except for such fraudulent representations, the Eastern Lumber Company would not have parted with the possession of the lumber. It is entirely immaterial whether the contract made in the first instance was induced by fraud, or whether the vendor waived or surrendered some right incident thereto because of such fraud. In either event, the vendee can acquire no rights by reason of such act or waiver if induced by his fraud. The Eastern Lumber Company, assuming that the car load of lumber was taken by Underhill from its yard with its consent, had the right to say: "It is true the contract as made provides that the lumber shall be paid for upon delivery, but Underhill has represented himself to be financially responsible. We rely upon and believe such representations to be true, and therefore will permit him to take the lumber into his possession, waiving so much of the contract of sale as provides that cash shall be paid upon delivery.' I am of the opinion that in interpreting the meaning of the evidence in this case we ought not to indulge in the refined distinction that, because the president of the Eastern Lumber Company did not testify in terms that he waived the payment of the "cash" upon the delivery of the lumber because of the representations of the plaintiff's assignor, the plaintiff is entitled to recover. Mr. Darr testified, and it is uncontradicted by even the slightest circumstance in the case, that the contract or transaction which he had with Underhill was induced by the representations which the learned trial court has found were false. Delivery of the lumber was an essential part of such transaction, and necessary to its consummation. The only interpretation of which the entire evidence is susceptible is that the plaintiff's assignor obtained possession of the lumber from the Eastern Lumber Company by means of false and fraudulent representations made by Underhill, which were relied upon by said company. An affirmance of the judgment appealed from enables the plaintiff to obtain something for nothing, enables him to take advantage of a gross fraud perpetrated by the assignor, and we think there is no rule of law applicable to the facts of this case, as disclosed by the evidence, which makes such a result necessary.

But, independent of the foregoing considerations, it appears that at the time Underhill's agent, McBride, represented his principal to be financially responsible for a large sum, the fact was Underhill was utterly insolvent, and must have known his condition financially to be radically different from the representations he was permitting or procuring his agent to declare. With this knowledge, it was a fraud in itself to permit his agent to purchase or procure the delivery of goods upon his credit without disclosing to the vendor the true state of his finances. A debtor in failing circumstances in obtaining goods upon credit is required to display perfect frankness in acquainting his vendor with his true financial condition, and his failure so to do is evidence of a fraudulent intent upon his part. Grant v. Walsh, 145 N. Y. 502, 40 N. E. 209, 45 Am. St. Rep. 626; Mauger v. Slavin, 11 App. Div. 483, 42 N. Y. Supp. 331.

It is suggested that the testimony given on the trial as to the fraudulent representations of Underhil' were not within the allegations of the defendant's answer, and therefore not available to her as a de

78 N.Y.S.-18

and 112 New York State Reporter

fense herein. A careful perusal of the testimony bearing upon that feature of the case fails to disclose a single objection to the testimony of Mr. Darr as to those representations, his belief in them and reliance thereupon. If the plaintiff desired to raise any objection to such testimony upon the ground that it was not within the allegations of the answer, he should have done so at the time the proof was offered, or he should have later made a motion to strike the same from the record. His failure to interpose such objection at the trial precludes its being asserted for the first time upon appeal. Brady v. Nally, 151 N. Y. 258, 45 N. E. 547, and cases cited. Had the plaintiff interposed the objection that the proof was at variance with the defense alleged in the answer, an opportunity would have been given the defendant to make a motion to amend her pleading to conform to the proofs at a time when its allowance would have worked no injury to the plaintiff. Motions of this character commend themselves to the courts, and we do not discover anything in the record before us which indicates that this defendant would not have been able to present a meritorious application to amend, had there been any reason therefor. Courts have expressly declared that greater liberality will be exercised in allowing a defendant to amend his answer than in permitting the plaintiff to amend his complaint. I Enc. Pl. & Prac. p. 518. A multitude of authorities declare the salutary rule that statutes of amendment are remedial, and must be construed and applied liberally in favor of the privilege of amending. Upon this proposition there are no dissenting authorities. I Enc. Pl. & Prac. p. 517, and New York cases cited.

Entertaining these views, I am compelled to dissent from the prevailing opinion of my brethren, and to vote for the reversal of the judgment and order appealed from, and the granting of a new trial, with costs to the appellant to abide the event.

