
    The Queensborough Gas & Electric Company, Respondent, v. Henry Schoncke and William Schoncke, Doing Business Under the Firm Name or Style of Schoncke Brothers, Appellants.
    (Supreme Court, Appellate Term, Second Department,
    March, 1912.)
    Municipal Courts — review — saving questions for review.
    Mistake—nature and importance of mistake in general — presumption of mistake — trial.
    In an action to recover for one-half of the electrical current claimed to have been supplied to defendants and which one-half was not billed to them because a mistake, for which defendants were in nowise to blame, was made in the reckoning of plaintiff’s employees who took monthly' statements from plaintiff’s own meter which would register but one-half of the current consumed for the reason- that defendants’ motor, which was near said meter and open to the inspection of plaintiff’s employees, was a “ double phase motor,” it was for the jury to say whether the defendants were supplied with more electrical current than the amount billed and paid for, and the direction of a verdict for plaintiff for the amount claimed, duly excepted to, was .reversible error. .
    Where the answer, by appropriate allegations, claims that plaintiff was negligent by reason of a mistake in reading its meter and that in the rendition of monthly bills, the amount óf which plaintiff was bound to ascertain and as to which defendants in no manner participated or contributed, they were not guilty of any wrong, fraud or deceit and should not be required to pay for-current which through plaintiff’s negligence or mistake had not been charged, as defendants could not recoup such loss, evidence tending to show that defendants in the- .conduct of their business added the cost of such electrical current as they .believed they were using to the prices charged for work done for their customers is competent, and its exclusion on plaintiff’s objection that it was incompetent, irrelevant and immaterial is error.
    Defendants’ equitable defense tending solely to defeat or reduce plaintiff’s claim was within the jurisdiction of the Municipal Court of the city of New York.
    Appeal' from a judgment for plaintiff entered upon a verdict directed by the Municipal Court of the city of Hew York, fourth district, borough of Queens.
    
      Joseph H. Kohan, for appellants.
    William Willett, Jr., for respondent.
   Kappee, J.

The pleadings were in writing. The complaint alleges that between the 14th day of May, 1909, and the 29th day of May, 1910, plaintiff furnished electrical current to the defendants of the reasonable value of $339.28, no part of which has been paid except the sum of $180.06, leaving a balance due and owing by the defendants to the plaintiff of $159.22.

The theory of the plaintiff’s'case may be stated briefly as follows: The defendants were engaged in a manufacturing business. Their machinery was operated by plaintiff’s electric power supplied to an electric motor installed by the defendants. The electrical current was measured on plaintiff’s own meter which it placed in defendants’ plant. The registratioKor ascertainment of the amount of current consumed by the defendants was made by the plaintiff through its employees monthly, and for the period of a year bills for such current as the plaintiff assumed was used were rendered monthly. Plaintiff claims that the motor of the defendants was what it characterized as a “ double phase motor,” and that where such a motor is in use its own meter would register but one-half of the actual current consumed. Hence it claims that, by mistake solely, it failed to render the proper bills to the defendants which, if so rendered, would have been for twice the amount of current registered on the meter. This action is brought to recover for the one-half of the current claimed to have been consumed by the defendants and which was not billed and ' charged to them by reason of this error, which amount, less a trade discount, represents the sum sued for. Plainly speaking, the plaintiff’s action is for furnishing a commodity which it manufactured and sold and delivered to the defendants and in the reckoning up of the quantity of which it made a mistake to the extent of fully one-half of the actual amount sold.

The evidence that, during all of the period for which the plaintiff claims the defendants used this extra quantity of current, the defendants made use of a. double phase motor,” was far from convincing. The proof may have sufficed to warrant the.conclusion that the plaintiff’s method of registration or recording of the amount of current consumed permits it to advance its present claim -that it was entitled to make a charge for double the number of kilowatts which the meter indicated. Odd as it may seem to the uninformed mind, the .plaintiff’s evidence was explicit that the meter would register the same whether the motor were a single or a double phase, and that it was only by the plaintiff’s inspection of the defendant’s motor • that it could be ascertained that the same, was a “ double phase motor ” and consuming the double amount of current. It is not contended that the defendants were in anywise to blame for the mistake in the bills or. that they withheld any knowledge of the character of the motor from the plaintiff. The motor was in propinquity to the meter and was open to plaintiff’s inspection at all times, and, if it be true that it would consume this excess amount of current, that was a fact which, the plaintiff knew at all times but was not a matter of knowledge to the defendants. Its use.by the latter was new at the. commencement of the period for which the present claim is sought to be imposed, prior to which time the" defendants’ manufacturing was carried oh by a caloric or air engine. At best the question was one of fact for a jury to say whether. the . defendants were supplied with more electrical current than the amount for which bills had been rendered and paid, but the court of its own motion directed a verdict for the plaintiff for the amount sued for, to which direction the defendants excepted, and for this error the judgment must be reversed.

