delivery, for the purpose of giving credit with the payee; the successive indorsements in blank and delivery of the note for value and before maturity by John J. Carroll, Thompson W. Miller, the respondent, and John Schorling, respectively; that before maturity and for value the note came into the possession of Marcus Badt; that at maturity the note was presented at the place designated therein; that payment was demanded and refused, whereupon the note was duly protested for nonpayment, due notice thereof given to the defendants Marguerita T. Meyer, Fred C. Meyer, John J. Carroll, Thompson W. Miller, and John Schorling; and that before the commencement of the action the cause of action for a lawful consideration was duly assigned by the said Marcus Badt to the plaintiff.

No opinion was written by the learned justice at Special Term, and the respondent neither by oral argument nor by written brief attempted to support the order on this appeal. It is stated in the brief of the appellant that the only point urged by the respondent at the Special Term was that the complaint was bad for the failure to allege notice of presentment, dishonor, and protest to the maker; but, of course, that is not required even to charge the maker, let alone an indorser to whom due notice was given. We think the complaint states a cause of action.

The order should therefore be reversed, with $10 costs and disbursements, and the plaintiff's motion for judgment and upon the pleadings granted, with $10 costs. All concur.

MUTUAL LIFE INS. CO. OF NEW YORK v. POLHEMUS et al.

(Supreme Court, Appellate Term. May 9, 1912.)

1. PARTNERSHIP (§ 279*)-DISSOLUTION-LIABILITY OF PARTNERS.

Where a partner retires from a firm, in the absence of evidence of the terms of the dissolution and of the assumption of the firm obligations by the continuing partner, and of notice thereof brought to the knowledge of the creditors of the firm, the retiring partner is not relieved of his liability as principal debtor on a lease of the firm, and does not acquire the relationship of surety.

[Ed. Note. For other cases, see Partnership, Cent. Dig. §§ 636, 637; Dec. Dig. § 279.*]

2. EVIDENCE (§ 471*)-OPINION EVIDENCE-CONCLUSION OF WITNESS.

The testimony of a retiring partner that the continuing partner assumed obligations under a lease with the firm was objectionable as a conclusion, and was insufficient to relieve the retiring partner from his obligations under the lease.

[Ed. Note. For other cases, see Evidence, Cent. Dig. §§ 2149-2185; Dec. Dig. § 471.*]

Appeal from City Court of New York, Trial Term.

Action by the Mutual Life Insurance Company of New York against David D. S. Polhemus and another, composing the firm of Polhemus Bros. From a judgment for defendant J. Arthur Polhemus, plaintiff appeals. Reversed, and new trial ordered.

For other cases see same topic & § NUMBER in Dec. & Am. Digs. 1907 to date, & Rep'r Indexes

Argued April term, 1912, before SEABURY, GUY, and GERARD, JJ.

Frederick L. Allen, of New York City (Charles L. Griffin, of New York City, of counsel), for appellant.

Neuman & Newgass, of New York City (Frederick F. Neuman and Walter S. Doernberg, both of New York City, of counsel), for respondent J. Arthur Polhemus.

GUY, J. Plaintiff appeals from a judgment in favor of the defendant respondent in an action brought to recover the rent of certain premises from August, 1909, to May, 1910, under a written lease. made between plaintiff and defendants for a term beginning January 25, 1908, and expiring May 1, 1911.

At the time of the making of the lease, the defendants constituted the firm of Polhemus Bros. The defendant David D. S. Polhemus defaulted herein, and the defendant respondent interposed an answer, admitting the making of the lease by the firm of Polhemus Bros., and the nonpayment by defendant respondent of the rent sued for, but setting up as an affirmative defense that on October 31, 1908, the firm of Polhemus Bros. was dissolved, and all the liabilities of the firm assumed by the continuing partner, David D. S. Polhemus, and that notice of such dissolution and of the assumption of the firm liabilities. by David D. S. Polhemus, including all liability under the lease herein, was given to plaintiff by defendant respondent on or about the 30th day of November, 1908; also that plaintiff agreed with the defendant David D. S. Polhemus, for a valuable consideration, to forbear and extend the time of payment of the rent sued for from the respective dates of the maturity of said rent until shortly before the commencement of this action, without the knowledge and assent of this defendant respondent; that plaintiff never gave this defendant any notice of said agreement, and has never made any demand on this defendant respondent for the payment of said rent, except by the commencement of this action; that at the several times when the said rent became due the defendant David D. S. Polhemus was solvent, and it might have been collected from him, if the plaintiff had endeavored to make such collection, but the plaintiff unreasonably and improperly neglected so to do; that David D. S. Polhemus is now insolvent.

