Von Keller v. Schulting

Court, and the fact that the judgment of this court will he the final determination of the rights of the parties, impose upon the court the duty of a careful examination of all the questions properly presented for review here. The exceptions taken to the legal conclusions drawn by the referee from the facts found, present the question whether, assuming the truth of all such facts, the plaintiff was legally entitled to recover anything against the defendants or either of them. The alleged purchase by the plaintiff, of the defendant Schulting, of his right to one-third of the money arising upon the sale of a large stock of goods, shortly before transferred by Schulting to the Stursbergs, over and above $275,000, lies at the foundation of the action. If the plaintiff had legally acquired the right to this money, he was entitled to a judgment. If he did not acquire this right, judgment should have been given by the referee dismissing the complaint as to all the defendants.

Section 32, R. S., 136, provides that every contract for the sale of any goods, chattels or things in action, for the price of fifty dollars or more, shall be void, unless, first, a note or memorandum of such contract be made in writing, and be subscribed by the parties to be charged thereby, or, second, unless the buyer shall accept and receive part of such goods or the evidences, or some of them, of such things in action, or, third, unless the buyer shall at the time pay some part of the purchase-money. The contract in question must, to be valid, have been made in conformity with this statute. Schulting’s right to the money was a thing in action within its meaning. The price was $20,000. bio thing was paid at the time by the plaintiff Schulting. The plaintiff did not at the time accept or receive from Schulting any of the evidences of the thing in action. This shows that the finding by the referee, that on the 8th of August, Schulting verbally offered to sell the said interest to the plaintiff for $20,000, and that the plaintiff verbally accepted such offer, and what the plaintiff said to Schulting about having the money at once, and the reply of Schulting thereto, must be

regarded as wholly immaterial. These facts did not constitute a valid bargain for the sale of the right to the money, nor was it competent to consider them to aid the construction of the papers at that time executed by them. The papers so executed, are the only competent evidence of the contract. These papers were letters signed the one by the plaintiff, and the other by Schulting, and each addressed to H. & A. Stursberg & Co. The one signed by the plaintiff was as follows: “ Gentlemen, please give Herman Schulting credit for the sum of ($20,000) twenty thousand dollars, U. S. C., and charge the same to me. In consideration of the above, Hr. Herman Schulting will authorize you to transfer to my credit all his share and interest in the profits upon the whole stock which you bought under the date of the 4th inst.” That signed by the defendant was as follows: “ Gentlemen, in accordance with the inclosed letter of Herman Yon Keller, you will please to transfer to his credit all my share and interest in the profits to be realized out of the sale of the whole stock which you bought of me under the date of the 4th inst. In consideration of the above transfer, you will please credit my account with the sum of ($20,000) twenty thousand dollars, U. S. C., to the debit of Hr. Yon Keller.” These letters were dated the 8th of August, 1868, and were at the time of their execution (Saturday afternoon) inclosed in an envelope, addressed to the Messrs. Stursberg and forwarded to that firm. The referee further finds that the Stursbergs were aware that the plaintiff was negotiating with Schulting for the purchase of this interest in the proceeds of said property, and before the papers were signed the same were shown and their contents known to Herman Stursberg, one of the partners of the firm, and he approved thereof. That the defendant, Herman Stursberg, at the same time, and before the making of the agreement and signing of the papers by Yon Keller and Schulting, verbally promised that the said firm would lend the plaintiff the sum of $20,000 to make such purchase, or would credit or deposit to the credit of Schulting said $20,000 in case the purchase was completed and the writings signed,

and would hold the plaintiff debtor to them for such credit or deposit. There was no finding that Schulting knew anything about these latter facts or evidence given tending to show that he had any such knowledge. They were not, therefore, extrinsic facts, within the knowledge of the parties, at the time of signing the letters; and even if susceptible of furnishing any aid in their construction, cannot be resorted to for that purpose. The referee further finds that the letters were signed about three o’clock in the afternoon of Saturday, and were immediately after sent by Schulting to the Stursbergs, who received the same and placed them in their safe, and that Herman Stursberg afterward verbally acknowledged the receipt thereof to the plaintiff, and verbally stated the assent of his firm to the agreement. The referee further found that the Stursbergs did not owe the plaintiff anything when the papers were signed, nor did he place any property or securities belonging to him in their hands. That he never paid them anything, or offered so to do, or gave them any security. That the Stursbergs did not advance the money to the plaintiff or to Schulting, and did not credit Schulting with $20,000 on their books, or do anything in respect to the advance or credit after the interview hereinafter stated. That at an early hour on Monday morning, the 10th of August (the morning after the execution of the letters), the plaintiff and Herman Stursberg went to the store where the goods were to look them over and consult about the sale, and that Schulting met them there and immediately demanded the return of his papers executed by him, saying that his wife was not satisfied, and that she said he was insane when he signed them. After this, nothing was done by the plaintiff or the Stursbergs toward paying Schulting for the goods, nor was he ever paid anything, nor did the Stursbergs ever give him any credit therefor.

