author: By the Court.—Ingraham, J. Sedgwick, Ch. J., (concurring).

text:
    WILLIAM H. CROSSMAN, et al., Plaintiffs, v. THE UNIVERSAL RUBBER COMPANY OF NEW YORK, Defendant.

      G'-ntract, rescission of on the ground of fraud in its inception—After party has elected to rescind a sale which was fraudulent, the contract cannot be enforced.

    In this case plaintiffs were the owners of goods sold to the defendant, and received defendant’s notes for the purchase price, and plaintiffs after-wards, and before the notes became due, elected to rescind the contract and to proceed against the defendant for fraud, and brought an action to reclaim the goods on the ground that such sale was induced by fraud. Held, that after this election and action on their part, they could not after-wards successfully assert a claim and recover in an action against the defendant on the contract or the notes. The contract was terminated by this election on the part of plaintiffs, and no action on the part of plaintiffs could revive it.
    Before Sedgwick, Ch. J., Freedman and Ingraham, JJ.

      Decided February 6, 1890.
    Exceptions taken by the plaintiffs to the dismissal of the complaint at the trial term, ordered to be heard in the first instance at general term.

      Norwood & Coggeshall, attorneys, and Carlisle Nor-wood, Jr., of counsel for plaintiffs, argued:—
    1. The trial court erred in excluding the evidence offered by plaintiffs to show that the action of the court of chancery in appointing a receiver was not predicated at all on the allegations in the bill charging fraud against the defendant by contracting the notes and to show that the charge of fraud was withdrawn on the hearing of the application for a receiver. A similar error was committed in refusing to permit the plaintiffs to show that no benefit accrued by the New Jersey attachment, and that the same was discontinued. On the trial of this case below, the defendant took the position that the ■plaintiffs having begun an action on the ground of fraud, and having obtained what preliminary advantages they could obtain by the form of their action, had elected there- and then the remedy they would adopt, and that the election of itself binds them to that position, and also that they had similarly elected their remedy by the commencement of the attachment suit. The plaintiffs took the position that allegations of fraud and of the rescission of the contract in the chancery suit were withdrawn on the hearing before the chancellor, and were not considered by him in disposing of the motion for a receiver, etc., and that his action in such proceeding was not based upon such allegations, and that such proceedings could have been brought by any creditor, whether his debt was due or not, and also that the attachment suit had been discontinued and that the plaintiffs had received no benefit therefrom. Where a party must elect between inconsistent remedies, his election is not conclusive unless the remedy first chosen has been prosecuted to judgment, or some substantial advantage has been obtained therefrom. The mere commencement of a former action is not such an election which will bar a subsequent action brought upon a different theory. Wright v. Ritterman, 4 Robt., 704, 709-10; Hays v. Midas, 39 Hun, 460, 461-2; affd. 104 N. Y. 602; Johnson v. Frew, 33 Hun, 193, 195; Equitable Foundry Co. v. Hersee, 33 Ib. 169; affd. 103 N. Y. 25; Underhill v. Rumsey, 18 N. Y. State Rep. 717-719; Boots v. Furguson, 46 Hun, 129; Terry v. Munger, 49 Ib. 560; Bach v. Tuck, 47 Ib. 536; Sternfeld v. Simonson, 44 Ib. 529; Kennedy v. Thorp, 51 N. Y. 174; Talcott v. Hess, 4 St. Rep. 67; Conrow v. Little, 41 Hun, 395.

      II. The remedies pursued in New Jersey were not inconsistent with this action. The suit in the court of New Jersey, as admitted by the answer, was simply brought “ for the purpose of declaring the defendant insolvent and procuring the appointment of a receiver for the purpose of administering its assets, etc.” It was brought in pursuance of the statute of New Jersey, which provides that the receiver shall be appointed in a summary way upon the application of any creditor or stockholder, the motion is heard by the chancellor upon affidavit, bill and petition, and then a final receiver is appointed to wind up the affairs of the company. In such suit there could be no recovery of the debt of the defendant or any judgment, and the proceeding terminated on the appointment of the receiver. It was a proceeding not for the benefit of the plaintiffs alone, but for all the creditors of the company who were to be paid proportionally to the amount of their respective debts. The allegations of fraud in the plaintiffs’ papers were totally unnecessary and mere surplusage, as the plaintiffs would have been entitled to take such proceedings as creditors, whether their debt was due or not. The act says, that the said creditors shall be entitled to such distribution on debts not due, making in such case a lawful rebate of interest, etc.” The plaintiffs endeavored to show by an order entered in such proceeding that the allegations of fraud and rescission of the contract were withdrawn on the argument, and were not considered by the chancellor in disposing of the matter. The mere fact that these charges of fraud and statements of rescission, of the contract appear in the papers on which the receiver was appointed does not make such proceeding inconsistent in theory with the action. They were unnecessary allegations, and not considered by the court. The sole question involved was whether the defendant was insolvent, and whether a receiver should be appointed, to have which question adjudged the plaintiffs could have brought such action, whether their debt was due or not, as they were creditors of the corporation. Post v. Stiger, 2 Stew. 559; Van Wyck v. Seward, 18 Wend. 384; Seward v. Jackson, 8 Cow. 437; Schmidt v. Opie, 6 Stew. 139; Oakley v. Paterson Bank, 1 Green. Eq. Rep. 173.
    III. The trial court erred in refusing to allow the plaintiffs to show that there was no answer on file in the suit in the court of chancery, and plaintiffs’ exception was well taken to such refusal. Such proof was offered to show that such suit was not pending at the time of the trial of the action, and that it was simply a summary proceeding for the appointment of a. receiver, and terminated on the disposal of such application. It was clearly competent to prove such by the witness called by plaintiff.
    IV. The trial court erred in refusing to admit in evidence Exhibit No. 2. Such exhibit was offered to show that on the argument for the appointment of the receiver, the allegations of fraud were withdrawn, and that the chancellor did not consider such question, and that he reiterated, such position when the defendant moved to impound the notes on the theory on a rescission of the contract by refusing to so impound on the ground that such allegations of fraud had been withdrawn, and therefore the plaintiffs should not be holden thereto. Such exhibit was offered to show an amendment made in the pleadings before the chancellor and to show exactly what facts were before him when he made the appointment of a receiver. Clearly if this exhibit had been admitted in evidence the very foundation of the defendant’s defence would have been taken away. As we have previously shown, such proceedings could be taken by any creditor whether his debt was due or not, and in snch case not even the defendant could claim any election of remedies. This evidence clearly was material, and was wrongfully excluded. This exhibit was properly exemplified under the statutes. § 905 U. S. Revised Statutes; Trebilcox v. McAlpine. 46 Hunf 469. The objection, however, of defendants was not sufficient for its exclusion. Weed Sewing Machine Co. v. Kautback, 3 T. and C. (Sup. Ct.) 304.
    V. The trial court erred in refusing to admit in evidence Exhibits 3, 4, 5 and 6. These exhibits were offered for the purpose of showing that the attachment suit had been discontinued. The defendant had previously introduced in evidence the affidavit of the plaintiff, in which the attachment was granted, and also the warrant of attachment, and also an affidavit of an alleged applying creditor, and an order admitting him as such a creditor. Under the law of New Jersey the attachment could not have been discontinued without the consent of all the applying creditors. If the theory of the defendant was right, that this attachment suit was inconsistent with the bringing of this action, then it was clearly material and competent for plaintiffs to show such action had been discontinued. These papers showed who the applying creditors were, their consent for the discontinuance of such proceeding and the order discontinuing the same.
    VI. The trial judge erred in refusing to allow the plaintiff to show by parol evidence what questions were included in the hearing, what facts were considered by the court, and the statements and arguments of the respective counsel on the motion for the appointment of a receiver in chancery suit and the plaintiffs’ exception was well taken. Pellman v. Johnson, 35 Hun, 41; Briggs v. Wells, 12 Barb. 567; Wilcox v. Lee, 26 Hun, 418; Agan v. Hey, 30 Ib. 510.

      Benjamin Estes, attorney and of counsel, for defendant, argued:—
    I. The plaintiffs have elected their remedy in the actions in New Jersey. They have disaffirmed and repudiated the notes over there and got their remedy, and now seek to affirm what they entirely disaffirm in the other actions. This they cannot do. The course they have pursued in the courts of New Jersey is a perfect bar and defence to this action. It is not merely matter in abatement. “The doctrine of pleading the pendency of a former suit in abatement has no application. The suits are not for the same cause.” Morris v. Rexford, 18 N. Y. 556, 557; Moller v. Tuska, 87 Ib. 166, 169; Rodermund v. Clark, 46 Ib. 357; Kennedy v. Thorp, 51 Ib. 176; Fowler v. Bowery Savings Bank, N. Y. Law Journal, May 23, 1889, pp. 399, 402; Embree & Collins v. Hanna, 5 John. 101. A motion was made in this case shortly before trial, before his honor Chief Justice Sedgwick, at special term, to stay the trial on the ground that inconsistent remedies had been elected in the New 'Jersey actions, and the court held in an oral opinion delivered, that the facts thus shown did not furnish grounds for a stay of trial, but would be a defence to the action if proven.
    II. The defendant’s attempt to show that they had discontinued the attachment suit was of no avail. The proof shows that by the statutes of. New Jersey, after an attachment suit is commenced by one creditor, . other creditors may apply in the same action and become parties with equal rights as the first, and that the action cannot be discontinued without the consent of all such applying creditors as come in after the action is begun. The proof shows that Charles Lowenthal had come in as an applying creditor after the action was begun, and he had not consented to the discontinuance of the action. Any attempted or alleged discontinuance therefore would "be a nullity without the necessary consent required "by the New Jersey statute. This attempted or pretended discontinuance of the attachment suit was not until the 6th of May, 1889, ten days before this trial. The plaintiff could not elect his remedy as he did, inconsistent with the present one, and prosecute it as he did for nearly a year and until his case here was to be tried, and then go over to New Jersey, discontinue them, and pursue the one here. He had made his election and was bound by it, even if Lowenthal and other applying creditors had consented to the discontinuance of the attachment suit, which is not the fact.
   By the Court.—Ingraham, J.

