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App. Div.)

FIRST DEPARTMENT, JULY TERM, 1903. agreement with respect to appellant's continued connection with the firm. If the bill of sale was intended to be absolute, it is not likely that respondent would unnecessarily exact an agreement that his son should take charge of the business. If appellant retained no interest in the business, and it had not been understood that he was to continue in the charge and management thereof as before, except with reference to signing checks, it is highly improbable that he would have been given this general charge, which became as exclusive as ever after the first six weeks. Nor is it jurobable that the business would have been continued in the firm name, which would have been a violation of law. (Penal Code, $363.) The fact that respondent's confidence was restored soon after taking the bill of sale and placing his son in charge of the finances tends to support appellant's claim that the son was sent here until the condition of the business could be ascertained, and that the bill of sale was given as security. Concededly, the respondent was dissatisfied with appellant's management; and appellant says he was willing to transfer his interest to respondent as security. Whether it was the intention of respondent to take the bill as security pending the dissolution, or, as claimed by appellant, until ench time as the firm's indebtedness to him should be discharged, it is not surprising that his attorney, who was admonished to draw up a paper, with a view to enabling respondent to have full possession and control in case of any “trouble," as respondent puts it, should prepare an absolute bill of sale and insert a clause reciting the dissolution of the firm. That would certainly accomplish what he was directed to obtain, and there might be a difference of opinion as to whether anything short of it would. Nor was it strange that appellant, who, owing to friendship and confidence, refrained from consulting his own attorneys, should sign the instrument in that forin. The obstacles to be overcome in reconciling the appellant's theory of the case with the bill of sale which he executed, are insigwificant in comparison with the difficulties encountered in endeavoring to reconcile the respondent's corduct with the bill of sale as an absolute transfer. The continuance of the firm business for nearly a year and a half with appellant in absolute charge, except that he did not draw checks for six weeks, the rendition of accounts by the firm to respondent, and by him to it, and the many representations

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First DEPARTMENT, JULY TERM, 1903.

[Vol. 86.

made by him during this period in letters and verbally to customers and others, and his other numerous acts briefly recited in this opinion, cannot be readily accounted for consistently with respondent's absolute individual ownership of the business during that period, and if that were the fact, it is inconceivable that he should have written the letters to appellant herein quoted, requesting as a favor from an employee in charge of his own business funds that belonged to himself.

Upon the trial, the appellant, for the purpose of corroborating his statement that the bill of sale was merely intended to secure respondent on account of the firm's indebtedness to him, on his main case offered evidence tending to show, not only that the firm was solvent, but that the assets exceeded the liabilities in a considerable amount, so that he had a substantial interest in the business. This evidence was objected to and excluded on the ground that the court would not go into an accounting in determining the main issues, and appellant excepted. Subsequently appellant was permitted to show from his personal knowledge and examination of the stock what he thought was the value of the assets, the amount of the firm's indebtedness to the respondent and to others, separately and in gross. His evidence tended to show that there was a surplus of assets over indebtedness of $107,947.17. The respondent was permitted to controvert this by the testimony of an expert accountant, who testified to the condition of the firm affairs as shown by its books, from which he assumed that the liabilities exceeded the assets by $7,844.48. It appeared that there were transactions that were not entered in these books at all, and in some instances only the sales of certain commodities were entered, there being no entry of the purchase or of the amount on hand. The expert testified that liis calculations were made exclusively from the books, and he deducted ten per cent of the stock shown to be on hand by the books, " for lost, stolen and different things, as a matter of custom," and computed the price from the average of all the purchases entered on the books for the entire period of the copartnership down to the execution of the bill of sale. The appellant claims that there was other stock on hand in large quantities, not shown by the books, and that the price assumed by the expert was not the current market price at the time of the execution of the

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App. Div.]

FIRST DEPARTMENT, JULY TERM, 1903.

bill of sale. He had prepared an estimate from personal examination on November 10 and 11, 1889, which the court excluded under respondent's objection and appellant's exception. On objection interposed by the respondent, the court precluded appellant from testifying as to the market price upon which the value of the stock on hand should be figured, upon the ground that the testimony of the witness should have been exhausted when he was first upon the stand. From the subsequent admission, during appellant's case, of the general evidence relating to matters concerning which the court had excluded special evidence, it may be that the court intended to change its ruling and permit appellant to establish the solvency of the firm; but the record contains no other evidence of a change of intention on the part of the court in that regard. Perhaps the appellant should have again offered specific evidence of the assets and liabilities. We think, however, that it was important evidence and would have materially aided in solving this important question of fact. Whatever the condition of the firm was with reference to solvency or insolvency, the appellant undoubtedly possessed accurate knowledge on the subject. If the firm was insolvent, then, of course, it is not improbable that he would be willing to execute a bill of sale of his interest; but if the firm were solvent, so that he had a substantial interest in the business, nothing is shown as an inducement for his executing the bill of sale.

