Hyperlawhypertext legal database Thurber v. Hughes 47 N.Y. Super. Ct. 159

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Thurber v. Hughes

47 N.Y. Super. Ct. 159 15 Jones & S. 159 Court First. The court erred in refusing to di Decision date 1881-02-07 English

Contents

Majority

p. 159
HORACE K. THURBER, and others, Appellants, v. WILLIAM HUGHES, Respondent.

Headnote

I. Consideration.
1. Want of, when it does not arise.
(a) Not when the purchaser gets all the bargain.
1. Breach of conditions of sale or of a warranty does not constitute a want of consideration.
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II. Pleading.
1. Defense of want of consideration.
(a) What not admissible under.
1. Evidence of breach of a condition of sale or of a warranty is not.
in. Appeal.
1. Error, when not cause for reversal.
When evidence has been received without being objected to on the ground that it was inadmissible under the pleadings, that objection will not be entertained on appeal, if the case was otherwise fairly left to the jury.
IY. Evidence.
1. Contradicting or varying writing.
(a) Hon-APPLICABILITY op rule that evidence tending to SUCH RESULT IS INADMISSIBLE.
1. Where the writing refers to matters which are not incorporated in it, the writing is to be read and construed in connection with such matters, consequently evidence of them is admissible.
Y. Application op above priniciples.
1. A bill of sale was in terms as follows: “For value received we have hereby sold and have also delivered to W. H.,” the defendant, “ the stock and fixtures of store . . . as per terms of sale sold at auction July 39, and also sold all our rights in the lease from R. B. to J. R. on same premises, and sold by J. R. to J. H.”
Signed H. K. T. & Co.
Evidence was admitted as to what took place at the time of the auction. The plaintiff and defendant and their respective witnesses differed in their versions. Accoiding to the defendant’s version, 1-1. II. T. announced that the landlord (R. B.) claimed $1,000 to be due for back rent, but that there was only $500 due; that he was II. II. T., that everybody knew who he was and where he was to be found. There was evidence upon which the jury could iind that the defendant was compelled to pay $1,040. The jury found for the defendant. It appeared that defendant purchased the property mentioned in the bill of sale for $3,500. The claim of II. II. T. & Co., the plaintiffs, was $3,148.74. This defendant paid by cheek for $599.55, and his three notes for $514.07 each. The balance of the $3,500 was paid to the owner of the property upon a claim against whom held by them, II. It. T. & Co. made the sale. . Defendant paid the first two notes, but refused to pay the third, on the ground that there was no consideration for it, ns the sum he had to pay
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to the landlord for back rent over and above the $500, subject to "which only the lease was sold, was in excess of the amount of the noto. It also appeared that defendant got the stock and fixtures, and his title to them had never been questioned or interfered with.
Held,
1st. Evidence of what took place at the auction sale was admissible.
2d. The jury must be assumed to have found in favor of defendant’s version of the announcement made.
3d. That such announcement was part of the terms of sale, and amounted, in connection with a prior announcement that the place would be sold subject to a claim of the landlord for $500, to an undertaking on the part of H. K. T. & Co., that the purchaser should have an allowance for all he might eventually have to pay, over and above the sum of $500, or at least defendant might have so understood it.
4th. That a breach of such undertaking did not constitute á want of consideration for the note sued on.
5th. That it was questionable whether a breach of the undertaking could be availed of under a want of consideration.
6th. That a question of pleading not raised below should not be entertained on appeal, if the case was otherwise fairly left to the jury.
7 th. That a motion for the direction of a verdict in plaintiff's favor was properly denied.
VI. False issue.
1. New trials for.
(a) Submission on theory not supported by the proof.
Cause for new trial.
(5) Irrelevant evidence tending to raise false issues.
1. Its admission and the submission to the jury for their determination, the question on which it bears as being involved in the issue, when in fact it is not, calls for a new trial.
1. In the action at bar the jury, by the charge, was left at liberty to find that the plaintiff pretended to sell a wholly unobjectionable lease standing in their own names, and that the defendant, if he had known all the facts, would never have given the notes in suit; and the question of the value of the lease was submitted to them, although it appeared that the defendant, by an arrangement with the landlord on the payment of the additional $540, got, without any interruption to his business, a lease in his own
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■ name reserving the same rent as was reserved by the lease sold, and in all material respects equivalent thereto.
Held,
error.
"VII. Lease, value of.
l._ How determined.
(a) By the value of the unexpired term less the rent reserved.
1. Good-will as an element in estimating value.[1]
Before Speir and Freedmah, JJ.
Decided February 7, 1881.
Appeal by plaintiffs from a judgment entered against them upon the verdict of a j ury and from the order denying their motion upon the judge’s minutes for a new trial:
The action was brought to recover the principal and interest of a note made by the defendant to the order of the plaintiffs, dated July 30, 1874, and payable eight months after date, for $514.74. The only defense pleaded is want of consideration.
