author: Beady, J.: Yan Brunt, P. J.:

text:
    ELISE KOHLER and Others, Plaintiffs, v. JOHN LINDENMEYR, Defendant.

      Special partner — the turning over of notes to the limited partnership is not a payment in cash of special capital— competency of pa/rtnership books as evidence.

    In an action brought to charge a special partner with a liability of the firm, because of the alleged falsity of the statement, required by the statute, that the capital contributed by him had been paid in cash, it appeared that before the special partnership was formed there had been in existence a partnership of a like character, in which the present defendant was not a partner, but to which he had loaned money, to secure the repayment of which he had taken the notes of that partnership for the sum of $30,000. These notes he contributed, as special capital to that amount, to the special partnership.

      Held, that the transaction showed that the sum which the defendant purported to have contributed towards the special partnership had not been paid in cash, and that he was liable for the debts of the firm as a general partner.
    In order to establish the fact of the notes of the old firm having been given to the defendant, the books of the old firm were admitted in evidence for that purpose. Held, that the books of the old firm were properly admitted in evidence. (Van Brunt, P. J., dissenting.)
    Also that entries in the books of the special partnership were competent as against the defendant, who was a special member thereof.
    Exceptions ordered to be heard at the General Term in the first instance, after a verdict directed for the plaintiffs rendered by direction of the court.
    The action was tried at the New York Circuit before the court and a jury on February 3, 1890, at which a verdict, in the sum of $1,016.66, was directed in favor of the plaintiffs, and it was ordered that the exceptions be heard in the first instance at the General Term.

      Samson Laohman, for the plaintiffs.

      lueien Birdseye, for the defendant.
   Beady, J.:

The object of this action was to establish the liability of the defendant as a general partner of the firm of P. Lenk & Company, wine dealers. An attempt was made on the 16th of November, 1885, to establish a limited partnership with the defendant Lindenmeyr and Otto Huber as special partners. The action was originally .brought against both of these persons, but Huber having died it was. continued against tlie present defendant, a suggestion of Huber’s death having been made upon the record at the time of the trial. The gravamen of the plaintiff’s case is the alleged falsity of the statement that the capital furnished by the defendant was contributed in cash as stated in the certificate and affidavit filed under the statute relating to the subject. Upon the trial the plaintiffs sought to ■establish the averment of falsity suggested, and when they rested a motion was made to. dismiss the complaint; but no grounds wrere stated of which that motion could be predicated and on which it should be granted. The counsel for the defendant then produced and read in evidence the affidavit of publication from the World and Register of the statutory certificate and other documents to establish the validity of that performance ; in other words, compliance with the statute relating to the subject, and rested his case. No question was raised about the regularity of that proceeding, the plaintiffs’ counsel, as already suggested, resting entirely upon the proposition that the statement of capital contributed was false, the same not having been paid in cash as required by the statute and the ad judications relating to the subject. The objections interposed on behalf of the defendant relate only to the sufficiency and competency of the proof to establish the asserted falsity of the certificate.

It appears conclusively that before the special partnership mentioned was formed there had been in existénce another partnership of a like character under the same name of P. Lenk & Co., in which Otto Huber was a special partner but the defendant was not; that on the 12th of August, 1885, the defendant lent or advanced to that firm $7,000 and received a promissory note of the firm for that amount, and, further, that on the twenty-eighth of September following, he lent or advanced to the firm the further sum of $13,000 and received another promissory note of the firm for that amount; and it appears from the testimony given on behalf of the plaintiffs, that when the new partnership, of which the defendant was a special partner, was formed he appropriated the notes already mentioned, held by him, amounting, as we have seen, to $20,000, as his capital in the new firm, and this was the mode in which he attempted to comply with the statute and to contribute cash to the new copartnership of which he became a member. These facts could not be proved without resort to the books of the old firm, and they were used, it is evident, for that purpose, and for that purpose only, that is to say, to prove the giving of the notes mentioned for the sums of $7,000 and $13,000; and the books clearly show the entries of the notes mentioned and the appropriation of notes of a similar amount .to the new firm, and not the amount of them in cash or any immediate conversion of them into cash, inasmuch as the amount of cash to the credit of the new firm established, by reference to the books of the new firm, shows conclusively that there was no such sum to its credit on hand or in bank.

The learned counsel for the defendant thinks that these entries were erroneously admitted, inasmuch as the defendant was not a member of the old firm, but they were entries relating to his transactions with the old firm and to his advantage and benefit, and from which, in the absence of any proof to the contrary, it should be presumed that the notes mentioned were issued and delivered to him as stated upon the books. At all events, they were prima facie evidence thereof, and there is nothing in the case to gainsay its truthfulness. It may be said, in addition, that if .the capital was not contributed in the manner stated, according to the books of the new firm, as shown by ]VIr. Davidson, sworn on behalf of the plaintiffs, and who was an attorney at law and an accountant, it was not paid at all, because, as already suggested, he shows that the cash on hand on the 16th of November, 1885, and the bank balance united, amounted to but $4,620.83 only. And this evidence was quite sufficient to put the defendant to his answer, which was made only by showing, as already stated, the publication of the notice and other papers required by the statute relating to the formation of special partnerships, nothing more. Under these circumstances, the evidence, properly received, seems to show conclusively that the sum the defendant purports to have contributed in cash was not paid in cash, and he, therefore, became, as a result, a general partner.

It is idle to urge the proposition upon which the counsel for the appellant lays some stress, that the books of the partnership of which the defendant became a member on the 16th of November, 1885, were not under his control and that he could not direct the making, altering or erasing of any entry in the books, even under the original statute as amended by section 17 of chapter 414 of the Laws of 1857. He could not employ or discharge a clerk or bookkeeper or govern liim in the performance of any duty or service to the firm perhaps, but he had a right, under that section, from time to time, to examine into the state and progress of the partnership concerns, and might advise as to their management, and should have the same rights and remedies in the respects named in the statute as any other creditor. He might also negotiate sales, purchases and other business of the partnership. He was prohibited, it is true, from transacting business on account of the partnership except as stated in the section, and could not be employed for that purpose as agent, attorney or otherwise; but that he had a perfect right to examine the books within these lines for the purpose of ascertaining what entry had been made with regard to his capital there seems to be no question whatever. In answer to the facts and circumstances arrayed against him in reference to the payment of his capital, as sworn to by him in the certificate, it was incumbent upon the defendant to offer some evidence to overcome it.

It is well established that the entries in partnership books are grima facie as between the parties. (Cheever v. Lamar, 19 Hun, 130; 1 Phillips on Evidence, 449; 2 Wharton on Evidence, § 1132.) And it is said by a learned writer that, in the absence of an express agreement to the contrary, every partner has a right, without the permission of his copartners, to inspect, examine and make extracts from all the books of the firm. (1 Bindley on Partnership, 404; Bates on Partnership, § 978.) As a special partner, as we have seen, he might, from time to time, examine into the state and progress of the partnership concerns, and advise as to their management (1 R. S., 766, § 17; vol. 4 [8th ed.], p. 2495), and he certainly could look after his capital, and he was bound so to do. Strict compliance with the statute in. reference to special partnerships is demanded. As said by Judge Folger in Van Ingen v. Whitman (62 N. Y., 520): “ The statement of the amount of the cash payment is required so that the public may guage thereby the extent of its dealings with the firm. The affidavit is called for that the public may have reliance upon the existence of the fact of payment. The statute is thivarted, the public is mislead, and its reliance is misplaced and deceived as much when there is an unintentional untruth as when there is an intentional one. This statute does not set out to deal with motives, -but with acts and their results; and it- guards the public not by requiring good intentions, but a certain act done in a certain mode, and a true statement that it has been done thus.” When the supposed true statement, therefore, is fairly and successfully impugned as false, it behooves the assailed partner to establish by reasonable evidence that the assault is unwarranted, and the statement true in fact.

For these reasons the exceptions should be overruled and judgment upon the verdict ordered for plaintiff.

Daniels, J., concurred.

Yan Brunt, P. J.:

I think that the admission of the entries in the books of the old firm was error. The defendant had nothing to do with those books or the entries therein contained. Tie was not a partner of the firm whose books they were, and because he subsequently became a special partner he did not become chargeable with notice of the entries which had been made previously in the books of the firm. I, therefore, dissent.

Exceptions overruled and judgment upon the verdict ordered for plaintiff.


source: Caselaw Access Project

author: Barrett, J.:

license: Public Domain

text:
    JOHN M. KNOX and Others, as Executors of the Last Will and Testament of RICHARD SMITH CLARK, Respondents, v. THE METROPOLITAN ELEVATED RAILWAY COMPANY and THE MANHATTAN RAILWAY COMPANY, Appellants.

      JUxecutors and trustees may recover the damage caused to property by an elevated railroad, as well that ca/used before as that arising after their testator’s death—effect of acquiescence in a trespass — remedy.

