Whittemore v. Judd Linseed & Sperm Oil Co. — 16 Daly (N.Y.) 290

Majority

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William L. Whittemore, as Administrator, etc., of Henry W. Hubbell, Deceased, Appellant, against The Judd Linseed & Sperm Oil Company et al., Respondents.

(Decided June 2, 1890.)

Headnote

In an action against H. and T. on a joint liability, H. made default, and judgment was rendered against T. on trial by a referee; but the plaintiff entered a several judgment against each of them. Subsequently the plaintiff assigned to L. its judgment so entered against T., with all its claims against T. individually, expressly reserving its rights against the joint property of T. and H. and the individual property of H. L., after-wards, as owner of the claims of the plaintiff against T. and H., executed . a release thereof to H.; and thereafter the plaintiff assigned to L. all its claims against the joint property of T. and H. The plaintiff having,after-wards issued execution on the judgment against H., he brought suit to restrain its collection, claiming that he was discharged by the release of L., on the ground that the judgment should be regarded, in equity, as joint. Held, that he could not complain that the plaintiff therein sought to take advantage of the fact that it was too late to correct the error in the entry of the judgment.

Towards the end of the trial of such action to restrain enforcement of the execution, a motion was made to amend the complaint so that L., who was a party defendant, might be compelled personally, to indemnify H. if payment of the judgment should be enforced. Held, that this was properly refused, as such amendment would introduce a cause of action which was not consistent with the original cause of action, and as to which, being a cause of action for damages for fraud or (Jeceit, L. would be entitled to a trial by jury.

Appeal from a judgment of this court entered on the dismissal of the complaint on trial by the court without a jury.

The facts are stated in the opinion.

William Q. De Witt and Edw. A. Smith, for appellant.

Joseph S. Ohoate, for respondent The Judd Linseed and Sperm Oil Company.

Daniel D. Lord and S. P. Nash, for respondent Lord.

In 1868 the defendant, the oil company, commenced an action against Henry W. Hubbell and Robert L. Taylor, to recover a certain sum alleged to be due from them as copartners. Hubbell made default, and Taylor put' in an answer denying his copartnership with Hubbell and his liability.as such copartner. The issues thus raised were tried before the late Judge Emott as referee, who reported in favor of the oil company against Hubbell for $40,950.29 and against Taylor for $43,420.70. Upon this report the company on the 27th of April, 1872, entered judgment against Hubbell and Taylor separately for the respective amounts above mentioned, at the same time, and by means of the same record or judgment roll, although there can be no doubt that the cause of action alleged in the complaint and found by the referee was a joint liability on the part of both defendants as copartners.

This action in equity was brought by Hubbell in his lifetime to have that judgment declared satisfied and discharged, and to enjoin the defendants from enforcing or collecting the same from him or his estate. During the pendency of the action Hubbell died, and it was revived in the name of the present plaintiff, his administrator, etc.

In October, 1867, Hubbell and Taylor executed assignments of their separate property and also an assignment of their joint property to John R. Gardner, Alexander P. Irvin, and Charles A. Sherman, and in February, 1868, the defendant herein, the oil company, and the assignees, entered into an agreement by which the latter guaranteed to the former that in case it established the liability of Taylor to pay its demands in the first-mentioned action it should receive fifty per cent, of such demands as a separate composition on the part of Taylor, an din full satisfaction of all their claims and demands against him or his estate; and thereupon the company agreed, pursuant to the statute provided in such case, to release and discharge Taylor and his individual estate from all further .claims, reserving for itself, however, anything that might remain due on its claims against Hubbell and his individual estate and against the joint estate of Hubbell and Taylor.

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After the entry of the judgments above mentioned, and on or about the 15th of August, 1872, the oil company assigned to the defendant Lord in consideration of $16,750, all its claims and demands against Taylor individually and against his individual estate, and all its right, title and interest in the judgment before mentioned as entered against Taylor for the sum of $43,420.70, and all its right, title and interest in and to the moneys due and to grow due under the same from Taylor or his individual estate. The assignment then contained this clause, viz.: “ And it is expressly understood that the said Judd Linseed-and Sperm Oil Company are to retain and do hereby expressly reserve all their claims and rights of every nature against the joint property and estate of Robert L. Taylor and Henry W. Hubbell, and against the individual property and estate of Henry W. Hubbell, it being intended hereby to transfer only such and any such claims as they may have against the said Robert L. Taylor individually, and his individual estate, in whatever way the same may be made available for the payment thereof.”

