and 118 New York State Reporter has property within this state, or the cause of action arose therein." I do not concur in the statement that the person served was not a managing agent, within this provision of the Code. TWELFTH WARD BANK OF CITY OF NEW YORK v. COHEN et al. (Supreme Court, Appellate Division, First Department. November 6, 1903.) 1. APPEAL-THEORY OF CASE BELOW. Judgment for defendant in an action for fraudulent representations in procuring discount of a note will not be reversed, though a representation made by him when a prior note was discounted was a continuing one, so that, had plaintiff sued on this theory, he might have recovered; the complaint having alleged that, when the second note was discounted, defendant represented that the prior statement continued to truly state the financial condition of the maker of the note, and that there had been no change in such condition, and that by reason of his representation the note was discounted, and conflicting evidence as to such second representations having been introduced, and the court, with the acquiescence of plaintiff, having charged that verdict could be for plaintiff only if defendant made the second representation. Appeal from Trial Term, New York County. Action by the Twelfth Ward Bank of the City of New York against Samuel Cohen and another. From a judgment on a verdict for defendants, and from an order denying plaintiff's motion for a new trial, it appeals. Affirmed. See 71 N. Y. Supp. 1150. Argued before VAN BRUNT, P. J., and HATCH, PATTERSON, O'BRIEN, and LAUGHLIN, JJ. Joseph E. Bullen, for appellant. Abraham I. Spiro, for respondents. HATCH, J. This action was brought to recover damages alleged to have been sustained by the plaintiff on account of the fraudulent representations made by the defendants in procuring the discount of a note. The defendants were partners conducting business on Third avenue, in the city of New York. In August, 1899, Samuel Cohen, the senior member of the firm, applied to the plaintiff's cashier for a loan of $500. The cashier required him to make a statement of the firm's financial responsibility, to be submitted to the plaintiff's board. of directors. Thereupon the defendant made and signed the following statement: Assets "Statement of S. Cohen & Bro. "Confidential. Liabilities $1,000.00 on stock. stock on hand. $12,000 Bal. in Bank $74.75 "I consider ourselves worth at least $15,000. "The above statement is made for the purpose of obtaining credit from Twelfth Ward Bank, New York City, and in consideration of the granting of such credit to me by said bank, it is hereby agreed that in the event said Bank finds the foregoing statement untrue in any particular at any time, or in case of failure or insolvency of the undersigned, all loans and obligations of the undersigned held by the Bank shall become immediately due and payable, and I hereby further agree to notify the said Bank of any material change in above statement. "[Sd.] "Sworn to before me this 11th day of Aug. 1899. "Witness: "F. B. French, Notary Public, N. Y. C." S. Cohen & Bro. This statement was submitted to the board of directors, and it authorized Mr. French, the cashier, to discount the note. French saw Cohen and told him the bank would discount his paper on the strength of his statement, and that he would file the statement for future reference. The note matured early in November, and was paid. On November 13th, Cohen called again on the bank to discount two notes-one for $500 due in two months, and one for the same amount due in three months. French testified that he asked Cohen if his financial condition was the same as before, and Cohen said that it was about the same, and on the strength of this statement the notes were discounted. This conversation Cohen denied. The two-months note was paid, but the note for three months has never been paid. Prior to the time of its maturity, the firm of Cohen & Bro. sold out their store, squandered their money in gambling, and went into bankruptcy It is claimed by the plaintiff that the written statement was a continuing representation; that the plaintiff was justified in relying upon it, and that it was therefore immaterial whether at the time of the discount of the last two notes the defendant reaffirmed such statement or not; and that in this view of the case, upon admitted facts, the fraud of the defendants was established, and the only question for the jury. was one of damages sustained on account thereof. It is quite probable that the representation, in view of the fact that it was filed for future reference, was regarded by both of the parties as a continuing representation of the financial condition of defendants' firm. This question, however, we do not find it necessary to decide. The averment of the complaint upon this subject is that the defendants "falsely and fraudulently stated and represented to the plaintiff that a certain written statement theretofore made by them to the plaintiff for the purpose of obtaining a loan from the plaintiff was and continued to be a correct and true statement of the financial condition of said copartnership, and that there had been no change in the financial condition of the said copartnership