    In an action brought to restrain the operation of an elevated railroad by the executors and trustees under the will of a deceased owner of property abutting upon the street through which said railroad runs, the plaintiffs are entitled to recover such damages as resulted from the loss of rental values during the testator’s lifetime, and also such as resulted from the operation of the defendant’s road subsequent to the testator’s death, and can recover "in one action in both •capacities.

      No acquiescence, short of twenty years, will bar a party from complaining of a nuisance, unless by some act or omission he has induced the party causing it to incur large expenditures or to take some action upon which an estoppel may be based.
    Where a structure is authorized by law which, without such authority, would constitute a nuisance, the same rule applies, and a person whose property rights are taken may complain of a failure on the part of the railroad to offer him due compensation or to condemn his property under the right of eminent domain.
    The mere failure to assert his rights while an elevated road is in process of construction does not preclude an abutting owner damaged thereby from maintaining an action for damages or an injunction, or operate as an estoppel against him.
    The only remedy by which a party, under such circumstances, can obtain just compensation for the property taken, is by an action in equity to restrain the continuance of the trespass, and to deprive him of an injunction nisi would be to leave him remediless.

      A. judgment will not be reversed on appeal because of inconsistent conclusions of law, where the judgment directed to be entered is in accordance with the correct • conclusions of law on the facts found.
    Appeal by the defendants from a .judgment of the Supreme Court, entered in the office of the clerk of the county of New York on the 12th day of June,. 1890, in favor of the plaintiffs, after a trial at Special Term in the county of New York.
    The action was brought to obtain an injunction restraining the operation of the defendants’ railroad, in front of plaintiff’s premises Nos. 767, 769 Sixth avenue, and to recover the damages resulting from loss of rents occasioned by such use.
    The judgment directed that the defendants should deliver to the-plaintiffs, or their attorneys, a written offer to pay to the plaintiffs the sum of $10,500, and interest from the date of entry of the judgment, and that, upon the plaintiffs tendering to defendants, within thirty days after judgment, a duly executed conveyance or grant of so much of the property of the plaintiffs in Sixth avenue, and the easements appurtenant to the abutting property described in the judgment, as had been taken or appropriated by the defendants for the purposes of their railroad, that said defendants pay said sum of $10,500, with interest, to the plaintiffs, in which event the injunction which was granted by said judgment perpetually enjoining and restraining the defendants from maintaining, or in any way using, the elevated structure on Sixth avenue, in the city of New York, in front of or adjoining the plaintiffs’ premises, should be inoperative and void.

      E. O. James, for the appellants.

      J. E. Burr ill, for the respondents.
   Barrett, J.:

It is contended that the plaintiffs cannot maintain this action because, in the caption of their complaint, they have styled them-' selves as executors ” and not as trustees.” In the body of the complaint, however, they set forth the testator’s will and allege the devise of the property in question (under the residuary clause) to his executors in trust to divide the same into eight equal parts, and to hold one of said parts for the benefit of each of eight grandchildren during his or her natural life, and to receive the rents, issues and profits thereof and to apply the same to the use of such grandchild during his or her natural life. It was proper, under such circumstances, to describe the plaintiffs as executors.” They are, ex officio, invested with the title for trust purposes, and as such they are entitled to maintain the action. "Were it otherwise, the averments in the complaint are sufficient to affix to the plaintiffs their proper representative character, and when that appears in the body of the complaint an erroneous description in the caption is immaterial. (Stilwell v. Carpenter, 2 Abb. N. C., 238; Beers v. Shannon, 73 N. Y., 297.)

It is also claimed that the plaintiffs did not take title under Mr. Clark’s will, or rather that their title was deferred until the actual partition of the estate into eight parts, and that) until such division, the fee passed to the heirs-at-law, subject to the execution of the power to divide, etc. This is an inaccurate view of the legal effect of the will. Under the sixth clause the residue of the estate, real and personal, was devised to these executors “ in trust to receive the rents, issues and profits thereof, and to apply the same to the use of my said grandchildren during their respective natural lives, one share being held in trust for each grandchild.” Under this clause the executors took the whole estate, in law and in equity, subject only to the execution of the trust. This is entirely consistent with the creation of eight separate trust estates. In law the separ ration of the trust estates is effected by the provisions of the will, and this is not dependent upon an actual division or partition in specie. Prior to such actual division or partition, the executors, in tlieir trust capacity, are vested with each of the undivided eight shares in trust for each of the eight grandchildren, and thus they are vested with the whole. The absolute power of alienation is not unlawfully suspended by the consolidation of an estate into one trust so long as it is a trust for distribution and payment to each beneficiary or class of beneficiaries upon the events specified in the will.” ( Wells v. Wells, 88 N. Y., 332, 333; Monarque v. Monarque, 80 id., 324; Stevenson v. Lesley, 70 id., 515.) In such a case the trustees are vested with the whole estate just as all the tenants in common of a piece of real estate are so vested, but the legal rights of each cestui que trust are separate and distinct.

The plaintiffs’ rights are not affected by the death of one of these eight grandchildren (Mary O. Le Roy) subsequent to the commencement of this action. Damages were not awarded to the plaintiffs for trespasses committed after Mary C. Le Roy’s death. Such damages were limited to the time of the commencement of the action. The plaintiffs were clearly entitled to all these damages. As executors, they were entitled to such as resulted from loss of rental values in the testator’s lifetime. As trustees, in their executorial capacity, vested with the fee, they were entitled to such as resulted from loss of rental values after the testator’s death. And in such an action as the present they could recover in both capacities. (Shepard v. Manhattan Railroad Company, 117 N. Y., 442.) Upon the issues as they stood at the time of the trial, they were also entitled to an injunction. There was no plea of a defect of parties, and no injustice was done by a refusal to permit the cause to stand over to enable the defendants to raise this technical point.

Upon the death of Mary C. Le Roy the undivided share held in trust for her passed, under Mr. Clark’s will, to the other seven grandchildren. The court provided that the injunction, to which the plaintiffs were absolutely entitled under the pleadings as they stood, should not go into effect in case the defendants tendered the adjudged value of the easement. And upon such tender the court required the plaintiffs to deliver to the defendants a proper conveyance, duly executed by all of these seven grandchildren, as well as by the executors and trustees. The court thus made ample and even superfluous provision against any possible prejudice to the defendants resulting from the failure to make these seven grandchildren parties. We say superfluous, because the plaintiffs, even after the vesting of Mary C. Le Roy’s share in these seven grandchildren, had a power of sale entirely sufficient to confer upon the defendants a perfect title to these easements.

There is nothing in the point as to the statute of limitations. The trespasses are continuous and a cause of action accrues daily. The equitable cause of action which accrued ten years ago resulted from the continuous trespasses then committed. The present cause of action is based upon the continuous trespasses of to-day. There can be no limitation to such action, whether legal or equitable, short of the twenty years from which a grant is presumed.

There is no greater force in the claim of acquiescence, and the cases cited by the appellants on that head (including specially Hentz v. Long Island Railroad Company, 13 Barb., 655; McAulay v. Western Vermont Railroad Company, 13 Vt., 311; Goodwin v. C. and W. Canal Company, 18 Ohio St., 169), are entirely inapplicable. They proceed either upon the doctrine of estoppel or upon the principle that an injunction should not be granted until all the ordinary means for obtaining indemnity have failed. The rule governing estoppel is clearly inapplicable. To constitute an equitable estoppel there must have been some act or admission by the party sought to be estopped inconsistent with the claim he now makes, and done or made with the intention of influencing the conduct of another, which he had reason to believe would, and which did, in fact, have that effect. Silence will not estop unless there is not only a right but a duty to speak. (N. Y. Rubber Co. v. Rothery, 107 N. Y., 310.) In Campbell v. Seaman (63 N. Y., 568) it was held that no acquiescence short of twenty years will bar one from complaining of a nuisance, unless by some act or omission he has induced' the party causing the nuisance to incur large expenditures or to take some action upon which an estoppel may be based. (See, also, Haight v. Price, 21 N. Y., 246.) In Chapman v. City of Rochester (110 N. Y., 277) the question of estoppel by acquiescence was also considered. The city had there constructed sewers in such a manner as to render the water in a creek above the plaintiff’s land unfit for use. Danforth, J., speaking for the court, said that the plaintiff was not estopped by acquiescence in the proceedings of the city in devising and carrying out its system of sewerage. “ It does not appear,” he observed, “that the plaintiff in any way encouraged the adoption of that system, or by any act or word induced the city authorities to so direct the sewers that the flow from them should reach his premises.”

