Majority
p. 421James W. Wiltsie v. William L. Northam. (Before Hoffman, Pierrepont, and Moncrief, J. J.) Heard, October 31; decided, November 26, 1859.
Headnote
1. Where, by an agreement between L. & A., of the one part, and the defendant N., of the other, the former sell their fixtures, &c., in a tioal-yard occupied by them, for a specific sum, and take N.’s negotiable note, and also sell to N., for other consideration, a lease of said yard, and guarantee its renewal on certain terms, and agree, if a renewal be not procured, “ to refund the dne-half the loss on such fixtures,” and no renewal can-be procured, and a suit is brought on such note by one who is an indorsee of it after its maturity, and there is no fraud in procuring the note or in the transaction on which it is founded, the most that the defendant can have deducted from the recovery on the note is one-half of the difference between the value of such fixtures for the purposes of use under a renewed lease and the value thereof for the purpose of removal.2. The plaintiff shows a sufficient title to the note to maintain an action on it, although he bought it by giving his own note for it, and, before the second trial of the action, took up his own note by assigning a judgment recovered in the action itself on a former trial of it, (which judgment was reversed and a new trial ordered,) and notwithstanding his vendors of the note and his assignees of such judgment are the persons to whom the note was originally given.
This action comes before the Court upon questions of law arising at the trial, and there ordered to be first heard at General Term. It was tried before Mr. Justice Hoffman and a jury, on the 24th of November, 1858.
The complaint is upon a note, dated November 16,1855, made by the defendant, for $1,648.28, payable twelve months after its
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date, to the order of P. H. Lalouette, by him indorsed to Lalouette & Ashfield, and alleged to have been indorsed by them to the plaintiff, who is averred to be the lawful owner and holder of it.
The answer denies the indorsement to the plaintiff, or that he is the lawful owner and holder, and states, as a defense, that, in Fovember, 1855, Lalouette & Ashfield sold to him their “ stock, fixtures and lease of - a certain coal-yardthat the agreement was in writing, and a copy of it, dated Fovember 16, 1855, is set forth, which states that, in consideration of the note, Lalouette & Ashfield sell to the defendant “all fixtures and appurtenances in, upon and appertaining to the coal-yard,” and described in a schedule annexed to the agreement; and also, in consideration of one dollar, sell “the present lease of said yard, which has about two years to run, at its present rent, and do guarantee to him a renewal to him of said lease for five years at a yearly rent of not exceeding $200, advance, per annum, and at as much less as can be, and also the free privilege to remove all said fixtures at its expiration. If a renewal is not given, then Lalouette and Ashfield are to refund the one-half the loss on said fixtures and “ further, in consideration of a note” made by defendant for $3,791.79, at six months, they sell to defendant “ all the coal in said yard, being about 700 tons.”
The answer states that, to induce the defendant to enter into said agreement, L. & A. represented that they held a lease which then “ had two years or thereabouts to run,” and that, by its terms, they “ were entitled and privileged to remove all of said fixtures at the expiration of said two yearsthat, relying on these representations, he entered into said agreement, and gave the note in suit, and, to secure it, executed a mortgage on real estate in Sacramento, and entered into the possession of the premises, fixtures and coal, and carried on business there until about the 1st of May, 1857, when he was obliged to quit and abandon all of said fixtures and appurtenances, excepting a horse and cart, worth about $200.
That, after entering into possession, he discovered that L. & A. had no lease, but occupied under one A. Ashfield, who had a lease which expired April 1, 1857; that L. & A. notified him they could not procure a renewal of said lease upon the terms
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they had agreed to do, and the owner notified him that he must pay an advance of $1,600 or quit,” and “ that he must not remove any of the fixtures or appurtenances;” and that defendant, on the 1st of May, 1857, “quit and surrendered the said premises and fixtures.” It avers that L. & A. knew they had no lease, and that, by the lease under which they occupied, “they had no right to remove the most valuable portion of the fixtures and appurtenances, * * for which said note for $1,600 was given,” and also avers great damage to defendant “in his said business” by reason of said misrepresentations. It alleges that defendant established a business which he was obliged to abandon; that he was obliged to remove his coal at great expense, and “ also to abandon all the fixtures and appurtenances belonging to said yard,” to his damage to an amount beyond that of said note; that the consideration of the note has entirely failed, and that, on the 10th of June, 1856, he brought a suit in the Supreme Court against L. & A. to recover damages for the breach of said agreement and to procure said note to be canceled and delivered up; that L. & A. appeared in said action on the 24th of said June ; that it is at issue and pending; that L. & A., and not the plaintiff, “ are the real parties in interest in this actionand it prays a dismissal of the complaint, and “that this defendant may have such affirmative relief in the premises as to this Court shall seem proper.” The plaintiff first called,. as a witness, Alfred Ashfield, who testified that the firm of Lalouette & Ashfield consisted of Paul H. Lalouette and Henry Ashfield; that Henry Ashfield is his son; that the note in suit was transferred to the plaintiff about the time the defendant sued L. & A., in the Supreme Court; that in that suit it was decided that the note should not be given up, but that defendant should have judgment for $1,127.60 damages; that the plaintiff bought the note in suit by giving his own note for it; and that the plaintiff, having recovered in this action on a former trial of it, he took up his own note by “ an assignment of the judgment so recovered.”
