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(182 N.Y.S.) During that period it was left to the other representatives of the payee, acting under the direction of Shelburne with respect to the work.
The first complaint from the defendant with respect to the work was a telegram to Morton on April 9, 1912, in which he stated that he had relied upon the assurances of Horowitz that the work would be done as economically and expeditiously as possible, and that the cost down to that time had been many times the estimate made, and was appalling, and that the work was not complete, and that the water was rising, and the reservoirs and ditches were not ready. He also stated that he had had a favorable offer for the sale of the whole project, which, owing to the fact that the work was not completed, he could not accept, and that he wished to know definitely when the work would be completed. Morton thereupon wrote Horowitz, explaining the reasons for the increase in the cost, which were as already stated, and this was communicated to the defendant. On the 12th of April, 1912, defendant wrote Whiting, stating that the vouchers received down to March 1st aggregated $67,178.72, and that apparently considerable work remained to be done. To this Whiting replied that the present progress of the work was very satisfactory, and that the project would be in shape to conserve water at an early date, and that the length of time required to complete the work would depend upon the weather and the number of teams obtainable, and that he believed it would be completed within 60 days. He also stated that favorable weather was some 30 days later that year than usual. From that time on, and until its completion, there was no serious or well-grounded complaint with respect to the progress of the work.
Notes aggregating, with interest, $72,225.10, were to fall due May 1, 1912, and there was an interview between Horowitz and the defendant on April 29th concerning them. With respect to this and other interviews and matters there was a serious conflict between the testimony of Horowitz and that of the defendant. The learned trial court accepted the testimony of the defendant, and as it was a question of veracity, with bụt little or no evidence corroborating either, and both were interested, an appellate court would not be warranted in holding that the trial court erred in so doing. We therefore accept the testimony of the defendant, but not in all respects the construction placed thereon by the trial court.
With respect to that interview the defendant testified, in substance, that Horowitz called at his office, and he stated to Horowitz that the cost of the work down to that time had very materially exceeded $60,000, which was a revised estimate made by a representative of the payee in December, 1911, and that he objected to paying the notes falling due May 1st, in view of the excessive cost, and owing to the delay in completing the work, and that he was unwilling to pay them without some investigation on his own account "with reference to the correctness of the situation”; that Horowitz expressed confidence that Morton had given the work every possible attention, that the cost was no more than it should be, and that the increased cost was due largely to weather conditions and to the additional work ordered by the engineers; that he thereupon stated that he had no information from his own representative with respect thereto, and that he "wanted to write Mr. Whiting and get some information"; that Horowitz then sugested that he pay the notes down to $50,000, and "renew them for $50,000 until November 1st, and that in the meantime he could make whatever investigation and inquiry he cared to make" to satisfy himself that what Horowitz had continually said to him was correct; that he then asked Horowitz, “What about the balance? Is there any assurance, there any indication, what I am to meet there?" and that Horowitz said, “Let whatever balance there is, let that-make your notes payable November 1st, so that in the meantime the work will be completed, and then, if there is anything wrong, it will be corrected;" that Horowitz assured him that the work would cost him infinitely less by the payee doing it than if any one else had done it, whereupon he said, "Well, I am willing to do that; I am willing to pay you down to $50,000, and then in the meantime I will give you these notes, but there must be some adjustment between now and November 1st, and find out exactly what is right;" that Horowitz replied, "That is perfectly satisfactory to me; I will find out what the amount is, so that we can figure it out.” The figures representing the amount necessary to reduce the indebtedness to $50,000 were furnished, and on April 30, 1912, defendant inclosed a check to Horowitz for $22,225.10 and a note for $50,000, payable on or before six months from May 1, 1912, "account my notes and obligation held by you in re North Laramie Land Company," and requested that Horowitz return the other notes. The other notes were returned to the defendant shortly thereafter, and he testified that he had previously received notice from the plaintiff with respect to them, and that, on receiving them, he noticed that they had been discounted by the plaintiff.
