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a ruling striking out the testimony respecting all statements communicated through the medium of an interpreter. The interpreters were not called as witnesses. As the plaintiff had only testified to the general course pursued at each plantation, it is impossible for us to tell even with the record before us what information he obtained through the medium of an interpreter as distinguished from what was communicated to him by the leaders in English, even assuming that such latter testimony was competent. In this state of the record, however, the case went to the jury.
The plaintiff claimed that the contract of October, 1901, was made with the defendants as principals, whereas the defendants, not disputing the making of the contract, claimed that to the knowledge of the plaintiff it was made by the defendants as agents for the said Hawaiian Sugar Planters' Association. The correspondence between the plaintiff and said association, extending over the period of the plaintiff's employment upon a salary, tends strongly to prove that the plaintiff fully understood that said association was the principal. The court charged at the request of the plaintiff's counsel as follows:
"That persons, though contracting only as agents, are generally liable where there is no responsible principal to resort to. * * * That if the jury believe that the Hawaiian Sugar Planters' Association was not legally competent to make a contract or liable to be sued, and that the defendants knew that fact and the plaintiff did not, then the defendants here would be liable as principals."
The exception to this charge presents reversible error. While it may be true that the charge in the abstract was correct, it had no application to the case at bar, and could have served no other purpose than to mislead the jury and possibly cause them to base their verdict upon an issue that was not in the case. There was no question in this case of an agent contracting for a sham principal. It was undisputed that the Hawaiian Sugar Planters' Asssociation actually existed and was composed of individuals capable of contracting and of being sued. The there fact that they resided in the Hawaiian Islands did not prevent their being bona fide principals, nor did the fact that they were organized as an association. It may be that in an action against the members of the association the plaintiff would have to prove more than is disclosed by the record in this case respecting the purposes of the association and the authority of its officers and agents to bind its members, but it does appear that the defendants were acting for a real principal, and that, when the contract in suit was made. the plaintiff had been informed by a letter from said principal that the defendants were authorized to represent it. There was no allegation in the complaint, and no proof offered on the trial, even suggesting that the plaintiff sought to hold the defendants as principals on the theory that they had assumed to act for a sham principal, or for one who did not have capacity to contract; on the contrary, the plaintiff's whole effort was to show that he dealt with the defendants as principals. It is undoubtedly the law that a person dealing in the name of a sham principal is liable as a principal, and that a person acting as agent, when he has, in fact, no authority so to act, is personally liable on the contract made. The ground upon which this liability depends is said and 136 New York State Reporter by Judge Selden, in White v. Madison, 26 N. Y. 117, to be that the agent warrants his authority, and this ground of liability is said by Judge Andrews, in Baltzen v. Nicolay, 53 N. Y. 467, to be accepted by the later and better-considered opinion.
The respondent contends that, as said association was not incorporated, the agent contracting in its behalf was personally liable, but this cannot be the law, and the cases cited do not sustain the proposition. The decision in Bartholomae v. Kaufman, 16 Wkly. Dig. 127, turned upon the point that the defendant had contracted in the name of a sham principal, and the case of Bentley v. Merriam, 16 Wkly. Dig. 59, seems to have been decided upon the theory that, in order to defeat personal liability, the defendants had to show that they were authorized to act for a principal capable of contracting. If this was the point decided, we do not think that case should be followed as an authority. If a plaintiff seeks to hold a person contracting nominally as an agent upon his implied warranty of authority, it must be that the burden is on him to establish every element of his cause of action, and that, until a case is made by the plaintiff, the defendant does not have to disprove it by showing his authority; and, if the plaintiff seeks to hold one who has contracted nominally as an agent upon the theory that the principal was a sham, the burden of proving the fact is upon the one alleging it. This proposition was squarely decided by the case of Plumb v. Milk, 19 Barb. 74. That case was decided upon the authority of Wilson v. Barthrop, 2 Mees. & W. 863, and is assumed by Judge Selden, in White v. Madison, supra, at page 129 of 26 N. Y., to have correctly stated the law. In the case at bar not only was there no attempt to prove that the principal for whom the defendant acted did not have legal capacity to contract or to be sued, but the plaintiff sought to recover on the theory that he dealt with the defendants as principals. Under these circumstances the injection of this issue into the case by the charge quoted was error, and may have contributed to produce the verdict complained of.
This conclusion renders it unnecessary to consider the other points discussed by the appellant.
The judgment and order should be reversed, and a new trial granted, with costs to abide the event. All concur.
(116 App. Div. 740)
ANDERSON v. FRY et al. (Supreme Court, Appellate Division, Second Department. January 11, 1907.) 1. TRUSTS-CREATION-EXPRESS TRUST-AGENT TO COLLECT AND INVEST.
