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proper authorities of the state of New Jersey, it must be assumed that that state has the power to and might at any time institute proceedings to collect the taxes out of which it has been defrauded. This is conceded by the appellant's counsel, for in his brief it is stated :

"It is true, as we now look at the result, there may be taxes due to the state; but we may safely assume that state is not without power to collect any arrears of taxes, or taxes out of which it has been cheated, from corporations of its own creation."

Upon the uncontradicted facts therefore the companies are still legally liable for the amount of the reduction obtained and full performance of the contract as alleged in the complaint was not shown, for which reason a verdict was properly directed for the defendant. Stern v. McKee, 70 App. Div. 142, 75 N. Y. Supp. 157. But I do not care, for the reasons hereinafter stated, to rest my opinion for an affirmance of this judgment upon this ground alone. A verdict having been directed for the defendant, the plaintiff is, of course, entitled to the most favorable inferences that can be drawn from the evidence, and the contested facts must be deemed established in his favor. When the evidence is thus considered, it appears that in May or June, 1903, C. L. Glass, one of the officers of the defendant, met the plaintiff in the office of the company in New York and asked him if he were a “Jersey man," and if he knew any of the people at the State House in Trenton. He answered both questions in the affirmative, and Glass then said they were paying taxes on stocks which had been canceled, which they thought was excessive. Plaintiff replied that the state of New Jersey only wanted what was right, and he would see if he could do anything, and then asked what he would get if he accomplished what was wanted. Glass, after consultation with the defendant's president, then made the promise alleged in the complaint. Plaintiff accordingly called on an ex-member of the state board of assessors of New Jersey, whom he knew, and then went to Trenton and had an interview with the secretary of the board of assessors, Maguire, who was a friend of his, and who advised him to employ counsel. Glass, being informed by the plaintiff of what Maguire had suggested, promised to pay counsel fees, and the plaintiff then engaged a New Jersey lawyer named Berdine, whom he had known some 25 years, and to whom Glass communicated the terms of his contract with plaintiff. Plaintiff and Berdine then went to Trenton, saw Maguire, and obtained printed forms to review the assessments in question, which they filled out the next day from data supplied by Glass. After the execution of these and other papers, plaintiff filed them with the board of assessors at Trenton, and Maguire told him the day when the petitions would be heard, and that he should obtain an affidavit that the amounts of stock had been correctly stated. Glass accordingly obtained from Cuyler, Morgan & Co., the bankers in charge of the reorganization, and who acted as transfer agents for the subsidiary companies whose stock was exchangeable for that of the defendant, a letter verified by a member of the firm, in which was stated, under the heading "Total Capital,” the number of shares of stock of each of the companies issued and outstanding, and in a parallel column, under the heading

“Outstanding, Jan. 1/03,” the number of shares “outstanding"; that is, which had not been acquired by the defendant. The plaintiff and Berdine attended the hearing at Trenton on the day set; the stock books and the canceled certificates having been sent there in charge of an employé of the bankers. At the hearing plaintiff opened the box which contained the canceled certificates and presented them to the board for inspection. The stock books, which would have shown the true state of affairs, were not produced by the plaintiff-though he knew they were there—nor were they asked for by the board. The hearing was informal, and soon after plaintiff and Berdine had retired Maguire came out of the room where the meeting was held and informed them that the petitions had been granted and the amount of the taxes reduced accordingly.

For the year 1904 the reports of two of the companies, the Glucose Sugar Refining and the National Starch, showed a further decrease in the amount of stock outstanding, and, in response to letters from Maguire asking for an explanation, plaintiff wrote two letters which he signed in the names of the officers of the respective companies "Per D. McCallum," stating that stock in such amounts was actually canceled and retired prior to January 1, 1904. Besides calling on Maguire several times and possibly filing some reports, this was all he did in connection with the taxes for 1904 and 1905. Berdine, in 1903, presented a bill for his services, which amounted to one-half of the reductions obtained for that year-something over $4,000—and the five subsidiary companies subsequently compromised and settled with him.

