Earle v. Crane — 13 N.Y. Super. Ct. 564

Majority

p. 564

Earle v. Crane and Taylor.

Headnote

A sale and delivery of property by M. to C. and T., and an agreement by the latter to pay, as part of its price, to E. a sum named, on account of M.’s indebtedness to E„ is a valid contract, on which E. can sue in his own name, and recover the sum so agreed to be paid to him.

If, after the consummation of such a sale, by a delivery and acceptance-of the property under it, M. executes a formal bill of sale of the property to C. and T. for a pecuniary consideration expressed in the bill of sale, and signs a paper stating that he consents to sell such property for his indebtedness to 0. and T., the fact of the subsequent execution of such papers does not render it incompetent for E. to establish by parol the actual agreement under which the property was sold, delivered, and accepted.

The execution of a bill of sale, expressing a pecuniary consideration, and a delivery of it with the property, present no obstacle to showing that such consideration was not wholly pecuniary, but consisted in fact of a special agreement in which E. is interested, and its non-performance to E.’s damage.

Whether, if the executory contract to sell and deliver had been rescinded before it was obligatory on either party to it, and it should appear that the delivery of the goods, and the execution and delivery of the bill of sale, and of the receipt, were cotemporaneous acts, they would preclude the parties to them, or the plaintiff, from- showing the agreement to have been such as the complaint states, quere.

(Before Bosworth and Hoffman, J.J.)

March 28, 1858.

This action was tried before Mr. Justice Woodruff and a jury, in February, 1856. The complaint was dismissed and the decision excepted to. The question of law arising on that exception, and those arising on exceptions taken during the trial, were directed by the court to be heard, in the first instance, at the General Term.

The complaint states, that plaintiff and defendants are merchants in the city of New York, the defendants comprising'the firm of R. E. Crane & Co.

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On and before the 1st of September, 1852, Nathan Meyer owed the plaintiff §1131.63, and owning ready-made clothing and unmanufactured articles, he agreed with the defendants, about that time, to sell and deliver the stock to them, at prices to be thereafter agreed upon, and they agreed to pay therefor as follows, to wit:

1. To pay to plaintiff §531.63 of the §1131.63.

2. To pay themselves $1263.37, the amount due to them from Meyer.

3. To account to Meyer for the balance. Plaintiff was notified of, and acceded to this arrangement, of which the defendants had notice.

That about the 9th of October, 1852, the stock of goods was delivered to the defendants in pursuance of this contract, at prices agreed upon amounting to §2800. That after satisfying the $1268.37 due to the defendants, and paying to the plaintiff the §531.63, there was a balance of $1000 in defendants’ hands, and Meyer’s claim for that had been assigned to the plaintiff"; that although required to do so, they had not paid that nor the $581.63, and it prayed judgment for §1531.63, with interest from the 9th of October, 1852, besides costs of the action.

The answer admitted a sale to the defendants by Meyer, on or about the 9th of October, 1852, but denied that it was under any such agreement as the complaint states, and that any such agreement was made. It averred that Meyer, instead of owing the defendants only $1268.37, in fact, owed them $3040.18; that of this $1407.47 was due to Crane, individually, and that certain of the stock was accepted and transferred to him in gross in satisfaction of that debt; that he also owed R. E. Crane & Co. $1632.71, and that certain other goods were transferred by Meyer to them, and by them accepted in gross, in satisfaction therefor, and that in each case a bill of sale was executed and delivered by Meyer. On the trial, the indebtedness of Meyer to the plaintiff, in the sum of $1131.53, was proved by a witness other than Meyer. Meyer was then sworn in behalf of the plaintiff, and testified to the same fact, and that he sold his stock of goods to Crane and Taylor about September, 1852. He said, “ the sale was in writing ; I made out an invoice of said goods and gave the defendants a copy of it.”

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The plaintiff’s counsel requested defendants’ counsel to product it, which he did, and plaintiff’s counsel then read it in evidence.

