Summary
In Armour v Gaffey, 30 App Div 121, 130 (3rd Dept 1898), an auditor was allowed to testify to a settlement meeting he attended where defendant expressed his willingness to reimburse the amount the auditor determined.
Summary of this case from Arben Corp. v. New York State Thruway Auth.Opinion
May Term, 1898.
John T. Norton and J. Newton Fiero, for the appellants.
George L. Stedman, for the respondents.
It was the duty of the defendants to keep books containing a correct account of the sales of meat consigned to them by the plaintiffs, and the credits and allowances to which they were entitled, which should be subject to the inspection of the plaintiffs. ( Keighler et al. v. Savage Mfg. Co., 12 Md. 383.) When the plaintiffs' agent commenced his investigation, it appears that they did have such books of account, but after Mr. Willetts had compared the amount received from the sales of sixty-seven carloads of meat, as shown by those books, with the reports, and had discovered a shortage of $958.62, they refused to allow him to have further access to the accounts, and shortly afterwards destroyed them.
No explanation whatever of this act, consistent with an honest and justifiable purpose, has been given. We are unable to find the slightest reason or excuse therefor. The willful destruction by them of their books authorized unfavorable inferences by the referee, and subjected the defendants "to a heavy burden of suspicion, as well as of proof." (1 Am. Eng. Ency. of Law [2d ed.], 1089n.) The defendants were informed that the examiner was employed by the plaintiffs, not only to examine their books, but those of all their agents. No improper act or procedure on the part of the examiner was shown. The referee could come to no other conclusion than that the objection made by the defendant Gaffey to Mr. Willetts was a mere pretense to stop the investigation commenced by the latter, especially as the plaintiffs offered to obtain another examiner, if the defendants had any personal objection to Mr. Willetts.
The court below was justified in absolutely disregarding, disbelieving and discrediting the statement made by the defendant Gaffey in explanation of the difference between the defendants' books and the reports made of the sales of the sixty-seven carloads of meat, as to which the witness Willetts compared the books with the reports. We will not attempt to recapitulate the evidence, but it is difficult, after reading it, to come to any other conclusion than that reached by the referee. Under the contract the defendants were compelled to pay the plaintiffs the amount for which they sold the meat, not the market value thereof. They were not entitled to any allowance for "credit risks." They might be for allowances or deductions to customers on sales after they had made reports, but the testimony of the witness Willetts shows that, as far as he was allowed to examine the books, the claim of the defendant for such "reclamations" did not appear to be well founded; and as he was proceeding to make a further examination as to the alleged "reclamations" the books were taken from him and destroyed. The well-settled principle, therefore, applied that "where it appears that a party has destroyed an instrument or document, the presumption arises that if it had been produced it would have been against his interest or in some essential particulars unfavorable to his claims under it. Contra spoliatorem omnia presumuntur. * * * The inference is that the purpose of the party in destroying it was fraudulent." (" Joannes" v. Bennett, 5 Allen, 169, 172.) The referee, under the circumstances, was justified in disbelieving the defendants' story as to the alleged "reclamations" and to determine that the defendants, on the sale of the sixty-seven carloads of meat, had wrongfully misappropriated the amount above stated.
It is clear that, under the evidence given, a claim was established in favor of the plaintiffs for the sum of $958.62 for money unlawfully retained by the defendants from the sales of the sixty-seven carloads of meat as to which the witness Willetts was permitted to compare their books with the statements previously furnished the plaintiffs
The question arises whether the referee was right in charging the defendants with the same rate of shortage on the 477 carloads of meat, as to which the plaintiffs' accountant was unable to compare the statements theretofore made with the books of the defendants.
Unless the finding of the referee in this regard can be sustained, the plaintiffs are remediless as to the said 477 loads, the only record of sales being contained in the destroyed books; and the evident purpose of the defendants in destroying them will succeed in its object.
As we have seen, the referee might well find, from the evidence and all the facts before him, that the defendant destroyed the books with no good or honest intent, but for the purpose of carrying out and effectuating a scheme to defraud the plaintiffs, commenced by the furnishing to the latter false statements of sales; and that the books were burned at the very time the plaintiffs were examining them with the intent to suppress evidence that the defendants knew would enable the plaintiffs to discover the amount of money they had misappropriated.
The defendant Gaffey in stating to the witness Willetts the reason for returning a less sum to the plaintiffs than his book showed as to the sale of the sixty-seven carloads, said "that he had always followed this plan since he had been in business, and claimed that it was legitimate, and claimed that he felt that he had a right to return to Armour Company what he claimed was a market value, irrespective of the selling price." To another witness he said that "what Willetts had found as to accounting for a less price than obtained, that he had always done it and considered it legitimate, and didn't propose to pay back that money. * * * He said further, that if we expected by auditing his books to find that he had accounted for a less price than he received, he would say right here that he had done so, and that we need not look after that."
