Court of General Sessions of the Peace of the city and county of New York rendered on the 12th day of July, 1892, convicting him of the crime of blackmail, in having attempted to extort money, in violation of section 558 of the Penal Code.
    Section 558 of the Penal Oode provides as follows:
    “ElaoKMAil. — A person who, knowing the contents thereof, and with intent, by means thereof to extort or gain any money or other property, or to do, abet or procure any illegal or wrongful act, sends, delivers, or in any manner causes to be forwarded or received, or makes and parts with for the purpose that there may be sent or delivered, any letter or writing, threatening,
    “ 1. To accuse any person of a crime; or,
    “ 2. To do any injury to any person or to any property; or,

      “3. To publish or connive at publishing any libel; or,
    “4. To expose or impute to any person any deformity or disgrace, is punishable by imprisonment for not more than five years.” Section 560 of' the Penal Oode provides :
    “ A person who, under circumstances not amounting to robbery, or attempt at robbery, with intent to extort or gain any money or other property, verbally makes such threats as would be criminal under either of the foregoing sections of this chapter, if made or communicated in writing, is guilty of a misdemeanor.”
    The letter sent by the defendant was as follows :
    “ Law Office of JoiiN EichleR,
    “ No. 113 St. Maric’s Place,
    “ New York, April 9iA, 1891.

      “ Mr. DoepfNee, :
    “ Dear Sir.— Please call at my office at 7 o’clock this evening in reference to the Mayer matter, without fail, otherwise I will be obliged to proceed against you criminally.
    “ Yery resp’ly,
    “JOHN EICHLER.
    “P. S. Inform bearer whether you will call. ' J. E.”

      Jioesch c& Fennel, for tbe appellant.

      De Lwneey Nieoll, for tbe People, respondent.
   PoLLETT, J. t

Tbe defendant was convicted of sending a letter threatening to accuse the complainant of a crime for tbe piulóse of extorting money. Tbe principal point made in bebalf of the defendant on this appeal is that evidence was excluded tending to show that defendant believed, when the letter was written, that the complainant was actually guilty of tbe crime imputed to him by the defendant in tbe interview of April ninth, which was bad pursuant to the appointment contained in the letter.

In case A. has committed a crime which has come to the knowledge of 33., and the latter, for the purpose of extorting money from tbe former, writes him a letter threatening to accuse him of the crime, he is guilty of a felony under section 558 of the Penal Code, or, if he verbally make such a threat, he is guilty of a misdemeanor under section 560. The fact that the' person who, in writing or orally, makes such a threat for such a purpose believes or even knows that the person threatened lias committed the crime of which be is threatened to be accused, does not make the act less criminal. The moral turpitude of threatening, for the purpose of obtaining .money, to accuse a guilty person of tbe crime which be has committed is as great as it is to threaten, for a like puiqmse, an innocent person of having committed a crime. The intent is the same in both cases, to acquire money without legal right, by threatening a criminal prosecution. But threatening a guilty person for such a purpose is a greater injury to the public than to threaten an innocent one, for the reason that the object is likely to be attained, ■and the result is the concealment and compounding of felonies to ■the injury of the State. Tbe fact that the defendant believed in the complainant’s guilt is no defense and is not even a mitigating fact. Tbe defendant admitted that he caused the letter to be written and delivered to the complainant, and so the only issue of fact was tbe intent with which it was written. Before tbe People rested their evidence related wholly to this issue, but the defendant was permitted to show that after the letter was written he directed his clerk to make a criminal complaint before the Police Court charging the complainant with the commission of the offense, and that April seventeenth he began a civil action for the recovery of the damages arising from the crimes charged.

"While the defendant was- under cross-examination the People introduced in evidence, without objection, the complaint in the civil action and offered in evidence the bill of particulars served therein. This bill was verified by the plaintiff’s father, her guardian ad litem, was signed by the defendant as her attorney, and it was therein charged that the defendant in that action, the complainant herein, had ravished a child five years of age on sixty consecutive days. This bill was introduced for the purpose of discrediting the defendant’s testimony of good faith and of his belief in the truth of the charge made. The defendant, having been permitted to show that he, as plaintiff’s attorney, brought such a civil suit, lias no legal ground for complaint because the People were permitted to show by the complaint and bill of particulars the cause of action for which brought.

Later in the trial the defendant’s clerk was called, who testified that he drafted the bill of particulars in the absence of the defendant, and from information given to him by the girl and her father. He was then asked by the defendant’s counsel if he believed the story of the girl and her father, but upon the People’s objection he was not permitted to answer. This is urged as error. It is difficult to see how the good faith of the defendant’s clerk was competent. It was not relevant to the issue with what intent did the defendant write the letter of April ninth, and the clerk’s belief was no more important than that of the defendant.

It is urged that the defendant was erroneously convicted of a felony under section 558, instead of a misdemeanor under section 560, because the defendant in his letter did not threaten to accuse the complainant of a specific crime, but simply threatened “ to proceed against you criminally,” and that evidence of what the defendant said at the interview had, pursuant to the letter, wras not competent to explain or to extend its meaning. We think that the threat “to proceed against you criminally ” is equivalent to a threat to accuse the person of a crime.

In People v. Gillian (50 Hun, 35 ; aff'd., 115 N. Y. 643) the point was made that the writing must contain a threat to do one of the four things mentioned in the section, but it was beld tliat while a threat of the character mentioned in the section must be made in the letter, or writing, that it was quite competent to introduce oral evidence to explain the meaning of the language used.

The People v. Gillian, (supra) and People v. Thompson (91 N. Y. 313) are decisive of the question last discussed. In neither of these cases did the letters threaten to accuse a person of a particular crime, but in both it was held to be competent for the People to introduce testimony showing the relations existing between the parties as explanatory of the intent of the defendants.

We think no error was committed on the trial, and that the judgment should be affirmed.

YaN BbuNT, P. J., and O’Beieit, J"., concurred.

Judgment affirmed.


author: Per Curiam :

text:
    Cornelius H. Tallman, Executor, etc., of Jacob B. Tallman, Deceased, Respondent, v. Adolph Bernhard, Appellant.

      Costs on sustaining a demurrer.

    The only exception to the rule that costs are absolute where a demurrer to a complaint in a common-law action is sustained, is that furnished by section 3332 of the Code of Civil Procedure, .which provides that where an issue of law and an issue of fact are joined and the issue of fact remains undisposed of, it is in the discretion of the court to deny costs to either party, or award costs either absolutely or to abide the event.
    Appeal by the defendant, Adolph Bernhard, from so much of an interlocutory judgment of the Supreme Court, entered in the office of the clerk of the city and county of New York on the 21st day of December, 1893, upon an order made after a trial had upon issues of law at the New York Special Term, as refused to allow costs upon sustaining a demurrer interposed to the complaint on the ground that it did not state facts sufficient to constitute a cause of action.

      Oarlos O. Alden, for the appellant.

      James M. Smith, for the respondent.
   Per Curiam :

The court in sustaining the demurrer erred in refusing to grant the demurrant costs. There is only one exception to the rule that costs are absolute where a demurrer to a complaint in a common-law action is sustained, and that is furnished by section 3232 of the Code, which provides that where an issue of law and an issue of fact are joined, and the issue of fact remains undisposed of, it is in the discretion of the court to deny costs to either party, or award costs either absolutely or to abide tire event.

So much of the order and interlocutory judgment as refuses to allow costs should be reversed, with ten dollars costs and printing disbursements.

Present — YaN BeuNt, P. J., O’BeieN and Paekee, JJ.

Order and interlocutory judgment reversed as, stated in opinion, with ten dollars costs and printing disbursements.


author: PARKER, J.:

text:
    Simon Newman, Respondent, v. Herman A. Curiel and Adolph Woolner, Jr., Appellants.

      Promissory note — settlement of a claim against a third party, as to the merits of which the maker is ignorant — defense of duress, fraud a/nd failure of consideration — evidence.

    To an action brought, by the payee against the maker, upon a promissory note made by a creditor of a corporation of which the maker was not an officer, but in the settlement of whose financial difficulties he was interested, and to sustain whose credit the note was given to a person asserting a claim against the corporation, as to the merits of which the maker of the note had no knowledge, a defense was interposed that the note was procured by duress; that it was procured through false representations, and that there was a failure of consideration.

