Case Name: SAMUEL P. KNAPP, Appellant, v. ULRICH SIMON, Impleaded with Simon Donau and Christian A. Steen, Respondent
Court: New York Superior Court
Jurisdiction: New York
Decision Date: 1882-12-30
Citations: 17 Jones & S. 17
Docket Number: 
Parties: SAMUEL P. KNAPP, Appellant, v. ULRICH SIMON, Impleaded with Simon Donau and Christian A. Steen, Respondent.
Judges: 
Reporter: Reports of cases argued and determined in the Superior Court of the city of New York
Volume: 49
Pages: 17–31

Head Matter:
SAMUEL P. KNAPP, Appellant, v. ULRICH SIMON, Impleaded with Simon Donau and Christian A. Steen, Respondent.
I. Agreement.
1. Extrinsic evidence, to apply terms of.
When parties use .a term which in itself, conveys no meaning, its meaning as used by them is to be determined by a reference to that which both had in mind when they used the term ; and to this end the transactions leading up to the agreement, the positions thereafter taken by them, and their situation at the time, are to be considered.
1. “ Cobb Claims. ”—Thus where by an agreement between plaintiff and defendants, the defendants agreed to protect the plaintiff against the 11 Cobb claim,’’the fact that one Cobb had brought an action against defendants for merchandise by him sold to them through the plaintiff, and during the pendency of this action another action was pending, brought by plaintiff against defendants for merchandise sold and delivered by him to defendants, including therein the Cobb merchandise, upon the settlement of which latter action the agreement in question was made, and also the fact that neither Cobb nor plaintiff had asserted that the latter had bought the Cobb merchandise as broker without disclosing his principal, may be considered in determining what was referred to by the phrase “ Cobb claim.”
Effect of these facts.—Their effect, nothing to the contrary appearing, is to show conclusively that the claim referred to was such claim as Cobb might have against the plaintiff for goods sold and delivered to him absolutely, and not a claim for goods sold to him as broker without disclosure of the principal.
II. Judgment—Privies to—Res adjudicata—Evidence.
1. Where one purchases merchandise of another, and his vendor sues him for goods sold and delivered, to which action he sets up as a defense that he purchased as broker of a third party, disclosing his principal at the time, and judgment goes against him, the third party having no notice of this action, is not privy to it, and the judgment does not establish as res adjudicata, or tend to establish as evidence, either that the purchase was made for him, or that the vendee disclosed or did not disclose him as the principal, m. Reversal of judgment against plaintiff; when not.
1. Cause op action not contained in the complaint.
1. When such judgment will not be reversed, on the ground that said cause of action has been conclusively made, or that the evidence was sufficient to carry the cause to the jury for its determination on that cause of action.
(a) It will not be, where the evidence tending to support such cause of action, was received without objection, but was competent on the issues joined, and plaintiff’s counsel did not request the trial justice to charge the jury as to the obligations of the defendant under such cause of action.
IV. Submission to jury.
1. Issue whether certain goods were bought by plaintiff as broker for defendants, or on his own account and by him sold to defendants.
(a) Under evidence that S. & Co. employed K., the plaintiff, to purchase certain wheat for them as their broker; that.plaintiff did purchase the wheat and directed Cobb, the vendor, to deliver it to S. & Co., and it was so delivered; that Cobb sued the defendants for the value of the wheat, as goods sold and delivered by him to them through K.; that pending this action K. also sued S. .& Co., for the value of wheat, sold and delivered by him to them (including therein the Cobb wheat) and for brokerage ; that the latter suit was settled, one of the terms of settlement being that S. & Co. were to protect plaintiff against the Cobb claim ; that afterwards S., one of the firm of S. & Co., settled the claim held against S. & Co. by Cobb by paying his portion thereof, and took a release under the act entitled an act for the relief of partners and joint debtors, passed April 18,1838, which release recited: “Whereas the late copartnership of S. & Co., has been dissolved and is indebted to Carlos
Cobb in the sum of--, and interest ;” that subsequently Cobb sued K. for the value of the same wheat as and for goods sold and delivered, giving credit for the amount paid by said S., to which action K. put in it a defense that he bought as broker for S. & Co. and disclosed them as his principals; in which action judgment went for Cobb, against K, of which action, however, S. & Co. had no notice; and that K. paid its judgment recovered against him by Cobb ;
HELD
the determination of the above issue was properly submitted to the jury in an action subsequently brought by K. against S. & Co., to recover the amount paid by him, K., to Cobb for this wheat, under the charge, “If in this transaction the plaintiff acted as principal and made a sale of this wheat to defendants, he cannot recover in this action ; if on the other hand he simply acted as broker then you have a further question to consider and that is in respect to this release.”
