Heilbronn v. Herzog

• Decision Date: 27 November 1900
• Parties: HEILBRONN et al. v. HERZOG.
• Court: New York Court of Appeals Court of Appeals

165 N.Y. 98

58 N.E. 759

HEILBRONN et al.

v.HERZOG.

Court of Appeals of New York.

Nov. 27, 1900.

Appeal from supreme court, appellate division, First department.

Action by Justus Heilbronn and Stephane Marchand against Abraham S. Herzog. From a judgment of the appellate division (53 N. Y. Supp. 841) affirming a judgment for defendant, plaintiffs appeal. Reversed.

Martin, Gray, and Vann, JJ., dissenting.

Benjamin N. Cardozo, for appellants.

Julius J. Frank, for respondent.

WERNER, J.

The action was brought to recover the purchase price of certain diamonds sold by the plaintiffs to the defendant. The complaint alleged the sale thereof on the 6th of August, 1896, at the agreed price of $2,450.12, and that defendant promised and agreed to pay said sum. This was followed by the allegation of nonpayment, and that said amount was due and payable. The answer denied that the sum specified in the complaint, or any part thereof, was then due and payable, and alleged that the goods were sold and delivered by the plaintiffs to the defendant upon a term of credit, which had not expired at the time of the commencement of the action.

Upon the trial the defendant claimed and was given the affirmative. This is assigned as error by the appellants. It is the well-settled rule in this state that the party holding the affirmative upon an issue of fact has the right upon the trial to open and close the proof, and to reply in summing up the case to the jury. This is regarded as a legal right, not resting in the discretion of the court; and a denial thereof may be excepted to, and the ruling reviewed upon appeal. Millerd v. Thorn, 56 N. Y. 402;Merzbach v. City of New York, 163 N. Y. 16, 57 N. E. 96. The general rule upon this subject is that if the plaintiff, without giving any evidence, is entitled to recover upon the pleadings, the affirmative of the issue rests with the defendant. Bank v. Judson, 122 N. Y. 278, 25 N. E. 367. This rule must, of course, be applied and enforced in each case in the light of the specific pleadings and issues before the court. Let us apply this simple and conclusive test to the pleadings before us. The promise to pay is expressly alleged in the complaint, and is not denied in the answer. In the absence of any allegation in the complaint as to the time when payment is to be made, the law implies, not only the promise, but the duty, to pay on the delivery of the goods. Defendant's plea of an unexpired term of credit, which is relied on to defeat plaintiff's recovery, is in the nature of an affirmative defense, which must be supported by evidence before the defendant can succeed. Like the defense of payment, it must not only be pleaded, but proved. The allegation of the complaint that the sum claimed is due and payable, and the denial thereof in the answer, add nothing to the issue. These are merely statements of conclusions of law. Without further discussion of this feature of the case, we conclude that the trial court was right in awarding to the defendant the affirmative on the single issue raised by his answer.

The record also presents for our review alleged errors in the charge of the court to the jury. This necessitates a brief résumé of the facts essential to an understanding of the legal question involved. On July 10, 1895, the defendant was engaged in business as a jeweler in the city of New York. On that day he made and delivered to the Bradstreet MercantileAgency a statement in writing, over his signature, showing his financial condition. Among the assets therein enumerated was real estate of the value of $28,000, mortgaged for $16,000, and of the net value of $12,000. In the spring or early summer of 1896 the Bradstreet Company furnished to the plaintiffs a copy of the said statement, and the latter claimed to have relied upon the repre sentations therein contained in extending to the defendant the credit upon which the goods described in the complaint were sold. Upon the sale, August 6, 1896, the defendant gave to plaintiffs his three promissory notes, payable in 6, 9, and 12 months from date, respectively. In the latter part of August, 1896, one Kantz, a representative of the Bradstreet Company, interviewed the defendant as to his financial condition, and referred to the statement of July 10, 1895. In that interview the defendant admitted that he was not the owner of any real estate, and claimed that the insertion of that item in the written statement of his assets was a mistake made by his son in preparing the statement; that he (the defendant) signed the same without scrutinizing its contents. After this interview between Kantz and the defendant, Heilbronn, one of the plaintiffs, called upon the defendant, and referred to the discrepancy between defendant's written statement of July 10, 1895, and the verbal one made to Kantz subsequent to the sale. In this conversation defendant reiterated his claim that there was a mistake in the written statement, and said ‘he was just as good without that property as he was before.’ Heilbronn testifies that thereupon he went away satisfied. The defendant, in his testimony, admits the essential features of these interviews with Kantz and Heilbronn, but adds that in his talk with the latter he (defendant) offered to return the diamonds, and demanded the return of his notes, whereupon Heilbronn said: ‘Herzog, I have known you for many years,-your family and your brothers. It is all right. I simply wanted to ask you what this change meant.’ This evidence is corroborated by that of the defendant's son, and denied by Heilbronn.

This brings us to that portion of the charge which is excepted to by the appellants. The court, after having directed the attention of the jury to the evidence relating to defendant's alleged offer to return the diamonds, charged as follows: ‘Now, if he did that,-if he made that explanation, if it was a mistake, and he explained to Mr. Heilbronn that there was a mistake, as he says he did, and offered to return the diamonds upon the receipt of his notes, and Mr. Heilbronn refused to receive the diamonds,-it was a waiver of the fraud, and the plaintiffs cannot recover. The plaintiffs were required to rely upon the promissory notes they had taken when this sale was made, if at that time the fraud was waived.’ We think this charge was erroneous. If the goods were sold and the credit extended to the defendant in reliance upon the false and fraudulent statements made by him, the plaintiffs had the right either to disaffirm the sale and proceed in replevin to recover their goods, or they could waive the tort and proceed in assumpsit for the purchase price of the goods. Wigand v. Sichel, 42 N. Y. 122;Crossman v. Rubber Co., 127 N. Y. 38, 27 N. E. 400, 13 L. R. A. 91;Wilson v. Foree, 6 Johns. 110. There is a wellrecognized distinction in such cases as these between a disaffirmance of the sale, with all its incidents, and a mere rescission of the credit upon which the sale was made. This distinction was overlooked by the learned trial court, as is plainly indicated by the charge above quoted. But it is urged with much force that, even if that portion of the charge is concededly erroneous, it was cured by the following instruction to the jury: ‘If you find that the defendant offered to return the diamonds, and gave this explanation, and that Mr. Heilbronn said he was satisfied to allow the sale to stand as it was, then the plaintiffs cannot recover. If, on the other hand, this offer was not made, then the plaintiffs are entitled to recover, if you find that this sale was fraudulently procured.’ It will be observed that in this portion of the charge there is the same distinct reference to the sale, and the defendant's alleged offer to return the diamonds, as in the portion first quoted. The jury were explicitly instructed that the plaintiffs could not recover if the defendant offered to return the diamonds. No allusion was made to plaintiffs' right to affirm the sale and to disaffirm the credit. That plaintiffs were willing to allow the contract to stand was apparent from their election to sue upon the contract and not in tort; but whether they had also affirmed the credit upon which the sale was made was an independent question, upon which the plaintiffs were entitled to have the jury plainly and correctly instructed. The obvious import of all that was said upon this subject by the trial court was that the plaintiffs' right to recover depended wholly upon the finding that the defendant offered to return the diamonds. This, as we have seen, was error, because it was not necessary...