ary 2d following each year during life of this agreement. *This agreement will go into effect on February 1st and continue in full force indefinitely until changed or discontinued by mutual consent, it being agreed that either party can terminate same by giving sixty (60) days' notice of intention to do so after one year. The complaint alleged that the plaintiff fully and faithfully performed the contract until July 27, 1899, when forbidden and prevented by the defendant from soliciting advertisements in pursuance thereof, the defendant thereafter on August 3, 1899, publishing in its periodical an advertisement as follows:

"NOTICE.

"Mr. C. P. Day is no longer the Eastern Representative of the American Machinist, nor is he in any way connected with it or the American Machinist Press. The name of Mr. Day's successor will be announced in an early issue. All mail intended for the American Machinist should be addressed to 218 William Street, New York. We have no office or representative at 95 Liberty Street." It is further alleged that since August 1, 1899, the defendant has refused to pay plaintiff's weekly salary and that the books show receipts since February 1, 1899, from advertisements in the eastern territory of $58,000, and the defendant in addition will receive therefrom $32,000, and if not prevented the plaintiff would have procured before April 1, 1900, additional advertising with cash receipts of $8,000 or more, and upon said advertising his commissions would amount to $19,500, and he has been paid only $3,600, leaving a balance due him of $15,900. The answer averred that the plaintiff failed to perform the conditions of the contract and did not devote his entire time and services as agreed, and, while in the defendant's employ, neglected its business, contrary to its instructions, and devoted his attention towards establishing a competing newspaper for himself and set up a separate office and endeavored to divert its business to him by disparaging its paper and solicited advertisements for other publications than The American Machinist and Locomotive Engineering and by such acts the contract was terminated and the defendant on July 27, 1899, so notified the plaintiff and it paid him in full for all services rendered under said agreement, and since that date the plaintiff has engaged in competing business, and the defendant has, by his breach of the contract, been compelled to employ other persons, incurring an expense and loss of $10,000. By reply the plaintiff denied allegations of the answer and particularly that he had solicited advertisements for other periodicals and since July has been engaged in competing business. At the close of the testimony the defendant moved for a direction of a verdict, which was granted, and thereafter judgment was entered thereon against the plaintiff upon the merits, from which judgment the plaintiff appeals.O'BRIEN, J.: The defendant's right to discharge the plaintiff summarily is placed upon four grounds: First, that the plaintiff willfully neglected the defendant's business; second, that he disobeyed the reasonable instructions of the defendant; third, that in violation of his contract and without the knowledge and consent of the defendant he established a separate office to which he sought to divert the defendant's mail and customers; and, fourth, that he attempted to engage in a competing business on his own account and to that end took steps to

[Vol. 86.

In

establish an independent newspaper. examining the sufficiency of these grounds it is important, as throwing light upon the weight to be attached to the acts complained of, to briefly review the relation of the parties at the time of the alleged breach. The particular employment under which the plaintiff was acting when discharged was pursuant to a written agreement dated January 11, 1899, by which the plaintiff was continued in the same work in which he had been engaged for the previous three years as solicitor of advertisements under the title of eastern representative. It appears that as far back as 1887 Mr. Hill, now defendant's president, was engaged in publishing a periodical named Locomotive Engineering, in which venture he was in 1891 joined by a Mr. Sinclair. In 1896 they added another publication known as The American Machinist, and at this time the plaintiff was employed by them as solicitor for both magazines. In 1887 Mr. Hill and Mr. Sinclair separated, the former continuing the publication of The American Machinist and the latter Locomotive Engineering, and the plaintiff was continued as solicitor of advertisements for both down to and after the time that the contract here involved was made. The plaintiff was thus working for two employers, his territory including sev eral States with many large cities. He became well known in the trade and was very successful in his work of soliciting advertisements. In addition to a large acquaintance with those who would be likely to need the service of the papers in advertising, the plaintiff had systematized his work by making a card index of his customers and, in other ways, he aided largely in developing what was a small into a large advertising business. In this work he was necessarily given considerable latitude and freedom, what was expected of him being that he should produce successful results. That this was the plaintiff's notion appears from one of his letters sent to Mr. Hill, wherein he says: "I am still working as heretofore on the basis of net results. A year's work during a year. I can and have done far more work in ten months than the average man does in twelve working full time day in and day out. Fifteen years' experience has taught me that it doesn't pay to pursue advertising during the summer. * * * The advertisers want to be left alone." Without, however, quoting at length from the correspondence or the testimony, it is made to appear that although in terms the contract provided that the plaintiff was to give his "entire time" to the defendant's business, it was understood that he was at liberty to give some portion of it to soliciting for the other publication, Locomotive Engineering, and that in the details of his work considerable freedom, latitude and discretion were vested in him. Moreover, not alone from the nature of his employment but also from the fact that he was to receive $150 a week out of commissions earned and the balance due him for commissions should be paid him at the beginning of the following year, it is made to appear that this was not the ordinary employment of one who is taken into a business and, under the direct instruction and guidance of his employer, is expected to work from day to day during regular hours. That the defendant profited largely from the plaintiff's work, appears from the fact that in the territory committed to his charge he had increased its advertising so that during the very period of the contract now under consideration his work was yielding better results than it had during any prior period