It was a formal bill of sale, dated October 9, 1852, from Meyer to Crane and Taylor, for the expressed consideration of §1632.71, and sold and conveyed absolutely the goods described in the schedule annexed to it. The schedule contained a list of goods, which, at the prices affixed to them, amounted in the aggregate to $2814.07. At the end of the schedule was a receipt in these words, viz.:

“I do hereby agree and consent to sell to Rufus E. Crane & Co. this stock of goods, of which this is the invoice, for my indebtedness to said Rufus E. Crane & Co.” “ N. Meyeb.”

This receipt or writing had no date. The witness, in relation to this invoice or schedule, further testified as follows:

“ The goods I have spoken of, which I purchased of Crane & Taylor, the defendants, I returned to them, as I bought them, and they accepted them, and they are not contained in this invoice or bill of parcels.”

Question by plaintiff’s counsel. “ Was any oral agreement made between the plaintiff, Crane & Taylor, and yourself, as to the sale and transfer of your goods to Crane & Taylor, before any bill was made out, and how the consideration was to be paid, and if so, what was the arrangement?” This question was objected to by the counsel for the defendants, and the objection sustained by the court. To which ruling of the court the plaintiff’s counsel then and there duly excepted.

“ Did you, after this paper was executed on the 9th day of October, 1852, owe Crane & Taylor any thing?” Objected to by the defendants’ counsel, and then withdrawn by the counsel for the plaintiff.

“ Before any papers were delivered to Crane & Taylor was any arrangement made by which you sold them your stock of goods and they agreed to pay Mr. Earle any sum of money?” The defendants’ counsel objected to the question,'on the ground, among others, that the arrangement made was in writing. The court sustained the objection. To which ruling of the court the plaintiff’s counsel then and there duly excepted.

“ You sold to Crane & Taylor your stock in trade?” “Yes.”

“At what price?” The defendants’ counsel objected to the

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question. The court sustained the objection. To which ruling of the court the plaintiff’s counsel then and there duly excepted.

“ Were the goods put at cost, above cost, or below cost?” Similar objection, ruling and exception.

“ How was the consideration to be paid by Crane & Taylor on that sale?” Similar objection, ruling and exception as above.

“Were they or were they not sold before the 9th of October, 1852, and delivered on an agreement between the plaintiff and defendants and youi’self, that they (defendants) were to pay the plaintiff" any, and if so what Sum of money ?” Similar objection, ruling and exception as above.

“ On the 9th of October, 1852, did you owe the firm of Crane & Taylor any thing, and if so what?” Similar objection, ruling and exception as above.

“ Did you, or did you not, return to Crane & Taylor, and they accept the goods bought by you of them, and rescind the contract of indebtedness to them after the bill of parcels of the 9th of October, 1852, by which all your indebtedness to them was can-celled?” Similar objection, ruling and exception as above.

“ Does this bill of parcels or invoice contain the goods that you bought of Crane & Taylor, and which you subsequently returned to them?” “No, sir. There is not a single article there I returned to them, and they rescinded the contract.”

“ Had Crane & Taylor any other indebtedness against you after the 9th of October, 1852, after returning those goods ?” Question objected to by the defendants’ counsel on the ground, among others, that the complaint itself admits an indebtedness at the time of the transfer.

The plaintiff’s counsel now moved the court to be permitted to amend the complaint by striking out the name of “ Co.” after the word Crane.

The defendants’ counsel objecting to the motion, the court sustained the objection, and denied the motion to amend.

The plaintiff’s counsel here introduced and gave in evidence the following transfer from the witness to the plaintiff.

“ Whereas, Rufus E. Crane & Co., heretofore purchased from me a quantity of merchandise, consisting of ready-made woollen clothing, etc., for the sum of $2,900, or thereabouts; and whereas, the said Crane & Co. did then and there agree to pay for the same

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in manner following, viz.: First, to pay to John E. Earle, of the city of New "York, $531.63; secondly, to deduct the sum of about $1,400 for their own claim, or debt; and lastly, to pay the remaining balance to me, or my order, and which said balance "would amount to about $968.