The question presented in this case is whether, where the vendor of goods has elected-to rescind a sale which was fraudulent, by commencing a proceeding in a court of justice, based upon such rescission, and in which proceedings the relief which such vendor asks was granted, and which judgment or decree granting such belief remains in full force and effect, there is any contract, that can be, after such an election, enforced.

In this case plaintiffs were the owners of goods sold to the defendant. They received the defendant’s notes for the purchase price. Such sale was induced by fraud. Plaintiffs, then, had the right to rescind the sale as fraudulent and reclaim the goods, and had also the right to insist that the sale was void and recover the value of the goods, notwithstanding that notes given for the purchase price had not matured.

These positions are based on the invalidity of the sale, and were inconsistent with the fact of the existence of a valid obligation of the vendee on the contract. The right to recover the possession of the goods could not exist with the right to recover on the notes, nor could the right to recover the value of the goods obtained by fraud on the sale of which the notes were given, exist with the right to recover on the notes. If one of these positions was taken and enforced it is clear that the other could not be. Plaintiffs having this right to proceed, elected to rescind the agreement for the sale for which the notes had been given, and declare that the amount was due, offering to return the notes. They did this by presenting to the chancellor of the state of New Jersey a petition in which they alleged the facts constituting the fraud and thereby repudiated the contract,—that the defendant was then indebted to the plaintiffs for goods obtained by it by false representations to the value of $9,309, and asked the appointment of a receiver of the defendant’s property, and that such indebtedness be paid out of the property of the defendant. That application was granted. A receiver was appointed who took possession of the defendant’s property. That such an election was binding upon the plaintiffs, and that the contract upon which the notes were given, namely, the sale of the goods had been destroyed by the rescission of the sale by the plaintiffs is clear, and there being no contract for the sale of the goods there was no consideration for the notes, and no action could be maintained to recover the amount due thereon.

I There has been no case cited that holds that where a party entitled to rescind a contract has elected to rescind it, and has upon such election enforced a remedy against the other contracting party, that said election has not been held binding.

In Kenny v. Kiernan, 49 N. Y. 168, Rapallo, J., says : “ But after the plaintiff had made a valid election to avoid the sale, and had asserted his title to the goods by bringing an action, the contract of sale was at an end. The fraud being established, neither Gill & Co., nor their vendees (other than bona fide purchasers) could claim any title under the “sale, and the right of action of plaintiff against Gill & Co., upon the contract was gone. No subsequent act of the plaintiff alone could revive the contract or the right of action thereon, which had thus been destroyed.” And it was there held that bringing an action against Gill & Co., on the contract, and the recovery of a judgment in that action, did not affect the rights of the plaintiff in the action previously commenced for the conversion. “ That such an action on contract could not debar the plaintiff from prosecuting his action for conversion, because the right of action no longer existed at the time the action on contract was brought.”

Grover, J., in his dissenting opinion, p. 174, says: “ An election to rescind, when distinctly made, cancels and puts an end to the contract, in toto, and restores the vendor to his original title as owner of the property. It follows that the rescission of the contract would constitute a bar to an action brought by the vendor against the purchaser upon the contract of sale for the recovery of the price of the goods. The contract is terminated by the rescission, and has no validity whatever thereafter.”

There was no dissent by any member of the court from the rule thus stated, and I have been unable to find that this decision has ever been questioned.

In Moller v. Tuska, 87 N. Y. 169, the same principle was distinctly asserted. It was there said, “ The plaintiffs manifested their election by bringing their action. After that the other way of redress was not open to them. Hence they could never successfully assert a claim against the purchaser under the contract; for the election to disaffirm it had been manifested, and to revoke it was not in their power * * * * The contract was at an end and no act on the part of the plaintiff alone could revive it.”

In neither of these cases had the plaintiff obtained any benefit by the action brought in disaffirmance of the contract, but it was held that bringing such ' an action was for itself such a disaffirmance of the contract that the contract was at an end, and that no act of the plaintiff alone could revive it.

Our attention has been called to many cases in which the effect of an action to recover the contract price of goods sold upon a subsequent action in disaffirmance of the contract has been discussed, and it is difficult to reconcile all that has been said in the cases cited. In many of the cases the decision is put upon the ground that the fraud was not known to the party seeking to rescind at the time the action was commenced upon the contract. It has, however, sometimes been held, that the mere commencement of an action to recover the contract price, which has not resulted in any advantage to the defrauded party, and which was discontinued before the contract was sought to be rescinded, was not such an election as would prevent such a rescission. The law on this subject has been determined in Conrow v. Little, 115 N. Y. 387. That case construes Foundry Co. v. Hersee, 103 N. Y. 26, and Hay v. Midas, 104 Ib. 602, and holds that bringing an action on the contract with a knowledge of the facts on which fraud is subsequently charged, is a definitive waiver of the right to proceed for fraud. But in no case has it been held that an election to rescind, duly and deliberately exercised, could be recalled, and an action subsequently maintained on the contract. I think, therefore, that the action of the plaintiffs was a rescission of the contract of sale, that after such a rescission the notes were in the hands of the plaintiffs without consideration, and no recovery could be based upon them. There was no judgment or decree of the chancellor that indicated that he did not base his action upon this election of rescission. In that proceeding the plaintiffs asked and obtained relief, • and in their petition their demand for such relief was based upon the rescission of the contract.. That election to rescind has never been withdrawn, but stands of record as the deliberate act of the plaintiffs. It might well be that although the chancellor had the power to grant the application, if the plaintiffs’ debt was not due, he would not in the exercise of his discretion have appointed a receiver if the notes had been outstanding and had had some time to run. It is impossible to tell what effect the allegation in question in the petition presented to him had upon his judicial action.

I do not think that under the conceded facts in this case the plaintiffs can recover upon the notes, and that the exception of the plaintiffs should be overruled and judgment ordered on the verdict, with costs.

Sedgwick, Ch. J., (concurring).

I agree with Judge Ingraham, and wish to point out that, beside the election to avoid the notes, in the mere bringing of the proceeding in chancery in New Jersey, the plaintiffs by means of that proceeding gained an advantage and the defendant suffered a disadvantage. This of itself made the election final.

That proceeding was begun by a bill of complaint. It alleged that the defendant, by false and fraudulent representations, particularly set forth, induced the plaintiffs to sell and deliver to defendant certain goods, for the price of which the defendant delivered its promissory notes to the plaintiffs, “which notes your orators bring into court and tender themselves willing to surrender under the direction of the court,” “ and your orators therefore repudiate the contract, and would take back the materials delivered, if it were possible to do so at this length of time.” The petition showed that at the time of the bill the . promissory notes were not due ; that the defendant was a corporation formed under the laws of the state of New York ; that it owned property situated within the state of New Jersey, and that it was insolvent. The bill prayed that a receiver be appointed of the property of the defendant.

An order to show cause why such a receiver should not be appointed was argued, the defendant appearing by counsel, and it was then ordered that Henry T. Hopper, Esquire “ be appointed and he is hereby appointed receiver, with full power to demand, sue for, collect and receive and take into his possession, all the goods, etc., of any and every description belonging ” to the said company.

It appeared on the trial, that it became the duty of the receiver to turn the property taken by him in the proceeding, into money, and to distribute that among such persons as should prove any claim against the company. This duty had not as yet been performed, but that the receiver was about to perform it in the future.

It would seem clear that if this were all the evidence, that an election had been made, and that under it, having procured a transfer of defendant’s property in New Jersey, and that, too, at a time before the notes became due, the plaintiffs had avoided the notes and could not thereafter resort to the notes.

The learned counsel for the plaintiffs claim, that the court below erred in excluding the evidence offered by plaintiffs to show that the action of the court in chancery in appointing a receiver, was not based at all on the allegation in the bill charging fraud against the defendant, and to show that the charge of fraud was withdrawn.

The evidence excluded was in part an order made upon the motion of the defendant in the chancery proceedings, that the promissory notes in question be surrendered in accordance with the tender in the bill, or that the same be impounded with the clerk of the court. The order recited that the complainants did not intend to rely on the statement of fraud on the defendant’s part set up in the bill, and proceeded to state that the chancellor being of the opinion, for divers reasons him thereto moving, that said motion should be denied, ordered that the same be denied with costs.

