author: Lehman, J.

text:
    In the Matter of the Claim of Daniel Cameron, Respondent, against Ellis Construction Company et al., Appellants, and The United States Fidelity and Guaranty Company, Respondent. State Industrial Board, Respondent.
    (Argued October 2, 1929;
    decided January 7, 1930.)

      Francis J. MacIntyre and John V. Downey for Employers’ Mutual Insurance Company, appellant.
    The Workmen’s Compensation Law of this State is not applicable to this case and the Industrial Board did not have jurisdiction to make the award. (Smith v. Heine Boiler Co., 224 N. Y. 9; Gardner v. Horseheads Constr. Co., 171 App. Div. 66; Thompson v. Foundation Co., 188 App. Div. 506; Perlis v. Lederer, 189 App. Div. 425; Donohue v. Robertson Co., 205 App. Div. 176; Pritchard v. Norton Bros., 217 App. Div. 711; Day v. McClintic-Marshall, 215 App. Div. 733; Klein v. Stoller & Cook Co., 220 N. Y. 670; Fitzpatrick v. Blackall & Baldwin Co., 220 N. Y. 671.)

      Hamilton Ward, Attorney-General {E. C. Aiken of counsel), for the State Industrial Board, respondent.
    An award was properly made against the employer and insurance carrier although the accident occurred in Canada. (Gardner v. Horseheads Constr. Co., 171 App. Div. 66; Hospers v. Smith Co., 230 N. Y. 616; Anderson v. Jarrett-Chambers Co., Inc., 242 N. Y. 580; Ayers v. Dunn Pen & Pencil Co., 244 N. Y. 557.)

      John H. Broderick and Thomas H. Guy for United States Fidelity and Guaranty Company, respondent.
   Lehman, J.

The claimant, a resident of Canada, was injured while operating a gasoline engine át a sand pit situated at Dundee in the Dominion of Canada, near the boundary of the State of New York. Immediately across the boundary and within the State of New York, the employer, a Massachusetts corporation, was constructing a road. It operated the sand pit in Canada solely for the purpose of obtaining sand and gravel used in the road construction of New York. The claimant’s injuries arose out of and in the course of his employment. Though employed only for work at the sand pit in Canada, his work was incidental to a hazardous industrial enterprise conducted by the employer in the State of New York. On that ground, the Industrial Board has made an award of compensation, under the Workmen’s Compensation Law of this State (Cons. Laws, ch. 67), for injuries received in Canada by a Canadian resident while employed by a Massachusetts corporation to perform services solely within the territorial limits of Canada.

Nowhere in the Workmen’s Compensation Law is there an explicit definition of its territorial scope. Every employer subject to its provisions must secure compensation to his employees and pay or provide compensation for their disability or death from injury arising out of and in the course of the employment.” (§ 10.) In the language of the statute, read in the light of its humane purpose, this court has found the implication that it intends that in every case of employment there is a constructive contract between the employer and employee, general in its terms and unlimited as to territory, that the employer shall pay as provided by the act for a disability or the death of the employee as therein stated.” (Matter of Post v. Burger & Gohlke, 216 N. Y. 544.) The relations of employer and • employee arise by agreement. The Workmen’s Compensation Law regulates these relations from the time the employment begins. Obligations and rights under the statute are not elective. They rest upon the command of the State and not upon agreement of the parties. The concept of a constructive contract ” to assume obligations which are created by law is open to criticism. (Matter of Smith v. Heine Boiler Co., 224 N. Y. 9, and authorities there cited.) Even if, in a sense, it is only a fiction, it points the way to the principle that the obligations created by the Workmen’s Compensation Law are an integral part of the relations of employer and employee, and are coterminous with the employment regulated by the State. Obligation to pay or provide compensation for injury arising out of and in the course of an employment which is regulated by the Workmen’s Compensation Law, is imposed by the statute. The problem presented here is whether the State has undertaken to regulate the claimant’s employment at a fixed place in Canada.

Nothing in the statute suggests that the State of New York has attempted to stretch forth its arm to draw within the scope of its own regulations the relations of employer and employee in work conducted beyond its borders. Hazardous employment here is regulated by the Workmen’s Compensation Law; hazardous employment elsewhere, though connected with a business conducted here, does not come within its scope. Even where the contract of employment is made within the State, we have said that the State does not attempt to regulate the duty of foreign employers in the conduct of their business within foreign jurisdictions.” (Matter of Smith v. Heine Boiler Co., supra.) There we were dealing, as in this case, with a foreign employer. The principle is not, however, limited to foreign employers. "The statute imposes upon every employer, foreign or domestic, the duty to secure to his workmen compensation for injuries, wherever sustained, arising out of and in the course of employment located here. Absence of a workman from the State in the course of such employment does not interrupt that duty where the duty has been imposed upon the employer under the statute. It has not been imposed upon the employer in connection with employment located outside the State. The test in all cases is the place where the employment is located.

When the course of employment requires the workman to perform work beyond the borders of the State, a close question may at times be presented as to whether the employment itself is located here. Determination of that question may at times depend upon the relative weight to be given under all the circumstances to opposing considerations. The facts in each case, rather than juristic concepts, will govern such determination. Occasional transitory work beyond the State may reasonably be said to be work performed in the course of employment here; employment confined to work at a fixed place in another State is not employment within the State, for this State is concerned only remotely, if at all, with the conditions of such employment. Such illustrations may indicate the manner in which the test should be applied; we do not now attempt a more definite classification intended to cover all the varying circumstances that may enter into the question in other cases.

Here it seems to us quite evident that the claimant was not employed in New York. His employment required him to work only at a fixed place in Canada. In the previous year the claimant had been employed to do the same work in the same sand pit when that pit was operated by another employer for another purpose. Then the operation of the sand pit was subject exclusively to the police power of the jurisdiction where the sand pit was located. Even if we should assume that the State of New York by the exercise of its own police power may impose conditions upon the operation of the sand pit in a foreign jurisdiction where such operation is an incident of an industrial enterprise located here, we must still conclude that there is nothing in the statute to indicate that the State intended to do so. Where a workman employed in work here is called upon, in the course of his employment, to perform transitory work outside of this State, the employment as a whole remains an employment here. It is otherwise when the workman is employed to work at a fixed place or places outside the State.

In a number of cases this court has sustained awards for injuries received outside the State by a workman employed in a business conducted here. (Matter of Post v. Burger & Gohlke, supra; Matter of Spratt v. Sweeney & Gray Co., 216 N. Y. 763; Matter of Valentine v. Smith, Angevine & Co., 216 N. Y. 763; Matter of Klein v. Stoller & Cook Co., 220 N. Y. 670; Matter of Fitzpatrick v. Blackall & Baldwin Co., 220 N. Y. 671; Matter of Hospers v. Smith Co., 230 N. Y. 616; Matter of Anderson v. Jarrett-Chambers Co., 242 N. Y. 580; Matter of Ayers v. Dunn Pen & Pencil Co., 244 N. Y. 557.)

In most of these cases it is clear that the decision is in strict accordance with what we have said in this opinion (e. g., Matter of Post v. Burger & Gohlke, supra; Matter of Hospers v. Smith Co., supra; Matter of Ayers v. Dunn Pen & Pencil Co., supra); in none did the court intend to apply any test at variance with the principle that the Workmen’s Compensation Law applies only to employment within the State, and that award of compensation may be made for injuries sustained outside the State only where those injuries arise out of and in the course of employment which is located here. In defining, by the process of inclusion and exclusion, the scope of novel legislation, the courts must at first be guided by abstract reasoning and anticipation of probable consequences. Experience may at times demonstrate initial error. Then the error should not be perpetuated by strict adherence to earlier precedents. To the extent that the decisions in such cases as Matter of Anderson v. Jarrett-Chambers Co. (supra) may, on the reported facts, seem at variance with the principle that an award may not be made for injuries received in the course of employment at a fixed place outside the State, the cases must be regarded as precedents of doubtful validity.

The order of the Appellate Division and the award of the State Industrial Board should be reversed and the claim dismissed, with costs against the State Industrial Board in all courts.

Cardozo, Ch. J., Pound, Crane, Kellogg, O’Brien and Hubbs, JJ., concur.

Ordered accordingly.


source: Caselaw Access Project

license: Public Domain

text:
    June O’Tier, Respondent, v. Walter Sell, Appellant, Impleaded with Others.
    (Argued"November 18, 1929;
    decided January 7, 1930.)

      Charles E. Spencer for appellant.
    Substituted service upon the appellant was not authorized by section 285-a of the Highway Law and the court has not obtained jurisdiction by the service of the summons as made herein. (Pennoyer v. Neff, 95 U. S. 714; Harkness v. Hyde, 98 U. S. 476; Wilson v. Seligman, 144 U. S. 41; Goldey v. Morning News, 156 U. S. 518; Baker v. Baker, Eccles & Co., 242 U. S. 394.) The language of section 285-a expressly limits jurisdiction by substituted service to cases of accidents or collisions occurring while the non-resident is operating the motor vehicle. The appellant was not operating his automobile at the time of the accident within the meaning of the provisions of section 285-a. (Witherstine v. Employers’ Liability Assurance Corp., 235 N. Y. 168.) When the Legislature enacted section 285-a as an amendment to the Highway Law it must be deemed to have intended that the word “ operate ” should have the same meaning in that section as in other parts of the Highway Law and in accordance with the construction given by this court. (Orinoco Realty Co. v. Bandler, 233 N. Y. 24; Matter of Cole, 235 N. Y. 48.)

      Irving H. Lessen for respondent.
    The intention of the Legislature in the passage of section 285-a of the Highway Law was to give the courts jurisdiction of a non-resident whose motor vehicle was involved in a collision on the highways of this State as a result of its operation by himself or with his express or implied consent. (Farmers Bank v. Hale, 59 N. Y. 53; People ex rel. 23d St. R. R. Co. v. Commissioner of Taxes, 95 N. Y. 555; People ex rel. Peake v. Supervisors, 43 N. Y. 130; People ex rel. Jackson v. Potter, 47 N. Y. 379.) The operation of the motor vehicle by the non-resident in this case conferred jurisdiction on the courts of this State by service of the summons in the manner provided by section 285-a of the Highway Law. (Plaumbo v. Ryan, 213 App. Div. 517.)
   Lehman, J.