The defendant’s structure, being authorized by law, is not a nuisance, but for that very reason the rule enunciated in Campbell v. Seaman and Chapman v. City of Rochester should be applied, and applied even more stringently than in the case of a nuisance. Where the structure is authorized by law the property owner cannot complain of it per se. His only complaint is of the failure to offer him due compensation or to condemn his property under the right of eminent domain. In the present instance it cannot truly be said that the property owners stood by and permitted large or any sums to be expended on the faith of their apparent acquiescence. Acquiescence in what? In the building of the road? Yes, but, even as to that, the word “ resignation ” would better express the property owner’s condition. Not, however, in the taking of their property without compensation. The elevated railroad was constructed with the clear understanding that there was no such acquiescence. It was constructed, as already suggested, under legislative authority, authority claimed to be sufficient to entitle the promoters of the enterprise to appropriate these easements without compensation. The property owners saw the road built regardless of their wishes and in defiance of their rights. It has been repeatedly held, and it is sound doctrine, that failure to assert their rights while the road was in process of construction did not, under the circumstances, work an estoppel. The promoters of the railroad proceeded in reliance upon what they supposed to be the law (Powers v. Manhattan Railroad Company, 120 N. Y., 178), not at all in reliance upon the property owner’s inaction. And the latter’s acquiescence was, as we have seen, only in the construction of the road under legislative authority, not in the appropriation of their easements without just compensa, tion. The road was built in the year 1878, and it was not until the year 1882 that the Court of Appeals finally decided that compensation was a right. (Story v. N. Y. Elevated Railroad Company, 90 N. Y., 122.) Even after this decision the property owner had no direct means of compelling compensation. He cannot apply under the act with regard to condemnation proceedings nor can he compel the corporation to apply. He certainly cannot maintain ejectment for the easements of light, air and access. Nor can he secure the value of his easements in actions of trespass for the damages sustained day by day. ' (Pond v. Metropolitan Elevated Railway Company, 112 N. Y., 186.) “A recovery of judgment for damages for a trespass or the invasion of an easement,” said Andrews, J., in the Pond Case, “ does not operate to transfer the title of the property to the defendant, either before or after satisfaction, nor does it extinguish the easement.”

The only remedy, then, whereby just compensation for the property taken can be compelled is an action in equity to restrain the continuous trespasses. To deprive the plaintiff of an injunction nisi would, therefore, be to leave them remediless in that regard. It would be to admit the existence of a distinct wrong without a specific remedy, and it would also be to permit the possibility of the wrong ripening by presumption into a right. It was held in Campbell v. Seaman (supra) that under our present system the right to an injunction in a proper case is just as fixed and certain as the right to any other provisional remedy. It is no longer a matter of grace, except,” as Earl, J., observed, “ that it rests in the sound discretion of the court, and that discretion is not an arbitrary one.” “ It can rightfully be demanded to prevent irreparable injury, interminable litigation and multiplication of suits.”

Ve think, therefore, that the remedy by injunction was properly granted in the present case.

The only other point calling for special consideration is that based upon the seeming inconsistency in the conclusions of law found by the learned judge at Special Term.

In the fifteenth and sixteenth findings of fact the learned judge finds the diminution of the rental value of the plaintiffs’ premises, caused by the erection, maintenance and use of the defendants’ railroad from the 14th day of June, 1883, to the 14th day of June, 1889. In the first conclusion of law he finds that the plaintiffs are entitled to recover from the defendants the damages awarded by these findings of fact.

At the request of the defendants, however, he found, in the fourth conclusion of law, that the plaintiffs are not entitled to recover any damages in this action which occurred prior to the death of their testator, the lltli of July, 1884. This was plainly an inadvertence. The learned judge had already found, and correctly, that the plaintiffs were entitled to recover these very damages. If the inconsistency had been in the findings of fact, the appellants might have invoked the rule that where such findings are irreconcilable, those most favorable to them should be taken. (Redfield v. Redfield, 110 N. Y., 673.) There is, however, no inconsistency in the facts found, and upon these there can be no doubt as to the proper conclusion of law. It is that the plaintiffs are entitled, as found in the first conclusion of law, to recover the sums .specified in the fifteenth and sixteenth findings of facts. ¥e agree with the Superior Court in Welsh v. Metropolitan Elevated Railway Company (57 Supr. Ct. Rep., 411, Ingraham, J., writing the opinion), that “no principle requires us to reverse a judgment, because of inconsistent conclusions of law, when the judgment directed to be entered is in accordance with the correct conclusions of law on the facts found.”

The sums awarded for past damages and allowed for the value of the easements were reasonable. We have examined the evidence on this head and see no reason for disturbing the findings of the learned judge at Special Term. And we are at a loss to understand what the appellants mean by the assertion in their brief that these sums have been awarded arbitrarily and without evidence to sustain them. Such assertions are gratuitous and without justification m the record.

The judgment should be affirmed, with costs.

Yan Brunt, P. J., and Bartlett, J., concurred.

Judgment affirmed, with costs.


author: Yan Brunt, P. J.:

text:
    ALFRED C. BARNES and Others, Respondents, v. SARAH FRANCES BLAKE, Appellant, Impleaded with EDWIN M. BARNES and Others.

      Action for an accounting and the construction of a will by the executors and trustees thereof— questions arising between a legatee and his assignee ma/y be determined in such an action.

    In an action brought by executors and trustees under a will for a final settlement of their accounts, and to obtain a construction of the will, the assignees of a legatee under the will are properly made-parties, and their rights, as against such legatee, may properly be determined in such action.
    It is not a misjoinder of causes of action to state in such a complaint a claim made by such assignees against the legatee.
    Appeal by the defendant Sarah Frances Blake from an order and interlocutory judgment of the Supreme Court, entered in the office of the clerk of the county of New York on the 3d day of May, 1890, overruling the demurrer of the defendant Sarah Frances Blake to the plaintiffs’ complaint, with costs.

      O. B. Smith,-io? the appellant.

      F. B. Gcmdler, for the respondents.
   Yan Brunt, P. J.:

The plaintiffs in this action are the executors and trustees under the will of Alfred S. Barnes, deceased, and it is claimed by them that this action was brought for a final settlement of their accounts as such executors and trustees, and for a construction of the will of the deceased in respect to certain points which it is necessary to settle before said accounts can be finally disposed of.

The defendants are the parties interested under the will, and the assignees of the appellant one of the legatees. The complaint sets forth the circumstances of the various assignments and the indebtedness which, it is alleged, they were made to secure. It is claimed uppn the part of the appellant that there has been a misjoinder of causes of action, in that it combines a cause of action by the executors for an accounting with a cause of action by the alleged creditors against the appellant.

We do not think that this objection is well taken. It may be true that the executors, in the bringing of this action, might have alleged that the assignees of the appellant claimed a share of her interest in the estate, leaving it to them to set up the particulars. But, in order that there may be a final determination and settlement of the accounts, and of all questions in relation thereto, it was necessary that they should make parties all persons claiming an interest in said estate, whether as legatees or devisees, or assignees of legatees and devisees. 'The assignee of a legatee has as much right to be heard in reference to the adjustment of the accounts of the estate as the original legatee. He is just as much a necessary party, and his claim against the original legatee must be settled before a decree of distribution can be made; and certainly it cannot in any way invalidate the complaint to state all the facts, as the plaintiffs understand them, necessary to a proper determination of the questions which such facts bring up for adjudication.

If the appellant had not executed assignments of her interest in the estate to these various defendants, although she may have been, indebted to them, clearly they would have been improper parties to the action. But she having given them a specific lien upon her interest in the estate by assignment, they were entitled to be heard as to the distribution, its method and amount. And although, incidentally, the questions as to the indebtedness of the appellant to these assignees may arise, yet they are kindred to the subject matter of the action, viz., the accounting of the executors, and the determination under the terms of the will as to how charges against the various devisees are to be made.

It is conceded, upon the part of the appellants that, perhaps, all of them may be proper parties, but it is urged that it is not necessary to discuss that question here, the objection being not that there is a misjoinder of parties, but that there is a misjoinder of causes of action, and that there is no power of the court or authority in law compelling the different defendants to litigate in this action their rights and claims against the defendant Blake.

It is clear, however, from what has already been said, that if these ■defendants choose to litigate their claims against the defendant Blake they have a right to do so, and they are not complaining of the allegations in the complaint. If there had been no allegations in reference to tlie claims of the defendants out of which these assignments arose, each assignee would have a right to set up his particular claim against the estate and have had it determined here, as they are, by reason of their assignments, the representatives of the defendant Blake to the extent of their respective claims. The defendant Blake cannot take the objection that these creditors cannot be forced to come in and litigate their claims against her in this action; and if these various assignees do not choose to assert their .rights here, they have a very easy remedy by disclaiming in their answer all interest in the estate as the assignees of Mrs. Blake. Until this is done, they having made the claims against the estate by reason of the assignment, they are not only necessary parties, but the grounds upon which they claim may with propriety be set forth in the complaint.

We are of opinion, therefore, that there has been no improper joinder of causes of action; that the complaint is one for an accounting and the construction of the will, and that the other allegations in reference to the assignments made by the defendant Blake of interest in her share of the estate are mere incidents in respect to the accounting and construction.

The judgment should be affirmed, with costs and with leave to the appellant, upon payment of the costs of this court and of the court below within twenty days after notice of the entry of the order upon this decision, to withdraw her demurrer and serve an answer.