An instrument appointing an agent to receive all sums to which the person executing the instrument might thereafter become entitled as residuary legatee, and to invest and reinvest the same, creates an active, continuing express trust.
[Ed. Note. For cases in point, see Cent. Dig. vol. 47, Trusts, $$ 25,
34-38.] 2. SAME-ACTIONS-LACIES. " Lapse of time does not bar an action for accounting against the trustee
of an active, continuing express trust.
[Ed. Note.--For cases in point, see Cent. Dig. vol. 47, Trusts, 8 571.)
Where an assignment to the trustee is set up as a defense in an action for an accounting under the trust, the effect of the assignment can be overcome by showing its fraudulent character, and, if fraudulent, the trust is not affected by the assignment.
[Ed. Note.-For cases in point, see Cent. Dig. vol. 47, Trusts, 88 404, 460,
462.] 4. LIMITATION OF ACTIONS-ASSIGNMENT OF Trusr FUND-ACTION TO SET ASIDE
Under Code Civ. Proc. § 382, subd. 5, providing that an action to procure a judgment on the ground of fraud must be brought within six years after discovery of the fraud, an action to set aside an assignment of trust fund to the trustee for fraud is not barred until six years after discovery of the fraud.
[Ed. Note.-For cases in point, see Cent. Dig. vol. 33, Limitation of Ac
tions, 88 481-486.] 5. TRUSTS-ENFORCEMENT-ACTIONS-FORM OF REMEDY.
Where a trust is not created after money is received by the trustee, an action for money had and received will not lie for its recovery by the cestui que trust, and an action against the executors of the trustee to compel an accounting is not one for recovery of money merely in which obtaining preliminary relief is a mere incident, nor is it one in which plaintiff has a concurrent remedy in equity and in law.
[Ed. Note.-For cases in point, see Cent. Dig. vol. 47, Trusts, $ 554.] 6. SAME-TIME TO SUE.
The time within which an action for an accounting under a trust may be brought is not affected by a void assignment of the fund to the trustee. 7. APPEAL-REVIEW-FINDINGS OF COURT.
A finding of facts by the court will not be reviewed. Appeal from Special Term.
Action by William B. Anderson, as ancillary administrator of the estate of Mary Elizabeth Purkess, deceased, against John C. Fry and William H. Fry, as executors of the estate of John C. Fry, deceased. Judgment for defendants, and plaintiff appeals. Reversed.
This action is brought to compel the defendants, as executors of John C. Fry, deceased, to account for property claimed to have been held by said Fry at the time of his death as trustee for his sister, plaintiff's intestate. William H. Fry died in this country in 1878. possessed of a large estate located here. His brother, the said John C. Fry, who also resided in this country, was made one of several executors of his estate. After making several specific legacies, among others a legacy of $12.000 to his said sister, Mary Elizabeth Purkess, he divided his entire residuary estate equally among his two brothers, three sisters, and a cousin, all of whom, except the said John C. Fry, resided in England. The said Mary Elizabeth was then a maiden lady at service as a parlor maid. On the 5th of May, 1879, the said Mary Elizabeth was paid her specific legacy of $12.000, and on June 6. 1879. she was paid $25,000 on account of her distributive share in the residuary estate. On the 18th of July, 1879, she executed and delivered to said John C. Fry an instrument in writing appointing him her agent and attorney to receive all sums to which she might thereafter become entitled as residuary legatee, and to take, invest, and reinvest the same for her benefit. By virtue of this instrument the said John C. Fry received $10,000 September 9, 1879, and $10.000 June 22, 1880, and executed receipts therefor in the name of the said Mary Elizabeth. On the 9th day of August, 1880, the said Mary Elizabeth made, executed, and delivered to the said John C. Fry an instrument in writing assigning to him all the money or property then in his possession or which he might thereafter receive on account of her share in the residuary estate of the said William H. Fry, and on January
and 136 New York State Reporter states. It had a place of business in the state of New York and kept on hand a certain number of Western securities, which were sold and replenished in the course of its business, the proceeds of which sales were temporarily deposited and subsequently sent for reinvestment. It was held that, to the extent of the moneys temporarily on hand and the securities through which it transacted its business, it employed capital within this state, and was, therefore, subject to a license tax.
