motion for an injunction pendente lite was duly marked discontinued by the defendant on behalf of the plaintiff. Defendant, on the other hand, admits the making of the agreement, but denies that its attorney was its duly authorized agent, or that said attorney had authority to make an agreement on behalf of the defendant wherein and whereby the defendant would be liable for the payment of $1,000. The attorney for the plaintiff was the only person who testified in the case, he being the vice president of the plaintiff corporation, and he said that prior to November 14, 1913, he had a conversation with H. E. Aitken, president of the defendant, at the defendant's office, as follows: "Mr. Aitken said he would like to produce the 'Romance of the Underworld' and the 'Escape' in motion pictures, and he would like for us not to produce them. I said: 'Mr. Aitken, we are not anxious to deal with your company, because we have been making some inquiries concerning the same, and I do not care to enter into any dealings with you; but I have since learned that Mr. Seligsberg is your attorney.' He said, 'Yes, Walter is our attorney, and a fine boy,' and I said, 'Yes; I was three years with him in a law office and was fond of him, and at one time we were thinking of practicing law together. That puts it in a very different light,' I said. 'If we reach an agreement, I will be glad to contract with your company with reference to these two plays, and the only reason I will do that is on account of Mr. Seligsberg being associated with you, and I want to have all my dealings with him. In regard to the expense of producing these pictures, should there be any misunderstanding, I want to have all my dealings with Mr. Seligsberg, and I do not want to have any dealings with you or any one of your company.' He said: "That is perfectly satisfactory, and you go down to Mr. Seligsberg and dicker with him about this agreement. He has the essential points. He has full authority to represent this company, and you may have all of your dealings with him.'" Thereafter the said witness met Seligsberg at Seligsberg's office, and the terms of the agreement were reduced to writing, signed by the witness, as vice president of the plaintiff, and by Mr. Aitken, as president of the defendant, and delivered on November 14, 1913. Mr. Beale and Mr. Seligsberg thereafter corresponded with each other, which letters were marked in evidence, the purpose of which was to amicably adjust the difficulties then existing, all of which was unsuccessful. Thereafter the action was commenced and a temporary injunction obtained, and a conversation was had between Mr. Seligsberg and Mr. Beale for the settlement of the action, and on March 16, 1914, Mr. Seligsberg and Mr. Beale discussed the terms of settlement. On March 18, 1914, Mr. Beale prepared a written agreement, executed it as vice president of the plaintiff, and caused it to be delivered to Mr. Seligsberg's office. The agreement was returned, with a letter stating that Seligsberg said he would change the conditions of the agreement, or would put it in a little different form. Thereafter Beale suggested certain changes in Seligsberg's agreement, and prepared a new agreement, and again executed it as vice president of the plaintiff and sent it to Seligsberg to be executed by the defendant. Subsequently Mr. Seligsberg stated to Mr. Beale that the defendant had forbidden him to deliver the agreement and the check, and he thereupon returned the agreement to Mr. Beale, with the signatures of the plaintiff and the defendant's officers cut off. These facts, as above stated, are in substance the testimony as testified to by Mr. Beale, the vice president of the plaintiff. The question now arises: Has the plaintiff proved sufficient facts for the making of an agreement with Mr. Seligsberg, a person authorized on behalf of the defendant corporation to make such agreement, wherein and whereby the defendant would be liable for the acts of Mr. Seligsberg as its agent; or has the act of said agent been ratified by the defendant as principal for the execution of the agreement and the payment of the $1,000 as additional advance