Beadt and Daniels, JJ., concurred.

Judgment affirmed, with costs, and with leave to appellant, upon payment of the costs of this court and of the court below within twenty days after notice of the entry of the order upon this decision, to withdraw her demurrer and serve an answer.


author: Van Brunt, P. J:

text:
    HESTER BATES, ALTHEA SCHMID and ISAIAH KEYSER, Appellants, v. WILLIAM H. JOHNSTON, BENJAMIN B. JOHNSTON and LUCRETIA JOHNSTON, Respondents, Impleaded with MARY BINGHAM, Appellant.

      Landlord and tenant — a covenant to pay rent, and a covenant to pay at the expiration of the lease one-half of the appraised value of buildings erected by the tenant, when dependent covenants.

    A lease of certain premises in the city of New York contained covenants for the payment of rent, taxes, etc., by the lessees, and a grant, in consideration thereof, for the period of twenty-one years from May 1, 1867. It further provided, that in case of the non-payment of rent, or, if default should be made in any of the covenants contained in the lease, that the lessors should have the right wholly ta re-enter upon said premises and remove all persons therefrom, and the same to have again, repossess and enjoy as in their first and former estate. The lessees-covenanted to erect a building upon the demised premises of certain dimensions, which it was agreed should, at the expiration of the term, be appraised, and either one-half of the appraised value be paid to the lessees or that the lessors would give a renewal of the lease.
    The lessees made default in the payment of rent and taxes during the term, and, in December, 1879, were dispossessed in summary proceedings.
    The term of the original lease having expired in May, 1888, an action was brought by the successors of the lessees to have the value of the building, which had been, erected by the lessees, appraised and to have one-half of its appraised value paid to the plaintiffs.

      Held, that the provision of the lease that in case of a default upon the part of the lessees the lessors might re-enter and enjoy the premises, as in their first and former estate, showed an intention that, in case of a default upon the part of the tenants, the whole estate should revert to the lessors unincumbered by anything that the lessees might have done.
    That the covenants as to the effect of a default, and as to the right to recover the appraised value of the building, were to be considered dependent, and not independent, covenants.
    Appeal by tbe defendant Mary Bingbam from a judgment of tbe Supreme Court, entered in tbe office of tbe clerk of tbe county of New York on tbe 20tb day of December, 1889, dismissing tbe complaint and awarding judgment to tbe defendants, William H. Johnston, Benjamin B. Johnston and Lucretia Johnston, against the plaintiffs, and against Mary Bingham; also an appeal by the plaintiffs from the same judgment.
    The action was brought upon a covenant made by tbe lessors in a lease, dated November 19, 1866, to pay at tbe expiration of tbe term granted, twenty-one years from May 1, 1867, in default of their granting a renewal for a like term, one-half of the appraised value of the buildings to be erected by the lessees on or before the 1st day of May, 1868.

      James M. Bishop, for the plaintiffs, appellants.

      L. Sanders, for defendant Bingham, appellant.

      Thompson & Boss, for the respondents.
   Van Brunt, P. J:

This action was brought to recover one-half of the value of buildings now standing on certain lots in the city of New York, which the plaintiffs claim to be due to them and the appellant Bingham from the defendants Johnston, the lessors, pursuant to the provisions of a lease of said property for twenty-one years from the 1st of May, 1867.

This lease contained covenants for the payment of rent, taxes, etc., upon the part of the lessees, and a grant, in consideration of the covenants contained in the lease, for the period' of twenty-one years. It also contained a provision that, in case of the non-payment of rent or if default should be made in any of the covenants contained in the lease on behalf of the lessees, that the plaintiffs should have the right wholly to re-enter on said premises and remove all persons therefrom, and the same to have again, repossess and enjoy as in their first and former estate, anything therein contained to the contrary thereof in anywise notwithstanding. The lessees covenanted to erect a building upon the premises of certain descriptions and dimensions, and the lease contained a mutual covenant by the parties that, at the expiration of the aforesaid term, the buildings upon the premises should be appraised, and either one-half of such appraised value paid to the lessees or the parties of the first part would give a renewal lease.

The lessees defaulted in the payment of rent and taxes, and in December, 1879, were dispossessed by summary proceedings. The term of the original lease having expired in May, 1888, the successors of the lessees brought this action to have the value of the buildings appraised, and the sum due and payable to the plaintiffs and the defendant Bingham, under the provisions of the lease, ascertained and determined, etc.

It might not be necessary to add anything to the opinion rendered by the learned judge who tried the cause in the court below, but, in view of the claim which is made because of the decision in the case of Finkelmeier v. Bates (92 N. Y., 172), it may not be improper to add one or two suggestions to the views which in said opinion were expressed.

It is undoubtedly true that in the case cited, where the covenants of this identical lease were under consideration, the court may have used language which might be construed’ into an affirmance of the claim of the appellants that the covenant to pay one-half the value of the building is an independent one, but no such question was ■before the court at that time, and the language used by the court was simply an answer to the question which was then before the court for its decision, and in no way was it attempted to forestall or to decide upon a claim such as is presented in the case at bar. All that was decided in that case was that the time fixed in the covenant to pay for the building was the expiration of the term, and that that phrase related to time, and not to the estate of the lessee.

The provision of the lease in regard to re-entry was to the effect that, in case of a default upon the part of the lessees, the lessors might re-enter, repossess and enjoy the premises in question as in their first and former estate. Now, if the lessors were under an obligation to pay for these buildings at the expiration of the term mentioned in the lease, and such obligation was a lien upon these premises, how was it possible for them to re-enter, have again, repossess and enjoy as in their first and former estate? Here is a clear intention shown by the contract itself that, in case of a default upon the part of these tenants, the whole estate shall revert, unincumbered by anything that the lessees may have done, to the lessors, who shall hold the premises thereafter as in their first and former estate. This seems to be a clear definition of the rights of these parties; and it seems to us that these covenants were considered by the parties to be dependent, and not independent. The lessees were to enjoy the premises and to have a right to payment for the buildings or a renewal of the lease upon condition of their performing the covenants contained in the lease. This necessarily followed from the fact that continued enjoyment of the premises by the lessees was undoubtedly contemplated, because the covenant for the payment for the buildings is coupled with a covenant to renew the lease, which would be impossible if the lease had ceased to exist years before the time to claim such a renewal had arrived. All these circumstances show clearly that the condition upon which the tenants were to be in a position to claim payment for the buildings was a compliance with the covenants in the lease. The grant is made in consideration of the rents, covenants and agreements mentioned in the lease. They were the consideration for the grant, and to say that the lessees may repudiate the consideration which they have to pay, and then claim performance of the covenants on the part of the lessors, does not seem to be equitable or just, and we do not think is the law.

We think, therefore, that the judgment should be affirmed, with costs.

Beady and Daniels, JJ., concurred.

Judgment affirmed,, with costs.


text:
    THIRD NATIONAL BANK OF SPRINGFIELD, Mass., Respondent, v. ORLANDO B. HASTINGS, doing Business under the Firm Name of HASTINGS & TODD, Appellant.

      Effect, as regards an accommodation maker of a note, of an acceptance of a dividend from the estate of the payee under the insolvency laws of another State by the creditor, a resident thereof.

    In an action brought against an accommodation maker of a note by a national banking association, located at Springfield, in the State of Massachusetts, the defendant, who resided in the State of New York, proved that the Hurlbut Paper Company, the payee of the note, for whose accommodation the note was made, was adjudged to be insolvent, under the laws of the State of Massachusetts, in proceedings duly had there; that the plaintiff proved its debt under the insolvency proceedings, which resulted in the release and discharge of the debtors, upon their paying twenty per cent of their indebtedness, which percentage was received by the plaintiff upon the note.

      Held, that the discharge of the Hurlbut Paper Company under the Massachusetts insolvent laws, and the acceptance of a dividend by the plaintiff, did not furnish a defense to the defendant.
    That, under the circumstances of this case, the appearance of the plaintiff, the creditor, in the insolvency proceedings, and the acceptance of the dividend, in no way deprived the accommodation maker of the note of any rights which he could have insisted upon, as against the debtor, had there not been such an appearance and acceptance of the dividend.

      Semble, that the rule is otherwise where the debtor and creditor do not reside in the same State.

      Qucere, whether the courts of the State of New York, as against a resident thereof, would give effect to a provision of the insolvent laws of the State of Massachusetts, providing that a discharge thereunder should not release or discharge a person liable for the same debt as partner, joint-contractor, indorser, surety or otherwise.
    Arreal by tbe defendant Orlando S. Hastings from a judgment of the Supreme Court, entered in the office of the clez’k of the county of New York on the 24th day of December, 1889, for $2,907.50, in favor of the plaintiff.
    The action was brought to recover upon a promissory note made by the defendant, under the firm name of Hastings <fc Todd, to the order of the Hurlbut Paper Company, by which company it was indorsed and delivered to the plaintiff.