Finally, it is urged that, even if these demands and evidences of debt can be deemed within the state, they were sent here for collection, or are moneys of a nonresident under the control or in the possession of his agent, transmitted here for the purpose of investment or otherwise, and that they are exempt from taxation by the provisions of subdivision 13 of section 4 of the tax law, and that the decision in People ex rel. Bank of Montreal v. Commissioners, 59 N. Y. 40, compels us to so hold. One answer to this contention is that they are not in the hands of an agent of the relator, but are held by the relator itself. Another answer is that they have not been transmitted here by the relator for collection, but have been sent here to the relator, because they belong to it, and because it desires to use them here in its business. The case of People ex rel. Bank of Montreal v. Commissioners, supra, apparently turned upon the fact that the foreign corporation was employing an agent to transact its business in this state, and was not itself doing business here. In construing Laws 1855, p. 44, c. 37, in connection with Laws 1851, p. 722, c. 371, § 2, which two laws contained substantially the provisions found in section 7 and subdivision 13 of section 4 of the present tax law, Judge Rapalle, in the course of his opinion, says:
"As the law stood at the time of the passage of the act of 1855, there was no authority for taxing a nonresident in respect to his personal property. If such property was in the hands of a resident trustee or agent, the agent or trustee, and no other person, could be assessed therefor. But, if the nonresident owner controlled and managed his own business in New York without the intervention of a resident agent, there was no method provided for taxing his assets herc. Hence the peculiar language of the act of 1853 which subjects to assessment and taxation nonresident persons, etc., doing business in this state as principals or partners, special or otherwise.”
It was finally concluded that so long as the foreign principal retained the control of its funds, and the transactions of the agent in this state were confined to the mere loaning of the money in single investment or in many, such act was not the carrying on of business, and that no tax could be imposed. This strict interpretation of the statute does not seem to have found great favor with the courts; for, so far as we have been able to discover, the case has never been cited in any of the numerous tax decisions, except in People ex rel. N. E. Loan Co. v. Roberts, supra, where it was held not controlling, as it manifestly was not. Whether the decision is to be deemed a correct interpretation of the statute or not, it does not apply to the present case; for such funds as the relator employed in this state were not in the hands of an agent, but of itself.
Our conclusion is that the relator was properly assessed, and that the writ was properly dismissed, and that the order should be affirmed, with costs. All concur.
(116 App. Div. 772)
STECKER v. WEAVER COAL & COKE CO. (Supreme Court, 'Appellate Division, Second Department. January 11, 1907.) 1. SALES-BREACH OF CONTRACT-DAMAGES.
In an action for failure to deliver coal within the contract time, the plaintiff, a retail dealer, is not entitled to recover the difference between the price paid at wholesale and the retail price at the time and place for delivery under the contract.
[Ed. Note. -For cases in point, see Cent. Dig. vol. 43, Sales, 88 1197,
1198.) 2. SAME.
Where coal was sold at wholesale, the measure of damages for failure to deliver it within the contract time was the difference between the purchase price and the wholesale market price on the day it should have arrived.
(Ed. Note.For cases in point, see .Cent. Dig. vol. 43, Sales, $8 1197,
1198.) 3. DAMAGES—BREACH OF CONTRACT-LOSS OF PROFITS-PLEADING-SPECIAL DAMAGES.
Profit which a purchaser of coal might have made by retail sales cannot be availed of as an element of damages, unless pleaded.
[Ed. Note.-For cases in point, see Cent. Dig. vol. 15, Damages, 413.)
Appeal from Trial Term, Westchester County.
Action by Charles H. Stecker against the Weaver Coal & Coke Company. From a judgment for plaintiff, defendant appeals. Reversed, and new trial granted, on condition.
Action for damages for failure to deliver 308 long tons of coal at Mt. Vernon, Westchester county, N. Y., within the contract time.
The plaintiff purchased 308 long tons of anthracite coal of the defendant on January 13th, 1903, at $11.15 a long ton, to be delivered at a specified dock at Mt. Vernon within the next week.
The defendant claimed that the contract was made under a representation of the plaintiff that Eastchester creek, through which the coal would have to go to Mt. Vernon, was 9 feet deep. The verdict of the jury negatived this.
A barge was loaded with the coal by the defendant at Port Liberty, N. J. With the load it drew 8 feet of water. Eastchester creek was only about 712 feet deep. The towing time to Mt. Vernon is 6 to 8 hours.
After the barge had been loaded the defendant notified the plaintiff that it could not go through Eastchester creek for lack of sufficient depth of water, and that its contract would therefore be fulfilled according to maritime law by delivering at the nearest accessible port, and it towed the barge to City Island as such port, and left it. The plaintiff afterwards had it towed to New Rochelle, where 81 tons were discharged to lessen the draft, and thence through Eastchester creek to Mt. Vernon, arriving on February 6th, which was more than two weeks late.
The defendant claimed that the plaintiff paid for the coal after such notice of lack of water was given, and accepted delivery at City Island. The plaintiff claimed that he had already paid for the coal, and took charge of it only to minimize his damage, and without waiving the defendant's breach of the contract. The jury found for the plaintiff on this issue.
Argued before HIRSCHBERG, P. J., and JENKS, HOOKER, GAYNOR, and MILLER, JJ.
Joseph A. Arnold for appellant.