| N.Y. App. Div. | Jan 15, 1905
Lead Opinion
This appeal is from a judgment entered on the report of a referee to whom the issues were sent to hear and determine, dismissing the complaint and from two orders, one of which denied a motion to amend the complaint and the other to send the report back to the' referee for further findings. ' - ^
The' facts are not complicated, and so far as material to the question presented are substantially as follows: In November, 1888, one John McNulta, the-original plaintiff in the action, entered into a contract under .seal with one Pardee .to sell and deliver'to him 800 shares of the stock of the San Francisco, Clear Lake and Humboldt Railroad Company, and 2,000 shares- of the Clear Lake Improvement Company, for the consideration of $32,500. At the time of the execution of the contract $14,100 was paid and the balance agreed to be paid within thirty days thereafter if certain claims which had been made against the r,ailroad and improvement com-' panics had then been satisfied. All of the. claims were not satisfied and discharged within the time specified iri the contract, but they subsequently were, and Pardee having failed and neglected to pay the balance agreed, this action was brought against Coll-is P. Hunt-' iiigton and Charles F. Crocker- to recover such sum, the' plaintiff
■ The appeal, in so far as it is taken from these orders, is irregular, and for that reason should be dismissed. They are not intermediate orders in the sense in which that term is used in section 1316 of the Code of Civil Procedure, which enables an intermediate order to be reviewed on appeal from a final judgment. An intermediate order is one made between the commencement and termination of the action. Both orders were made after the referee had made his report, and a review, therefore, could only be had by a direct appeal from them. The filing of the referee’s report was the termination of the action, which finally and conclusively determined the rights of the parties, and nothing thereafter remained except to enter and enforce the judgment.
This brings us to a consideration of the main question, and that is whether the respondents, as the representatives of Mr. Huntington, can be held liable for the breach of a contract under seal, when his name is not mentioned or referred to therein. I am of the opinion that the conclusion reached by the referee was the proper one, and
A case directly in point is Briggs v. Partridge (64 N.Y. 357" court="NY" date_filed="1876-03-21" href="https://app.midpage.ai/document/briggs-v--partridge-3627882?utm_source=webapp" opinion_id="3627882">64 N. Y. 357). There the plaintiffs entered into an executory contract under seal with one Hulburd for the purchase of land. The complaint alleged that in executing the contract Hulburd acted 'as the agent of the defendants.,' Plaintiffs’ counsel, in opening the case at tlie trial, stated that the agreement on which the plaintiffs relied was in Writing ; that it was made by the plaintiffs as vendors and Hulburd. as vendee; that it did not show but that Hulburd was'a principal party, inasmuch as it was signed and sealed by him individually ; that the name of the defendant Partridge did not appear in the instrument, but that the plaintiffs would prove that Hulburd when he executed the contract, was acting solely for and under the direction of Partridge, who paid of caused to be paid .the first payment under the contract; that Hulburd was the agent and trustee of Partridge in the transaction. The defendants moved to dismiss the complaint upon the opening, which motion was granted, and in reviewing the disposition thus made the Court of Appeals, speaking through Judge Andrews, said : “Ye find no authority for the proposition that a contract under seal may be .turned into the simple contract of a person not in any way appearing on its face to be a party to or interested in it, on proof dehors the instrument that the nominal. party was acting as the agent of another, and especially in the. absence of any. proof that the alleged principal has received any" benefit from it, or has in any way ratified it, and we do not feel at liberty to extend the doctrine applied to simple contracts executed by an agent for an unnamed principal so as to embrace this case. The general rule is declared by Shaw, Ch. J., in Huntington v. Knox (7 Cush. 374): ‘Where a contract is made by deed under seal on technical grounds, no one but a party to the deed is liable to be sued upon it, and, therefore, if made by an attorney or agent it must be made in the name of the principal in order that he ...may be a party, (because otherwise he is not bound by it.”’
