Rider v. Union India Rubber Co. — 17 N.Y. Super. Ct. 169

Majority

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William Rider and Jonathan Trotter, as Assignees of Goodyear and Ely, Plaintiffs and Respondents, v. The Union India Rubber Company, Defendants and Appellants.

Headnote

1. In an action against a corporation by R and T., to recover the value of tools and machinery belonging to themselves, and the value of the use thereof; which tools and machinery have by such use been worn out and rendered valueless, it is competent for the defendant to show as a defense, that the plaintiffs were officers of the defendants, and authorized by the defendants to purchase from a third party all his tools and machinery used by him in his manufactory for $30,000. That such purchase was made by the plaintiffs, the tools and machinery in question being then set up in the factory. That the defendants, with the concurrence of the plaintiffs, acting as defendants’ officers, paid the money, took possession of the factory and of all the tools and machinery therein, and used the same, believing the whole to be included in the said purchase.

2. In such case the production of a judgment record in evidence which showed that the plaintiffs had once brought an action against the defendants, alleging a sale by themselves to the defendants of the same tools and machinery, and claiming the price; in which the defendants denied any purchase from the plaintiffs;and in which it was found as a fact that the defendants did not purchase the property from the plaintiffs, and judgment for the defendants was pronounced, does not preclude such defense, and it is error to exclude evidence of a purchase by the defendants from such third person.

3. One who stands by and acquiesces in a sale of his own property by a third person claining to own it, and suffers the purchaser to pay the price, without notice, is estopped thereby to assert title in himself and claim the property or its value.

4. One who uses the property of another with his assent, is liable for the fair value of such use; but the statute of- limitations is a bar to any recovery for that portion of the period of use which is more than six years before action brought.

5. Where, by such use for eight years, the articles are worn out and rendered valueless, it is error to charge the jury that the plaintiff is entitled to recover what the articles were worth when they came to the defendants’ possession.

6. It may be a just presumption that the use of articles voluntarily procured and used, and worn out, is worth at least the ordinary depreciation of such articles by the use thereof; but such presumption is not conclusive, and will not warrant a charge that as matter of law the plaintiff is entitled to the value of the articles as compensation for the use thereof.

7. On the denial of a motion for a new trial at Special Term, if no appeal be taken from the order, the moving party will be deemed to acquiesce in the

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propriety of such denial, and to have waived all grounds for a new trial, except such questions of law as under exceptions taken at the trial may be reviewed on an appeal from the judgment itself; and on appeal from a judgment such exceptions will alone be considered.

(Before Slosson, Woodruff and Pierrepont, J. J.)

Heard, October 4th, 1858;

decided, February 19, 1859.

This action came before the Court in General Term on an appeal by the defendants from a judgment entered upon a verdict in favor of the plaintiffs for $866.75.

The complaint herein alleges that the defendants had and used certain machinery, &c., belonging to the plaintiffs as assignees of Goodyear & Ely, from November 1st, 1848, to October 1st, 1855, which articles were worth $824.

That the said property, or the largest part thereof, has been consumed or rendered worthless during the time the defendants had and used the same.

That the use of the said property by the defendants was worth the sum of $1,000.

That on or about the 1st of September, 1855, the plaintiffs demanded a return of the property, and the defendants neglected or were unable to return the same, or but a small part thereof, the same then being of the value of $200.

That the defendants have purchased and paid for certain articles parcel of the said property, which, at the time of such demand, were of the value, of $30, for which the defendants are entitled to a credit.

The answer, so far as it is material to state its contents, sets up a purchase of the property in question from the firm of William Rider & Brothers, in pursuance of a resolution of the Company of November 15th, 1848, by which the plaintiff Trotter, (then being the defendants’ President,) was directed to purchase all their machinery, tools, steam curers, boilers, engines, and other fixtures used by them * * for the sum of $30,000. That such purchase was made on the 4th day of December, 1848, and embraced the articles mentioned in the complaint. That the plaintiff Trotter was then President of the Company, and the plaintiff Rider was their Treasurer. That by the by-laws of the Company it was the duty of the President to make all purchases for the defendants, and it was required by

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such by-laws that all business done by any officer should be entered in the books of the Company. That the purchase so made by the plaintiff Trotter, in pursuance of such resolution was duly entered in the books of the Company, and that the defendants have never had nor used the property in any other manner than as the purchasers thereof. And .also, that at the time of such purchase the defendants took possession of all the personal property then used by the said Rider & Brothers, with the consent of the said Rider & Brothers, and of the said plaintiffs, as purchasers, and believing that they (the defendants) were such purchasers; and that the property continued to be used by the said plaintiffs while they were the acting officers of the Company and connected therewith; and that on or about the lst day of October, 1855, the plaintiffs first claimed the articles mentioned in the complaint as their property, and that the same had not been sold to the defendants; and that the defendants, after averring that all the property thus claimed had been purchased by them, permitted the plaintiffs to take whatever property they claimed and found in the defendants’ possession, and the plaintiffs claimed and took six tables only and disposed of the same.

