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Patterson v. Stettauer

40 N.Y. Super. Ct. 54 8 Jones & S. 54 Court N.Y. Super. Ct. Decision date 1875-08-03 English

Contents

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JAMES PATTERSON, Plaintiff and Respondent, v. CHARLES S. STETTAUER, and another, Defendants and Appellants.

Headnote

I. DEPOSITION TAKEN IN AN ACTION AGAINST CO-PARTNERS BEFORE ONE OF THE DEFENDANTS HAS APPEARED (WHO SUBSEQUENTLY APPEARED AND ANSWERED), BUT AFTER THE OTHERS HAD APPEARED AND ANSWERED,
Is admissible on the trial of the issues formed by the answers as against those who had appeared and answered at the time it was taken, and being so admissible must affect the one who had not then appeared to the same extent as it would have affected him as a partner of the others if he had not appeared at all.
1. A ruling to this effect is correct.
. XL BILLS OF EXCHANGE—DRAFTS.
1. Authority to draw, construction of.
An agreement by A to deliver to B goods from day to day for a period extending over several months, and by B to pay for such goods on the first day of each month in drafts drawn by A on B at twenty days’ sight,
does not restrict
A to drawing on the first of each month but a single draft for all the goods delivered during the preceding month,
does not require, as a condition precedent,
to the obligation to pay that there should be a demand for the payments of such drafts.
2. Drawn under such an agreement as above, generally on THE VENDEE FOR PART PAYMENT OF GOODS DELIVERED.
1. Effect of delivery by drawer to a third person, and re-delivery to drawer.
a. Delivery does not operate as an assignment pro tanto of what was due to the drawer under the contract, or of the drawer’s rights and interests thereunder.
1. This although the agreement provided that the drafts should he endorsed as correct by a person specified in the agreement, and the same were so endorsed.
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b. Re-deliveby would operate as a be-assignment of what was originally transferred.
1. Cause oe action. If the delivery operated to divest the drawer of any cause of action he then had, the re-delivery operated to re-invest him therewith.
8. Pbesentment fob acceptance.
1. Evidence sufficient to sustain a finding of presentment,
a. Proof of repeated promises by the drawees to pay the draft is sufficient; it not appearing that the promise was made under a mistake as to the fact, or from a benevolent motive or moral and not legal obligation.
1. This although the drawees testify that the draft was not presented.
El. GOODS SOLD AMD DELIVERED—ACTION FOR.
1. Special' contbact fob payment in a pabticulab mode does not intebfebe with the maintenance of such an action,—• when,
a. When the defendant, upon being duly and properly requested to make payment in the mode prescribed refuses so to do.
1. Drafts drawn as per special agreement by the vendor on the vendee for payment do not interfere with the maintenance of the action, when.
a. When the drawee refuses to either accept or pay the drafts, and at the commencement of the action they remain unpaid and unaccepted in the vendor’s hands.
8, Complaint, allegations in.
1. What do not necessarily interfere with the action being for goods sold and delivered, and malee it one solely for damages for non-acceptance of drafts.
a. When the complaint avers that defendant agreed with plaintiff in consideration of plaintiff’s delivering to him certain goods to accept, honor, and pay the drafts of tlie plaintiff on him, for the value of such deliveries, provided such drafts were endorsed as correct by a person named in the agreement; that plaintiff in pursuance of such agreement delivered a large quantity of goods of the value of thirty thousand dollars, and drew on defendant five drafts amounting in the aggregate to eleven thousand six hundred and four dollars and twenty-five cents, which were endorsed as correct by the person named in the agreement, and were duly presented to the defendant for
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acceptance who refused to accept, honor, or pay the same; that plaintiff is the lawful owner and holder thereof; that by reason of defendant’s failure to accept, honor, and pay said drafts, plaintiff has suffered damage in the sum of eleven thousand dollars; and prays judgment for damages in eleven thousand dollars;
1. It states : a cause of action on the contract for that part of the value of the goods delivered for which the drafts sat forth in the complaint were drawn.
2. The averments as to the drawing of the drafts, the presentment of them and the refusal to accept, honor, or pay, and the ownership of them, and the averment “ by reason of the defendant’s failure to accept, honor, and pay saids drafts,” do not necessarily malee the action one based solely on a muse of action for damages for refusal to accept.
Before Curtis and Sedgwick, JJ.
Decided August 3, 1875.