The note, with others, was given for the purchase of the contents of a liquor store and plaintiffs’ interest in the lease of the store. The plaintiffs, who had purchased the property at a sheriff’s sale under an execution, and also held a chattel mortgage on it for $3,000 that had been made by Joseph Hughes to John Riordan and assigned by the latter to the plaintiffs, on July 39,1874, proceeded to sell the same by auction. Th e sale was conducted by a clerk in their employ. The defendant, who is a brother of Joseph Hughes, attended, and the property was struck down to Mm for
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the sum of $2,500. A day or two thereafter the parties met to consummate the transaction, and the defendant executed and delivered to the plaintiffs his three promissory notes, dated July 30, 1874, and payable four, eight and twelve months after date, respectively, each for $514 and some cents, together with a check for $599.55, amounting together to the sum of $2,143.74, being the amount claimed by the plaintiffs for their interest in the property, together with certain expenses of sale, etc. On receipt of these notes and the check the plaintiffs executed and delivered, and the defendant accepted a bill of sale in the following language, viz. :
1 ‘ For value received we have hereby sold and have also delivered to Mr. William Hughes the stock and fixtures of the store corner of Oak and Roosevelt streets, Hew York, as per terms of sale sold at auction July 29 th, and also sold our rights in the lease from Robert Boyd to John Riordan on same premises, and sold by John Riordan to Joseph Hughes.
“ H. K. Thueber & Co.”
The balance of the $2,500 bid, amounting to1 $356.26, the defendant paid over to his brother, Joseph Hughes, the mortgagor. He also took possession of the property sold and of the store immediately after the sale.
The defendant subsequently paid the note at four months, and also the note at twelve months, but as to the note at eight months he insists that there was no consideration, though they were all given for the same, transaction. Other facts appear in its opinion.
Nelson Smith <& Leavitt, attorneys, and of counsel,, for appellants, upon the questions considered by the court,'u rged:
First. The court erred in refusing to di
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rect a verdict for the plaintiffs as requested by their counsel at the close of the evidence.
I. It is error fora judge to submit a question to the jury where there, is no evidence to sustain a finding thereon ; and it is for a similar reason correct to refuse to submit a question unsupported by evidence (Algur v. Gardiner, 54 N. Y. 360 , 364, 365 ; Shirley v. Vail, 38 How. Pr. 406 ; Corning v. Troy Iron & Nail Factory, 44 N. Y. 594 ; Benson v. Southard, 10 Id. 236 ; Herring v. Hoppock, 15 Id. 413 ; Godin v. Bank of Commonwealth, 6 Duer, 76 ; Pray v. Garcelon, 17 Me. 145 ; Pollock v. Pollock, 71 N. Y. 153 ).
II. The only defense set up in the answer was failure of consideration. There was no evidence to sustain that defense.
III. There is no failure of consideration when the purchaser gets what he purchased, even though it turns out to be valueless (Johnson v. Titus, 2 Hill, 606 ; Chapman v. Speller, 14 Q. B. 621; Oakley v. Boorman, 21 Wend. 588 -596 ; Horner v. Wood, 15 Barb. 371 , 373).
IY. A purchaser with knowledge that the goods purchased are claimed by a third person, or that such person has a claim upon them, and he voluntarily pays the price, or any part of it, to such third person, cannot afterwards, when sued by the vendor for the price, set up want of title in the vendor (Vibbard v. Johnson, 19 Johns. 77 ). The plaintiffs were not obliged to prove any title in themselves to either the stock, fixtures or lease (Fitzpatrick v. Kaplin, 4 E. D. Smith, 365). Want of title in the vendor of personal property is no defense to an action for the purchase price, when there has been no recovery by the owner against the purchaser (Case v. Hall, 24 Wend. 102 ; Bardwell v. Collie, 45 N. Y. 496 ).
Y. There was no evidence of any warranty by the plaintiffs as to the amount of rent in arrear. 1. The written bill of sale was the contract between the par
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ties. All that occurred at the auction sale is presumed to have been inserted in that contract (Van Ostrand v. Reed, 1 Wend. 424 ; Pollin v. Leroy, 30 N. Y. 549 ; Johnson v. Mackintosh, 31 Barb. 267 ; Mumford v. McPherson, 1 Johns. 414 ; Highland Chemical Co. v. Matthews, 11 J. & S. 41; Wilson v. Dean, 74 N. Y. 531 ). 2. Thurber’s statement that he was responsible was no warranty that the rent in arrear did not exceed $500. It was - no warranty of anything. The subsequent writing is presumed, to embrace all that occurred (Ib.).
Second. The court erred in overruling the plaintiffs’ objection to the question put to the defendant: — “What was the value of the use and occupation of those premises under the lease of ten years, in 1874, seven years and some months to run ?”
I. The value of a lease is to be determined by the value of the unexpired term, less the rent reserved (Trull v. Granger, 8 N. Y. 115 ; Dean v. Roesler, 1 Hilt. 420).
II. The witness answered he believed the lease to be worth $1,000. This improper evidence prejudiced the plaintiffs with the jury, and especially so in view of the fact that the court called attention to it in his charge (Ray v. Smith, 5 T. & C. 702; Warrall v. Parmley, 1 N. Y. 519 ).
Third. The court erred in its charge modifying the plaintiffs’ fourth request. The court there said: — “The value of the lease for a term embraces in it what seems to have been considered a certain good-will or privilege of carrying on business there.” That was . error, and the exception to it was well taken. And as we have so often said, the value of a lease is to be determined by the value of the unexpired term less the rent reserved. The statement of the court that the value of the lease and term embraces in it, what seems fo have been considered a certain good-will or privilege
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of carrying on the business was misleading to the jury and erroneous.