      F. B. Candler for the appellant.

      J. I. Bishop, for the respondent.
   Yan Brunt, P. J.:

This action was brought to recover upon a promissory note made by the defendant under the firm name of Hastings & Todd to the order of the Huzdbut Paper Company, properly indorsed and delivered to and held by the plaintiff. The defendant made the note for the accommodation of the Hurlbut Paper Company, under which name Thomas O. Hurlbut and H. Co Hurlbut conducted business as copartners. The Hurlbuts were afterwards adjudged insolvent under the laws of the State of Massachusetts in proceedings instituted in the Court of Insolvency for the county of Berkshire in that State. The plaintiff proved its debt under the insolvency proceedings, which resulted in a composition and discharge of the debtors under said act, by which it was adjudged that upon the debtors paying into court a sum sufficient to pay to their creditors twenty per cent of their indebtedness a certificate of discharge should be granted them. They made the payment and the discharge was granted. The plaintiff received twenty cents on the dollar upon the claim proved, which claim included, among other things, the note in suit.

The plaintiff is a national banking association, organized under the United States statute, at Springfield, in the county of Hampden and State of Massachusetts, where it was located and had its place of business. The Hurlbuts were both residents of the State of Massachusetts, and the defendant was a resident of this State.

The question presented at the trial was whether the discharge of the Hurlbuts under the Massachusetts insolvent law furnishes a defense to the defendant as against his liability as maker of the note in suit.

The court directed a verdict for the plaintiff, and from the judgment thereupon entered this appeal is taken.

It is urged, upon the part of the plaintiff, that conceding that the defendant occupied the position of accommodation maker and the Hurlbuts were principal debtors, the discharge of the Hurlbuts in the insolvency proceedings would not discharge the liability of the defendant, because, under the insolvent laws of Massachusetts, it is éxpressly provided that a discharge shall not release or discharge a person liable for the same debt as partner, joint contractor, indorser, surety or otherwise. This proposition it does not seem to be necessary to decide in the disposition of this case. But it is doubtful whether the courts of this State, as against a resident of this State, would give effect to this provision of the statute law of Massachusetts in contradiction of its own policy in that regard. But we think there is another proposition which is fatal to the defendant’s contention, and that is the plaintiff, the owner of the debt, and the Hurlbuts, the debtors, were both residents of Massachusetts. The insolvency court acquired jurisdiction, both of the subject matter, viz., of the debt due to the plaintiff and of the persons, both debtors and creditor. The discharge of the debtors under the insolvent laws discharged the debt as to them, whether the creditor appeared or not, and, therefore the appearance of the creditor and the taking of the dividend in no way deprived the surety of any rights which he could have maintained had not such appearance been had.

It is a well-established principle that where debtor and creditor reside in the same State and the debtor is discharged by the insolvent laws of that State that the discharge is valid everywhere. And it is equally well settled that where a debtor and creditor are residents of different States a discharge under the bankrupt laws of the State where the debtor is domiciled will not operate as a discharge of the debt in the State where the creditor is domiciled. It was for this reason that it was held in the cases cited by the defendant that the appearance of the creditor in the bankruptcy court, and thus conferring jurisdiction upon the bankruptcy court, although not a resident of the country over which the court had jurisdiction, and the accepting of a dividend, discharged the surety. In such a case, unless the creditor had intervened, the discharge would have had no effect upon the debt in the jurisdiction where the creditor and the surety lived, and the property of the debtor which might come into that jurisdiction could be made subject to the payment of the debt. But no case has been found, and no principle adverted to, where the debtor and creditor reside in the same State, and the discharge would be operative whether the creditor appeared and proved his debt or not, holding that the proving of a debt or the taking of a dividend by the creditor discharges the surety.

The whole theory of these decisions is that the surety is entitled to be subrogated to the rights of the creditor; and that in a case where the discharge becomes operative as to the debtor the right of the surety is cut off without his having an opportunity to be heard ; and where that is done voluntarily by the creditor he cannot subsequently come upon the surety for any portion of the debt. But where the discharge has taken place involuntarily, or where, whether the creditor appeared or not, the same result would have followed, except that the surety’s liability would have been increased because the debt -would not have been diminished by the dividend, the rule in the cases cited cannot apply.

It is urged, upon the part of the appellant, that the mere fact that the creditor resided in the State with the bankrupt would not destroy a foreign surety’s right to subrogation. But in this proposition the learned counsel overlooks the principle which is conceded in the cases of Gardner v. Oliver Lee's Bank (11 Barb., 558) and Phelps v. Borland (103 N. Y., 406) that if the bankrupt court acquired jurisdiction of the creditor without his intervention, the debt would have been discharged and the surety would have lost no rights. And those cases were decided as they were, only because the creditor voluntarily intervened, and gave the court jurisdiction to so discharge the debt that the rights of the surety were gone. If a bankruptcy court, having jurisdiction of the person of the creditor, could not discharge the debt so that the right of the surety would be extinguished, it could not do so where the creditor having appeared, being a non-resident, thus conferred jurisdiction. But the contrary is the rule recognized by the cases above cited, viz., that where the court has jurisdiction of the person in proceedings of this description, where the creditor is a resident within the jurisdiction of the insolvency court, its decree discharges the debtor absolutely, and there are no rights against the debtor to which anybody can be subrogated.

The judgment should be affirmed, with costs.

Brady and Daniels, JJ., concurred.

Judgment affirmed, with costs.


author: Van Brunt, P. J.: Bartlett, J.:

text:
    THE PEOPLE OF THE STATE OF NEW YORK, Respondent, v. JAMES DOYLE, Appellant.

      Discussing before the jury the defendants failure to go upon the stand in a criminal case—is ground for a new trial—felonious intent in grand larceny—evidence as to.

    Upon the trial of a person accused of crime the district attorney has no right to discuss before the jury the refusal of the defendant to go upon the witness stand; and when such remarks are made and objected to, either in the opening or summing up of the case, and no attempt is made by the court to repair the damage done by cautioning the jury in this regard, the defendant will be awarded a new trial upon appeal.
    Such action upon the part of the district attorney is a clear violation of law and prejudicial to the defendant, putting him in a false position before the jury and compelling him to testify when otherwise he might not have done so.
    On the trial of a prisoner, charged with grand larceny in the first degree, it is necessary that the prosecution should establish a felonious intent upon the part of the prisoner, and where the offense consists in drawing out from a bank money which had been deposited there in the names of the prisoner and another party, since deceased, it is error to exclude evidence as to statements made by such deceased party prior to his death, in reference to his having made a gift of the money belonging to him in the bank to the prisoner, even though such gift may have been ineffectual in law, as the evidence would be pertinent upon the question of intent.
    Appeal by the defendant James Doyle from a judgment, rendered against him at the Court of General Sessions of the county of New York on the 18th day of April, 1889, convicting him of the crime of grand larceny in the first degree.
    ' The defendant was indicted for misappropriating the sum of $7,500, the property of Thomas G. Doyle, as administrator, etc., of William Doyle, deceased. William Doyle was a brother of the defendant and died in 1887.

      J. B. Henzleman, for the appellant.

      M. Semple, for the respondent.
   Van Brunt, P. J.:

The manner in which the assistant district attorney conducted the prosecution of this case was certainly of a character which should call for the censure of the court, and which requires a reversal of the conviction. In his opening of the case he stated to the jury that he was curious to know whether the defendant would go upon the stand, since he had found Lee, and have anything to say about how much money he spent with Lee ; that the defendant might listen to prudent counsel and not go on the stand.

To these remarks the counsel for the prisoner objected and excepted; and called the attention of the court to them, but all that was done was, the court ordered his objection and exception to be noted.

It is quite well settled that the prosecution have no right to predicate anything upon the refusal of the defendant to go upon the stand. In the case of Ruloff v. People (45 N. Y., 222) the court, in adverting to this subject, say: “ Neither the prosecuting officer or the judge has the right to allude to the fact that a person has not availed himself of this statute; and it would be the duty of the court promptly to interrupt a prosecuting counsel who should so far forget himself and the duties of his office as to attempt to make use of the fact in anyway to the prejudice of a person on trial. An allusion by the judge to the fact, unexplained, cannot but be prejudicial to a person on trial; and a provision intended for his benefit will prove a trap and snare. It is an intimation to the jury of the effect upon his mind of the omission of the accused to explain by his own oath, suspicious and doubtful facts and circumstances, as affecting the question of guilt or innocence.”

The remarks made by the assistant district attorney to the jury were a challenge to the defendant which compelled him to go upon the stand, or the fact of his refusal would necessarily be considered by the jury to his prejudice. This the attorney had no right to do. He had no right to advert, in any manner or way, upon the question as to whether the defendant would become a witness. And if he had no right to suggest the fact in his summing up, he had no right to press it upon the minds of the jury at the opening of the trial, It does not appear that there was any attempt, upon the part of the learned judge presiding, to repair the damage done by cautioning the jury in this regard. All that the defendant received was the notation upon the record of an objection and exception.