Y. Knapp v. Simon, 86 N. T. 315, distinguished.
It seems the case there showed, either conclusively or as matter for the jury, that the Cobb claim, intended by the agreement made on the settlement of the former action of Knapp v. Simon, was a claim against Knapp, based on the fact that he had bought of Cobb as purchaser, while in fact he was broker for S. & Co. The present case shows that no such thing was proved at the last trial or assumed to be the fact at the time of the agreement.
Before Sedgwick, Ch. J., Freedman and Russell, JJ.
Decided December 30, 1882.
The litigation arises out of a transaction which took place about October 23, 1868, between the plaintiff and one Cobb, resulting in the sale by Cobb of certain wheat.
The complaint alleges that the plaintiff bought the said wheat from said Cobb for the defendants, at their request, as their broker, that the wheat was. delivered to defendant, that the total of the purchase money ■ with charges for measuring and towage, and interest thereon on October 28, 1869, amounted to $5,425.40, upon which day defendants paid said Cobb the sum of $1,688.32, leaving due and unpaid' the sum of $3,737.04, which the defendants have never paid.
The complaint further set forth that said Cobb sued the plaintiff for the price or value of said wheat, and towage remaining so unpaid, and recovered a judgment for the sum of $5,554.30 ; that said Cobb also recovered a further judgment for costs, on appeal from said judgment, amounting to $106.51, and a further judgment for costs for $145.34, in the same action.
It then set forth the payment by him (Knapp), on January 15, 1878, of said second judgment and the interest thereon, amounting to $6,498.36, and that no part thereof had been repaid to him. It then averred that said judgments were recovered against him “although the defendants were the principals in said transaction, and he was a mere broker and surety, under allegations and proof that he failed to disclose the defendants as his principals, all of which were at the defendants’ request, and for their use.” The complaint prayed judgment for $6,498.36, with interest from January 15, 1878.
Only the defendant, Ulrich Simon, answered.
By his answer he denied all the above allegations ; and alleged affirmatively that all the grain and merchandise which were purchased by defendants from plaintiff were so purchased from him as principal, and not as agent for Carlos Cobb or any other person; and also set up (among others), as affirmative defenses the statute of limitations and a release to him from Cobb of, and from all claims and demands arising out of the transactions in the complaint set forth.
On the trial the plaintiff testified: “I have been a grain broker since 1863. I know the firm of C. A. Steen & Co. Its members were C. A. Steen, Simon Donau, and Ulrich Simon. Mr. Donau came to my office, and stated to me that they wished me to buy them a small quantity of wheat—say two thousand five hundred or three thousand bushels—and have it delivered to that distillery as soon as I could ; I did so that day; I bought three thousand and twenty-six bushels and eleven pounds of Mr. Carlos Cobb, and it was delivered by Mr. Cobb ; I ordered it of Mr. Cobb for this firm, I think, on October 23, 1868 ; I was to pay, I think, $1.62 a bushel; I had bought other grain for them about that time, aggregating, including this, somewhere in the neighborhood of $40,000 worth.”
Two witnesses gave evidence in corroboration of this.
Defendant Simon was asked, “You knew Mr. Knapp bought this grain as a broker for your firm ? ” and answered, “ I can hardly tell how he bought it—he charged brokerage. Yes sir.” It appeared on the trial that the wheat was delivered to defendant; that about November 5, 1868, Cobb brought an action .against these defendants for $5,064.95, the value of said wheat, with certain charges, alleging a sale and delivery thereof to them through the plaintiff; that this action was settled as to defendant Simon, October 30, 1869, by his paying' his part of the whole claim, and a release was given him under the act, entitled an act for the relief of partners and joint debtors, passed April 18, 1838, which release contained the recital, “Whereas the late copartnership of C. A. Steen & Co. has been dissolved, and is indebted to Carlos Cobb in" the sum of $5,064.95 and interest.”