On the 30th of September, 1873, the oil company released the assignees of Hubbell and Taylor from all claims and demands which it might have against them, which release expressly reserved the oil company’s rights against Hubbell individually, or against any estate of his not then in the hands of the assignees.

On the 8th of August, 1874, the defendant Lord executed, as owner and holder of the claims of the oil company against Taylor and Hubbell, a release thereof to Hubbell. In October,. 1874, the oil company assigned to Lord all their claims and rights of every nature against the joint property of Taylor and Hubbell in the hands of their assignees under the before mentioned judgment for $43,420.70, giving Lord full power to ask and demand the same from the assignees of said joint estate, or from any person or persons whomsoever, excepting as against Hubbell and any individual or joint estate thereafter realized by him.

In April, 1876, the'oil company issued an execution against

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the property of Hubbell, upon the before-mentioned judgment of $40,950.29, claiming that the sum of $25,060.20 was still due thereon. Thereupon plaintiff’s intestate commenced this action to prevent its collection.

The case was first tried in the Equity Term for November, 1876, before Chief Justice Van Brunt, then one of the judges of this court. He dismissed the complaint, on the ground that the oil company never parted with its title to the judgment against Hubbell by reason of the assignments before stated, and that the defendant Lord did not have power to release Hubbell.

The evidence upon that trial was substantially confined to the documents before referred to, and the learned chief justice substantially held that, inasmuch as the judgment was entered against Taylor and Hubbell severally and not jointly, and as that judgment had never been modified, it was conclusive; and it was not worth while to discuss what would have been the effect of the papers which had been executed had the judgment been entered as a joint judgment, nor was it necessary to consider whether it ought to have been so entered, because, as he said, “in construing the various instruments which were executed, it is necessary to be governed by the actual condition of the record, and not by what I might think it should have been.....The judgments being several, I can see no reasons why the oil company was not at liberty to assign the judgment against Taylor, reserving all their rights against Hubbell. This it seems to me is all the oil company did by the assignment of August, 1872. .... By this assignment the defendant Lor,d could collect nothing whatever from Hub-bell or from the joint estate of Hubbell and Taylor, but was restricted to the individual estate of Taylor.”

From the judgment entered on this decision the plaintiff appealed to the General Term. Pending this appeal, and in January, 1877, Hubbell moved at the Special Term of this court, in the action of the oil company against him and Taylor, to vacate the judgment entered against him, on the ground that judgments had been entered against him and Taylor as

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several judgments, whereas it should have been joint against both, or to amend it so as to make it a joint judgment. On this motion Hubbell introduced, as part of the proceedings, the entire record in this action, down to and including the decision of Chief Justice Van Brunt. (See bound volume, Cases in Court of Appeals, Law Institute.) The motion was denied, and Hubbell appealed from the order denying it. He also appealed from the original judgment.

All these appeals were heard by the General Term of this court, in March, 1878, composed of Chief Judge Charles P. Daly, Judges Van Hoesen and J. F. Daly.

On the appeal from the judgment entered on the decision of Judge Van Brunt, separate opinions were written by each of these judges. Judge J. F. Daly was for reversal, on the ground that Hubbell and Taylor wrere in the original action sued as joint debtors and a single judgment demanded against them; the complaint charged them as copartners, Hubbell admitted this by failing to answer, and on the issues by Taylor the referee had found he was jointly and severally indebted with Hubbell, and therefore a joint judgment should have been entered against both defendants and not separate judgments against each; that notwithstanding the judgment had been.so entered, it should in equity be regarded as a joint judgment against both, and therefore the assignment of the oil company to Lord of their claim under the judgment as against Taylor was effectual to transfer the whole claim to Lord, and that consequently the release to Taylor was operative to discharge Hubbell from the. whole.

Chief Judge Daly and Judge Van Hoesen in their opinions agreed with Judge Van Brunt that the judgment as. entered was several and not joint, and they agreed that a new trial must be granted, for the reason, stated by Judge Van Hoesen, that evidence had been improperly excluded. Judge Van Hoesen concurred with Judge Van Brunt to the effect that the judgment could not be impeached collaterally in this action as a separate judgment, whether it ought to have been joint or not, and thus expresses himself, on the question.