The complaint alleges that the plaintiff was injured in the county of Onondaga, State of New York, in a collision with an automobile owned by the defendant Sell and operated by Karl It. Trevor, an employee of the H. H. Franklin Manufacturing Company. The defendant Sell is a resident of Pennsylvania. In an action against a non-resident growing out of any accident or collision in which such non-resident may be involved while operating a motor vehicle ” on a public highway, the summons may be served in accordance with the provisions of section 285-a of the Highway Law (now section 52 of the Vehicle and Traffic Law; Cons. Laws, ch. 71) by leaving a copy with the Secretary of State. The plaintiff served the summons and complaint in that manner, and the defendant Sell moved to set aside that service on the ground that he was not “ operating ” the motor vehicle at the time of the accident.

It appears from the affidavits submitted upon the motion that Sell, an employee of the Franklin Company, drove his automobile to Syracuse to attend a convention of the employees of the company. While there Sell took his car to the factory of the Franklin Company and stated that he was having some trouble with the car. Trevor and Sell drove the car for an hour and a half; then Sell left the car at the factory with Trevor and Trevor stated “ that he would proceed immediately to find out what the trouble with said automobile was and repair the same and that he would report to Walter Sell.” The accident occurred the next day while Trevor was driving the car for the purpose of finding the “ trouble.” Sell was not at that time in the car.

Under the common law of this State the owner of a motor vehicle was responsible for injuries caused by his own negligence or the negligence of his agent in the operation of the vehicle. If the automobile was not being operated by the owner personally or through an agent, the owner was not responsible for the negligence of the operator. Section 282-e of the Highway Law (now section 59 of the Vehicle and Traffic Law) extended the owner’s responsibility to include negligence of a third party who operated a motor vehicle with the owner’s permission. Perhaps under the new statute the defendant Sell is responsible for the negligence of the operator of the car at the time of the accident. The operator was not Sell’s agent, but we assume for the present, without considering the correctness of the assumption, that Trevor was then operating the car with Sell’s permission within the meaning of the statute. In order to enforce the statutory liability, personal service within the State must be made upon the defendant Sell, unless the statute otherwise provides. The statute does provide for constructive service upon a non-resident in an action “ growing out of any accident or collision in which such nonresident may be involved ” while operating a motor car. We are asked by construction to read into the words “ while operating a motor vehicle ” an additional clause “ or while the car is being operated with his permission, express or implied.” That we may not do.

We have said that “ the word ‘ operate ’ is used throughout the statute [Highway Law] as signifying a personal act in working the mechanism of the car. The driver operates the car for the owner, but the owner does not operate the car unless he drives it himself. If the meaning were extended to include an owner acting either by himself or by agents or employees, the provisions of the Highway Law would be replete with repetitious jargon.” (Witherstine v. Employers Liability Assur. Corp., 235 N. Y. 168.) In that case construction of the statute was merely ancillary to construction of an insurance policy. Section 285-a was not at that time part of the statute, but what the court then said must have indicated to the Legislature the significance which the court would probably attach to the use of the word operate ” in any amendment to the statute.

We do not overlook the fact that in the meanwhile the Legislature by section 282-e of the Highway Law had enlarged the responsibility of the owner of a motor vehicle to cover injuries caused by the negligence of a person operating the vehicle with the owner’s permission. In that section certainly the Legislature used the word “ operate ” as signifying a personal act.” If the Legislature had intended that operation with the permission of a non-resident owner of a motor vehicle on a public highway shall subject the non-resident to suit without personal service within the State, it could have used apt language to indicate its purpose. It has not done so. On the contrary, it has used language which excludes such a construction. If its language is construed in accordance with its ordinary significance, the statute is not unconstitutional. (Hess v. Palowski, 274 U. S. 352.) We are not called upon to determine whether it would be constitutional if given other construction.

The order of the Appellate Division should be reversed and that of the Special Term affirmed, with costs in this court and in the Appellate Division. The questions certified should be answered in the negative.

Pound, Crane, Kellogg, O’Brien and Hubbs, JJ., concur; Cardozo, Ch. J., not sitting.

Ordered accordingly.


author: Cabdozo, Ch. J.

text:
    Benjamin R. Kittredge, Appellant, v. William C. Langley, Respondent.

      (Argued December 4, 1929;
    decided January 7, 1930.)

      R. Randolph Hicks, George F. Canfield, and Evelyn P. Luquer for appellant.
    The fact that the judgment for the partnership debt could be rendered only against the resident partner, the other being out of the jurisdiction of the court, is immaterial, since the debt established in such an action does not lose its character of a partnership debt, but remains in equity a charge on the partnership property within the State of New York and the jurisdiction of its courts. (Burdick on Partnership [1st ed.], 77; Bindley on Partnership [4th ed.], 1054; Warren on Corporate Advantages without Incorporation, 148-150, 245; Brown v. Birdsall, 29 Barb. 549; Crehan v. Megargel, 234 N. Y. 67; Heckermann v. Young, 134 N. Y. 170; Whittemore v. Elliott, 7 Hun, 518; Atkins v. Prescott, 10 N. H. 120; Parker v. Danforth, 16 Mass. 299; Gay v. Johnson, 32 N. H. 167; Elliott v. Stevens, 38 N. H. 311; Inbusch
      v. Farwell, 66 U. S. 566; Lord v. Baldwin, 6 Pick. 348; Howe v. Kane, 2 Chandler [Wis.] 222.) The fact that the plaintiff is not entitled to a judgment at law under the provisions of sections 1197-1201 of the Civil Practice Act relating to joint judgments and remedies for their enforcement does not deprive the plaintiff of his equitable rights. (Brown v. Birdsall, 29 Barb. 549; Lane v. Salter, 51 N. Y. 1.) The plaintiff having established at law his claim as a firm creditor and having exhausted all his available remedies at law, is entitled to relief in equity against the equitable assets of the firm, although he has been unable to obtain a judgment in form against that firm. (McCartney v. Bostwick, 32 N. Y. 53; National Bank v. Wetmore, 124 N. Y. 241; People ex rel. Cauffman v. Van Buren, 136 N. Y. 252; Sherman v. Skuse, 166 N. Y. 345; DeCoppet v. Cone, 199 N. Y. 56; Trotter v. Lisman, 209 N. Y. 174.) The assets of a partnership, and especially the special capital of a limited partnership, are held subject to an equity in favor of the firm creditors. The special capital of a limited partnership is part of the firm’s assets, as such is primarily liable with the general assets for the firm’s obligations, and, therefore, cannot be withdrawn at the dissolution of the partnership before all claims against the firm have been paid. (Ames v. Downing, 1 Bradf. Sur. 321; Green v. Breck, 32 Barb. 74; Wilson v. Robertson, 21 N. Y. 587; Menagh v. Whitwell, 52 N. Y. 146; Bulger v. Rosa, 119 N. Y. 459; Van Alstyne v. Cook, 25 N. Y. 489; Bell v. Merrifield, 109 N. Y. 202; Fuhrmann v. von Pustau, 126 App. Div. 629; Coffin’s Appeal, 106 Penn. St. 280; Burdick on Partnership [1st ed.], 382; Harris v. Murray, 28 N. Y. 574; Met. Bank of New York v. Sirrett, 97 N. Y. 320; Casola v. Kugelman, 33 App. Div. 432.) The plaintiff is entitled to recover interest. (Civ. Prac. Act, § 480; Stoughton v. Lynch, 1 Johns. Ch. 467; Andrews v. Durant, 18 N. Y. 496; Mayor of New York, etc., v. Sands, 39 Hun, 519; Gilmore
      v. Hirschman, 188 App. Div. 218; Bell v. Merrifield, 109 N. Y. 202.)

      R. E. T. Riggs and A. S. Gilbert for respondent.
    The plaintiff failed to prove the allegations of his complaint. (Hall v. Lanning, 91 U. S. 160; Bienestok v. Ammidown, 155 N. Y. 47.) A special partner cannot be held liable for torts of the general partners. (Mc Knight v. Ratcliff, 44 Benn. St. 156.) The defendant had an absolute right to withdraw his capital contribution from the firm. (White v. Eiseman, 134 N. Y. 101; Fifth Avenue Bank v. Colgate, 120 N. Y. 381; President, etc., of Manhattan Co. v. Laimbeer, 108 N. Y. 578; Fuhrmann v. von Pustau, 126 App. Div. 629; Bliss v. Hornthal, 33 App. Div. 225; Baily v. Hornthal, 154 N. Y. 648; Bell v. Merrifield, 28 Hun, 219.) The plaintiff was never the owner of a “ debt ” nor a “ creditor ” until his claim was put into judgment. (Matter of Putnam, 193 Fed. Rep. 464; Matter of Kendrick & Co., 226 Fed. Rep. 978; Mock v. Stoddard, 177 Fed. Rep. 611; Matter of Weisenberg, 131 Fed. Rep. 517.)
   Cabdozo, Ch. J.

The action is in equity against the special partner in a limited partnership to charge him with liability to the extent of his capital contribution withdrawn from the partnership at or about the time of dissolution.

Grannis and Lawrence were stockbrokers in the city of New York. They formed in 1907 a limited partnership in which the present defendant, Langley, became the special partner with a capital contribution of $80,000. On May 1, 1908,' when the term of the limited partnership expired, its assets were left in the possession of a general partnership formed by the same partners, the debts being assumed. This latter partnership continued for a month only, and on June 1, 1908, was dissolved and liquidated. Langley and Lawrence acted as the liquidators. To Langley there was paid the $80,000 which he had contributed to the limited partnership. Grannis received a seat on the New York Stock Exchange, valued at that time at $71,000, which had been his contribution to the capital, and also $7,412.11 cash. Lawrence received cash in the amount of $10,599.70. There were no unpaid claims other than the plaintiff’s which amounted at that time to about $82,000, though by now with the accrued interest it has more than doubled. Notice of this claim had been given to the partnership in May, 1908, but not till April, 1914, was there any action to enforce it.