The evidence as to whether plaintiff consented to the giving of the release is contradictory.
It further appeared that during the pendency of this Cobb action, another action was pending, brought by this plaintiff against the defendants to recover the value of certain lots of wheat, including therein the said lot sold by Cobb, alleging a sale and delivery thereof by. him to these defendants.
The pleadings in this action were not in evidence. Its value was derived from the oral testimony. Plaintiff testified as to it, “ I could not get the money ; they refused to pay. I called on them for the money, then I could not get the money, and I sued them.”
Defendant Simon testified, “he sued me for $39,000. There was $37,000 and odd for grain, and $1,000 and odd for commission.”
This action was settled about April 8, 1869. The terms of the settlement as testified to by plaintiff, are best given in his language. He testified :
“Mr. Ulrich Simon called me out of the court-room ; he said he wished to make a settlement, that he did not wish to have the matter go -further, and wanted to know what arrangement he could make with me; I said they could settle if they wished to pay and make a very easy arrangement ; he said they could not do that, but that he and Mr. Donan would pay me fifty cents on the dollar of my claim ; I said, “ Will you then take charge of the Cobb claim—bar that from me? ' Mr. Ulrich Simon said, “You never shall hear of that again ; that we will settle ourselves; you need never give yourself any uneasiness in regard to the Cobb matter, that we will settle then we agreed upon a basis of settlement, paying me fifty c^nts on the dollar, excluding the Cobb claim, which was deducted from the original amount, which was not settled then.
One witness gave evidence in corroboration of this.
Defendant Simon testified : “At the time I settled with Knapp, he gave me distinctly to understand I had to settle the one with Cobb also.” On his cross, the following questions were put and answers given. Q. “ You agreed to settle it ? A. I agreed to settle my portion. Q. And you say Mr. Knapp said you have got to settle that for yourself ? A. Yes, my portion. Q. Did he use the words ‘ your portion ? ’ A. Yes.”
Defendant Simon did settle with Cobb for his portion, as above stated.
It further appeared, that in October, 1873, Cobb commenced an action against the plaintiff, alleging a sale and delivery of the wheat in question, by him to,the plaintiff ; that this plaintiff, for defense to that action, set up that he bought the wheat, as. broker, for C. S. Steen & Co., and at the time disclosed his principals. In that action, Cobb recovered a judgment against this plaintiff for $5,554.30, being for costs of the action, and the price of the wheat and towage with interest, after crediting the amount as to which Steen had been released.
Plaintiff paid this judgment, January 16,1878. Defendants had no notice of this action.
The judge charged the jury : “If in the transaction the plaihtiff acted as principal, and made a sale of the wheat to defendant, he - cannot recover in this action, because his claim is outlawed.” (To this plaintiff’s counsel excepted.)
If, on the other hand, he simply acted as broker in the transaction, then you have a further question to consider, and that is in respect to this release. Notwithstanding the release, if it was given by Cobb to the defendant, without the knowledge of the plaintiff, then plaintiff, having paid the money, can recover. On the other hand, if the plaintiff were present, or acquiesced in the agreement by which Simon was released, then the defendant is not liable.”
The jury rendered a verdict for defendant. A motion for a new trial was denied. From the judgment entered on the verdict, and the order denying the motion for a new trial, plaintiff appealed to the general term.
D. M. Porter,
attorney, and of counsel for appellant, on the questions considered in the opinion urged:—(1.) Under the agreement whereby defendant undertook to protect plaintiff against the Cobb claim, the relation of the parties, whatever they may have been originally, became, as between them, that of principal and surety; the defendants becoming principal debtors to Cobb and the plaintiff surety for the defendant; the surety cannot recover of the principal until he has paid the debt. Therefore plaintiff’s cause of action under the agreement did not accrue until he paid the debt, which was not until January, 1878, and consequently this action having been commenced April, 1878, it was not bar-, red by the statutes of limitations. Citing numerous authorities. (2.) Notice by plaintiff to Simon of the pendency of the Cobb suit was unnecessary (citing many authorities). (3.) This charge of the court, to wit: “If, in the transaction, the plaintiff acted as principal and made a sale of the wheat to the defendants, the plaintiff cannot recover in the present action,” is erroneous, (<x.) Because there is no evidence that he acted as principal, but the evidence is uncontradicted that he acted as broker. The complaint in the suit of Cobb v. Steen shows that Knapp was simply broker, and that suit was pending at the time of the settlement. Simon does not testify that Knapp sold as principal; the evidence is uncontradicted that Knapp bought as broker. Reed so testifies and also Knapp. Simon testifies : “As I stated he (Knapp) sued us for $39,000 ; there was $37,000 and odd for grain and $1,100 and odd for commission.” (5.) Because under the agreement plaintiff was surety for the defendants, and as such having paid defendants’ debt is entitled to recover against them.