And finally the answer sets up the statute of limitations.

The action was commenced on or about the 10th of October, 1856, and was tried before Mr. Justice Slossos, and a jury, on the 22d day of March, 1858.

On the trial the plaintiffs gave evidence tending to show that before the incorporation of the defendants, William Rider & Brothers were carrying on the business of manufacturing india rubber goods, at a manufactory at Harlem, and had also a warehouse in this city. That in the same building at Harlem, a firm of Groodyear & Ely had also manufactured goods, but had failed and made an assignment to the plaintiffs. That the machinery, &c., mentioned in the complaint had belonged to Groodyear & Ely, and passed to the plaintiffs " under the assignment, but it remained in the manufactory at Harlem occupied by Rider & Brothers; and there was evidence that it was of the same description of machinery, &c., as the machinery, tools, &c., which confessedly belonged to Rider & Brothers, and that it was used by the last named firm, and was in such use when the defendants were incorporated.

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That upon such incorporation, in September, 1848, the plaintiffs, (being then such assignees of Goodyear & Ely,) became President and Treasurer of the defendants. That the firm of Rider & Brothers, upon the organization of the defendants, sold out .to them, and in November, 1848, the defendants took possession of the manufactory, and of all the machinery, tools, fixtures, &c., there, and commenced manufacturing, and “ went on and used ” the articles which had belonged to Goodyear & Ely.

The defendants in this stage of the trial, on the cross-examination of the plaintiffs’ witness, stated that they proposed to prove that the defendants had purchased the articles mentioned in the complaint, and thereupon the plaintiffs introduced in evidence a judgment record in an action commenced by the present plaintiffs against the present defendants on .or about the 2d day of October, 1854:, brought to recover upon an allegation of the sale and delivery of the same articles to which this, suit relates, by the plaintiffs as assignees of Goodyear & Ely, to the defendants. The answer, in which action, denied that the plaintiffs sold the goods, &c., to the defendants. The issue thus formed was referred, and the referee reported that the plaintiffs did not sell and deliver these goods to the defendants. .Judgment was entered on the report on the 2d of August, 1855, and it was thereby adjudged that the plaintiffs did not sell and deliver to the defendants the goods and property so mentioned.

After the reading of the said judgment record, the Court (in reference to the defendants’ proposal to prove that they had purchased the articles in question), held that, as between the parties to this suit, the question of title to the said articles as purchasers, had been passed upon, and that the defendants could not now claim "as purchasers.

To this ruling the defendants’ counsel excepted.

A resolution of the defendants, ¡Dassed on the 15th of November, 1848, was given in evidence by them, directing the President, Mr. Trotter, (one of the present plaintiffs,) to purchase for the defendants, from William Rider & Brothers, “ all their machinery, tools, steam curers, boilers, engines, dry curer and other fixtures, used ly them in and about their rubber manufactory at

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Harlem, (except the moulds for curing balls,) together with their lease of the factory and houses, for the sum of $30,000.” .

Evidence was given tending to show that it was the intention of the plaintiffs to sell these articles in question to the defendants, and that they were left in the defendants’ .possession; but Trotter & Rider, the plaintiffs, both testified that the articles were not in fact included in the sale made under that resolution, and they were corroborated by other witnesses, one of whom says that the “company were to buy them.” It was also testified that Trotter, before the incorporation of .the defendants, was at the manufactory, and the articles which had belonged to Goodyear & Ely were pointed out to him. But the articles in question remained in the same rooms with the other machinery, and they all went into the actual possession and use of the defendants when possession of the manufactory was delivered to them, and there was no evidence that any person connected with the company, except Trotter and the Messrs. Rider, had any knowledge that the whole of the machinery and property so delivered was not the property of Rider & Brothers, or that it was not purchased and paid for by the $30,000 appropriated by the said resolution.

It was admitted that the defendants continued to use the articles down to the fall of 1855, after the determination of the former suit, when the plaintiff, Trotter, demanded the articles at the manufactory, and the defendants’ Secretary told him if he found any he could take them. He took certain tables, but the residue of the articles appear to have been either worn out or rendered worthless by long use.

There was evidence that the value of the goods, when the plaintiff received the possession, was, as was alleged in the complaint, $824. That the wear and tear of the article of chief value, a heater, by use, was ten per cent a year; and again the same witness stated that it would naturally wear out in five or six years by constant use; and besides that evidence, there was nothing tó show what was the value of the use of the goods.