Whatever might be the effect of the declaration of the counsel for. complainant, that effect concerned the future and did not annul the legal effect of what had already happened on the filing of the bill and the appointment of the receiver. Indeed, the withdrawing of the allegation of fraud would have left the prayer for the appointment of a receiver without any ground, for, as has been shown, there would have been left no allegation of fact that would show that the complainant claimed that the defendant was indebted in contract. And several months after the order that was excluded from the testimony was made, the plaintiffs here, recognized the authority of the receiver as continuing, by entering an order of the discontinuance of an action against the corporation upon the consent of the receiver. I am of opinion that the exclusion of the order did not injure the plaintiffs. If it had been admitted as evidence, the conclusion of the court, upon the testimony admitted, should not have been changed.

The defendant, on the trial below, proved without objection, for the purpose of supporting its defence, that the plaintiffs had elected to avoid the notes and to proceed against defendant for fraud ; that the plaintiffs had begun an action in the state of New Jersey, by attachment, which the sheriff had levied upon the defendant’s property in that state. The attachment proceeded upon an affidavit that the defendant was indebted on contract. The defendant gave extrinsic evidence to show that the claim in the attachment was upon the sale of the goods, for which the promissory notes in action were given; and argued that the notes must have been avoided for fraud by the plaintiffs, because the claim in the attachment was treated as maturing before the notes matured. The plaintiffs were not permitted to show that the attachment-suit had been discontinued by order. The order proposed for testimony and the papers on which it was founded appear in the case and, in my opinion, if treated as admitted, they do not change the result of the decision below. That order of discontinuance was based upon the consent of the receiver appointed in the chancery proceeding. It recognized the right of that receiver to act for the corporation and to take into his possession as receiver the property of the defendant. Its intended, if not actual, effect was, that the sheriff should deliver the property levied upon by him, to the receiver, and at the least it freed the title of the receiver from the claim of the sheriff. So that the discontinuance made clearer the advantage to the plaintiffs and the disadvantage to the defendant caused by the appointment of the receiver.

The court, on the trial below, did not allow the defendant to show that at the time of the appointment of the receiver the counsel for defendant here, who was complainant there, made a certain statement. The counsel offering the testimony did not explain the nature of this statement. The court in excluding the statement permitted the defendant to prove what ruling the chancellor made, if verbal or written. The court was right, as prima facie the statement of a counsel is not evidence of the existence of any fact.

The result below should not be changed, because in the chancery suit the defendant did not answer and no judgment had been entered. The effect of not answering was that the defendant conceded the correctness Of the charge made in the bill, and if no judgment was entered, that was because the plaintiffs did not apply for judgment. The election was effectual upon the earlier appointment of the receiver.

The same considerations are relevant to the position of plaintiffs, that they had not proved any claim before the receiver and that the time for proving claims had expired. ' The receiver had possession of the property lawfully as against the parties to this action. That property had been appropriated to the satisfaction of claims against the defendant and among them of plaintiffs’ claim. If plaintiffs omitted to secure their part of the benefit of that appropriation, none the less had the appropriation been made. As the appropriation had béen made at the instance of the plaintiffs, solely upon the position they took in the bill, that goods had been obtained by fraud, they were at least from the time of the appointment of the receiver, held to the election then made. On the record it appears that the only right they claimed to become complainants, was that they had been defrauded by the defendant.

The judgment should be for defendant, plaintiffs’ exceptions being overruled, with costs.

Freedman, J., concurred.


source: Caselaw Access Project

author: By the Court.—Freedman, J. Ingeaham, J.-—(concurring).

license: Public Domain

text:
    SARAH J. PIRSSON, et al., Appellants, v. OLIVER M. ARKENBURGH, Respondent.

      Contract for the payment or vacation of an assessment—Deposit as security or indemnity—Forfeiture not favored in the law.

    The four different papers executed by Bronson, the assignor of the plaintiffs, namely, (1.) The contract of sale, (2.) The deed to the defendant, (3.) Agreement between Bronson and the N. T. Life Ins. Co. for the deposit of the money as security, and (4.) The agreement in regard to said money between Bronson and defendant, must be construed together in order to ascertain what the contract was between Bronson and the defendant; and when so construed, clearly establish a contract of indemnity and not a contract for the absolute forfeiture of the whole deposit, in excess of what was necessary to pay the assessment, in case Bronson failed to pay or to procure its vacation within one year.
    A forfeiture is not favored in the law, and it is a rule in the construction of contracts, under which forfeiture is claimed, that a conclusion that forfeiture was intended should be avoided if the facts and circumstance justify such a conclusion.
    In the case at bar, it clearly appears by the contract that ample security and indemnity were sought in the premises, and no forfeiture intended.
    Before Sedgwick, Oh. J.,Freedman and Ingraham, JJ.

      Decided February 6, 1890.
    Appeal from judgment in favor of defendant, entered upon a verdict of the jury directed by the court, and from an order denying plaintiffs’ motion for a new trial.

      John Alexander Beall, attorney and of counsel, for appellants, argued :—
    I. There were four different papers executed by Willett Bronson, all of which are intimately connected and must be construed together in order to ascertain the contract. These papers are: (1.) The contract of sale, (2.) The deed to Arkenburgh (3.) The agreement between Bronson and the New York Life Insurance Company for the deposit as security, (4.) The agreement between Bronson and Arkenburgh. These papers express and define the contract. And this contract was that Mr. Bronson having already deposited with the Insurance Company security for the payment of the disputed assessment, and having afterwards sold the property to the defendant, subject to the assessment, the money so deposited might be applied to the payment of the assessment if it was not vacated or set aside within one year, the surplus, if any, to be returned to Mr. Bronson. The paper or agreement of April 19,1883, was never intended as a substitute for the contract of sale and deed, but was merely supplemental to them. This agreement was made at the request of defendant at the time of passing the title, and was made solely because the defendant objected that the deed did not carry out the original contract, and did not specify the time in which the assessment was to be paid. (1.) It is a general and well-established rule of law that every contract which is in its language or terms ambiguous, or in any way susceptible of more than one interpretation, is to be construed, not only from the words of the contract itself, but also from the circumstances surrounding the parties. Now, the paper or agreement of April 19, 1883, on which the learned judge below rested, his decision, very explicitly refers to and makes a part of that agreement, the previous agreements relating to the same subject matter. So that all these papers ought manifestly to be construed together to ascertain the intentions of the parties and the contract between them. The cases upon this point are numerous. Clark v. N. Y. Life Ins. & Trust Co., 64 N. Y. 33, 37; Knapp v. Warner, 57 Ib. 668; Parshall v. Eggert, 54 Ib. 18; Coyne v. Weaver, 84 Ib. 390. While the circumstances surrounding the execution of a contract cannot be used to contradict what is expressed therein, this rule does not confine the court in construing the contract to the very instrument in question ; other contemporaneous writings between the parties relating to the same subject-matter are admissible in evidence to explain or qualify the agreement under consideration. Wilson v. Randall, 67 N. Y. 338. The rule in ethics is that ‘when the terms of a promise admit of more senses than one, the promise is to be performed in that sense in which the promisor apprehended at the time the promisee received it,’ arid this is the established rule at law as well as in morals. In the language of the books it is to be interpreted in the sense in which the promisor had reason to suppose it was understood by the promisee. White v. Hoyt, 73 N. Y. 512. In the absence of all proof there is no presumption that either party intends to give up the benefit of covenants of which the conveyance is not a performance or satisfaction. Morris v. Whitcher, 20 N. Y. 41; Sage v. Truslow, 88 Ib. 243. The provision as to payment of assessment in contract was not merged in the deed. (2.) If it be claimed that the contract of sale and deed, both of which contain the explicit provision for the return of the surplus after paying the assessment, are merged in the subsequent agreement of April 19th, and that the provision was waived and abrogated by failure to express it, the answer is obvious that the doctrine of merger is not favored in the law, and depends entirely on the intention of the parties. Courts do not favor the doctrine of merger where it would violate the intention of the parties and work injustice. Hill v. S. B. & N. Y. R. R., 8 Hun, 299 ; McGregor v. Bd. of Education (Jany. 23,1888). Upon all the circumstances surrounding the case, the agreement of April 19, 1883, ought to be construed in connection with the deed and the previous agreements in order to ascertain the intention of the parties. No other method of construction is reasonable.
    II. The contract was substantially performed by Willett Bronson, the assignor of the plaintiffs. That contract was that the assessment, the validity of which was contested, should be paid unless vacated. To secure such payment he had deposited with the Insurance Company, the mortgagee, an ample sum. The assessment was reduced and only a portion (less than one-half) of the sum deposited as security was required to pay it. The defendant paid the assessment, after awaiting the result of the litigation by which it was reduced, and then collected from the Insurance Company the whole deposit made by Bronson as security, with interest thereon. The payment of the assessment was therefore made from the fund deposited by and belonging to Bronson, or his assignees. This was a performance of the contract by Bronson, not only substantial, but complete. If claimants acted in good faith and honestly performed contract in all substantial particulars, they should not be compelled to forfeit the whole payment by reason of inadvertent or slight defects. Glacius v. Black, 50 N. Y. 145; Johnson v. De Peyster, Ib. 666. Where in a building contract the contractor in good faith intended to comply and has substantially so done, although there may be slight defects caused by inadvertence or unintentional omission, which are susceptible of remedy without difficulty so that an allowance will give to the other party a full indemnity, he may recover the contract price less the damages on account of such defect. Woodward v. Fuller, 80 N. Y. 312; Heckmann v. Pinkney, 81 Ib. 211.
    III. The defendant claims, or seems to claim, that by failing to pay or vacate the assessment within one year, the plaintiffs forfeited to him the whole deposit in excess of what was necessary to pay the assessment. Now the rule is well settled that equity does not favor a forfeiture, and it will not be sustained if by any means the court can avoid it. Jackson v. Topping, 1 Wend. 388 ; Livingston v. Tomkins, 4 J. C. 415. In the construction of all contracts under which forfeiture is claimed, it is the duty of the court to interpret them strictly in order to avoid such a result, for a forfeiture is not favored in the law. Bouv. Inst., § 780 [1814]; Duryee v. Mayor, &c 62 N. Y. 594; Lorillard v. Silver, 36 Ib. 578. While no particular form of words is necessary to create a limitation or condition, it is yet essential that the intention to create them shall be clearly expressed in some words importing ex vi termini, that the vesting or continuance of the estate or interest is to depend upon a contingency provided for. Craig v. Wells, 11 N. Y. 315 ; Bouv. Inst., § 753, Lyons v. Hersey, 103 N. Y. 270. In an action to recover for legal services in reducing or vacating an assessment under a contract that they be completely performed by the 1st of May, 1881. Nothing was accomplished until after that time. The defendant assented to the proceedings going on after that day. He did not at the time, nor until this action was threatened, claim that the contract was at an end. Held, that the contract was not avoided, and plaintiff could recover (60 N. Y. 448). Deering v. McCahill, 51 N. Y. Supr. Ct. 260. Even if a forfeiture might have been claimed by defendant, it was waived by his failure to insist upon it, and by waiting the result of the litigation to vacate the assessment. The defendant had the right to pay the assessment immediately on the expiration of the year. That was what he insisted should be done. He elected, however, not to do so, but to wait the result. By so doing, he acquiesced in and became a party to that proceeding. This was a waiver of any forfeiture.

