Monnet v. Merz — 61 N.Y. Super. Ct. 120

Majority

p. 120

PROSPER MONNET, et al., Appellants v. HENRY MERZ, Respondent.

Headnote

Principal and agent, action for an accounting between them.

An agent cannot be allowed, for an amount paid by him, to compromise an action in which his principal and his principal’s goods were affected, unless the agent establishes by evidence that he was specially authorized to compromise the same, or the nature of his agency clearly authorized him to so compromise such action and pay said amount.1

Before Sedgwick, Ch. J., Freedman and McAdam, JJ.

Decided May 2, 1892.

Appeal by plaintiff from a judgment entered on the report of a referee.

The facts and points in the case appear fully in the opinion of the court. In the trial of the case the referee declined to allow to the defendant the whole of the claim but allowed him one-half, and defendant appealed from such ruling, and the general term sustained the referee ( 57 N. Y. Super. Ct., 576 ), and the Court of Appeals modified the judgment by striking out the allowance of one-half made by the referee, Monnet v. Merz, 127 2V. Y., 151. The plaintiff now appeals from the judgment entered upon the report of the referee allowing defendant one-half of said amount.

Arnoux, Ritch & Woodford, attorneys, and William H. Arnoux of counsel, for appellants, argued :—

The allowance of the amount appealed from was erroneous and should be reversed. This was so decided by this court. The language of the decision is this: “ The defendants had the burden of showing that they

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were authorized to compromise said action ; that is, that they were specially authorized by the plaintiffs in this action to compromise, and that they were authorized from the nature of their agency. They have failed to prove either one of these facts. The referee refused to find that the goods described in the invoices that were made for the entry of the goods had been undervalued, and his finding is warranted by the evidence. If there was no undervaluation there was no reason why the action should be compromised, and the defendants in compromising the action acted at their own peril.” When the case reached the Court of Appeals, - Beowe, J., carefully examined the authorities cited in our original brief and approved the same. This logically and inevitably led to the conclusion that the court was right and the referee wrong. Monnet v. Merz, 127 N. Y., 151 , 156.

A. P. & W. Man, attorneys, and William Man of counsel, for respondent, argued:—

The findings of the fact of the referee are ample to support his allowance to defendants of one-half the compromise sum paid to the government. Plaintiffs, not defendants, made up the invoices; defendants did not know the cost of the goods, made by a secret process; the invoices were made by plaintiffs and furnished to defendants for the express purpose of being used by defendants to “ enter ” the goods for payment of duties. Defendants used said invoices in good faith in entering the goods. The government suit was brought on the ground that plaintiff’s invoices were fraudulent, and plaintiffs thereupon authorized the employment of counsel on their behalf. That plaintiffs requested defendants to settle and compromise said government suit at any sum that should be found necessary, of which plaintiffs agreed tó pay half. That negotiation was made by defendants through plaintiff’s attorneys for settlement, which settlement at $>10,000 defendants paid. The

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money, $10,000, for the compromise, was deposited with the government (with the proposition for settlement) by the defendants October 9, 1882, and the settlement was made and the money accepted by the government March 2, 1883. The defendants notified plaintiffs by letter of November 11,1882, and again by letter of February 20, 1883, of the proposition to settle and the deposit of the money; both of these letters were received by plaintiffs. The defendants never repudiated or refused to be bound by this action, except so far as their telegram of February 8, 1883, may be construed as a revocation (of their agreement to pay half) and this telegram was : “We refuse Custom House compromise of seventy thousand francs.” Our compromise offer was 50,000 (not 70,000) francs, as plaintiffs knew by our letter of November ll, 1882, received by plaintiffs as early as November 28, over two months before this telegram. The telegram, therefore, did not refer to our $10,000 offer made in October preceding. The referee, therefore, holds that the plaintiffs having offered to pay half of any sum required to settle with the government, which offer they never revoked or withdrew, and we having settled for $10,000, we are entitled to be allowed one half that sum as against any claim of plaintiffs. It is true that the referee finds that on February 9,1883, the plaintiffs, by telegram, revoked any authority to compromise ; but he has also found that the only such telegram was the one there stated, which most certainly does not purport in any way to revoke the authority to settle and compromise on joint account. If two findings conflict, we, as the respondents, are entitled to the benefit of any presumption, as we are seeking to uphold the judgment, and presumptions will not be indulged in to upset it. The referee’s findings, therefore, amply support his allowance to the defendants of one half the $10,003 paid to compromise with the government. Every presumption is to be indulged in favor of the

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judgment. Standard Oil Co. v. Triumph Ins. Co., 64 N. Y., 85 . It is incumbent on the party seeking the reversal to show affirmatively that an error was committed to his prejudice. Tracey v. Altmeyer, 46 N. Y., 598 , 604; Appleby v. Erie Co. Savings Bk., 62 Ib., 12, 18. It is not enough to show that error may have been committed. Smith v. Newland, 9 Hun, 553 , 554; Philip v. Gallant, 62 N. Y., 256 , 265.

The action is virtually for an accounting between the plaintiff, a foreign consignor, and the defendant, his consignee in this country. This appeal involves the correctness of a ruling which charged the appellant with the sum of $6,126.09. That charge arose from the following facts. The plaintiff consigned certain goods to the defendant. After they had arrived in the country, the United States began a suit against the defendant to recover $75,000, under sections 2839-2864, U. 8. Rev. 8tat., and section 16, Act of June 22, 1874. On February 9,1883, the United States accepted from the defendants an offer of compromise of $10,002.12 and discontinued the action. The respondent claims the amount paid in compromise should be charged to plaintiff. The claim is not valid for the reasons stated in Monnet v. Merz, 127 N. Y., 151 , unless it appears by the evidence on this appeal that the plaintiff authorized or took part in the compromise. The evidence does not show any authority from the plaintiff to compromise on joint account. A proposition to that effect made by the plaintiff to the defendant was refused by the latter. The offer did not thereafter continue. Nothing can be implied on this subject unfavorably to the plaintiff from his omitting to answer concerning the suit, for as to that he had no obligation. The telegram “We refuse Custom House compromise of 70,000 francs,” as there was but one compromise in a suit claiming 75,000 francs, clearly referred to the compromise for $10,000. The

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defendant failed to establish that the plaintiff authorized or, was a party to the compromise.

The referee charged the plaintiff with one half of the amount of the compromise. This was not valid, and the from the judgment so far as that is affected by the charge that has been examined. The judgment, therefore, should be reversed. as to such matter, and a new trial ordered, with costs to abide the event, and the order of reference vacated. only