Concededly, if the plaintiff knew the true facts and endeavored to have the taxes reduced when it could not lawfully be accomplished, he could not recover; but it is claimed he acted in good faith and supposed, as he was told by Glass, that the stock had been actually canceled and retired, and for that reason he is entitled to enforce his contract. The position in which the plaintiff is placed by the conceded facts, as well as the claim made by him predicated thereon, is a peculiar one. The action is to recover upon a contract to secure a reduction of taxes, which he claims to have performed, and which performance was accomplished by means of the grossest misrepresentation, fraud, and perjury. Yet he claims to have been entirely ignorant of the methods used. He admitted knowing the defendant was a holding company, but claimed to know nothing as to the condition of its stock and that of the subsidiary companies, on the basis of which the reductions were secured. He could not state by what means he supposed the reductions were lawfully secured, nor why the defendant should have been interested in having the taxes of the other companies reduced if the stock which it held had been canceled. I think it must be held that the plaintiff had at least constructive knowledge of the means by which the reductions were obtained. Ignorance in law cannot exist when a party knowingly has at his command knowledge which will dispel the same. The letter from Cuyler, Morgan & Co., setting forth the number of shares "outstanding," could not have been misunderstood by him. It correctly stated, under the heading “Total Capital,” the num

plaintiff had ordinary intelligence, and, if so, he could not have been mistaken in the meaning of these figures. The claim that the plaintiff supposed the numbers stated in this letter represented the authorized capital is overcome by the fact that the authorized capital was correctly stated in the petitions filed by him. Not only this, but in this letter the “total capital” of one of the companies was 50,500 shares, which was the amount stated in the report filed for 1903, upon

which a tax of $50.50 had been assessed, and the "outstanding stock" was stated to be "none." Yet in the petition to review the assessment, the stock issued and outstanding was given as 500, and the assessment was accordingly reduced to 50 cents.

In this connection, and as bearing upon the same subject, it is highly significant and of the utmost importance, that the plaintiff submitted to the board of assessors at Trenton only the canceled certificates, which were, of course, no proof that stock to that amount had been retired, and that no other certificates had been issued to take their place. The transfer books showing the true condition of affairs were there. He knew it, and it is difficult to imagine that he was entirely ignorant of their contents. If he was, it was his own fault. The information was placed at his disposal, and under such circumstances he had no right to rely solely upon the statements made by Glass. He could not suppress the evidence which he had in his possession, which showed that the companies were not entitled to the reductions asked for, or shut his eyes to the fact that he was participating in a fraud. He was, as already said, a salesman of one of the subsidiary companies earning about $1,400 a year. He was not a lawyer, had never had any experience whatever in looking after the taxes of corporations, nor did he claim to have any knowledge of the tax laws of New Jersey, or the method by which an erroneous tax could be legitimately corrected. He did not have sufficient knowledge upon that subject to fill out an ordinary blank furnished by the board of assessors for that purpose. It is difficult to see what he did, or what he supposed he was to do, to earn such a large compensation. Then, too, the terms of the contract itself are suspicious. If taxes had been erroneously assessed for the year 1903, there is no reason suggested why it should be supposed there would be an erroneous assessment in subsequent years, and, if not, then there would be no occasion for paying plaintiff any part

of the amount saved in those years. Take the plaintiff's own testimony, and give him the benefit of every inference that can fairly be drawn from it, and you have this situation presented: He was engaged primarily, not because he had any knowledge which would enable him to legitimately or legally obtain a reduction of the taxes assessed, but simply because he was a “Jersey man" and knew some of the officials at Trenton. A lawyer was employed and paid for doing the legal part of the work. Aside from the mere clerical services, then, which would not by any means warrant the compensation agreed to be paid, there was nothing for the plaintiff to do, unless it were to improperly make use of his acquaintance with public officers for the purpose of illegitimately influencing them. If this was the intention of the parties, the contract was void. Mills

v. Mills, 40 N. Y. 543, 100 Am. Dec. 535; Veazey v. Allen, 173 N. Y. 359, 66 N. E. 103, 62 L. R. A. 362; Hazleton v. Sheckels, 202 U. S. 71, 26 Sup. Ct. 567, 50 L. Ed. 939. The conclusion is irresistible that the plaintiff undertook to and did secure a reduction by methods which the court does not and will not sanction or approve.

Entertaining these views, I am of the opinion that the court properly directed a verdict for the defendant.

The judgment and order appealed from therefore should be affirmed, with costs.

INGRAHAM, LAUGHLIN, and SCOTT, JJ., concur. PATTERSON, P. J., concurs in result.

PENN OIL & SUPPLY CO., Limited, v. COHN. (Supreme Court, Appellate Division, First Department. April 8, 1909.) 1. ARREST ($ 35*)-COMPLAINT AS BASIS FOR ARREST.

An allegation on information and belief in a complaint may be disre garded as a basis for an order of arrest, where no facts are stated in the complaint or accompanying affidavit to substantiate it.