App. Div.]

of his employment. He made his headquar- | ters in New York city, but his duties required that he should be constantly visiting various localities, and in determining the places to be visited he was largely allowed to exercise his own discretion. Before May 1, 1899, his home was in Yonkers, but at that time he moved his family to Nantucket for the summer. Just prior to such removal, but at what exact date and from what cause beyond the statement attributed to the plaintiff that it was on account of a quarrel between their wives, does not appear, ill-will grew up between the plaintiff and Mr. Hill, the defendant's president. Pleasant relations having been destroyed, it appears, according to the plaintiff's testimony, that he was deprived of office facilities with The American Machinist, his personal mail was wrongfully opened and he was discredited with his customers, and this ill-feeling continued to an extent that in April and May there was, Mr. Hill admits, "friction" and "unpleasantness," and he indulged in more or less criticism of the plaintiff to customers. The effect on the plaintiff was to cause him to be dissatisfied, as appears from the testimony of Mr. Hill, who says that in the spring of that year the plaintiff had spoken with a customer of unpleasantness existing between Mr. Hill and himself which would probably lead to his leaving the paper at the end of the year and he expected to be able to start a new paper on kindred lines. This unpleasantness, it further appears from the correspondence, had culminated in the plaintiff's writing to Mr. Hill on May 3, 1899, that he proposed to carry out his contract for the year, but at the end of the period for which his services were contracted his position might be considered vacant. In the light of this brief summary of the former pleasant and subsequently strained relations of the parties, we may proceed to an examination of the four causes assigned as reasons for the plaintiff's discharge during the latter part of July, 1899. The evidence bearing upon these causes, outside of the correspondence, rests mainly upon the testimony of the plaintiff and Mr. Hill, and for the most part does not present serious contradiction. The first cause assigned for the discharge by the defendant is that the plaintiff willfully and in violation of his contract neglected the defendant's business. In this connection the defendant points out that the plaintiff was absent at Fortress Monroe from June 10 to 20, 1899, and at Nantucket between May 1 and July 21, 1899, instead of attending actively to business. It is conceded, however, that the plaintiff's absence at Fortress Monroe was to enable him to attend a convention of railway master mechanics and car builders and was with the knowledge of the defendant and in the interests of Locomotive Engineering, and that his visit there in 1899 was but a continuation of his visits in prior years to a similar convention. This, therefore, may be dismissed from serious consideration. The second branch of the charge relates to the plaintiff's absence at Nantucket, where his family had gone for the summer, and according to the defendant's figures he was there twenty-three out of eighty-two days between May first and July twenty-first. It does not appear, however, that in this figuring any account was taken of Sundays and holidays, of which there were about fourteen during that period, and no credit is given for work done there in correspondence or in keeping up the card index. It is true that the plaintiff wrote from Nantucket that he intended to