      Robert F. Little, attorney and of counsel, for respondent, argued :—
    The contract of sale became merged in the deed when delivered, and cannot be referred to for the purpose of charging the defendant respecting any of its terms. Defendants’ Ex. A, is a contract—a dispositive instrument—and is to be construed according to its plain intendment, which is, that Bronson and the plaintiffs shall be excluded from any right to the funds in question after payment by the Insurance Company to the defendant upon his compliance with the terms thereof. The recital in Ex. A, of the clause in the contract of sale, whereby Bronson should have one year from March 22, 1883, within which to pay said assessment, excludes all other clauses or provision of said contract, and was evidently inserted to explain why the defendant should not call on Bronson or the New York Life Ins. Co., for the payment of the assessment till March 22, 1884, and also, to make clear to the Insurance Company, whose agreement gave Bronson till January 29, 1885, to remove the assessment, why the defendant could call on them for the money on or after March 22, 1884, after paying said assessment.
   By the Court.—Freedman, J.

Upon the whole case the contract under which'$1,700. remained on deposit as security for the payment of the assessment, subject to which Willett Bronson conveyed the lots to the defendant, must be gathered from four different papers executed by Bronson. . These papers are: (1.) the contract of sale, (2.) The deed to defendant, (3.) The agreement between Bronson and the N. Y. Life Ins. Co. for the deposit as security, and (4.) the agreement between Bronson and the defendant.

They are so intimately connected that they must be construed together in order to ascertain what the real contract was. When thus construed they clearly establish a contract of indemnity, and not a contract for the absolute forfeiture of the whole deposit in excess of what might be necessary to pay the assessment in case Bronson failed to pay, or to procure the vacation of the assessment within one year. A forfeiture is not favored in the law and it is, therefore, a rule in the construction of contracts under which forfeiture is claimed, that, if it can be fairly done, the conclusion shall be avoided that a forfeiture was intended. In the case at bar the conclusion can be readily avoided, for the surrounding circumstances fairly show that all that was intended in fact was ample indemnity.

The plaintiffs, to whom all the right, title and interest of Bronson in and to the moneys so deposited were transferred by several assignments, are therefore in a position to maintain the action for the recovery of the balance remaining unexpended after the payment and extinguishment of the assessment by the defendant, and it was error on the part of the trial judge to direct a verdict for the defendant. The judgment and order should be reversed, and a new trial ordered with costs to abide the event.

Sedgwick, Oh. J., concurred.

Ingeaham, J.-—(concurring).

I agree with Judge Feeedman as to the construction of the contracts.

The money deposited with the Trust Company was Bronson’s, deposited before the contract with the defendant was made as a fund from which the assessment was to be paid. It is nowhere transferred to defendant, nor is there anything that would show that the parties intended the defendant should be entitled in any contingency to the money. It was provided that if the assessment was not paid by Bronson in one year, the money should be paid to defendant by the Trust Company, but it was paid to defendant as the plaintiffs’ money for the special purpose of repaying defendant the amount that he had been compelled to pay to discharge the assessment under the covenant contained in the deed. The balance that remained after paying that assessment was still Bronson’s money, and Bronson was entitled to maintain an action for money had and received to recover such balance.

I think plaintiffs were, therefore, entitled to recover, and that the judgment should be reversed.


author: By the Cotjet.—Fbeedmah, J. Ingraham, J. (dissenting).

text:
    LEWIS M. TEEL, Respondent, v. ABRAHAM YOST, Appellant.

      Judgment of another state, action upon, evidence required, etc.

    At the time of the entry of the judgment in question, the defendant was domiciled in the state of Pennsylvania, and was personally bound by the judgment, provided it was entered in accordance with the laws of that state.
    The evidence in the- case shows that the judgment, notwithstanding its faulty form, is, under the laws of Pennsylvania, in every respect a valid judgment of a court of general jurisdiction in that state. That during the period the note had to run, the judgment was only a lien, but on the maturity of the note it became absolute and enforceable by execution. [Iitgkraham, J., dissenting.]
    Before Sedgwick, Ch. J., Freedman and Ingraham, JJ.

      Decided February 6,1890.
    Appeal from judgment entered upon the decision of a judge at special term.

      Lemuel Skidmore, attorney and of' counsel, for appellant, argued :—
    I. The alleged judgment roll offered in evidence lacks many essential characteristics of a judgment. It shows that no process was issued, no pleadings had, no appearance ever made by the defendant or by any one. It simply recites that a bill, of which a copy is given, was produced, and concludes with the words “ wherefore judgment,” not stating for what sum, and no proofs having been taken of the authenticity of the bill produced or the amount owing thereon. Such a proceeding would not constitute a judgment at common law, nor according to the law of this state. The alleged judgment record shows that there was nothing offered to the Pennsylvania court as the basis of a judicial decision. It is in the nature of a mere memorandum by the clerk, and does not amount to a judgment. Cromwell v. Bank of Pittsburg, (U. S. Circuit Court in Penna.) 2 Wallace, Jr., 584. The very idea of a judgment is a judicial decision upon the rights of parties after hearing the evidence on both sides or giving both sides an opportunity to be heard. The alleged record here shows that the defendant was not in any way summoned or notified, and there is no waiver by him of such notification. It is not within the clause of the constitution of the United States, requiring full faith and credit to be given in each state to the judicial proceedings of another state, because it is not in any sense a judicial proceeding, within the meaning of the constitution or the Act of Congress of 1790. Thatcher v. Blackbourne, 1 N. H. 242; Doughty v. Doughty, 28 N. J. Eq. 585.
    II. It was claimed of course that the judgment alleged was a judgment by confession. The only authority, however, is a clause in the copy of the alleged note authorizing “ any attorney of any court of record in Pennsylvania, or elsewhere, to confess judgment therefor,” etc.; but this power of attorney, if not void for indefiniteness, is of an attorney in fact and therefore special and limited, and must be strictly pursued. Baldwin v. Freydendohl, 10 Ill. App. 106. There is nothing in the record to show that judgment was confessed by an attorney of any court of record in Pennsylvania or elsewhere. Moreover, the plain construction of the power to confess judgment would be to confess judgment upon the note after it was due, whereas the proceeding shown by the record was taken two days after the date of the note, which was not due until one year after date.
    III. There is no reported case in the state of an action brought upon a record similar to the one offered in this action. In the following cases—Shumway v. Stillman, 6 Wend. 447; Huntley v. Baker, 33 Hun, 578; Ferguson v. Crawford, 86 N. Y. 609, and 70 Ib. 253; Pringle v. Woolworth, 90 Ib. 502. —the records showed that process was issued and served upon the defendant, either personally or in some mode which our court adjudged to be binding upon him. The opinion of the "general term on the former appeal, held: “There is no evidence of any law of Pennsylvania that would authorize a judgment to be entered on a note that had yet a year to run.” On the second trial plaintiff attempted to strengthen his case by giving proof of the law of Pennsylvania. He introduced in evidence a statute to the following effect : “ That it shall be the duty of the prothonotary of'any court of record, etc., on the application of, etc., the holder, etc., of a note, etc., in which judgment is confessed, or containing a" warrant from any attorney at law, or other person, to confess judgment, to enter judgment against the person or persons who executed the same for the amount, which from the face of the instrument may appear to be due, without the agency of an attorney or declaration filed, with such stay of execution as may be thereon mentioned, etc. In Rube v. Heslip, 4 Penn. St. R. 139, offered by plaintiff, this statute is construed as follows : “ The act of assembly merely substitutes the prothonotary, though not named or described for an attorney of the court, but it supplies no deficiency of the power given in the first instance.”
    And in Conway v. Halstead, 73 Penn. St. R. 354, it was held that the doings of the prothonotary in entering judgment under the foregoing act must be strictly within the power given by the act, or else they are void ; and that he can only enter judgment for the amount which, from the face of the instrument, may appear to be due. In this case the prothonotary undertook to calculate from other documents the amount for which he entered judgment and it was held his act was invalid. The law quoted in above point is the only statute proved by plaintiff on the trial. It plainly does not authorize entry of judgment for an amount not appearing to be due. The plain and reasonable sense of the word due as . used in the sentence is the usual sense in which that word is ordinarily used in reference to notes and obligations to pay money, i.e. payable immediately. Allen v. Patterson, 7 N. Y. 476. No practice ever existed at common law, before the enactment of this statute of entering judgment upon a note or other obligation before it was by its terms payable. The practice was for the debtor to give a bond, payable immediately, with an instrument called a warrant of attorney which authorized some attorney to accept service of a declaration in a suit upon the bond and to suffer judgment to be taken against the debtor in such suit by default. 3 Chitty Gen. Practice, 669; Allen v. Smilie, 1 Abb. 354. The statute of Pennsylvania was obviously intended to simplify this practice by allowing the prothonotary to enter judgment “without the agency of an attorney or declaration filed,” the purpose being .as expressed by the courts of that state in several of the cases cited, to lessen the expense of entering the judgment. But that statute did not intend to authorize the prothonotary to enter judgment in a ease wherein no judgment could have previously been entered by “the agency of an attorney” and by “declaration filed.” No declaration could have been founded upon the promissory note in the present case before it was due and payable, according to its terms. Nicholl v. Bromley, 2 Brod. & Bing. 464. Therefore the statute by its term did not authorize the prothonotary to enter judgment upon the note in this case. The other Pennsylvania cases quoted by the plaintiff show nowhere any express adjudication that the prothonotary is authorized by law to enter judgment upon a note, or other instrument before it is due. The Pennsylvania statute put in evidence authorizes the prothonotary to enter judgment “ without the agency of an attorney or declaration filed,” but does not, in any other respect, change the practice.