since the date of the said statement,' and that by reason of this representation the plaintiff was induced to discount the two notes. Upon this theory the plaintiff brought the action. It gave proof tending to establish that the defendants made. the representations averred in the complaint when they presented the last two notes for discount. The defendants denied this testimony, claiming that they made no representation whatever. At the close of the trial the court charged the jury, in speaking of the defendants: "They can only be bound if you shall find from the evidence, by that fair preponderance of credible evidence which I have laid down, that the defendant adopted and reaffirmed in November, for the purpose of getting this par and 118 New York State Reporter ticular discount, the statement which he made in August, when in fact such statement did not then represent the true condition of affairs." And the court further observed that upon this issue the testimony was conflicting. In this charge the plaintiff acquiesced. It appears, therefore, that by the pleadings, the evidence, and the submission of the case to the jury, the plaintiff tendered the issue, which was accepted by the defendants and the court, whether the defendants made the oral representation at the time of the discount of the last two notes. Upon this issue the case presented a question of fact; the plaintiff's cashier testifying that the representations were made, and the defendants denying that any were made. This issue excluded the written statement as a continuing representation of financial condition. The issue was one of fact, upon which the jury found in favor of the defendants. There is no basis, therefore, upon which their conclusion can be legally disturbed, as no error was committed upon the trial, on the theory upon which the case was tried. The judgment and order should therefore be affirmed, with costs. Judgment and order affirmed, with costs. All concur. MASTERSON v. CITY OF NEW YORK. (Supreme Court, Appellate Division, First Department. November 6, 1903.) 1. MUNICIPAL CORPORATIONS-STREET IMPROVEMENTS-COMMENCING WORKNOTICE. Where a contract for constructive work for a city requires the work to commence on the day designated by the commissioner of highways, a notice to commence work on May 9th, which is received on May 10th, is sufficient to require the contractor to commence in a reasonable time after its receipt. 2. SAME-DAMAGES FOR DELAY-CERTIFICATE OF OVERTIME-FRAUD-QUE › TIONS FOR JURY. Where a contract for a street improvement, imposing liquidated damages for failure to complete the work by a specified time, allows a deduction for delay caused by the city, to be determined and certified by the commissioner of highways, that the commissioner allowed no deduction on account of a sewer which the city permitted to be constructed in the street, or because of a retaining wall which had to be rebuilt, or for failure of the engineer to furnish grades, which delays arose through no fault of the contractor, is sufficient, in an action to recover a sum deducted by the city from the contract price for delay, to require a determination by the jury as to whether the commissioner, in making the certificate as to overtime, was not actuated by bad faith. Appeal from Trial Term, New York County. Action by William H. Masterson against the city of New York. From a judgment for defendant, plaintiff appeals. Reversed. Argued before VAN BRUNT, P. J., and HATCH, PATTERSON, O'BRIEN, and LAUGHLIN, JJ. L. Laflin Kellogg, for appellant. LAUGHLIN, J. On the 24th day of April in the year 1900 the plaintiff entered into a contract with the commissioners of highways of the city of New York "for regulating, grading, setting curbstones, flagging the sidewalks, laying the crosswalks, and building fences in East 189th street, from Webster avenue to Third avenue," for the gross sum of $9,922.17. The plaintiff has fully performed the work to the satisfaction of the proper municipal authorities, and has been paid therefor in full, except the sum of $1,580, which has been deducted by the city and retained for overtime. The contract provided that the plaintiff should commence the work "on such day and such place or places as the commissioner of highways shall designate, and progress therewith so as to complete the same in accordance with this agreement on or before the expiration of 100 consecutive working. days next thereafter, and that in the computation of such days the time (aggregated in days and parts of days) during which the work required by this contract has been delayed in consequence of the condition of the weather, or any act or omission on the part of the party of the first part (all of which shall be determined by the said commissioner, who will certify to the same in writing), and also Sundays and holidays on which no work is done, and days on which the prosecution of the whole work is suspended by order of the said commissioner, will be excluded." The commissioner of highways made a certificate. as to the overtime to be charged against the contractor, charging him with 158 days overtime at $10 per day, which was the stipulated damages, aggregating the amount which has been deducted and