Appeal by defendants from judgment entered on report of referee.
The action was brought upon a contract made between plaintiffs and defendants, by which the plaintiffs promised to deliver to the government of the United States at the Bosque Rodondo Reservation, as many pounds of beef as might be called for by the government commissary. The defendants promised to pay the plaintiff therefor, six and one-half cents per pound tor the beef so delivered and accepted by the commissary. The contract provided “payment to be made on the first day of each month, in drafts twenty days’ sight on C. S. Stettaner & Co., 44 Hudson street, New York, said drafts to be endorsed by the commissary agent as correct.”
The complaint was as follows:
“ The plaintiff, by this his amended complaint, alleges :
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“ That at the times hereinafter mentioned, the-defendants above named, with one Perry Fuller, were-co-partners in trade, and doing business in the city of New York, under the firm name of C. S. Stettauer & Co., and at the city of Washington, D. C., under the firm name of Perry Fuller & Co.
“That the defendants’ partners in business, under the firm name of C. S. Stettauer & Co., at Las Vegas, New Mexico, on or about February 10, 1868, agreed with this plaintiff, in consideration of this plaintiff’s furnishing and delivering* at Fort Sumner, in the Territory of New Mexico, a quantity of beef for said firm, that said firm would accept, honor, and pay the drafts-of this plaintiff upon them for the value of the said deliveries, provided said drafts so drawn by this plaintiff were, before presentation, endorsed by one W» Rosenthal, who was acting as the commissary for theNavajoe Indians, as correct.
“The plaintiff further shows that, in pursuance of said agreement, during the months of March, April,, and May, 1868, he duly delivered a large quantity of beef of great value—to wit, of the value of thirty thousand dollars—at Fort Sumner, as required in and by said contract
“This plaintiff further shows that at Fort Sumner, on April 23,1868, in pursuance of said agreement, he drew upon the defendants four drafts, in the words.and figures following:
[Here the complaint set out four drafts, amounting in the aggregate to eight thousand one hundred and thirty-four dollars and twenty-eight cents. And then proceeded:]
“The plaintiff further shows that each of said drafts was, before its presentation to the defendants, duly endorsed : Correct, W. Rosenthal, commissary Navajoe Indians,’ and also by John J. Chi sum, and was afterwards, to wit, on June 30,1868, duly present
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■ed for acceptance to the said drawees named in said bills, but the said defendants refused to accept, honor, ■or pay the'same or any part thereof.
“That this plaintiff was thereupon compelled to, •and did, take up said drafts, and is now the lawful ■owner and holder thereof.
“This plaintiff further shows that, at Fort Sumner, ■on May 1, 1868, in pursuance of said agreement, he drew upon the defendants a further draft, in the words and figures following:
6 $3,505. 97.
‘ Fort Sumner, N. M., May 1, 1868.
‘ Twenty days after sight pay to the order of myself three thousand five hundred and five dollars, value received, and charge the same to account of
‘ JAMES PATTERSON.
* No.-13.
6 To C. S. Stettauer & Co.,
45 Murray street, New York city.’
“ The plaintiff further shows that the said draft was, before its presentation to the defendants, duly endorsed : ‘ Correct, W. Rosenthal, commissary Navajee Indians,’ and also by this plaintiff; and that the same was duly presented for acceptance to the defendants on May 14, 1838.
“That the defendants refused to accept, honor, or pay said draft, and that the plaintiff is now the lawful ■owner and holder thereof.
“The plaintiff' further shows that by reason of the failure of the defendants to accept, honor, and pay said drafts, this plaintiff has suffered damage in the •sum of eleven thousand six hundred and forty dollars, with interest from May 23, 1868. That afterwards, •and on or about January 3, 1871, the said Perry Fuller ■departed this life, leaving the above-named defendants the surviving partners of the said firm of C. S. Stettauer Co. and Perry Fuller & Co.
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“ Wherefore plaintiff demands judgment against the said defendants for damages in the sum of eleven thousand six hundred and forty -fife- dollars, with interest as aforesaid, besides the costs of this action.”