The action, when begun, was in tort for conversion. The two general partners, Grannis and Lawrence, and the special partner, Langley, were named as defendants, but the summons was served oh Lawrence and Langley only. Plaintiff had a verdict except as to the defendant Langley, as to whom the complaint was dismissed, for the reason that he was a special partner. Judgment was entered on the verdict against the firm of Grannis & Lawrence, Grannis not being served (Civ. Prac. Act, § 1197); and execution issued upon that judgment against the individual property of Lawrence and the joint property of the firm was returned unsatisfied. Thereafter, the defendant Grannis, appearing specially for that purpose only, moved to amend the judgment by striking his name therefrom on the ground that Civil Practice Act, section 1197, is limited by its terms to actions upon contract, and is not to be extended to one in tort for conversion. The Appellate Division upheld that contention, and its order modifying the judgment was affirmed by this court (Kittredge v. Grannis, 234 N. Y. 501). Still later, the judgment as thus modified was reversed and a new trial granted, for errors in the charge (Kittredge v. Grannis, 236 N. Y. 375).

The plaintiff, coming back for a new trial, changed his complaint from one in tort to one in quasi-contract, charging the same acts, however, that he had charged at the beginning. Again the plaintiff had a verdict, on which judgment was again entered against the firm under Civil Practice Act, section 1197, and execution against the firm property and against the individual property of Lawrence returned unsatisfied. Grannis again moved to amend the judgment by strildng out his name. The Appellate Division affirmed the judgment and also an order denying the amendment. Upon appeal to this court, the judgment was affirmed (Kittredge v. Grannis, 244 N. Y. 168), but the order denying the amendment was reversed and the amendment granted (Kittredge v. Grannis, 244 N. Y. 182). We held by a closely divided vote that since the action was in tort at the beginning, the amendment changing it to one in contract, though effective as to Lawrence, was ineffective as to Grannis. In view of the allegations of the original complaint the defendant Lawrence appeared at the trial only as an individual in defense of his own interests; the court could not give judgment which would affect the interest in joint property of other defendants not served (per Lehman, J., 244 N. Y. at p. 194).

The plaintiff began in the meanwhile the present suit in equity. The theory of the suit is that he has exhausted the legal remedies available against the general partners, and that the capital withdrawn by the special partner is now chargeable in equity with liabilities unpaid. The defendant, the special partner, maintains in opposition: (1) that the plaintiff has not exhausted his remdies at law; (2) that he has not established his claim by any judgment binding upon the special partner or by evidence dehors the judgment; and (3) that the capital contribution was rightfully withdrawn, and is now retained without obligation to refund it either to the firm or to a creditor. These grounds of opposition will be successively considered.

(1) We think the plaintiff has exhausted his remedy at law in such a sense and to such a degree that he may now resort to equity in the pursuit of equitable remedies. This question is quite distinct from the one whether he has established his debt by a judgment binding on the defendant, or must establish it anew. If that necessity be assumed, there is even then no insuperable barrier to equitable remedies where the case in its other aspects is referable to some acknowledged head of equity jurisdiction. Equity may still act because of the futility or inadequacy of remedies at law upon a showing that those remedies have been pursued to the limit of the possible and that there will be no injustice to the defendant through the failure to pursue them farther (Trotter v. Lisman, 209 N. Y. 174; National Tradesmen’s Bank v. Wetmore, 124 N. Y. 241; Patchen v. Rofkar, 12 App. Div. 475, 476; s. c., 52 App. Div. 367; People ex rel. Cauffman v. Van Buren, 136 N. Y. 252; Whitney v. Davis, 148 N. Y. 256; American Surety Co. v. Conner, 251 N. Y. 1, 5; First Nat. Bank v. Eastman, 144 Cal. 487, 493; Williams v. Adler-Goldman Commission Co., 227 Fed. Rep. 374; Bank of Commerce & Trusts v. McArthur, 256 Fed. Rep. 84; Quart v. Abbett, 102 Ind. 233, 242; Earle v. Grove, 92 Mich. 285, 290; 38 A. L. R. 269, 270, and cases there collated). Such a, showing is made upon the record now before us.

The plaintiff cannot stir another step in the pursuit of legal remedies. He has recovered a judgment against Lawrence and is still unable to collect it. He is not in a position to recover a judgment against Grannis or against Grannis and Lawrence jointly, for Grannis is now a resident of Massachusetts without an office or place of business in this State, and has steadily refused to submit himself to the jurisdiction of our courts. The plaintiff’s every effort to recover a joint judgment has been thwarted by an adverse ruling. If equity will not act now, it can never come to his relief at all, for there is nothing more that he can do (Trotter v. Lisman; National Tradesmen’s Bank v. Wetmore; Patchen v. Rofkar, supra).

A different conclusion might be called for if injustice would ensue to the defendant by recourse , to equity at this time without further compliance with preliminary conditions. The chance of such injustice is illusory. The defendant would profit nothing by the recovery and enforcement of a judgment for the misappropriated securities against the other partners jointly. This is evidenced in divers ways. Such a judgment was twice recovered, though modified later upon appeal. In each instance execution was issued against the joint property and returned unsatisfied while the judgment was still in force. The fact is thus established that the defendant's liability as special partner would not be reduced by a dollar if the judgment were standing against the firm just as it is now standing against Lawrence. The evidence thus furnished by the executions is confirmed by other evidence more recent. Grannis, examined under a commission in Massachusetts, testified upon this trial that neither he nor the firm had any assets in this State. There is not even a suggestion to the contrary. In such circumstances equity would be sacrificing the substance to the shadow if the tyranny of a formula, the mirage of an unattainable condition, should lead it to stay its hand.

(2) Assuming that there has been due exhaustion of the remedy at law, we approach the second question, the adequacy of the evidence to establish the misappropriation of the securities and the existence of a debt. We think the plaintiff might have been required, if the defendant had so chosen, to prove the debt anew without reference to the judgment. We think, however, that there has been a waiver of that requirement, a consent by the defendant that the evidence in the first action be accepted without repetition as evidence in this. If that is so, the debt was proved.

We have said that the judgment against Lawrence was not binding upon Langley, and that the cause of action, in default of waiver, must have been established once again. The ratio decidendi of our opinion when the judgment was modified by striking out the name of Grannis goes far to blaze the path for us, irrespective of decisions elsewhere. The implication is a strong one that the judgment as thus modified is binding upon Lawrence individually, and not upon any one else, whether a partner or a stranger (244 N. Y. 182, at p. 194). If we assume in favor of the plaintiff that the question is still open, the result will not be changed. The plaintiff pins his reliance on a group of common-law decisions. Typical and most important are Inbusch v. Farwell (1 Black, 566); Brown v. Birdsall (29 Barb. 549), and Walsh v. Kirby (228 Penn. St. 194, 197). They hold or are said to hold that in the circumstances there set forth a judgment against one partner is effective against the other partners in respect of their joint interests, and collectible in equity out of the equitable assets, if the others are non-residents and beyond the jurisdiction (cf. Gay v. Johnson, 32 N. H. 167; Whittemore v. Elliott, 7 Hun, 518; Powers v. Braley, 41 Mo. App. 556; Lane v. Salter, 51 N. Y. 1).

We make no attempt to analyze the cases closely or to say how far they can be reconciled with the judgments of this court. If they go as far as the plaintiff says they do and are consistent with our own pronouncements, they do not go far enough to control the case at hand. They are built, one and all, on the assumption that the nonresident partners were not amenable to service. In England the ancient practice was to procure a judgment of outlawry against the partners or co-debtors beyond the jurisdiction (Hall v. Banning, 91 U. S. 160, 166; Blessing v. McLinden, 81 N. J. L. 379). The plaintiff might then proceed against the partners he could' serve. It does not follow as of course that any others would be bound. Decisions are not lacking that a return by the sheriff, non est inventus, will receive the same effect as a judgment in the ancient form, since the process of outlawry is one unknown to our law (Nathanson v. Spitz, 19 R. I. 70, 73; Tappan v. Bruen, 5 Mass. 193). Proof of such a return, or its equivalent, is, however, the minimal requirement. Nowhere in the decisions is there holding or suggestion that in cases uncovered by the statute (Civ. Prac. Act, § 1197) a partner or a joint debtor, if present within the State, though resident elsewhere, will be affected as to his joint interest by a judgment against another (cf. Oakley v. Aspinwall, 4 N. Y. 513; Lane v. Salter, supra). This was the situation in respect of the defendant Grannis while the action for conversion, begun in April, 1914, was pending undetermined. He was a resident of Brookline, Mass., or of Greenwich, Conn., but from 1914 till 1917 he had an office in New York for the daily transaction of business in person. Whether his attendance at this office began at the commencement or at the end of 1914, the record is uncertain. In any event there was ample opportunity to serve him, for not till January, 1915, did Lawrence serve an answer in the action for conversion, and not till December, 1921, was the case brought on for trial. It does not even appear that a return, non est inventus, or the equivalent, was put in evidence by the plaintiff to supply an excuse for the omission. So far as the record shows, he proceeded against one when he could have served the process upon all, misled by his belief that he was protected by the statute (Civ. Prac. Act, § 1197). We are referred to no authority that would give effect to such a judgment except against the party served. If Grannis had an office in this State for the transaction of business in person where he was in regular attendance, he was not absent from the State within the meaning of our decisions, though resident abroad (Mack v. Mendels, 249 N. Y. 356). Service is impossible now, as it has been since 1917, when there was an abandonment of the office and a withdrawal from the State. We cannot say that it was impossible while the litigation was still young.

Assuming as we do that the plaintiff might have been required to prove his cause of action anew against Langley, we have yet to meet the question whether the requirement was waived.

The gist of the defendant’s contention on the trial was this, that there was no remedy in equity till the plaintiff had a judgment binding on the firm. Nowhere during the trial was there a suggestion of the point that though equity might act, there was need to prove the debt over again before the defendant could be charged. Not a little of the argument was directed to the pleadings. The complaint states the wrong to the plaintiff, the misappropriation of his securities, and follows this by a statement that for the wrong so committed he has a judgment against the firm. At the date when the complaint was served, the judgment had not yet been amended by striking out the name of Grannis. Counsel for the special partner, far from insisting that the misappropriation of the securities must be independently established, made the point upon the trial that nothing of the kind was necessary, since the cause of action pleaded was framed on the assumption that there had been a recovery of a judgment binding on the partnership. In moving later on, at the close of the plaintiff’s case, for a dismissal of the complaint, he launched the same attack. He was not urging the failure to make proof of the misappropriation over again by evidence dehors the judgment. What he was urging was the failure to make proof of a judgment corresponding to the judgment pleaded. A like attitude is revealed when, upon the denial of the motion, he advanced to the defense. The fact was then brought out that the judgment had been modified by striking out the name of Grannis with the result that in its altered form it was a judgment against Lawrence only. Upon this being shown, the plaintiff amended his complaint by allegations to the effect that the judgment so modified was the only form of judgment he was able to recover. Even then the defendant did not urge that the cause of action back of the judgment was to be made out again. He renewed the motion to dismiss upon the grounds previously urged at the end of the plaintiff’s case without hint of any others.

