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Goldman & Unger, of New York City (William F. Unger, of New York City, of counsel, and Samuel Rubin, of New York City, on the brief), for appellant.

Walton, Bannister & Hubbard, of New York City (Daniel Day Walton, of New York City, of counsel), for respondents.

FINCH, J. Whether the complaint states facts sufficient to constitute a cause of action, and the defenses contained in the answer and supplemental answer are sufficient in law, are the questions presented by this appeal. The facts, in so far as necessary to call attention to the questions involved, are briefly as follows: The complaint alleges that, while the four defendants were copartners in the stockbrokerage business, the plaintiff deposited with them securities as 'collateral in connection with the purchase and sale of stock; that as the account stood on December 31, 1911, the plaintiff owed $33,723.42, and had on deposit as collateral $266,552 in securities with the defendants; that on said date the said partnership of the defendants was dissolved, and the said business was continued by the defendants Gay, Sturgis, and Hall under the same firm name of Gay & Sturgis, "and said firm continued in possession of the plaintiff's securities hereinabove mentioned"; that between January 9, 1912, and August 1, 1912, the new firm sold certain stock, and credited the plaintiff's indebtedness with the amount received therefrom, and made an exchange of certain other shares, receiving certain money, which sum was also credited on account of the plaintiff's indebtedness to said firm; that thereafter, and on May 22, 1914, a petition in involuntary bankruptcy was filed against said firm of Gay & Sturgis, and on June 8, 1914, said firm was adjudicated bankrupt; that on said May 22, 1914, said securities belonging to the plaintiff and under the control of said firm were reasonably worth the sum of $234,172; and that the plaintiff has received none of said securities "except certain shares of stock of the value of $31.50, together with the proceeds of other shares of stock, amounting to $1,027.85, together with the sum of $6,949.93, making in all the sum of $8,009.28, leaving a balance due and owing to the plaintiff of $204,601.27, no part of which has been paid, although duly demanded from the defendants." Wherefore plaintiff demands judgment for said sum.

Only the defendant Hodgson was served. Hodgson interposed an answer, which substantially denies only the amount and value of the plaintiff's securities in the hands of the firm at the time of the bankruptcy, and sets up three separate defenses: (1) The six-year statute of limitations; (2) a novation, alleging that the new firm was substituted and the defendant Hodgson released; and (3) that the defendant Hodgson, after he had left the firm, advised the plaintiff that said firm was in financial straits, or that the management thereof had become dishonest, and urged the plaintiff to withdraw his accounts, notwithstanding which the plaintiff continued to deal with the firm until its bankruptcy. The defendant filed a supplemental answer, setting forth that the plaintiff in the bankruptcy proceedings received certain stocks or the proceeds thereof, and his claim was reduced by the sum of $8,738.05, and that the plaintiff thereafter received a second and final dividend, amounting to $3,302.80.

(202 N. Y.S.) [1] The plaintiff demurred to the defenses and the supplemental answer, whereupon the defendants moved for judgment on the pleadings, and the plaintiff moved for a determination of the issues raised by the demurrers to the affirmative defenses in the amended answer and the supplemental answer. The learned Special Term was correct in holding that the demurrers should be overruled, as the defenses and the supplemental answer clearly are valid, if the proof substantiates the facts alleged.

[2] There was error, however, in holding that the complaint failed to state a cause of action, since the mere allegation of a dissolution of the old firm by the withdrawal of one of the partners does not import a notice thereof to the plaintiff. For all that appears in such complaint, the plaintiff may only have known of the facts of the withdrawal just previous to the beginning of this action in 1917. Plaintiff makes out a prima facie case, when he shows his dealings with the firm of which the defendant Hodgson was one of the partners.

13, 41 In the absence of a notice of withdrawal, the retiring partner continues liable for all obligations occurring after as well as before the dissolution. United States Nat. Bank v. Underwood, 2 App. Div. 342, 37 N. Y. Supp. 838; Briggs v. Briggs & Vose, 15 N. Y. 471. Even as to customers of the firm having notice of such dissolution, in the absence of facts showing a novation and discharge of the retiring partner, or other facts which would release a surety, such partner continues liable as a surety in connection with liabilities accrued at the time of the dissolution. Akin v. Van Wirt, 124 App. Div. 83, 108 N. Y. Supp. 327. In this connection it is to be noted that there is no allegation in the complaint from which it can be inferred that the plaintiff did any act on his part which would amount to a direct dealing by him with the new firm. The allegations in this regard are compatible with a state of facts where the new firmi alone would deal with the securities on their own initiative.