The defendants were partners in business under the firm name of 0. S. Stettauer & Co. The evidence tended to show that during the month of April, 1868, the plaintiff delivered to the commissary, under the contract, a quantity of beef, which was accepted by the commissary, and which, at the contract price, entitled the plaintiff to draw' upon the defendants for a sum greater than four thousand five hundred and five dollars and ninety-seven cents. The plaintiff drew his draft at twenty days’ sight, dated May 1‘ 1868, for three thousand five hundred and five dollars and ninety-seven cents, to the order of himself, upon the defendants, and transferred it for a valuable consideration to a firm of Bold & Brunswick. This draft was upon its face certified to be correct by the government commissary. A notary testified without objection, that he presented this draft for acceptance at 45 Murray street, to a person representing Charles S. Stettauer & Co. That a' memorandum across the draft in the words, “Protest for non-acceptance. B„ S. Fanning, Notary Public,” was in the handwriting of witness. The witness testified that he recollected nothing about the presentment of the draft apart from the memorandum, and that the reason he said he presented it to a person representing the defendant’s firm was, that it was his habit always to do so, and he spoke entirely from his habit. No question was made upon the trial as to the place of presentation being 45 Murray street, and not 44 Hudson, named in the contract.
It appeared that about August 20, 1869, the defendant’s firm of C. S. Stettauer & Co. was dissolved by written articles signed by the various members of the firm. The articles referred to the contract now in
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suit, and a schedule stated : “The contract owes Andreas Bold ” (a member of Bold & Brunswick) “ on draft drawn by Patterson for three thousand five hundred and five dollars and ninety-seven cents.” After ' the bill had matured, the plaintiff paid it to Bold & Brunswick, who re-delivered it to plaintiff. There was much evidence, that the defendants who appeared in this action had after the maturity of the bill promised on several occasions to pay it.
At the conclusion of the .testimony on both sides, the counsel for the defendants moved for a non-suit as to the draft for three thousand five hundred and five dollars and ninety-seven cents, on the grounds :
First. That the plaintiff had no right, under the contract, to draw any drafts, except for beef delivered up to the first day of some month ; that is to say, on March 1, 1868, for the beef delivered in February, 1868 ; on April 1, 1868, for the beef delivered in March preceding; on May 1, 1868, for the beef delivered in April preceding; and on May 22, 1868, for beef delivered between April 30 preceding and May 22.
That the plaintiff could draw but four drafts in all under the contract.
¡Nor could the plaintiff, when entitled to draw a draft, draw one for less than the amount due him up to the first day of some month or May 22, unless he expressly released the defendants from the balance of the payment for which he was entitled to draw.
Second. That it appeared that the draft of May 1, 1868, was drawn fora less amount by some thousanJs of dollars than the plaintiff was entitled to draw for.
Third,. That the commissary agent, Rosenthal, had no authority to endorse as correct any diafts not drawn in pursuance of the terms of the contract. That his authority to so endorse must be strictly pursued.
Fourth. That as to this draft, there was no proof at all' of any kind of presentment for payment; that, indeed,
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there was no competent proof of any presentation of that draft for acceptance.
Fifth. That the evidence shows that at the time of the alleged presentment for acceptance and payment and the refusal to pay the draft in question, it was held by persons other than the plaintiff, to whom he had negotiated the same for value, and who knew it was drawn under the contract in question, and took it on the faith thereof; and that the cause of action against the defendants, arising upon that refusal, was therefore in those other persons, and had never been assigned to or become re-vested in the plaintiff. That the cause of action did not arise on the draft, the ' defendants- not being parties thereto, but upon the refusal to pay it; and the plaintiff did not become re-vested with that cause of action by subsequently taking up the draft as he did.
The referee denied the motion for a non-suit, to which decision the counsel for the defendants Stettauer excepted.
Defendant’s counsel also moved for a non-suit as to the four other drafts, but as the final decision was in his favor as to them, the motion and grounds therefor need not be enumerated here.
The counsel for the defendants requested the referee in settling this case to find the following facts:
First. That the draft of May 1, 1868, for three thousand five hundred and five dollars, specified in his report, was never presented for acceptance or payment to any member of the firm of 0. S. Stettauer & Co. personally.
The referee refused so to find on the ground that he did not consider such finding material to the issue. Defendant excepted, and then requested the referee to find one way or the other as to this fact; that is, either that the draft was or that it was not presented for ac
