Harris v. Morse

54 F.2d 109, 1931 U.S. Dist. LEXIS 1862
CourtDistrict Court, S.D. New York
DecidedSeptember 4, 1931
StatusPublished
Cited by15 cases

This text of 54 F.2d 109 (Harris v. Morse) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Harris v. Morse, 54 F.2d 109, 1931 U.S. Dist. LEXIS 1862 (S.D.N.Y. 1931).

Opinion

WOOLSEY, District Judge.

My decision in this case is that the bill of complaint must be dismissed, with costs.

I. This is a suit in equity praying to have a trust in favor of the plaintiff, Harris, impressed on eighty-five thousand shares of stock, now owned by the defendant Morse, in the Addressograph International Corporation, a Delaware corporation, on the ground that these shares are the resultant profit to Morse through various corporate metamorphoses, as one of four participants in a co-adventure initiated to secure the stock of the Addressograph Company, a corporation of Hlinois.

The associates of this eoadventure, in addition to the defendant, were John B. Russell, now deceased, Frank H. Woods, and Joseph E. Rogers.

Harris, who, when the story in this record begins, had an option on 50 per cent, of the Addressograph Company’s stock, then owned by Joseph S. Duncan, claims to have had a one-quarter interest in the eoadventure pursuant to an oral understanding with Russell, based on the fact that in August, 1923, Harris brought his option to Russell and endeavored to secure Russell’s help in disposing of it to their mutual advantage..

The plaintiff’s contention in regard to Morse is that when Russell engaged Morse to investigate and make an audit of the Addressograph Company in the latter part of August, 1923, Morse knew that Harris and Russell were engaged in a eoadventure of which the purpose was to secure the control of the Addressograph Company, and that, consequently, Morse was equitably preeluded from thereafter participating, to the exclusion of Harris, in the profits resulting from such control subsequently secured by Russell, Morse, Woods, and Rogers, without any contribution of money, effort, or advice from Harris.

II. The trial herein was held during the latter part of June, 1930. The events on which the plaintiff’s claim against Morse is based occurred in September, 1923. Consequently the reconstruction of the facts from the evidence now available has been a task which approximates a problem in paleontology.

■ However, a careful study of the record .which, owing to the care of trial counsel, has been admirably arranged for my convenience, has enabled me to piece together a skeleton for the ease with which I am satisfied, and which, although perhaps it is not perfectly articulated, is nearly enough complete to enable me safely to infer those parte which are missing.

III. As Mr. Claude Houghton has aptly said in a recent novel, “Jonathan Scrivener”: “To know the facts is one thing; to know the truth is another. Facts are to the truth what dates are to history — they record certain events, but they do not reveal the significance of those events.”

This observation might almost be taken as a text for this opinion, because owing to Russell’s death, the meaning of many of the events as to which evidence has been given is difficult definitely to ascertain. For in dealing with a ease the decision of which is dependent on events so long past, when, as here, one of the chief actors therein is dead, the trier of the facts has a constantly recurring impression that they are being presented, as it were, ex parte — that they are having light thrown upon them from one'side only, with the result that there is an impression of distortion, and an inescapable feeling arises that truth cannot be ascertainable in such a half light.

*111 IV. This feeling is the undoubted basis of such statutory provisions as section 347 of the Civil Practice Act of New York State, which is binding on me by a federal statute, title 28, United States Code, § 631 (28 US CA § 631), and which provides, so far as here relevant, that (italics mine): “Upon the trial of an action * * * a party or a person interested in the event, * * * shall not be examined as a witness in his own behalf or interest, * * * against the executor, administrator or survivor of a deceased person * * * concerning a personal. transaction or commwmcation between the witness and the deceased person

This statute has been held in New York courts, whose construction thereof controls mine, Central Iron & Coal Company v. Hamacher, 248 P. 50, 55 (C. C. A. 5), to preclude such evidence by a person interested in the event of a case against a surviving partner of a deceased person. Levy v. Louvre Realty Company, 222 N. Y. 14, 10, 20, 118 N. E. 207; Green v. Edick, 56 N. Y. 613; Manning v. Schmitt, 4 App. Div. 131, 38 N. Y. S. 640; Herschman et al. v. Pischer, 206 App. Div. 629, 199 N. Y. S. 45; Id., 206 App. Div. 670, 679, 199 N. Y. S. 927; Weiss v. Meyer, 95 Misc. Rep. 145, 147, 159 N. Y. S. 211.

When the trial began, I was under the impression that the plaintiff’s claim here might perhaps be maintained as a direct claim against Morse, and not a claim derived through the deceased Russell; - and on that theory I made a tentative ruling — subject to an exception and a motion by the defendant to strike the evidence out — that statements alleged to have been made by Russell to' Harris and other witnesses with an interest in this ease were admissible as declarations against interest by Russell.

On reconsideration of this ruling, I am satisfied that I was wrong, for, however the plaintiff’s ease is looked at, his right, if any, against Morse is derivative and comes only through Russell.

Consequently, I hold that the plaintiff, his son, Sanford Harris, and Miss Strain, were incompetent to testify to statements made to them by Russell in regard to the plaintiff’s interest with him in the original option given to him by Duncan on the Addressograph’s stock, or as to any other matters concerning it.

As a result of my present ruling, I have wholly disregarded such evidence of these witnesses, and hereby grant the defendant’s _ motion to strike out such parts of their evidence as relate to conversations with the deceased Russell.

V. The record having been thus purged of the evidence of witnesses rendered incompetent by section 347 of the New York Civil Practice Act, the next question with which to deal before taking up the facts further is, necessarily, the question of'the credibility of witnesses, which has come to play an unusually important part in this case.

Joseph Harris, the plaintiff, and his son, Sanford Harris, did not make a very pleasing impression on me when they were on the stand. I had a feeling, whilst they were testifying, that for some reason their evidence seemed to lack candor, and not really to represent their actual positions with regard to the situation here involved at the time when the events to which they were testifying occurred.

The whole effect of their evidence was, so to speak, synthetic, and seemed to be posed so as to bring themselves as nearly as might be within a theory of the case which would be favorable to them.

I attributed this impression at first as due to the plaintiff’s age and to the time which had elapsed since 1923 when the early negotiations between Harris and Russell about the Addressograph Company option occurred.

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Bluebook (online)
54 F.2d 109, 1931 U.S. Dist. LEXIS 1862, Counsel Stack Legal Research, https://law.counselstack.com/opinion/harris-v-morse-nysd-1931.