      Edward L. Short and Samuel B. Rogers, attorneys and of counsel, for respondent, argued:— ,
    ' I. The court of common pleas of Northampton county, Pennsylvania, is a court of general jurisdiction. This was proved by the testimony of an expert in laws of that state. But this court will take judicial notice of that fact. Pringle v. Woolworth, 90 N. Y. 502; Hatcher v. Rochelau, 18 Ib. 86, 95. The defendant being domiciled in Pennsylvania at the time the judgment was entered there, was bound personally by the judgment, provided it was rendered in accordance with the laws of that state. Upon the former appeal to this general term the judgment of the trial term was reversed upon the sole ground that the legality, sufficiency, and binding effect of this judgment under the laws of Pennsylvania was not proved. Teel v. Tost, 56 Super Ct.

      II. The plaintiff has on the new trial fully met the requirements suggested by this general term on the former appeal in this case, by proving that the judgment sued on is, under the laws of Pennsylvania, in every respect a valid, binding, personal judgment. The plaintiff proved the law of Pennsylvania by the testimony of Mr. Henry Gr. Ward, an expert in the laws of that state, and a member of the law firm of Biddle & Ward, which has offices both in Philadelphia and New York. This expert testimony is wholly uncontradicted, and is supplemented by numerous decisions of Pennsylvania courts, each of which was duly put in evidence on the trial. The judgment was entered pursuant to the following act of the Pennsylvania Legislature, (L. 1806, Oh. CXXIL, § 28): “That it shall be the duty of the prothonotary of any court of record, within this commonwealth, on the application of any person being the original holder (or assignee of such holder) of a note, bond or other instrument of writing, in which judgment is confessed, or containing a warrant for an attorney at law, or other person to confess judgment, to enter judgment against the person or persons who executed the same for the amount, which, from the face of the instrument, may appear to be due, without the agency of any attorney, or declaration filed with such stay of execution as may be therein mentioned, for the fee of one dollar, to be paid by the defendant, particularly entering on his docket the date and tenor of the instrument of writing, on which the judgment may be founded, which shall have the same force and effect as if a declaration had been filed, and judgment confessed by an attorney, or judgment obtained in open court and in term time ; and the defendant shall not be compelled to pay any costs or fee to the plaintiff’s attorney when judgment is entered on any instrument of writing as aforesaid.” This act is still in force and nnrepealed. A judgment so entered has precisely the same force in Pennsylvania as if rendered after appearance and trial. In Braddee v. Brownfield, 4 Walts. 474, the supreme court of Pennsylvania says: “In contemplation of law a judgment on a warrant of attorney is as much the act of the court as if it were pronounced on nil dicit or a cognovit; and till it is reversed and set aside it has all the qualities and effect of a judgment on verdict. * * * Like any other judgment it is an estoppel, and concludes the parties from drawing into controversy the point or thing adjudicated.” In St. Bartholomew v. Wood, 61 Pa. St. 100, Aghew, J., says: “A judgment entered by the prothonotary under a power- contained in the instrument is a judicial act, and by the words of the Act of 1806 has the same force and effect as a judgment confessed by an attorney, or given in open court in term time.” The same quality of those judgments is laid down over and over - again. Colvin v. Blymyer, 121 Pa. St. 582; Montague v. McDowell, 99 Ib. 265; Hopkins v. West, 2 Norris 109; Rutherford v. Boyer, 3 Ib. 347; Hageman v. Salisberry, 74 Pa. St. 280, 284. The plaintiff has also proved that the Pennsylvania judgment was regularly entered, and is formally sufficient, Mr. Ward, an expert in Pennsylvania law, is familiar with the practice of entering such judgments in Pennsylvania, and has frequently entered them himself. His testimony in brief, is to the effect that the record in question is an adjudication that Lewis M. Teel, recover of Abraham Tost, the sum of $2,268, with interest, from January 12, 1878. Every possible objection to the form, regularity or sufficiency of this record was met by the testimony of Mr. Ward, or by decisions of Pennsylvania courts.
   By the Cotjet.—Fbeedmah, J.

I am of the opinion that upon the trial, the proceedings of which we are now asked to review, the plaintiff has cured the defect of proof for which upon the former appeal a new trial was ordered.

The defendant was domiciled in the state of Pennsylvania at the time of the entry of the judgment in the court of common pleas of Northampton county of said state, and was, therefore, bound personally by the judgment, provided it was entered in accordance with the laws of that state.

It has now been shown, by extrinsic evidence, that the judgment sued on, notwithstanding its apparently faulty form, is, under the laws of Pennsylvania, in every respect a valid, binding, personal and sufficient judgment of a court of general jurisdiction; that, during the period the note had to run, the judgment gave only a lien, but that on the maturity of the note it became absolute and enforceable by execution; and that, under the laws of Pennsylvania, it is customary and proper to enter such a judgment at' any time before the maturity of the note for the sake of the lien given, though it cannot be enforced by execution until after the „ maturity of the note.

The judgment appealed from should be affirmed with costs.

Sedgwick, Ch. J., concurred.

Ingraham, J. (dissenting).

I am unable to agree with my associates in affirming the judgment in this action. It appears that no process of any kind was • ever served upon the defendant in any suit in the court of common pleas of Northampton county in which the plaintiff in this action was plaintiff, and that the defendant never appeared in such action, and that no suit or action in such court ever came to the defendant’s knowledge.

To entitle a judgment of the court of common pleas of the state of Pennsylvania to be enforced in this state it must appear that the court had jurisdiction of the subject matter and of the person of the defendant. That the court had jurisdiction of the subject matter of the action is conceded. I think it clear, however, that that court had no jurisdiction over the' person of the defendant. The rule is stated in Shumway v. Stillman, 6 Wend. 453, that if it appeared by the record that the defendant was not served with process, and did not appear in person or by attorney, such judgment is void; and if it appear by the record that defendant appeared by attorney, the defendant may disprove the authority to appear for him. See Kerr v. Kerr, 41 N. Y. 275; Shepherd v. Wright, 59 How. 514. The question is squarely presented, therefore, whether a judgment entered in a court of general jurisdiction in another state against a resident thereof, without the commencement of any action in which he was a party, and in which no proceeding was taken to bring him into court by service of process, either personal, by publication, or by any other method of substituted service, can be enforced in the courts of this state, the judgment debtor having subsequently become a resident of this state, where the judgment sought to be enforced requires -the defendant to pay a sum of money. There is no question here as to the sufficiency of substituted service, or whether the defendant is bound by the law of the state of his domicile which provides for the service of process by mail or in some other way than by personal service; jurisdiction over the person of the defendant was never acquired because no attempt was made to summons the defendant to appear in court.