Fourth. The exception to the charge of the court: “ That it is for you (the jury) to determine whether, if the defendant had known this, the landlord’s rights, he would have given his notes,” was well taken. There was no dispute but that the defendant knew all about the landlord’s rights. The evidence of Thurber, Campbell, and of all the witnesses, shows that the defendant went out on the sidewalk with the landlord and Mr. Thurber and Mr. Campbell, and had full notice of the landlord’s rights. The charge was calculated to mislead the jury, and was erroneous. In fact the landlord had no claim, except for the $500 as claimed by Mr. Thurber.
Fifth. The exception to the charge of the court which states “ that there has been testimony that the lease and good-will were worth $1,000,” was well taken. There was no evidence as to what the lease or goodwill was worth—no legal testimony, we mean. The only testimony admissible to show what the lease was worth was testimony to show the value of the unexpired term less the rent reserved. The defendant’s own testimony shows that the rent reserved in the lehse was more than use of the premises was worth. Hence there could be no testimony that the lease was worth $1,000, and as to the good-will there was no testimony whatever, and in the nature of things could not be, as goodwill is intangible and not subject to computation in dollars and cents. Besides, the defendant enjoyed the ,good-will, whatever it was. •
Sixth. When the charge of the court is uncertain as to' what rule the judge intends to give the jury in determining any question submitted to them, or misapprehends the case, it is ground for granting a new trial, though no exception was taken (Oviatt v. Pond, 29 Conn. 486 ; Standard Oil Co. v. Amazon Ins. Co., 79
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N. Y. 506 -510). The charge oí the court here, in view of the fact that there was no warranty by the plaintiffs, or that, if there was, there was no breach shown, the whole amount of rent due to the landlord being only §500, as appears by the record of the summary proceedings in his favor, shows that the case was submitted to the jury through a mistake or misapprehension of the court as to the questions involved ; and hence a new trial should be granted on that ground, if for no other.
Seventh. The judgment should be reversed and a new trial ordered, with costs to the appellants to abide the event.
Frederick Smythe, attorney, A. J. Yanderpoel, of counsel, for respondent, on the questions considered by the court, urged:
First. None of the plaintiff’s exceptions to the admission or exclusion of evidence were well taken. We proceed to consider these exceptions seriatim, (a) The question : “ What was the value of the use and occupation of those premises under a lease of ten years in 1874, seven years and some months to run?” was properly admitted ; no ground for the objection was stated. The witness testified: “That he owned real estate in that neighborhood ; that he rented houses down there,- and knew what property of that sort rented for.” This was certainly a sufficient foundation for his opinion as to the value of this unexpired lease, if the objection had been placed on that ground. The evidence was perfectly competent. This was a proper method of proving its value. The witness had already shown himself peculiarly qualified by his experience and knowledge to testify to his opinion (See Clark v. Baird, 9 N. Y. 183 , 196). (b) Plaintiff’s objection to defendant’s answer to a question was improperly made .(Platner v. Platner, 78 N. Y. 90 ). Poggek, J., says :
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“ The answer, let it be conceded, was improper. The office of an objection is to stop an answer. When the question is proper, and has been put, and the witness answers that with proper and responsive matter, and of his own head adds something irrelevant, an objection does not check it. The improper part of the answer is to be met, and its effect taken away by motion to strike out, or request for instruction to the jury that they disregard. Though the court sustain the objection, the improper evidence is on the record. A motion made to strike out removes it therefrom.” Even though the objection in form be properly made, the answer of defendant was complete and responsive.. In the case of a written contract, if a person has been induced to enter it by false representations they may be proved by parol (Dobell v. Stevens, 3 B. & C. 623 ; Lysney v. Selby, 2 Ld. Raym. 1,118 ; Eakins v. Tresham, 1 Keb. 510 ; Wright v. Crooks, 1 Scott N. R. 685 ; Clermont v. Tasbaugh, 1 Jac. & W. 112; Irwin v. Saunders, 1 Cow. 249 ; Van Valkenburgh v. Roun, 12 Johns. 337 ; Creery v. Holly, 14 Wend. 26 ; Johnson v. Miln, Id. 195 ; Farmers’ & Manufacturers’ Bank v. Whinfield, 24 Wend. 419 ).
Second. The charge was in all respects correct. The court correctly and fully met each of the requests of the plaintiff’s counsel. 1. For the reasons already stated, the court properly refused to instruct the jury to disregard the parol testimony tending to show what the negotiations between the plaintiffs and defendant were prior to the execution of the bill of sale. 2. The good-will of the business, which was by means of the lease to be carried on by the defendant on the demised premises, constituted an element of their value. Such good-will was inseparable from the lease (Williams v. Wilson, 4 Sandf. Ch. 380 ; Dayton v. Wilkes, 17 How. Pr. 110 ; Cartwell v. Lee, 17 Vesey, 224 ; Martin v. Van Shaick, 4 Paige, 480). In Dougherty v. Van
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Nostrand (1 Hoffm. Ch.), Vice-Chancellor Hoffman says, at page 70: ‘ ‘ Upon a sale the good-will, of course, enters in the value of the lease, and enhances the purchase money. In truth, in the lease of a trading establishment it constitutes a large part of the value ” (See Mitchell v. Reed, 61 N. 7. 123). 3. There is sufficient evidence in the case to authorize the jury to find that the value of the term in the lease mentioned in the plaintiff’s bill of sale to the defendant was more than the rent reserved therein.