It follows that the judgment should be reversed and a new trial granted, with costs to appellant to abide the event.

O'BRIEN and HATCH, JJ., concurred; PATTERSON and McLAUghLIN, JJ., concurred in result.

Judgment reversed, new trial ordered, costs to appellant to abide

event.

FIRST DEPARTMENT, JULY TERM, 1903.

[Vol. 86.

THE PEOPLE OF THE STATE OF NEW YORK ex rel. EDISON ELECTRIC ILLUMINATING COMPANY OF BROOKLYN, Appellant, v. THOMAS L. FEITNER and Others, as Commissioners of Taxes and Assessments of the City of New York, Respondents.

What statement, filed by an electric illuminating company with tax commissioners, is sufficient to present the questions of overvaluation and of inequality of assessment of its plant.

An application made by an electric illuminating corporation to the commissioners of taxes and assessments of the city of New York for a reduction of the assessment levied upon its real estate, which consisted of foundations, substructures, superstructures, conduits, pipes, wires, cables and connections in the borough of Brooklyn, stated as follows: "It finds that the same has been assessed on the assessment roll of 1899 at a valuation of nine hundred and five thousand dollars ($905,000), whereas the same should not have been, in its judgment, valued at more than five hundred thousand dollars ($500,000) to be in proportion to the assessed value of similar property, and in accordance with the fair marketable value thereof.

"The said system, comprising the electric system of distribution of your petitioner, whereby it distributes electric light and power throughout the said borough, is being superseded by different systems of electric distribution. The entire system has been deteriorated and damaged by the action of stray currents in the ground not owned or controlled by your petitioner, causing a deterioration in the said system by a process known as electrolysis; much of the system has been in the ground for many years, and is worth but a part of its original cost; the present cost price of similar material is much less at the present time than it was when said system was put in."

Held, that the application was sufficiently broad to present to the commissioners the questions of overvaluation and of inequality of assessment. VAN BRUNT, P. J., dissented.

APPEAL by the relator, the Edison Electric Illuminating Company of Brooklyn, from an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the county of New York on the 14th day of January, 1903, dismissing the writ of certiorari granted herein, which sought to review the action of the commissioners of taxes and assessments in assessing the valuation of real estate.

The relator filed with the tax commissioners of the city of New York on the 29th day of April, 1899, an application in writing asking that the amount of the assessments for the year 1899 upon real estate of the relator, consisting of foundations, substructures,

the

App. Div.]

FIRST DEPARTMENT, JULY TERM, 1903.

superstructures, conduits, pipes, wires, cables and connections in the borough of Brooklyn, which had been previously assessed for that year by the commissioners at $905,000, be reduced to the sum of $500,000.

The application to the commissioners was as follows: "To the Commissioners of Taxes and Assessments:

"The undersigned, the Edison Electric Illuminating Company of Brooklyn, represents that it is the owner of real estate in various parts of the Borough of Brooklyn, consisting of foundations, substructures, super-structures, conduits, pipes, wires, cables and connections of the said Company. It finds that the same has been assessed on the assessment roll of 1899 at a valuation of nine hundred and five thousand dollars ($905,000), whereas the same should not have been, in its judgment, valued at more than five hundred thousand dollars ($500,000) to be in proportion to the assessed value of similar property, and in accordance with the fair marketable value thereof.

"The said system, comprising the electric system of distribution of your petitioner, whereby it distributes electric light and power throughout the said borough, is being superseded by different systems of electric distribution. The entire system has been deteriorated and damaged by the action of stray currents in the ground not owned or controlled by your petitioner, causing a deterioration in the said system by a process known as electrolysis; much of the system has been in the ground for many years, and is worth but a part of its original cost; the present cost price of similar material is much less at the present time than it was when said system was put in.

"Your petitioner, therefore, asks that the said assessment may be reduced to the amount stated.

"Dated, BROOKLYN, CITY OF NEW YORK, April 29, 1899. "EDISON ELECTRIC ILLUMINATING COMPANY OF BROOKLYN,

"By ROYAL C. PEABODY,
"Vice-President."

This was the only application submitted on behalf of the relator with respect to said assessment, and no evidence was offered in

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