Vanderpoel, Green & Cuming, attorneys, A. J. Vanderpool and H. N. Bookstaver, of counsel, for respondent.

Opinion:
By the Court.—Sedgwick, Ch. J.—The
complaint alleged that, in October, 1868, the defendants requested the plaintiff to purchase, as broker, for them certain wheat of Carlos Cobb, and that the plaintiff, as such broker, did buy for the defendants the wheat for $5,064; that in October, 1868, the defendants paid said Carlos Cobb $1,688, leaving the sum of $3,737 due, which the defendants never paid; that thereafter said Carlos Cpbb sued the plaintiff for the price and value of the wheat remaining unpaid and recovered judgment against him for the amount claimed ; " that the said Cobb recovered the said judgments against this plaintiff, although the defendants herein were the principals in said transaction and the plaintiff was a mere broker and surety, under allegations and proof that the plaintiff failed to disclose the defendants as his principals, all of which was at the defendants' request and for their use." The testimony established the facts about to be stated. In agreement with the allegations of the complaint, the plaintiff as a witness swore that the defendants' firm requested him to buy the grain for them, and that on October 23, 1868, he ordered it of Mr. Cobb for the firm. The complaint, it has been seen, specifically states that he bought as a broker. The plaintiff gave no evidence to show that at any time down to January, 1878, he took the position, that he bought of Cobb apparently for himself but actually for defendants' firm as their broker, not disclosing the agency. For in addition to what has already been noticed, his answer in the action of Cobb against him alleged that the wheat was purchased of Cobb by him only as a broker for the present defendants' firm, and that Cobb knew that the wheat was purchased only by him as a broker and for the benefit of that firm. The plaintiff verified this answer ^f ter October, 1873, five years after the wheat was bought.
Soon after the wheat was bought in October, 1868, the plaintiff took a position at variance with that shown by the complaint and the proof. He brought an action against the defendants' firm for the value or price of the wheat, as goods sold and delivered by him to them. If this were well founded, the fact asserted by the plaintiff must have been that he bought for himself of Cobb, and sold to the defendants' firm.
* In this action last referred to, the plaintiff claimed to recover for other wheat sold by him to the defendant's firm, which, with the Cobb wheat, amounted in value to about $40,000. The learned counsel for appellant has argued that this form of complaint as to the Cobb wheat was, "in other words alleging, in effect, that he had not disclosed the names of the buyers and sellers, and therefore brought suit as principal." This seemed to me conclusively negatived, by the train of considerations that has been adduced, ending in his sworn answer of October, 1873, that Cobb knew that he acted as broker for the defendants' firm.
I wish now to notice, the effect of the action of Cobb against this plaintiff, upon the relation of the defendant to the transaction. It has been noticed that down to the time of the beginning of that action, plaintiff did not claim that he bought of Cobb as broker in fact, but not so informing Cobb. There is no testimony tending to show that the defendant or his firm, were informed or had any reason to believe, that the plaintiff had bought in that manner, or that Cobb claimed that he had. There is no proof that the defendant knew of the action by Cobb, its nature, its progress, or its result. He swears he did not, until after the judgment was paid by the plaintiff 1878. In the case it is admitted that he had no notice of the action, or the complaint of Cobb against the plaintiff simply charged him as purchaser. The answer alleged that the present plaintiff bought as broker of the present defendants' firm, and that Cobb so knew at the time.
The present complaint avers that Cobb recovered judgment inethis action "under allegations and proof that the plaintiff failed to disclose the defendants or his principals." This averment was not proved. Cobb recovered from the plaintiff, on the purchase by him, he failing to prove that he bought as alleged in his answer.