      Held, that the defendant was not precluded from showing, under the defense of duress, fraud and failure of consideration, that he was induced to give the note through a threat of the plaintiff to immediately attach the property of the corporation, and that the plaintiff knew that he had no claim against the corporation, but was in fact indebted to it.
    The rule, that where a claim is made by one party, disputed by the other, and subsequently compromised, a promise to pay founded thereon is supported by a good consideration, so that it can be enforced against the promisor although he might be able to prove, if permitted, that there was nothing in fact due from him when the settlement was made, is not applicable to such a case.

      Appeal by tbe defendants, Herman A. Curiel and Adolph Woolner, Jr., from a judgment of the Supreme Court, entered in the office of the clerk of the city and county of New York on the 16th day of- June, 1893, upon a verdict in favor of the plaintiff rendered at the - New York Circuit, and from an order denying the defendants’ motion for a new trial made upon the minutes.

      Charles E. Bushmore, for the appellants.

      Benno Loewy, for the respondent.
   PARKER, J.:

The defendants on the 1st day of July, 1891, were doing business under the firm name of the United Growers Company.”

In conformity with the terms of a written agreement between the plaintiff and the defendants, but executed by only one of the defendants, a firm note for $2,750, payable to the order of the plaintiff in four months, and bearing date July 1, 1891, was made and delivered to him.

The note not being paid at maturity, this action was brought to enforce its collection.

The answer interposed by the defendants embraces three propositions : That the note was procured by duress ; that it was procured through fraudulent representations, and that ther¿ was a failure of consideration.

Briefly stated, the contention of the defendants, by their pleading and upon the trial, was that the Old Colony Distilleries Company and the Atlantic Compressed Yeast. Company (Connecticut corporations) were on the date of the note indebted to them for advances of over $150,000, and in addition they were contingently liable for over $90,000 as indorsers for the companies. Because of such fact one of the defendants was at that time in a distant State conducting negotiations, which it was hoped would so result as to greatly benefit the corporations primarily, and these defendants as creditors secondarily. That the plaintiff being aware of the indebtedness of the corporations to the defendants, and of the negotiations pending, the importance of which to the defendants he fully appreciated, secured the services of an attorney, who had for some time prior been the attorney of the defendants, to go to them and demand an immediate payment of a pretended claim of bis against suck corporations, accompanying the demand with a threat that unless the defendants should on that day pay or secure plaintiff’s claim that he would at once proceed against the corporations by attachment, and thus interrupt, and probably put at end, the negotiations pending. The defendant Curiel, whom the attorney saw, having no knowledge of the existence of such a claim against the corporations, asked for delay sufficient to enable him to ascertain whether it was of a substantial character and enforcible, but his request was denied, and believing that the plaintiff would carry out the threats which he had made through the attorney, consented to make the agreement and give the note for a claim which subsequent investigation proved to his satisfaction was wholly without foundation. The plaintiff, upon the trial, controverted the facts upon which defendants mainly relied to establish fraud, misrepresentation and want of consideration, and so successfully that the jury, after a charge by the court to which only one exception was taken, rendered a verdict in favor of plaintiff for the full amount claimed to be due.

Defendants assign as a ground of error that the court regarded as applicable to the situation presented the rule which generally obtains where a claim is made by one party, disputed by the other and subsequently compromised, that a promise to pay founded thereon is supported by a good consideration, so that it can be enforced against the promisor, although he might be able to prove, if permitted, that there was nothing in fact due from him when the settlement was made. This rule, defendants contend, is not applicable because plaintiff was not making a claim against them, about the merits of which they must be presumed to have had knowledge, but rather it was a claim against corporations, of which the defendant Curiel was not an officer, and as to the merits of which he had no knowledge whatever. So that there was absent one of the elements which may usually be found in cases of which Dunham v. Griswold (100 N. Y. 224) affords an illustration, to wit, such knowledge of the circumstances lying at the foundation of the claim made as enables the alleged debtor to determine that it has such support in fact as to make a settlement of it necessary or prudent. Again, it is said that the rule cannot properly be invoked here, because the purpose of tbe evidence was not merely to show a want of consideration for the note, but to support defendants7 contention that the note was procured by fraud. They insist that if this fact had appeared, the jury might have given it such weight, when considered in connection with the other evidence presented on their behalf tending to show fraud, as would have induced a different finding than that made by them.

Whether it would have had such a result, we need not inquire, as it is sufficient for the appellants’ purpose, if the fact which they sought to prove was of such a character that it was their right to have it presented to the jury for consideration. •

It seems to be reasonably clear that if the fact had been clearly established that plaintiff, knowing he had no claim whatever against either of the corporations, but that instead he was indebted to them in a considerable sum for goods sold to him, that such fact would have tended in some measure to support defendant Curiel’s testimony to the effect that he was induced to make the agreement and give the note, because of his fear that plaintiff would carry his threat of at once attaching the property into execution. Such a fact would have had a tendency to explain, and, therefore, to some extent would have furnished support to Curiel’s testimony that to Ms plea of ignorance touching the merits of plaintiff’s claim, and his request for delay long enough to inquire at the general offices of the corporations whether it was meritorious, the plaintiff’s attorney interposed a prompt refusal, saying that, unless settled at once, the plaintiff could not be restrained from proceeding by attachment against the corporations. It would have tended to establish that the conduct of the plaintiff was wrongful, and would have supported, in some measure, defendants’ assertion that the making of the note was induced through fear of threatened action on the part of plaintiff, which would have jeopardized the large interests of defendants.’

Defendants attempted to prove this alleged fact by inquiries of the plaintiff, and of the treasurer of the Connecticut corporations, by the production of the books of the corporations containing the accounts against the plaintiff, and by offering to introduce in evidence checks of one of the corporations, drawn to the order of the Empire Vinegar Works, under the name of which plaintiff conducted business.

Tlie questions put to the witnesses, and the books and checks, were excluded, the court expressly holding that there could be no investigation of the accounts between the corporations and the plaintiff. To the assertion of counsel that plaintiff had no claim, the court said: I can’t help that; if he did not, he asserted it and that is quite sufficient.”

We think this was such error as entitles the defendants to a new trial.

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

Van Brunt, P. J., and Follett, J., concurred.

Judgment reversed and new trial granted, with costs to the appellants to abide event.


text:
    Alexander McK. JoNes and Another, Respondents, v. Gasoline Ogden Jones and Another, as Trustees Under the Will of Caroline Ogden McCagg, Deceased, Appellants, Impleaded with Another.

      The lam and decisions of another State — expert testimony in reference to — commission — interrogatories.

    In an action ’brought for the specific performance of an implied contract on the part of the defendants, testamentary trustees, to convey land located in another State, which contract is claimed to have arisen upon the acceptance by the trustees of a certain legacy, interrogatories proposed to be propounded on behalf of the defendants, under a commission, to a lawyer of the State in which the land is situated, for the purpose of proving what the law of that State and the decisions of its courts are as to such an implied contract, are not so clearly frivolous as to call for their disallowance.
    Appeal by the defendants, Caroline Ogden Jones and Frances Ogden Jones, as trustees under the will of Caroline Ogden McCagg, deceased, from that part of an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the city and county of New York on the 20th day of November, 1893, which disallowed certain interrogatories to a witness to be examined under commission, on behalf of the defendant trustees. The action was brought for the specific performance of a contract which the plaintiffs claimed was implied on the part of the trustees, to convey property located in Illinois, forming a portion of the estate of their testatrix. It was claimed that this implied contract arose upon the acceptance by the trustees of a certain legacy in the will.
    The order for the commission was granted upon an affidavit which set forth with reference to what the defendant trustees desired to obtain in the way of testimony, by examining the proposed witnesses, that the fact that the decision of the Supreme Court of the State of Illinois in the case of Jones v. Jones, claimed by the trustees to render all matters and things relating to their trust res adjudicata as to the plaintiffs, has never been reversed, and that the same is the settled law of the State of Illinois with reference to a trust of the character involved in this case, and that the proceedings in said Supreme Court in said suit were in all respects regular.
    The interrógatories proposed to be propounded on behalf of the defendant trustees were as follows:

      “ First Interrogatory. Please state your name, age, residence and occupation.
    “ Second Interrogatory. If you shall have stated that you are a counselor at law of the Supreme Court of the State of Illinois, please state how long you have been admitted to the bar and what the nature of your practice has been, and any other facts which will qualify you for the purpose of giving an expert opinion with reference to the law of the State of Illinois.
    “ Third Interrogatory. Do you know the parties to this action or any of them ?