(75 App. Div. 561.)

SCOTT v. CONN.

(Supreme Court. Appellate Division, First Department. November 7, 1902.) 1. INDEMNITY-LIABILITY OF INDEMNITOR-CONDITION PRECEDENT - ACTION AGAINST PERSON PRIMARILY LIABLE.

Where, in an action on a contract to indemnify plaintiff on failure of a corporation to perform its contract, the indemnitor denied liability on the ground that no suit had been instituted to enforce the contract against the corporation, and that plaintiff's damages had never been ascertained, etc., a reply alleging that plaintiff's failure to institute such proceedings was due to the corporation's insolvency was sufficient.

Appeal from special term, New York county.

Action by Walter Scott against Charles G. Conn. From an interlocutory judgment overruling a demurrer to a part of a reply to an answer, defendant appeals. Affirmed.

Argued before VAN BRUNT, P. J., and HATCH, O'BRIEN, INGRAHAM, and LAUGHLIN, JJ.

Henry J. McCormick, for appellant.
Charles D. Ridgway, for respondent.

HATCH, J. It appears by the averments of the complaint that the plaintiff was engaged in business in the city of New York under the name of Walter Scott & Co.; that on or about July 29, 1895, the plaintiff entered into a contract with the Washington Times Company, of Washington, D. C., a corporation then owning and publishing a newspaper known as the Times; that by the terms of the contract the plaintiff agreed to manufacture and deliver to the newspaper corporation two printing presses at a specified price; that the plaintiff duly performed his contract, manufactured said presses, and tendered delivery of the same, but that the said corporation refused to receive the same, or otherwise perform its contract. It was further averred that at the time of entering into said contract the defendant promised and agreed, as an inducement to the making of the same, that, in the event of the sale of the newspaper, he would indemnify the plaintiff from loss he might sustain by reason of the failure of the corporation to perform its contract. It is further averred that the said corporation subsequently sold its said newspaper, and is now insolvent, and that by reason of the premises plaintiff is entitled to recover upon the agreement of indemnity; that he has frequently requested the defendant to perform his said contract, but that he has refused so to do. The defendant answered the complaint, and averred, among other things, that plaintiff has never brought any action at law or suit in equity, or sought to enforce in any way the contract against. the said corporation, and that plaintiff's damages have never been fixed or ascertained, nor has the amount been adjudged which the corporation is liable to pay on account of its failure to perform its contract, and that the plaintiff, by failing to pursue the principal debtor under the contract, has been guilty of such negligence as defeats this action. After issue was thus joined, the defendant procured an order directing that plaintiff reply to that portion of the answer which averred the failure to institute legal proceedings to enforce his claim against the corporation. The plaintiff replied thereto, admitting that he had never instituted an action at law or suit in equity to establish the liability of the said corporation, and further averred that during all the times mentioned in the complaint the said corporation was utterly insolvent and had no property from which a recovery of said damages could be had. To the reply defendant interposed a demurrer upon the ground that it was insufficient in law upon the face thereof. The demurrer was overruled at the special term, and interlocutory judgment entered thereon. From such judgment an appeal was taken to this court.

The contract of indemnity which the plaintiff seeks to enforce in this action is expressed in the complaint in the following language:

"As an inducement to the making of said contract said defendant promised and agreed with said plaintiff that, in the event of the sale of the said newspaper, he would indemnify the said plaintiff from any loss he might sustain by reason of the failure of the said Washington Times corporation to perform their said contract."

It is the contention of the defendant that this contract is to be construed as a simple guaranty upon the part of the defendant against loss sustained by reason of the failure of the corporation to perform.