The inference of waiver would be inconclusive, however, if it rested upon silence only. Beyond the silence there is evidence of affirmative consent. Plaintiff did not limit his proof to the production of a judgment roll. He put in evidence the whole case, including all the testimony upon which' the judgment was recovered. The defendant might have insisted that the court should close its eyes to the testimony thus offered, unless and until it was repeated by the witnesses. Instead, he signified a willingness that it might be considered as it stood. This appears very plainly "from a colloquy between counsel. A question had arisen in respect of certain facts to be conceded. Counsel for the defendant offered an admission that the plaintiff on April 10, 1908, had delivered certain bonds to the firm of Coster, Knapp & Co., which the latter firm had transferred to the firm of Grannis & Lawrence, and he requested an admission from counsel for the plaintiff that Grannis & Lawrence had paid $86,000 for the bonds so delivered. Counsel for the plaintiff refused to concede anything except what was shown by the record then in evidence. To this counsel for the defendant retorted in effect that he- was not asking for the concession of anything which the record already in evidence would not establish independently. “I do not think,” he continued, “ that there is any other testimony or evidence as to the transaction itself other than what is contained in these voluminous records that is going to help us at this stage.” A moment later he observed: “ I am not going to have any further admissions as to the transaction itself, except such as appear in the record,” referring to the record of the other trial. I agree with you,” replied counsel for the plaintiff. “ I do not care for any.”

We think the fair inference from this discussion is that the evidence in the former action was to be deemed before the court to be considered and acted upon as evidence in this. There would certainly be injustice to the plaintiff if in the face of these concessions, tacit and express, the point were now upheld that proofs, capable of being duplicated, should have been gone over anew. This does not mean, however, that the trial judge was under a duty to draw the same inference from the evidence that had been drawn by the jury. Very likely he would concur, but h‘e was at liberty to dissent. The difficulty is that up to this time he has not found upon the subject either one way or the other. His opinion makes it clear that he did not think himself at liberty to base a finding of conversion upon the record of the other trial. This is shown also by his disposition' of requests to find. We said upon the last appeal (244 N. Y. at pp. 176, 177, 181) that a conversion, or what was equivalent to a conversion, by the firm of Coster, Knapp & Co., through the delivery of the securities to the firm of Grannis & Lawrence, had been established as a matter of law by uncontroverted evidence, but that the question whether the securities had been received with guilty knowledge was one of fact for the jury. The trial judge upon this trial refused to find the uncontradicted facts of delivery and sale, very plainly in the belief that the evidence was not before him. We think it was before him just as it had been before the jury.

(3) Assuming in plaintiff’s favor that the remedy at law has been shown to be inadequate and that misappropriation with guilty knowledge by the defendant’s general partners may be gathered from the record, we are brought to the question whether the defendant must respond in equity to the extent of the capital withdrawn.

The defendant’s limited partnership, organized in 1907, was subject to the Partnership Law of 1897 (L. 1897, ch. 420). The present law governing limited partnerships (Article 8 of the Partnership Law of 1922; amending Cons. Laws, ch. 39), which is substantially the Uniform Limited Partnership Act prepared by the Commissioners on Uniform State Laws, did not take effect till April, 1922, though an act substantially the same had been adopted a few years earlier (L. 1919, ch. 408). Under the act of 1897, a special partner was conceived to be a true partner, but with limited liability (Ames v. Downing, 1 Bradf. 321,326; Casola v. Kugelman, 33 App. Div. 428, 432,433). From this the consequence followed along with others that if he failed to comply in substance with the statutory requirements, he was liable to creditors as if the partnership were general (Van Ingen v. Whitman, 62 N. Y. 513; Durant v. Abendroth, 69 N. Y. 148; s. c., 97 N. Y. 132; Manhattan Co. v. Laimbeer, 108 N. Y. 578). Under the uniform act, the conception of his relation to the business has been modified not a little, with the result that liability has been withdrawn in many situations in which it would have been recognized before (see the Commissioners’ note to section 1 of the Uniform Limited Partnership Act). . Even under the uniform act, however (as will later be explained more fully), a special partner is liable, to the extent of his withdrawn capital, for the payment of a partnership liability where the assets left with the general partners, irrespective of their valuation at the time of dissolution, are thereafter found to be inadequate. A fortiori we may expect a like result to follow where the special partner is conceived of as a true partner, though one whose liability is limited.

The defendant concedes that a special partner must respond to the extent of his withdrawn contribution if the partnership is insolvent at the time of the withdrawal. The concession was hardly to be avoided in view of decisions of this court to the effect that the special partner in such circumstances is liable in equity, the remedy against the firm having been followed and exhausted (Bell v. Merrifield, 109 N. Y. 202; Baily v. Hornthal, 154 N. Y. 648; cf. Fuhrmann v. von Pustau, 126 App. Div. 629). The question is still open, however, whether the special partner may be charged at the instance of a creditor where at the time of the withdrawal of his capital contribution, the assets left with the general partners are sufficient at a fair valuation to discharge the outstanding liabilities, but have become inadequate thereafter. We think his obligation to creditors to the extent of his limited Habihty can be discharged by nothing less than payment (cf. Fuhrmann v. von Pustau, supra; Coffin’s Appeal, 106 Penn. St. 280, 285; Snyder v. Leland, 127 Mass. 291). The general partners are not reheved of their Habihty to creditors by distributing the assets among themselves. They remain Hable in solido. The special partner does not relieve himself of Habihty by withdrawing his contribution. He remains Hable as before, though as before his Habihty is limited. A case may be supposed where a special partner receives in cash his capital contribution, the general partners retaining property sufficient at a fair valuation to pay the debts in fuH, but the next day or the next hour the property is destroyed by earthquake, flood or fire. The conclusion is hardly thinkable that the special partner may keep the cash, and leave the creditors with nothing. His contribution, like the capital of a corporation and to a similar extent, is to be treated as a trust fund for the discharge of Habifities (Hurd v. N. Y. & C. Steam Laundry Co., 167 N. Y. 89; Hazard v. Wight, 201 N. Y. 399; Irvine v. N. Y. Edison Co., 207 N. Y. 425; Hollins v. Brierfield Coal & Iron Co., 150 U. S. 371, 385), and this whether the Hability has its origin in contract or in tort (Matter of Peck, 206 N. Y. 55). He can gain nothing for himself out of the fund so created, except in subordination to the creditors, until the debts have been extinguished. What was left with the general partners in this instance was cash in bank to the extent of $18,011.81, and a stock exchange seat, of the value of $71,000, available for creditors, if at aU, through the aid of equitable remedies. Nothing was left that was subject to execution at law. There was not even a promise by the general partners to hold .these equitable assets intact while the plaintiff’s contested claim was in course of liquidation. Without dissent from the defendant, they divided what had been left and used it for themselves. By the time that the plaintiff was armed with an execution, the assets had been wasted or their value had evaporated. The special partner insists that the risk of change was on the creditors. We think it was on him.

There is reinforcement for this conclusion in the provisions of the statute. Even in relation to the partners inter se, a special partner may not receive any part of his capital contribution until all liabilities of the partnership, except liabilities to general partners and to limited partners on account of their contributions, have been paid or there remains property of the partnership sufficient to pay them ” (Uniform Limited Partnership Act, § 16, subd. 1-a; New York Partnership Law, § 105, subd. 1-a). This, standing by itself, might seem to justify the contention that the payment might be kept if what was left was then adequate, though inadequate thereafter. The. inference is seen to be erroneous when we read the section following. By the next section it is . provided that when a contributor has rightfully received the return in whole or in part of the capital of his contribution, he is nevertheless liable to the partnership for any sum, not in excess of such return with interest, necessary to discharge its liabilities to all creditors who extended credit or whose claims arose before such return ” (Uniform Limited Partnership Act, § 17, subd. 4; New York Partnership Law, § 1Ó6, subd. 4). The equity thereby established in favor of the partnership is one to which creditors succeed (Saunders v. Reilly, 105 N. Y. 12, 19; Bulger v. Rosa, 119 N. Y. 459; Case v. Beauregard, 99 U. S. 119, 127). Supplementing that section, and pointing to a like conelusion, is another and later section, which regulates the distribution of assets in the event of dissolution. Provision is there made (Uniform Limited Partnership Act, § 23; New York Partnership Law, § 112) that the claims of creditors shall have priority over those of special partners for capital contributions, though the claims of special partners are to have priority over those of their associates. We are not unmindful of the fact that these provisions of the statute do not govern this partnership, which was organized and dissolved before the statute was enacted. We think that in their general tenor they are declaratory of existing law.

The defendant makes the point that if he is liable for anything, the limit of liability is the capital withdrawn, and that interest must be excluded. We see no adequate reason for upholding the exclusion. Undoubtedly, the liability is to be limited to the capital contribution as long as the contribution is left at the risk of the business. When, however, it is withdrawn from the business, with the result that it has become available for the use of the partner individually, the interest which has been earned, presumably, through the employment of the capital, must be included as part of the sum to be refunded. The statute in its present form is explicit to that effect (Uniform Limited Partnership Act, § 17, subd. 4; New York Partnership Law, § 106, subd. 4). The general principles of equity enforce a like conclusion (Stoughton v. Lynch, 1 Johns. Ch. 467; Bell v. Merrifield, supra; Woerz v. Schumacher, 161 N. Y. 530, 538).

The judgment of the Appellate Division and that of the Special Term should be reversed and a new trial granted with costs to abide the event.

Pound, Crane, Lehman, Kellogg, O’Brien and Hubbs, JJ., concur.

Judgments reversed, etc.


author: O’Brien, J.

text:
    Isabelle E. Boyd, Appellant, v. Robert H. Boyd, Defendant, and Blanchard P. Atkinson, Respondent.
    (Argued December 4, 1929;
    decided January 7, 1930.)