take a long vacation, but the testimony shows that he was not, during the few days that he personally remained there, idle; but what he in fact did was to use Nantucket as a center and during the time visited customers in Connecticut, Boston and other New England points, and with respect thereto he furnished an account of the times and the number of such visits. It does not appear that any damage resulted to the defendant from the few days which dur ing the summer the plaintiff actually spent at Nantucket with his family, and unless the contract is susceptible of a construction which we do not think it is, that the plaintiff was bound to be in the city of New York every day during the period of his employ. ment or could not absent himself, or visit different places and other customers without the express assent or direction of the defendant, there was a question of fact as to whether plaintiff's conduct constituted willful or any neglect of the defendant's business. The second cause assigned is the failure to obey the reasonable instructions of the defendant. The testimony bearing upon this subject shows that in two instances instructions were sent him which it is claimed he was remiss in failing to carry out. The first is with respect to obtaining an advertisement from the Ferracute Machine Company, whose office was at Bridgeton, N. J., about which the defendant, on June nineteenth, while defendant was about leaving the wharf at Old Point Comfort on his way from the convention at Fortress Monroe to New York, telegraphed him: "Ferrute Machine want quotation on two-inch double column space.' The plaintiff did not go directly to Bridgeton, and when later he started, he was told not to go; and in excuse for his not going immediately, he says that he had been in communication with that company and knew just what they wanted, gave them rates by mail at once and told them he would be down. He further testified that he continued on his way to New York and reported at the defendant's office and then went to Connecticut and to Boston. On June twentieth, it appears, the defendant wrote plaintiff at Nantucket, "Immediately after the fourth we want you to see Ferracute Machine Co.," and on July seventh Mr. Hill replied to a letter from plaintiff by saying that the Ferracute Company had sent in a small advertisement, whereas competitors had secured a larger contract. The second instance cited by the respondent was the plaintiff's failure to see the Hendey Machine Company at Torrington, Conn. In the letter of June twentieth (which plaintiff says he did not receive till his return from Boston after July first) Mr. Hill wrote:" Go and see Hendey at once and report." Just what had occurred prior to this is not entirely clear, but it appears that the Hendey Company had canceled their contract, of which the plaintiff was aware, and he says that he delayed attending to the matter because he had no data as to why they had done so and wished to know the situation, and he wrote to the secretary, who was a personal friend, and who replied July first that no reason was given and that what they did not care to commit to paper could be said briefly. On July fifth the plaintiff went to Torrington and succeeded in getting the desired contract. Thereafter he continued to other places and obtained other contracts for the defendant up to and including July 25, 1899. We do not think it can be said as matter of law that plaintiff's acts constituted willful violations of instructions. He did not refuse to obey,

but merely used his own judgment as to the manner of carrying out the instructions. Considering the nature of the contract and the character of the employment, although it was the duty of the plaintiff to obey any orders or instructions given him, it was shown by the course of conduct between the parties that he was permitted to exercise some latitude and discretion in working out the details. Though there was not an instantaneous response by the plaintiff to the directions, upon the evidence it was a question of fact as to whether or not he was acting within the limits of the discretion conferred upon him. It further appears, however, that such conduct was not seriously considered by the defendant or relied upon in his subsequent discharge, and we need not, therefore, pursue the subject further. The third ground is that the plaintiff established an office at 95 Liberty street, New York city, to which he sought to divert the defendant's mail and customers. It is conceded that the office was established May 1, 1899, nearly three months prior to the plaintiff's discharge. It was done openly and was fully known to the defendant as shown by the plaintiff's testimony and by the fact that Mr. Hill received from that office the letter of May third in which the plaintiff signified his desire to resign at the close of the year. No objection so far as appears was ever made to the use of this office. It is now insisted that as the plaintiff set himself up as an "Advertising Counselor," which was different than "Eastern representative," he was entering a new business. These words, however, were not only on the plaintiff's office door, but on the letter heading which Mr. Hill received, and the plaintiff's testimony is that he was thus endeavoring to forward the defendant's paper by getting better acquainted with the customers and assisting them in their advertising. It was not proved and plaintiff denied that he received any pay from or secured any work for a competitor. The additional reason which he gives for establishing the office is that he required a place for his papers; and, as his family had removed from Yonkers and the defendant had declined to permit him any longer to have a desk in his office, he concluded to have a separate office down in the manufac turing center and adjoining his other employer, Locomotive Engineering, with whom in previous years he had had an office. With respect to diverting mail and enticing customers to leave the defendant, the plaintiff makes a positive denial, and all the evidence we have to the contrary is that some few let¡ters for the American Machinist found their way to the office of its eastern representative. Nothing was presented on this subject, therefore, which, as matter of law, would justify the defendant in discharging the plaintiff; and viewed in the light most favorable to the defendant there was a question for the jury. The respondent's final ground is that the plaintiff undertook to engage in a competitive business on his own account, and in that connection took steps to establish an independent newspaper. This, as will be seen from an examination of what occurred when the plaintiff was dismissed, was the real ground relied upon. The plaintiff, after receiving a letter dated July seventh from Mr. Hill intimating that he hasten his resignation, went to New York and had an interview with him, and suggested that inasmuch as there seemed to be friction, and it was not desired to continue the relationship, he would be glad to settle on any fair and equitable basis at that time, and said that he had received encouragement

