Case Name: John Fulton, Appellant, v. George A. Varney and L. J. Ostrander, Doing Business Under the Firm Name and Style of George A. Varney & Co., Respondents
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1907-02-08
Citations: 117 A.D. 572
Docket Number: 
Parties: John Fulton, Appellant, v. George A. Varney and L. J. Ostrander, Doing Business Under the Firm Name and Style of George A. Varney & Co., Respondents.
Judges: 
Reporter: Appellate Division Reports
Volume: 117
Pages: 572–576

Head Matter:
John Fulton, Appellant, v. George A. Varney and L. J. Ostrander, Doing Business Under the Firm Name and Style of George A. Varney & Co., Respondents.
First Department,
February 8, 1907.
Contract — past act not consideration for promise — pleading — failure tó allege consideration or performance — promise to pay out of a particular fund not negotiable instrument.
Action upon a contract. The plaintiff for a first cause of action alleged in substance that in consideration of notification by the plaintiff that certain work was to be performed and in consideration of the plaintiff’s recommendation that defendants were proper persons to perform the work, the defendants agreed to pay the plaintiff half of the profits arising from the work, and that thereafter the defendants at the request of the plaintiff delivered a writing by which they agreed to pay the plaintiff ninety days after date a,stated sum to ' be considered as part of the profits, as per the verbal agreement. As a second cause of action the plaintiff alleged that the defendants for a valuable consideration executed and delivered to the plaintiff the paper before set forth, that the plaintiff was the sole owner thereof, and that no part had been paid.
On demurrer,
Held, that if the allegations of the first cause of action be construed to allege that the verbal promise was made after the information and recommendation of the plaintiff, it was for Services previously rendered and the contract was unenforcible for-lack of consideration;.
That if the agreement were, made after services rendered without employment or request of the defendants there could be no recovery, for a consideration must consist of a present of future act; a past act cannot serve as a consideration for a promise;
That if the allegations be construed as an averment of an agreement to pay for information to be supplied thereafter by the plaintiff the complaint was insufficient in failing to allege performance;
That the paper set out in the complaint was not a negotiable instrument in that it was not an Unconditional promise or order to pay a sum certain in money, but was a -promise to pay Cut of a 'particular fund, and in that it was not payable to order or bearer;
That the instrument not being negotiable or under seal the all jgition that it'was executed and delivered for a valuable consideration without setting out facts showing the consideration was a mere conclusion of law;
That the second cause of action was also'defective in failing to allege that any profits had been earned by the defendant.
Appeal by the plaintiff, John Fulton, from an interlocutory judgment of the Supreme Court in favor of the defendants, entered in the office of the clerk of the county of New. York on the 9th day of June, 1906, upon the decision of the court, rendered after a trial at the Hew York Special Term, sustaining • demurrers to both lauses of action set forth in the amended complaint.
John H. Hazelton, for the appellant.
Allan C. Rowe of counsel [Purdy, Squire & Rowe, attorneys], for the respondents.

Opinion:
Clarke, J.:
The complaint alleges that heretofore the defendants, for and in consideration of the securing by the plaintifE of notification to the defendants of the fact that Cottier & Co. desired certain work to be performed at Ho. 3 East' Fortieth street, in the borough of Manhattan, city, county, and State of Hew York, for and in consideration of the securing by thé plaintifE of the notification to the defendants ¿f the fact that the architect of said work to be performed, Joseph H. Taft, was receiving bids therefor,.and for and in consideration of the recommendation to the said Joseph H. Taft by the plaintifE of thé defendants as proper persons to perform said work to be performed, all or several, the defendants agreed to pay to the plaintifE a sum of money equal to one-half of the profits to the defendants arising from or out of the said work to be performed and to allow the plaintifE all reasonable and proper examination of the. defendants' books and papers to ascertain the amount of such profits. That heretofore the defendants, at the request of the plaintifE, executed and delivered to the plaintiff a paper writing, dated February 3, 1905, by which they agreed to pay to the plaintiff, to be considered as a part of such profits, the sum of $1,059.19,' ninety days from the date thereof, said paper reading: "As per verbal agreement made between Mr. John Fulton, Jr., and our Mr. Varney, we hereby agree to pay you the sum of Ten hundred Fifty-nine dollars and nineteen cents ($1,059.19), ninety days from date, this amount to be paid out of our profits, on the 3 East 40th street job." That the profits to the defendants arising from or out of said work are $12,000, and that no part of the same has been paid to the plaintiff.