      “Fov/rth Interrogatory. Have you examined the record of the case of Jones v. Jones, No. 1657, in the Supreme Court of the State of Illinois, the opinion of which court in which case is found in the 124th volume of the Illinois Reports, page 261; and also the record in the court below; and if so, state whether or not the proceedings in said cause are in all respects regular and valid, and in conformity with the laws of Illinois and the rules of practice of the courts of Illinois %

    “ Fifth Interrogatory. Have you read the opinion of the Supreme Court of Illinois in said case, expressed by Shope, J., and found at page 261 of the 124th volume of the Illinois Reports ?

      “ Sixth Interrogatory. Has the decision of the Supreme Court of Illinois in said case ever been reversed, or is it still in full force and effect ?
    “ Seventh Interrogatory. Have you read the last will and testament and codicil of Caroline Ogden McOagg, admitted to probate in the Probate Court of Cook county, State of Illinois, on the 16th day of March, 1885?
    “ Eighth Interrogatory. Have you compared said will and codicil with the opinion of Shops, J., aforesaid, with a view of determining the precise construction placed by the Supreme Court of Illinois upon the trust created by the said will and codicil for the benefit of the children of 'William Ogden Jones, deceased, and if s.o, state the precise construction placed by the Supreme Oourt of Illinois upon those portions of the will and codicil creating said trust, in said opinion ?
    “ Ninth Interrogatory. Please state if a trust of the character of that under discussion is a valid trust under the laws of the State of Illinois, and was so under the laws of that State at the time of the death of the testatrix.

      “ Tenth Interrogatory. Please state if you have examined the decree of the Circuit Court of Cook county, Illinois, entered in said suit on the 4th day of Januaiy, 188J, and thereafter affirmed by the Supreme Court of Illinois, and if so, state what the powers and duties of the trustees of said one-fifth of the estate of Mrs. McCagg are defined to be under said decree.
    “ Eleventh Interrogatory. Have you read the pleadings in this cause, and are you familiar with the same ?
    “ Twelfth Interrogatory. What do you understand to be the scope and purpose of this action, and the precise contention of plaintiffs ?
    “ Thirteenth Interrogatory. Hoes the law of the State of Illinois admit of any extension of the trust involved and adjudicated by the Supreme Court of Illinois in said suit, beyond the construction given by the decision of that court ?
    “ Fourteenth Interrogatory. If you shall have testified that there is nothing in the law which would warrant a contention that the extension of the trust in said suit beyond the construction given to it by the Supreme Court, give any authorities you can for such testimony. ;

      “Fifteenth Interrogatory. Are or are not tbe defendant trustees amenable to tbe courts of tbe State of Illinois for tbe proper and lawful conduct of tbeir duties as such trustees ?
    “ Sixteenth Interrogatory. If tbe defendant trustees are amenable -to tbe courts of Illinois, or subject to tbe control of a court of that State, wbat effect would a decree made by a court of New York have upon tbe property forming tbe subject of tbe trusts and upon tbe rights and persons of tbe trustees ? ”
    Tbe court at Special Term disallowed tbe eighth, ninth, tenth, twelfth, thirteenth, fourteenth, fifteenth and sixteenth interrogatories, and from tbe order of disallowance this appeal w-as taken.

      Willard Parker Butler, for tbe appellants.

      JE. W. S. Johnston, for tbe respondents.
   Per Curiam :

'Without passing upon the admissibility of tbe evidence which may be adduced under these interrogatories, we do not think that tbe eighth, ninth, thirteenth, fourteenth, fifteenth and sixteenth interrogatories are so clearly frivolous that the defendants should be deprived of the opportunity of securing the testimony, that they may offer it at the trial, and, if excluded, have the benefit of an exception.

We think, therefore, that the order appealed from should be reversed in respect to the eighth, ninth, thirteenth, fourteenth, fifteenth and sixteenth interrogatories, and the same should be allowed, without costs to either party upon this appeal.

Present- — Van Brunt, P. J.,- O’BeieN and PaeKee, JJ.

Order reversed as directed in opinion, without costs to either party upon this appeal.


author: Van Brunt, P. J.:

text:
    Thomas J. Deegan and Another, Individually and as Administrators, etc., of Patrick Wade, Respondents, v. John Von Glahn, as Temporary Administrator, etc., of Patrick Wade, Deceased, and Another, Appellants, Impleaded with Mary Boyd and Others, Respondents.

      Judgment — when inequitable — presumption as to money collected being on hand— trust — absolute devise— life estate with power to the life tenant to devise the inherit-anee —future estates limited thereon — they attach in defatilt of appointment.
      deceased, wbo was tbe executor under tbe will of Patrick Wade, deceased.

      A judgment which directed the temporary administrator of an estate to pay to the executor and executrix of such estate a certain sum of money, which had been collected by such executrix, who had refused to turn the same over to the temporary administrator, and which amount had never been received by him, is inequitable, the person collecting' such money being chargeable therewith and presumed to have the same in hand.
    A testator died in October, 1890, leaving a will dated September, 1890, devising certain real estate to his executor, his successor or substitute, and directing him to sell the same at public auction at the city of Hew York to the highest bidder, at some convenient day and place during the spring months of 1891, and to make, execute and deliver good and sufficient deed or deeds of conveyance of the same to the purchaser at such sale, and directing the disposition of the proceeds thereof to certain legatees.
    Held, that a valid express trust was created to sell lands for the benefit of legatees; that the trust was not one personal to the executor nor was the statute against perpetuities violated thereby;
    That the devise was absolute, and the direction to sell was not a limitation of the devise, but a provision for a more speedy administration than the law required.
    "When a life estate is created by will with a general and beneficial power to the life tenant to devise the inheritance, such tenant for life may devise or sell the inheritance, or his creditors may cause it to be sold in satisfaction of his debts, even though future estates are limited on the inheritance, and if neither of these things are done upon the death of the life tenant intestate, any future estates, limited thereon, attach.
    Appeal by the defendants, John Von Glabn, as temporary administrator, etc., of Patrick Wade, and by Charles Wade, an infant, from a judgment of the Supreme Court, entered in the office of the clerk of the city and county of New York on the 30th day of June, 1893, upon the report of a referee construing the will of Patrick Wade, deceased, and settling the accounts of the temporary administrator, and of James Boyd, executor of John Boyd,

      J. F. C. BlaehJmrst and Abram Fling, for tbe appellants.

      Louis V. Booraem, Townsend c& Mahan, Jesse G. Boe and A. B. Gnoihshcmh, for tlic respondents.
   Van Brunt, P. J.:

Tbis appeal is from so much of tbe judgment entered herein as construes certain parts of tbe will of the testator, Patrick Wade, and disallows certain items in tbe account of tbe temporary administrator.

Tbis action was brought for a construction of tbe will of said Wade, and for tbe accounting of the temporary administrators and tbe executor and executrix of said will; Tbe issues in tbis action having been referred to a referee, after a trial be charged tbe temporary administrator with certain sums which tbe plaintiff Hyland bad collected and refused to pay over to tbe temporary administrator, and be is by tbis decree directed to pay these sums to the plaintiffs. In other words, one of the plaintiffs has retained money belonging to tbe estate which she should have paid over to the temporary administrator; and because she did not do so, be is by tbis judgment directed to pay said sums to her. Tbe mere statement of tbis judgment seems to show its want of equity. In law tbe plaintiff Hyland is chargeable with these moneys collected by her, and is presumed to have them in band, and cannot now claim, what she has already got, from tbe temporary administrator.

As to tbe item of $250, although evidence was given in respect to tbis charge, no request was made to tbe referee to find that it was a reasonable charge, and consequently no foundation was laid for a review of bis ruling.

Tbe evidence in this case is that this amount was to be in full of all claims for service in tbis action, and as the court allowed $225 to the counsel for tbe temporary administrator, which was, we think, a very liberal allowance, it would seem that the same was substantially allowed, and tbe temporary administrator lias no reason to complain.

The only other questions presented are those relating to tbe construction of tbe will of Patrick Wade.