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ceptance or payment to any member of the said firm personally. The referee refused so to find on the ground that he considered the question presented by such finding immaterial. The defendant excepted to such refusal.
Second. That the said draft of May. 1, 1868, was never presented for acceptance at the oifice of the defendants (0. S. Stettauer & Co.). Nor was that draft ever presented at their office for payment. The referee refused so to find, and finds the contrary. Defendant excepted.
The other material matters sufficiently appear in the opinion. z
R. W. Townsend, attorney, and A. R. Dyett, of counsel for appellant, urged :
I. The referee erred in admitting the deposition of Andrew Napier. If Charles S. Stettauer never had answered, a joint debtor judgment might have'been rendered which would not have affected his separate property, but having answered, it "was impossible to render a judgment which would not affect him personally.
II. The referee erred in refusing to non-suit the plaintiff, (a) The draft being for less than the whole of the amount of beef delivered during the preceding month, was not authorized by contract. Bach payment, like monthly payments of rent on a lease, was indivisible, and he could not split up his demand therefor by drawing several drafts which, if he could draw, he could negotiate to third parties (as indeed he did), and thus compel the defendants to make separate payments (it might be of one dollar apiece), to a legion of assignees, which, would be entirely inadmissible (15 Johns. R. 229; 16 Id. 131; 1 Wend. 487 ; 16 N. Y. 54 , 87, 548; 43 Id. 243; 1 Sween. 19; 19 Wend. 207 ; 54 Barb. 191 ; 3 Keyes, 40). We do not mean that the plaintiff might not release the defendants from liability for the
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residue of the monthly payment, but his intention to do so should be expressed ; and that lie did not intend to-do so is evident from the fact of his drawing other drafts. Without such a release it is perfectly evident that if the defendants should voluntarily pay a draft for the less sum they would thereby consent to the severance. If the payments under the contract were to-be made generally, without anj'- previous demand, and an action were brought for a part of an indivisible payment, the plaintiff could recover, because he might sue for a- part, and the only consequence would be that the judgment would bar a recovery for the residue. But where a demand is necessary, especially where as here, a prescribed formula is to be observed in making it, such a demand is a condition precedent, and the plaintiff can not recover on a specific demand of a part only, without an express release of the residue, not because he sues for a part only, but because the defendants were not obliged to comply with such a demand; and the defect, therefore, is in the demand, and the condition precedent has not been complied with. (6) A presentment of the draft for acceptance was not proved. The only semblance of evidence in the case as to the presentment of the draft- for acceptance, is that of the notary, Fanning. And the defendants both testified that it never was presented. It was necessary, to enable the plaintiff to recover in this action, under the contract in question, to prove a personal presentment of the draft to the defendants or some of them. It can not be pretended there is any evidence of such a- presentation. The referee refused to find one way or the other on the subject of personal presentment, on the express ground that he did not consider such finding material to the issue, (e) There was no cause of action in the plaintiff. In addition to what is stated in the case, it is deemed necessary simply to add that the drafts in question having been drawn and endorsed as
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-correct by the commissary agent under the contract in question, for the purpose of payment of the money due thereunder, and negotiated for value to, and taken by, "the parties to whom they were so negotiated on the faith thereof, the transferees were assignees of the plaintiff’s rights and interests, pro lardo, under the contract (Hall v. The City of Buffalo, 1 Keyes, 193, 198, ;and 300; Morton v. Nailor, 1 Hill, 583 ; Young v. Wardens, 61 Barb. 489 ; Shuttleworth v. Bruce, 7 Rob. 160 ; Lewis v. Berry, 64 Barb. 593 ; 25 N. Y. Rep. : N. Y. Rep. 179 ; 64 Barb. 593 , 597, 598 ; 3 Bosw. 505 ; 46 N. Y. Rep. 660 ; 1 R. S. 768, §§ 6-9 ; 7 Hill, 577 ; 34 Barb. 630 ; 15 Johns. R. 6 ; 15 Abb 280 ; 17 Wend. 508 ; 40 Barb. 368 ). There is some evidence in the case tending to show that the -defendants promised to pay this draft, but this promise is unavailable to help the plaintiff for several reasons. (1). There is no allegation of any such promise in the complaint which is drawn upon the theory (and so ■expressly stated) that this draft was drawn in pursuance of the agreement, certified by