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its contract; that, as a condition precedent to the maintenance of an action thereon, it must be made to appear that the party has sustained loss, and that such loss cannot be considered as established until such party has had the same adjudged in an appropriate action, and that process is unavailing to collect the same; that, as these facts must be proved in order to authorize a recovery, it is essential that they be pleaded, or no cause of action is stated in the complaint. The complaint does not contain such averment, and the reply expressly states that the plaintiff has never brought an action at law or a suit in equity against the corporation to enforce the claim. The plaintiff contends that the agreement is one of indemnity for the failure of the corporation to perform its contract and take and pay for the machines, in which event it seems to be conceded that no action would be necessary as a condition precedent to the maintenance of the action. We do not find it necessary in the disposition of the demurrer to determine the correctness of either contention, for, however determined, we think the reply should be sustained as a good pleading. It is averred in the complaint, and also in the reply, that the corporation is insolvent, and had no property out of which the plaintiff could have recovered his damages, or any part thereof. This being true, it shows that it would have been an idle ceremony to institute legal proceedings for the collection of the debt against the corporation. If, therefore, we assume that this is an indemnity to save harmless from loss, and not for the fulfillment of the contract, the loss is established, and the damage is measured by the sum agreed to be paid. Under such circumstances it is not an essential prerequisite that an action should have been commenced and prosecuted to judgment, awarding damage before resort may be had to the contract of indemnity. Ward v. Fryer's Ex'x, 19 Wend. 494. Where a proceeding to establish the loss is rendered impossible or impracticable, or facts appear showing that such proceeding would be futile, and barren of results, and the loss. can be otherwise established, an action is unnecessary to establish the same, unless the parties have by precise language stipulated therefor. Otto v. Van Riper, 164 N. Y. 536, 58 N. E. 643, 79 Am. St. Rep. 673. In the present case the pleadings show that an action, judgment, and execution would have been futile in result. It is not, therefore, a condition precedent to the maintenance of the action. against the indemnitor. The interlocutory judgment should therefore be affirmed, with costs, with leave to the defendant to withdraw the demurrer within 20 days on payment of the costs of this court and in the court below. All concur.

(75 App. Div. 532.)

CODDINGTON v. LARNER et al.

(Supreme Court, Appellate Division, First Department. November 7, 1902.) 1. MARRIAGE-ACTION TO ANNUL-PARTIES.

Notwithstanding Code Civ. Proc. § 1750, provides that a relative of a party to a marriage may maintain an action to have it annulled on the ground that the party was a lunatic, or that her consent was obtained by force or fraud, yet under sections 446-448, providing for parties having

an interest in the subject of the action being made plaintiffs or defendants, the person claimed to have been insane or overcome by force or fraud should be a party.

Appeal from special term, Kings county.

Action by Louise A. Coddington against Albert E. Larner. From an order denying application of Alma Louise Larner to be made a party defendant, she appeals. Reversed.

Argued before VAN BRUNT, P. J., and MCLAUGHLIN, O'BRIEN, and LAUGHLIN, JJ.

W. W. MacFarland, for appellant.
Charles Blandy, for respondent.

MCLAUGHLIN, J. On the 6th of June, 1899, Alma Louise Larner, the appellant herein, was married to the defendant, Albert E. Larner. On the 18th of May following she was adjudged, by reason of the excessive use of alcoholic stimulants, to be incapable of managing her person or her property, and committees were appointed for that purpose, who qualified, and since have been and now are acting as such. Thereafter this plaintiff, a daughter by a former marriage, brought this action to have the marriage of her mother with the defendant annulled, upon the ground that the appellant at the time she was married to the defendant was a lunatic and unable to understand the nature of the contract and its effect, and also that the marriage was procured by fraud and undue influence of the defendant. After issue had been joined in the action, the appellant, upon a petition verified by her, applied to the court for leave to be made a party defendant. Her application was denied, and from that order she has appealed.

The Code provides (section 1750) that any relative of a party to a marriage, "who has an interest to avoid the marriage," may maintain an action to have the same annulled on the ground that one of the parties to it, at the time the same was contracted, was a lunatic, or when the consent of such party was obtained by force, duress, or fraud. Section 1743, subds. 3, 4. But these sections of the Code must be read in connection with the other sections, which contemplate that all persons having an interest in the subject of the action shall be joined as plaintiffs or defendants. The appellant certainly has an interest in the subject of the action, and is a necessary party to it, and a determination cannot be had of the subject-matter of it unless she be made a party. Sections 446-448. It is certainly a novel, if not a startling, proposition that a judgment can be procured, dissolving a marriage contract, without having both of the parties to it before the court. Manifestly, this cannot be done. Fero v. Fero, 62 App. Div. 470, 70 N. Y. Supp. 742.

The order appealed from, therefore, must be reversed, with $10 costs and disbursements, and the motion granted, with $10 costs. All concur.