It is claimed upon this appeal that the third clause of thé will relating to No. 3 Eranklin street is in contravention of the statute against perpetuities.

The clause in question is as follows :

“Thirdly. I give, devise and bequeath to my executor hereinafter named, his successor or substitute, my. lot known as number three (3) Eranklin street, in the city of New York, with the two houses thereon erected, and direct him to sell the same at public auction at the city of New York, to the highest bidder, at some convenient day and place during the spring months of 1891, and to make, execute and deliver good and sufficient deed or deeds of conveyance for the same to the purchaser at such sale.” And then the testator disposes of the proceeds to certain legatees.

By this provision the testator created one of the express trusts provided for by the Revised Statutes (1 R. S. 728, § 55), viz., to .sell lands for the benefit of legatees, and the trust was not a personal one to the executor, because the devise is to the executor named in the will, his successor or substitute, who were to exercise the power. Ye do not think that the statute against perpetuities was violated. There was no intention to suspend the right of the executor to sell. It seems to have been the intention of the testator to secure a speedy sale. The will was executed in September, 1890, and 'the testator died in October of the same year, and it seems to have been made in contemplation of death. In the ordinary course of administration the executor could have refrained from selling for nearly a year after decease, and to avoid that delay the testator gave the direction to sell in the spring months of 1891. These words were, therefore, intended to be merely directory and not mandatory, and in no way limited the estate devised.

In no case has a devise ever been held void except where an intention is expressed to suspend the power of alienation so that the ordinary method of administration could not be carried out. In the case at bar the devise was absolute, and the direction to sell was not a limitation of the devise but a provision for more speedy administration than the law required.

1 In respect to the devise of No. 228 Mott street, it is claimed that the referee erred in holding that Charles Wade took only a life interest therein with remainder to his heirs.

The provision of the will in respect to No. 228 Mott street is as follows :

“Fourthly. I give, devise and bequeath my lot number two hundred and twenty-eight (228) Mott street, in the city of New York, free and clear of all incumbrances, with the two houses thereon erected, to my son Charles Wade for the term of his natural life, with full power to devise, but with no power to grant or convey the same, and if he shall die intestate then with remainder over to his heirs; and I desire and direct my executor hereinafter named to collect and receive the rents and profits of said number 228 Mott street, until my said son shall arrive at the age of twenty-one years, and after paying the taxes, assessments and the expenses of necessary repairs on the said house, then to apply the balance of said income primarily to the support, education and maintenance of my said son, and if-there shall be any surplus, to^add the same yearly to the other moneys invested for him under the provisions of this will, and when he shall arrive at the age of twenty-one years, to pay to him the value of such accumulated sums with the interest.”

The devise is to Charles Wade for the term of his natural life, with full power to devise, but with no power to grant or convey the same, and, if he should die intestate, then with remainder over to 1ns heirs. In other words, if he died intestate his heirs were to take under the Statute of Descents.

Section 84 at page 733, volume 1, Devised Statutes, provides that: “ Where a general and beneficial power to devise the inheritance shall be given to a tenant for life, or for years, such tenant shall be deemed to possess an absolute power of disposition within the meaning and subject to the provisions of the three last preceding sections.”

That is, the tenant for life may sell or devise the inheritance, or creditors may cause it to be sold in satisfaction of debts; and if neither of these things are done, upon the death of the tenant, any future estates limited thereon attach. So that even if any future estates are limited upon the inheritance in question (which may well be a matter of doubt), pursuant to the provisions of the statute quoted, the tenant has an absolute power of disposition.

The judgment should, therefore, be reversed as to the items of fifty-seven dollars and sixty-eight cents, six dollars and fifty-six dollars and thirty-seven cent^ charged against the temporary administrator, and also as to the findings in respect to No. 228 Mott street, with costs to the plaintiff and to each of the guardians ad litem to be paid out of the estate, a.nd without costs' to the temporary administrator.

Eoi.lett and PabKeb, JJ., concurred.

Judgment modified as directed in opinion, with costs to the plaintiff and to each of the guardians ad litem to be paid out of the estate,, and without cost to the temporary administrator. about the 24th day of July, 1893, directing the deposit of certain moneys in court, and substituting William J. Clarke and another as defendants in the place of James A. Lowe.


author: Parker, J.:

text:
    Alice A. Schell, Appellant, v. James A. Lowe, Respondent, and William J. Clarke and Another, Interpleaded, Respondents.

      Application f or order of interpleader — what must be shown thereon.

    The remedy authorized hy section 820 of the Code of Civil Procedure is a substitute for the old action of interpleader, and is governed by the same principles.
    The facts essential to the maintenance of such a suit were that two or more persons have a claim against the complainant; that they claim the same thing ; that the complainant has no beneficial interest in the thing claimed; that he cannot determine without hazard to himself to which of the persons the thing belongs ; that there is no collusion between him and any of the parties, and that he brings the money or thing claimed into court.
    A person, without collusion on his part, was made the party defendant in an action for rent wherein the plaintiff claimed to be the devisee of the lessor as to the premises in question. Upon an application for an order of interpleader the fact was made to appear that, in pursuance of the statute authorizing proceedings for the revocation of probate, the persons sought to be substituted as-defendants, who were the heirs at law of the lessor, were then contesting the validity of the alleged will of the lessor before the surrogate.

      Held, that under such facts the court could not have held otherwise than that a reasonable doubt was presented as to which of the claimants would ultimately be adjudged to be entitled to the rent;
    That it was unnecessary in such application to state that the moving party was-in doubt as to which of the claimants was entitled to the rent;
    That an order of interpleader substituting the heirs at law of the lessor as defend* ants was properly granted.
    Appeal by the plaintiff, Alice A. Schell, from an order of the1 Supreme Court, made at the New York Special Term and entered in the office of the clerk of the city and county of New York oh or

      Daniel G. IioWms and William Mitchell, for the appellant.

      Andrew Wilson and Wales F. ¡Severance, for the respondents.
   Parker, J.:

An action was brought to recover from the defendant, James Lowe, $3,000 for rent of certain premises leased by him from Richard J. Clarke and Caroline Clarke, May 1, 1891.

The term of the lease is five years and the rental $3,000 per annum, payable monthly in advance.

Richard J. .Clarke died June 10, 1892. During the month of October following William J. Clarke and George B. Clarke commenced an action, claiming that Richard J. Clarke died intestate seized of the premises in question; that they were his heirs, and demanded judgment for the possession of the premises, for an accounting of the rent, and for damages. Lowe answered denying knowledge or information sufficient to form a belief as to the rights of the respective parties, alleging the making of the lease and his possession thereunder, offering to pay the rent into court or otherwise, as ordered. A contest was then pending over an alleged will of Richard J. Clarke, but subsequently, and on April 24, 1893, it was admitted to probate.

The next day, however, proceedings for revocation of probate were instituted by William J. Clarke and George B. Clarke, which were undetermined at the time this motion was made.

June 17, 1893, this plaintiff, Alice A. Schell, claiming as devisee under such will, and as assignee of Caroline Clarke, commenced this action to recover the rent of the premises from July 1, 1892, to July 1, 1893. Thereupon this motion was made, the defendant Lowe stating in his affidavit, which formed a part of the moving papers, among other things,-that he had no interest in the result of the claim of either of the parties, and that the claim of either had not been made through any collusion with him. The court determined that defendant was entitled, under section 820 of the Code of Civil. Procedure, to have William J. and George B. Clarke brought in as defendants, and he discharged from all liability to either plaintiff or the Clarkes, on payment into court of the sum claimed in the complaint.

Appellant contends that the order thus made cannot be sustained because the affidavit of the moving party does not allege that he is in doubt as to who has the just claim.

In other words, his contention is that it is not sufficient to put.the court in possession of the facts, leaving it to determine whether they require the granting of the relief asked for, but that, in addition, the moving party must express an opinion touching the merits- of the claim asserted by the respective parties. It is difficult to see how such an expression of opinion could be of aid to a court in reaching a conclusion which must necessarily be founded upon facts. Certainly there is nothing in the section authorizing the court to inter-plead other parties, requiring that a moving party shall give expression either to his opinions or doubts.

But it is said that the discretion committed to the court is a judicial one, and, therefore, to be exercised in accord with the rules which the courts have from time to time, by decision, established.