This case was cited With approval arid followed in Kiersted v. O. & A. R. R. Co. (69 N.Y. 343" court="NY" date_filed="1877-04-15" href="https://app.midpage.ai/document/kiersted-v-orange--alexandria-railroad-5470857?utm_source=webapp" opinion_id="5470857">69 N. Y. 343), Judge Andrews .again saying: “ The form of the lease made him the lessee, and the covenants in a deed can only be enforced against the party who, upon the face of
In Schaefer v. Henkel (75 N. Y. 378) the rule was again announced. There an action was brought upon a lease under seal executed by “ J. Romaine Brown, agent,” as lessor, and by defendant as lessee. The action to recover the rent due was brought by the principal and not by the agent who signed the lease. Defendant had a judgment upon the ground that plaintiffs were not parties to the lease and, therefore, could not sue upon its covenants. The judgment was affirmed, Judge Miller delivering the opinion, saying : “ The plaintiffs were not parties to the lease upon which this action was brought. It was not signed by them. Their names did not appear in it and there was nothing in the lease to show that they had anything to do with or any interest in' the demised premises, or-the execution of the lease, or that it was executed in their behalf. * * * The rule seems to be quite well established, that in general an action upon a sealed instrument of this description must be brought by and in the name of a person who is a party to such instrument, and that a third person or a stranger to the instrument cannot maintain an action upon the same. The question presented has been the subject of frequent consideration in the courts and I think it is established in this State that where it distinctly appears from the instrument executed that the seal affixed is the seal of the person subscribing who designates himself as agent and not the seal of the principal, that .the former only is the real party who can maintain an action on the same. He alone enters into the covenants and is liable for any failure to fulfill and he only can prosecute the other party. * * * ■ The principle has long been settled by authority that to render an instrument of this nature, signed by an agent in his own name, binding on the principal, it must appear from the contract itself that it purports to be made by the principal before it can be considered as obligatory upon the principal.”
These cases were all referred to and cited with approval in Henricus v. Englert (137 N.Y. 488" court="NY" date_filed="1893-03-21" href="https://app.midpage.ai/document/henricus-v--englert-3621395?utm_source=webapp" opinion_id="3621395">137 N. Y. 488), where Judge Earl, speaking for the entire court, said: “Where an instrument is under seal, no per-, son can sue or be sued to enforce the covenants therein contained, except those who are named as parties to the instrument, and who signed and sealed the'same.”
Whitehouse v. Drisler (37 A.D. 525" court="N.Y. App. Div." date_filed="1899-02-15" href="https://app.midpage.ai/document/whitehouse-v-drisler-5185450?utm_source=webapp" opinion_id="5185450">37 App. Div. 525) is also in point. There action was brought upon a contract under seal to recover commissions alleged to have been earned by the plaintiffs as brokers, in selling certain real estate. At the trial plaintiffs were permitted to prove, against defendants’ objection, that when Whitehouse signed the contract he did so for a Mrs. Rae. On appeal this was held error and. the judgment reversed, the court saying: “ The contract was under seal. The name of Mrs. Rae did not appear in it. There was nothing upon its face to show that she was in- any way connected with it or interested in the subject-matter of it. It couldv not have been enforced against, her by the defendants. The . covenant to buy was the personal covenant of Whitehouse and it could only have been enforced against him. The rule is too well settled
To the same effect is Williams v. Magee (76 A.D. 512" court="N.Y. App. Div." date_filed="1902-07-01" href="https://app.midpage.ai/document/williams-v-magee-5192385?utm_source=webapp" opinion_id="5192385">76 App. Div. 512). There action was brought upon a contract under seal to which the plaintiff was not a party, he alleging that one of the parties to the contract acted as the agent of a copartnership of which the plaintiff was the sole survivor. Defendant’s demurrer to the complaint was sustained, and in affirming the action of the court below the Appellate Division in the fourth department said: “ The right of the plaintiff to maintain his cause of action as surviving partner is, consequently, founded upon the assumption that he can show by extrinsic proof that Case was the agent of the copartnership. The law is apparently well settled in this State that only parties named in and who executed an instrument under seal can enforce its covenants. * * * The solemnity which for centuries has been attached to instruments under seal still remains anchored as something tangible, and of substance, although in this- practical age we are apt to think it rests upon a fiction.”
It is not true, as contended by the appellant, that this rule does not apply to contracts under seal, where a seal is not essential to the validity. This fact was considered in some of the authorities cited, and especially in the Briggs Case (supra), where Judge Andrews, referring to it, said: “ A seal has lost most of its former significance, but the distinction between specialties and simple contracts is not obliterated. A seal is still evidence, though not conclusive, of a consideration. The rule of limitation in respect to the two classes of obligations is not the same.”