[5,6] The allegations in the answer cannot be used in aid of the complaint. The demurrer is deemed to admit the allegations of the answer for the purpose only of testing the legal sufficiency of the same; but the demurrant is not estopped from contesting the facts alleged and putting the defendant to proof thereof at the trial.

It follows that the judgment dismissing the complaint should be reversed, with costs of this appeal to the appellant, and the order should be reversed in so far as it dismisses the complaint, and fails to permit plaintiff to withdraw his demurrers to the affirmative defenses, and the motion of the defendant should be denied; in other respects, the order should be affirmed, and leave granted to the plaintiff to withdraw his demurrers, upon payment of $10 costs, with costs in this court to the appellant.

Order filed.

CLARKE, P. J., and SMITH and MERRELL, JJ., concur.
MARTIN, J., dissents.

MIELE v. ACIERNO et al.

(Supreme Court Special Term for Motions, Kings County. March 5, 1923.) Contempt en 13–Willful perjury punishable as contempt.

Willful perjury by a witness at a trial or hearing, or in an affidavit submitted to the court, as well as refusal to answer, may be punished as a contempt, regardless of the fact that in the case of false answer the witness may be prosecuted for perjury.

In the matter of supplementary proceedings for contempt of court in an action by John Miele, judgment creditor, against Feliciano Acierno and another, judgment debtors. Heard on motion. Motion denied.

Walter A. Werner, of New York City, for judgment creditor.
George H. D. Foster, of New York City, for judgment debtors.

CROPSEY, J. I have difficulty in grasping the reason underlying those decisions that hold that willful perjury committed upon a trial or hearing, or in an affidavit submitted to the court, may not be punished as a contempt. Matter of Silberman Dairy Co. v. Econopouly, 177 App. Div. 97, 163 N. Y. Supp. 824. The refusal of a witness to answer may be so punished. Kendrick v. Wandall, 88 Hun, 518, 34 N. Y. Supp. 976. But it is said that if, instead of refusing to answer, a witness deliberately answers untruthfully, he is not in contempt. If such be the rule, the witness who is unwilling to make an untruthful answer, and yet is not willing to tell what he knows, and so remains silent, commits a contempt, while the witness who is equally unwilling to say what he knows, but who, instead of remaining mute, readily gives an answer he knows to be false, has not offended. I cannot subscribe to a rule that produces such a result. Nor is it in my opinion any answer to say that in the case of a false answer, the witness may be prosecuted for perjury.

The question of a contempt of court has no relation to the commission of a crime. It affects the dignity of the court and the integrity of all proceedings conducted therein. For a witness to deliberately swear falsely with a view to defeating justice is a more serious affront to the court than for him merely to refuse to answer. When a witness is required to answer, he is obligated to answer truthfully. He has no more complied with the direction when he gives a false answer than when he does not answer at all. In either situation he should be equally guilty of contempt. See Matter of Gordon v. Feldberg, 149 App. Div. 246, 133 N. Y. Supp. 693; Matter of Shorwitz v. Caminez, 152 App. Div. 758, 137 N. Y. Supp. 545: People ex rel. Nunns v. County Court of Nassau County, 188 App. Div. 424, 439, 440, 176 N. Y. Supp. 858; In re Steiner (D. C.) 195 Fed. 299; U. S. v. Appel (D. C.) 211 Fed. 495. But in the case at bar, as the contempt consisted not only of the false testimony, this question is not decisive of the motion, and will not be discussed at greater length.'

Motion denied.
For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes

(202 N.Y.S.)

GOLDBERG V, MARKEL, (Supreme Court, Appellate Division, First Department. January 25, 1924.) Frauds, statute of Cw160-Refusal to charge oral contract not terminating within

year void held reversible error,

Where plaintiff's bill of particulars, in an action for wrongful discharge, alleged that an oral contract to employ him from August 20, 1920, to August 20, 1921, was made on August 19, 1920, a refusal to charge that, if the jury believed the allegation therein, the contract was void under the statute, was reversible error. Appeal from Supreme Court, New York County.

