Poulson v. De Navarro

68 N.Y.S. 177

This text of 68 N.Y.S. 177 (Poulson v. De Navarro) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Poulson v. De Navarro, 68 N.Y.S. 177 (N.Y. Ct. App. 1901).

Opinion

JENKS, J.

The learned counsel for the appellants has argued his appeal with great ability and ingenuity, but I think that the judgment should be affirmed. In 1881, De Navarro planned to build 18 apartment houses in New York City. He took title to land in the name of Clyne, and organized eight separate apartment associations. In November, 1882, he made a contract in his own name with these, plaintiffs for interior work on four of the apartment houses. All of the stock subscriptions to the apartment associations were not paid in, so that in June, 1883, De Navarro organized the Central Park [178]*178Building Company, Limited. The defendant McComb became a subscriber thereto in June, and again in September, 1883, in the amount of $400,000. De Navarro gave McComb a guaranty to take back the stock from McComb, at his option, 60 days after the buildings were completed. De Navarro was president and McComb became treasurer of this company, but resigned in 1883. Instead of paying his subscriptions into the company for its disbursement, McComb paid a large part to De Navarro, who disbursed it to the various contractors, and McComb himself paid out a large part thereof in the same channel. In the fall of 1883 the plaintiffs and the architects wrote to one another relative to work on the remaining four apartment houses, and on November 1, 1883, the architects wrote that they were authorized to accept plaintiffs’ offer by letter to do this work. No formal contract for these four houses was executed, however, until the- 24th of August, 1884, when the work was largely completed. At that time the plaintiffs signed a contract therefor, dated August, 1883, with the Central Park Building Company, Limited. The plaintiff testified that the execution of this contract was requested for record by one Adams, one of the officers, but that neither payments were made nor the work was done under it, but under the contract established by the said correspondence. Some time in the fall of 1883 payments to the material men and to the contractors were delayed in consequence of De Navarro’s failure or inability to furnish his quota of $400,000. The contractors and material men met, and appointed a committee. That committee went back and forth between De Nayarro and McComb to effect arrangements, and finally proposed to McComb to furnish in materials the $400,000 due from De Navarro to the enterprise. This was first acceptable to McComb, but finally an arrangement was made, the particulars of which I shall discuss further on, whereby McComb furnished the needed funds. Work was continued, and no liens were filed and no suits were brought by any of the contractors. A contract was made on December 1, 1883, between McComb and De Navarro, which recognized the liability of De Navarro to repay the said $400,000 first subscribed by McComb, and whereby De Navarro agreed to pay any and all sums to be thereafter advanced by McComb for the completion of the venture, which sums McComb thereby agreed to advance, provided the total cost should not exceed $4,500,000. The agreement further provided that certain security should be given to McComb, and that McComb or his agent should have the right to oversee the application of all funds to .be advanced by him. There was, on the same date, a supplemental agreement made, increasing the limit from $4,500,000 to $5,000,000. And bonds and mortgages were also given to McComb for security from Clyne, who took the title to the land, and from one Scannell, on certain outside property which he held for De Navarro; and subsequently, on January 14,1884, eight agreements were made, each one between Clyne, the Central Park Building Company, Limited, De Navarro, McComb, and one of the eight associations for erecting an apartment house, which changed the scheme by providing for conveyance of the land by Clyne to the association, and for a bond and mortgage to be given by the association to McComb. These were given, and thereafter McComb advanced [179]*179about the entire face value of the mortgages, some $1,500,000. Thus it appears that McComb’s interest in the enterprise was that of a subscriber to the stock of the Central Park Building Company, Limited, in the sum of $400,000, and as a lender to De Navarro and his associates and to the apartment associations of $1,500,000, which was secured to him by bonds, mortgages, and similar obligations. The building company first opened a bank account in December, 1883, and . thereafter it appears that, commencing on February 2, 1884, a large number of payments for work were made to the plaintiffs by the corporation checks drawn upon its funds in the Chemical Bank. This action is brought against De Navarro, McComb, and Adams to recover an alleged balance for work. Adams was also a subscriber to the stock of the Central Park Building Company, Limited, but died after this action was begun. De Navarro was not served. Plaintiffs complain that the defendants were “jointly interested and engaged in the building of these eight apartment houses,” and that plaintiffs, at the request of the defendants, performed certain work, labor, and services for which the defendants agreed to pay. The defendant McComb answered that McComb and Adams were only interested as holders of the stock of the Central Park Building Company, Limited, and that McComb was also concerned as the creditor of De Navarro, and of the building company, and of the other associations. At the trial the plaintiffs offered testimony. The learned trial court denied the motion to dismiss at the close of the plaintiffs’ case. The defendant McComb then rested, and renewed the motion, and thereupon the court dismissed the complaint on the merits. The plaintiffs appeal.

The first contract was made with De Navarro personally. The second contract, when reduced to formal terms, was made with the Cen tral Park Building Company, Limited. Though the plaintiffs testify that this contract was executed after the work was substantially done,, and that before such contract was executed the work was done under the contract before alluded to, made out by the correspondence of offer and acceptance, yet even the parties thereto, as revealed by the testimony, were but the plaintiffs and the architects. Although the architects wrote that they “were authorized,” they named no principal, and none is directly indicated by the testimony. There is, then, no testimony in the case that the defendant McComb was ever party to any express contract. But the learned counsel for the appellants seeks to spell out the liability of McComb upon a contract to be implied from proof which, he claims, establishes that McComb promised to pay for the material and labor necessary to be supplied for the construction and completion of the buildings on the condition that the material men would not file liens or begin litigation, but would proceed with the work, which was done. Assuming that this cause of action was maintainable under the pleadings, there is no evidence sufficient to sustain it. De Navarro could not raise his quota of $400,000, and the problem before the contractors and material men was to procure it. The committee of the creditors attempted to effect some arrangement between De Navarro and McComb, and finally the result was an arrangement between De Navarro" and McComb. One of the committee, called by the plaintiffs, testified that they went [180]*180back and forth between De Eavarro and McComb. McComb said that he was anxious that there should be no trouble, that he had already paid $400,000 under agreement with De Eavarro, and that he could do no more unless De Eavarro could do something.

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Cite This Page — Counsel Stack

Bluebook (online)
68 N.Y.S. 177, Counsel Stack Legal Research, https://law.counselstack.com/opinion/poulson-v-de-navarro-nyappdiv-1901.