While the action of this plaintiff against defendants' firm was pending, another action, that of Cobb against defendants? firm was pending, and this the plaintiff' knew. Cobb alleged in his complaint, that he sold and delivered to the defendants' firm, through the present plaintiff as broket, the wheat in question. The complaint did not, and it was not necessary to allege, whether at the time of the sale, the present plaintiff announced his agency for defendants' firm.
The case does not show what was the answer of the defendants' firm to this complaint, nor does it show what was the answer of defendants' firm in the action of the present plaintiff against them. Although it may now be taken that there was an issue of fact in each action, its nature is not disclosed.
While these two actions were pending, contemporaneously and before April, 1869, negotiations began between the plaintiff and the defendants, for the settlement of claims in the action by the plaintiff against the defendants' firm. There was an agreement finally made, as plaintiff testified, on which he relies in whole or in part to support this action. The agreement, according-to plaintiff's testimony, was that defendant's firm should, pay in a specified way, 50 per cent, of the claim for goods sold and delivered excepting for the wheat bought of Cobb. This 50 per cent, was afterward paid. The plaintiff further testified, that, in addition, he said to the defendant "will you then take charge of the Cobb claim, bar that from me?" and that to this the defendant said: "You shall never hear .of that again ; that we will settle ourselves; you need never give yourself any un easiness in regard to the Qobb matter; that we will settle." Now it is of vital importance, in the construction of this alleged agreement to determine to what both the parties referred in the phrase Cobb claim. The question, of course, is not, to what, if each had taken other positions than in fact were taken, they might have referred to % nor to what either in his own mind referred to ? but to what did they both refer, in the use of that term %
They must have referred to a claim against the present plaintiff. He, of course, would only stipulate for that. If Cobb was right in his action against the defendants' firm, as stated in his complaint, and as this plaintiff swore in his answer to Cobb some years after, then the plaintiff appeared in the transaction as an avowed agent, and would not be liable to Cobb, and would have no claim against defendants' firm except for brokerage.
But if his action against the defendants' firm were well founded, as he asserted by bringing the action and then settling it, and as he therein sued for wheat sold by him to the defendants'" firm, his position, at the time of the agreement, was, that he remained liable to Cobb for the value of the same wheat as a purchaser of the wheat. He had bought the wheat of Cobb, and sold it to the defendants' firm., If they paid him, he could pay Cobb. Or, if they paid Cobb, the same benefit resulted to him. It would be, in effect, the same thing if they settled with Cobb, for then he could not recover from plaintiff on an allegation that the plaintiff bought the wheat. This latter was the case on the assumption" of facts between the parties. Neither Cobb nor the present plaintiff had asserted that the latter had bought as broker without disclosing the principal. Cobb made no such claim until in his action in 1873. Noras against the defendant has it been shown tobe the fact. The conclusion seems to me to be inevitable that the claim which the parties stipulated should be settled, was such claim as Cobb might have against the plaintiff for goods sold and delivered to him absolutely, and not as broker, without disclosure of the principal.
If these be just views, then £he plaintiff could, in this action, only rely upon a cause of action arising out of the making of the agreement, for the reason before stated, that the only claim by Cobb from which the plaintiff at that time considered he was to be relieved, was such that it negatived the notion that the plaintiff had any claims against the defendants' firm excepting as sellers of wheat to them. This latter cause of action has been barred by the statute of limitations.
But this action is not apon the agreement. The complaint contains no intimation that the plaintiff claims upon it. The learned counsel for the appellant takes the position that the making of the agreement operated as a request that the-plaintiff should do all the things alleged to have been done. We have seen that if this were right in principle it is not supported by the testimony. The only alternatives for the defendant are either that the plaintiff bought the wheat for himself of Cobb, or as broker, Cobb knowing the principal. If the latter be the fact, the defendant, who had no notice of the action of Cobb against the plaintiff, is not responsible for the consequences of the plaintiff not proving his defense in that action. It cannot be true, I say with deference, that when the testimony does not show that the agreement referred to any claim by Cobb against the plaintiff, based upon the relation of the defendant to the plaintiff as broker and principal, and the testimony does not show that, as a fact, the plaintiff was liable to Cobb on such a claim, the plaintiff can gain any rights by the result of the action, for which and for the testimony and want of testimony in it the defendants were not responsible. The defendant has never before this action been called and given a day to answer as to this. The claim, as stated in the complaint, evidently depends upon its being the fact, that plaintiff bought of Cobb actually as agent for defendants, but did not disclose that defendants' firm were his principals.