This is the only testimony in support of the supplemental findings, to which reference has been made, with respect to any agreement or understanding between the defendant and the payee at the time the note for $50,000 was given on May 1, 1912. There is no other testimony or evidence bearing on the question as to whether the note then given, or the notes thereafter given on vouchers subsequently submitted by the payee, were to be held by or to be negotiated by the payee. Defendant continued to give notes on vouchers submitted for the completion of the work. The aggregate of the vouchers, plus the 5 per cent. which the payee was to receive as compensation, was $121,504.56. Defendant retained the vouchers as received, and never forwarded any of them to Whiting or to Shelburne to check up, or for information, until the 25th of June, 1912, when they aggregated $100,143.27.
The first complaint by Whiting with respect to extravagance or neg. ligence in the performance of the work was a telegram on May 17, 1912, in answer to a telegram from the defendant, referring to the fact that the work had then cost over $83,000, and that the payee claimed that the increase in the cost was due to extra work constantly ordered by Whiting. In that telegram Whiting stated that the contractor was constantly exceeding its own estimate by 50 per cent. and that there was lack of economy and proper handling of men, and he
(182 N.Y.S.) suggested that the contract be terminated, and stated that he could take charge of the plant and equipment and proceed with work, employing the payee's concrete foreman as superintendent, and save the defendant time and money, and that it was impossible for him to regulate the cost under the present management. The defendant sent a copy of Whiting's telegram to Horowitz, who replied on May 21, 1912, that in his opinion Whiting's statements were not justified, and that he thought Whiting had made too low an estimate and was attempting to place the blame on the payee, and said that the work was taken over by the payee as an accommodation to the defendant, and that the payee was quite willing to relinquish it, and expressed the hope that the defendant would act on Whiting's recommendation. The work evidently was nearly completed at that time, and the papee was continued in charge, and completed it to the entire satisfaction of the defendant with respect to the work itself.
On the 31st of June, 1912, Whiting wrote O'Neill, of the land company, criticizing the work that was being done by the payee, and complaining of negligence and incompetency on the part of the superintendent of the payee, and stating that he had complained to Morton and to the superintendent with respect to the cost of the work; but as a witness he admitted that he had made no such complaint to them. On the 23d of July, 1912, Horowitz wrote the defendant asking for a check or note for vouchers aggregating $35,150.04 that had been rendered, and thereafter there was an interview between the defendant and Horowitz with respect thereto. The defendant testified that he then informed Horowitz that he was not disposed to give any more notes; that he had been informed, through Whiting, that Morton was not on the job between December and the end of May, although he had been assured by Horowitz that Morton would give it his attention, and he took the position that the matter should remain for adjustment, and that a proper investigation should be made, as he suggested when the note of May 1st was given; that Horowitz replied that his finance committee was criticizing him for not getting the notes for expenditures that had been made a month or two months before, and said, “It is not necessary to withhold the notes; my understanding with you is that the matter shall be investigated and adjusted, and it will save me adverse criticism if you will give me the notes;" and that he replied, "Very well, I will do so." Horowitz denied that conversation.
The notes were inclosed to Horowitz by the defendant, with a letter, dated August 2, 1912, containing no reference to the reservation with respect to adjustment, but merely stating that they covered the last two statements, which were being sent to Whiting for review. According to the testimony of the defendant, there was an interview between him and Horowitz in Chicago early in September, 1912. With respect to that interview he testified that he was desirous of taking up the matter of the adjustment of their account, because he expected to be very much occupied with personal matters between then and the 1st of November; that he informed Horowitz that the opportunity for making the necessary investigation had not been sufficient, and Horowitz agreed to that on the ground that the men who worked on
the job had become scattered; that he told Horowitz that he was unwilling to make any payment on the notes until after the subject had been fully and entirely investigated, and every effort made to make an adjustment based upon the results of the investigation; that Horowitz asked what he suggested, and that he said that sufficient time should be given to get the information, and that the charges were serious, and that Horowitz should be as much interested as he in having an investigation complete and satisfactory; and that to this Horowitz assented, and said that he wanted the defendant to be satisfied that he had not been imposed upon, and that the complaint made to him by Whiting had been grossly exaggerated, and he asked what the defendant would suggest doing; that the defendant replied that the notes ought to be renewed for a sufficient length of time to permit the investigation and adjustment, whereupon Horowitz said that the matter of the defendant's contract, claims, and complaints had been the subject of discussion in the finance committee of the payee, and that the committee had charged him with showing favoritism to the defendant through friendship, but that he insisted that the renewal of the notes which he had agreed to should be made, so that the investigation could be conducted; that he told Horowitz that he thought the renewal ought to be for a year, to afford ample opportunity for the investigation, and for the adjustment after the result of the investigation; that Horowitz replied that it would be difficult for him to persuade the committee to allow such a renewal, but that he felt the defendant ought to have every opportunity to satisfy himself with respect to the facts, and that he would renew the notes for one year; that he then said:
"Of course, Mr. Horowitz, you must understand these various claims and complaints I have made, and whatever defenses I have to these notes, are reserved, so that they can be the subject of adjustment when the renewal period is up.”