As a further separate answer, defendant alleges that plaintiff, at some time prior to the 1st day of August, 1909, accepted the defendant David D. S. Polhemus individually as a tenant in lieu of the defendant respondent, and thereby discharged this defendant respondent from further liability under the lease; also that at some time after the 1st day of December, 1908, the defendant David D. S. Polhemus, with the knowledge, consent, or acquiescence of the plaintiff, but without the knowledge, consent, or acquiescence of this defendant respondent, sublet or assigned a part of the premises mentioned in the complaint to a tenant that has been since, and still is, in occupation of that portion of the premises.

The court charged the jury as follows:

"The law is incontrovertible and irrefutable that a partner, retiring from a firm and turning over the assets of the partnership to the continuing part

ner, stands in a relation in reference to the obligations of the partnership, not only as a surety for those obligations, or in other words as a guarantor of those obligations, as between himself and his partner, but also as to all third parties, providing that, in order to make the situation as a surety binding on third parties, he must show by a preponderance of the credible testimony that such third parties knew the nature of the dissolution, namely that the one partner continuing the business had received and obtained all the assets and claims of their partnership, and in consequence had assumed all the obligations and liabilities of the firm. If such knowledge is brought home to third parties dealing with the partnership, then such third parties must respect the change of relationship from coprincipal on the part of the retiring partner to surety for the obligations of the partnership from that time on."

[1, 2] While the learned court correctly stated the law on this subject, so far, at least, as concerned obligations thereafter incurred in the name of the copartnership, it erred in submitting this question to the jury, for the reason that there was no evidence introduced from which the jury could determine the terms of the dissolution of copartnership, or could find that the obligations of the firm were assumed by the defendant David D. S. Polhmeus; and the finding of the jury in favor of this defendant respondent on that point is unsupported by competent evidence. The testimony of the defendant respondent, admitted under objection and exception by plaintiff's counsel, that David D. S. Polhemus assumed the obligations under the lease, was improperly admitted, was at best but a conclusion of the witness, and insufficient to relieve this defendant respondent of his obligations under the lease. On the evidence adduced, plaintiff would have been entitled to the direction of a verdict against this defendant respondent, had a motion for such a direction been made. The verdict in favor of the defendant must be set aside as against the evidence.

The judgment is therefore reversed, and a new trial ordered, with costs to appellant to abide the event.

GERARD, J., concurs. SEABURY, J., concurs in the result, on the authority of Phillips v. Schlang, 139 App. Div. 930, 124 N. Y. Supp. 40.

KELLEY v. T. L. SMITH CO.

(Supreme Court, Appellate Division, First Department. May 3, 1912.) FRAUDS, STATUTE OF (§ 152*)-NECESSITY OF PLEADING.

In an action for a breach of a contract of employment for one year, the defendant set up the statute of frauds of a foreign state, but did not plead the statute of the forum. The petition did not on its face show that the contract was invalid because not in writing, or that it was not to be performed for more than a year, and was invalid, though oral. Held, that defendant's failure to plead the statute of frauds precluded its reliance on that defense; the failure being a waiver of the bar of the statute, which does not invalidate contracts, but merely renders them unenforceable.

[Ed. Note. For other cases, see Frauds, Statute of, Cent. Dig. §§ 363366, 371, 372; Dec. Dig. § 152.*]

For other cases see same topic & § NUMBER in Dec. & Am. Digs. 1907 to date, & Rep'r Indexes

Appeal from Trial Term, New York County.

Action by Edward B. Kelley against the T. L. Smith Company. From a judgment for defendant, plaintiff appeals. manded.

Argued before INGRAHAM, P. J., and CLARKE, SCOTT, and DOWLING, JJ.

Reversed and re

MCLAUGHLIN,

Kellogg & Rose, of New York City (L. Laflin Kellogg, of New York City, of counsel, and William K. Hartpence, of New York City, on the brief), for appellant.

Hastings & Gleason, of New York City (Albert H. Gleason, of New York City, of counsel), for respondent.

CLARKE, J. This action was for breach of contract of employment. The complaint alleged:

"That heretofore, and on or about the 1st day of March, 1908, this plaintiff was employed by the defendant to render services to the defendant in the sale of concrete mixers and other machinery manufactured by the defendant for the term of one year from March 1, 1908, for which services the defendant promised and agreed to pay four thousand dollars ($4,000), and also to reimburse the plaintiff for all necessary disbursements and expenses incurred by him in said business"

--and alleged an unlawful discharge on September 4, 1908. The answer set up several defenses, including the statute of frauds of the state of Illinois, but not that of the state of New York. It was conceded in the record that the contract was verbal, was made on the 11th day of February, 1908, and was to be performed in New York. It was conceded upon the argument, therefore, that, if any statute of frauds applied, it was that of the state of New York. At the close of the plaintiff's case, the complaint was dismissed.