The plaintiff having rested, the defendant moved for a nonsuit, because the evidence showed that the plaintiff was not the lawful owner and holder of the note, and upon the evidence he could not recover on the cause of action stated in the complaint; which motion was overruled, and the defendant excepted.
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The defendant was then sworn in his own behalf; produced the agreement of November 16, 1855, described in his answer; and testified that the note in suit was the one named in said agreement—its amount being larger than the sum there named, by reason of the addition of interest; and also produced a lease which he said “is the lease referred to in the agreement.” That lease is dated the 3d of March, 1851; is from John Targee to Alfred Ashfield, for the term of five years from the 1st of April, 1852, at a rent of $700 per annum, payable quarterly. It contained a covenant of the lessee not to assign or underlet without the written consent of the lessor: it contained no covenant for a renewal: it contained a covenant to surrender the premises at the end of the term in as good condition as they then were, ordinary wear and tear alone excepted; and also an agreement that the lessee or his assigns might erect an office on the premises and remove it on or before the expiration of the term. It had a written consent on it,'that the lessee might underlet. The defendant further testified that he first discovered, about nine months after he went into possession, that L. & A. had no lease: on conversing with Lalouette, he said he thought there would be no difficulty in procuring a renewal; defendant told him unless he pledged himself to withdraw the note from the bank he would advertise it; that he withdrew the note. He was informed in September, 1856, the lease would not be renewed; that he left the middle of April, 1857; left “ the old fixtures in the yard;” removed a horse and cart, worth about $150; expenses of removing were about $100; lost many of his customers, and his business was deranged; and he testified as to the value of the fixtures, if to be used as they were, and their value to be removed.
Mr. Ashfield being recalled, said he took the lease for Lalouette because the owner said he would let to him cheaper than to any one else,- and offered to transfer the lease to Northam when the agreement.of November 16, 1855, was made; that the lease was then in the room where the parties were; that he first took a lease in 1837, and' the present lease is a renewal of that; it has always been in his name; was present when the agreement of November 16, 1855, was signed; “ told Northam he could see the lease if he wished; he said he was in a hurry, and didn’t care to see it;” that the office was built in 1837; the addition in
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1849; the new fence was built before the present lease was made by Lalouette; he occupied two or three years before the last lease was made.
Northam, being recalled, said he did not aslc to see the lease, nor was there any offer to show it to him.
There was no evidence of any representations by L. & A. to induce the making of the agreement of November 16, 1855. There was evidence on both sides as to the value of the different articles, denominated fixtures and appurtenances, their value for continued use on the premises, and their value for the purposes of removal. Northam, on his cross-examination, said: “ The fixtures were abandoned by me; some one came for me to take away the fixtures ; spoke of the paving stones; the owner-came and told me to remove the fixtures or he should send them to the public yard; I remember that circumstance now.”
The fixtures and appurtenances are described in the schedule annexed to the agreement of November 16,1855, as being “two offices, brick; one office desk; one sofa; chairs, washstand, scale and weights; two carts and harness; one horse; one safe, screens and shovels; one sleighbells ; sheds; fence around yard; paving; sections; iron rods; hydrants; shop corner Division and Ridge streets.”
The Judge charged that the plaintiff “had shown a sufficient title to the note to maintain this action thereon;” ordered a verdict for the amount claimed, subject to the opinion of the Court at General Term, and directed the jury to answer these two questions, viz.:
“ 1. What was the value of the fixtures on the 1st of April, 1857, viz., two offices, fence, paving, hydrant?
“ 2. What was the damage to the defendant from the lease having less than two years to run from the date of the agreement, viz., increase of rent, expenses, (breaking coal,) cartage ?”
The defendant excepted to the charge, and claimed the right to go to the jury on the question of ownership of the note and its transfer to the .plaintiff. The Court restricted the summing up to the questions specially submitted to the jury, and the defendant excepted.
The jury rendered a verdict for the plaintiff for $1,882.12, and answered the questions submitted thus:
p. 426Contended that there was no fraud; that the agreement fixed as the damages to be paid, (if there should be no renewal of the lease for that cause,) one-half of the loss on the fixtures, which the jury found to be worth, April 1,1857, $702; that according to the evidence they were worth half that to remove, viz., $351, and one-half of this loss would be $175.50; and that on the view most favorable to the defendant, only this sum could be deducted from the verdict. And that the allegation in the answer, that he was obliged to abandon the fixtures, was untrue, the proof showing on the contrary ; not only that he had full liberty to remove them if he saw fit, but that by the law of landlord and tenant he had a legal right to remove them without asking permission. (Taylor’s Land, and Ten., §§545, 546; Van Ness v. Pecard, 2 Pet., 137 ; King v. Wilcomb, 7 Barb., 263 ; Dubois v. Kelly, 10 id., 496; Lawrence v. Kemp, 1 Duer, 363 ; note to Elves v. Mawe, 2 Smith’s L. C., 99, 115 ; Amos & Ferard on Fixtures, 32.) Also that the plaintiff had shown title to the- note in suit. It is not necessary for an indorsee to prove that he paid value for the note. (James v. Chalmers, 5 Sand., 52; 2 Seld., 209.) I. The defendant’s motion for a nonsuit should have been granted. The plaintiff, when he rested, had not shown a bona fide ownership of the note. II. The Court erred in not permitting the defendant to go to the jury upon the question of the bona fide transfer of the note
11 First. Answer,.......................$702 00
“Second. Answer,.........................;____$300 00
Increase of rent,........................ 73 84
Expenses, breaking coal,................. 20 00
Cartage,................................ 18 00
$411 84”
The plaintiff now moves for judgment on the verdict, and the defendant for a new trial.