(Ed. Note.--For other cases, see Arrest, Cent. Dig. $ 87; Dec. Dig. $ 35.*] 2. ARREST ($ 35*)-COMPLAINT AS BASIS FOR ARREST.

Where the allegations of a complaint are positively stated, but appear from the verification by plaintiff's attorney to be in fact based on information furnished affiant by third parties, or by letters or papers the contents of which are not stated, the complaint has no probative value as an affidavit and furnishes no support for an order of arrest.

(Ed. Note.-For other cases, see Arrest, Cent. Dig. $ 87; Dec. Dig. $

35.*) 3. ARREST ($ 22*)—AFFIDAVIT FOR ORDER-INSUFFICIENCY.

An affidavit of plaintiff's attorney accompanying the complaint held insufficient to furnish a basis for an order of arrest.

(Ed. Note.-For other cases, see Arrest, Cent. Dig. § 49; Dec. Dig. $

22.*] 4. AFFIDAVITS (8 3*)-STATEMENTS FOUNDED ON INFORMATION AND BELIEF.

When courts and judicial officers are asked to act on affidavits founded on information and belief, they must be furnished with the sources of information in order that they may draw their own conclusions.

[Ed. Note.-For other cases, see Affidavits, Cent. Dig. 16; Dec. Dig. $ 3.*) Appeal from Special Term, New York County.

Action by the Penn Oil & Supply Company, Limited, against Gustav Cohn. From an order denying a motion to vacate the order of arrest, defendant appeals. Reversed.

Argued before PATTERSON, P. J., and INGRAHAM, CLARKE, HOUGHTON, and SCOTT, JJ.

M. Carl Levine, for appellant.
Willard G. Stanton, for respondent.

SCOTT, J. The defendant appeals from an order denying his motion to vacate an order of arrest; the motion being made upon the

papers on which the order was granted. These papers consist of a complaint and an affidavit, both verified by one of the plaintiff's attorneys. The complaint is a curiously unscientific pleading, and it is not easy to determine just what cause of action is sought to be stated, or whether any is sufficiently stated. It alleges a written contract between plaintiff, on the one hand, and defendant and one Hans Boellert, of Berlin, Germany, on the other, under the terms of which defendant and Boellert agreed to sell to plaintiff a large number of incandescent kerosene mantle burners of a certain kind, and to guarantee plaintiff the exclusive right to sell in certain territory. The plaintiff agreed to pay to defendant and Boellert the sum of $7,800, to be in payment of one-quarter of the total amount to be paid to said defendant and Boellert; the remaining three-quarters to be paid on each order upon delivery of each shipment of burners. It was agreed that plaintiff might at any time at its option rescind the contract, in which event defendant and Boellert agreed to repay to plaintiff all moneys paid to them; plaintiff to have the option to take such payment in cash or burners, and payment to be made within 15 days after notice of rescission.

The complaint alleges compliance by plaintiff with the terms of the agreement and the payment of $7,800 to defendant in accordance therewith on February 7, 1908, that on April 6, 1908, defendant repudiated the said contract, and on April 30, 1908, plaintiff notified defendant that it elected to rescind the contract and demanded the return of the money paid, which has not been returned, although more than 15 days have elapsed. It is then alleged: That before the making of said contract defendant represented to plaintiff that he said defendant) was the agent of said Boellert, and duly authorized to make the agreement for him as agent, that he (said defendant) was able to and would protect plaintiff in all its rights under said agreement, and that the deposit of $7,800 was required by Hans Boellert as a guaranty of good faith, and would be immediately transmitted to him. That plaintiff relied upon said representations, and by reason thereof executed the agreement and paid over the money. That said representations were false and intended to and did deceive plaintiff. That defendant was not authorized to enter into such agreement for said Boellert, as his (Boellert's) agent. That defendant was not able, and knew that he was not able to protect plaintiff in his rights under said agreement. That said Boellert did not require a deposit of $7,800, or any sum, as a guaranty of good faith. That defendant did not send said moneys forward to Boellert, or advise the said Boellert that the same had been received, nor advise said Boellert that the agreement had been entered into, but wrongfully and with intent to defraud plaintiff converted the said $7,800, and unlawfully retains the same. There is also an allegation, upon information and belief, that defendant has removed or disposed of the property, or is removing or disposing of the same, with intent to defraud his creditors; but no facts are stated in the complaint or the accompanying affidavit to substantiate this allegation, so that it may be disregarded as a basis for the order of arrest.

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