Court Opinion

ID: 3613078
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:56:52.292307+00
Date Added: 2024-06-11T07:45:34.548461
License: Public Domain

This action is brought on two written agreements annexed to the complaint, under which the defendant obtained licenses from the plaintiff, which was the owner of certain patents, to manufacture patented articles, and in consideration thereof agreed to pay a stipulated royalty and to abstain from manufacturing other articles. The defendant answered, setting up, among other things, that the two license agreements declared on were a part of and made in pursuance of another agreement annexed to the answer, the purpose and object of which was to limit and control the production and market price of spring-tooth harrows in the United States, which contract, it was alleged, was illegal and void as in restraint of trade. The referee rendered judgment for the plaintiff, making the short form of decision authorized by section 1022 of the Code of Civil Procedure, in which he ignored the agreement set forth in the answer. The case states that it contains all the material evidence. On appeal, the Appellate Division reversed the judgment and ordered a new trial, but as the order does not declare that the judgment was reversed upon the facts, under section 1338, it must be assumed that it was based on errors of law alone. In my opinion, the defendant conclusively proved, by uncontroverted evidence, that the two agreements declared on by the plaintiff were made in pursuance of the prior agreement referred to in the answer and the written instruments construed together show an illegal combination. This was so held in Nat. Harrow Co. v. Quick (67 Fed. Rep. 130);Same v. Hench (76 Fed. Rep. 667); Same v. Same (85 Fed. Rep. 991). In the views expressed in those cases I entirely concur, but it would be *Page 518 
unprofitable to pursue the discussion in this respect, as the majority of the court hold that we cannot look into the record to see if the defendant has conclusively proved its defense, but are confined to the inquiry whether the facts found by the referee in his decision have the support of evidence, and if there is evidence to sustain them, whether they authorize the judgment rendered. From this view of the practice and the power of the court I am constrained to dissent.
The difference in opinion between the majority of the court and myself is occasioned by the repeal of section 1023 of the Code, and the amendment of section 1022, which authorizes the short form of decision. We all agree that the reversal by the Appellate Division in this case can be supported only for some error of law committed by the trial court. The difference between us is, as to what is an error of law. I think that where a fact is pleaded and conclusively proved on the trial, which is fatal to the judgment rendered, the failure to give effect to that fact is an error of law, for which the judgment is properly reversed by the Appellate Division as erroneous in law. Of course, if there is a conflict of evidence, or if the evidence admits of different inferences or the credibility of witnesses is involved, the question is one of fact and not of law; also, of course, this rule applies only to issuable or traversable facts, and not to facts which are merely evidence from which the existence of other facts may be inferred. In the present case it is not necessary to go even to the extent stated, for the defense rests on uncontroverted documentary evidence. In determining the effect of the amendment of section 1022 and the repeal of section 1023, it is vital to bear in mind the distinction between questions of law and the practice that may be necessary to raise those questions on appeal. If an action is brought on a promissory note and the Statute of Limitations is pleaded, it can hardly be denied that the question of what limitation applies is one of law, and that an instruction that it requires the lapse of ten years to bar the claim would be erroneous. If no exception, however, were taken to the ruling of the trial court in this respect, the defendant would *Page 519 
be precluded from taking advantage of the point on appeal, not because the question was not one of law, nor because the ruling was not erroneous, but simply because he had not adopted the proper practice to correct errors. It is a mistake to suppose that a failure to give effect to a defense or to a cause of action conclusively proved, was made an error of law solely by virtue of section 1023 of the Code. On the contrary, the principle that where the facts concerning an issue which necessarily controls the disposition of a cause are uncontroverted, a question of law only, is presented, is as old as the maxim "ad quæstionem facti non respondent judices, adquæstionem legis non respondent jurartores," a maxim, the Latin of which has been criticised but its doctrine in civil cases never impugned. Under the old Code there was no statutory provision for requests to find, yet as early as Pratt v.Foote (9 N.Y. 463) it was said: "Where, however, there is no conflict of evidence and no dispute about the facts of the case, the conclusion to be drawn from these facts is a question of law." In that case a judgment on a promissory note was reversed because the court was of the opinion that the facts proved amounted to a payment. In Mason v. Lord (40 N.Y. 476) it was said by GROVER, J., "When it is the finding of a fact without any evidence, or the refusal to find a fact proved by uncontroverted evidence, it is a legal error which is available in this court." It is conceded that the first proposition remains true to this day. (Shotwell v. Dixon, 163 N.Y. 43.) It is clear that the second proposition was equally true up to the time of the amendment of the Code referred to. (See Beck v. Sheldon,48 N.Y. 365; Bryce v. Lorillard Fire Ins. Co., 55 N.Y. 244;Koehler v. Hughes, 148 N.Y. 507.) It is true that in the early history of this court the practice was established that to take advantage of an error in failing to find a fact conclusively proved it was necessary that a request to find that fact should be made. But the request to find did not create the error of law; it was merely prescribed as the proper way of raising the question of law upon appeal, and in this respect is analogous to an *Page 520 