It seems to us that the action of the assistant district attorney was a clear violation of law which was prejudicial to the defendant, putting him in a false position before the jury and compelling him to testify when otherwise he might not have done so. The gravity of this error is enhanced by the course of the testimony, because we find that this defendant had been examined in supplementary proceedings upon a judgment obtained against him to recover the very money which is the subject of this indictment. And evidence as to what he testified to upon this examination was offered. It is true it was not objected to, but it was clearly improper and incompetent, as such evidence could not, by the provisions of section 2460 of the Code of Civil Procedure, be used against him in a criminal action or a criminal proceeding. If it were not for the exemption contained in this section, a party might shield himself always in supplementary examinations where there was any question of fraud by claiming his privilege, and it was to avoid the failure of justice, by reason of this claim, that it was enacted that evidence given under these circumstances should not be used against the witness.

There is, however, another question raised by an exception where evidence seems to have been improperly excluded. One of the vital questions in the case was as to the relations of William Doyle and the defendant in respect to certain moneys which belonged to William Doyle and which he had deposited in certain savings banks. It was in evidence that William Doyle had changed these deposits from his own individual name to that of himself and the defendant, and in respect to one deposit he opened a new account in his name in trust for the defendant.

It was claimed by the defendant that the bank-books were delivered to him and he had charge of them from that time until he drew out the money, after the death of William. The wife of the defendant was being examined upon the part of the defendant, and she stated that she remembered a conversation between William Doyle and herself in the last days of July or 1st of August, 1885,' in reference to her husband and some bank-books, and that her husband was not present when they had that conversation. She was then asked this question : c‘ State the conversation which you then had with William.” This question being objected to, the counsel for the defendant stated that he intended to prove by the witness declarations of William Doyle to the effect that he had in his lifetime made a gift to the defendant of the money which the defendant was charged with misappropriating. The' objection was sustained and the evidence excluded. This seems to have been material testimony upon the question which has already been suggested. Apart from the legal rights of the parties, it was necessary to establish upon the part of the prosecution a felonious intent upon the part of James Doyle in the drawing and using of this money. If William Doyle had attempted to make a gift of this money to James Doyle, and James Doyle had innocently believed that such gift had been made and had acted upon that‘belief in the drawing of the money, then the felonious intent necessary to make a crime would be absent, even though, as against the heirs of William Doyle, the gift may have been ineffectual. Whether such a gift could be effectual or not it is not necessary to determine. The evidence certainly was pertinent upon the question of the intent with which James Doyle possessed himself of this money, and he should have had the benefit thereof.

Upon the whole case, therefore, we think that the conviction should be reversed and a new trial ordered.

Barrett, J., concurred.

Bartlett, J.:

I concur upon the first point discussed in the opinion.

Judgment reversed and new trial ordered.


author: Brady, J.:

text:
    WILLIAM M. HALL, Appellant, v. SUSAN L. ROBERTS and JOHN F. PATTERSON, as Surviving Executors of MARSHALL O. ROBERTS, Deceased, Respondents.

      Agreement to pay on the sale of a vessel and to give notice of the sale—when the statute of limitations begins to run.

    An action was brought, on August 2, 1888, to recover upon a written obligation, in which the defendants’ testator admitted himself to be indebted to the plaintiff in the sum of $30,000, which was to be due and payable when the steamship “Illinois” should be disposed of by sale, gift or loss, the agreement stating that said sum should not be “due or payable until a sale and transfer of the said steamship Illinois is perfected, in which event 1 hereby promise and agree to notify said Hall of her disposal, and within ten days thereafter to pay the full amount.” A sale of the vessel took place in 1864, about eight months after the contract was made, of which the plaintiff was not informed until in 1887, although inquiries had been made of the testator, in respect thereto, prior to his death in the year 1880.

      Held, that the money was neither due nor payable until the expiration of ten days after the plaintiff had received notice of the sale of the vessel; and that the statute of limitations did not begin to run until the plaintiff ascertained, in 1887, that the vessel had been sold.
    Appeal by the plaintiff from a judgment of the Supreme Court, entered in the office of the clerk of the county of New York on the 8th day of April, 1890, dismissing the plaintiff’s complaint after a trial at the New York Circuit.
    The action was brought to recover under an agreement of which the foliowing is a copy:
    “ Know all men by these presents. That I, Marshall O. Roberts, of the City, County and State of New York, hereby acknowledge myself indebted to William M. Hall of Brooklyn, Kings county, and State of New York, in the sum of thirty thousand dollars, which amount will be due and payable to the said Hall, his heirs, executors or assigns, when the steamship Illinois of twenty-five hundred tons burthen, which is in the market, shall be disposed of by sale, gift or loss, and which is held by me to sell and dispose of, and from the proceeds to pay said Hall the amount above named, and
    “ It is agreed and understood between the aforesaid Roberts and Hall, that neither the whole or any part of the above sum of thirty thousand dollars, will be due or payable until a sale and transfer of the said steamship Illinois is perfected, in which event I hereby promise and agree to notify said Iiall of her disposal, and within ten days thereafter pay the full amount in the lawful currency of the United States as stipulated above.
    “MARSHALL O. ROBERTS, [seal.]
    “ Witness:
    “ Theodore E. Tomlinson,
    “New York, February 10th, 1864.
    “ [U. S. Int. Rev. Stamp.] ”

      George F. Betts, for the appellant.

      Almon Goodwin and John Yard, for the respondents.
   Brady, J.:

This action was brought to recover the sum of $80,000, with interest, upon a written obligation, in which Marshall O. Roberts, the defendants’ testator, admitted himself indebted to the plaintiff in the sum mentioned, and which was to be due and payable when the steamship Illinois, of 2,500 tons burthen, should be disposed of by sale, gift or loss, and which he held to sell and dispose of, and from the proceeds pay the plaintiff the amount named. But in that instrument it was agreed between Messrs. Roberts and Hall that neither the whole nor any part of the sum mentioned should be due and payable until the sale and transfer of the steamship was perfected, in which event Roberts promised and agreed to notify Hall of her disposal, and within ten days thereafter pay the full amount in lawful currency of the United States, as stipulated.

It was conceded on the trial that this action was not commenced until the 2d of August, 1888. After the learned counsel for the plaintiff had presented in his opening the facts and circumstances attending and surrounding the claim the defendants moved to dismiss the complaint. The motion, after the admission stated, was predicated of the counsel’s opening, from which it appeared that Mr. Roberts had died in the year 1880 ; that the plaintiff had made inquiries of him as to the sale of the vessel, and that Mr. Roberts had denied that the vessel was sold; but that after the death of Mr. Roberts he had employed persons to ascertain whether the Illinois was sold but was unable to obtain information until 1887, when he learned from Mr. Patterson, an executor of Mr. Roberts, that it had been sold in 1864, about eight months after the contract was made, and, further, that the bill of sale was not registered nor recorded in the customhouse until 1865. It thus appears that up to the year 1880 inquiries were made by the plaintiff of Mr. Roberts as to the sale of the vessel, but that no information of that circumstance was given him, and that he did not learn of the sale of the vessel until 18S7, less than two years prior to the commencement of this action, and notwithstanding that he had employed persons to discover whether the sale had or had not taken place.

When the motion to dismiss the complaint was made, and after the admission which has been referred to, the learned justice presiding asked the counsel for the plaintiff if he had any acknowledgment in writing or any evidence, further than that he had stated, to take the cause of action out of the operation of the statute of limitations; and his answer was “No, sir,” whereupon the motion was granted and the plaintiff duly excepted.

It will be observed, upon an examination of the agreement, that neither the whole nor any part of the sum of $30,000 to be paid, should become due or payable until the sale and transfer of the vessel was perfected, and until within ten days after the notification of such sale by Mr. Roberts, a notification which was_ never given; and, therefore, the statute of limitations had not begun to run under the terms of the contract. The money was neither due nor payable until the expiration of ten days after the notification mentioned. This was not only an appropriate but a very reasonable provision in the agreement, inasmuch as it appears from a previous part of it, that the vessel was held by Mr. Roberts to sell and dispose of, and he was to pay to the plaintiff from the proceeds of the sale, if one were made, the sum mentioned in the agreement.

The conclusion expressed, as to the notice to be given, seems to be a very plain proposition, although no authorities have been found upon the precise question presented The nearest approach to it that has been found is the case of Keller v. The West, Bradley & Cary Manufacturing Company (39 Hun, 348). There it appeared that the defendants were to render an account on or before the tenth day of each and every month, and that the payments should be made within ten days after the. making of such return, the account relating to the number of pounds of wire hardened and tempered by the use of a patented invention. The returns were made regulai'ly down to and including the 3Qth of September, 1871, but from that day to the 24th of August, 1872, no returns were made as contemplated, and they were refused, although the use of the invention was continued. The action was commenced on the 22d of August, 1878, and the statute of limitations was interposed as a defense. It was rejected, however, upon the ground that the omission of the defendant to render monthly accounts for the period mentioned prevented the running of the statute against its obligation to make the payments within ten days after making the returns, inasmuch as no returns having been made, the period of ten days had not been set in motion; the statute had at no time commenced to run and could not, under the agreement, as long as the returns were not made.