In Crane v. Powell, 139 N. Y. 379, 34 N. E. 911, the Court of Appeals held that the statute of frauds was a shield, which a party may use, or not, for his protection, and said:

"The statute may be used as a defense to actions on certain agreements. A defense must now be presented, either by demurrer or answer. Code, § 487 When the defect in the plaintiff's cause of action appears on the face of the complaint, the defense must be interposed by demurrer. Section 488. When the complaint does not, as in this case, disclose an invalid agreement upon its face, but it is in fact invalid for some reason, the defendant must take the objection by answer (section 498), and if objection is not taken in either way, the defendant is deemed to have waived it (section 499). The conclusion is thus reached that the defendant waived the benefit of the statute in this case by omitting to plead it."

In Matthews v. Matthews, 154 N. Y. 288, 48 N. E. 531, the complaint did not show whether the alleged contract was oral or written. The answer contained a general denial, but did not set up the statute of frauds. Andrews, C. J., referring to Crane v. Powell, said:

"The question was distinctly decided in that case, and it was held that the statute was a defense, and, unless pleaded, was not available to the defendant to defeat the action. The case must be regarded as settling the law of this state upon a question upon which courts of different jurisdictions have differed in opinion. This court regarded the rule adopted in Crane v. Powell as sound in principle and supported by the rule applied in analogous cases. 135 N.Y.S.-2

It is plain, upon the view that the statute of frauds does not make an oral contract within its terms illegal, but only voidable at the election of the party sought to be charged, that such election must be manifested in some affirmative way. * * The mere denial in the answer in the present case of the contract alleged in the complaint did not, therefore, raise any question under the statute of frauds, and it could not be raised by objection, on the trial, to the proof of the oral contract, for the very conclusive reason that the statute must be pleaded before the validity of the contract on that ground can be assailed."

In Bennett v. Mahler, 90 App. Div. 22, 85 N. Y. Supp. 669, the complaint alleged that on or about the 1st day of January, 1902, the parties entered into an agreement wherein plaintiff agreed to work for defendants for and during the calendar year 1902. This court said: "Under this pleading the plaintiff might prove and recover thereon for a contract entered into on the 30th day of December, 1901, for an employment during the ensuing year, and recover thereon, in the absence of a plea of the statute of frauds as a defense thereto. The complaint * gave

*

the defendants notice that the contract relied upon was made on or about the 1st day of January, 1902. Proof of the conversation was on the 30th of December, 1901, and this time was within the averments of the complaint. Of these facts the defendants were bound to take notice, and, if they desired to raise the statute of frauds as a defense to the contract thus averred, they were required to plead it. Consequently, not pleading it, they were bound by such contract, even though it fell within the statute."

In the case at bar the complaint did not show upon its face an invalid contract, because it was not alleged that it was not in writing, and it did allege that it was made on or about the 1st of March, to begin on the 1st of March, and to continue for one year thereafter. Under those allegations it was possible that the contract might be invalid, and the defendant had such information or knowledge in regard thereto that it undertook specifically to plead the Illinois statute; but it did not prove said statute upon the trial, and, upon the conceded facts, it was inapplicable. Therefore, not having set up the New York statute of frauds, and the plaintiff having made out a prima facie case, the dismissal of the complaint was error.

The judgment appealed from should be reversed, and a new trial ordered, with costs to the appellant to abide the event. All concur.

(76 Misc. Rep. 441.)

SMITH V. TRAVELERS' INS. CO.

(Supreme Court, Appellate Term. May 9, 1912.)

1. INSURANCE (§ 292*)-LIFE INSURANCE-WARRANTIES-BREACH-EVIDENCE. A breach of warranty in a health policy, stipulating that insured has not consulted a physician within five years, is not established by the certificate of a physician, attached to an application by insured to the board of education of a city for leave of absence with pay, reciting that insured's illness within five years was influenza and tonsilitis, in the absence of any evidence that insured consulted the physician for purpose of treatment.

[Ed. Note. For other cases, see Insurance, Cent. Dig. §§ 691, 692; Dec Dig. § 292.*]

*For other cases see same topic & § NUMBER in Dec. & Am. Digs. 1907 to date, & Rep'r Indexes