“Now know ye that I, Nathan Meyer, in consideration of one dollar to me, in hand paid by John E. Earle, and for divers other good considerations, do hereby assign and set over to the said Earle the said remaining balance. First, to pay himself the sum of about $600 due to him from N. & M. Meyer, (independent of the sum of $531.63,) and to pay over to me, or my assigns, the residue of said remaining sum, after the payment of the aforesaid sum of money. “N. Meyer, [l. s.]

“Dated, New York, March 7, 1853.”

And also another transfer to Rachael Smith, as follows:

“ In consideration of one dollar to me, in hand paid, and for divers other considerations, I hereby assign and set over to Rachael Smith, of the city of New York, any and every sum of money that shall or may be coming to me from John E. Earle, of the said city, by reason of a certain assignment made and executed to him, by me, on the 7th of March instant, of a claim or demand of mine against Rufus E. Crane & Co:, of the city of New York, more particularly mentioned and described in said referred to assignment. This assignment is intended to embrace only what shall be coming to me after the payment of the amount due said Earle, as provided therein. “ N. Meyer, [l. s.]

“ Dated, March 8, 1853.”

The defendants’ counsel thereupon moved the court to dismiss the plaintiffs’ complaint.

The plaintiff’s counsel opposed the motion, but the court sustained the same, and dismissed the complaint, with leave to the plaintiff to move the court, if so advised, to amend the complaint, and on such amendment being granted, to set aside dismissal: and to the decision of the court, in so dismissing the complaint, the plaintiff’s counsel then and there duly excepted.

And inasmuch as the said several matters so given in evidence,

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and the objections, offers, decisions, refusals, and exceptions, on the part of the plaintiff, do not appear by the record of the trial aforesaid, the counsel for the plaintiff did thereupon request his honor, the said Justice, to sign this case upon exceptions, containing the matters aforesaid, according to the statute in such case made and provided, which is accordingly done, the said 20th day of February, 1856.

It was further ordered, that the exceptions taken be heard, in the first instance, at the General Term.

Jos. W. Gerard, for plaintiff.

R. M. Harrington, for defendants.

Proof of such an agreement as is stated in the complaint, and of full execution of it, on the part of Meyer, standing alone, would entitle the plaintiff to recover the $531tm-. The plaintiff could sue on such a promise, in his own name, although not a party to the agreement, by being present and participating in the making of it, and such an agreement is not affected by the statute of frauds. (Barker v. Bucklin, 2 Denio, 45 , and cases there cited.)

Notwithstanding that Meyer testified that “the sale was in writing,” and that the papers shown to him were executed by him, and delivered to the defendants, the plaintiff should not, for that cause, have been stopped short in his examination of the witness, and precluded from showing, if he could, that such an agreement was made in.September, 1852, as the complaint states, and the delivery of the goods to, and an acceptance of them by the defendants, pursuant to, and in execution of, such agreement. We think that answers, naturally and fairly responsive to some of the questions put by plaintiff’s counsel, and excluded by the court, might have proved such an agreement and its consummation. We are not at liberty to say, that if the witness had been permitted to answer, he would have failed to give such evidence. We must presume those questions were put with a view to prove the plaintiff’s cause of action; and as responsive answers might have established it, the refusal of the court to allow the witness to answer was erroneous.

p. 570

If the agreement alleged in the complaint was made, and Meyer delivered, and the defendants accepted the goods in pursuance of it, the plaintiff is-entitled to recover the $531tóv, although subsequent to the delivery and acceptance of the goods Meyer executed the papers, which were produced and exhibited to him on his examination at the trial.

An agreement between Meyer and the defendants, such as the complaint avers was made in September, 1852, would not preclude them, before any thing had been done under it to make it obligatory upon the parties to it, and which would have created a right of action by reason of it, in favor of the plaintiff against the defendants, from, annulling or abandoning the agreement, and making a new one upon such terms as they might think proper.