the commissary agent, and that the defendants refused to accept, honor, or pay it, and damages are claimed by reason of such failure. (2). The promise, if made, was made after the draft had been presented for acceptance and payment •(so far as it wa s presented) and after it had got back in the plaintiff’s possession, and was in possession first of the witness Bold, and then of the witness Jacobs for collection, except, however, the promise to the witness Marcus Brunswick, which was in the summer of 1868. (3). It did not appear that at the time that promise was made by the two defendants by whom it was made that they or -either of them had any knowledge that the draft was drawn for less than the full amount of the monthly payment; but on the contrary they both testified and .they were not contradicted, that they had no knowledge on the subject; and (4). The promise, if made, had
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had no consideration, and was not binding, nor had it ever been relied on, and at best would have been but an item of evidence tending to show the correctness of the draft, whereas, its incorrectness was expressly proved and, indeed, admitted.
Compton & Root, attorneys, and Elihu Root, of counsel for respondent, urged:
I. The exception to the admission of Napier’s deposition should be overruled. His interests were fully protected by the limitation on the effect of the deposition as to him.
II. The draft for three thousand five hundred and five dollars and ninety-seven cents, was drawn in accordance with the contract. The sole objection to the validity of the draft presented by the (defendants is, that it was not drawn for the full amount that was due. They say that the plaintiff was entitled to draw on the first of each month one draft only for the price of the beef delivered during the preceding month, and could not divide the amount into a number of different drafts. (1). The first obvious answer to this proposition is, that if it were of any force at all it would be not against the first draft, but the second, should it be presented. If the plaintiff had power to draw but one draft under the contract for April beef, this draft exhausted his power, and all subsequent drafts would be invalid—so much the better for the defendants; but the one draft he did draw while he had power would not be affected. (2). No such limitation is to be found in the contract. If they wished but one dralt to be drawn each month for the whole of the previous month’s beef, they should have provided for it in the contract, and agreed to pay by accepting a draft; oil the first of eacli month. (3). It is evident, from the circumstances of the parties, that their intention in contracting, was to provide for drafts to be used as the plaintiff might require. (4). It is evident from the
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acts of the parties that the construction of the contract now contended for by the defendants was not in the minds of either party before the commencement of this action The drawing of a draft for two thousand six hundred and one dollars and eighty-eight cents, March II, and six hundred and sixty dollars and twenty-five cents, on April 3, was totally irreconcilable with that construction. (5). If there be any question upon the face of the contract of the nature of the drafts authorized, the circumstances above mentioned must govern its construction in plaintiff’s favor (Ulster Co. Bank v. McFarlan, 3 Denio, 553 , 564). (6). The provision for payment was on the defendant’s part, and must be construed most strongly against them (Ulster Co. Bank v. McFarlan, supra).
Y. The defendants refused to accept the bill. The evidence of the defendants Charles and Louis Stettauer, that they did not remember to have seen this or any of the drafts except the two paid, weakened as it was by the evidence of Hatch and the subsequent admission of Louis Stettauer, was sufficient to justify the referee’s finding that the drafts had been presented both for acceptance and payment and both had been refused. The dissolution agreement, and the interviews with Dold, Jacobs and Brunswick establish the fact that for a long period before the commencement of this action the defendants knew tha.t the draft had been presented, had not been accepted, was held for payment and payment required of them ; and that defendants had promised to pay the draft in question which as against the demands by Dold and Jacob were sufficient, whether drafts were shown or not (Etheridge v. Ladd, 44 Barb. 69 ). It was, then, the defendants’ duty to pay the draft precisely as if they had accepted it (Williams v. Germain, 9 B. & C. 468, 477). The refusals to pay the draft more than twenty days after presentment and non-acceptance involved a refusal to accept, and adopt
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ed and made the defendants, the refusal of whatever person was in charge of their office when the presentment was made.