The agreement referred to was given in evidence by the plaintiff, and contradictory evidence as to it was given by defendant. No objection was made to the evidence. It cannot, for that reason, be assumed that the parties acted as if the agreement were the substantive cause of action intended to be litigated. Evidence as to it was competent under the complaint, as it was to show that in the settlement of the action of plaintiff against defendant the claim of plaintiff, in regard to the Cobb wheat, had been accepted, and also in connection with the position assumed by the complaint as to the liability of plaintiff to Cobb, as ostensible purchaser, while, in fact, broker, to show that the defendant, in the agreement, recognized his' obligation to indemnify the plaintiff.
If the agreement created an independent cause of action, as was argued by appellant's counsel, it, as described by the plaintiff, was made upon a valuable consideration, that is upon relinquishing plaintiff's claim to one half of the other amounts due, and was a promise to protect plaintiff from Cobb's claim, which we have already examined. This stood on its own feet, and was to be enforced the same as if there were no question that the plaintiff had not bought as broker, in any sense, the wheat from Cobb.
The counsel for plaintiff did not request the court to charge the jury, as to the obligations of the defendant under the agreement, as itself with a breach, making a cause of action. The only allusion in the charge to the agreement, as to the executory rights of the plaintiff under it, was, that for the reasons the judge stated, the plaintiff refused to include the_ claim by him against the defendant for the Cobb wheat, in the settlement.
The court charged that if the evidence showed that the plaintiff acted as broker in the transaction, the defendant was liable, unless he had shown that the release by Cobb to the defendant was made with the assent or concurrence of the plaintiff.
The court also charged, that <£ If in this transaction the plaintiff acted as principal, and made a sale of this wheat to the defendants, the plaintiff cannot recover in the present action." The plaintiff's counsel made to this the only exception to the charge. The charge seems clearly right under the circumstances. As the plaintiff did not claim under the agreement, if he did not act as broker for the defendant, the only claim he could have would be as a seller of wheat to the defendant. That claim was barred by limitation of time, as we have already said.
The court of appeals, in its opinion in • this case, on appeal (86 N. Y. 315), said that the defendants' firm " were originally liable to pay the plaintiff for the wheat which he had purchased for them, upon the obligation incurred by , the nature of the contract itself, and the plaintiff had a remedy against them for the price of the wheat sold, which liability does not depend upon the recovery of the judgment by Cobb against the plaintiff." The application of this to the fact of plaintiff selling the wheat to the defendants, if such were the case, is clear. It may be applied, perhaps, to the,, fact of the plaintiff buying from Cobb, as a broker, disclosing or not disclosing his principal; but in the latter contingency it was left to the jury, on the last trial, to say whether the plaintiff bought as broker.
It seems from the opinion of the court of appeals that the case then showed conclusively or as a matter for the jury to pass upon, that the Cobb claim, intended by the agreement was a claim against the plaintiff based upon the fact that the plaintiff had bought of Cobb as a purchaser, while in fact he was defendants' firm broker. This cáse shows that no such thing was proved oh the last trial or assumed to be the fact at the time of the agreement.
It may be well to see if there were anything done or said by the defendant which would tend to show that at the time of" the agreement the parties to it meant to refer to a claim that Cobb might have against the plaintiff, although he in fact was broker for defendants' firm. I can perceive nothing of the kind. What the defense was- to the action, in which plaintiff alleged that defendants' firm had bought the Cobb wheat of him, is not shown. The defendant soon after the agreement paid to Cobb about $1,700 to procure a release for him individually from the claim made in Cobb's action, that the defendants' firm bought the wheat through the plaintiff as a broker. This is no admission that Cobb had in such a- case any claim against the plaintiff. And on the other hand, any dealing by Cobb with the claim as he made it in the action last referred to, especially any payment upon a satisfaction of it, would tend to relieve the plaintiff from Cobb's claim, as the plaintiff asserted it to be, viz.: that of a vendor to the plaintiff.
The exception that has been particularly examined seems to present the only important question.
I am of opinion that the judgment should be affirmed, with costs, and that the order denying motion for a new trial made upon the minutes should be affirmed with $10 costs.
Freedman and Russell, JJ., concurred.