      I. Maurice Wormser and Harry N. Selvage for appellant.
    The Court of Appeals has the power, and it is its duty, to review the findings of fact. Due weight must be accorded to the original findings of the Special Term justice,. who saw and heard the witnesses and was in a better position to determine their reliability and veracity than the Appellate Division. (State Const, art. VI, § 7; Civ. Prac. Act, § 589, subd. 2; Van Bergh, New York Court of Appeals Jurisdiction & Practice, chap. 2, p. 33; Exchange Bakery & Restaurant, Inc., v. Rifkin, 245 N. Y. 260; Prager v. N. J. F. & P. G. Ins. Co., 245 N. Y. 1; Matter of Flagler, 248 N. Y. 415; Forstmann v. Joray Holding Co., Inc., 244 N. Y. 22; Baird v. Mayor, 96 N. Y. 562; Vermilyea v. Palmer, 52 N. Y. 471; Knickerbocker Life Ins. Co. v. Nelson, 78 N. Y. 137; Van Wyck v. Watters, 81 N. Y. 352; Shultz v. Hoagland, 85 N. Y. 464.) The facts clearly establish all the elements necessary to constitute a common-law marriage. (Gall v. Gall, 114 N. Y. 109; Townsend v. Van Buskirk, 33 Misc. Rep. 287; Matter of Terwilliger, 63 Misc. Rep. 479; Hynes v. McDermott, 91 N. Y. 451; Caujolle v. Ferrie, 23 N. Y. 90; Procita v. Procita, 190 N. Y. Supp. 21; Graham v. Graham, 211 App. Div. 580; Smith v. Smith, 194 App. Div. 543; Matter of Brush, 25 App. Div. 610; Christy v. Clarke, 45 Barb. 529; Matter of Seymour, 113 Misc. Rep. 421; Sorenson v. Sorenson, 219 App. Div. 344.)

      Frank C. Laughlin and H. Preston Coursen for respondent.
    The Court of Appeals may review the facts. (Civ. Prac. Act, § 589, subd. 2.) The testimony of Jane Morgan was clearly incompetent and the reception of her testimony over the objections and exceptions of the respondent was error and requires that her testimony be disregarded. (Dysart Peerage Case, 6 App. Cas. 489; Matter of Taylor, 9 Paige, 611; Stackhouse v. Stotenbur, 22 App. Div. 312; Eisenlord v. Clum, 126 N. Y. 552; 19 Am. & Eng. Ency. of Law, 1200; Drawdy v. Hesters, 130 Ga. 161.) The evidence adduced by plaintiff does not establish the alleged common-law marriage. (Gall v. Gall, 114 N. Y. 109; Harbeck v. Harbeck, 102 N. Y. 714; Badger v. Badger, 88 N. Y. 546; O’Gara v. Eisenlohr, 38 N. Y. 296; Clayton v. Wardell, 4 N. Y. 230; Dietrich v. Dietrich, 128 App. Div. 564; Foster v. Hawley, 8 Hun, 62; Matter of Farley,
      91 Misc. Rep. 185; Bell v. Clarke, 45 Misc. Rep. 272; Matter of Rossignot, 112 N. Y. Supp. 353; Bates v. Bates, 7 Misc. Rep. 547; Spencer v. Spencer, 84 Misc. Rep. 264; Moller v. Sommer, 86 Misc. Rep. 110.)
   O’Brien, J.

In Kings county is now pending an action for the annulment of a marriage in which this intervening defendant, Blanchard P. Atkinson, is plaintiff, and the plaintiff in this action, Isabelle E. Boyd or Atkinson, is defendant (Atkinson v. Atkinson, 217 App. Div. 96). Therein the issue is whether Isabelle, when she participated in a marriage ceremony with Atkinson, was already married to Robert H. Boyd, now one of the defendants here. It is awaiting a new trial and will be determined in accordance with the result in the suit before us. This one, in which Atkinson has intervened as a party defendant, was instituted in Bronx county by Isabelle against Boyd to annul her marriage to him upon the ground that, when she joined in a ceremony with him, a common-law marriage existed between him and Annie Bernes. At Special Term such a common-law marriage was established. By the order of the Appellate Division, the findings and conclusions were reversed, new findings made and final judgment was directed dismissing the complaint. Since the reversal was not only on the law but also on the facts and new findings were made, our duty is to review the facts. (Forstmann v. Joray Holding Co., Inc., 244 N. Y. 22; Prager v. N. J. Fidelity & Plate Glass Ins. Co., 245 N. Y. 1; Exchange Bakery & Restaurant, Inc., v. Rifkin, 245 N. Y. 260; Matter of Flagler, 248 N. Y. 415.)

The only issue before us relates to the question whether Boyd and Annie Bernes contracted a common-law marriage. The evidence, if credible, establishes such a marriage. In the record is embodied testimony of an unusual nature but not, as we think, beyond the bounds of probability. The ultimate issue is reduced to one of credibility.

In the year 1878 Annie Bernes was nineteen years of age and Robert Boyd was twenty-four. She was a dressmaker living alone in Little Jones street' on the lower west side of New York. He was a ship carpenter employed in the yards at Jersey City and living in that vicinity. A casual meeting occurred between them and on the first day of their acquaintance they entered into meretricious relations. For six months they lived together in Little Jones street and then, according to Boyd, they signed a marriage agreement and he gave her a wedding ring engraved with the initials R. to A.” The giving of the ring was for the purpose, as he expressed it, “ to bind the bargain like.” He thought that unless she had a ring, the marriage would not be full fledged.” Because they had made their agreement, he never took her to a minister. They did not think it necessary. She became known as Mrs. Boyd and he introduced her as his wife. Half a dozen times the witness Palmer visited the house in Little Jones street and was informed by Boyd that Annie was his wife. For a year and a half they lived there. Twice they separated but each time he returned. For three years they lived on Steuben street in Jersey City and during that time Boyd contracted a ceremonial marriage with Isabelle Ellen Milligan, the plaintiff in this action. Then he seems to have embarked upon a double fife. As late as February, 1894, the witness Moran knew Boyd and Annie Bernes, then living together on Van Horn street in Jersey City, as Mr. and Mrs. Boyd. In June of the same year the witness Morgan knew Boyd and the present plaintiff, then living together on Boyd avenue in Jersey City, also as Mr. and Mrs. Boyd. During that month, according to Mrs. Morgan, Annie Bernes appeared at the Morgan home, displayed her marriage agreement and her wedding ring and threatened Boyd with prosecution for bigamy. Within a few days he told Mrs. Morgan that he was in trouble, could stay there no longer and was going away. He left a letter in which he stated that Annie Bernes was known as Annie Boyd and that he had allowed her to tell her friends that they were married. Many years later he admitted to two of defendant Atkinson’s witnesses, as they testify, that he had in fact given her a wedding ring, but only for the purpose of concealing from his parents the fact that he was living with a woman who was not his wife. A few days after the delivery of the threat to prosecute for bigamy, Boyd, abandoning the present plaintiff as well as Annie Bernes, departed for San Francisco. In the year 1903 Annie Bernes died and Boyd returned from California. During the interval, in 1901, plaintiff had married Atkinson who, after twenty-two years of life with her, has made her defendant in the Kings county action for annulment. Although in this record there is no competent evidence of a third marriage by Boyd, counsel for'plaintiff stated unchallenged at the trial that in 1903 or 1904 he married Viola Glad and that offspring of that pair survives. Counsel for Atkinson in their brief in this court twice refer to and apparently concede the existence of this third affair and the survival of offspring.

No part of the evidence is viewed by us as incredible. The tangled course of Boyd and Annie Bernes, as related at the trial, embraces no more improbable features than that of thousands whose ways of life are inscribed in history and in the archives of the courts. Many an-outcast, eager for a lawful status, has succeeded, at times even by bell and book and candle, at times only by written line or oral word, in persuading her paramour to raise her from her debased condition. In her ambition to become a wife, Annie Bernes might have copied the marriage lines from some document or she might have retained a lawyer to draw them for her before she presented them to her companion for signature. A rover like Boyd, if invited to transform a mistress into a wife, would probably indulge in no nice discrimination and, if he agreed per verba de prcesenti, he might, at the time at least, have intended to keep his promise. With the passing of the years his sense of marital responsibility would doubtless become even duller and more blunt. In his next affair he might not be unwilling carelessly to conform with the conventions and to submit to formal rite. If he committed bigamy, he could scarcely be expected, at the time, to declare otherwise than that his second marriage was his first. Self-protection would so impel him. Scruples would not impede him. When confronted by a deserted woman who claimed to be bis wife and threatened by her with prosecution for bigamy, what conduct more natural, if the charge were true, than swift departure from the State, residence outside its jurisdiction during the rest of that woman’s life and abstention from further marriage until her death? He abandoned his common-law wife, if she was one, in no less ruthless a spirit than that in which he deserted the wife, if she was one, whom he had taken by formal ceremony. In after years, in the State where he had lived with both, he married again when the first was dead and the second living. Omission to tell the whole truth on this and on the former trial is consistent with a desire to refrain as long as possible from admission of facts which brand his act as the commission of the crime of bigamy. Mrs. Morgan’s recitation of the marriage agreement, unseen by her for so many years, is an uncommon feat of memory but even the achievement of such an exploit is not outside the realm of probability. A man and a woman, to all appearance a true married pair, dwell in her house. A second woman arrives and creates a painful and turbulent scene. That woman proclaims herself the real wife, displays a marriage agreement and a wedding ring and utters a declaration of intention to prosecute for crime. Had any other such dramatic event ever occurred in the commonplace life of this prosaic housewife? As the trial justice believed, that experience might well make an indelible impression on her memory. 1

The validity of any alleged common-law marriage is always open to suspicion. Especially is doubt justified when one of the parties is dead. Clear, consistent and convincing evidence is required to establish the fact. This natural suspicion must, however, be dispelled when testimony, if reasonably believed, proves the existence of circumstances inconsistent with the absence of the alleged marriage. If the testimony in this record be not perjured to the effect that, immediately after threats of prosecution for bigamy had been uttered by a woman claiming to be a common-law wife, the alleged husband fled and during the lifetime of that woman remained outside the jurisdiction of the State where the crime was asserted to have been committed, then facts are proved tending in a very high degree to exclude any reasonable belief that the fugitive had been a bachelor when he pretended to marry the present plaintiff. Ordinary knowledge of human nature might impress the trial justice with a settled conviction that the normal man could not have been driven to flee from his home and a lawful wife by blackmailing threats of a discarded mistress to whom he owed no enforceable obligation. Motives for false swearing by him may be imagined, but neither are motives for telling the truth at this late day, even at the expense of exposing himself as a criminal in his young manhood, difficult to discover. Counsel for respondent suggest that he has a motive to commit perjury by reason of the fact that, if his marriage to plaintiff be annulled, he would be free from a charge of bigamy in marrying Viola Glad. On the other side of the scale, an equally reasonable inference for believing him to tell the truth can be drawn from the fact that his bigamous marriage with plaintiff was committed so many years ago that his crime is now stale and he will incur slight if any danger of prosecution and that his revelation of the truth will establish not only the validity of his marriage with Viola Glad but, with it, the legitimacy of their surviving son.