That one of the rules so firmly grounded as not to admit of further questioning, requires a statement on the part of the moving party, to the effect that there is a real doubt in his mind, based upon facts, as to which one of the claimants has a just claim.

It has been uniformly held that the remedy authorized by section 820 of the Code of Civil Procedure is a substitute for the old action of interpleader and governed by the same principles.

The facts essential to the maintenance of such suit were, that two or more persons have a claim against the complainant; that they claim the same thing; that the complainant has no beneficial interest in the thing claimed; that he cannot determine, without hazard to himself, to which of such persons the thing belongs; that there is no collusion between him and any of the parties, and that he will bring the money or thing claimed into court. (Crane v. McDonald, 118 N. Y. 648.)

Now all of these facts appear. It is true that he does not state that he cannot determine, without hazard to himself, to which of the persons claiming it the money belongs, but if he did it would merely be an expression of his opinion, not a fact. The facts were fully stated, and it was for the court to say whether the defendant would incur such risk in determining which of the parties he should pay, as devolved upon it the duty of exercising the discretion committed to it in his favor.

The decision of the court at Special Term is fully within and authorized by Bowery National Bank v. The Mayor (4 N. Y. St. Repr. 565); Pratt v. Myers (45 id. 63); Barnes v. The Mayor (27 Hun, 236); Dreyfus v. Casey (52 id. 95).

It is not in conflict with Nassau Bank v. Yandes (44 Hun, 55).

It was not held in that case that a moving party should manifest, by appropriate language, that he had doubts as to which of the claimants, urging upon him the payment of money which he ought not to pay but once, would ultimately be successful, but that the facts upon which a moving party bases his claim for the order of interpleader should be such as to satisfy the court that there was a reasonable doubt as to whether he would be reasonably safe in paying over the money to one of the claimants. So, in Mars v. Albany Savings Bank (64 Hun, 424), the point of the decision was that the facts stated by the moving party were insufficient to support an order of interpleader, because they failed to establish that there was some foundation for the' rival claim, or some plausibility in it.

It is true that the court quoted from the opinion in Williams v. Ætna Life Ins. Co. (8 N. Y. St. Repr. 567) the following : “ There must always be a real doubt in the mind of the defendant, based upon facts, as to who ‘has the just claim, before an interpleader should be permitted, or the provisions of the Code, section 820, enforced.”

So far as I have observed,, the case thus quoted from is the only one in which a court has said that the failure of a party to express his opinion touching the claims of success likely to attend the efforts of either of the contending parties should be treated as a fact to be weighed by the court in connection with actual facts in determining whether he is entitled to the relief which the Code undertakes to provide for those meriting it. It is not unlikely that through inadvertence the word “ defendant ” was used where “ court ” was intended. Had it been so written, it would have more nearly har- ’ monized with several other decisions. But while it was quoted in Mar's Case (supra), it was not necessary for the decision in that case, because the point was not involved.

It was made use of doubtless with the view that it tended to support the determination made that it must appear from the facts presented in support of the motion that the claim of a person sought to be substituted as a party defendant was not frivolous, but plausible, and such as to create a reasonable doubt touching its validity.

Subsequently, and in the same case (69 Hun, 398), that court reaffirmed the position thus taken.

Now, the facts presented on the motion clearly brought Lowe within the protection of the rule laid down in Nassau Bank v. Yandes and Mars v. Albany Savings Bank (supra;). Without collusion on his part, he had been made a party defendant in an action wherein it was claimed that his lessor had died intestate as to these premises, by reason of which the plaintiff, as his heir at law, demanded the rents. As further evidence of the plausibility of the plaintiff’s claim, the fact was made to appear that in pursuance of the statute authorizing proceedings for revocation of probate, the plaintiffs were then contesting the validity of the will before the surrogate. And it was as 'devisee under that will that the plaintiff in this action claims the right to recover the rent which Lowe in his lease had promised to pay his lessor, Richard J. Clarke.

From these facts it is apparent that the court could not have held otherwise than that a reasonable doubt was presented as to which one of the claimants would ultimately be adjudged to be entitled to the rent. Indeed, it is not conceivable what other facts could have been shown except the evidence upon which the contestants were relying to attack the validity of the alleged will.

No case has gone so far as to hold that it is necessary to produce such evidence on a motion for interpleader. To take such a step would be to practically deny the relief which section 820 was intended to afford, for it would burden a party seeking its aid with the annoyance and expense which the section was intended to authorize courts to shield him from.

The order should be affirmed, with ten dollars costs and printing disbursements.

YaN BituNT, P. J., and Follett, J., concurred.

Order affirmed, with ten dollars costs and printing disbursements.


author: Parker, J. : Pollett, J.:

text:
    Mayer Goldsmith, Respondent, v. William Coverly, Appellant, Impleaded, etc.

      Action on contract — burden of proof — uncontradicied testimony of a party or officer of a corporate party — the question of Ms credibility is for the jury.

    In an action upon a contract the burden of proof necessarily rests upon the plaintiff to establish a compliance on his part with the provisions thereoi, upon which he bases his claim of right to recover.
    The testimony of disinterested witnesses who are neither impeached nor discredited must be credited, but the testimony of witnesses who are parties to the action must ordinarily he considered by the jury, in order that they may determine what effect, if any, their interest in the result of the controversy should have upon their credibility, and although the testimony of a party to an action be uncontradicted, his interest presents a question as to credibility which the jury must pass upon; where a corporation is a party to an action, the same rule applies to the testimony of its officers.
    Appeal by tbe defendant, William Coverly, from a judgment of tbe- Supreme Court in favor of tbe plaintiff, entered in tbe office of tbe clerk of tbe city and county oí New York on the 26th day ol June, 1893, upon the- verdict of a jury directed by tbe court after a trial at tbe New York Circuit.

      Austen G. Fox, for tbe appellant.

      Wilhelmus Mynd,&rse, for tbe respondent.
   Parker, J. :

Tbe agents in New York for the National Steamship Line, the Wilson Line and tbe Anchor Line of steamers, about May 18, 1887, made an agreement with tbe plaintiff, which was reduced to writing in tbe form of a communication signed by tbe agents, and accepted by tbe plaintiff, which reads as follows:

“ New York, Men/ 18, 1887.
“ Dear Sir.— Please note that on October 1st, 1887, we will severally return to you a sum equal to five (5) per cent of the aggregate freights you may pay us from April 1st to July 1st, 1887, on live cattle shipments to Glasgow, Liverpool, London or Hull, England.
That on January 1st, 1888, we will return to you a like per-eentage óf the aggregate freights which you may pay us on such shipments from July 1st to October 1st, 1887.
“ That on April 1st, 1888, we will return to you a like percentage of the aggregate freights which you may pay us on such shipments from October 1st, 1887, to January 1st, 1888.
“ That on July 1st, 1888, we will return to you a like percentage of the aggregate freights which you may pay us on such shipments from January 1st to April 1st, 1888.
“ Provided, that any and all live cattle in the export of which,! from this port to Glasgow, Liverpool, London or Hull, you may be interested, directly or indirectly, shall have been shipped exclusively,, for the six months preceding each of said dates of payment on steamers represented by the undersigned.
“ Respectfully yours,
“F. W. J. HURST,
“HENDERSON BROTHERS,
“SANDERSON & SON.”

This agreement was continued orally by the plaintiff and Henderson Bros., defendants in this case, from the 1st day of April, 1888, to January 1, 1890.

The defendants, in the meantime, made for the plaintiff large shipments of cattle, receiving payment therefor. But from December 31, 1888, to January 1, 1890, they did not pay to the plaintiff anything on account of rebates, and refused to do so, for the reason, as they alleged, that plaintiff had failed to comply with the conditions upon which the right of rebate was made to depend, in that he had not shipped all live cattle in which he was directly or indirectly interested from the port of New York to the ports named in the agreement by the steamship lines agreed upon.

It was to recover .the amount of such rebates that induced the commencement of this action. There was no dispute as to the amounts of freights paid defendants, and the only issue presented by the pleadings was whether plaintiff had conformed to the agreement by shipping live cattle to the ports designated in it by the steamship lines represented by the agents signing it. The burden of proof necessarily rested upon the plaintiff to establish a compliance^ on his part with that provision of the agreement upon Avhich he based his claim of right to recover.

