187 A.D. 6 | N.Y. App. Div. | 1919
Lead Opinion
We are all agreed that the learned trial justice was right in his ruling that the contract was a chose in action, and that Ryan could not transfer a greater interest in it than he himself possessed, unless as between plaintiff and himself he had authority to dispose of it. And if he had no such authority, the question would still remain whether the plaintiff by his conduct or laches is estopped from questioning the sale to the Canadians. We are also agreed that if the plaintiff is entitled to recover, his interest would be in the net profits, if any, of the contract for the ten submarine chasers after proper allowances have been made for expenses for the use of the plant, interest on working capital, premium on bond and all other necessary and proper expenses in the construction of the vessels. The judgment appealed from establishes plaintiff’s ownership of one-half interest in the contract and his right to one-half of such net profits.
My brethren who dissent from the affirmance of the judgment are of opinion that upon the evidence the plaintiff cannot, as against the Canadians represented by the defendant corporation appellant, question Ryan’s right to sell the contract, and that plaintiff omitted to promptly disavow Ryan’s acts on learning of his assignment or sale of the award and contract. This is the point of difference between us.
The learned trial justice has found as matter of fact that
I cannot find any evidence that the plaintiff ever authorized Ryan to sell or assign the award and contract. The trial judge has found that Ryan acted without the knowledge
It is suggested that he is in some way estopped from questioning the sale to the Canadians because when he first learned of Ryan’s duplicity about May 12, 1917, he did not at once notify the Canadians of his claim. But the sale was then an accomplished thing. He had in no way induced the Canadians to deal with Ryan. They say they never knew, him or heard of him. He at once demanded from Ryan the money which he had advanced and to which he was entitled under his agreement irrespective of his interest in the profits arising from the profits of the enterprise. He refused Ryan’s offer of $30,000 in stock of the defendant company as a gift for “ past favors.” He rendered statements of his advances and afterwards itemized them, but he could not collect anything and finally consulted counsel and this action was commenced late in July. I cannot see how anything he did or omitted to do prejudiced the defendant corporation or its managers. They had purchased the award and contract, signed the papers, incorporated the company, expended $50,000 in cash for the Nyack shipyard and deposited $100,000 for working capital, all on May second or third. They had at once commenced work on the boats. It is hard to see
It is impossible to tell upon the record before us what profit may have resulted from this contract, or whether there was any profit, but upon the evidence the judgment rendered at the Special Term appears to be right and should be affirmed.
Rich and Putnam, JJ., concurred; Mills, J., read for reversal, with whom Jenks, P. J., concurred.
Dissenting Opinion
The crucial question here is whether or not Ryan as against Curnen had authority to sell the award to the Canadian
(a) The award, according to the "finding, was really in the name of Ryan, viz.: “ International Shipbuilding and Marine Engineering Company, John J. Ryan, by John J. Ryan,. Manager.” There was no such corporation. The bid, therefore, was really in form by Ryan, and the award was really to him. If Curnen was, as found, a half owner of it with Ryan, he, Curnen, suffered the Canadians to deal with Ryan as sole owner and, therefore, should be held estopped from disputing as to them Ryan’s authority to deal with them as such, inasmuch as they did so deal with him in entire good faith.
(b) It is evident that the two, Curnen and Ryan, in the matter of the bid and award were co-adventurers; that neither had the capital to carry out the proposed work, and that their real purpose was to dispose of the award. It was, therefore, within the obvious scheme of their copartnership to dispose of the award outright, or at least for a part of the stock of the corporation which capitalists might form to do the work under the award. Hence Ryan had real authority from Curnen to dispose of the award as he did for an interest in the working corporation formed by the Canadian capitalists. The telegram by plaintiff to Ryan of April 9, 1917, fairly implies that Curnen realized that Ryan could then in Detroit make valid, such deal and, therefore, deemed it necessary to specially stop him from so doing until he, Curnen, had a chance to submit a proposition which he was attempting to negotiate. Moreover, it is evident that when Curnen first learned of the deal actually made by Ryan with the Canadians, he did not repudiate Ryan’s authority to make it, but merely complained, in effect, that Ryan was not giving him his share, viz., that “ he [Curnen] had been given a rotten dirty deal;” and the break between them evidently came from Ryan’s
My conclusion, therefore, is that Curnen is bound by the contract made by Ryan with the Canadians and their corporation: (a) Because such a deal was within the real authority of Ryan as co-adventurer with Curnen; (b) because it was certainly within the apparent. such authority of Ryan, i. e., within the appearances with which Curnen had clothed him and upon which the Canadians in good faith acted; and (c) because Curnen did not at once, upon being informed of the deal, repudiate to the Canadians and their corporation Ryan’s such authority, but suffered them to go on with their expenditures and work upon the faith of such authority. In short, the situation appears to be this, that the two adventurers (here using the term in the other and dubious sense), having entered into a scheme to exploit the government, and to that end taken an award which they were utterly incapable of carrying out, did by one of them sell it for a substantial price to the Canadian capitalists and then quarreled among themselves as to the division of that price, and after, through such quarrel, Ryan, who had received the whole price, had made away with it, then the other one, Curnen, made claim upon the Canadians. To my mind there is no merit, legal or equitable, in such claim.
Therefore, while I appreciate the great care which Mr. Justice Kelly has exercised in considering the appeal and preparing his opinion, I feel constrained to dissent therefrom.
Jenks, P. J., concurred.
Judgment affirmed, with costs.