Nor is it true, as also contended by the appellant, that this rule has been modified by the authorities cited by him. We have care^ fully examined them and it is sufficient to say that each is clearly distinguishable and inapplicable to the principle here involved. It would not be practicable, nor would it serve a useful purpose, to here indicate wherein each. authority has no application, and it is
It is not contended that any fraud was practiced upon McNulta in the execution of the contract itself. He first objected to having Pardee execute it in his individual capacity, but after negotiations with Crocker and Huntington, finally - consented to it. This,. it ' would also seem, precluded "him from thereafter asserting that it "was not Pardee’s contract, under the well-recognized rule that all negotiations had at "or prior to the execution , of a written contract are merged in it, and proof cannot be given thereof for the purpose’ of modifying or changing its terms'.
It follows, therefore,', that the Appeal, in so far as the same is taken from the orders, should be dismissed and the judgment ■ affirmed, with costs.
' Van Brunt, P. J„ and Ingéraham, J., concurred; Patterson, J., concurred in result..
Concurrence Opinion
(concurring): I concur in the result upon the opinion of the referee.
The following is the opinion of William N. Cohen, Esq., Referee :
Cohen, Referee:
' On the 19th day of November, 1888, one McNulta entered into an agreement in writing and, under seal with one Pardee, whereby McNulta in consideration of the sum of thirty-two thousand 'five hundred dollars ($32,500), agreed to sell eight hundred (800) shares of stock of the San 'Francisco, Clear Lake and Humboldt Railroad
The agreement acknowledged the receipt by McNulta of the sum •of fourteen thousand one hundred dollars ($14,100), and recited the sale and delivery of the said shares to Pardee, who covenanted to pay the balance of eighteen thousand four hundred dollars ($18,400) within thirty days, during which time McNulta was to discharge both companies of all debts and obligations. The time to clear the properties was extended in order to adjust a certain claim known as the Davis claim. When McNulta delivered the stipulation discharging the Davis claim, he demanded, not from Pardee, who was a party to the agreement, but from Huntington and Crocker, who were strangers to it, the said balance, which was refused. Thereupon McNulta commenced this action against Huntington and Crocker to recover the said balance.
At the time of the commencement of the action the defendants were Collis P, Huntington and Charles F. Crocker. Thereafter Crocker died and the plaintiff was permitted to proceed separately against Huntington. Still later Huntington died, and the action was continued against the present defendants as his executrix and executors. McNulta having also died daring the pendency of the action, Laura McNulta was appointed “ administratrix" to collect ” by the Probate Court of Cook county, 111. Subsequently she was authorized by the said court to assign this cause of action to the above-named plaintiff.
In the consideration of the case there is presented at the very outset the question as to the plaintiff’s right to recover against a party who is nowhere mentioned in. the writen, sealed instrument. This plaintiff does not sue, as the complaint is drawn, in assumpsit. He alleges that a contract was made with Huntington and Crocker, which contract was reduced to writing and signed'and sealed by Pardee, acting as the agent of Huntington and Crocker ; that Pardee was an agent of said Huntington and Crocker, and that he subscribed said agreement as their agent, for them and in their behalf, with full power and authority so to do, and that said agreement was in fact the agreement of said Huntington and Crocker. By express allegation he makes the written, sealed instrument part of the complaint. Under this state of facts, and under this form of pleading,
That the precise point here involved was decided by these cases might be shown by extracts from each of the opinions. It' will be sufficient for our purpose, however, to quote the language of Earl, J., in Henricus v. Englert (supra): “ Where an instrument is under seal, no person can sue or be sued to enforce the covenants therein contained, except those who are named as parties to the instrument, and who signed and sealed the same.”
■ As this is the law, it was error to receive evidence of the facts tending to show that Huntington and Crocker were the actual principals. But such evidence was admitted, so that upon an appeal, if any should be taken, all the facts might be before the appellate tribunals. The evidence so improperly admitted proved that the negotiations of purchase' and sale of the shares of stock in the corporations mentioned were had by McNulta with Huntington and Crocker; that between these three persons the terms of the contract as subsequently reduced to writing were agreed upon, and that after being written out,1 Pardee was named as the party of the second part to the agreement upon, the suggestion of Huntington and Crocker; that Huntington and Crocker stated to McNulta that the name written in the contract made "no difference as to their liability, and that Pardee was acting as their agent, and that the agreement was to all intents' and purposes the agreement of Huntington' and Crocker;' and furthermore, subsequent to the signing of the agreement and the payment of the fourteen thousand one hundred dollars ($14,100), negotiations were had between McNulta and Huntington as to the liens-and" claims upon the property, and that when the final breach came that breach Was openly declared .'by Huntington.
