Weill v. Malone

This is an appeal from a judgment entered upon the decision of a justice of this court after a trial at the special term, and also from an order denying a motion of the plaintiffs’ to open the judgment. The facts are recited in the opinion of the trial judge, and, as we -concur in his conclusions, a recitation of the case by us would be unprofitable.

All concur.

The opinion of Mr. Justice G-aynor at special term is as follows :

The plaintiffs were commission merchants, while the defend-' ants Joseph Malone & Co. were manufacturers of corset steels and like corset materials. These parties entered into a written agreement by which the plaintiffs became the selling, agents of the entire product of the factory of the said Joseph Malone & Co. They were to guarantee all sales, and have a comission of five per cent.; and Joseph Malone & Co. were to fill orders for such manufactured goods as should be given to them by the plairitiffs. The contract also contemplated that the plaintiffs should make money advancements and deliver merchandise to Joseph Malone & Co., for it provides that they shall be credited with all such advances, and with the pricp of any goods shipped and invoiced by them to Joseph Malone & Co. Tt also provides that the balances should be struck monthly, and paid by the debtor side. Under this arrangement, when goods were manufactured, though still lying in the factory, and not yet delivered to customers, the plaintiffs were in the habit of creding Joseph Malone & Co. with them, and advancing to them their value, less the cash discount and the five per cent, commission. They were also in the habit of depositing at the factory quantities of steel bars, which Joseph Malone & Co. drew from and used to make the corset materials, notifying the plaintiffs from time to time of the quantity used, whereupon the plaintiffs would charge them with the same. During these dealings Joseph Malone & Co. purchased some machinery from the plaintiffs, and gave them a chattel mortgage thereon to secure the payment of $4,000, the purchase price. The said chattel mortgage is also in terms for the faithful performance of the aforesaid agreement, which, of course, embraced the payment of all balances found against them as aforesaid. Books of account, embracing the dealings, and showing the credits and debits between the parties, were kept by the plaintiffs. This being the condition of affairs, a fire occurred in the said factory of Joseph Malone & Co., by which the same and the machinery and the goods and materials therein were much damaged. At the time of the fir.e the plaintiffs’ books showed a balance against Joseph Malone '& Co. of about $5,500. The fire occurred on April 26, 1890. The plaintiffs claim that of the steel bars of which they had deposited with Joseph Malone & Go. at their factory from time to time, as aforesaid, there should have been as much as ninety-two casks, of the value of about $5,000, at the time of the fire. About §4,000 worth of manufactured stock also lay in the factory at the time. In these circumstances, both parties having suffered by the fire, and the insurance, namely, $14,000, being in the name of Joseph Malone & Co., about $7,000 of which was upon the stock and the rest upon the machinery and fixtures, the said parties entered into the following agreement:

“This agreement, made this 1st day of May, 1890 by and between Elie Weill & Co. and Joseph Malone & Co., witnesseth : The parties hereto agree to pool their joint loss on machinery and stock on the following basis, to wit: First. That the money received shall first be applied to cancel the indebtedness of Joseph Malone & Company to Elie Weill & Company, amounting to about $6,-000 in full; and the balance, if any, to be divided pro rata between the parties as follows, and in the. following proportion : Seventy-five per cent, to Elie Weill & Company and twenty-five per cent, to Joseph Malone & Company. And it is further-agreed that whatever salvage there may be left after the payment of the five per cent, to the adjusters shall be divided equally between Elie Weill & Co. and Joseph Malone & Co. There shall be a release of responsibility to Joseph Malone & Co, and they are hereby reléased from said responsibility; and, in consideration thereof they shall, and do hereby, assign their policies to Elie Weill & Company. In witness whereof, the parties hereto have hereunto set their hands and seals the year and day first above written.

“Elie Weill & Co. [Seal.]

“Jos. Malone &Co. [Seal.]

“In presence of Bernard Oberndoerfer.”

This agreement was carried out, in that the insurance money was paid and the salvage of stock divided in kind as therein provided; but the machinery was not divided, neither, party apparently understanding that it should be, for nothing was said or done in that view. It is conceded that the insurance money was more than sufficient to pay the said book balance .of $5,500. Afterwards, namely, in July, the plaintiffs began an action against Joseph Malone & Co. for an alleged conversion of about fifty-two casks (52,461 pounds) of the said ninety-two casks of steel deposited from time to time with them at this said factory by the plaintiffs as aforesaid. In the following month they took from said Joseph Malone & Co. the machinery mentioned in their said chattel mortgage thereon, professing to take it by virtue, of the said mortgage. In the following March, Joseph Malone & Co. brought an action against them for the alleged conversion of the said machinery. In this latter action the plaintiffs therein (Joseph Malone & Co.) claimed that the agreement above set out, and the carrying out of the same, was a complete adjustment between the-parties; and that the taking of the said machinery under the said mortgage was, therefore, without right, and a trespass. The present action was brought to set aside the said agreement for fraud ; or, failing in that, to have it so reformed or construed as to exclude the said mortgage from its intendment and operation. And now, at the end of the case, it is insisted, as it is in the complaint, that Joseph Malone & Co. having converted to their own .use about fifty-two casks of the said steel bars deposited in their factory as aforesaid, and the plaintiffs being unaware of such conversion when they entered into the said adjustment agreement, it should therefore be declared void for fraud. It is