The fundamental law of this state and nation requires that no person shall be deprived of life, liberty or property without due process of law.

By the note which is recited as the foundation of this judgment no consent or authority was given to the clerk of the court to enter any judgment upon it. The pretended judgment sought to be enforced was entered long before the note was due and when the defendant was not liable. The authority for an attorney to appear for him and consent to the judgment, gave no authority to the clerk of the court to enter a judgment without such an appearance and without notice. To hold that this defendant has had his day in court and has had a right to be heard, contradicts the whole evidence and the record sought to be enforced, and to allow a recovery in the courts of this state against a citizen of this state without giving him an opportunity to impeach the correctness of the judgment or the execution of the obligation upon which the pretended judgment in Pennsylvania was recovered, would be to deprive this defendant of his property without due process of law. At no time has he had an opportunity to be heard; at no time has he had any opportunity to show that he was not liable for the debt.

It is not necessary to determine whether or not this judgment could have been enforced in Pennsylvania. It is sufficient to say that it is not enforceable in this state against a citizen of this state.

I think, therefore, that the judgment should be reversed.


author: By the Couet.—Fbeebman, J. Ingraham, J. (concurring).

text:
    JAMES A. HAMILTON, et al., as Trustees, etc., Appellants, v. THE MANHATTAN RAILWAY COMPANY, et al., Respondents.

      Costs, extra allowance of, discretion of the Court in regard to allowance.

    The plaintiffs moved for an extra allowance in addition to costs, upon the amount of past damages and the amount of damages to the fee value, if the defendants paid the same to avoid the injunction granted, and the court made an order giving them five per cent on the amount of past damages as found, and denied the motion otherwise, and plaintiffs appealed from so much of the order as denied a part of their motion.

      Held, That as an order granting or refusing an extra allowance rests largely in the discretion of the trial judge, if it is to be reviewed at all, the whole of the order should be presented for review, so that the exercise of discretion can be reviewed upon all the facts that bear upon it. The determination of the court below as to the amount of allowance to be granted, was within the discretion of the court.
    Before Freedman and Ingraham, JJ.

      Decided February 6, 1890.
    • Appeal from so much of an order of the special term • as denies the motion of plaintiffs for an extra allowance in addition to costs.

      Burnett ' & Whitney, attorneys, and Edward B. Whitney of counsel, for appellants, argued :—
    I. The order is appealable, since it denies the application on grounds barring the exercise of discretion. Adams v. Arkenburgh, 106 N. Y. 615 ; Mingay v. Holly Manufg. Co., 99 Ib. 270; Burton v. Tremper, 10 State Rep. 629; Munro v. Smith, 25 Ib. 624.
    II. It is not necessary that there should be a recovery of the value of the easements taken. If the value is proved, an allowance is properly granted upon a decision even absolutely enjoining defendant from interference with the easements. Such was the case in Lattimer v. Livermore, 72 N. Y. 174, 183, the leading authority upon this point. That action was based upon breach of a covenant for “ air, light and vision,” very analogous in that respect to the case at bar. In Munro v. Smith, 25 State Rep. 624, the judgment enjoined infringement of a trademark, and the value of the trade-mark was held a proper basis for allowance. In Adams v. Arkenburgh, 106 N. Y. 615, one half the value of the assets ofo a partnership as alleged in the complaint was held a proper basis in an action for injunction and accounting, the complaint having been dismissed. In the two latter cases the decision was a reversal of the court below. In the court of appeal’s decisions denying allowances there was no evidence of the value of the subject matter. Co-naughty v. Saratoga Bank, 92 N. Y. 401; People v. Genesee R. R. Co., 95 Ib. 666.
    III. The value of the subject matter of the judgment for injunction is determinate and susceptible of liquidation. Lattimer v. Livermore, 72 N.Y. 174, supra. This is necessarily implied in the decisions which permit the defendants by taking proper proceedings to acquire the easements taken by them, such as Matter of New York Elevated Railroad Co., 70 N. Y. 327, 354, 360.
    IV. To grant the allowance in this instance would be to' follow the general practice of the courts in these elevated railroad cases. We are informed by judges of the court of common pleas that allowances are there always granted upon the easement valuation without question. This question was argued between the undersigned and Mr. Davies, as counsel for the present defendant in the case of Watson v. Manhattan Railway Co. in 1885, and after deliberation was decided in plaintiff’s favor by Mr. Chief Justice Sedgwick; and although the case was appealed on other points (53 Super. 137), no appeal was taken on this point. A similar allowance was granted in the N. Y. National Exchange Bank Case, supra, and never questioned, although that case went to the court of appeals. e

      Davies & Rapallo, attorneys, and Edward S. Rapallo and Brainard Tolies of counsel, for respondents, argued:—
    I. No extra allowance could be given based upon the “loss of fee value.” There was, as the .learned trial judge said, no recovery for “ loss of fee value,” and there could be none. Pond v. Metropolitan El. R. Co., 112 N. Y. 186. But there is another reason, not less conclusive, why no extra allowance could be computed upon the “ loss of fee value.” Under the decision of this court in Carter v. N. Y. Elevated R. Co., just handed down, it is clear that there had never been any judicial determination as between these parties of the amount of “ loss of fee value.” It is true that the decision contains such a finding, but it was not an issue in the case which the defendants had a right to have fairly tried on legal evidence. On the contrary, the fixing of any condition for avoiding the injunction was, in the language of this court in the Carter case, “ gratuitously made as to the defendants and was allowed for the sake of third parties.”
    II. No extra allowance could be given based upon the value of the subject matter of the injunctive relief. The court was not asked by the plaintiff’s notice of motion to grant an extra allowance on this basis, but as the impossibility of doing so is referred to in the order it is perhaps open to discussion upon this appeal. Section 3253 of the Code provides that in difficult and extraordinary cases where a defence has been interposed an extra allowance may be granted not exceeding five per cent. “ upon the sum recovered or claimed or the value of the subject matter involved.” It has already appeared that an allowance was actually granted equal- to five per cent, on the whole sum recovered. The claim which we now anticipate is that the trial judge should be com-polled to fix a value upon the easements which constitute the subject matter of the injunctive relief. Lattimer v. Livermore, 72 N. Y. 174. The “ loss of fee value ” consists of two elements ; first, the value of the easements taken ; and, second, the depreciation of the remainder of the plaintiffs’ estate by reason of the deprivation of the easements. Under the decision in the Carter case the court was not required to find, upon legal evidence as between these parties, the amount of loss of fee value ; much less was it required to find, upon any of the main issues in the action, the value of the easements for the protection-of which the injunction was to be granted. It has been, many times decided that in order to afford a basis for an extra allowance the subject matter of the litigation must not only have a pecuniary value, but that value must be shown as a fact by the evidence. Atlantic Dock Co. v. Libby, 45 N. Y. 499 ; Heilman v. Lazarus, 90 Ib. 674 ; Conaughty v. Saratoga Co. Bank, 92 Ib. 401; Weaver v. Ely, 83 Ib. 89 ; Adams v. Arkenburgh, 106 Ib. 615 ; Coates v. Goddard, 34 N. Y. Super. 128; Spofford v. Texas Land Co., 41 Ib. 428 ; Palmer v. Dewitt, 42 How. 466 ; Coleman v. Chauncey, 7 Robt. 578 ; Gray v. Robjohn, 1 Bosw. 618 ; Voorhis v. French, 47 N. Y. Super.Ct. 364; Musgrave v. Sherwood, 29 Hun, 475; People v. Giroux, 29 Ib. 248; People v. Albany, etc., R. Co., 5 Lans. 25; Munro v; Smith, 25 N. Y. St. Rep. 624.
   By the Couet.—Fbeebman, J.

This action was brought in equity for an injunction and damages on account of the interference by defendants with easements belonging to certain pieces of property of the plaintiffs. The trial of the issues resulted in the recovery by plaintiffs of the sum of $8,750, for past damages with costs, and the award of an injunction which was not to become operative if the defendants should pay the further sum of $8,500, for loss of fee value. The plaintiffs then moved for an extra allowance in addition to costs and the court made an order giving them five per cent, on the amount of past damages as found and denying the motion otherwise. The plaintiffs appeal from only so much of the order as denies the remainder of their motion. In other words they want to retain all the benefits and to get more. Such a .practice should not be encouraged. As an order granting or refusing an extra allowance rests largely in the discretion of the trial judge, if it is to be reviewed at all the whole of the order should be presented, so that the exercise of discretion can be reviewed upon all the facts that bear upon it. The reasons given by the learned chief judge on making the order in this case, do not amount to a denial of power to grant more than was granted, but consist of considerations of an equitable character. He may have been mistaken as to their force, but that does not help the plaintiffs here. If he could have been persuaded to grant something based on loss of fee value, he might not have granted as high a percentage as he did on the amount representing past damages.

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

Ingraham, J. (concurring).

I concur with Judge Freedman that the order appealed from should be affirmed. The order does not state that the motion for an extra allowance on the amount of the fee value of the plaintiffs’ property was denied on the ground that the court had no power to grant it. The denial is based upon the ground that there had been no recovery of the amount of the value of the fee, and that the value of the subject matter of the judgment for injunction is indeterminate and unsusceptible of liquidation.