detained. The action is brought to recover this balance, and it is alleged in the complaint that the certificate is "false, fraudulent, and untrue, made. in bad faith, and under a misconstruction of the terms of said contract, and by palpable mistake." The notice to plaintiff to commence work under the contract was dated on the 7th of May, and required him to commence work on the 9th day of May, and at Park avenue. The notice was not received by the plaintiff until the 10th day of May, which was after the time specified for commencing the work. The plaintiff contends at the outset that this notice cannot be made the basis of enforcing the liquidated damage clause against him. We are of opinion that it served the purpose of a notice to commence work, but, the time for commencing work having passed, it was the plaintiff's duty to commence within a reasonable time after receiving the notice. That is the view taken by the commissioner, who computed the time from the 14th day of May. The verdict was directed. at the close of the plaintiff's case. His counsel asked to go to the jury upon the question as to whether the certificate of overtime was not false, and made in bad faith and fraudulently. This motion was denied, and counsel for the plaintiff excepted. In these circumstances the direction for a verdict cannot be sustained if there was any evidence of fraud or bad faith tending to impeach the certificate. We are of opinion that plaintiff made out a prima facie case for submission to the jury. His evidence tended to show that Park avenue, where he was directed to commence work, was obstructed with water pipes, placed there by the city, which used 189th street between Park avenue and Third avenue for storing water pipe. He further testified that he was not given the plan which he was to follow in doing the work until some time in June. It also appeared that a retaining wall and 118 New York State Reporter which had been built along one side of this street between Park and Webster avenues had been built upon a wooden drain, and that the wall was sinking, and had to be taken up and rebuilt. The plaintiff testified that when he asked the engineer for stakes and grades of Park avenue, in order to begin work where he was ordered to commence, the engineer declined to give him the stakes upon the ground that this wall might have to be rebuilt. It appears from his evidence that he needed these stakes in order to do the work. It further appears that a large section of the retaining wall was removed and rebuilt by the plaintiff by order of the city. This took more than two months, and, according to testimony introduced in behalf of the plaintiff, delayed his work a considerable length of time. Counsel for the respondent contends that, according to the testimony of the plaintiff, the taking down and rebuilding of the wall did. not delay his contract work; but we are of the opinion that that is not the proper construction of his testimony. The plaintiff further showed that, after the city let this contract to him, a permit was granted to Church E. Gates & Co. to construct a sewer in 189th street between Webster and Park avenues, being all that part of the street in which the sewer was to be constructed that was not used by the city for storing water pipe, and that the construction of this sewer delayed the contract work. The plaintiff, according to his testimony, finding that the construction of the sewer was authorized, and that it would delay his work, took the contract therefor, and constructed it himself, thus delaying the contract work in question for a period of about 32 days. Counsel for the city argues that this was a private sewer. If so, the record does not show it. The evidence shows that branches were constructed from it for house connections, as if a public sewer; but, as we view it, it was immaterial whether it was a public or private sewer, if, indeed, a sewer could be a private sewer constructed in a public street. The material point is that the city permitted its construction at that time, and the interference and delay with the plaintiff's work was the same, regardless of the character of the sewer. We have not overlooked the clause of the contract which provides that the contractor shall make no claim for damages in case the work should be postponed or delayed by the precedence of other contracts on the line of the work. The plaintiff is not asserting a claim for damages. He is insisting that the penalty or liquidated damages shall not be enforced against him where the delay was caused by the city. Plaintiff testified that he did not commence the work until the 5th day of June, and that down to that day there was a building in 189th street at Webster avenue which prevented his commencing work at that end, even if he had been so directed, which does not appear. The contract provided, among other things, that masonwork, setting curbstones, and laying flagging should cease from the 1st of December to the 1st of April, unless otherwise allowed by the commissioner of highways. The notice to the plaintiff to commence work expressly excepted from the notice work "excluded by the terms. of your contract between December 1st and April 1st." It appears |