White v. Smith, 46 N. Y., 418.

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WHITE v. SMITH.

New York Court of Appeals, 1871.

[Reported in 46 N. Y., 418; rev'g 1 Lans., 469.]

1. If the complaint, after alleging the original amount of the indebtedness, in substance admits a specific amount as having been paid, the defendant can under a general denial claim the benefit of that admission, and still contest the items which plaintiff has alleged as constituting the original amount.—So held where the parties seemed to have acted on that view at the trial.

2. An admission in pleading, forming the issue on trial, is effectual to limit the issues without being offered in evidence.

The complaint, after alleging the partnership of the plaintiffs as house carpenters and joiners, was as follows:

That between the 13th day of June, 1866, and the 15th day of August, 1866, they, by themselves and their servants, performed work and labor as such carpenters and joiners, and furnished material for the erection of a building on the corner of Franklin and Warren streets, in said village of Watkins, at the request of the said defendant and with her knowledge and 2 approbation, to the amount of $541.90, as by the bill of items. therefor, hereto annexed, will fully appear.

That the work and labor so performed for the defendant, and the material so furnished, were reasonably worth the price charged therefor in said bill of particulars.

That there is a balance due from the defendant to the plaintiffs for such work, labor and material, as aforesaid, after deducting all payments made by the defendant to the plaintiffs thereon, of $175.75.

THEREFORE, the plaintiffs demand judgment against the defendant for the said sum of $175.75, with interest thereon since the 15th day of August, 1866, besides the costs and disbursements of this action.

Annexed to this complaint was a bill of items headed "M. T. Smith to W. E. White & Son, Dr.," and footed up $541.90, butnot mentioning any payments.

Defendant's answer was a general denial; and, for a separate

White v. Smith, 46 N. Y., 418.

defence, a claim to recoup $500 for damages by alleged bad t work, for which sum the answer asked judgment against plaintiff. Plaintiffs' reply to the counterclaim was a denial.

The referee found that the amount originally earned by plaintiff was $501.26 (being $40.64 less than alleged in the complaint), and he deducted from this the entire sum mentioned in the complaint as having been paid, and gave judgment for $96.39.

The Supreme Court at General Term were of opinion that the admission of payment should have been treated as conditioned or dependent on the allegation of the sum originally due. 5 BALCOM, P. J., delivering the judgment of that Court [now reversed], said: "The referee could properly have found that the defendant paid the plaintiffs $366.15 on their claim of $541.90, prior to the commencement of the action. The just inference from the complaint is that the plaintiffs had been paid that sum on such claim, by the defendant. The amount of the plaintiffs' claim, stated in the complaint, was $541.90, which is followed by the allegations, that there was a balance due from the defendant to the plaintiffs, on such claim, after deducting all payments made by the defendant to the plaintiffs, of $175.75 ; for which balance only judgment was demanded in the complaint, besides interest and costs. The difference between such balance and the amount of the plaintiffs' claim, as alleged in the complaint, was $366.15, which the referee found that the defendant had paid the plaintiffs.

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"It is provided by § 168 of the Code of Procedure,* that the material allegations in the complaint, which are to be taken as true, are those not controverted by the answer. This makes the defendant admit the material allegations of the complaint to be 7 true, which he omits to deny. But it does not authorize the plaintiffs to except to, or complain of a holding that any material allegation of his complaint is true, which is denied, though no evidence be given to establish it by either party, unless the holding wrests such allegation from its true meaning.

"I think the referee had the right to assume that the defendant paid the plaintiffs $366.15, upon the plaintiffs' claim of

* Code Civ. Pro,, § 522.

White v. Smith, 46 N. Y., 418.

S $541.90; but he found the plaintiffs' claim was only $501.26, and then held that $366.15 was paid upon it, without any evidence or admission, except what was inferable from the complaint. I am of the opinion, this holding wrested the allegations of the complaint, respecting payments upon the plaintiffs' claim, from their true meaning, and that it was erroneous.

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"It seems to me the defendant should have alleged payment in his answer, of $366.15, and proved it; or that he should have conceded on the trial that the plaintiffs' entire claim was $541.90, as stated in the complaint, to enable him to insist that the complaint showed he had paid the plaintiffs $366.15.”

The Court of Appeals reversed the judgment.