[Vol. 86.

from friends in regard to starting a new paper, although he had no intention of doing so unless forced to, in which case that would be his logical course. Nothing was then done, but on July twenty-first the defendant wrote to plaintiff saying he had broken his agreement by his scheme to start another paper and that the time to part company had arrived, and that a settlement strictly in accord with the agreement would be made up to date if desired. The plaintiff declined to accept a settlement on this basis, and thereafter the notice set forth in the complaint was published by the defendant in its periodical. On April 4, 1899, the plaintiff had filed an application for a copyright at Washington for an engineering paper called Mechanical Engineering, of which until the fall of 1839 the defendant knew nothing. He had not, however, sought any financial support or taken any further action. And, as for the application, the plaintiff testified that he desired merely to learn if that name Mechanical Engineering was pre-empted, and the Washington office affords no facilities for a search and that he puts in the words "Volume 1, No. 1, October, 1899," simply to have a date within the year. There was, however, nothing in this which injured defendant's business or constituted as matter of law a ground for the plaintiff's discharge. The fact seems to be that, because of criticism and friction that antedated any of the acts alleged to be violations of the contract, the plaintiff was warned to look for future work elsewhere and that what he did was not of such a positive and competitive nature as to be a breach of his contract of employment. His work during all the period is admitted to show good results, and it was after his letter of May third, stating that he wished at the end of the year to terminate his contract, that the criticism and friction increased and the attitude of the defendant became entirely different from what it had been in prior years. We think that what, undoubtedly, affected the temper and controlled the action of the president of the company was the knowledge which was brought to him through the plaintiff's letter expressing the intention to discontinue his services at the end of the year, and the feeling that he would employ the intervening time to his own advantage rather than for the benefit of the company. Such a feeling, however, would not justify the plaintiff's dismissal unless it appeared - which we do not think it did that he was using the time which he should have given to the company's business in furthering his own interests. We agree with the respondent that although it had no knowledge of what the plaintiff had done with reference to obtaining a copyright of a paper at the time of his dismissal, this act, coupled with evidence that what he had done was necessarily prejudicial to the business or had taken up time that should have been devoted to the defendant's business or had resulted in the establishment of a paper which had been in competition with the defendant's paper, would have been sufficient to sustain such dismissal. We do not think, however, that taking steps to obtain a copyright or engaging in idle talk about the possibility of starting an opposition paper at some indefinite future time without seeking financial or other support in such a prospective enterprise would, as matter of law, be ground for discharge. As we have endeavored to point out, we do not think that any or all of the grounds taken together or separately as they appear in this record were sufficient as matter of law to warrant his discharge. But if a jury should find that

App. Div.]

there was bad faith of the plaintiff or willful | refusal to obey proper instructions, or a course of conduct injurious to the defendant's business, they might conclude that the discharge was justified. Our conclusion, therefore, is that the case should have gone to the jury and that the judgment appealed from should be reversed and a new trial ordered, with costs to the appellant to abide the event. Patterson, Ingraham, McLaughlin and Hatch, JJ., concurred. The Barber Asphalt Paving Company, Respondent, v. The City of New York and Jacob A. Cantor, as President of the Borough of Manhattan of the City of New York, Appellants. Order affirmed, with ten dollars costs and disbursements. -- Appeal from an order granting an injunction before final judgment.

