Case Name: CAROLINE B. POWERS, as Administratix, with the Will Annexed, of HOLLIS L. POWERS, Deceased, Respondent, v. FRANCIS W. SAVIN and Others, Appellants
Court: New York Supreme Court, General Term
Jurisdiction: New York
Decision Date: 1892-06
Citations: 71 N.Y. Sup. Ct. 560
Docket Number: 
Parties: CAROLINE B. POWERS, as Administratix, with the Will Annexed, of HOLLIS L. POWERS, Deceased, Respondent, v. FRANCIS W. SAVIN and Others, Appellants.
Judges: Andrews, J., concurred. '
Reporter: Supreme Court Reports (Hun)
Volume: 71
Pages: 560–572

Head Matter:
CAROLINE B. POWERS, as Administratix, with the Will Annexed, of HOLLIS L. POWERS, Deceased, Respondent, v. FRANCIS W. SAVIN and Others, Appellants.
Bmdenee — entries in a loan-booh of a broker — against one’s interest — made subsequently —and by an assignee for creditors — answer setting up an independent issue not raised by the complaint.
In an action brought by the administratrix of Hollis L. Powers the complaint alleged that Powers had certain shares of railway stock in the hands'of the firm of Bogart & Co., and that that firm without authority had pledged them with the firm of Savin & Vanderhoof for a loan, and demanded judgment against Savin & Vanderhoof for a surplus beyond the advances made upon the stock by Savin & Vanderhoof.
It appeared that Bogart, Jr., sent these securities to Savin & Vanderhoof, and at the same time made a memorandum of the loan on a New York Stock Exchange “ticket,” which memorandum he testified was correct. At the same time he made a memorandum on the loan envelope of the collaterals contained therein. In order to identify the stock pledged with that owned by Powers the loan-book of Bogart & Co. was admitted in evidence. These memoranda did not agree, the entry on the loan-book containing, and the entry on the envelope not containing, the initials “H. L. P.” The entry on the loan-book was made some days after the transaction, and after the firm had failed. The New York Stock Exchange ticket was lost.
The person who called off, as was claimed, to the bookkeeper of Bogart & Co., who kept the loan-book, the substance of the “ticket,” was not produced as a witness upon the trial.
Held, that the testimony in regard to the entries on the loan-hook was not sufficient to justify their being received in evidence.
That as Bogart & Co. were not parties to the action, as the entries were made after the assignment by the firm, and as the person who made the entries knew nothing of the facts to which they related, the entries were not admissible, as being against their own interest. (O’Brien, J., dissenting.)
That as the entries were made after Bogart & Co. had failed, and were made by their assignee, they were not the entries of the firm, nor made in the usual course of business.
Under section 1304 of the Code of Civil Procedure, providing, among other things, that a judgment may grant to a defendant any affirmative relief to which he may be entitled, a defendant cannot tender an independent issue between himself and a co-defendant which was not raised by the complaint. (Per O’Brien, J.)
Appeals by the defendants, Francis W. Savin and Elislia W. Yanderhoof, composing the firm of Savin & Yanderhoof, and by John Wheeler, as assignee for the benefit of the creditors of O. M. Bogart & Co., from a judgment, entered in the office of the clerk of the city and county of New York on the 9th day of December, 1891, in favor of the plaintiff for $4,300, and interest and costs, after a trial before a referee.
Thadcleus D. Kenneson and John Uotman, for the appellants.
L. G. Waehner, for the respondent.

Opinion:
YaN BeuNT, P. J.:
This action was brought by the plaintiff, claiming the ownership by her testator of 300 shares of Chicago, Milwaukee and St. Paul stock, which had been pledged, with other securities, by the firm of O. M. Bogart & Co., without right or authority, with the firm of Savin & Yanderhoof as collateral for a loan of $50,000, which securities were subsequently sold; and judgment is demanded for the surplus realized upon such sale over the amount of said loan.
