Case Name: John C. Oldmixon, Respondent, v. Stephen N. Severance and William N. Severance, Composing the Firm of Severance & Son, Appellants
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1907-06-07
Citations: 119 A.D. 821
Docket Number: 
Parties: John C. Oldmixon, Respondent, v. Stephen N. Severance and William N. Severance, Composing the Firm of Severance & Son, Appellants.
Judges: 
Reporter: Appellate Division Reports
Volume: 119
Pages: 821–825

Head Matter:
John C. Oldmixon, Respondent, v. Stephen N. Severance and William N. Severance, Composing the Firm of Severance & Son, Appellants.
First Department,
June 7, 1907.
Bankruptcy — action by assignee of bankrupt and trustee on claim for goods sold —■ validity of assignment ■— attorneys — champerty •— liquor tax certificate.
When bankrupts together with their trustee unite in the assignment of a claim for goods sold and delivered, the buyer when sued by the assignee for the purchase price cannot assert that the title to the.cause of action is still in the trustee, especially so when the trustee has been defeated in a prior suit to collect the claim.
.A trustee in bankruptcy is not bound to take property which may involve him in litigation. «
When it appears that the assignee, an attorney at law, had no interest in the claim sued upon other than the legal title taken, for the purpose of enforcing the claim for the benefit of others, it is not error to refuse to submit to th.e jury the defense of champerty.
Under a complaint'to recover for the sale and delivery of goods consisting of liquors, provisions,-china, glassware and cigars, there can he no recovery for the value of a liquor tax certificate.
Appeal by the defendants, Stephen R. Severance and another, from a judgment of the Supreme 'Court in favor of the plaintiff, entered in the office- of the -clerk of the county of New York on the 9th day of January, 1906, upon the verdict of-a jury, and also from an order entered in said clerk’s office on the 26th day of February, 1906, denying the defendants’ motion for a new trial made upon the minutes. •
Stillman F. Hneelcmd, for the appellants.
I. Henry Harris, for the respondent.

Opinion:
McLaughlin, J.:
This action was brought to recover the purchase price of certain goods, wares and merchandise alleged to have been sold and delivered to the defendants. The plaintiff had a verdict, and from the judgment entered thereon and an order denying a motion for anew trial defendants have appealed. The goods, wares and merchandise in question were formerly owned .by J. Fred Graves and Bertha Katherine Graves, his wife,, who had a lease of and operated a cer-. tain hotel in the city of New York. Tills hotel was bought by the defendants on or about March 1, 1903, and they took the goods, wares and merchandise'in question without, any definite agreement having been made as to the price to be paid. Some time during the following July, Graves and his wife were adjudged bankrupts in their individual names, and one Michaels was appointed, trustee. In their schedule of personal property'filed in the bankruptcy proceeding they included the claim for the goods, wares and merchandise sold to the defendants, and subsequently —as appears from the record and concessions made in open court upon the argument of this appeal — the trustee brought an action in the United States District Court for the Southern District of New York against the defendants to enforce the* claim. He was nonsuited, but upon what ground it is unnecessary here to consider. Thereafter, on April 30, 1905, Graves and his wife, by an instrument which they both signed and which described them, as copartners, assigned the claim to one Lee, who in turn assigned it to the plaintiff. There was also introduced in evidence at the trial an instrument' dated April 28, 1905, signed by Michaels, waiving all claim to. the merchandise and consenting to the assignment to Lee.