There is no difference in principle between that and the present case. Here no part of the $30,000 could become due and payable until the expiration of ten days after notice of the sale of the vessel by Mr. Roberts, in whose custody the ship was placed for that purpose, and the plaintiff had a right to rely upon Mr. Roberts’ performance of the contract in accordance with its terms. He seems, however, to have been more vigilant than the contract required, inasmuch as he made frequent inquiries of Mr. Roberts from the time of the making of the agreement until 1880, and, it would seem, up to the death of Mr. Roberts, as to whether or not a sale had been accomplished, and was advised by him that none had been made.

In the one case there were no returns made, and consequently the statute did not apply; in the other no notice was given, and the statute, therefore, did not commence to run. As already stated, we can discover no difference in principle between the cases.

The learned counsel for the respondents seems to think that the decision of the question in regard to the statute of limitations was not concurred in, in that case, by a majority of the court; but this is an error.

The learned counsel for the appellant has urged upon the consideration of the court the doctrine of estoppel, and has cited a number of cases bearing upon the misleading statements of Mr. Roberts, and also upon the proposition that the statute of limitations has no application to this case, for the reason that Mr. Roberts was the trustee of an express trust. It is not, however, deemed necessary to proceed to the consideration of either of these propositions, and for the reason stated. The statute of limitations did not begin to run, at most, until Mr. Hall ascertained, namely, in 1887, that the vessel had been sold, the obligation to give notice resting upon Mr. Roberts and his representatives. The statements made in regard thereto are binding upon the defendants because the dismissal of the complaint was made upon the opening of the counsel for the plaintiff, which contained a statement of the facts and circumstances creating the claim, and characterizing and explaining the delay in the bringing of the action. The case is one which should have been submitted to the jury.

The dismissal of the complaint was, therefore, erroneous, and the judgment must accordingly be reversed and a new trial ordered.

Yan Brunt, P. J., and Daniels, J., concurred.

Judgment reversed and new trial ordered.


author: Beady, J.: Daniels, J.: Tan Brunt, P. J.:

text:
    MAX FRANKEL, Respondent, v. JOHN B. WATHEN, Appellant, Impleaded with Others.

      Principal and agent—ithat disclosure required of an agent acting for both the parties to a bargain — commissions of ari agent — account stated—when the minds of a principal and agent do net meet as to the latter’s commissions.

    In an action brought to recover commissions alleged to have been earned by the sale of whiskies, it appeared that the plaintiff, while acting as the general agent of the defendants in the sale of whiskies, was requested by the firm of Cook & Bernheimer to negotiate the exchange of a clay farm, owned by them, for whiskies. The plaintiff called the attention of the defendants to the farm, and an exchange was finally effected through his agency. The whisky was thereupon delivered and the defendants agi-eed to allow the plaintiff $1,000 for his commissions in this transaction, which amount was charged on the plaintiff’s hooks to the defendants’ firm, and was included in an account rendered hy him, which was received without objection by the defendants, and the amount thereof paid to the plaintiff by a remittance made prior to November 1, 1886.
    It appeared that the plaintiff had also obtained a commission of $250 from Cook & Bernheimer for selling the farm, a fact which he had concealed from the defendants.

      Held, that although an account stated is prima facie evidence, and will be deemed conclusive evidence of its correctness, between the parties, unless some fraud, mistake, omission or inaccuracy is shown, yet the converse of the rule is equally well established, namely, that if fraud be shown, the account loses its conclusive character and is subject to re-examination.
    Where an agent is acting in a double capacity, representing two persons, for each of whom he is expected to do his best, a knowledge by the principals of his duplicate character should be established, not by mere inference, but by evidence of a full disclosure or positive proof of knowledge, so that the seller or the buyer, as the case may be, may be advised of the exact relation of the agent to the other parties to the negotiations.
    Where a principal authorizes his agent, by letter, to sell certain property on condition that he waits for a time for his commissions, and the agent writes to his principal refusing to wait for his commissions, and the sale is made, the principal may enforce the condition as to the time of payment of the commissions.
    Appeal by the defendant John B. Watben from a judgment of the Supreme Court, entered in the office of the clerk of the countj of New York on the 12th day of November, 1889, after a trial before a referee, who reported in favor of the plaintiff.

      J. L. Bennett, for the appellant.

      Ferdinand Kurzman, for the respondent.
   Beady, J.:

This action was brought to recover commissions earned by the sale of whiskies, and also for services in superintending a farm belonging to the defendants, and for various sums of money laid out and disbursed for them and loaned and advanced to them, all of which they promised to pay. The jfiaintiff also alleged that from time to time he had rendered an account to the defendants, copies of which are annexed to the comjfiaint, upon which the defendants made various payments. He also alleges that the items charged in the account are true and correct in all respects.

The defendants denied any knowledge or information sufficient to form a belief that any of the work, labor or services were rendered for J. B. Wathen & Bro., or for the defendants in this action, or that any of the sums disbursed were expended other than as alleged or mentioned in the answer for the defendants or for J. B. Wathen Bros. & Co. or J. B. Wathen & Bro., but, on the contrary, alleged, on information and belief, that the liquors mentioned in the complaint were the property of and belonged to a corporation duly organized under the laws of the State of Kentucky, and known by the corporate name of the J. B. Wathen & Bro. Co., and that all the services rendered by the plaintiff, mentioned or referred to in the complaint, were done or performed for the corporation, and that all the moneys expended by the plaintiff were expended for and in doing business for the said corporation, and not otherwise, as the plaintiff at all times well knew; but whether all the services for which charge is made or what part thereof were rendered, or whether, or what part of the disbursements therein were charged, the defendants denied any knowledge or information sufficient to form a belief. The defendants, further answering, alleged, as a separate defense, on information and belief, that the claims and demands of the plaintiff, and all of them set out in the complaint, against the defendants and against the corporation had been fully paid. The defendants, further answering, set up counterclaims, on information and belief, arising from money advanced to the plaintiff and for property of the defendants in the hands of the plaintiff; and the whole answer, from supposed inconsistencies, is criticised by the learned counsel for the respondent as an old device, suggestive of the hunter so aiming his rifle as to hit the animal in the hushes if it was a deer and to miss it if it was a calf.

The question presented in limine, however, is whether the services were rendered to the firm of John B. Wathen & Bro., or the corporation named John B. Wathen & Bro. Co. It is conceded that there was a firm in Louisville designated J. B. Wathen & Bros., which began business in 1815 and which was continued until 1885, when it is insisted it was merged in a corporation under the laws of the State of Kentucky, known by the corporate name of the J. B. Wathen & Bro. Co.

There does not seem to be any doubt that the asserted change took place, but the firm and the corporation, nevertheless, seem to have gone along pari passu together, so far, at least, as the plaintiff is concerned, a circumstance which arose doubtless, in part at least, from the fact that J. B. Wathen was the president of the company, inasmuch as he was not advised of the merger asserted, and which it may be said actually took place. His contract was made with the firm, and not with the corporation, and was so continued, the evidence to establish which is abundant, and, therefore, justifies the finding of the referee, although there are some facts and circumstances, perhaps, bearing upon the asserted knowledge of the plaintiff that this change had taken place, but not at all sufficient to overcome the correspondence and other facts and circumstances proven and employed for the purpose of establishing the plaintiff’s ignorance of the change. And it may be said that a perusal of the testimony creates the impression that the affairs of the corporation were so conducted, Mr. J. B. Wathen being the principal active person in both; that the firm was continued as a distinct organization in its relations with the plaintiff. The referee has so found and invoked, on behalf of the plaintiff, the pi’oposition well established by authority, that the dissolution of a firm, its discontinuance, or any change in its character, will not affect persons dealing with the copartnership, unless actual notice be given. (See Bates on Partnership, §§ 890, 611; National Shoe and Leather Bank v. Herz, 89 N. Y., 629; American Linen Thread Co. v. Wortendyke, 24 id., 550.) On this subject the referee, in speaking of certain letters that were signed J. B. Wathen & Bro. Co,, and which he justly says refer to a corporation of that name, observed as follows: “ The striking fact, however, appears, that throughout this long correspondence, the defendant John B. Wathen gave no distinct notice to the plaintiff of the organization of a corporation or of any change in his business, nor direction of any kind to charge any other concern or corporation, except what might be inferred from the signing of letters, and, in May, 1887, the denial that Mr. Bond was vice-president of the company.” There was, in other words, no such proof on the subject as would necessarily require the plaintiff to look upon his' employers as others than the members of the firm, and thus, by a proper legal notification, be required to sever his connection with it.