Mr. Justice O'BeieN, in his opinion, states the questions presented by the pleadings to be:
First. ITad Hollis L. Powers, the plaintiff's testator, title to the stock ?
Second. Did Bogart & Co., without his consent, authority or right, pledge such stock ?
T'hw'd. Can the firm of Savin & Yanderhoof hold the stock or apply the surplus realized upon the sale thereof, upon account of any other indebtedness due them from Bogart & Co. as against the plaintiff ?
Fourth. Is the defendant Wheeler, upon the facts proven, entitled to judgment for the surplus realized upon the sale of other securities pledged for a second or other loan made by the firm of Bogart & Co. ?
We concur in the conclusion arrived at by Mr. Justice O'BeieN as to the third and fourth of these questions. In view of the conclusion reached by us as to the first, it is entirely unnecessary to decide the second. And we cannot concur in the conclusion arrived at by him as to the first.
It appears from the evidence that, almost immediately after the pledge of the stoclc in question, Bogart & Co. made a general assignment for the benefit of creditors to the defendant Wheeler; and the attempt is made to identify the St. Paul and Milwaukee stock pledged for the debt of Slavin & Vanderhoof as stock belonging to the plaintiffs testator by entries now appearing upon the loan-book of Bogart & Co. And the determination of the question now under discussion depends upon whether such entries were admissible in evidence or not.
It appears that Bogart, Jr., sent the securities which were pledged to Savin & Vanderhoof, and made a memorandum of the loan on a Stock Exchange ticket called "tickets," which memorandum he testified was correct, and at the same time he made a memorandum on the loan envelope of the collaterals therein contained. These memoranda were the only memoranda made of the loan in the first instance. The slips were not produced upon the trial, but evidence was introduced showing that they were made for temporary purposes only, and that, when entries were made therefrom into the books of the firm, no attention was thereafter paid to them. There was no evidence that these particular memoranda had been lost, although there was some to the effect that a search had been made for them; and in response to a notice to produce, a statement was made by one of the attorneys that a search had been made for them, but they could not be found. It does not appear with certainty what was done with these memoranda. And there is no evidence as to what was put upon the slips ; Mr. Bogart's best recollection was that he placed them in an envelope; and that the envelope was with the books and was left for the cashier, Townsend, to enter in the loan-book. Townsend remembers nothing about the original memoranda, although the entries were made by him in the loan-book. Such entries were not made contemporaneously, but after the failure of Bogart & Co., and after Townsend had come back from being absent, which he states might have been a week after the failure. Townsend testified that he either copied the memoranda from slips (temporary Stock Exchange slips) or that they were called off to him. And it does not appear that there was any other source from which he could get the entries.
As Mr. Justice O'BbieN has shown, the learned referee states that the memorandum of entries on the envelope correspond with the entries in the loan-book; and that in this a grave error was committed, because in that part of the entry which is most material to this action there is a fatal discrepancy, the entry on the envelope not containing the initials " II. L. P.," which appear opposite the entry in the loan-book in relation to the 300 shares of St. Paul stock, and which has been held to indicate that the stocks in question were the 300 shares of St. Paul stock belonging to the plaintiff's testator.