Action by David Goldberg against Maurice Markel, doing business under the name of the American Art Embroidery Company. From a judgment for plaintiff on the verdict of a jury for $3,022.95, and from an order denying defendant's motion to set aside the verdict and for a new trial, defendant appeals. Reversed, and new trial ordered.

Argued before CLARKE, P. J., and DOWLING, FINCH, McAVOY, and MARTIN, JJ.

Samuel Kahan, of New York City (Horace G. Marks, of New York City, of counsel), for appellant.

Israel Siegel, of New York City, for respondent.

MCAVOY, J. The plaintiff in this action alleges that defendant employed him as an embroidery machine operator for a period commencing on August 20, 1920, and ending on August 20, 1921, at a salary of $95 per week, and that defendant wrongfully discharged plaintiff on November 1, 1920. The answer admits the employment and the discharge, but asserts that there was no hiring for a definite period, and sets forth that, if there was any such agreement, it was void under the statute of frauds, because the agreement, if any, was made on August 19, 1920, for the hiring to begin on August 20, 1920, and to terminate August 20, 1921, and thus it contemplated a contract which could not be performed within a year from the making thereof, to wit, that it was a hiring for a year and two days, beginning on the 19th day of August, 1920, and ending on the 20th day of August, 1921.

The plaintiff filed a bill of particulars, in which he alleged that the agreement was made on the evening of August 19, 1920, at defendant's place of business, that it was oral, and that the substance of the agreement was that the defendant agreed to employ the plaintiff as a machine operator and embroiderer for a period commencing August 20, 1920, and ending on August 20, 1921. Respondent also, in his bill of particulars, computes his damage to be at the rate of $95 per week for a period of 42 weeks from November 1, 1920. Forty-two weeks from November 1, 1920, expires on August 22, 1921.

Upon cross-examination, after plaintiff had detailed all the conversation had on August 19, 1920, when he alleges he was hired for a year, his services to commence on the following day, he was asked whether he was to work on August 20, 1920, and he answered, "Yes;" and in answer to the succeeding question, he testified he was to work every For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes

202 N.Y.S.-52

working day after that. He was then asked if he was to work on August 20, 1921, and he answered, "No." In answer to the question whether anything was said about the 20th day of August, 1920, he answered, "No. Plaintiff, upon further cross-examination by defendant's counsel, said, in respect to the variance of his testimony from the statement in the bill of particulars, that he did tell his attorney that that was the period of the employment; but he repeated that nothing whatsoever was said between defendant and him as to the day or dates to which the employment was to continue or on which it would end. He then testified that his statement for the period in which his contract was to run was upon his own calculation, and not based upon any statement of defendant.

Thus a question of fact whether the statute of frauds did apply to the hiring or not was squarely presented and the defendant's counsel asked the court to charge these requests, as follows:

“I respectfully ask your honor to charge that the plaintiff is bound by his bill of particulars.

"The Court: Yes; I charge that.

Defendant's Counsel: I ask your honor to charge that, if the jury believes the plaintiff's version of this case as set forth in the bill of particulars, to wit, that he was hired on the 19th day of August, 1920, for a term commencing on the 20th day of August, 1920, and terminating on the 20th day of August, 1921, the contract is void, as being within section 31 of the Personal Property Law (statute of frauds).

"The Court: I refuse to charge as requested.
"Defendant's Counsel: I respectfully except."

This refusal to charge was doubtless effective in rendering defendant's proof that the contract was within the statute of frauds of no avail to him, and was a substantial error of law, for which we must reverse the judgment. It permitted the jury to find that, notwithstanding the complaint, the bill of particulars, and the plaintiff's testimony as to the date of hiring and the termination of the employment, the plaintiff might recover, although if the version of the employment was as asserted by him in the bill of particulars, the contract would not be enforceable.

he judgment and order should therefore be reversed, and a new trial ordered, with costs to appellant to abide the event. Order filed. All concur.

in re PINKNEY.

(Supreme Court, Appellate Division, First Department. January 11, 1924.) 1. Courts 99(1)-Decisions of referee, affirmed by Surrogate's Court and Ap.

pellate Division, held res judicata.

Decisions of a referee relating to the apportionment of testatrix's property affirmed by the Surrogate's Court and Appellate Division, in so far as they decided the same issues, were res judicata in subsequent proceedings.

For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexen

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