The referee further says: It must be found as a matter of fact that the defendant Wathen represented himself to be engaged in business under a firm name; that such representation was made in such a manner as to induce the plaintiff to rely upon it; the plaintiff did rely upon it, and, as a conclusion from the facts, it must be held that he is estopped from denying the copartnership.” This, however, is a mere reiteration of the fact in a different form that the plaintiff was not aware of the change which was made, had received no legal notice of it, and, therefore, was not concluded by it, or liis right in any way affected by it to the compensation for the services rendered to the firm, as he understood it to exist.

The defendants have made a gallant struggle against the effect of the evidence and the rule of law suggested, but in vain. On that issue the referee must be sustained.

The general liability of the defendants having been thus established, the referee proceeded to examine the claims of the plaintiff which were disputed, namely, the commission for the sale oí 2,500 barrels of whisky to Cook & Bernheimer in exchange for a clay farm owned by them, the alleged sales of “ Criterion ” whisky in Philadelphia by the plaintiff, the compensation for his services in managing the farm mentioned, and commissions for the sale of 1,000 barrels of whisky to Cook & Bernheimer in exchange for the yacht “ Sea Witch.”

As to the first, namely, the sale of 2,500 barrels of whisky in exchange for a farm, it appears that the plaintiff, while acting as the general agent of the defendants for the sale of their brands of whiskies within the limits prescribed, was requested by Cook & Bernheimer to negotiate the exchange of a clay farm owned by them for whisky. He called the attention of the defendants to the farm, and the exchange was finally effected through his agency. The whisky was thereupon delivered, and the defendants agreed to allow the plaintiff $1,000 for his commission in this transaction, which amount was charged on the plaintiff’s books to the defendant’s firm and included in an account rendered by him, and which was received without objection by the defendants, and the amount thereof paid to the plaintiff by the remittance made prior to November 1, 1886. The correctness of the item was not disputed until the trial of the action, although the defendant insisted that the corporation of J. B. Wathen & Bro. Co., and not he, was subject to the liability, if any. It was disputed upon the ground that the plaintiff had obtained a commission of $250 from Cook & Berheimer for selling the farm, a fact which he concealed, and was, therefore, guilty of such misconduct and fraud as to forfeit his rights to any commission from the defendant, who thus, even if there was an account stated, established his right to open it.

It is true that an account stated is prima facie evidence, and will be deemed conclusive between the parties unless some fraud, mistake, omission or inaccuracy is shown; but the converse of the rule is equally well established, namely, that if fraud be shown the account loses its conclusive character and is subject to re-examination and a contest. The learned referee, however, arrived at the conclusion that the defendant knew, whilst the transaction was going on in reference to the farm, that the plaintiff was also acting as the agent of Cook and Bernheimer, and was. therefore, not subject to the rule clearly stated in the case of Gardner v. Ogden (22 N. Y., 347), that where a person stands in the inconsistent relations of both buyer and seller, there are dangers, and it is not relevant to say that it is impossible there could be any in a particular case. And, as said by Lord Cranworth and quoted in that case: “An agent has duties to discharge of a fiduciary character toward his principal; and it is a rule of universal application that no one having such duties to discharge shall be allowed to enter into engagements in which he has or can have personal interest conflicting, or which possibly may conflict, with the interests of those whom he is bound to protect. So strictly is this rule adhered to, that no question is allowed to be raised as to the fairness or unfairness of a contract so entered into.” And, further: “It may sometimes-happen that the terms on which a trustee has dealt, or attempted to deal, with the estate or interests of those for whom he is a trustee, have been as good as could have been obtained from any other person ; they may even, at the time, have been better. But still so inflexible is the rule that no inquiry on that subject is permitted.”

In the case of Claflin v. The Farmers and Citizens’ Bank (25 N. Y., 297) Judge Smith says: “The rule is applicable to all persons standing in a trust relation. The principal is entitled to the exercise in his behalf of all the skill, industry and ability of his agent, and to liis intensest fidelity to his trusts.” The 'same question was discussed in Murray v. Beard, (102 N. Y., 508), by Justice Folgeb, who, in the course of his opinion, said: “An agent is held to ubemmafides in his dealings with his principal, and if he acts adversely to his employer in any part of the transaction or omits to disclose any interest which would naturally influence his conduct in dealing with the subject of employment, it amounts to such a fraud upon the principal as to forfeit any right to compensation for services.” The question in such cases does not, therefore, turn upon the point of whether there is any intention to cheat or not, but upon the obligation arising from the fiduciary relations of the parties to make a frank and full disclosure. (Story’s Eq. Jur., § 316; see, also, Martin v. Bliss, 57 Hun, 157, a distinctive case on the subject.)

The rule governing the subject suggested is, therefore, so strict and so vigorous, so sensible and so just, that when the person is acting in the double capacity of representing two persons, for each of whom he is expected to do his best, a knowledge of the duplicate character should be established, not upon mere inference, but upon a full disclosure or positive proof of knowledge, so that the seller or the buyer, as the case may be, may be advised of the exact relation of the agent to the parties conducting the negotiation. There is no such evidence in this case. At most, there is a mere suggestion that Cook & Bernheimer relied upon the plaintiff’s judgment as to the selection of the whisky which was to be given for the farm. This, said the learned referee, “ is some evidence of the fact that Mr. Frankel was employed by Mr. Cook to negotiate the exchange, and that Cook & Bernheimer relied upon his judgment and skill in the transaction.” There is no pretense that there is anything more than an intimation, inferentially arising, that the defendants knew that Cook & Bernheimer were to compensate the plaintiff for his services in securing the exchange. For these reasons it is thought that the referee was in error in all his views affecting the Commission of a thousand dollars, which was to have been paid to the plaintiff for the exchange which has just been considered. It should have been rejected in every aspect in which it may be legally considered.

An examination of the case has resulted in the conclusion that the commission on the sales of “ Criterion ” whiskies in Philadelphia, the facts and circumstances relating to which were elaborately con. sidered by the referee, should be allowed as found by him. The third disputed item, namely, the claim for services in managing the farm, was found against the plaintiff, and, therefore, requires no consideration. The last item in dispute, namely, the commissions for the-sale of 1,000 barrels of whisky for Cook & Bernlieimer, in exchange for the yacht Sea Witch,” allowance of which was made by the referee, had not been earned at the time this action was commenced. On the subject of this exchange, which embraced not only the yacht mentioned but Southern lands, a correspondence had taken place between the parties’ which resulted in Mr. Wathen’s writing a letter to the plaintiff in relation thereto, and in which he said : “ If you make a trade on the basis of a thousand barrels, we should expect you to wait for your commissions until we can realize something on the yacht.” That letter was dated the 15th of November, 1886, and written from Louisville, Kentucky. On the eighteenth of November the plaintiff wrote to the defendant Wathen stating, Yours of the 15th to hand and noted,” and it contains a statement of the proposition as it then stood, and further refers to the special arrangement in reference to the commission, saying: “ In your letter you say that, in case the trade is consummated for only one thousand barrels, you will expect me to w7ait for my commission until the yacht is disposed of. Now, you know very well that I am not very particular. It was not until some time after the completion of last year’s contracts that I commenced drawing on account of my commission. and, in fact, have not drawn it all yet, although on several occasions I required the money in my business; but I certainly hold that my commissions are due me immediately on the completion of contracts, although I may not always wish to draw on you for same at once, especially when you require funds yourself.”

The learned referee in dealing with this question says the minds, of the parties did not meet, and he, therefore, fails to find that the sale was effected on the express condition that the payment of commission should be deferred until the yacht was disposed of. It does not appear that the sale which was made was authorized by the defendants in any other mode than that suggested by the letter of November fifteenth, and which, in the ordinary course of mail, would have reached New York on the seventeenth of November,, two days after it was written, and which was, in fact, received by the plaintiff before the sale took place.

The testimony in regard to the transaction presents some features perhaps worthy of comment, but which it is not needful here to indulge in, the referee having placed his decision upon the proposition, as suggested, that the minds of the parties did not meet. The mind of the defendant must prevail here, and the letter containing the condition having been received prior to the sale, controls the claim of the plaintiff and limits his right of action for the commissions to the time of the sale of the “ Sea Witch ” or other disposition of her was made. His right of action did not accrue until that event occurred, unless the defendant acted collusively, or designedly delayed the sale or disposition of the vessel beyond a reasonable time.

The result of this review is, therefore, that the judgment appealed from must be modified by striking out the recoveries of the commissions allowed for selling the farm and the “ Sea Witch,” and affirmed for the balance, without costs to either party.

Daniels, J.:

I concur except in the result. There should be a new trial unless the plaintiff shall stipulate to deduct the items concluded to have been erroneously allowed by the referee. And in case of the service of such stipulation then the judgment as thereby modified should be affirmed, without costs of the appeal.

Tan Brunt, P. J.:

I concur in modification suggested by Judge Daniels.

Judgment modified, as stated in opinion, and as modified affirmed, without costs of the appeal.