royalties upon the moving pictures as aforesaid? Plaintiff contends that the agreement upon which this action was predicated was made with Seligsberg as attorney and agent of the defendant. From the reading of the testimony given by one of the officers of the plaintiff as aforesaid, no sufficient facts to constitute a cause of action against the defendant appear. The plaintiff has failed by his testimony that the attorney's (Seligsberg's) promise to submit the agreement and to pay the $1,000 was ever ratified by the defendant. [2] While a principal is bound by his agent's acts, when he justifies a party dealing with his agent and believing that he has given to the agent authority to do those acts, he is responsible only for that appearance of authority thus caused by himself, and not for that appearance of conformity to the authority which is caused only by the agent. Bush v. O'Brien, 164 N. Y. 205, 58 N. E. 106; Lewis v. Duane, 141 N. Y. 302, 36 N. E. 322. Again referring to the testimony of one of the officers of the plaintiff, I fail to find that there is a scintilla of proof that the defendant's president, Aitken, or any other officer of said cor· poration, authorized or directed the attorney, Seligsberg, as its agent, to contract for and agree to pay the sum of $1,000 for advance royalties. Nor has it been proven that there was an implied power vested in the attorney to bind his client by contract. Bush v. O'Brien, supra; Lewis v. Duane, supra; Mandeville v. Reynolds, 68 N. Y. 528-540; Joseph v. Platt, 130 App. Div. 478, 114 N. Y. Supp. 1065; Smith v. Bradhurst, 18 Misc. Rep. 546, 41 N. Y. Supp. 546, affirmed 31 App. Div. 96, 52 N. Y. Supp. 527; Matter of City of New York, 112 App. Div. 160, 98 N. Y. Supp. 331; United States v. Beebe, 180 U. S. 343– 352, 21 Sup. Ct. 371, 45 L. Ed. 563; Bogart v. De Bussy, 6 Johns. 94; McKechnie v. McKechnie, 3 App. Div. 91, 39 N. Y. Supp. 402. In Bush v. O'Brien, supra, 164 N. Y. at page 210, 58 N. E. at page 107, Judge Haight stated the law as follows: "In Barrett v. Third Avenue R. R., 45 N. Y. 628, 635, Allen, J., says: "The authority of the attorney does not extend to a compromise or release. He may discontinue an action, because that relates to the conduct of the suit, and is within his retainer, and not to the cause of action. An attorney cannot settle a suit, and conclude the client in relation to the subject in litigation, without his consent'-citing Shaw v. Kidder, 2 How. Prac. 244; Lewis v. Gamage, 1 Pick. 347. In the case of Beers v. Hendrickson, 45 N. Y. 665, 669, Grover, J., says: 'An attorney is not authorized by his retainer to satisfy a judgment without payment, and, if he does so, the court will set such satisfaction aside.' In Mandeville v. Reynolds. 68 N. Y. 528, 540, Folger, J., in delivering the opinion of the court, after referring to the ruling of the court below to the effect that the attorneys in the action had no power to compromise the judgment and release the defendant, unless authority was expressly given to them by the plaintiff, says: 'In holding thus, I think that the court was right. An attorney is not authorized by his retainer to satisfy a judgment without payment, and, if he does so, the satisfaction will be set aside. The authority of an attorney does not extend to a compromise or a release. He cannot settle a suit, and conclude his client in relation to the subject in litigation, without consent of the latter.' In Arthur v. Homestead Fire Insurance Co., 78 N. Y. 462 [34 Am. Rep. 550], it was held not to be within the scope of the authority of an attorney in an action to change the rights of his client, except so far as it may be done in the action. He cannot justify the commencement of another action or create a cause of action against his client which before did not exist. In Lewis v. Duane, 141 N. Y. 302 [36 N. E. 322], it was held that an attorney employed to foreclose a mortgage has no implied authority in the matter to compromise the rights of his client and make nugatory the duty he was employed to perform." In Lewis v. Duane, supra, Judge Finch, by a unanimous opinion of the court, says: "An attorney, as such, may not compromise the rights of his client outside of his conduct of the action, or accept less than the full satisfaction sought, or release his client's right, or subject him to a new cause of action. Arthur v. Homestead Fire Ins. Co., 78 N. Y. 469 [34 Am. Rep. 550]; Barrett v. Third Avenue R. R., 45 N. Y. 635; Beers v. Hendrickson, 45 N. Y. 665.” In Matter of City of New York, 112 App. Div. 160, 98 N. Y. Supp. 331, McLaughlin, J., in a unanimous opinion by the court, says: "An attorney ordinarily has no implied power to bind his client by contract (Bogart v. De Bussy, 6 Johns. 