objection and exception. On this question the case of People exrel. Cornell S. Co. v. Dederick (161 N.Y. 195) seems controlling. In that case, which was a proceeding to review an assessment for taxation, the judgments of the Special Term and the Appellate Division were reversed in part, because it appeared by undisputed evidence that a portion of the indebtedness for which the relator claimed exemption was incurred for the purchase of the good will of another company. There was no finding in the courts below of such a fact, but this court said per HAIGHT, J., "The testimony upon this subject is undisputed, and we are, therefore, of the opinion that a question of law is presented. * * * This testimony, we think, permits us to properly treat as a fact in the case that at least one-half of the increased bonded indebtedness created in 1893, to wit, $150,000, was contracted for the good-will of the business of the company then purchased by the relator." Since the constitutional amendment of 1895 the jurisdiction of this court has been limited to the review of questions of law. If it is the request to find and not the state of the proof that creates the question of law, I cannot see how this court could have modified the judgment, for, in the proceeding, there was no request to find, nor was any request permissible. In these respects the condition of a special proceeding and that of an action where a short decision is rendered are the same. Bearing in mind the difference between questions of law and questions of practice, as to the proper method of raising questions of law, we now come to the effect of the Code amendments. By section 1022, "Whenever judgment is entered on a decision which does not state separately the facts found, the defeated party may file an exception to such decision, in which case, on an appeal from the judgment entered thereon upon a case containing exceptions, the Appellate Division of the Supreme Court shall review all questions of facts and of law." If I am right in the view that it is the state of the proof and not the request to find that creates the question of law, then this provision would seem to give the Appellate Division ample power to reverse this judgment as *Page 521 
erroneous in law, provided the proof of the illegality of the contract was conclusive and uncontroverted. The general exception is by the Code made a substitute for all other methods of raising questions of law.
The repeal of section 1023 of the Code is not in conflict with these views. That section went beyond the state of the law at the time of its enactment. It made a new error of law; that is, a failure to pass upon and decide one way or the other a material question of fact, where the evidence was conflicting. (James v.Cowing, 82 N.Y. 450.) The repeal of the section only abolished the question of law which it had created. It does not affect a case where the proof is uncontroverted. If this action had been tried before a jury, as it well might have been, so far as the matter of damages is concerned, the defendant would, undoubtedly, have had the right, by a motion to direct a verdict in its favor, to have the question whether, upon all the evidence in the case, the illegality of the contract was not conclusively proved, decided as a matter of law. I do not think that it should lose that right because the case has been tried before a referee, nor do I believe that a change in the mode of trial from a court and jury to a referee or court alone, can transmute a question of law into one of fact. The practice which the court is about to establish by its decision in this case, I fear, may cause serious embarrassment to litigants, and in many instances deprive them of their rights. A defendant may set up in answer to a claim a discharge in bankruptcy, a general release, a prior adjudication or other matters which generally present only a question of law. If the referee in his short form of decision ignores these defenses because he holds them insufficient, there will be no possibility of review of the questions in this court, for, if such a decision presents a question of fact and not of law at the Appellate Division, it is equally so in this court, and this court has no jurisdiction to review questions of fact.
I do not think the dicta quoted from the long list of authorities cited by the appellant's counsel, that this court is *Page 522 
limited on appeal to an examination whether there is any evidence to support the finding of fact and whether those findings justify the conclusions of law, should control our decision. There are, at least, five recent decisions of this court in which statements are to be found in the opinions which, taken without reference to the cases then before the court, would seem to deny our power to examine the question whether there is any evidence to support the findings of fact. (Bomeisler v. Forster, 154 N.Y. 237;Snyder v. Seaman, 157 N.Y. 449; Petrie v. Trustees ofHamilton College, 158 N.Y. 463; Farleigh v. Cadman, 159 N.Y. 175;Smith v. Syracuse Imp. Co., 161 N.Y. 489.) Yet there is no question but that this court has such power, except in case of an unanimous affirmance below. We have recently protested against the practice of excerpting expressions from judicial opinions and reading them without reference to the cases in which they were rendered, and have shown the errors to which such a practice may lead. (Fealey v. Bull, 163 N.Y. 397.) The statements in the various cases cited by the counsel for the appellant, as well as those cited in this opinion, were entirely justified, because they were made with reference to the questions raised by the records in the particular cases then before the court. If it be not permissible for a judge to make such an assertion without at the same time stating all the possible limitations and exceptions to the rule declared, the prolixity of judicial opinions, oftentime necessarily great, will become intolerable. Stability and uniformity in the administration of the law is to be obtained by adhering to the propositions actually decided or necessarily involved in the decision, not to dicta in opinions. I can find no case in which the question presented on this appeal has been decided.
I think the order of the Appellate Division should be affirmed and judgment absolute rendered for the defendant on the stipulation.