The evidence of this entry in the loan-book is claimed to be admissible because of the rule laid down by the Court of Appeals as to the admission of account books in The Mayor v. Second, Avenue Railway Company (102 N. Y., 572). But a brief examination of that case will show that the condition of the proof was entirely and essentially different from that which appears by the record in the case at bar. The case cited was an action by the mayor, etc., of New York to recover from the Second Avenue Railroad Company for work and labor and materials for which the railroad company was claimed to be liable. The work done and the materials furnished related to the pavement of the streets in and about the rails of the defendant's railroad. In order to prove the time spent in the doing of this work, the plaintiff called as a witness the foreman who had charge of the work, under whom were two gang foremen, each having charge of a separate gang of laborers. The chief foreman kept a time-book in which was entered the name of each man employed. He visited the work twice a day, and while there took on the time-book the time of each man as reported to him by the gang fore man, who did not see tbe entries; and be also marked tbe men's names as be saw tbem and knew tbeir faces. Tbe gang foremen testified that they correctly reported to the chief foreman tbe names of tbe men who worked; and if any did not work full time they reported that fact also. And the main foreman testified that be correctly entered tbe reports in tbe time-book as reported to him in tbe usual course of business each day. And it was held that, with such evidence, tbe books were admissible, because tbe gang foremen were testifying of tbeir own knowledge as to tbe correctness of tbe reports made by tbem to tbe main foreman, and the main foreman testified that in this time-book be correctly entered tbe reports as made to him.
Under such condition of proof tbe court held tbe evidence to be admissible, but in the case at bar the evidence was essentially different. In tbe first place there is no evidence as to what Bogart, Jr., entered upon the slips, and in view of the fact of the entry upon tbe loan envelope tbe presumption would seem to be that tbe letters " H. L. P." did not appear upon tbe slip. And, further, the bookkeeper Townsend, who made these entries, bad no recollection as to whether be entered tbem from tbe slips or from somebody who called tbem off to him. Therefore, we do not know that even what was upon the slips was entered in these books. The person who called off these entries is not produced, and there is a very decided link missing which was supplied in the case cited. And in view of the fact that it was claimed that the entries upon tbe slips and the envelope corresponded the inference would be that, as the letters " H. L. P." did not appear ujjon the envelope, they did not appear upon the slip, and Townsend must have got his information somewhere else. How, we do not know, except, perhaps, it may have been from the inspiration of this somebody who made the announcements to Townsend for entry, whether from the slips or not does not appear.
But Mr. Justice O'BeieN has come to the conclusion that upon another principle these entries are admissible, viz., that they are declarations found in the books of Bogart & Co. against their interest in respect to the ownership of these 300 shares of stock. And attention is called to' the rule laid down in Greenleaf on Evidence, that " there are two classes of admissible entries, between which there is a clear distinction in regard to the principle upon which they are received in evidence; and one of the classes consists of entries made against the interests of the party making them; and these derive their admissibility from this circumstance alone. It is not, therefore, material when they were made. The testimony of the party who made them would be the best evidence of the- fact; but if lie is dead, the entry of the fact made by him, in the ordinary course of business and against his interest, is received as secondary evidence in a controversy between third persons." And attention is also called to the case of Adams v. Bowerman (109 N. Y., 23), where the entries in a firm's books as to its solvency were admitted for the purpose of proving the insolvency of that firm in an action to .which they were parties.
Now, it seems to us that this principle has no application whatever to the case at bar. If Bogart & Co. were suing here, or were the defendants in this action, it is possible that the principle might apply, but probably not, as the person who made the entries is alive; but in the present case the party making the entry is not only alive, but upon being called shows that he knows nothing about the facts to which the entry related. But when we take into consideration the fact that these books were not Bogart & Co.'s books at this time, and that they were being written up that the assignee might ascertain the condition of the estate of which he was the assignee, it is clear that such entries were not made in the ordinary course of business, and that the title of Bogart & Co. to this stock could not be impeached or impaired thereby. It is no duty of an assignee to confess judgment,'or to make admissions in reference to the liabilities of his assignors, which would be the result of the admission in evidence of an entry of this description.
In the face of the evidence showing the circumstances under which this entry was made; showing that the party who made it had no knowledge whatever of the transaction; showing that a material part of the entry, as far as this case is concerned, seems to have been evolved out of his own imagination, it certainly cannot be the law that upon such an entry the title of property can be disposed of.
We think, therefore, that it was error to admit these entries in evidence; and because thereof the judgment must be reversed and a new trial ordered before another referee, with costs to appellants to abide the event.
Andrews, J., concurred. '