135 N.Y.S. 930 | N.Y. App. Div. | 1912
On the 6th day of July, 1900, H. Allen Odell, representing the defendants, wrote to Tully R. Oornick at Knoxville, Tenn., as follows:
*43 “Dear Sir.— We make you the following proposition: That we will accept the lease of the Lexington Gas Company, recently obtained by you from said company, and perform the terms and conditions of said lease.
“That we will pay to you and your associates One Thousand Dollars ($1000) a year for five years, commencing at the beginning of the lease. We will further pay you and your associates the sum of Ten thousand Dollars ($10,000) in consideration of the transfer of said lease and for services in connection therewith, said transfer to be to our nominee.
“ The only .proviso which we make in this proposition is that the legalities of the deal, such as the right of leasing the property, the validity of the franchises and all other matters of that sort which arise in this transaction shall be favorably passed upon by our attorney, Mr. John J. C. Tomlinson of New , York.
“That we will complete the deal on or before the 21st day of July, 1900, at Lexington, Kentucky.
“Please forward your acceptance of this proposition at once and oblige.”
On the 9th day of July, 1900, Mr. Cornicle, through whom the plaintiff claims in this action by reason of certain assignments of the contract, wrote to the defendants, saying: “I have received a letter dated July 6th, 1900, signed 'H. Allen Odell,’ representing Wood & Havemeyer, a copy of which is hereto attached, and beg to advise you that the proposition contained therein is accepted. I shall be glad to place your attorney Mr. Jno.J. C. Tomlinson in communication with the attorneys at Lexington, who are fully cognizant of the Charter, franchises and other details with which your counsel will wish to become familiar.” ■
It is not disputed that Mr. Tomlinson has never passed favorably upon the legal questions involved in support of the lease. On the contrary, it is shown by the evidence that he had rejected the lease as not conforming to the requirements of the law, and it is admitted that, acting in good faith, this would be sufficient to defeat the plaintiff’s cause of action. The contention is, however, that the defendants fraudulently conspired with Mr. Tomlinson to prevent a favorable report upon the lease, and
The complaint alleges, on information and belief, that “said Tomlinson was under the full direction and control of these defendants in the matters and transaction covered by Exhibits 'B ’ and 'C ’ hereto attached [the letters above quoted]; that said Cornick offered and made to said Tomlinson a full statement of the legal and other'matters bearing upon the transaction as set forth in said Exhibits * * * and furnished said Tomlinson with full and complete data, from and upon which he could and should have promptly formulated his opinion regarding the legality of the transaction involved in said contracts within the time limited for the completion and performance thereof; that these defendants with the fraudulent and preconceived intent to default in the performance of the contract and agreement covered by and included in said Exhibits * * * failed to submit the questions therein set forth to said Tomlin-son and prevented said Tomlinson from considering or passing upon the questions set forth in Exhibits 'B ’ and 'C' in the period fixed in said exhibits for closing and waived the provision therein that said Tomlinson shall pass upon same; and that although said Cornick and his associates demanded of these defendants and of said Tomlinson a statement of their respective positions in the matters covered in said Exhibit 'B ’ and his opinion regarding the legality of said transactions, said Tomlinson, who was the agent of the said defendants as aforesaid and was under the full direction and control of said defendants in these transactions as aforesaid, at the special instance, demand and request of said defendants, with the preconceived purpose and fraudulent intent upon their part and upon the part of said Tomlinson, of defendants defaulting in th¿ completion of said contract, and of defeating the rights of said Cornick and his associates, neglected, refused and failed to pass upon the legalities of the deal and other matters more particularly referred to in Exhibit 'B,' hereto attached, favorably or otherwise, in the period named.” ' Still on information and belief, “ that the said Cornick and his said associates promptly
These are serious allegations against the integrity of a lawyer whose reputation is not otherwise assailed, as well as against the defendants, and this judgment ought not to stand unless the allegations to constitute the alleged fraud are established by a fan preponderance of evidence, for the defendants, as well as then* attorney, are entitled to the presumption of honesty and fair-dealing. Respondent lays stress upon the fact that in the letter of Mr. Odell to Oornick, notice was given to the plaintiff that it was the approval of “ our attorney ” which must be had as a condition of the acceptance of the contract, and contends that it “was not incumbent upon plaintiff’s assignors to submit the legal questions to Mr. Tomlinson and to procure his opinion.” Whether that is so we need not decide, since plaintiff alleges that they did submit to him “ a full statement of the legal and other matters bearing upon the transaction” and furnished him “with full and complete data ” upon which to base his opinion. The defendants in making then proposition to accept, certainly had a right to make any condition precedent which they thought proper; they had a right to make their acceptance depend upon any fact which they might name, and having elected to make their acceptance to depend upon the approval of their own attorney, they did not undertake to guarantee that their attorney was a competent lawyer, or that he would, upon any given state of facts,
There is no presumption of fraud; it must be proved, and to meet the requirements of this case the fraud alleged in the pleadings must be proved by a fair preponderance of evidence, "for the defendants have denied all of the material allegations going to the question of fraud. To support the allegations of fraud the plaintiff calls two witnesses. The first of these is Absolom P. Bachman, who, after testifying to the matters leading up to the defendants’ proposition-quoted above, says: “ The week following July 6th Mr. Cornick came to Hew York, and he and I went to Mr. Tomlinson’s office, 15 Wall street, and asked him if he had looked into the matter yet. He said it had not been referred to him. I think that was Friday of that week. The next Monday I went to Mr. Odell’s office and asked him what was being done towards the furtherance of this matter that he and I were contracting. He said Mr. Wood wanted to go down to - Lexington, and wished to start that day, and asked me if I would give a letter of introduction,’’- etc. After this the witness testifies to some matters between the sixteenth and twentieth of July, and of receiving a dispatch from Lexington on the twenty-first of July; in which Oornick says that none of the defendants have appeai-ed in-Lexington to close the deal, and he tells of a conversation
The only other witness called by the plaintiff on the issue of fraud was Mr. Tomlinson himself. . This witness appears to have desired to be perfectly frank about the matters upon which plaintiff’s counsel made inquiries, and although his direct examination took on practically the character of cross-examination no objections were interposed, and every opportunity was given-to bring out all the witness knew about the transaction which occurred in the year 1900, and which might very easily be forgotten. The only result of this examination, supplemented- by a single question on cross-examination, was that Mr. Tomlinson did, at some time either before or after the 21st day of July, 1900, have under consideration the question of the legality of the proposed transaction, in so far as it involved the lease and franchises^ and that he passed upon the same and did not pass upon it favorably, and that he got the most of his information in reference to the 'proposed transaction from his clients. ' There is nothing to indicate that his
The defendants were not called upon to act until their attorney had. approved of the proposition, and if the plaintiff’s assignors had not supplied him with sufficient information on which he could come to a conclusion in support of the legality of the transaction, they have no cause for complaint, and, as we have already pointed out, the evidence in this case does not even show conclusively that the transaction was legal, assuming that such evidence would be sufficient to raise a question of good faith. We are of the opinion, however, that Mr. Tomlinson was not occupying a position where he was under any obligations to act, and that it would be necessary for the plaintiff to show conduct on the part of the defendants amounting to a conspiracy with their attorney to avoid the obligation to warrant a recovery in this action, and such evidence is not within the record.
The judgment and order appealed from should, he reversed and a new trial granted, costs to abide the event.
Jenks, P. J., Hirschberg and Burr, JJ., concurred; Rich, J., concurred in result.
Judgment and order reversed and new trial granted, costs to abide the event.