The defendants offered the by-laws of the Company, enacted October 3d, 1848, in evidence. They purported to have been passed at a meeting of the Trustees of the Company, at which

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both of the present plaintiffs were present, acting as Trustees, and to have been unanimously adopted.

The Court rejected the evidence, and the defendants’ counsel excepted.' The presiding justice charged the jury,

1st. That “ if the articles in question were intended by Rider & Trotter, assignees, to pass under the purchase of the articles in use by Rider & Brothers, under the Company’s resolution of ¡November, 1848, and were received, and have been used by the defendants as purchasers, supposing that they were purchasers, there then being no dispute that the $30,000 appropriated by that resolution had been paid, the defendants have not been in fault, and are not liable in this action.”

2d. “If, on the contrary, the articles pf Goodyear and Ely were at the time of the purchase discriminated from those of Rider & Brothers, and it was not the intention of the parties that they should pass under the general purchase, then the defendants have used them with the consent of the assignees, and not having the articles to respond to the demand for them, but having used them until they had become valueless, must answer for their value, or for the value of the use, in respect to which you will judge on the testimony.”

3d. “ The statute of limitations applies to all the period anterior to six years before the beginning of this suit.”

“ To which charge ” (as the Case states) “ the defendants’ counsel did then and there except.”

The defendants’ counsel requested the judge to charge “that if the Company did, by their resolution, intend to and supposed they had bought all the property on the premises at Harlem, this action cannot be maintained.”

The judge refused to charge otherwise than he had charged, and the defendants’ counsel excepted.

The jury found a verdict for the plaintiff for $866.75.

The defendants moved at the Special Term for a new. trial, which was refused.

From the judgment entered upon the verdict, the defendants appealed.

A. Thompson, for the appellants.

John T. Hoffman, for the respondents.

This case being now before us on appeal from the judgment only, we have only to consider the exceptions which were duly taken at the trial.

The counsel for the appellants have made and argued some points relating to the sufficiency of the proofs, which, however proper on the motion for a new trial, are not open to consideration here as a ground of reversal. The defendants not having appealed from the order denying a new trial, must be taken to have acquiesced in the propriety of such denial, and therefore to have waived all grounds for a new trial, except such questions of law as, under the exceptions taken, may be raised on an appeal from the judgment.

The answer of the defendants distinctly averred, as a defense, that the property for the use whereof the action is brought, was in the possession and use of Messrs. -Rider & Brothers, in October, November and December, 1848, when the defendants purchased from them all their machinery, tools, steam curers, &c., &c., used by them in their manufactory, for the sum of $30,000. That such purchase embraced all the articles in controversy here; that the plaintiff, Trotter, acted in such purchase as the defendants’ President, and that the defendants took possession as purchasers, with the consent of the plaintiffs and Rider & Brothers, and in the belief that all of such articles were included in such purchase, and that the plaintiffs themselves, while acting officers of the defendants, until after January, 1852, used the articles in question. And the defendants deny that they have had or used any property named in the complaint, except as purchasers as aforesaid, with the knowledge and consent of the plaintiffs.

These facts, in substance, the defendants offered to prove on the trial; and the Court held that, as between the parties to this suit, the question of title had been passed upon in the former suit, and that the defendants could not now claim as purchasers.

And yet, the Court charged the jury, that if the articles in question were intended by Rider and Trotter, (assignees,) to pass under the purchase of the articles in use by Rider & Brothers, and they were received and used by the defendants, as purchasers, supposing they were purchasers, the defendants are not liable.

We are of opinion, that the principle of this direction to the jury is correct, and if there was no error in that direction, and

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if the ruling of the Court, that “ the defendants could not now claim as purchasers,” is to be taken as an exclusion of evidence that the property was purchased by the defendants, from Rider & Brothers, and under circumstances which forbid these plaintiffs to set up title in. themselves, i. e., if it was an exclusion of evidence tending to'prove the facts alleged in the defendants’ answer, then it seems inevitable that the ruling that the defendants could not now claim as purchasers, was erroneous.

If Messrs. Trotter and Rider acted for the defendants, as their officers, in making a purchase of the property of Rider & Brothers, and included therein the articles in question; or, if they acquiesced in the payment of the $30,000 by the defendants, and consented to their taking possession and using the articles, under the belief that such articles were included in that purchase, then the plaintiffs, (Trotter and Rider,) are concluded. They are estopped to claim title in themselves, as assignees of Goodyear & Ely. To permit them to make such a claim would operate as a fraud upon the defendants, and this principle is substantially recognized in the charge. In this view of the transaction, the defendants acquired a title to the property which the plaintiffs cannot gainsay nor deny. The title was not, it is true, acquired by purchase from the plaintiffs, but it was acquired- by purchase from Rider & Brothers, under circumstances which forbid the plaintiffs to allege that Rider & Brothers were not the owners.