If it should turn out that they subsequently made-a different agreement, under -which the goods were delivered and accepted, and that it was no part of that agreement that the defendants should pay to the plaintiff the debt which Meyer owed the plaintiff, the plaintiff could not recover in this action.

Even if such agreement was a fraud upon the creditors of Meyer, and was made with intent to defraud them, the plaintiff, as a creditor at large of Meyer, could not assail it in this action. (Reubens v Joel, 3 Kern. 488.)

But the plaintiff may show, if he can, such an agreement as is stated in the complaint, and the delivery by Meyer, and the acceptance by the defendants of the goods, in execution of it, before the bill of sale of the 9th of October, 1852, was executed and delivered. If, after such a delivery and acceptance of the goods, in. execution of such an agreement, that bill of sale, and the receipt 'annexed to the invoice, were executed, it should not affect the plaintiff’s right to recover.

The bill of sale, of itself, and standing alone, would be no obstacle to the reception of parol evidence to prove what price the defendants agreed to pay for the goods, or the manner in which, or the persons to whom, they promised Meyer they would pay it. (Murray v. Smith, 1 Duer, 412 . Affirmed as to those points in the Court of Appeals.)

But if there was no agreement concluded before the goods were delivered and accepted, or if one had been made in form, but before any thing had been done to execute.it, by either party to it,

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it was modified, and all previous conversations or understandings ended by accompanying the delivery of the goods with a delivery of the bill of sale, and the receipt, so called, which is annexed to the invoice, a different question may be presented.

A mere receipt is, undoubtedly, susceptible of explanation by parol evidence, as to the nature or payment of the consideration stated in it, when such proof does not prevent the instrument from operating to pass a title, or to give effect to the transfer as a transfer. But when a receipt also contains clauses of contract, the latter are no more subject to be varied by parol evidence than any other written contract. (Kellogg v. Richards, 14 Wend. 116 ; Coon v. Knap, 4 Seld. 402; vide Noel v. Murray, 3 Kern. 167.)

The receipt in question imports that Mr. Meyer was indebted to Rufus E. Crane & Co., and agreed and consented to sell the goods, to the invoice of which it is appended, in satisfaction of his indebtedness to them. It does not state, in terms, that they agreed and consented to accept them in satisfaction of such indebtedness, nor that such satisfaction was the whole consideration of such transfer. Their acceptance of the goods, with that paper annexed, may import, and is, undoubtedly, evidence that they accepted them on those terms.

Whether, if they were plaintiffs in an action against Meyer to recover an alleged balance, which the proceeds of the goods were insufficient to pay, or to recover the indebtedness mentioned in the receipt, proof of the delivery of the goods, and that the invoice and this receipt accompanied such delivery, without proving more, would preclude them from showing that they did not accept, nor agree to accept, them in full payment, may be a somewhat different question from any one settled by either of the three cases last cited.

In Kellogg v. Richards and Coon v. Knap, supra, the plaintiff’s receipt, which was produced in bar of the plaintiff’s action, stated in the first case, the receipt of a note made by a third person, “ as a compromise for the full payment,” and in the latter, of a specific sum, “in full for damages done to us by the stage accident,” or, in other words, of the plaintiff’s cause of action. The court held these clauses to be clauses of contract, and not capable of being varied by parol evidence. In the present case, no paper writing, signed by the defendants, was shown which evidenced any agree

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ment on their part. The acceptance of the bill of parcels, with the receipt annexed, is, undoubtedly, evidence against them that they accepted the goods on the terms stated in the receipt. But do those facts alone estop them from showing to the contrary ?