Either hypothesis is reasonable. Which is true? In a case so close as this, let the court of first instance decide. Face to face with living witnesses the original trier of the facts holds a position of advantage from which appellate judges are excluded. In doubtful cases the exercise of his power of observation often proves the most accurate method of ascertaining the truth. Annie Bernes may have held no higher place in fife than mistress of the man with whom she lived for sixteen years. She may have been his wife. In the presence of the judge, Boyd swore that he had taken her to wife. The judge heard the sound of his voice and gazed upon his countenance and tells us that he believes the witness spoke the truth. Mrs. Morgan swore that she read the marriage lines, saw the ring and heard the woman assert her status as a wife, and the judge declares her to be honest and reliable. Moran swore that, sixteen years after the inception of the meretricious affair, the couple were known to him as man and wife, and the judge describes him as impressive and convincing. How can we say the judge is wrong? We never saw the witnesses. No worldling could read the printed lines before us without pausing to reflect that such things as they recount do often happen. To believe that in fact they did happen to Annie Bernes and Robert Boyd is not to stamp one as too artless and ingenuous. To the sophistication and sagacity of the trial judge the law confides the duty of appraisal. If these witnesses imposed upon the credulity of an experienced fact finder, this court cannot correct him. His was the opportunity, the responsibility and the power to decide.

The judgment of the Appellate Division should be reversed and that of the Special Term affirmed, with costs in this court and in the Appellate Division.

Pound, Crane, Kellogg and Hubbs, JJ., concur; Cardozo, Ch. J., and Lehman, J., dissent.

Judgment accordingly.


author: Hubbs, J.

text:
    George R. Dyer et al., Appellants, v. Broadway Central Bank, Respondent.
    (Argued December 2, 1929;
    decided January 7, 1930.)

      Nathan L. Miller, John Godfrey Saxe and H. Bartow Farr for appellants.
    The transaction is not illegal or ultra vires.

      (Bath Gas Light Co. v. Claffy, 151 N. Y. 24; Langston & Whitney on Banking Practice, 309; Kniffen on Commercial Banking 511; Fiske on The Modern Bank, 154; Bendell v. De Dominicis, 251 N. Y. 305; Conklin v. Raymond, 127 App. Div. 663; Central Nat. Bank v. White, 139 N. Y. 631.)

      Joseph J. Corn for respondent.
    The enumeration of the powers and functions specified in the Banking Law prohibits the exercise by a bank of all other powers or functions. A contract involving the exercise of any such prohibited power or function is ultra vires, illegal, contrary to public policy, and unenforceable. (Pratt v. Short, 79 N. Y. 440; Nassau Bank v. Jones, 95 N. Y. 115; Gause v. Commonwealth Trust Co., 196 N. Y. 134; Jemison v. Citizens’ Sav. Bank, 122 N. Y. 135; California Bank v. Kennedy, 167 U. S. 362; Concord Nat. Bank v. Hawkins, 174 U. S. 364; First Nat. Bank v. Nat. Exch. Bank, 92 U. S. 122; Barron v. McKinnon, 196 Fed. Rep. 933; Leslie v. Lorillard, 110 N. Y. 519; People ex rel. Peabody v. Goldfogle, 213 App. Div. 710; 242 N. Y. 543.) Since the amended complaint shows on its face that the transactions in suit are against public policy, illegal and ultra vires, it was properly dismissed. (Sirkin v. Fourteenth Street Store, 124 App. Div. 384; Sayres v. Decker Automobile Co., 239 N. Y. 73; Sprague v. Webb, 168 App. Div. 292; Bank of Salina v. Alvord, 31 N. Y. 473; Dunham v. Hastings Pavement Co., 56 App. Div. 244; 118 App. Div. 127; 189 N. Y. 500; Drake v. Lauer, 93 App. Div. 86; 182 N. Y. 533; Barry v. Mulhall, 162 App. Div. 749; Chard v. Ryan-Parker Co., 182 App. Div. 455; Appleton v. Citizens’ Cent. Nat. Bank, 116 App. Div. 404; 119 App. Div. 889; Topken, Loring & Schwartz, Inc., v. Schwartz, 249 N. Y. 206; Oscanyan v. Arms Co., 103 U. S. 261; Dresser v. Traders Nat. Bank, 165 Mass. 120; Wood & Selick Co. v. Ball, 190 N. Y. 217; Welsbach Co. v. Norwich G. & E. Co., 180 N. Y. 533.)
   Hubbs, J.

The plaintiffs are stockbrokers, engaged in business in the city of New York. The defendant is a banking corporation organized under the laws of this State. The plaintiffs purchased certain stocks for the defendant upon its order. The original complaint alleged that the purchases were made “ for and on account of the defendant.” The defendant moved to dismiss the complaint for insufficiency. The motion was denied. The Appellate Division reversed the order and dismissed the complaint, but granted to plaintiffs permission to amend. (130 Misc. Rep. 842; 225 App. Div. 366.) Thereafter the complaint was amended so as to read that “ the plaintiffs, as brokers, at the request of the defendant, and on its promise to pay therefor immediately on delivery,” purchased the stocks ordered, that thereafter the plaintiffs delivered part of the stocks and the defendant paid therefor, and that the defendant refused to accept and pay for the balance of the stocks. This action is to recover the loss sustained by the plaintiffs because of the defendant’s breach of contract. The amended complaint was dismissed at Special Term upon motion before answer, and the order was affirmed by the Appellate Division. The basis of the decision, as stated by the Appellate Division, upon the first appeal, was that the complaint upon its face stated an illegal and void transaction.

The question for determination in this court, as stated by the learned counsel for the appellant, is May a bank in this state ever, under any circumstances, order the purchase of common stock from a stock exchange house, rendering itself liable as principal to its brokers for the purchase price? ”

"Upon a motion to dismiss a complaint upon the ground that it does not state facts sufficient to constitute a cause of action “ every intendment and fair inference is in favor of the pleading.” (Madole v. Gavin, 215 App. Div. 299; Marie v. Garrison, 83 N. Y. 14, 23.) If in any aspect upon the facts stated the plaintiff is entitled to a recovery, the motion should be denied.

The position of the respondent is that the complaint herein discloses absolutely and undisputably that the transaction is not only ultra vires but illegal and void, in contravention of public policy and the statutes of the State governing banking corporations.

It is well known that many depositors in banks deal directly with their banks in making purchases of stocks on the stock exchange. In fact, it is a matter of common knowledge and has been so recognized by this court. (Central Nat. Bank v. White, 139 N. Y. 631; LeMarchant v. Moore, 150 N. Y. 209, 215.) So far as we are advised, the Superintendent of Banks in this State has never raised any objection to that extensive practice. In determining this case, we should not close our minds to the well-known fact that the banking business in this country has developed rapidly during the last few years to meet the ever-growing demands of business. Banks ex necessitate have been required to extend their functions and perform services formerly foreign to the banking business. Courts have taken cognizance of that fact in passing upon cases involving questions of banking law. (American Surety Co. v. Philippine Nat. Bank, 245 N. Y. 116, 127.) We are not called upon to decide whether a State bank can legally for its own account purchase and hold common stocks as a permanent investment of its capital. That question is not present on this appeal. Undoubtedly there is no express provision of the statute authorizing a State bank to purchase certificates of stock except the particular stocks specified in the statutes. (Banking Law, § 106, subds. 3, 4 and 5; Cons. Laws, ch. 2.)

The position of the respondent is that the enumeration in the statute of specified powers prohibits the exercise of all other powers and functions and that a contract involving the exercise of any power or function not expressly conferred upon a bank by statute is necessarily illegal and unenforceable. The public policy of the State, expressed in statutes and judicial decisions, has treated banking as a business involving elements of trust and confidence. The State has limited the field of activities of banks and prescribed limitations upon the nature of their investments in an endeavor to make them and keep them financially safe and sound. Courts should be zealous to maintain the standards of safety which have been demonstrated to be essential for the continued safety of such institutions. On the other hand, care should be exercised not to cripple them and break down their usefulness by a narrow and unreasonable construction of the statutes which will result in unwisely limiting their usefulness in the transaction of business under modern conditions. (Whiting v. Hudson Trust Co., 234 N. Y. 394, 406.)

Section 106 of the Banking Law defines the general powers of banks, which are “ in addition to the powers conferred by the general and stock corporation laws.” Subdivision 1 grants to banks the power of loaning money on real or personal security; ” also all such incidental powers as shall be necessary to carry on the business of banking.” Subdivision 7 grants the power to receive * * * upon deposit for safe-keeping * * * stocks ” and other valuable securities. Section 13, subdivision 1, of the General Corporation Law (Cons. Laws, ch. 23) provides: A corporation shall not possess or exercise any powers unless given by law, or necessary to the powers so given.” Under the express provisions of the statute a bank may lawfully receive certificates of stock from its customers for safekeeping. It may also receive certificates of stock as collateral to loans. Under certain conditions it may be quite necessary for a bank to replace stock which has been lost by it or improperly disposed of. Under such circumstances it seems clear that the bank would be authorized to contract for the purchase of stocks to replace those lost or disposed of. The power to make such a contract would be among the “ incidental powers * * * necessary * * * to carry on the business of banking.” Doubtless other illustrations of the right of a bank to make a valid contract to purchase stocks could be given. These are sufficient for the purpose of conveying our view that not all contracts made by a bank for the purchase of stocks are necessarily unenforceable.

Whether such a contract is enforceable must depend upon the facts and circumstances under which the contract is made. It cannot be determined upon a motion to dismiss a complaint.