We find that in the manner in which the defendants had conducted the business there had ensued a loss to the plaintiffs, on sixty-seven carloads, of $958.62. The referee, as we have shown, being authorized to discredit the statement of the defendants as to "reclamations," was authorized to find that this shortage resulted from the defendants reporting to the plaintiffs, instead of the price at which they actually sold meat, what they called the "market value;" and as on the 67 loads this method of doing business resulted in a shortage of the amount above stated, and as the defendants admitted that they followed the same method of doing business as to the other 477 carloads of meat consigned to them by the plaintiffs — not reporting the price at which they had in fact disposed of the same, but what they called the market value thereof — we think the referee was authorized to reach the conclusion that the shortage on the 477 loads was at the same rate as on the 67 loads, as to which he was permitted to compare the books with the reports. If the defendants conducted the business with the plaintiffs on the sale of the 477 loads in the same way as they did on the sale of the 67 loads, the referee could well find that the same result ensued — the same rate of shortage. There was a difficulty in determining the amount of the damage the plaintiffs were entitled to recover. It was difficult, however, because of the wrongful action of the defendant. If the books could have been produced on the trial, the exact state of accounts between the parties could have been ascertained without difficulty. It may be claimed that the method adopted to determine plaintiffs' damages was somewhat speculative and uncertain; but, under the circumstances, the court was not compelled to be exacting in regard to the evidence on which to base the plaintiffs' claim for damages.
There are authorities, where actions have been brought to recover anticipated profits in cases of breach of contract between partners or principals and agents, holding that past profits may be shown and considered as bearing on future profits. ( Bagley v. Smith, 10 N.Y. 489; Wakeman v. Wheeler Wilson Mfg. Co., 101 id. 205.) In the case first cited it is said: "It is very true that there is great difficulty in making an accurate estimate of future profits even with the aid of knowing the amount of the past profits. This difficulty is inherent in the nature of the inquiry. We shall not lessen it by shutting our eyes to the light which the previous transactions of the partnership throw upon it. Nor are we the more inclined to refuse to make the inquiry, by reason of its difficulty, when we remember that it is the misconduct of the defendants which has rendered it necessary." In the opinion in Wakeman v. Wheeler Wilson Mfg. Co. ( supra), EARL, J., speaking of the damages in that class of cases, said: "They are nearly always involved in some uncertainty and contingency; usually they are to be worked out in the future, and they can be determined only approximately upon reasonable conjectures and probable estimates." We see no reason to doubt that the referee, on the result of the examination made by the plaintiffs' accountant as to the sale of the sixty-seven carloads of meat and the defendants' admission that they had always accounted for a less price than they received, and had always conducted their business in the same way, had as good a basis for his finding as to damages as the several plaintiffs had in the authorities last cited.
We have been referred to the case of New York Brooklyn Ferry Co. v. Moore (18 Abb. N.C. 106). The action was brought to recover a large sum, which, it was claimed, the defendant had embezzled. Substantially, the only evidence showing the defendant's liability was the amount of his bank account and other property he was shown to own. It appeared that when he entered the employment of the defendant he was poor; that he always received small wages, and at the end of his service he had in savings banks $30,000 and real estate of the value of $15,000, and failed to account for the possession of this large amount of property. The trial court considered the amount of property the defendant was shown to have possessed at the termination of his employment as a basis for computing damages, and its determination was sustained by the Court of Appeals, not only as to the fact of the misappropriation of the funds, but of the amount thereof. In his opinion Judge EARL remarked that the plaintiff "was able, however, to give evidence, which, we think, fully justified the findings of the Special Term and the judgment there given;" and, again, "We see no reason to believe that the trial court committed any error to the prejudice of the defendants in the amount awarded to the plaintiff." The amount embezzled by Moore, as appears by the statement of facts in the case cited, was as uncertain and indefinite as the amount appearing by the evidence in this case to have been appropriated by the defendants. In the case last referred to, Judge EARL remarked: "It may be that in reaching a conclusion adverse to Moore a mistake has been made. But mistakes cannot be eliminated from the administration of justice by human tribunals. No more certainty in proof should be required than is ordinarily practicable." The remark thus quoted from the opinion of the learned judge can well be applied to this case. The plaintiffs — the only record of sales being destroyed by the defendants — were compelled to rely upon the result of the examination by their accountant of sixty-seven of the five hundred and forty-four loads of meat delivered to the defendants, and the admissions of the latter that they had never accounted for meat delivered at the price at which they had sold it, and that they had always conducted their business in the same way they did in reference to the sixty-seven loads. This evidence was the best proof practicable under the circumstances, and, we think, sufficient to justify the finding of the referee. If the defendants have been injured, it is the result of their own wrongful act.
It is claimed that the referee erred in allowing evidence of the offer of the defendant Gaffey to compromise, made in Chicago. The conversation in question was had at an interview at which the plaintiff Armour was present, and must be considered by itself. It is held that no advantage can be taken of an offer made by way of a compromise; that a party may, with impunity, attempt to buy his peace. ( Tennant v. Dudley, 144 N.Y. 504; Smith v. Satterlee, 130 id. 677.) But it has never been doubted that an admission of fact by a party is evidence against him, although made in a conversation respecting a compromise of a controversy. ( Marvin v. Richmond, 3 Den. 58; Bartlett v. Tarbox, 1 Keyes, 495; Murray v. Coster, 4 Cow. 617, 635.) In the conversation referred to at Chicago, at which the plaintiff Armour was present, the defendant Gaffey made no denial of his indebtedness in the amount of the shortage found to exist by Mr. Willetts' examination of his books. He at that time said that he was willing to reimburse the plaintiffs for the amount which Mr. Willetts, the auditor, had found. The referee could properly receive this statement as an admission of the amount thus found due by the auditor; and in this view of the case we think no error was committed in receiving the testimony referred to.
We conclude that the judgment should be affirmed, with costs.
All concurred.
Judgment affirmed, with costs.