There is no denial here of the power of the court to grant an allowance where the value of the subject matter of the judgment for injunction is capable of exact determination, but that for some, reason not stated the trial judge was unable to determine it in this action. The determination of the court below as to the amount of allowance to be granted was in the discretion of the court, and I see nothing in the record that requires us to review that determination.

The order appealed from should, therefore be affirmed with $10 costs and disbursements.


author: By the Court.—O’Gorman, J.

text:
    MARY HEATH, Respondent, v. THE BROADWAY AND SEVENTH AVENUE RAILROAD COMPANY, Appellant.

      Evidence—Disclosure of inf ormation acquiredby witness in attendance upon his patient in a professional capacity, employment in that capacity must

      t appear.

    In order to enforce the prohibition against disclosure contemplated by the statute, it must clearly appear that the witness was attending the party in a professional capacity, and the information acquired by him, and as to which he was called to testify, was acquired in that attendance, and was necessary to enable him to act in that capacity. The burden of proof' that such prohibition exists, rests upon the party claiming that such prohibition shall be enforced.
    In the case at bar the exclusion of the testimony held to have been error.
    Before Freedman and O’Gorman, JJ.

      Decided February 6. 1890.

      Appeal from a judgment entered upon a verdict in favor of plaintiff, and from an order denying motion for a new trial made upon the minutes of the judge at the trial.

      Root & Strong, for appellant, argued:—
    That their exceptions, taken on the trial to the rulings of the court sustaining the objections of the plaintiff to the testimony of Dr. William A. Ewing as to conversations with plaintiff, on the ground that he was the plaintiff’s physician and that the communications sought were confidential and inadmissible, were well taken.

      Vanderpoel, Cumming & Goodwin, attorneys, and Benj. W. Franklin and Henry Thompson of counsel, for respondent, argued:—
    The testimony of Dr. Ewing as to the conversations had with plaintiff respecting the circumstances of the accident detailed to him by the plaintiff in reply to interrogatories of the physician was properly excluded. Of Dr. Ewing it may be said that he had been retained by both parties. He was sent for by a friend of the plaintiff’s on her behalf, and he was directed to make an examination of the plaintiff by the president of the defendant.
    The privilege given by the statute, as the court say in Westover v. Ætna, Ins. Co., 99 N. Y. 56, is absolute. ‘ The seal of the law placed upon such disclosures can be removed only by the express waiver of the person mentioned. There does not seem to be left any room for construction. The sections (§§ 834-836) are absolute and unqualified.” Section 834 is as follows : “ A person, duly authorized to practice physic or surgery, shall not be allowed to disclose any information which he acquired in attending a patient, in a professional capacity, and which was necessary to enable him to act in that capacity.” Section 836 provides : “ The last three sections apply to every examination of a person as a witness, unless the provisions therefor are expressly waived by the person confessing, the patient or the client.” The privilege, therefore, depends upon the relation of physician and patient, and not upon the circumstances under which it was created.
    The relation of physician and patient existed between Dr. Ewing and the plaintiff. He says “ a letter' was sent to me" purporting to come from a friend of Mrs. Heath, stating that a lady had been injured, a lady residing at 1558 Broadway, and the letter was sent to my office to attend to it, and I immediately went down to 1558 Broadway and inquired for Mrs. Heath. I asked the servant to say to Mrs. Heath that a gentleman would like to see her. I did not send my name.” Mrs. Heath came in and then the doctor continues, “ Then I gave her my name and stated that I came on behalf of the Broadway and Seventh Avenue Railroad Company, learning that she had been injured.” * * * * “ Then I proceeded to -examine her knees, of which she complained.” * * * * “ Then after the examination of the knees I examined her side, because complaint was made of pain in the left side.” * * * * “ The side was bared, and I was able to map out the ribs very readily. I could feel the edges of the ribs to their full extent, etc.” Upon objection being made to his disclosing the communications made by Mrs. Heath, he * undertakes to get in the testimony by a general statement, “ I can’t exactly say the words I used, but I gave her to understand that I came on behalf of the Broadway and Seventh Avenue Railroad Company.” The letter was sent from a friend of Mrs. Heath to the president of the company, and he in turn sent it to Dr. Ewing to attend to it. It is thus obvious that Dr. Ewing attended the plaintiff upon the defendant receiving a request from her or in her behalf for medical aid. She desired a doctor to be sent to her, and the doctor came in response to that invitation. When we consider the plaintiff’s own testimony we find it still more manifest that, in the plaintiff’s opinion, at least, Dr.- Ewing was a physician attending her as such, and as much under the rules of law respecting physicians as Dr. Rider. It is a little difficult to understand by what theory defendant concludes that Dr. Ewing was not under the prohibition of the statute forbidding him to disclose information acquired while in attendance upon the plaintiff. If it be upon the notion that the defendant’s president, having become liable to pay the physician, has therefore a right to control his actions and speech, the answer is, the point is decided otherwise in Grattan v. The Metropolitan Life Insurance Company, 80 N. Y. 281; S. C. 92 Ib. 274; People v. Murphy, 101 Ib. 129. If it be upon the idea that Dr. Ewing was in some way interested in belittling the injuries of plaintiff, and was sent to her ostensibly in reply to a letter asking for help, but really as a sort of detective to entrap the plaintiff in her speech, then the testimony of Dr. Ewing and the plaintiff entirely explodes that theory. But the purpose for which the doctor went to see the plaintiff is of no importance, except as it bears upon the question of what the relation was that existed between them. It is not enough if Dr. Ewing understood that he was in the employ of the defendant and made his examination for the very purpose of this case, and for getting information against the plaintiff and disclosing it in a suit at law, provided that the attendant circumstances were such as to reasonably lead the plaintiff to suppose, and she did in fact suppose, that that relation existed between them. People v. Stout, 3 Park. C. R. 670.
    The tendency of the courts of late years has been to apply very rigidly and strictly the statutory rule of the common law now contained in sections 834 and 836. Where a question arises upon the evidence whether the information obtained was necessary to enable the physician to act, or whether the relation of patient and physician existed, it is for the court and not for the physician to determine, although the statement of the physician should be considered by the court in determining the question. Bacon v. Frisbie, 80 N. Y. 394, 399. And in the absence of any proof upon the subject, it will be presumed that the information would not have been imparted, except for the purpose of enabling the physician to prescribe for the patient, and that it was necessary for thatpurpose. Grattan v. Metropolitan Life Ins. Co., 80 N. Y. 282, 299; 92 Ib. 294, affirming 24 Hun, 47. It does not matter that no prescription was made or intended to' be made, nor does it matter that the physician was called by a friend of plaintiff instead of being called by herself personally.” Matter of Freeman, 12 N. Y. St. Rep. 175; The Grattan cases (supra). The statute is not confined to information of a confidential nature. It is sufficient that the person attended as a physician upon the patient, and obtained his information in that capacity. Renihan v. Dennin, 103 N. Y. 573; People v. Murphy, Ib. 126; Westover v. The Ætna Ins. Co., 99 Ib. 56; Edington v. Mut. Life Ins. Co., 67 Ib. 185; 77 Ib. 564; Sloan v. N. Y. C. R. R. Co., 45 Ib. 125. To the same effect are the very recent and important decisions of People v. Murphy, 101 N. Y. 129; Renihan v. Dennin, 103 Ib. 573; People v. Schuyler, 106 Ib. 298; Matter of Coleman, 111 Ib. 220; Loder v. Whelpley, 111 Ib. 229.
   By the Court.—O’Gorman, J.

This action is brought by the plaintiff to recover damages against the defendant company, for injury inflicted on her by reason of the negligence of the conductor on one of defendant’s cars in starting it suddenly while plaintiff was alighting, whereby plaintiff was personally injured and incurred pecuniary loss.

A verdict was rendered in favor of the plaintiff for $2,513.86, and judgment entered thereon. The defendant moved for a new trial, which motion was denied and appeal was taken. Appeal was also,' taken from the judgment.

An important question to be considered now is, was error committed at the trial in the rejection of certain testimony offered on the part of the defendant of a statement made by the plaintiff to the witness, Dr. Ewing, of the circumstances of the accident.

The counsel for the plaintiff contends that it was inadmissible, under section 834 of the Code of Civil Procedure, as calling for the disclosure of information which the witness acquired in attending his patient (the plaintiff) in a professional capacity.

The material facts as they appear in evidence are these :—

A few days after the accident occurred to the plaintiff, and while she was under the care and professional attendance of Dr. Rider, a person came to plaintiff”s house, and sent to her a message by her servant that a gentleman would like to see her. The plaintiff came to him in her parlor and he gave his name and said that he came on behalf of the Broadway and Seventh Avenue Railroad Company, learning that she had been injured. She asked him to walk back to her rear room. He did so, and there met Dr. Rider who was a lady physician. He had some conversation with the plaintiff as to the circumstances of the accident, and proceeded, in company with Dr. Rider, to examine the plaintiff’s knees. He moved the knee pans, then examined her side, which was bared for the purpose, and felt the edges of the ribs to their full extent. After finishing this examination, and assuring himself that there was no fracture of any rib, witness and Dr. Rider withdrew into the parlor.