He did not testify that Horowitz made any reply, but he says they both agreed to expedite the investigation, so that abundant time would be left for adjustment. Horowitz admitted an interview with the defendant at about that time, but denied that there was any discussion with respect to the notes, and said that at the interview the defendant claimed to have discovered evidence of irregularity and extravagance, and that he asked for the facts, and assured the defendant, if there was anything wrong with respect to the expenditures made by the payee, the payee would suffer the consequences, and not require the defendant to sustain the loss. Horowitz contemplated going to Europe in the fall of 1912, and did not expect to return until after November 1st, when the notes were to fall due. He sailed on the 3d of October, 1912, and did not return until between the 15th and 20th of November of that year. The day before he sailed there was an interview between him and the defendant. At that time there was a balance of over $200,000 due from the defendant and Graham to the payee on account of the Chicago contract, and the defendant executed for himself and Graham four notes, for $50,000 each, therefor.
The defendant testified with respect to that interview that, while (182 N.Y.S.) receipts for the payments evidenced by the notes were being written out, he asked Horowitz if he had disposed of the renewal of the Uva notes during his absence, and that Horowitz replied, in substance, that he had, but that he had had great difficulty in getting it through the finance committee, and that they insisted that he was altogether too friendly in giving the defendant the renewals, but that he insisted that the defendant should have whatever time was necessary to make a complete investigation and reach an adjustment, and that they finally agreed to it; that Horowitz asked about the interest, and that he replied by asking what Horowitz would do with reference to the notes, if he were going to be away, and that Horowitz answered that he would give instructions to Mr. Pond, the treasurer of the payee, to exchange the existing notes for the renewal notes on the 1st of November, that Horowitz again asked with respect to the interest, to which he replied that it would be practically impossible to pay the interest, because “the amount that is to be payable on these notes is not ascertained,” and that the amounts could not be fixed until the "adjustment is reached," and that therefore there could be no interest paid “at this time," and that he offered to give a note for the interest, payable on demand, which could be adjusted the same time the principal was taken up for final adjustment.
The defendant also testified that the defenses which he referred to in his testimony consisted of the investigation and adjustment of the amount to be paid by him. Horowitz testified that the first reference to the renewal of the notes falling due on November 1, 1912, was at this interview, and that, when the defendant requested a renewal for a year, he objected, saying that the investigation would not require a year, and did not involve the whole amount, and that the defendant agreed that he would take up the notes sooner, if the investigation was finished, but that he wanted the investigation completed.
There was evidence of negligence on the part of the payee's superintendent with respect to the work, and of his incompetency, which, however, was not known to the payee at the time; and the evidence shows dishonesty on the part of the payee's cashier on the job, through which several items, relatively small, however, were included in the vouchers which were not properly chargeable to the work, but this was not known to the payee until long after the work was completed. The learned trial court held that the evidence tending to impeach the vouchers upon which the original notes were given was sufficient to require the plaintiff to bear the burden of showing to what extent the vouchers were correct. The plaintiff failed to bear that burden, and the court determined the amount to be deducted from the notes in suit by determining what the work should have cost, if it had been skillfully and honestly performed. The learned counsel for the appellant contends that the nature and extent of the evidence tending to impeach the vouchers was not sufficient to constitute a prima facie impeachment of all the vouchers, and that it did not warrant the ruling to that effect made by the trial court; but, in the view I take of the case, it is unnecessary to consider or to decide whether that ruling was