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of a new trial: “ Having carefully read all the testimony, I am very much dissatisfied with the result o£ the trial. It is very evident that the merits of the case have not been made to appear. ... It appears to be more than probable that some understanding existed between The Judd Oil Company and Mr. Geo. De Forest Lord, which led Lord to believe that he had a right to give Hubbell a full and clear discharge. Mr. Lord is a man of character, and a lawyer of ability and experience. In August, 1874, he gave Hubbell a release from the judgment. From what did he derive power to execute such a release? The oil company would have the court believe, from an assignment made in October, 1874. Is it to be supposed that Lord acted without authority in August, 1874 ? Did he execute the release in August without the right to do so ? And did he in the following October procure an assignment from the oil company to cover and conceal his want of authority in August? Again, if the assignment, dated October 6 th, 1874, Avere Lord’s only authority for releasing Hub-bell, how was it possible for him to believe that he was empowered to grant such a release, Avhen the assignment in unmistakable Avords declares that the company reserves all its rights of every nature against Hubbell ? These are matters which the trial did not clear up, and which the witnesses did not explain. Had a more liberal line of examination been fixed, it seems probable to me that evidence might have been elicited showing that Mr. Lord acted throughout in the best of faith towards all parties, and that the company, either by an oral assignment or by some Avritten instrument which has been lost or destroyed, gave to Lord prior to August, 1874, ample authority to execute a release to Hubbell.”

The appeal of Hubbell from the judgment in the original action was dismissed upon the ground tiiat the judgment was regularly entered against Hubbell upon his failure to answer, and that so far as he was concerned no appeal would lie, and that the remedy of a party in case of judgment entered against him by default Avas by motion to vacate or correct it.

On the appeal from the order denying the motion to vacate

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or amend, the original judgment, three separate opinions were also written: Chief Judge Daly and Judge Van Hoesen concurring in reversing the order and in directing an order to be made correcting the judgment by making it a joint judgment against both, Judge Van Hoesen holding that there was not merely the irregularity of entering a separate judgment against each defendant, but that there was the unauthorized act of entering judgment against one of the defendants for a larger sum than the plaintiff was entitled to recover; and the Chief Judge holding that the judgment was wrongly entered as a separate judgment when it should have been entered as a joint judgment for tho amount found by the referee to be due; and in the course of his opinion, answering the point that inasmuch as Hubbell had filled his bill to restrain the prosecution by the Oil Company of proceedings against him he must abide by the result of that action, said : “ It appeared in the equitable action that the judgment • ought to have been entered up as a judgment against both defendants jointly for the same amount, but the plaintiff failed because it appeared by the record that the separate judgments were entered up against each of the defendants for different amounts; ” and agreed with Judge Van Hoesen that the entry of the judgment was unauthorized and not irregular merely. Judge J. F. Daly, in effect, held that the judgment as entered was a joint judgment, and not several, and there was therefore no occasion to amend or correct it; he was therefore for the affirmance of the order appealed from.

From' this order made by the General Term, an appeal was taken by Hubbell to the Court of Appeals. In that court the order of the General Term was reversed and the order of the Special Term affirmed, all of the judges concurring except the Chief Judge, who was for a dismissal of the appeal, As before stated, the record of this action, down to the trial and decision of Judge Van Brunt, was before that court. The counsel for Hubbell took the express ground that the error in the judgment was not a mere irregularity but a substantial error. The court in its opinion says: .“As the

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judgment was rendered on the 27th of April, 1872, and the order did in effect s.et it aside and was made on motion, notice of which was not served until January, 1877, it is apparent that it is necessary to determine whether the cause upon which the court acted was or not an irregularity and nothing more.” The court then recited the proceedings in the cause up to judgment, and proceeds : “ The plaintiffs at the same time and by means of the same record or judgment roll, took judgment against the defendants separately, as stated in the order to show cause. This was clearly irregular, but we think it was nothing more. The plaintiffs did not adhere to the prescribed rule or mode of proceeding, by which they were entitled to a joint judgment and which a due and orderly conduct of the suit required them to take. But this defect was merely technical, and does not affect any substantial right of the adverse party. It does not in any way increase the liability of the defendant, for upon each partner rests an absolute liability for the whole amount of every debt due from the partnership; and although originally a joint contract it may be separate as to its effects. Though all are sued jointly and a joint judgment obtained and a joint execution taken out, yet it may be enforced against one only. Each partner is answerable for the whole and not merely for his proportionable part; and as the judgments were taken against each partner for a partnership debt, the partnership property is bound to the same extent as if there had been but one judgment for the whole against both partners ; nor does the form of the judgment in any way affect the debtor’s relations with his copartner, for if he pays the debt or judgment, he will be entitled to contribution or to a credit for the sum paid, in any accounting respecting the partnership affairs.” Thereafter the case was retried by Chief Judge Larbemore, and, as he says in his opinion, “ a vast mass of evidence has been taken, much of it, as appeared to me when admitted, clearly immaterial, but it seemed better to allow plaintiff every opportune to establish the parol assignment which the learned judges had suspected had been given. The re-