The judgment record given in evidence by the plaintiffs was conclusive as between the parties, upon the question determined thereby, to wit: that the defendants had not purchased these articles from the plaintiffs.

But it did not in anywise prove that the defendants had not title to the property acquired by the purchase from Messrs. Rider & Brothers, under the circumstances above suggested. The defendants did not, in this action, claim by purchase from the plaintiffs, but only that they acquired title, as purchasers, by virtue of the transaction with Rider & Brothers, and the acts and consent of the plaintiffs in relation thereto. Although the record of the former judgment was a bar to proof of title by purchase from the plaintiffs, it did not preclude proof of title-acquired in any other manner.

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We think, therefore, that a rejection of evidence to prove that the defendants purchased the property, and a ruling that the question of title to the articles, as purchasers, had been passed upon so that the defendants coutd not now claim as purchasers, if understood to exclude proof of the facts set forth in the answer, was not only inconsistent with the charge, but was erroneous.

But on the other hand, it would seem, from some of the evidence which was afterwards given, that the ruling on the trial was understood at the time as merely excluding evidence of a purchase from the plaintiffs, and the Court did certainly submit to the jury the question whether the parties respectively did, at the time, intend that the articles should pass under the purchase from Rider & Brothers, and whether the defendants received the same as purchasers. As already observed, this is so inconsistent with the exclusion of any evidence of title in the defendants, as certainly to indicate that the judge himself did not intend any such exclusion, and to create great doubt whether he was so understood.

Counsel, on the argument of this appeal, differ entirely upon the construction of the ruling, and the points of the appellants assume that the defendants were not permitted to prove that they acquired a title which the plaintiffs were not at liberty to deny. We have no hesitation in saying that the ruling, as intended by the judge at the time, (as we gather that intention from the whole aspect of the case, and also from his recollection of the views by which he was governed,) was correct, and that the defendants could not defend by setting up a title acquired by purchase from the plaintiffs.

And yet, as the case is settled and laid before us on this appeal^ the offer and the ruling are susceptible of the construction first above considered, and we ought not, perhaps, to say that the defendants’ counsel may not have so understood it.

We hesitate the more in overruling the exceptions taken, because we find that in another particular the defendants have been plainly prejudiced.

The jury were charged that if the property in question did not pass under the purchase from Rider & Brothers, and if the defendants had used the articles until they had become valueless, they must answer for their value, or for the value of their use.

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Taking the case most favorably for the plaintiffs, they had permitted the defendants to use the articles until a portion of them had been rendered of no value. In this there was, therefore, no ground for charging the defendants with the value of the articles as for a tortious conversion. And when at length the plaintiffs demanded the goods, the defendants permitted them to take all that were of any value. So that the defendants were not chargeable at all as tort feasors, and the plaintiffs were not liable for the value of the articles as such.

Under the proofs, all that the plaintiffs had a right to claim was the value of the use for six years next before the action-was brought.

The jury were told, in another clause of the charge, that the statute of limitations applies to all the period anterior to six years before the beginning of the suit. And yet, under the direction which permitted the jury to give the plaintiffs the value of the articles, the statute of limitations could not be applied to the case, and accordingly the jury appear to have given to the plaintiffs the full value of the articles at the time they came into the possession of the defendants.

The articles came to the defendants’ possession about eight years before this action was commenced. Ho evidence was given of the value of their use, unless such value could be inferred from the testimony showing the probable annual depreciation in value from the use, and the fact that during the period of use some of the articles had been worn out and become valueless. It may, perhaps, be a just presumption, that in the.ordinary course of business, the use of an article voluntarily procured and used for the. purposes of a manufacture, is worth at least its ordinary deterioration by such use. But such a presumption is by no means conclusive, and would not warrant a charge that, as matter of law, the plaintiffs were entitled to recover the value of the articles.

By whatever testimony the jury were to arrive at the fair value of the use, finding the value of the articles themselves, as and. for the value of the use, precluded the application of the statute, which only allowed a recovery for the use for six years.

We allude to this branch of the case not for the purpose of recognizing the exception taken to the charge in this respect as a

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sufficient exception—the exception was too general; it was in terms to the whole charge—but because it may be useful on another trial,"which, in view of the other exception before noticed, we think should be had. (4 Seld., 37; 4 Kern., 315.)

Judgment reversed and new trial ordered, costs to abide the event.