I am of opinion, that the judgment should be affirmed, and proceed to examine the exceptions argued on this appeal by the appellant’s learned counsel,

A deposition de T)ene esse was offered in evidence. This had been taken after Louis Stettauer had answered, but before Charles S. Stettauer had appeared or answered. Counsel for Charles S. Stettauer objected to the admission at all of the deposition, on the ground that it was taken before Charles S. Stettauer had appeared. If this were so, the referee would not have been justified in preventing the plaintiff using it as testimony against Louis Stettauer. He, therefore, properly admitted it. At the same time he made a ruling which by misprinting, as I think, does not appear correctly in the printed book. - The meaning of the referee, was, I have no doubt, that, although admitted as against Louis Stettauer, the deposition would not affect Charles Stettauer, excepting as it would have affected him as partner of Louis, if Charles had not appeared at all. Perhaps as the case stood, under oar system of practice, this might have been hard to accomplish, yet the referee was correct in his ruling upon the objection made.

The defendants moved for a non-suit on the ground that it appeared on plaintiff's case, that when the draft in question was drawn, there had been actually delivered one thousand dollars worth of beef, at least, more than was included in the draft, which was for three thousand five hundred and five dollars and ninety-seven cents. The argument was, that by the contract, payment was to be made on the first, day of each month, in drafts at twenty days’ sight on C. S. Stettauer & Co.:

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that the plaintiff had no rightto draw, nor had the commissary to endorse, any draft except in accordance with this contract; that the defendants were not obliged to pay any drafts not drawn in accordance with the contract ; and that if the plaintiff could draw for any part less than the whole of the amount of beef delivered during the preceding month, there is no limit to the number of drafts that he might draw.

Undoubtedly, the form of the contract is the only basis of the obligation of the defendants to the plaintiff, but the defendants must rely upon the words as they are. The contract says that, after the beef has been delivered, ihe defendants promise that payment shall be made (of course by them), on the first day of such month in drafts, not draft. The defendants therefore can not rely on this provision as establishing their right to claim that they only promised to pay, if a single draft was presented which was for the exact amount of beef delivered in the preceding month. Nor does this provision establish as a condition precedent to the obligation to pay that there should be a demand for the payment of such a draft. The reasonable construction of the provision is, that the beef of one month is to be paid, not in cash at the end of the month, but by means of drafts drawn by plaintiff, the payment of which should become due on the twentieth of the following month. The defendants would not be subjected to annoyance from the amounts of the drafts being made very small. The number is not expressed, but the law construes the contract with reference to the transaction provided for by it.

As to another ground upon which a non-suit was asked, viz., that there was no evidence that the draft had ever been presented to the defendants for acceptance, the' testimony of the notary Fanning being insufficient from its peculiar character, and each of the defendants having testified that the draft was not pre

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sented, I am of opinion that the referee was at liberty to find, as he did, that the draft was presented upon the testimony showing that the defendants had repeatedly promised to pay the particular draft. Looking at this as mere circumstantial evidence, the referee had a right to infer that all had been done as to the draft, which was necessary to create a legal liability in reference to it, on the part of the defendants. There was no sort of evidence that the defendants promised under a mistake as to the facts, or from a benevolent motive, or a moral and not legal obligation. It is not necessary, therefore, to pass upon what would have been the effect of the notary’s evidence, if his had been the only testimony in this case.

Another ground upon which a non-suit was asked, was that it appeared that the cause of action was not in the plaintiff, because that at the time the draft was presented, it was owned by another than the plaintiff, who knew that it was drawn under the contract proven. This is supported by the argument, that the delivery of the draft was an assignment pro tanto of what was due to plaintiff under the contraer. This has no solid foundation. The draft was properly a bill of exchange only. It could operate as an assignment, only if on its face it appeared to be drawn on a particular fund in defendants’ hands. But it appeared in all the parts that, made it a bill, to be drawn on the defendants generally. If it were an assignment, its re-delivery to plaintiff, for a valuable consideration, made it a reassignment to him of what it originally transferred. Indeed, the plaintiff’s action was upon the original contract. He had delivered the beef, and defendant had not paid for it in the manner provided. The plaintiff proved that he had complied with all the conditions precedent that the contract implied should be performed on bis part. The damages suffered by plaintiff were at least the amount of the draft.

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The proof that was given as to the delivery of beef, and the promises of the defendants to pay their draft was sufficient to sustain the referee’s finding as matter of fact, that the beef on account of which the draft was drawn, had actually been delivered.

There were other exceptions argued, but it is not necessary to examine them, as they related to other drafts in regard to which the referee’s findings and conclusions were in favor of defendants.

The judgment should be affirmed with costs.

Cubtis, J„, concurred.

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