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suit is that I shall make the same findings as on the former trial, there being no sufficient evidence to show that any assignment, either by parol or in writing, of the individual judgment against Hubbell, was ever made to the defendant Lord.” Upon this appeal, it is unnecessary to determine whether or not a parol assignment of the judgment in question would be good and operative, as the learned justice who tried the case has found, and as we think on the evidence he was fully justified in finding, that no assignment either oral or written was proved. We agree with the learned Chief Justice that much, if not most, of the oral evidence admitted upon the trial was immaterial for the purposes of establishing an assignment, and at most it only went to prove that Mr. Lord was the attorney or agent of the oil company, and much of it was incompetent even for that purpose, as agency cannot be proved by the declarations of the agent, and the evidence referred to was merely evidence of what plaintiff’s witnesses recollected of Mr. Lord’s declarations.

In order to make the release executed by Lord to Hubbell effective, it must have been founded upon some assignment, either oral or in writing. The release was under seal, and was required to be under seal in order to be binding, as the law only recognizes that method of wiping out a debt without payment. But it is clear that this evidence did not in any way injure the plaintiff, and no further consideration of it is necessary.

Inasmuch as four of the judges of this court and at least six of the judges of the Court of Appeals have held that the judgments in question were several and not joint, and as four of the judges of this court have held, either sitting together or in individual opinions, that the record is conclusive against the parties in this case, and we feel bound to follow their opinions, it would be out of place for us to further discuss the question whether the judgment is or should have been joint and not several.

The plaintiff complains that a technical advantage is being, taken in this action because the judgments were' incorrectly

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entered as several judgments, and because it is now too late to correct such error. But the plaintiff is himself endeavoring in a court of equity to take advantage of a technical rule of law by which. he seeks to avoid the effect of a judgment without paying the just debts of Hubbell’s estate. A court of equity is for the purpose of a shield and not to put a sword in the hand of a suitor for such purpose. Had the judgment been originally entered as a joint judgment against Hubbell and Taylor, the release to the latter might have been executed-under the statute without releasing Hubbell, or other means, might have been found to effectuate what they really intended, and still to have held Hubbell’s estate.

Toward the end of the trial, plaintiff’s counsel moved for an amendment of the complaint so that Mr. Lord might be personally charged with indemnifying the plaintiff if the injunction were dissolved, and plaintiff was obliged'to pay the judgment held by the oil company. The court reserved its decision, which was not made until the whole case was decided. Testimony, however, was. taken at some length, bearing upon this question, and we think the court properly refused such amendment. First, because the amendment sought to introduce an element in this action entirely inconsistent with the groundwork of the action, which is that the judgment was in fact discharged, and any claim such as made by the plaintiff against Mr. Lord must go on the theory that the judgment was not discharged. Causes of action against several defendants can only be joined when they are all of the’ same nature and “are consistent with each other,” and “ except as otherwise provided bylaw, affect all the parties to the action” (Code § 484; Equitable Life Ass. Soc. v. Schermer horn, 60 How. Pr. 477 ). The exceptions alluded to relate to mortgage foreclosures and other cases where the mode of procedure is especially provided (Code § 1627; Vanderbilt v. Schreyer, 91 N. Y. 392 ). Second, the claim thus sought to be introduced was one for damages for alleged fraud or misrepresentation, or for deceit, and therefore was a legal and not an equitable claim, and one in which the defendant Lord,

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was entitled to a trial by jury. We have carefully read over the testimony on this subject and agree with the learned Chief Justice in the conclusion at which he in his opinion apparently arrived, that the evidence was not sufficient to establish any cause of action against Mr. Lord on these grounds, and that his course throughout the transactions had been upright and honorable.

For these reasons, as well as for the reasons stated by the learned Chief Justice in his opinion, which we have not herein alluded to, we think the judgment should be affirmed, with costs to both respondents.

Bisohoff, J. concurred.

Judgment affirmed, with costs.^[1]

* The judgment entered on this decision was affirmed on appeal to the Court of Appeals, April 14th, 1891.

Cases cited

Equitable Life Assurance Society v. Schermerhorn 60 How. Pr. 477 N.Y. Sup. Ct. p. 299
Vanderbilt v. Schreyer 91 N. Y. 392 N.Y. 1883-03-06 p. 299