94), and a general retainer does not authorize him either to sell or purchase property (Averill v. Williams, 4 Denio, 295 [47 Am. Dec. 252]), or release, compromise, or settle a cause of action (Barrett v. Third Avenue R. R., supra), or to satisfy a judgment without full payment (Mandeville v. Reynolds, supra), or to make an offer of judgment." Bush v. O'Brien, supra; Riggs v. Waydell, 78 N. Y. 586; Stone v. Bank of Commerce, 174 U. S. 412, 19 Sup. Ct. 747, 43 L. Ed. 1028. [3] The burden of proof was upon the plaintiff to prove that on March 18, 1914, Seligsberg was still the agent for the defendant, and that he had authority to enter into the agreement for the discontinuance of the motion, as well as the action, and the payment of the $1,000. No evidence was produced by the plaintiff to this effect (Fullerton v. McLaughlin, 70 Hun, 568, 571, 24 N. Y. Supp. 280), and for such failure of proof the dismissal of the complaint was proper. The plaintiff cites numerous authorities in support of his contention in reference to ratification. From the examination of those authorities the court finds that there had been an agency, and from the evidence adduced in those cases it was implied that the agency for the principal existed; but in the case at bar no such proof of agency was presented to enable the court to submit the question involved herein to the jury. The motion for a new trial must, therefore, be denied, to which plaintiff's counsel may have an exception, with a stay of 5 days and 30 days to make a case, if the plaintiff be so advised. (87 Misc. Rep. 150) MAYER, LANE & CO. v. CHARLES I. WEINSTEIN REALTY CO. 1. ASSIGNMENTS (§ 50*) - EQUITABLE ASSIGNMENT FUND. ORDER FOR PROCURING An order, accepted by the drawee, to pay a sum of money due on a contract, the amount being deducted from the last payment, is not a negotiable instrument, but operates as an equitable assignment of money on the condition stated. [Ed. Note. For other cases, see Assignments, Cent. Dig. §§ 99-105; Dec. Dig. § 50.*] 2. ASSIGNMENTS (§ 131*)-ORDER FOR PAYMENT OF MONEY-PLEADING. In an action against a drawee, accepting an order for the payment of money due on a contract, amount to be deducted from the last payment thereon, the complaint is insufficient, where it fails to allege that the work under the contract was completed and that the money was due out of the last payment thereon. [Ed. Note. For other cases, see Assignments, Cent. Dig. §§ 220-226; Dec. Dig. § 131.*] Action by Mayer, Lane & Co. against the Charles I. Weinstein Realty Company. On motion for new trial. Motion denied. Charles M. Russell, of New York City, for plaintiff. FINELITE, J. Plaintiff and defendant are domestic corporations, each having a place for the transaction of business in the city of New York. Plaintiff brings this action to recover the sum of $500 from the defendant on a draft, alleging that on the 2d day of December,. 1913, the plaintiff was a creditor of Katz & Kanter, Incorporated, and in consideration of the forbearance by plaintiff in enforcing the payment of said sum the Charles I. Weinstein Realty Company agreed to pay the sum of $500 to the plaintiff. On the trial hereof the plaintiff's complaint was dismissed. A motion thereafter was made for a new trial, which motion was entertained by the court. [1, 2] The plaintiff alleges in his complaint, after alleging that it and the defendant are domestic corporations: That about the 2d day of December, 1913, Katz & Kanter, Incorporated, a domestic corporation, was duly indebted to the plaintiff in the sum of $500, and that said defendant herein