The only evidence presented by him for that purpose was his own testimony, which, if true, was sufficient to require a verdict in his favor. The court, assuming it to be true, directed a verdict in his behalf for the sum of $7,088.17. The defendants, having asked for leave to go to the jury on the issues presented, now contend that it was error for the court to direct a verdict against them, and the reason assigned is that, in view of the fact that the only evidence offered in support of plaintiff’s claim was that of a party to the action, whose testimony it is urged was to some extent discredited by his own answers on cross-examination, the question as to the truthfulness of his evidence was for the jury.

That the court could direct the jury to find a verdict in favor of plaintiff in the event that they should believe his testimony to be true, but that it had no right to direct them to believe him. The early rule denied the competency of a party to the record to testify as a witness.

Subsequently this rule was changed by statute, which has since become incorporated in the Code of Civil Procedure (§ 828). But ever since parties to an action were qualified by statute to testify as witnesses in their own behalf, a distinction has been uniformly observed between their testimony and that of wholly disinterested witnesses. "While the testimony of disinterested witnesses who are neither impeached" nor discredited must be credited, that of witnesses who are parties to the action, by reason of their interest in the result, is ordinarily to be considered by a jury, in order that they may determine what effect, if any, their interest in the result of the controversy should have upon their credibility.

And it has been held many times that, although the testimony of a party to an action be uncontradicted, his interest presents a question as to credibility, which the jury must pass upon. (Honegger v. Wettstein, 94 N. Y. 252-261; Wohlfahrt v. Beckert, 92 id. 490-494; Kavanagh v. Wilson, 70 id. 177; Elwood v. W. U. Tel. Co., 45 id. 549 ; Sheridan v. The Mayor, 8 Hun, 424; Moody v. Pell, 2 Abb. N. C. 274.)

In actions where corporations are parties the same rule has been applied to the testimony of its officers. (Canajoharie Bank v. Diefendorf, 123 N. Y. 191-200; Joy v. Diefendorf, 130 id. 6.)

The case which tends more strongly to support the decision made than any other is Kelly v. Burroughs (102 N. Y. 93). In that case the defendant was the first and plaintiff the second indorser on a note made by one Evans. From the statement of facts we quote: Defendant then testified that he indorsed the note at the request and for the accommodation of Evans, the maker, and returned it to him; that the plaintiff procured the note to be discounted, had the money placed to his own credit, and on the same day drew the money. The plaintiff then testified that he indorsed the note and procured it to be discounted at the request of the maker, and gave the proceeds to him. Other evidence was given to the same effect.” It is apparent, therefore, that to some extent, at least, the plaintiff was corroborated. How fully the report of the case does not infoi’m us, but it appears from the statement of the case that it was in substantial respects. The court held there was no question for the jury, saying, the mere fact that the plaintiff, who testified to important particulars, was interested, was unimportant, in view of the fact that there was no conflict in the evidence, or any thing or circumstance from which an inference against the fact testified to by Mm could be drawn.”

It will be observed that neither in the statement of facts nor in the opinion of the court does it appear that plaintiff’s recovery was based solely upon testimony given by himself.

But if we assume that the fact was otherwise, and that the authority of Kelly’s case has not been impaired by the later decisions in Bank v. Diefendorf and Joy v. Diefendorf (supra), the conclusion is nevertheless required that the defendant was entitled to go to the jury, for in this case the testimony elicited from the plaintiff on his direct and cross-examination was of such a nature that, considered in connection with the fact that he was a party to the actiQn, the question of his credibility became one for the jury to pass upon.

The defendants relied, whether wisely or not is of no moment in the present discussion, upon the plaintiff’s testimony and his books and papers covering the period in dispute, to show that he had failed to keep his part of the agreement not to ship cattle to the ports named therein by other than the agreed steamship lines. In order that the books and papers should be made available for such purpose on the trial the plaintiff was duly subpoenaed to produce such of them as covered the period from December 31, 1888, to January 1, 1890.

He did not produce them, assigning as a reason that the books were lost or destroyed and the bookkeeper dead.

We quote from his cross-examination some of the answers made by him to inquiries with reference to them : “ Q. And you have no books back of 1891 ? A. No. Q. Where were the books which covered this period as to which we are all interested, when you saw them last ? A.. I can’t remember. Q. What is the name of your bookkeeper ? A. That man I had at that time is dead now; he died last year. It is not quite twelve months since he died; I guess it is about — I can’t remember exactly, nine or ten months. His name was Michael Epstein. Q. How many books do you think there were that related to your business, covering this period in question when you last saw them? A. I can’t remember. Q. You did a pretty large business ? A. I know that. Q. How many thousands of dollars worth of cattle do you suppose you' shipped, in which you were interested, directly or indirectly; during the year 1889 ? A. I can’t remember that; the bookkeeper knows that; he can tell you. Q. I thought you said he was dead? A. Well, I know, but he knew it at the time. * * * Q. You canrt seriously mean that you don’t remember whether there was one book or six books which covered the enormous shipments’ which you, the biggest shipper in New York, made? A. I can’t remember. Q. Did you ever see, yourself, any page or any book which recorded or purported to record any of your transactions in cattle during the year 1889 ? A. No. Q. Do you know anybody that ever did, except the bookkeeper whom you saw buried. A. No ; I bought a house about two years ago, and I kept my books up at the house, and then we moved out, and the books didn’t come down, and the books were destroyed; they didn’t come to the office, because we didn’t have any safe. We bought a new safe down here. He (the bookkeeper) always kept those books in his power. I myself am no bookkeeper. Two years ago I bought a house and the books were left there, and we bought a safe down here; and they commenced with new books. Q. He claimed your books as his own property? A. Yes. Q.. And you didn’t make any objection to his claiming your books as his own property ? A. No, I always thought he was a straightforward man.”

The defendant, evidently with the idea that plaintiff’s bank account and checks would furnish evidence of payments to other lines for the shipment of cattle, inquired of him in what banks he kept his accounts for the year 1889. "With what success the following questions and answers which fairly measure it will disclose : “ Q. Did you keep more than one bank account during the year 1889 ? A. I can’t remember; I kept one; I can’t tell you; we have got two bank accounts; I don’t know where we generally put the money in; I can’t remember exactly. I didn’t draw checks, I only signed them. Q. Can you tell this jury the name of any bank in which you kept an account and upon which you were in the habit of drawing checks or signing checks during the year 1S89 ? A. I can’t remember thorn all. Q. Can you remember the name of any bank in which you ever kept an account? A. I kept an account in the Chemical Bank. Q. Was it not in the Chemical Bank that you kept an account during the year 1889 ? A. I can’t remember that.”

It was, at least, quite remarkable that the plaintiff, who was the largest shipper of live cattle from the port of New York, and who during the year 1889 shipped between 60,000 and 10,000 head of cattle from that port to Liverpool, London, Glasgow and Hull, should within a short time thereafter permit the books showing all these transactions to be lost or destroyed under the circumstances testified to by him.

The care which he says he took of them was not such as would ordinarily be expected of a reasonably prudent man engaged in business of such magnitude. Clearly, the jury should have been permitted to say, in view of the character of his answers to defendant’s inquiries on cross-examination, of which we have given specimens merely, whether they believed his testimony in such respect. And if the conclusion should have been reached that his testimony in that regard was untrue they would have been at liberty to disregard the rest of his evidence.

In addition, the defendants produced two witnesses who were shipping agents of other lines, who testified that in the year 1889 they had seen plaintiff’s foreman, Mr. Iiirscli, on several occasions superintending the loading of cattle on boats belonging to their lines.

In view of the general rule which obtains when the testimony of a party is wholly uncorroborated, coupled with the improbability of many of the plaintiff’s statements, the defendants were clearly entitled to have the jury pass upon liid credibility. It was for them to say, after weighing the entire testimony in the light of the witness’ interest in the result, whether they believed that he had met the burden resting upon him of establishing full performance of the contract on his part.

The judgment should be reversed, with costs to the appellant to abide the event.

Van Brunt, P. J., concurred.