As a new trial must be had, another question is, presented by this record which will undoubtedly b.e presented on the retrial and a disposition thereof is now necessary.

The..defendants sought to show that in the conduct, of their business they added the cost of such electrical current as they believed they were using to the prices charged by them to their customers for work. They contend that the plaintiff was negligent in any mistaken reading of its own meter and that, in the rendition of the bills monthly by the plaintiff to the defendants of the amount of the current consumed which the plaintiff itself was bound to ascertain and as to which the defendants in no manner participated or contributed, the defendants were not guilty of any wrong, fraud or deceit, nor of any act which misled the plaintiff, and that they, the defendants, should not now be required to. pay the plaintiff for any electrical current which the plaintiff through its own negligence or mistake failed to charge for, as the defendants cannot recoup such loss, and that a refusal to consider this defense works a hardship and an injustice upon them. The claim is presented by appropriate allegations in the defendants’ answer. One of the defendants as. a witness was asked a number of questions with a view of showing facts from which a finding might have been made that the defendants did actually conduct their business upon the basis of the expenditures incurred in its carrying on, that the cost of the electrical current entered into their operating charges and that they relied upon the bills presented monthly by the plaintiff as one of the bases of determining this operating cost.

To each and every question of the character indicated a ruling of exclusion was made by the court upon the objection of the plaintiff that the evidence was incompetent, irrelevant and immaterial. We think this proof should have been received.

The position of the defendants presents the doctrine of an equitable estoppel. ' It is that the plaintiff by his negligent conduct induced the defendants, acting in reliance thereon, to carry .on their business in such a way as to work an injury to the defendants if the plaintiff is to be now permitted to assert its rights to double the amount of its charges. ¡

It may be conceded that the plaintiff did not designedly mislead the defendants. But that the evidence warranted a finding that the plaintiff was' negligent to the defendants’ injury seems clear, if the contention of the defendants as to the effect of the excluded proof be the fact. While some of the adjudicated cases hold to the effect that to constitute an -equitable estoppel the persons sought to be estopped must do some act or make some admission with an intention of influencing the conduct of another, there is abundant authority for the proposition that a mistake arising from carelessness which produces injury to another may furnish a ground for such an estoppel. “A man is not.prevented by estoppel from telling the truth. He is only barred from the assertion of a right or title by some previous action or conduct on his part which would render the present assertion of his right unjust. * * * The equitable doctrine of estoppel may be enforced against one who has been guilty of no deceit but who has through innocent misapprehension induced another to rely upon his statements or conduct.” Bispham Eq. (8th ed.) § 280. In Manufacturers’ & Traders’ Bank v. Hazard, 30 N. Y. 226, 229, the court say: “It is-not necessary to an equitable estoppel, that the party should design to mislead. If his act is calculated to mislead, -and actually has misled, another acting upon it in good faith, and exercising reasonable care and diligence under all the circumstances, that is enough.” So, also, in Trustees of Brookhaven v. Smith, 118 N. Y. 634, 640, it was said: “It is not' necessary, as is claimed in one of the briefs submitted to us, by the appellant, to constitute an equitable estoppel that there should be a false representation or'concealment of material facts. Mor is it essential that the party sought to be estopped should design to mislead. , If his act was voluntary and calculated to mislead -and actually has misled another acting in good faith that is enough.” See also Blair v. Wait, 69 N. Y. 113, 116; Boardman v. Lake Shore & Mich. So. R. Co., 84 id. 157, 181; Conable v. Smith, 61 Hun, 185.

It follows, therefore, that error was committed in excluding the evidence offered by the defendants to establish their defense. This defense, equitable in character, is one which the Municipal Court, under the circumstances existing here, could entertain. While the court is one of statutory, and, therefore, limite'd jurisdiction, an equitable defense not seeking affirmative relief but tending solely to defeat or reduce the plaintiff’s claim is cognizable by that court in an action at law. That must be the rule here where the exclusion of the defense on the ground of its equitable nature would leave the defendants remediless.

Garretson and Stapleton, JJ., concur.

Judgment reversed and new trial ordered, costs to abide event.  