The learned counsel for the respondent has cited cases in the Federal courts to sustain his contention that all contracts by banks to purchase stock are void. Those cases were decided under the doctrine of ultra vires in all its severity as enforced in the Federal courts. Under the rule followed by the Federal courts, an ultra vires contract is void, not merely voidable. This court has adopted a more liberal rule, holding that not all ultra vires contracts are void, but that some are voidable only, and that a corporation which seeks to avoid such a contract must plead the facts entitling it to do so. (American Surety Co. v. Philippine Nat. Bank, supra; Appleton v. Citizens’ Central Nat. Bank, 190 N. Y. 417; Gordon Malting Co. v. Bartels Brewing Co., 206 N. Y. 528.)

The respondent relies upon the following cases in this State to sustain its contention that the complaint herein disclosed upon its face a void and illegal agreement: Pratt v. Short (79 N. Y. 437, 440); Nassau Bank v. Jones (95 N. Y. 115); Gause v. Commonwealth Trust Co. (196 N. Y. 134); Jemison v. Citizens’ Savings Bank (122 N. Y. 135); People ex rel. Peabody, Houghteling & Co., Inc., v. Goldfogle (213 App. Div. 710; affd., 242 N. Y. 543). None of those cases arose upon a demurrer or motion to dismiss a complaint upon the ground that it did not state facts sufficient to constitute a cause of action. That question was not considered in any of those cases and they do not sustain the respondent’s contention. The Jemison case decided that the defendant, a savings bank, upon the facts elicited at the trial, could not lawfully enter into a speculative contract for a short sale of cotton futures upon margin to be held for the bank’s account, the bank by the contract becoming, the broker’s debtor. That is far from holding that the complaint herein does not, under any circumstances, state a valid cause of action.

It is urged by the appellant that a bank has authority to purchase stock for its depositors as an incidental power * * * necessary * * * to carry on the business of banking.” This court has recognized the fact that banks have engaged in such transactions. (LeMairchant v. Moore, supra; Central Nat. Bank v. White, supra.)

Those cases, at least impliedly, recognized that a purchase of stock by a bank might be lawful. (See, also, People ex rel. Pratt v. Goldfogle, 242 N. Y. 277, 295.)

As the only question before us is the sufficiency of the complaint, we deem it advisable to limit our decision to that question. The judgment of the Appellate Division and that of the Special Term should be reversed, with costs in this court and in the Appellate Division and the motion to dismiss the complaint denied, with ten dollars costs.

Cardozo, Ch. J., Pound, Crane, Lehman, Kellogg and O’Brien, JJ., concur.

Judgments reversed, etc.


text:
    Village of Kenmore et al., Appellants, v. County of Erie et al., Respondents.
    (Argued December 3, 1929;
    decided January 7, 1930.)

      Simon Fleischmann, Martin Clark and Frank C. Moore for appellants.
    The provisions of the Village Law relating to the collection of unpaid village taxes merely provide a means and method for the effective collection thereof, and the Legislature had power to enact the same, and they are not of a jurisdictional nature. (Michigan Cent. R. R. Co. v. Powers, 201 U. S. 245; Lorillard v. Town, 11 N. Y. 392; County of Albany v. Hooker, 204 N. Y. 1; Town of Guilford v. Supervisors, 13 N. Y. 143; People v. Mayor, 4 N. Y. 419; People v. Board, 126 App. Div. 414.) The provisions of the Village Law relating to the imposing, spreading, levying and collection of village taxes were within the comprehensive power of the Legislature as to taxation and did not trench on constitutional restrictions or limitations. (Pardee v. Rayfield, 192 App. Div. 5; 230 N. Y. 543; People ex rel. Griffin v. Mayor, 4 N. Y. 419; Genet v. City of Brooklyn, 99 N. Y. 296; Gautier v. Ditmar, 204 N. Y. 20; Wilson v. Mayor, 1 Abb. Pr. 4; People v. Waldof, 168 App. Div. 473; Adriaansen v. Board of Education, 222 App. Div. 320; 248 N. Y. 542; Matter of Van Antwerp, 56 N. Y. 261; Matter of Wendel, 223 N. Y. 433; People ex rel. Clark v. Gilchrist, 243 N. Y. 173; Matter of Bryant, 152 N. Y. 412; Matter of Keeney, 194 N. Y. 281; Michigan Cent. R. R. Co. v. Powers, 201 U. S. 245.) The tax provisions of the Village Law are not violative of section 10 of article VIII of the State Constitution. (Board of Supervisors v. State, 153 N. Y. 279; Sun Publishing Assn. v. Mayor, 152 N. Y. 257; 1 McQuillin on Municipal Corp. § 112; Madden v. Lancaster, 65 Fed. Rep. 188; Comrs. v. Mighels, 7 Ohio St. 109; Askew v. Hale Co., 54 Ala. 639; Kahn v. Sutro, 114 Cal. 317; Moore v. Harrison, 224 Mich. 518; County of Albany v. Hooker, 204 N. Y. 1; People v. Fitch, 148 N. Y. 71; Buland v. Tuthill, 187 App. Div. 20.)

      Frank C. Laughlin, M. Edwin Merwin, Joseph W. Kirkpatrick and Stewart W. Bowers for respondents.
    Section 126-d of the Village Law (Laws of 1928, chap. 39) is unconstitutional in that it violates the provisions of section 10 of article VIII of the Constitution of the State of New York. (Fifth Avenue Coach Co. v. City of New York, 194 N. Y. 19; City of Rochester v. West, 164 N. Y. 510; Gilman v. Tucker, 128 N. Y. 190; Stuart v. Palmer, 74 N. Y. 183; Matter of Fleischmann v. Graves, 235 N. Y. 84; County of Albany v. Hooker, 204 N. Y. 1; Village of Haverstraw v. Eckerson, 194 N. Y. 54; Williams v. Port Chester, 97 App. Div. 84; 183 N. Y. 550; Berry v. Village of Port Jervis, 64 App. Div. 268; Horton v. Andrus, 191 N. Y. 231; Smith v. Smythe, 197 N. Y. 457; Matter of Borup, 182 N. Y. 222; Sun Publishing Assn. v. Mayor, 152 N. Y. 257; Matter of Mayor of N. Y., 99 N. Y. 569; Bush v. Board of Supervisors, 159 N. Y. 212; Weismer v. Village of Douglas, 64 N. Y. 91.) The fact that the Village Law (§§ 126-d and 126-e) contains provisions substantially the same in terms as those contained in the Education Law (§§ 435 and 436) does not furnish any legal ground for upholding the constitutionality of the former statute which in its application directly violates the express provisions of the Constitution while the latter does not appear to violate any constitutional provisions. (People ex rel. Wogan v. Rafferty, 208 N. Y. 451; Matter of Wendell v. Lavin, 246 N. Y. 115; Fairbank v. United States, 181 U. S. 283; United States v. Graham, 110 U. S. 219; United States v. Tanner, 147 U. S. 661; Board of Education v. Van Zandt, 119 Misc. Rep. 124; 204 App. Div. 856; 234 N. Y. 644; 1 Cooley on Taxation [4th ed.], 269.)

      H. L. Wallace for County of Oswego, amicus curies.

    Section 126-d of the Village Law violates section 10 of article VIII of the Constitution of the State of New York. (Matter of Town of Flatbush, 60 N. Y. 398.)

      E. W. Hofstatter for County of Rockland, amicus curice.

    Section 126-d of the Village Law, violates section 10 of article VIII of the Constitution of the State of New York. (Matter of Town of Flatbush, 60 N. Y. 398.)
   Lehman, J.

The Legislature has devised a plan by which the function of collecting unpaid village taxes has been shifted from the village officers to county officers. (Chapter 650 of the Laws of 1927.) The method is simple. The village board of trustees is required each year to transmit to the treasurer of the county a verified and certified account of the village taxes remaining due and unpaid and the County Treasurer is required to pay to the treasurer of the village the amount of -the taxes so returned unpaid. (Village Law, §§ 126-b, 126-d; Cons. Laws, ch. 64.) Then the board of supervisors must levy the taxes upon the lands upon which the same were imposed * * * and when collected the same shall be returned to the county treasurer to reimburse the amount so advanced with the expenses of collection.” (§ 126-e.)

Doubtless the system of levying and collecting taxes by officers of villages works imperfectly. Machinery devised for larger taxing districts than villages might function more efficiently and economically. Certainty that the village treasurer will receive the full amount of all village taxes levied is desirable for the village. To achieve that result, the Legislature has commanded that the county shall obtain either through taxes or loans moneys sufficient to pay to the villages, within its boundaries, the amount of the village taxes before the taxes are fully collected, and must assume the burden of collecting the unpaid' taxes and such risk as there may be that some of the taxes cannot be collected. The county of Erie, claiming that such commands exceed the power of the Legislature, has refused to accept from the village of Kenmore the account of unpaid taxes levied in the year 1928 or to pay to the village the amount of such unpaid taxes.

We are not concerned with the policy or expediency of the legislation. Subject only to the restrictions contained in the State and Federal Constitutions, the power of the Legislature is plenary. Obedience must be rendered to statutes which do not offend against such restrictions, even though they may seem to us impolitic; statutes which are beyond the- power of the Legislature are invalid, though they may be politically wise. Arguments based on public policy or expediency are irrelevant, except in so far as they may guide us towards a reasonable construction of the constitutional limitations.

“A county is a municipal corporation, comprising the inhabitants within its boundaries, and formed for the purpose of exercising the powers and discharging the duties of local government, and the administration of public affairs conferred upon it by law.” (County Law, § 3; Cons. Laws, ch. 11.) It is a corporation formed for the specific purpose of local government and administration. It is in effect a subdivision of governed territory established for the more convenient administration of government and having such powers as are necessary to be exercised for the welfare, advantage and protection of the public within their boundaries. “ While in the People resided the sovereign right to declare the general mode of their government, it was the appropriate duty of their legislative body to so arrange the territory of the state into civil divisions and to so apportion among them governmental duties, as would best conduce to the advantage of its citizens.” (Markey v. County of Queens, 154 N. Y. 675.)