A. Wakeman, for plaintiff,
A. McGue for defendant.
p. 427and its ownership by the plaintiff. This was a question of fact clearly put in issue, and it was the right of the defendant to have it determined by the jury. It is clear that the transfer was merely, colorable and made for the convenience of Lalouette & Ashfield, they still retaining their actual interest and ownership. (Killmore v. Culver, 24 Barb., 656 ; Andrews v. Bond, 16 Barb., 633 ; Bell v. Drew et al., 4 E. D. Smith, 59.) III. The plaintiff not being the real party in interest cannot maintain the action. (§§ 111 and 113 of the Code.) IV. The Court erred in submitting question No. 1 to the jury. The question was improper, both in form and substance. The question should have been, “ What was the value of the fixtures at the time the agreement for the purchase of the same was made?” 1. Because the damage which defendant sustained accrued immediately upon the breach of the warranty as to title. If Lalouette & Ashfield had no title to these fixtures at the time they attempted to sell and transfer the same, it follows that the use of these fixtures passed with the lease and the value of their use was covered by the rent reserved. 2. The question was improper in substance. The lease was dated March 3, 1851. The fence, offices, paving, hydrant, &c., were all on the premises at this date, and passed under the lease. And if there were any doubts as to the intention of the parties, the covenant that Alfred Ashfield might erect and build an office on the premises and remove the same, shows that it was not intended that any other improvements should be removed. No office was built under this privilege. The lease expressly recognizes the existence of the office. V. The second question was also improper. The plaintiff having taken the note after maturity, took it, subject to all the equities between the original parties; and the defendant had a right to set off against any recovery by L. & A. if they had sued the note, all damages sustained by him by the deceit and fraud. The measure of damages was too restricted. The defendant should have been allowed for actual damage to his business. The plaintiff is not entitled to any judgment, but there should be a new trial.
The action was upon a promissory note, made by the defendant, bearing date 16th November, 1855, whereby twelve months after date he promised to pay to the order of P. H. Lalouette, for value received, the sum of $1,648.28.
The complaint alleged an indorsement by the payee to Lalouette & Ashfield, and by the latter to.the plaintiff.
The answer admitted the making of the note and the delivery thereof to Lalouette & Ashfield, but denied the indorsement by them to the plaintiff, and also 'denied that the plaintiff was the lawful owner and holder of the note, &c., &c.
To entitle the plaintiff to recover'it was only necessary to produce the note at the trial, and prove the indorsements; possession of the note was prima facie evidence that he was the lawful owner-and holder of it.
The plaintiff, when he rested, had shown a tona fide ownership of the note, and the exception taken by the defendant was therefore untenable.
There was no question of fact to be submitted to the jury. It was conceded at the trial that the plaintiff became possessed of "the note after maturity; any defense, therefore, that could be urged against other parties to the note, might be maintained against the plaintiff. It was immaterial what consideration was given by him for the note; it was perfectly competent for Lalouette & Ashfield to give it to him.
To my mind it is quite clear that the only consideration for the note was the sale and delivery by Lalouette & Ashfield to the defendant of “ all fixtures and appurtenances in, upon and appertaining to the coal-yard, known as 441 Grand street, and now (then) occupied by said Lalouette & Ashfield, and described in the annexed schedule.”
The lease, which had “ about two years to run,” was sold for the consideration of one dollar. It contained “ a free privilege to remove all the said fixtures at its expiration.”
There is no difficulty in the present case arising from a refusal by the lessor to permit the fixtures to be removed; whether or not he could successfully have resisted the claim of the defendant to remove them can in no way be invoked; (Ombony v. Jones, 19 N. Y. R. 287; Amos & Ferard on Fixtures, 8;) the defendant was
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desired to remove them; no one prevented him. * The landlord requested him to take them away; and the defendant did take some of the things specified in the schedule.
By express agreement if a renewal of the lease was not given Lalouette & Ashfiejd was to refund the one-half the loss on said fixtures.
The jury found, and upon the evidence it could not be questioned, that the value of the fixtures was $702."
It is quite clear that the fixtures were worth one-half that sum if removed and taken away. Thus it is evident that the only damage which the defendant could have sustained, was $851; the extent of the liability of the defendants on that account by agreement, being the one-half of this latter sum, is the sum of on hundred and seventy-five dollars and fifty cents.
.The plaintiff should be permitted to enter judgment for the amount of the verdict, less the sum of $175.50.
Ordered accordingly.