INGRAHAM, J.: There is presented upon this appeal the same question that was presented in the case of Rose v. Low (85 App. Div. 461), and for the reasons stated in the opinion in that case the order appealed from should be affirmed, with ten dollars costs and disbursements. Van Brunt, P. J., Patterson, Hatch and Laughlin, JJ., concurred. The Farmers' Loan and Trust Company, Respondent, v. The Hoffman House, Respondent. Hoffman House, New York, Intervenor, Appellant.- Order affirmed, with ten dollars costs and disbursements.- Appeal from an order denying a motion for a stay of proceedings upon the report of a referee.INGRAHAM, J.: The Hoffman House, New York, was the purchaser at a sale under a judginent in this action which was to foreclose a mortgage upon certain property of the defendant, The Hoffman House. Under the judgment the purchaser was allowed to pay a certain amount of the purchase money in cash and the remainder in bonds secured by the mortgage which was foreclosed. When the purchase was completed the purchaser delivered to the referee 300 out of the 425 outstanding bonds secured by the mortgage and, in lieu of the delivery of the remaining bonds, the court by order directed the referee to complete the purchase upon the purchaser giving a bond in the penalty of $35,000 to secure the balance of the purchase money in case the remainder of the bonds should not be delivered to the referee as provided by the judgment. The referee thereupon completed the purchase and delivered the deed to the appellant who then took possession of the mortgaged premises, and since that time has remained in possession thereof. Subsequently the plaintiff made an application to ascertain the value of the remaining outstanding 125 bonds secured by the mortgage, and which were not delivered to the referee upon the completion of the purchase. Whereupon an order of reference was entered directing a referee to take proof of the amount properly chargeable against the gross proceeds of the foreclosure sale; and subsequently, on the 13th day of December, 1900, that order was modified and the referee was directed "to take proof and ascertain the amount which the Hoffman House, New York, the purchaser on the foreclosure sale herein, should be permitted to deduct from its bid, and to take proof of the amounts properly chargeable against the gross proceeds of the foreclosure sale herein, for the compensation and expenses of Grosvenor S. Hubbard, Esq., Referee herein, and for the compensation of the attorneys and of the receiver herein, and to ascertain the value of said outstanding one hundred and twenty-five mortgage bonds of the Hoffman House, the defendant in this action, and that said referee

report the said amounts, together with the proof to this court." In pursuance of that order the referee proceeded and made his final report, in which he allowed the purchaser all sums of money to which it was entitled for payments made by it on account of the liens upon the property, including rent that it had paid to the lessors of the leases which were foreclosed in this action. The appellant, The Hoffman House, New York, appeared before the referee and presented its proof and had its claim passed on by the referee. The referee made his report whereby he determined the amount that the 125 bonds which were not delivered to the referee would be entitled to from the proceeds of the sale, charged the purchaser with that amount and allowed to the purchaser the amount that it had paid for rent and other liens upon the property with which it was entitled to be credited, and determined that the balance remaining due from the purchaser was $30,353.75. The appellant then made a motion to stay the parties to the action from proceeding upon this report until after the further adjudication under the order by which it had been allowed to intervene in the action. It is difficult to see how this can be of any advantage to the appellant. In the proceeding before the referee whose report has been made, the claims of the appellant for an allowance were presented, and those claims were passed upon and determined by the referee. It can only present the same claims again which have been considered and passed upon in a proceeding to which the purchaser was a party. All of the questions as to the right of the purchaser have been disposed of by the referee in the report already made; and if the appellant is not satisfied with that report it can appeal and have the question as to the amount that it is entitled to have credited upon the balance due of the purchase money finally determined. I can discover in this petition no claim on behalf of the appellant that it would not have presented before the referee in the proceeding which has already terminated. In fact, so far as appears, there is no claim of the appellant that was not presented to and considered by the referee and by him passed upon in his report already made. certainly is suggested no reason why the proceeding should be further adjourned and a new reference had to go over the same ground that has been gone over by the referee in the proceeding already terminated. The appellant claims that if the referee's report is allowed to stand, great injustice would be done to it; but any injustice that has been done in that proceeding can be corrected on the appeal from the order confirming the referee's report which is now pending, and which will finally determine the rights of all the parties. It follows that the order appealed from should be affirmed, with ten dollars costs and disbursements. Van Brunt, P. J., O'Brien, McLaughlin and Hatch, JJ., concurred.

There

Henry W. Rosenbaum, Appellant, v. Isaac L. Rice and Others, Respondents.- Judgment affirmed, with costs.- Appeal from judg ment entered upon decision of the court at Special Term.

INGRAHAM, J.: The plaintiff, as a stockholder of a corporation known as the Consolidated Railway Electric Lighting and Equipment Company, brings this action in his own behalf and in behalf of all other stockholders of the corporation similarly situated, to enforce a cause of action in favor of the corporation. The complaint is very voluminous, setting up at great length various acts