He deposed that when he saw the plaintiff he gave her to understand that he came on behalf of the railroad company. He also said—“ Mrs. Heath gave me the particulars of the accident in reply to questions of mine.”

There is no substantial variance between the testimony of the plaintiff and that of Dr. Rider and Dr. Ewing on this subject. The plaintiff deposed that her doctor (Rider) brought Dr. Ewing into the plaintiff’s room. She does not remember whether Dr. Ewing told her his business. She was in pain at the time he carné. She did not send for him. Some one told her that he said that he came from the railroad and she must see him.

There is no evidence that Ewing prescribed for the plaintiff, consulted with the plaintiff’s doctor, or gave her any professional advice or suggestions as to the treatment of the plaintiff’s case, or gave, by word or deed, any reason to believe that he intended to render any professional service to the plaintiff. On the contrary, the evidence shows that his purpose and object were to procure for his employer, the defendant company, exact information about the extent of the plaintiff’s injury, and to elicit from her admissions as to the circumstances of the accident, and to place the information thus procured at the disposal of the defendant company, by whom he was employed.

Ewing testified that it was the intention of Dr. Rider to call in a surgeon in whose hands the case was to be placed. But it does not appear that there was any thought of seeking any professional assistance from Ewing.

In these facts I can see nothing to support the contention that Ewing was, at any time, attending the plaintiff in a professional capacity, or that the information acquired by him, as to which he was called on to testify, was acquired in attending plaintiff as a patient, or was necessary to enable him to act in a professional capacity.

In order to enforce the prohibition against disclosure, contemplated by the statute, it is necessary that these essential conditions should exist, and I do not find any authoritative decision of our courts that does not require them. The burden of proving the prohibition against disclosure, by the witness, is on the party claiming the prohibition to exist. People v. Schuyler, 106 N. Y. 298, 304; Edington v. Ætna Life Ins. Co., 77 Ib. 564; Stowell v. American etc. Co., 5 N. Y. Supplement, 235.

The authorities cited on behalf of the plaintiff on this subject do not seem to me to sustain her conclusion. In Renihan v. Dennin, 103 N. Y. 577, 578, the physician, whose testimony was admitted, was called in by the attending physician and went in a professional capacity to see the patient. He did not thrust himself into the presence of the patient or intrude there—he was called in by the attending physician.

In the case at bar, Ewing was not called in by Dr. Rider, or by any one else, on behalf of the plaintiff, and was' to all intents and purposes an intruder.

For the reasons stated, and inasmuch as the admissions or declarations of a party, if material to the issue, are always admissible against him, the exclusion of the testimony cannot be justified- on the ground that the witness was a physician. It was clearly relevant to the issue, and, if the answer of the witness had shown that the plaintiff had made to the doctor a statement inconsistent with the testimony given by her on the trial, it would have been quite material.

Under the doctrine laid down in Rosenberg v. Block, 102 N. Y. 255, 259, we must presume that the answer to the excluded question, if the question had been allowed, would have related to some material fact. The result is that the exclusion of the testimony must be held to have been error.

The appellant also complains that the condition of the plaintiff about a year after the accident, in consequence of an abscess which then appeared, was not connected with the accident with sufficient certainty to authorize the jury to take it into account in assessing damages.

The medical testimony on this point was admissible under the decision of Turner v. The City of Newburgh, 109 N. Y. 301, and it was sufficient to go to the jury for what it was worth.

And, inasmuch as the jury were expressly instructed not to give damages on account thereof, unless they were reasonably certain that the abscess was caused by the fall of the plaintiff from defendant’s car, the rights of the defendant were fully protected.

There are other questions in the case which it is not necessary to discuss.

For the error committed in the exclusion of the testimony hereinbefore referred to, the judgment and order appealed from should be reversed and a pew trial ordered, with costs to abide the event.

Freedman, J., concurred.


author: By the Court.—Ingraham, J.

text:
    CHARLES PUTZEL, as Receiver, etc., Respondent, v. RICHARD L. SCHULHOFF, et al., Appellants.

      Practice—Judgment after trial at special term without a jury, must be based upon the decision of the court that should state separately the facts found and the conclusions of law, and direct judgment to be entered thereupon.

    This action was tried at special term by the court without a jury, and the record shows that certain requests to find were presented by plaintiff and defendants and passed upon as required by section 1023 of the Code, but no decision of the court was filed pursuant to section 1022 of the Code, and judgment was subsequently entered without such decision. Held, that in the absence of a decision of the court directing the judgment to be entered pursuant to section 1022 of the Code, the judgment is entirely unauthorised and not in a condition for review, and, therefore, should be reversed and the case remanded to the special term, to be decided as provided in section 1022 of the Code.

      Further held, that if the judgment was in a condition for review, that some of its provisions cannot be sustained, and there are other defects and errors that cannot be reconciled to the existing practice.
    Before Sedgwick, Ch. J., Freedman and Ingraham, JJ.

      Decided February 6, 1890.
    Appeal from judgment at special term.

      Donohue, Newcombe & Cardoso, attorneys, and Stephen C. Baldwin of counsel, for appellants.

      William King Hall, attorney, with Albert Batch of counsel, for respondent.
   By the Court.—Ingraham, J.

This action was commenced by plaintiff as receiver of the choses in action, equitable assets and the property of Richard L. Schulhoff, appointed by the city court of New York in supplementary proceedings under section 2464 of the Code, to set aside the assignment made by said Schulhoff to one Lowe for the benefit of creditors, and a transfer by said Lowe to the defendant Krause and by Krause to the defendant Clara Schulhoff, of all the assigned estate, on the ground that the said assignments and transfers were made with intent to hinder, delay and defraud creditors.

The action was tried at special term by the court without a jury, and the record shows that certain requests to find were presented by plaintiff and by the defendants. Such requests were passed upon by the court as required by section 1023 of the Code. No decision of the court appears to have been filed as required by section 1022 of the Code.

That section requires that the decision of the court, or the report of the referee, upon the trial of the. whole issues of fact, must state separately the facts found and the conclusions of law, and it must direct the judgment to be entered thereupon.

This section does not appear to have been followed. It appears by the record that a judgment was subsequently entered. It adjudges the assignment void, and it directs the defendants to forthwith account for, pay and deliver all the money and other property assigned to said Lowe, and subsequently transferred by a bill of sale to the defendants Krause and Schulhoff, and the value and proceeds thereof, and also the policies of insurance thereon, or any part thereof, to the plaintiff at his office, to the extent of the amount of the judgment recovered in the action in which plaintiff was appointed receiver.

It also further directs, that the defendants, Richard L. Schulhoff and Clara Schulhoff, do forthwith account for, pay and deliver to the said receiver at his office, aforesaid, all the moneys alleged to have been saved by the defendant Clara Schulhoff out of allowances made to her by said defendant Richard L. Schulhoff for household expenses, and which savings she had in her possession at the time of the execution of said assignment, and which amounts to upwards "of $500, to the extent of the aggregate amount of said judgment with interest thereon, and with the legal fees of the plaintiff as receiver of the goods as aforesaid.

It further orders that the plaintiff have a valid lien upon all such property and money in whosesoever hands the same may be; and the judgment also directs a personal judgment against defendants for the amount of the plaintiffs claim, with interest and costs.

If the judgment was in a condition for review, we do not think that all of its provisions could stand. If the plaintiff is entitled to a judgment against the defendants jointly, an accounting is unnecessary and improper. If an accounting is necessary the judgment is interlocutory, and there should be no formal judgment until the accounting has been had.

The judgment contains no provisions for an accounting before a referee or other officers appointed for that purpose, but by the judgment the plaintiff seems to occupy the position of plaintiff who is to receive the money, referee who is to pass upon the extent of the defendants’ liability, and receiver who is to execute the judgment; and all this by a formal judgment which provides for no report to the court nor method of review if the decision of the plaintiff in favor of himself should not be satisfactory to the defendants. I do not think this is in accordance with the practice in cases of this character.

Nor do we think that the provisions of the judgment that the policies of insurance on the property transferred to the defendant Clara Schulhoff should be transferred to the plaintiff or are subject to the claim of the creditors, can be sustained. The policies were not taken out for- the benefit of the judgment debtors or his creditors were not paid for with his property.

In Loos v. Wilkinson, 113 N. Y. 500, it was held that insurance taken out by a fraudulent transferee of property which was taken out for his own benefit, could not be enforced in favor of the creditors.

Nor do we think that, on the evidence, the defendant, Clara Schulhoff, was liable to the plaintiff for the money that she had saved from the money given to her for household expenses. The evidence shows that money to have been given to her by her husband long before he was insolvent, and we think it belonged to her.

Nor do we see any evidence to justify the provision that the plaintiff have a valid lien on all the property, etc., of the judgment debtors. We think, however, that there has been no decision of the case as required by Section 1022, and that we should not review the provisions of that judgment.

Whether this judgment was entered by the court, or was entered by the clerk under Section 1228 of the Code does not appear, but in the absence of a decision of the court directing the judgment to be entered, it appears to be entirely unauthorized. I think, therefore, the judgment should be reversed with costs to the appellant to abide the event, and the case remanded to the special term to be decided, as provided for by Section 1022 of the Code.

Sedgwick, Ch. J., and Fbeedhan J.. concurred.