Monnet v. Heller — 25 N.Y. St. Rep. 609

Majority

p. 609

Prosper Monnet et al., Pl’ffs and Resp’ts, v. Frederick Heller et at., Def’ts and App’lts.

(New York Superior Court, General Term,

Filed June 29, 1889.)

Headnote

1. Principal and agent—Action bt principal for balance Account-Defense—Suit bt U. S. custom authorities for penalties—Credit SHOULD BE ALLOWED FOR COUNSEL FEES, BUT NOT FOR AMOUNT PAID TO COMPROMISE SUIT.

Defendants were the agents of plaintiffs to sell merchandise to he shipped hy plaintiffs to them from France for that purpose, and this action was brought to recover balance in their hands as such agents. The defendants set up as a defense to the suit that they had been sued hy the United States custom authorities to recover certain alleged penalties incurred by the plaintiffs in shipping said goods at an under valuation, and had been compelled to pay counsel fees in that suit, and had also paid a large sum to settle and compromise the suit. Held, that the defendants were entitled to a credit for sums paid for counsel fees in defending the suit, but not for amounts paid to compromise the suit.

2. Same—Burden of proof.

That the defendants had the burden of showing that they were specally authorized hy plaintiffs to compromise, or were authorized so to do by the nature of their agency, and failing to show this, in compromising the action they acted at their own peril.

3. Same—Error of referee—When judgment affirmed.

• The referee erred in charging defendants for goods on hand, $4,995.05, whereas they should have been charged only §2,686.91. Held, that even if the referee did err in this respect, yet as he had not given judgment against defendants for as large a sum as the evidence would have warranted, the judgment is affirmed.

4. Same—When error of referee should be corrected on motion and NOT ON APPEAL.

In allowing credit for amounts paid hy defendants for counsel fees, the referee made a small error ; he allowed credit for fees paid counsel §2,276, hut hy mistake he placed the amount at §2,250. This is an error that should have been corrected on motion and not on appeal.

The facts sufficiently appear in the opinion.

A. P. and W. Man, for app’lts; Arnoux, Rich & Wood-ford, for resp’ts.

This is an appeal from, a judgment in favor of the plaintiff, entered on the report of a referee. The complaint alleged that plaintiffs consigned to the defendants as agent of said plaintiffs, to sell on commission, certain merchandise, and that there was due plaintiffs from defendants, upon an account between them, $18,958.40, “ being a balance of said account in favor of said plaintiffs, and against said defendants.” The defendants admitted that plaintiffs consigned to them, as agents to sell on commission, certain merchandise, but denied that there was anything due plaintiffs from them, the defendants. The defendants also alleged as a further and separate defense, and as a counter-claim, that they had been compelled to pay to the custom authorities of the United States, the sum of upwards of $10,000 to settle an action brought against them by said custom authorities because the plaintiffs had fraudulently undervalued in entry for duties for goods consigned by them to defendants, that there was a suit pending to recover from defendants a large sum of money because of said fraudulent undervaluations, and that they, the defendants, had been compelled to employ counsel to defend themselves in the action brought against them by the custom authorities of the United States, and had paid such counsel a large sum of money, and asked that they, the defendants, be credited with the moneys that they had paid to settle said action, and to their counsel.

The plaintiff replied to those portions of the answer that constituted counter-claims. The referee held on the trial that the defendants were entitled to be credited with one-half the sum that defendant had paid to compromise the action that had been brought against them by the government of the United States. The plaintiffs have not excepted to this ruling of the referee, but the defendants have excepted, and allege that the referee erred in not crediting them with the whole amount that they had paid to compromise said actions, and they also say that the re- • feree erred in computing the amount paid by defendants to compromise said actions. It does appear that the referee had made a small error in the computation of the amount paid as aforesaid, but defendants cannot complain of this because they were not entitled to any credit for the sums paid to compromise said actions. The grounds of the action that was compromised, as aforesaid, are very generally and not very definitely shown in the appeal book. The attorney for the defendants in that action says at folios 365, 366 of the case: “I cannot, at this time, state the details of that claim, but in a general way I remember that it was based upon a claim that dyes which had been imported by Hellen & Werz had been invoiced at a less value than the market value of such goods in France (from which they mostly came) at the time and place of importation.” The defendants had the burden of showing that

p. 611

they were authorized to compromise said action, that is, that they were specially authorized by the plaintiff in this action to compromise, and that they were authorized from the nature of their agency.

They have failed to prove either one of these facts. The referee refused to find that the goods described in the invoices that were made for the entry of the goods had been undervalued, and his finding is warranted by the evidence. If there was no undervaluation there was no reason why the action should be compromised, and the defendants in compromising the action acted at their own peril. The referee did find that the defendants were authorized to retain and employ counsel to defend said action, and that they paid their counsel $2,276, but by mistake, presumably, he allows them $2,250 for fees to counsel. This is an error of the kind, that if it is to be corrected at all, should be corrected on motion, and not on appeal for the error appears on the face of the judgment-roll. But we have seen that the referee has allowed the defendants one-half of the sum of $10,000, and other sums when in law, and in fact he should not have allowed them more than $2,276. That is he allowed the defendants $6,126.10 instead of allowing them $2,276. The defendants were not injured by their ruling. The defendants also claim that the referee erred in charging them $4,995.05 for the goods on hand, whereas they should have been charged with $1,739.55, and $947.36, a total of $2,686.91. But even if the referee had erred in this respect, yet he had not given judgment against defendants for as large a sum as the evidence would have warranted him in giving.

The judgment is affirmed, with costs.

Sedgwick, Oh. J., and Dugro, J., concur.