is duly indebted to said Katz & Kanter, Incorporated, in the sum of $500. That about the 2d day of December, 1913, the defendant herein and said Katz & Kanter, Incorporated, applied to the plaintiff for the sale and delivery of certain goods, wares, and merchandise, consisting of plumbers' materials, and also applied to the plaintiff herein for an extension of time to pay the said indebtedness to this plaintiff from said Katz & Kanter, Incorporated, and requested this plaintiff to make immediate delivery of the plumbing supplies to the work then being undertaken by this defendant, and said Katz & Kanter, Incorporated, in consideration of the delivery of said plumbing material to this defendant and to said Katz & Kanter, Incorporated, and of and for a forbearance to press said account against For other cases see same topic & § NUMBER in Dec. & Am. Digs. 1907 tc úate, & Rep'r Indexes Katz & Kanter, Incorporated, and for other good and valuable considerations said Katz & Kanter, Incorporated, did duly make a certain order in writing directed to this defendant and thereby ordered this defendant to pay immediately to this plaintiff the sum of $500. thereafter the defendant accepted said draft and promised and agreed to pay the same. That Defendant for a separate and distinct defense states: That on the 16th day of June, 1913, Katz & Kanter, Incorporated, entered into an agreement with the defendant wherein and whereby said Katz & Kanter, Incorporated, agreed to perform certain work, labor, and services and furnish material, and the defendant agreed to pay therefor the sum of $9,600 in various installments and the balance upon the completion the contract. That on or about the 2d day of December, 1913, an order was made by Katz & Kanter, Incorporated, on the defendant to pay the sum of $500, which was to be deducted out of the last installment to become due said Katz & Kanter, Incorporated, 60 days after the completion of said contract was presented to defendant, which the defendant accepted upon the express terms in said order contained, and that the said Katz & Kanter, Incorporated, failed to complete said contract, and did not complete the performance of said work, labor, and services, or furnish said material, all of which the plaintiff knew, and by reason thereof the said Katz & Kanter, Incorporated, was not entitled to the said last installment, nor was the plaintiff herein entitled to it. The draft in question reads as follows: "Mayer, Lane & Co., N. Y., Dec. 2, 1913. Chas. I. Weinstein Realty Co., N. Y. City-Gentlemen: We hereby authorize you to pay Mayer, Lane & Co. the sum of five hundred dollars ($500.00) due us for work to be done on contract and deduct the same from our last payment on Fourteenth street job. "Katz & Kanter. "Philip Kanter. "Witness: P. A. Harden. "Accepted by Chas. I. Weinstein Realty Co., by Charles I. Weinstein, Pres." From the reading of said paper it cannot be construed as a negotiable instrument, but it operates as an equitable assignment, limiting the liability of the defendant to a certain fund and contingent for payment out of the moneys of the fund becoming due as for work to be done on contract; and as the plaintiff failed to allege in his complaint the necessary allegations showing that it was contingent upon the payment out of a certain fund for work to be done under a certain contract, and that Katz & Kanter, Incorporated, had completed its work under said contract, and that this money was due out of the last payment thereof, and in failing to allege these facts, the plaintiff cannot now claim that it is a draft for the payment of certain moneys. Schmittler v. Simon, 101 N. Y. 554, 5 N. E. 452, 54 Am. Rep. 737; Brill v. Tuttle, 81 N. Y. 454, 37 Am. Rep. 515; Ehrichs v. De Mill, 75 N. Y. 370; Munger v. Shannon, 61 N. Y. 251; Alger v. Scott, 54 N. Y. 14; Parker v. Syracuse, 31 N. Y. 376. In Ehrichs v. De Mill, supra, the order was similar to the one at bar and reads as follows: "Mr. Richard De Mill: Please pay to F. Ehrichs $400, and charge the same to my account of grading and paving Lexington avenue, between Patchen and Broadway, as per contract. "$400. James P. Howard." |