(182 N.Y.S.)

state of New York, and with a capital consisting of 1,000 shares of preferred stock, of the par value of $100 each, and 4,000 shares of common stock, of no par value, issued at $5 per share, all of which stock was issued in September, 1917, as fully paid; that on or about the 22d day of November, 1917, in order to induce the plaintiff to become interested in the corporation, the defendant represented to him that the corporation was building a steel plant at Fulton, N. Y.; that there had been paid into the corporation in cash for the stock $120,000; that the corporation needed additional capital; that he (the defendant) planned to increase the capital stock from $120,000 to $600,000 and that an increase to that extent was necessary to complete its plant and make the operation. thereof commercially profitable; that Pittsburgh investors had promised to take $400,000 of the increased capital stock, but were desirous that some practical steel man nearer Fulton than they should become interested in the corporation in an advisory capacity; that the plaintiff was just the man to fill that requirement; that the defendant owned or controlled all the capital stock, and could and would immediately increase the capital stock to $600,000; that, if the plaintiff would subscribe for 200 shares of the proposed increase of the capital stock, he (the defendant) would loan to the plaintiff $10,000, which could be applied in the payment of the stock, and would take his promissory note for that sum, payable one year from date, with interest at 5 per centum per annum; that in view of the fact that the defendant owned or controlled all the outstanding stock he could and would immediately increase the capital stock as stated; that, relying upon such representations and believing the same to be true, the plaintiff on the 22d day of November, 1917, subscribed for 200 shares of the proposed increase of the preferred capital stock, with an option for an allotment of the common stock at $5 per share, and thereupon executed and delivered to the defendant his negotiable promissory note, dated November 22, 1917, drawn to the order of the defendant, for the payment of $10,000 one year from date, with interest at 5 per centum per annum at the Merchants' & Mechanics' National Bank of the city of Buffalo, N. Y.; that the note was upon the form used where collateral is to accompany the same, and required that there should accompany it as collateral security for its payment 200 shares of the preferred stock of the Fulton Steel Corporation; that the stock for which the plaintiff subscribed was never issued nor tendered to him; that the corporation is insolvent, in the hands of receivers, and that the plaintiff's subscription for the increased capital stock has lapsed; that the plaintiff's note was diverted by the defendant from the purpose for which it was given, a.d was appropriated to the defendant's own use; that the note was discounted by the defendant at the Syracuse Trust Company, of Syracuse, N. Y., on the 18th day of December, 1917, more than 10 months before it became due, without the above referred to stock, or any stock, of the Fulton Steel Corporation accompanying the same; that the defendant applied $7,500 of the proceeds of the discount in paying an obligation of the Fulton Steel Corporation, and lent the other $2,500

to it direct, and that for these payments the defendant received a credit of $10,000 on the books of the Fulton Steel Corporation upon an account entitled "G. C. Warner Loan Account"; that some time after the discount, at the request of the Syracuse Trust Company, the defendant placed with it 100 shares of the preferred capital stock of the Fulton Steel Corporation, and later another 100 shares of such capital stock.

Judgment was directed in favor of the plaintiff, with costs against the defendant, to the effect that the note in question was void and without consideration as between the plaintiff and defendant, and, in case it thereafter should come into the ownership and possession of the defendant, it should be canceled and surrendered up to the plaintiff, and also that if the plaintiff should pay the note, or any part thereof, application might be made by him upon the foot of such judgment for a money judgment against the defendant for the amount which the plaintiff should have thus paid. Judgment was entered upon the decision, which is the judgment under review.

[1] It is well settled that a court of equity has jurisdiction to protect the maker of a promissory note before its maturity from the risk of its passing into the hands of a bona fide purchaser in case it has been diverted by the payee from the purpose for which it was given and converted by him into his own use. Pomeroy's Equity Jurisprudence (4th Ed.) § 221.

[2, 3] The counsel for the appellant argues that the plaintiff had an adequate remedy at law. Doubtless the plaintiff had a remedy at law, but the difficulty with the contention of the counsel for the appellant is that, in the circumstances, that remedy might not be adequate. It is well settled that the remedy at law must be adequate in order to deprive a party of relief in a court of equity. Pomeroy's Equity Jurisprudence (4th Ed.) §§ 1363 and 2107. If the plaintiff had sued at law, he would have elected to take his relief in damages only. That relief might not be adequate, because the defendant might be execution proof. It is possible that the plaintiff may never be sued on the note, and it is possible that, if sued, he might successfully defend the action. In either case, he would avoid the risk of the action at law. In our opinion the plaintiff was justified in seeking relief in equity, and the relief which he has been afforded should not be disturbed.