Plaintiff’s counsel; in' a full and able brief, argues that this testimony was properly admitted. In support of his position he relies upon text books and upon precedents in other jurisdictions. (Huffcut Agency-[2d edl], § 188; Mech. Agency, § 702; Lancaster v.
The authors and cases cited bear out his contention, but they go-further in narrowing the paroi evidence rule, or in overturning the substantive law that such a claim is not tenable, than do the courts, of this State. Within our own jurisdiction, it is true, there are authorities tending to modify the import of a seal. (Blewitt v. Boorum, 142 N. Y. 357; Bridger v. Goldsmith, 143 id. 424.)
But these cases are not decisive of the question here involved, and, so far as that question is concerned, are mere dicta. They do not pass upon the right of substituting fora party named in a. sealed instrument another and different party who is .not mentioned therein* They do minimize the import of a seal, and regard it, when attached to a contract that is valid without it, as mere surplusage. It is also-true that a seal is no longer in the law the fetish that it once was,, but it still stands for something. By statute
But conceding, as we must, that this contract is absolutely valid, without a seal, and regarding the seal as' of little moment, the plaintiff’s position is not bettered.
In Schaefer v. Henkel (supra) a lease was executed by one Brown, who was described in the written document as “ agent,” and his principals endeavored to maintain an action against the lessee-named in the instrument, and the court there said: “ It is, therefore, settled law that in order to take a casé out of the general rule, where the contract is one which is valid without a seal, and the seal is, therefore, of no account, it must appear that the contract was really made on behalf of the principal from the instrument, and that the party derived benefit from and accepted and confirmed it by acts on his part.”
Judge Miller concludes his opinion with the statement that
Proceeding .further than a mere disregard of the seal,, the plaintiff attempts to disregard the writing itself, except as evidence of a contract between McNulta on the one hand and Huntington and 'Crocker on the other. This, however, cannot be done under a complaint which pleads and rests upon the written contract itself.
Going still further, the plaintiff seeks to maintain his action upon thé theory of an estoppel, or what is practically the same thing, an implied obligation arising from the facts in the case. The difficulty here is that the facts necessary to invoke either doctrine cannot be established in this action; since the objections taken by the defendant to the introduction of any evidence implicating Huntington and ^Crocker were, well taken.
A conclusion favorable to the defendants on the main question in this action having thus been reached, it is not strictly necessary.to consider other objections that have been raised by the "defendants. As, however, they have been persistently urged and fully considáidered, it may not be amiss to notice them briefly.,
The point is made that the plaintiff has not legal capacity to sue' on the ground that the letters of administration to the plaintiff’s assignor authorized the administratrix only to collect and secure the property of John McNulta “in this State” (Illinois), and that the situs of the present claim being without the State of Illinois, she was given no power over it, and that, therefore, her assignee is without capacity to sue. The court which granted the letters of administration expressly authorized the assignment of this cause of action to the plaintiff herein, andprima facie, therefore, by virtue of the ; ■direction of the court, the plaintiff has such capacity. • Moreover; by the terms of the Will of John McNulta, his . personal property passed to the plaintiff’s assignor, who, consequently, had authority to make, the assignment independently of the authority conferred by the court. ‘ •
It is also asserted by the defendants that the Davis claim was not discharged at the time of the commencement of this action. The
On -the hearing the defendants introduced in evidence the record •of an action commenced by Go Look against the San Francisco* Clear Lake and Humboldt Railroad Company and others, begun in the Superior Court of the city and county of San Francisco, State •of California, August 16, 1889. A summons and writ of attachment were issued in the action, but the summons was never served ■on any of the defendants. Subsequently, on motion, on June 29, 1903, the action was dismissed". At the time the contract was signed no reference to the Go Look claim was made, nor was it known to exist by either of the parties hereto or by Huntington, and Crocker, so far as the proof shows. At the time the demand was made for the balancé alleged by the complaint herein to be due no reference to the Go Look action was "made; Under these circumstances as "well as under the Code of Civil Procedure and the statutes of California, there is no ground for holding that the Go Look action-was an outstanding debt or obligation or a contested claim within the terms of the agreement.
The complaint herein must be' dismissed, with costs to the defendant.
Appeal from orders dismissed. Judgment affirmed, with costs.
Code Civ. Proc. § 840.— [Rep.
See Code Civ. Proc. §§ 381, 382.— [Rep.