If the bill of sale embraced the whole of the contract between the parties, the defendant apparently received all he purchased, and if he did in fact, he should be held concluded by his bargain, though it may not have turned out as good as he imagined it was. For, as a general rule, an obligation cannot be defeated in whole or in part on the-mere ground of the inadequacy of the consideration, and there is no failure of consideration when a purchaser gets what he purchases, even though it turns, out to be valueless.

The defendant certainly got the stock and fixtures-absolutely, and his right and title to them has never been questioned or interfered with.

As to the lease in respect to which the real contention is, the bill of sale only calls for -whatever rights the plaintiff's had in it. Upon this point the bill of sale is explicit, and should be held to be the best evidence. The weight of the other evidence, however, points to the same conclusion. Horace K. Thnrber, Nason, the clerk who conducted the sale, and Wiley, ' another clerk also present, all testified that plaintiff's* interest only was sold. The defendant himself so testified, both on his direct and cross-examination, when first placed upon the stand, though, when recalled at a later stage, he sought to qualify it. But even then

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he did not retract the admission made on his first cross-examination in respect to the correctness of the writing. Moreover, he seems to have perfectly understood throughout that the lease was not held by the plaintiffs in their own names. Upon the question, therefore, relating to the nature of the lease, the plaintiffs were entitled to a ruling that they sold only what rights they had.

But the written bill of sale evidently does not express the whole of the contract between the parties. It shows upon its face that the sale took place upon ■certain terms, which are not set forth therein. Parol evidence was therefore admissible to show what these terms were.

The controversy between the parties arises out of a claim of the landlord of the premises for unpaid rent and a statement made by Horace K. Thurber at the auction sale in reference to such claim. There were present at the sale Horace K. Thurber, one of the plaintiffs, and two of his clerks ; William Hughes, the defendant; Mr. Riordan, the lessee named in the lease ; Joseph Hughes, the brother of the defendant and assignee of the lease from Riordan ; Mr. Boyd, the landlord ; Mr. Campbell, the attorney of the landlord, and a number of others. Mr. Thurber, in opening the sale, referred to the lease as an unexpired term of a ten years’ lease, having seven years and some months to run, and that plaintiffs’ interest therein would be'sold, subject to a claim of Mr. Boyd for rent, amounting to $500. In point of fact the lease was then virtually at an end, in consequence of á judgment obtained by the landlord in summary proceedings instituted to recover the possession, for two months rent in arrear from Joseph Hughes, but which judgment had not yet been enforced. This is not important, however, as the landlord and Joseph Hughes stood by and acquiesced, and the landlord was ready