Pollett, J.:

The circumstances disclosed by the record made the credibility of the plaintiff a question for the jury, and the court erred in directing a verdict; but I am not prepared to hold that the credibility of a party must, in all cases, be submitted to the jury. In case the testimony of a pai’ty is wholly uncontradicted, is not improbable on its face and there is no circumstance which tends to discredit the credibility of a party or the testimony given, the court may direct a verdict based on such testimony. (Lomer v. Meeker, 25 N. Y. 301; Kelly v. Burroughs, 102 id. 93.)

I do not understand that the Court of Appeals has laid down as a general rule that in all cases the credibility of a party or of a witness interested in the event of the action must be submitted to the jury, but in the particular cases considered it was held that the credibility of the party or of the interested witness should have been submitted to the jury.

Judgment reversed, with costs to the appellant to1 abide the event.


author: PARKER, J.: Follett, J.

text:
    The Hanover National Bank of the City of New York, Appellant, v. The Americas’ Dock and Trust Company, Respondent.

      Discount of a note of an officer of a corporation —■ notice of the illegality of a warehouse receipt — corroboration of the statements of such officer — existing facts mailable although no inquiry is made — the question of authoi’ity is foi' the jury-

    The president of a storage company discounted his note at a hank, and gave as collateral security a paper purporting to be a warehouse receipt for certain cotton, signed by him-as president of the storage company, and containing an indorsement that such receipt was only valid when signed by its president or treasurer The bank accepted the collateral, discounted the note, and after the ' maturity thereof demanded of the storage company the cotton of which the receipt acknowledged the possession Such demand was refused, inasmuch as such cotton had never been in the possession of such corporation.
    Held, that as the bank knew that the person named in the receipt was the same person who, as president, had signed it, and that he was making use of it for his own personal benefit, such bank was thereby put upon inquiry touching such person’s authority to issue the receipt.
    That if such bank had made inquiry and had ascertained thereby that such president had authority to sign receipts, acknowledging that cotton had been stored by him with such storage company, it would have been protected in taking v such collateral.
    That if at the time when inquiry should have been made there existed ‘facts establishing the authority of the president of the storage company as such to sign receipts," evidencing a contract between the storage company and himself, upon proof of the same the facts were as available to protect such bank as if it had inquired before accepting the collateral and had learned thereby of the same. (Follett, J., dissenting.)
    Where a situation is present which the law declares should put a person of ordinary prudence upon inquiry, he is chargeable with constructive notice of everything to which that inquiry would reasonably have led and nothing more.
    The facts considered and commented upon, on learning of which a lender would be justified in reaching the conclusion that an assumption of authority by the leading executive officer of a corporation to make a contract with it had been assented to and ratified by the corporation itself, and which would justify such lender in taking, as collateral to the personal note of the president of a storage company, its receipt, signed by such president, acknowledging the storage with it by him of certain merchandise (Follett; X, dissenting.)
    It is for the jury to pass upon the question of authority when the facts tend strongly to show an acquiescence by a corporation in its officer’s assertion of his right to act for it.

      Appeal .by tbe plaintiff, The Hanover National Bank of the city of New York, from a judgment of the Supreme Court in favor of the defendant, entered in the office of the clerk of the city and county of New York on the 12th day of May, 1893, upon the verdict of a jury directed by the court after a trial at the New York Circuit, and also from an order made on the 10th day of May, 1893, and entered in said clerk’s office, denying the plaintiff’s motion to set aside the verdict and for a new trial made upon the minutes.

      Thomas 8. Moore, for the appellant.

      Thadeus D. Kenneson, for the respondent.
   PARKER, J.:

The defendant is a corporation created by chapter 881 of the Laws of 18Y2, to act as a storage warehouse for cotton and other merchandise, and to issue receipts certifying the amount of the merchandise so deposited, which are negotiable and transferable by indorsement and delivery so that the transferee is deemed to be the owner of the merchandise specified, either absolutely or as a pledge for any advances or credits, subject to the payment of the company’s charges accrued upon it. The plaintiff is a national bank engaged in general banking business in the city of New York, and has for a number of years been accustomed to loan money upon such receipts issued by the defendant or upon notes with receipts as collateral security ; and for about seven years prior to 1891 it had frequently loaned money to Mr. Stone, the president-of the defendant corporation, taking therefor his notes, with warehouse receipts of the defendant as collateral.

About March 11, 1891, Stone applied to the plaintiff to discount his promissory note payable to plaintiff’s order in ninety days for $5,000, and offered to the plaintiff as collateral for said note a paper writing in the form of the warehouse receipts issued by the defendant. It reads as follows :

“ M, W. StoNE, PresH. A. J. Pouch, Vice PresH.
“ E. N. Pouoh, Treas. A. C. Hasoy, Sedy.
“AMERICAN DOCK & TRUST CO.
“ Number of Certificate. Office, Cotton Exchange,
Rooms 50 and 51, “ 26,512.
“ New York.
New York, Mar. 11, 1891.
“ Received on Storage at £ Tbe American Docks,’ for account of M. ~W. Stone, one hundred and seventy-two bales cotton.
" 151 S. Y. E.
££ 21 0. U. V.
Subject to tbe order of themselves on payment of tbe charges accrued thereon and surrender of this receipt.
“ Weight or grade not guaranteed. Labor, 10 c. ,, Storage per month, 10. Bales, 172. Store, 7. M. W. STONE, Pras't”
(On left hand margin :)
“ This receipt is valid only when signed by either the president or treasurer.
(Indorsed:) "M. W. STONE.”

The plaintiff discounted the note, paying the full amount thereof, less legal discount. After the maturity of the note the plaintiff demanded from defendant the cotton which the receipt acknowledged possession of. As the cotton was not and never had been in defendant’s possession, plaintiff’s demand was refused, and this action was thereupon instituted to recover its possession or value.

The question which the facts so far stated present was before this court in Bank of New York National Banking Association v. This Defendant (70 Hun, 152; 53 N. Y. St. Repr. 905). It was there held that as plaintiff knew that the Stone named in the receipt was the same person who, as president, had signed it, and that he was making use of it for his own personal benefit, it was thereby put upon inquiry touching Stone’s authority.

Plaintiff’s right of recovery was denied, ancl without further discussion the position then taken is reasserted. It is true that the plaintiff made no inquiry except of Stone, but if Stone did have authority to sign receipts as president, acknowledging that cotton had been stored by him with defendant, that fact would have been ascertained had inquiry been made, and would have protected plaintiff.

"Whether the result is the same when the facts exist, and insufficient or no inquiry is made, was considered in Wilson v. Met. Elevated R. R. Co. (120 N. Y. 145-153), the court saying: “ He assumed that the issue and proposed disposition of the notes had been duly authorized. He trusted to the fact of authority, and not to the evidence of it. And can it be said that the resolution which would have protected him if he had been informed of it, cannot be invoked to aid him now ? Does the purchaser of a note under circumstances which devolve upon him the duty of inquiry, assume a greater risk than the burden of proving that which would have protected him had he diligently inquired before making the investment? We think not.” So here, if at the time when inquiry should have been made there existed facts establishing the authority of Stone, as president of the defendant, to sign receipts evidencing a contract between that corporation and himself, they are as available to protect the plaintiff as if it had inquired at first. Had it made inquiry resulting in an ascertainment of the facts which it now proves, assuming that they are sufficient to have authorized Stone as president to make such contracts with himself, still plaintiff would have been burdened with the necessity of proving them. Instead, it believed Stone’s assertion of authority, but his representations under the circumstances surrounding their making were not binding upon defendant, because the occasion and the situation made them personal and not official. But if tlieir truthfulness should be established by other evidence, the fact would protect plaintiff as fully as if it had the best evidence of it in its possession at the time of making the loan. In other words, when a situation is presented which the law declares should put a person of ordinary prudence on inquiry, he is chargeable with constructive notice of everything to which that inquiry would reasonably have led and nothing more. (Cheever v. Pittsburgh & L. E. R. R Co., 72 Hun, 380 ; Shaw v. Spencer, 100 Mass. 382.) This leads us to inquire wnat plaintiff would have found had it, instead of relying upon the individual assertion of Stone, made inquiry at the office of the corporation.