The second cause ©faction alleges that heretofore, and on or about the 3d day of February, 1905, the'defendants, jEor a valuable consideration, executed and delivered to the plaintiff the paper herein- before set forth that the plaintiff, is the sole owner thereof, and that no. part of the'same has been paid, wheref ore plaintiff demanded, judgment for $6,000.
The defendants demurred to both causes of action upon the ground that facts, were not therein stated sufficient to constitute a cause of action, and the demurrer having been sustained, the plaintiff appeals.'
In regard to the first cause of action the allegation of "the complaint is susceptible, as it appears to. me, of two interpretations ; First, that after "the receipt of the information and the giving of the recommendation alleged as consideration, the defendants promised to pay for said information and said recommendation; that is, for services previously rendered. If that be the interpretation intended hy the pleader, the complaint is bad because' the performance by the plaintiff having preceded the defendants' promise, it. is. evident that the consideration was a past; one and so will not support the contract. If the agreement was made after, tlie services rendered without employment or-request of the defendants, there can be no recovery. Consideration must consist óf a present "or future act. A past act cannot serve as consideration for a promise, as said by. Hr. Justice Bischoff for the General Term of • the Court of Common Fleas in" Winch v. Farmers' Loan & Trust Co. (11 Misc. Rep. 390): "Construing the instrument, however, to have been'a mere promise *. "to pay.for.information already imparted, the-trial judge deemed the complaint to be wanting in substance because of the omission of an averment that the 'information was imparled at the request of the promisors, express or implied. Obviously in the absence of such a request the promise to pay was nudum pactum and the omission to allege it rendered the complaint fatally defective." (Citing authorities.)
Second, if the allegation is to be construed as the averment of an agreement whereby defendants promised" to pay for information which plaintiff promised to supply thereafter, it is insufficient in that performance is not averred. It is necessary, it seems to me,, that the pleader set forth a promise or offer hy the defendants calling for a specific act hy the plaintiff and a statement of subsequent performance by the plaintiff of such specific act, and the breach by the defendants. " ,
I.see no way to spell out a cause of action. The. pleader merely says that in consideration of securing information and his recommendation 'defendants promised to give him one-half of their profits. I see no way to bring this allegation within the rule as laid down by Ruger, Ch. J., in Bogardus v. New York Life Ins. Co. (101 N. Y. 328) : " It is essential to the legal statement of such a cause of action that it should show an existing contract and the performance by the plaintiff of such conditions precedent as are thereby provided, or a tender of their performance." The complaint either states that plaintiff performed certain acts withoqt in any way alleging that they were those called for by the defendants' promise or what the terms of that promise were, or that the defendants promised to- pay if the plaintiff would perform the acts specified as consideration. The words employed cannot at the same time be construed to mean, an allegation that the notifying and recommending were the conditions called for by the defendants' promise and an allegation of the subsequent performance of that notifying and recommending as well. Both statements are necessary and if we. assume the complaint does in fact allege either, the other is necessarily-lacking.
As to the second cause of action, the allegation thereof is equally deficient in substance.. The paper set out in the complaint is not a negotiable instrument: Section 20 of the Negotiable Instruments Law (Laws of 1897, chap. 612) provides that an instrument to be negotiable must, among other things, contain an unconditional promise or order to pay a sum- certain in money, and section 22 thereof provides : " But an order or promises to pay out of a particular fund is not unconditional." This instrument provides' as follows: " This amount to be paid out of our profits on the 3 East 40th Street job." Being, therefore, a promise to pay out of a particular fund, it is not unconditional. (American Boiler Co. v. Fontham, 34 App. Div. 294.) Further, it is not payable to order or to bearer as required by section 20- of the Negotiable Instruments Law.
This instrument not being under seal and not being negotiable, the allegation in the complaint that it was executed'and delivered "for a-valuable .consideration" without in any way setting .up the facts showing consideration, is a mere conclusion of law.
The instrument is at best a conditional promise to pay' out of a particular fund, to wit, the profits of the makers in a particular job. As there is. no, averment in . the second cause of action that any profits, had been earned on said job, even if consideration had been properly alleged', the complaint would still have failed to set forth sufficient facts to sustain this cause of action.. •
The interlocutory judgment sustaining the demurrer to tlie complaint should be affirmed, with costs and disbursements to the i-espon'dehts, • with leave to the appellant, however, within twenty days and upon payment, of costs in this court and in the court below to1 serve an amended complaint.
Patterson, P. J., Ingraham, Laughli-n and Scott, JJ., concurred'.
Judgment affirmed, w-ith costs, with leave to appellant to amend on payment of costs in this court and in the court below. Order filed.