PECKHAM, J. The plaintiffs' counsel insists that the referee erred in finding a payment of $366.15 to the plaintiffs. The Supreme Court so held, and upon that ground set aside the judgment. No point of this kind seems to have been presented at the trial, either in the receipt or exclusion of evidence, or by any decision upon any question raised as to the pleadings.

But as there was no proof given of any payment, and payment is found and perhaps, sufficiently excepted to, the pleadings must contain an admission thereof, in substance, or the order must be affirmed. I think they do in substance.

The complaint was for work and materials, and sets forth the items specifically, both of labor and materials, amounting to $541.90. It then claims a balance due therefor, "after deducting all payments made by defendant to plaintiffs thereon of $175.75."

The answer is a general denial, and sets up a counterclaim, 11 etc.

It cannot be denied that this complaint admits in substance that $366.15 had been paid upon the items in the complaint. It alleged that the items were all just, and that thereafter deducting all payments, there was yet that balance due. It is clear that both parties acted upon the view that the complaint conceded a payment, and I think with good ground.

The Supreme Court says that the defendant "should have conceded on the trial that the plaintiffs' entire claim was $541.90,

Knapp v. Roche, 94 N. Y., 329.

as stated in the complaint, to enable him to insist that the com- 12 plaint showed he had paid the plaintiffs $366.15."

It is clear that the items must all be taken as true to ascertain the amount of the payment, but as a payment it cannot be claimed to have been any less than that sum, upon those items. Whether the items were all legitimate, were all the subject of recovery, was another question.

The referee, upon the evidence, found the said items that were recoverable amounted to $501.26, instead of $541.90.

Upon the theory of that Court, the difference, or $40.64, was the 13

precise error of the referee. I think he committed no error in that.

It is also alleged that no portion of the complaint was read as evidence before the referee. It was not necessary to read the pleadings. They are presumed to have been before the referee, and that he had knowledge of their contents. [A minor ruling is here omitted.]

KNAPP v. ROCHE.

New York Court of Appeals, 1884.

[Reported in 94 N. Y., 329.]

1. In an action by the receiver of a bank, against its officers, for damages, a mere allegation that they made illegal loans will not show a cause of action; but non-payment of such loans must be alleged in order to show damage.

2. Where the defendant's liability depends on non-payment by a third person, such non-payment is a fact essential for plaintiff to allege and prove, and in such case, a general denial lets in evidence of payment. 3. In an action of tort, a general denial lets in any evidence controverting the allegations of damage contained in the complaint.

4. If the action is against joint tortfeasors, the denial will let in payments made by either or both.

5. Such evidence is proper in mitigation.

Action by a receiver, for damages.

The complaint contained allegations to the following effect:the incorporation of the Bowling Green Savings Bank; its

Knapp v. Roche, 94 N. Y., 329.

2 dissolution; the appointment of the plaintiff as receiver and leave given him to sue. Then followed a quotation from the act of incorporation, forbidding the use of its funds or deposits for any purpose except to pay necessary current expenses, under the direction of the Board of Trustees; and providing that the affirmative vote of at least five members of the board should be requisite in making any order for the investment of any moneys, or for the sale or transfer of any stock or security.

The complaint then proceeded to allege that the defendant, Walter Roche, was vice-president of the bank from its organization to its dissolution; that without the affirmative vote of five members and without any authority whatever, he took and loaned the moneys of the corporation to the Avenue "C" Railroad Co. of New York City, "of which the sum of $48,825.30 remains due and unpaid."

Then followed similar allegations as to other loans, concluding thus:

"The plaintiff further shows that all and each of said loans and advances were made by the defendant while he was vice4 president of said bank, and were made with and out of the funds. and moneys belonging to said bank, and that none of said loans were authorized by the affirmative vote of at least five trustees of said bank, nor were said loans or advances made upon the securities or collaterals required by the charter of said bank, or upon any security or collateral whatever."

The answer denied knowledge or information sufficient to form a belief as to the allegations relating to the appointment of plaintiff as receiver; admitted the incorporation, but denied that he was vice-president from November. 1871, up to time of its dissolution; and concluded thus: "The defendant denies each and every other allegation in the said complaint contained."

A supplemental answer alleged that Henry Smith, deceased, and Reeves E. Selmes, were respectively president and secretary of the bank, and that the loans were made with their knowledge, consent, and by their direction, and that they were jointly liable with defendant for them, and that the plaintiff had settled, compromised and discharged the claim and cause of action stated in the complaint with Henry Smith, deceased, in his lifetime, and