[4] The claim of the appellant that this action was tried upon a theory not justified by the pleadings is without merit. The conversion of the note by the defendant is plainly alleged in the complaint. It follows from the foregoing that the judgment appealed from should be affirmed.

Judgment affirmed with costs. All concur.

(182 N.Y.S.)

HENDERSON IMPORTING CO., Inc., v. BREIDBART et al. (Supreme Court, Appellate Term, First Department. May 13, 1920.) 1. Sales 384 (2)-Measure of damages for failure to accept needles sold stated. In an action for breach of contract to receive and pay for certain needles purchased, under a contract whereby defendant agreed to purchase the needles loose, if plaintiff was unable to obtain them "stuck in cloth," and it appeared that the needles in loose bundles were refused, if the needles were salable in the ordinary course of business, the measure of damages was the difference in the contract price and the market or current price at the time or times when the goods ought to have been accepted, in view of Personal Property Law, § 145.

2. Sales 345-On refusal to accept goods not capable of resale, seller must notify purchaser that goods are held by him as bailee.

In action for refusal to accept goods sold, if they could not readily be resold at a reasonable price, the seller must notify the purchasers that the goods are held by him as bailee for them, in view of Personal Property Law, § 144, subd. 3, authorizing action for price on giving such notice.

Appeal from Municipal Court, Borough of Manhattan, First District. Action by the Henderson Importing Company, Incorporated, against Isidor Breidbart and others. From a judgment for plaintiff, defendants appeal. Reversed, and new trial ordered.

Argued April term, 1920, before GUY, FINCH, and WAGNER, JJ. I. Gainsburg, of New York City, for appellants.

Gerald G. Schwartz, of New York City, for respondent.

FINCH, J. The action is brought to recover damages for defendants' alleged breach of a contract to receive and pay for goods purchased from plaintiff's assignor. The complaint set forth "breach of contract," and the answer "general denial and defense of cancellation and rescission." By acquiescence this cause resolved itself on the trial of the issues as to whether there was a verbal contract for the sale and delivery of needles in loose bundles, if the plaintiff was not able to obtain the same "stuck in cloth." Without objection this issue was clearly submitted to the jury, and the jury found in favor of the plaintiff. The court and jury, however, allowed the plaintiff the full purchase price. Defendants' counsel duly excepted to that part of the court's charge which stated, in substance, that the plaintiff could recover the entire amount claimed "on the ground that it has not shown damage in that amount."

The finding of the jury has resolved the facts, so that the defendants agreed to purchase from the plaintiff the needles in question loose if the plaintiff was unable to obtain them "stuck in cloth." The plaintiff obtained the needles and tendered them to the defendant, but the latter refused to accept them, and the plaintiff brought this action for the purchase price. It is clear that the plaintiff's damage was not the full purchase price. There was no evidence that the goods were not salable in the ordinary course of business, except in so far as shown by the fact that the goods were marked "Owl Brand," which

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was a brand used by the defendants in their business. There was also no proof of any adequate notice that the plaintiff's assignor held the goods as bailee for the defendants.

[1, 2] If the goods were salable in the ordinary course of business, the measure of damages to which the plaintiff would be entitled was the difference between the contract price and the market or current price at the time or times when the goods ought to have been accepted. Personal Property Law (Consol. Laws, c. 41) § 145. If, on the other hand, it is held that the goods could not readily be resold at a reasonable price, then the plaintiff should have notified the defendants that the goods were held by the plaintiff as bailee for the defendants. Personal Property Law, § 144, subd. 3. In either event, it is clear upon this record that it was error to allow a recovery for the full purchase price.

It follows that the judgment should be reversed, and a new trial ordered, with $30 costs to the appellant to abide the event. All con

cur.

EDWARD J. BARTON LIGHTERAGE CO., Inc., v. LA BRECQUE CO., Inc. (Supreme Court, Appellate Term, First Department. May 25, 1920.) Contracts 322 (3)-Evidence held insufficient to show complete performance of lighterage contract.

