Reitzenstein v. Tomlinson

• Decision Date: 19 July 1928
• Citation: 249 N.Y. 60,162 N.E. 584
• Parties: VON REITZENSTEIN v. TOMLINSON et al.
• Court: New York Court of Appeals Court of Appeals

249 N.Y. 60

162 N.E. 584

VON REITZENSTEIN

v.TOMLINSON et al.

Court of Appeals of New York.

July 19, 1928.

Action by Hugo G. A. Von Reitzenstein against John C. Tomlinson, Jr., and another, as executors of and trustees under the last will and testament of John C. Tomlinson, deceased. A judgment entered on a verdict of the jury in favor of the plaintiff was affirmed by the Appellate Division (222 App. Div. 835, 226 N. Y. S. 919), and defendants appeal by permission.

Reversed, and new trial granted.

Appeal from Supreme Court, Appellate Division, Second department.

Frank C. Laughlin and Joseph W. Kirkpatrick, both of New York City, for appellants.

Benjamin P. De Witt, Roger Hinds, and Sidney Pepper, all of New York City, for respondent.

CARDOZO, C. J.

Defendants' testator, who for convenience will be called defendant, was a lawyer in New York. For himself and his clients he held bonds of the Havana Tobacco Company to the extent of $2,000,000 or more. In April, 1922, a foreclosure suit was imminent, for default had been made in the payment of the interest. The notion came to the defendant that he might improve his chance of a favorable settlement by unearthing graft or other wrongdoing in the conduct of the business.

Plaintiff, who was then in Cuba, after a more or less checkered career of miscellaneous activities, was thought of as a fitting man to carry on the search. After a talk with the defendant's son, he was employed to gather such information as he could, and report to his employer. For this he was to receive $25 a day besides expenses, and also ‘an appropriate percentage’ of the benefits, if any, accruingthrough his efforts. He was occupied in the work of investigation for 36 days. In this period he brought together affidavits and rumors of wrongdoing and mismanagement which were received by his employer with expressions of satisfaction. He was paid his expenses as he went along, and also his per diem wage. Then came a term of silence. The defendant acting for himself and his clients filed a petition to intervene in the pending action of foreclosure. Other bondholders, represented by other counsel, petitioned for the same relief. Intervention was permitted in June, 1923. About eight months later a reorganization committee offered a plan of reorganization, which thereafter went into effect. As a result the bonds of the old company were exchanged for those of the new on the basis of $450 of the new for $1,000 of the old. Preferred shares of the new company were allotted besides. Plaintiff made demand of the defendant for ‘an appropriate percentage.’ The demand was followed by a refusal, and later by this action. The value of 36 days of work in collecting information is fixed by the plaintiff at $125,000, on which he credits $900 paid upon account. He sues for the balance on the footing of a quantum meruit. A verdict for $25,000 has been unanimously affirmed.

[1] The defendant's promise to pay ‘an appropriate percentage’ in excess of the per diem stipend is too indefinite and meaningless to be enforceable as a promise for the payment of anything more than the reasonable value. Varney v. Ditmars, 217 N. Y. 223, 111 N. E. 822, Ann. Cas. 1916B, 758. It is, however, significant as rebutting an agreement that value was liquidated by the liquidation of the daily wage. As to what the work was worth, the door is still wide open. Whatever it was worth in excess of payments made, the plaintiff should receive. Varney v. Ditmars, supra; Winch v. Warner, 186 App. Div. 710, 174 N. Y. S. 819;Plattenburg v. Briggs, 166 App. Div. 326, 151 N. Y. S. 925. The case is to be disposed of as founded on a common count for service rendered at request.

Two errors or classes of error vitiate the judgment. There was error in rulings upon evidence, rulings closely related to the quantum of the verdict. There was error in letting the case go to the jury on the theory that the gains accruing to the defendant upon the reorganization of the company might be found to have accrued to him as the outcome of the plaintiff's efforts.

[2] To prove the value of the services before reorganization and afterwards, the court received the reports of the National Quotation Bureau, an association supplying its subscribers with quotations of the current prices of bonds and shares of stock. One Corson, the representative of the bureau, testified that, before making its reports as to the securities of the Havana Tobacco Company, it sent out its employees to a group of bankers and brokers, reputed to be dealers, with instructions to ascertain the prices bid and asked. From the returns thus collected, it compiled its figures. There is no evidence that its employees did their work correctly. There is none that its price lists are generally recognized or acted upon as accurate by dealers in the market. This at least must be proved before quotations, not otherwise authenticated, become evidence of value. Watts v. Phillips-Jones Corporation, 211 App. Div. 523, 207 N. Y. S. 493;Id., 242 N. Y. 557, 152 N. E. 425. All that we have here is the fact that the bureau sells its service to subscribers in numbers not disclosed. On this basis without...