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and willing to concede to the purchaser a right of redemption upon payment of the rent unpaid. In respect to that the landlord claimed, however, that in addition to the two months owing by Hughes there was due to him from Riordan a further sum, amounting to about $540; and through his attorney he gave public notice to those present that he would enforce his entire claim against the purchaser. Thurber, after consultation with the landlord and his attorney, directed the sale to proceed, and it is at this point that the most important conflict in the testimony arises. According to the version given by Thurber and some of the witnesses, he then announced that there was a dispute between him and the landlord as to the amount of rent due ; that he, Thurber, claimed that but $500 were due, that the landlord claimed $1,040, and that under the circumstances the place would be sold subject to whatever claim the landlord had. According to the version given by the defendant and some of the witnesses, Thurber announced that while the landlord claimed about $1,000, there were only $500 due ; that he was H. K. Thurber; that everybody knew who he was and where he was to be found, and that he was responsible.

If the fact was as claimed by the defendant, and Thurber’s statement amounted to a warranty that only $500 were due, or to a condition that the purchaser should have an allowance for all he might eventually have to pay over and above the sum of $500, it constituted one of the terms upon which the sale was made, and there being evidence upon which the jury could find that the defendant was compelled to pay $1,040, the case, aside from the question of pleading, was one for the jury, and no error was committed in denying plaintiffs’ motion for the direction of a verdict in their favor.

The jury having found for the defendant, the an

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nouncement, for the purposes of the present appeal, should be assumed to have been made as claimed by the defendant. The question then arises as to what legal effect should be given to it. It did not establish- or tend to establish want of consideration in the note sued upon, for the defendant got all, he purchased; and if treated as a warranty or condition it is ques.-tionable whether the defendant could avail himself of it without having pleaded it. But the question of pleading was not raised, and should not be entertained now, if the case was otherwise fairly left to the jury. Upon much reflection, and not without hesitation, I have come to the conclusion that under the circumstances the announcement made by Thurber, as the jury must be deemed to have found it, should be held to have been part of the terms upon which the sale proceeded, and amounted, in connection with the prior announcement that the place would be sold, subject to. a claim of the landlord, for $500, to an undertaking on the part of the plaintiffs that the purchaser should have an allowance for all he might eventually have to pay over and above the sum of $500, or that at least the defendant might have so understood it.

But here a new difficulty arises. The case was not submitted to the jury upon this theory, but they were left at liberty to find that after all the plaintiffs pretended to sell a wholly unobjectionable lease standing-in their own names, and that the defendant, if he had known all the facts, would never have given the note in suit. This mode of submission must have greatly prejudiced the plaintiffs. But this is not all. There was also testimony which had been improperly admitted, and which the jury were allowed to consider. The defendant, to whom the affirmative of the issue had been awarded on his motion, was allowed to testify on his direct examination, against plaintiff’s objection and exception, that the lease in question, if it had seven

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years and some months to run, was worth $1,000. This testimony was not based, as it should have been, if the inquiry had been material and relevant, on the value of the unexpired term, less the rent reserved, but solely on the opinion of the witness. No foundation had been laid for it, and on his cross-examination the witness admitted that he could not tell what it was worth, and that when he named $1,000, he had in view the good-will of the business. The testimony was also irrelevant to the issue to be tried and tended to raise a false issue. The defendant got not only all the rights of the plaintiffs under the lease, whatever they may have been, but under an arrangement made with the landlord, upon payment of the $1,040, and without any interruption in the business, he got a lease in his own name, reserving the same rent as was reserved by the lease sold, and in all material respects equivalent thereto, and as a consequence he did secure the good-will of the business, if that was sold to him, which is also a disputed question. The question to be tried, therefore, was not what was the value of either the lease or the good-will or of both combined, but upon what terms the defendant had purchased them. But the question of value was submitted to the jury, and their attention was called to the testimony complained of as proof of the value of the lease and good-will combined, which the defendant, in a certain aspect of the case, had a right to get. Such admission and submission, therefore, constituted error, for which a new trial must be ordered.

Having arrived at this conclusion, it is unnecessary to consider the remaining questions presented by the exceptions. Most of these exceptions, if not all, I have no doubt can readily be obviated when the case comes to be re-tried in conformity with the views above expressed.

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The judgment and order should be reversed arid a new trial granted, with costs to appellants to abide the event.

Speir, J., concurred.

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