The conclusion at which I have arrived renders it unnecessary to consider the question, which was argued at so'me length by the appellants, as to whether, if the property in question were originally owned by Graves and his wife as partners, and if. they were adjudi cated bankrupts as individuals, the title to the claim nevertheless vested in the trustee, for it seems to me in any event title was sufficiently shown in the -plaintiff to enable him to maintain the action. The assignment by Graves and his wife 'to Lee, though describing them as a partnership, was signed by them in their individual names, and was clearly competent to pass whatever rights they had, whether as individuals or partners. If they owned the goods, wares and merchandise as partners, and the claim for them did not pass to the trustee, their assignment to Lee was. valid and sufficient, and the introduction of the instrument signed by the trustee was harmless error; if the'title passed to the trustee, whether . from them as individuals or partners, or if they were estopped from 'asserting that, it did not pass, then the instrument signed by the trustee in which he waived his claim and consented to the . assignment was sufficient to validate the assignment to Lee. It is well settled that a trustee in bankruptcy is not bound to take property which may involve him in litigation. ' (Sparhawk v. Yerkes, 142 U. S. 1; Sessions v. Romadka, 145 id. 29.) In the case last cited the action was brought to recover damages and for an injunction for the infringement of a patent: Defendant claimed that title was not shown in the plaintiff, in that he claimed as assignee and that the original assignor, one Poinier, had been adjudicated a bankrupt before the assignment, so that the title to the patent vested ini the assignee in bankruptcy. The assignee in bankruptcy had taken no steps regarding the patent or its infringement, and had directed a prospective purchaser to negotiate directly with Poinier. The court held that title to the patent ljad originally passed to the assignee in bankruptcy, but that he had shown his intention not to take it, and that while creditors of the bankrupt might have objected " it does not lie in the mouth of an alleged infringer to set_ up the right of the assignee as against a title from the bankrupt' acquired with the consent of such assignee."
If mere inaction and an oral permission given to a third person by a trustee is sufficient to enable the bankrupt to assign a good title, then the instrument signed by Michaels which waived all claim to' the goods sold, and expressly consented to the assignment, certainly gave Graves and his wife power to make a valid assignment to Lee, and especially so in view of the fact that he had been unsnc cessful in his effort to enforce the claim. . ISTot only this, but I do not think the defendants, who have never paid for the goods, can be heai'd to assert---for the purpose of defeating an- action to recover the purchase pi-ice—the right of the trustee as against a title acquired with his consent.
One of the defenses strenuously insisted upon at the trial was that the plaintiff, was an attorney at law and had purchased the claim with the intent and for the purpose of bringing an action thereon, and the appellants now assert that the refusal to submit this question to the jury was error, The only evidence adduced in support of this contention was that the plaintiff was an attorney at law ; also plaintiff's counsel -stated in-his opening to tile jury that the plaintiff was a clerk in his office and had no other interest in the claim than the legal title; and it appeared that the assignment to him was made May 31, 1905, and this action began on the twenty-third of. June following. This evidence was insufficient to defeat the title on that ground, or to justify the: jury in finding that the plaintiff,'-an attor-ney, purchased, the claim for the. purpose of bringing -this action. (Code Civ; Proc. §.73 ; Moses v. McDivitt, 88 N. Y. 62; Wightman v. Catlin, 113 App. Div. 24.) There was not only no evidence whatever to show that the claim was purchased with the intent and for tiie purpose of bringing the action, but'.the statement of plaintiff's counsel in the openifig—-which was not controverted — was to the'effect that the plaintiff had no "personal interest in the claim but simply held' the legal title —• obviously for the purpose of enforcing the claim for the benefit of others. The court, therefore,, did.not err in denying defendants' request to go to the jury on this subject
I am, however, of the opinion that the-verdict was'excessive. The in ventory of the goods made '.by Graves and his wife included an item of $138.69 for a liquor tax certificate, and the verdict was for the entire amount stated in the.inventory, which necessarily included this item. The complaint alleged -only the sale- and- delivery of "goods, wares and merchandise,, consisting of liquors,, provisions, china, glass-ware and cigars,"'and not only did this.certificate fail to come within this allegation, but there was no evidence giyen to show' that it had been assigned. '
The judgment, therefore, should be reversed and a. new trial ordered unless plaintiff stipulate to.reduce the verdict by the sum of $138.69 and interest thereon. If such stipulation be given, then the judgment as thus modified is affirmed, without costs to either party on this appeal.-
Patterson, P. J., Ingraham, Clarke and Lambert, JJ., concurred.
Judgment reversed and new trial ordered, with costs to appellant to abide event, unless plaintiff stipulates as stated in opinion, in which event judgment as modified' affirmed, without costs. Settle order on notice.