In an action on a contract to lighter certain drums of menthol acetate, to-recover the stipulated compensation, wherein defendant claimed that performance had not been completed, and it appeared that the lighter, before being unloaded, capsized, precipitating the drums into the water, whereby some of them were permanently lost, evidence held insufficient to show complete performance on plaintiff's part, so as to entitle it to a verdict for the full amount of the contract; it not appearing whose duty it was to unload the lighter.

Appeal from Municipal Court, Borough of Manhattan, First District.

Action by the Edward J. Barton Lighterage Company, Incorporated, against La Brecque Company, Incorporated. From a judgment for plaintiff, and an order denying defendant's motion for a new trial, defendant appeals. Reversed, and new trial ordered.

Argued April term, 1920, before GUY, FINCH, and WAGNER, JJ. O'Brien, Malevinsky & Driscoll, of New York City (Arthur F. Driscoll, of New York City, of counsel), for appellant.

Benjamin Marcus, of New York City, for respondent.

WAGNER, J. On or about March 15, 1919, the plaintiff, in writing, agreed to lighter certain drums of menthol acetate, as embodied in the following confirmatory letter sent by plaintiff to defendant:

"March 15, 1919.

"La Brecque Warehouse Co., Woolworth Building, New York City-Dear Sir: Attention Mr. Farley. As per agreement with your Mr. Farley, we are placing our lighter H. S. & T. No. 8 at the foot of Eagle street, Greenpoint,

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(182 N.Y.S.)

March 14th, to lighter 620 drums of menthol acetate, from the above-mentioned point to the New Jersey Zinc Works, Hackensack river.

"The rate on this shipment to be 12 cents per one hundred pounds, allowing four (4) calendar days free time. In the event of demurrage accruing on this boat, the charge will be $25 for each and every day.

"Thanking you for this business, we remain,

"Very truly yours,

"Signed] Edward J. Barton Lighterage Co., Inc."

This action is brought to recover for the services claimed to have been rendered under the contract. Plaintiff claimed complete performance. It introduced evidence to prove that the lighter was loaded with the drums in question (being 616 in all) at the foot of Eagle street, Greenpoint, as provided by the contract. The loading began on March 14th. There is no evidence as to how long it took to load the lighter, or when it left Eagle street for its destination, or the length of time it took to reach the New Jersey Zinc Works, Hackensack river, its destination, or when it arrived there. After this hiatus in the proof we have the testimony of the plaintiff's foreman, who testified that he saw the lighter tied to the bulkhead of the New Jersey Zinc Works on April 8th; he did not know when it reached there. When he arrived the lighter was listing about 45 degrees. About five minutes after his arrival the lighter suddenly "groaned," turned over, and spilled a number of the drums into the water. All but 8, according to the testimony, were eventually recovered. While there was evidence that the lighter was properly fastened to the posts on the bulkhead, there was no attempt made to account for the overturning of the lighter, no evidence when the lighter arrived, whether or not the defendant or its employés were notified of its arrival, and no evidence as to the condition of the lighter at the time of its arrival. Upon this evidence the plaintiff rested its case.

The defendant moved to dismiss the complaint upon the ground that the plaintiff failed to prove its cause of action. The court denied the motion, and defendant offered no further proof, but rested on plaintiff's case. The court then submitted to the jury the question as to whether or not the plaintiff had completely performed its contract. That was the only question submitted to the jury. The jury rendered a verdict for the full amount of its contract. This we think was error. The complaint should have been dismissed for failure of proof. There was no direct evidence offered at the trial as to whether the contract for lighterage included the loading and unloading of the drums in question in addition to their transportation. The contract is silent on that point, unless the words "to lighter" include, in addition to transportation, the loading and unloading of the merchandise to be transported. There is evidence that the plaintiff's employés loaded the lighter, and also evidence that plaintiff's foreman, who witnessed the overturning of the lighter, went there for the purpose of superintending the unloading of the lighter. It is not clear whether that was a duty under the contract, or whether it was a mere voluntary act on the part of the plaintiff's employés. If the contract included loading and unloading, then clearly the plaintiff did not by its evidence prove the performance. of the contract, for the drums transported were never unloaded com