From these facts the referee found as conclusions of law that by the letters of the 8th of August, 1868, the defendant Schulting made to the plaintiff an absolute assignment of all his interest in the fund in question. That upon

the execution and delivery of such letters, the plaintiff became and has since continued to be the owner of one-third of the net proceeds, over $275,000 of the goods, sold by Bchulting to the Stursbergs, and since sold by them for $576,981.86, and orders judgment for the plaintiff for $100,660.62, without making any provision whatever for the payment of the $20,000 to Schulting. The legal conclusions of the referee, it will be seen, are based entirely upon the effect of the letters of the 8th of August. This entirely repels the assumption that he found any additional facts in support thereof, which is sometimes made when the case contains proof which would authorize such findings to sustain the judgment. The real question in the case is, whether the signing and delivery of the letters transferred to the plaintiff this fund or whether something else was to be done. I think the letters did not, and were not intended to, accomplish any such result, certainly not by Schulting. The plaintiffs letter directs the Stursbergs to credit Schulting $20,000 and charge the same to him, in consideration of which Schulting would authorize them to transfer the fund to him, etc. This admits of no other construction than that the authority to transfer to be given by Schulting was a condition precedent to giving the credit and making the charge. Ho one can claim that there would have been any validity to the credit and charge in the absence of such authority. It is not material to inquire whether the authority to transfer being given and the credit and charge made on the. books, an assignment of the claim executed by the Stursbergs to the plaintiff was not necessary to transfer the legal title, as it is clear the equitable title would have passed. The construction of the letter of the defendant is, if possible, still more clear. That authorizes a credit of the fund by the Stursbergs to the plaintiff. In consideration of the above transfer they were to credit his account with $20,000 and charge the same to the plaintiff. This can only mean that upon the condition that the Stursbergs credited his account with $20,000 and charged the same to the plaintiff in such a way that the production and proof of the books would furnish complete evi

dence in his favor of their liability to him. To that extent they might transfer the claim, but not otherwise. Gould there be a possible doubt of the meaning as to what was to be done, it is removed by the other evidence in the case. From that it appears that the Stursbergs were the bankers of Schulting and that he kept an account with them as such, and that this was known to the plaintiff. It was this account that was to receive the credit, as the condition precedent to the transfer, and the referee erred in holding otherwise. But it is said that H. Stursberg promised before the letters were executed to lend the money or make the credit. This was a promise entirely without consideration, and therefore void; but had it been valid, it would not have been a performance of the condition. A verbal promise was not what Schulting required. That was a credit, actually entered in his banking account that would prove his right to the money whenever he called for it. But it is said the entry was but a mere form. The same with equal force might be said had Schulting required a note to be given. That would be no better evidence of his right than an actual entry to his credit upon the books. Either would be far better than a mere verbal assent, even if such assent was binding when proved. From the evidence in the case, I should infer that Schulting would have had but a poor prospect of proving that H. Stursberg ever even promised before the letters were mitten to give the credit or assented to it verbally afterward, had the goods upon sale have produced no excess over the $275,000. Schulting himself knew nothing of this. It seems to have been known only to H. Stursberg and the plaintiff. But it is said that Schulting himself prevented the credit being given, and he cannot take advantage of his own wrong. The answer to this is that no such fact is found, and there is no evidence to warrant the assumption of any such finding by this court, even if such assumption was not repelled by the legal conclusion of the referee. Then under the advice of his wife he threatened to institute proceedings to set aside the sale to Stursberg, on the ground of his insanity, a sale by which, as

the uncontroverted evidence shows, they acquired to a stock of goods which were sold at auction for' upward of $570,000 for $225,000; and when his wife interfered in this negotiation, to satisfy her, H. Stursberg verbally promised to give him or to her one-third of the proceeds, over $275,000, which it appears Schulting refused to take, and when the contract was thereafter reduced to writing this provision was omitted. This threat and settlement of this controversy by a new agreement, in which the provision was inserted, in no way prevented the plaintiff placing in the hands of the Stursbergs $20,000 to the credit of Schulting. It may have changed the purpose of Stursberg in regard to lending plaintiff the money, but there is not a particle of evidence that Schulting ever knew of any such purpose. The letters would have led him to suppose that the plaintiff had money in Stursberg’s hands which was by the credit and' debit to be transferred to him. The General Term rightly reversed the judgment for the legal error of the referee as to the effect of the letters. It is equally clear that the referee erred in finding the fact that Schulting had any valid claim against the Stursbergs for the fund at the time the letters were written. Upon the supposition that Schulting was competent to make a valid contract at the time it was reduced to writing, he had no such claim. The verbal promise made during the negotiation was merged' in the writing. There was no estoppel for the reason that the plaintiff never advanced anything or incurred any liability upon the faith that there was any such interest.

The order of the General Term must be affirmed and judgment absolute against plaintiff.

■ All concur except Bapallo, J., who is for reversal of order and affirmance of judgment on report of referee, deducting $20,000.

Order affirmed and judgment absolute against plaintiff, with costs.