It would have found there the president, Stone, who has asserted over his official signature in this receipt that he personally had on storage 172 bales of cotton, and who, it is but fair to assume, would not have denied his authority to issue the certificate. An examination of the books would not have disclosed any authority given by resolution of the directors to the president to thus evidence contracts between himself and the corporation, nor discovered any resolution forbidding it. Further examination would have caused it to appear that on March 16, 1886, a certificate for forty-one bales of cotton was issued by M. W. Stone, vice-president, to M. W. Stone, which was subsequently used, returned and canceled in the regular course of business, and a stub corresponding with the certificate made out at the time of the issuing of the certificate, and thereafter continuing among the records of the company, to which is attached a receipt signed by Stone acknowledging the receipt of the negotiable certificate. April 14, 1886, another certificate for eighty-five bales of cotton was issued by Stone as vice-president to himself; the stub is made out to correspond, and to it is attached a receipt for the negotiable certificate signed by Stone. Under date of May 24,1886, is a certificate signed by Stone, vice-president, to himself for 261 bales of cotton; the stub is made out in the usual form, and to it is attached a receipt from Stone for the negotiable certificate. June 15, 1881, a certificate for 100 bales of cotton was issued by Stone as vice-president to himself; a stub was made out to correspond, to which, was attached a receipt in the usual form, signed by Stone acknowledging the delivery of the certificate to him. Under date of November 29, 1881, a certificate for eighty-three bales of cotton was issued by Stone, vice-president, to himself, and he signed a receipt for it, which was thereupon attached to the stub corresponding to the certificate issued. All of the certificates referred to were used, returned and canceled in the regular course of business like the others; the receipts were signed, and stubs made out in accordance with the general custom. Under the practice of the defendant, if a man having a receipt for fifty bales of cotton calls for one bale, instead of making out a new receipt for forty-nine bales, one is indorsed off on the back, so that such indorsement represents the-deliveries as made Upon the back of the receipt of April 14,1886, the following indorsements for delivery appear :

“ INDORSEMENT EOR DELIVERY.

“The property mentioned below is hereby released from this-receipt for delivery from warehouse.

These indorsements were made by the bookkeeper, who signed his name underneath the entries in each instance.

No effort appears to have been made to prevent these transactions from coming to the knowledge of all interested. They were openly done, and the record of each of them is, and from the time when they severally occurred has been, contained in and formed a part of the regular books and record of the company. Certainly, plaintiff •or the officer representing it would have been justified in reaching the conclusion, after a review of the transactions referred to, that they tended to show, at least, that the assumption of authority by the leading executive officer has been assented to and ratified by the company.

Inquiry of the agent in charge of the defendant’s warehouse would have disclosed the fact that cotton had been stored there from time to time by Stone ; that he was accustomed to report it regularly as it came in, and did not try to conceal from anybody the fact that Stone had cotton stored there. But one other officer of the company was regularly in attendance, and he was the secretary of the company, Mr. Hascy. Of such an officer, generally, the Court of Appeals recently said in Hastings v. B. L. Ins. Co. (138 N. Y. 473-479): The secretary is one of the general managing agents of a corporation, and when in the discharge of the duties of his office he represents the corporation itself.” The representations made by him in the course of the business of the company are binding upon it, and how could there be a stronger representation of authority on the part of Stone to sign receipts evidencing the contract between himself and the corporation, of which he is the executive officer, than is furnished by the fact that the certificates to which we have already referred as executed by Stone to himself and the corresponding stubs are in the handwriting of Hascy, the general secretary ?

Had defendant, with these facts in its possession, reached the conclusion that the president’s representations as to his authority were true and then made the discount, its right to have a jury pass upon the question whether the evidence upon which it relied was not sufficient to amount to assent by the corporation to the president’s assumption of authority in making such certificates, could not well be denied.

As bas already been observed, if the facts tending to show an assent on the part of the officers of the corporation to the acts of its president in signing certificates in behalf of the corporation representing that it had stored for him cotton, are of such a character as would have entitled the plaintiff to a submission of the question to a jury, and he on inquiry ascertained such facts, they are equally available to it for that purpose when it did not inquire, or rather when the inquiry which it did make was of one who was then acting for himself and could not bind the company in what he said.

It is a wholesome rule which charges those who are invited to deal, with the officers of corporations, in respect to securities cr other obligations of the corporation, for the personal benefit of such officers, with the necessity of inquiring as to the authority of the officer to make the contract which he proposes.

But it should not be carried to such an extent as will, under all circumstances, shift the misfortunes almost inevitably resulting from lax administration on the part of the officers and directors of a corporation from its shoulders to that of the individual or corporation having dealings with one of its officers. The dividing line between the two extremes will in the end be located more nearly central, and, therefore, with greater fairness, if where the facts tend strongly to show an acquiescence in the wrongdoing officer’s assertion of a right to thus act for it, a jury be permitted to pass upon the question of authority.

This question is presented by the request of the plaintiff, at tíie close of defendant’s testimony, to go to the jury, its denial and the exception taken.

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

VaN BeuNt, P. J., concurred.

Follett, J.

(dissenting):

It is not asserted in behalf of the plaintiff that the defendant authorized its president to issue the warehouse receipt by which it agreed to deliver, on demand, 172 bales of cotton which it had not received. The receipt was a fraud, and as between Stone, to whom it was issued, and the defendant, it was void. The burden was on the plaintiff: to show that it did not stand in the shoes of Stone, and before a recovery can be had the plaintiff must show (1) that it is a holder in good faith, and (2) that the defendant is estopped from delaying its liability by some act or omission of its directors or managing officers relied on by the plaintiff when it acquired the receipt.

It is a general rule that a principal is not bound by a contract executed by an agent in favor of himself. (Story Ag. §§ 10, 11, 210, 211; Neuendorff v. World Mutual Ins. Co., 69 N. Y. 389; Voltz v. Blackmar, 64 id. 646; Pratt v. D. H. M. F. Ins. Co., 130 id. 206; Bank of New York v. Am. Dock & Trust Co., 70 Hun, 152; Morse on Banks & Banking, § 499.)

It appeared on the face of this receipt that the president of the defendant assumed to bind his corporation for his own benefit, and the plaintiff’s cashier testified that he knew when he took the ' certificate that II. ~W. Stone, president, and H. W. Stone, to whom the receipt was given, were the same person. So the plaintiff had knowledge that it was a contract which Stone had no right to make, and it took the receipt at its peril. (Claflin v. Farmers & Citizens’ Bank, 25 N. Y. 293 ; Dabney v. Stevens, 2 Sweeny, 415 ; affd., 40 N. Y. 681; West St. L. Sav. Bk. v. Shawnee, etc., Bk., 95 U. S. 557; Mor. Corp. §§ 517-606.)

The case is barren of evidence tending to show that the plaintiff received this warehouse receipt on the faith of any act done or omitted by the directors or the managing officers of the defendant. Facts -which existed and had not come to plaintiff’s knowledge and were not relied on by it, form no basis for an estoppel in pais. A person is not estopped by conduct unless his conduct was known to .and relied on by the person asserting the estoppel. The plaintiff cannot rely upon the acts of Stone, nor upon his statement made in connection with this transaction, for he was then acting in his .individual capacity, for his own benefit, and not as the president of the defendant. He could not act in both capacities in the same transaction. (Moores v. Citizens’ National Bank of Piqua, 111 H. S. 156; Manhattan I. Ins. Co. v. F. S. S. & G. S. F. R. R. Co., 139 N. Y. 146.)

I think the plaintiff took this certificate with notice of its infirmity, and that the defendant is not estopped from denying that it was issued without authority. Stone was the vice-president of the defendant from 1816 to 1890, and president from the latter date until March 27, 1891, when he died In 1881, Stone, as vice-president, issued to himself two receipts for cotton, and in 1886, three receipts for cotton, all of which were regularly entered on defendant’s books. It is not shown that the issuance of these receipts was authorized, nor that the fact that they had been issued ever came to the knowledge of the board of directors or of any officer except the secretary. It is asserted that from this evidence the jury might have found that Stone was authorized to issue receipts to himself for cotton actually delivered.

I think the fact that five receipts were issued by Stone in his own behalf in fifteen years, during which time many thousand receipts were issued, is insufficient evidence to warrant a jury in finding that the defendant had authorized Stone to issue receipts to himself. It seems to me that The Bank of New York v. Am. Dock & Trust Company (70 Hun, 152) is decisive of this case, and that the judgment should be affirmed, with costs.

Judgment reversed and new trial granted, with costs to the appellant to abide event.