In Noel v. Murray, ( 1 Duer, 385 , and 3 Kern. 167,) the receipt of the plaintiff stated that the note of a third person and a sum of money were “received in full for the above bill,” the amount of which bill that suit was brought to recover. In the latter case, a verdict was taken in this court for the plaintiff, subject to the opinion of the court upon a case containing the whole evidence. This court gave judgment against the defendant; and in the opinion delivered, the question was suggested, but not decided, whether such a receipt ought not to be deemed to conclude the defendant. That action went to the Court of Appeals after the case had been turned into a bill of exceptions, according to which it was submitted to the jury for them to determine, as a question of fact, whether the note was received as actual payment and satisfaction, and they found that it was.

The Court of Appeals do not intimate or suggest the idea that the receipt was conclusive, although they held, on the facts of the case, that there was no valid debt existing against the defendant prior to the day on which the receipt bore date, and that, independent of any thing contained in the receipt, the legal presumption was, that the note was received in payment. Whether the plaintiff is estopped from showing that' the receipt, so called, does not state the actual agreement between Meyer and the defendants, even if it would be conclusive as between the latter, except in an action by one of them against the other, to set it aside for fraud or clear mistake, it is .unnecessary to decide. That question does not now arise, and may not, on another trial.

It is sufficient to say, that the plaintiff is not a party to that paper, nor to the bill of sale of the 9th of October. He does not claim under those papers, nor under any agreement made on the day of their date, or at the time of their delivery.

A written agreement concludes the parties to it, and privies, but not strangers. (Whitbeck v. Whitbeck, 9 Cowen, 263-270.)

Whether the evidence which may be given on another trial will place the plaintiff in the position of a privy to these contracts cannot now be foreseen.

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Nor are we, now, at liberty to pass upon the question, whether, if it should appear that the delivery of the goods by Meyer to the defendants was accompanied by the bill of sale and the receipt, both of those parties, as between themselves, would be concluded from showing by parol, that the consideration was different in its nature from, or larger than that named in, either the bill of sale or the receipt ? In the bill of sale it is stated to be $1632TVY lawful money. In the receipt it is stated that Meyer consents and agrees to sell the goods to Rufus E. Crane & Co., for his indebtedness to them.

Construing the two together, it is not an unnatural construction of the receipt, to read it as declaring that such indebtedness is treated by both parties as .money paid to Meyer, to the extent of its amount. Nor would proof, that such indebtedness, in the contemplation and agreement of the parties, consisted, in part, of the sum owing by Meyer to the plaintiffs, and which the defendants had assumed to pay, be necessarily in conflict with the meaning of the terms of the receipt.

In Murray v. Smith, when before the Court of Appeals, Gardiner, J., said, that, prima facie, the consideration was such as the deed stated, and payment of it had been made, as the deed declared. Still it was competent for the plaintiff to prove that it had not been paid; that the sum was greater or less than the deed declared, or that it was not pecuniary, in whole or in part.

That if a special agreement constitutes a part of the consideration, that agreement and a breach of it might be shown, whether it was an agreement to pay money to the plaintiff or to Powers, the mortgagee, or whether it was an agreement to indemnify the plaintiff against half of that incumbrance.

In other words, when proof of the agreement as alleged, will not prevent the bill of sale or instrument of transfer from being effective as such to pass a title, and such agreement, in fact, forms part of the actual consideration, the plaintiff may prove it if he is the party damnified by non-performance of it, and there is nothing in the clause relating to the consideration so conclusive upon the parties as to render such proof inadmissible.

When the facts are fully developed, the court must judge whether they present a case falling within this rule, or one falling

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within the prohibition against varying or enlarging the terms, or clear legal import of a written contract by parol evidence.

We grant a new trial on the ground that it was competent for the plaintiff to prove, if he could, the contract between Meyer and the defendants set out in the complaint, and the delivery of the goods by Meyer to the defendants, and an acceptance of the goods by the latter pursuant to, and in execution of, that contract.

We think the plaintiff was precluded from giving such evidence by the decision, that the questions put to the witness, Meyer, could not be allowed to be answered by him.

A new trial must be granted, with costs to abide the event.

Cases cited

Kellogg v. Richards 14 Wend. 116 N.Y. Sup. Ct. p. 571