In the same case the court pointed out that a county is a political subdivision of the State. A village is a municipal corporation invested with particular franchises. “A distinction exists between such a corporation, which is created by charter and is granted the power to own and to manage private property and is invested with particular franchises, and a municipal corporation, which is created for the purposes of state government and to exercise as one of its civil divisions, certain of its political powers.” A village is not, like a county, an involuntary corporation. Owners of property assessed for taxation may vote upon a proposition for the incorporation of territory as a village. (Village Law, § 9.) A village may take and hold real and personal estate absolutely or in trust for any public use, and its corporate powers extend beyond the field of local government and the administration of local affairs.

Doubtless the Legislature, in the exercise of its power and the performance of its duty to arrange the territory of the state into civil divisions and to so apportion among them governmental duties,” may use the county and its officers for the performance of such governmental functions or duties as it sees fit. School districts are, like counties, governmental subdivisions of the State, though their governmental function is confined to education. The State uses the machinery of county government to supplement the machinery of the school districts where the latter proves inefficient in the collection of school taxes. (Education Law, §§ 434-439; Cons. Laws, ch. 16.) These provisions of the law are perhaps in many respects analogous to the provisions of the Village Law now under consideration. Not in all. In the one case a burden is placed upon the county and all its inhabitants to assist a subordinate governmental subdivision in the exercise of a power and the discharge of a duty of local government. Moneys paid to a school district may be used for no other purpose, and since that purpose is governmental, it is a county purpose. (Horton v. Andrus, 191 N. Y. 231.) A city or village holds the proceeds of taxation as its corporate property. It may use the moneys received as it pleases for purposes of local government or for any other purpose within its corporate powers. In placing upon the county the burden of providing moneys to be used by the village for village purposes, the government of the State is not applying moneys of a governmental subdivision to governmental purposes performed through the agency of a subordinate subdivision. To the extent that the village has corporate powers which are not governmental; to the extent that the village is incorporated for purposes outside the field of local government and administration for which counties are formed, it is more than a governmental subdivision. (Matter of Northern Bank of New York, 85 Misc. Rep. 594; affd., on opinion below, 1G8 App. Div. 974; affd., 212 N. Y. 608.) Furnishing money which a village may use for purposes not governmental nor of State concern is not a county purpose. (Horton v. Andrus, supra; State ex rel. Town of Kirkwood v. County Court, 142 Mo. 575, at p. 584; Commissioners of Johnston County v. Lacy, 174 N. C. 141.)

These considerations narrow the scope of the question we must decide. We may in this case cast aside all questions of the power of the Legislature to place upon a whole county a burden of local government within a subdivision of the county. The question before us is whether the legislative power is restricted when it casts upon a county a burden for purposes other than local government.

Article VIII, section 10, of the Constitution provides that No county, city, town or village shall hereafter give any money or property, or loan its money or credit to or in aid of any individual, association or corporation, or become directly or indirectly the owner of stock in, or bonds of, any association or corporation; nor shall any such county, city, town or village be allowed to incur any indebtedness except for county, city, town or village purposes. This section shall not prevent such county, city, town or village from making such provision for the aid or support of its poor as may be authorized by law.” These provisions were inserted in the Constitution in 1874. Other provisions of section 10 limiting the amount of the indebtedness of municipal corporations have been added since. The earlier provisions have been preserved in their original form. In its present form the section prohibits any indebtedness except for county, city, town and village purposes, and limits the amount of indebtedness within that field. We are concerned with the prohibition not the limitation. The county of Erie cannot obey the legislative command without incurring an indebtedness for moneys sufficient to pay to the village of Kenmore the amount of the unpaid village taxes. The Legislature was restrained by the Constitution of the State from giving such command.

We need not now decide whether the Legislature could have compelled the counties óf the State to give from their own funds to villages the amount of unpaid village taxes, nor whether a county could be compelled to raise funds for such a purpose by taxation. We base our decision upon the express restriction of the Constitution, not upon any argument that other restrictions are implied. While section 126-d of the Village .Law provides that the amount of taxes returned unpaid by a village shall be paid out of any moneys in the county treasury raised for contingent expenses or for the purpose of paying the amount of the taxes so returned unpaid,” it also provides that such amount must be paid in any event even if there are no moneys in the treasury applicable to such purpose.” Obviously if there are no moneys in the treasury applicable to such purpose, the county can make the payment only by incurring an indebtedness in the form of a loan, and there can be no doubt that the Legislature intended as a necessary part of the procedure for carrying out the provisions of the statute that such indebtedness should be incurred.

It is argued that the constitutional restriction that a county shall not be allowed to incur any indebtedness except for county, city, town or village purposes ” should not be construed to include an indebtedness which the Legislature imposes upon it. We have held, or at least assumed, the contrary in Horton v. Andrus (supra). The object of the constitutional provision is to prevent a municipal corporation from being subjected to indebtedness for other purposes than those for. which it was created. In determining the effect of an analogous provision in a State Constitution upon indebtedness incurred under legislative command, the Supreme Court of the United States has said: “ The legislature could no more impose it than the county could voluntarily assume it, as against the disability of a constitutional prohibition.” (Lake County v. Rollins, 130 U. S. 662.) (See, also, Doon Township v. Cummins, 142 U. S. 366; Barnard & Co. v. Knox County, 105 Mo. 382; Commissioners of Johnston County v. Lacy, supra.)

It is true that in some other jurisdictions, courts construing provisions of State Constitutions limiting the amount of the indebtedness of municipal corporations, have construed the language of the Constitution as intended to include only indebtedness voluntarily assumed. (Lewis v. Widber, 99 Cal. 412; Rauch v. Chapman, 16 Wash. 568; Cladwin v. Ames, 30 Wash. 608; McCarthy v. City of Kelso, 129 Wash. 121; Thomas v. City of Burlington, 69 Iowa, 140, at p. 143; City of Springfield v. Edwards, 84 Ill. 626, at p. 632; O’Bryan v. City of Owensboro, 113 Ky. 680, at p. 692; Hume v. Wyand, 68 Okla. 261, at p. 262.) Sometimes the courts have based decision upon peculiar language of the constitutional provisions; more often upon an assumed necessity. A constitutional limitation upon the indebtedness of a municipal corporation should not receive a construction, it is said, which would at times render it impossible for a municipal corporation to carry out its governmental functions. In a limited field that argument may be sound. It may apply where the Constitution limits the amount of indebtedness which can be incurred for any purposes; it can have no application where the Constitution does not limit but entirely prohibits indebtedness incurred for other than county purposes.

Public policy may dictate that a limitation upon the indebtedness which may be incurred by a municipal corporation for its own purposes should not prevent the corporation from borrowing money to carry out the purposes for which it was formed, until such time as it might be able to raise the money through taxation. Therefore, when a limitation upon the indebtedness of a municipal corporation was inserted in article VIII, section 10, of the Constitution, provision was made that “ this section shall not be construed to prevent the issuing of certificates of indebtedness or revenue bonds issued in anticipation of the collection of taxes for amounts actually contained, or to be contained in the taxes for the year,” etc. The intent of the provision is clear, its language is unambiguous. It applies only to the limitation of indebtedness otherwise permitted; without perversion of its letter and spirit it cannot be made to apply as an exception to the earlier prohibition against a county incurring any indebtedness except for county purposes.

For these reasons, and without passing upon other objections, the judgment should be affirmed, with costs.

Cardozo, Ch. J., Pound, Crane, Kellogg, O’Brien and Hubbs, JJ., concur.

Judgment affirmed.


author: Per Curiam.

text:
    Arthur E. Fanroth, Appellant, v. James J. Byrne, as President of the Borough of Brooklyn, City of New York, et al., Respondents.
    (Argued December 5, 1929;
    decided January 7, 1930.)

      Charles L. Craig for appellant.
    The plaintiff has an easement of ingress and egress across the sidewalk of Surf avenue to Cook’s lane, and his property reached thereby, of which he is deprived by the judgment appealed from. (Kellinger v. Forty-second St. R. R. Co., 50 N. Y. 206; Story v. N. Y. Elevated R. R. Co., 90 N. Y. 122; Welsh v. Wilson, 101 N. Y. 254; Lahr v. Metropolitan Ry. Co., 104 N. Y. 269; Callinan v. Gilman, 107 N. Y. 360; Reining v. New York, L. & W. Ry. Co., 128 N. Y. 157; Egerer v. N. Y. C. & H. R. R. R. Co., 130 N. Y. 108; Lord v. Atkins, 138 N. Y. 184; Jergensen v. Squires, 144 N. Y. 280; Hatfield v. Strauss, 189 N. Y. 208; Lyman v.
      Village of Potsdam, 228 N. Y. 398; United States v. Grizzard, 219 U. S. 180.)

      Arthur J. W. Hilly, Corporation Counsel (Joseph P. Reilly of counsel), for respondent.
    The plaintiff did not establish his right to an injunction. (Lyon v. Batchford, 25 Hun, 57; Porous Plaster Co. v. Seabury, 1 N. Y. Supp. 134; Southern Leasing Co. v. Ludwig, 217 N. Y. 100; Interborough Rapid Transit Co. v. Lavin, 247 N. Y. 65.) An injunction herein would not protect any property right of the plaintiff, but would create or perpetuate a danger to pedestrians which might charge the city of New York with negligence and make it hable in damages. (Greeley Sight Seeing Co. v. Byrne, 224 App. Div. 752; High on Injunctions, §§ 587 and 1270; Spelling on Injunctions, § 222.)
   Per Curiam.

Defendants’ threat to construct a sidewalk curb across the entrance to plaintiff’s premises was stayed by injunction pending trial and, therefore, the finding of fact at Special Term to the effect that defendants prevented plaintiff from entering and leaving his premises is wholly without support. The proof is that, at all times up to and including the date of the trial, access was complete. On the record, defendants’ counsel conceded a total absence of right to construct a curb in such a manner as actually to keep plaintiff from his property. By the memorandum prepared by the Appellate Division full recognition is given to the principle that the maintenance of sidewalks and curbs is an administrative function within the reasonable control of defendants but that the conceded right of an abutting owner to cross a sidewalk with vehicles is not such an unlimited one as may be exercised without appropriate safeguards for the public. The conditions prescribed by the Appellate Division on the authority of Greeley Sight Seeing Co. v. Byrne (224 App. Div. 752) are within the discretion of that court. Plaintiff has failed to show that his right of access is not preserved with reasonable convenience to himself and to the public. If the curb hereafter constructed should prove to. be unreasonable our decision will be without prejudice to appropriate relief. The judgment should be affirmed, with costs.

Cardozo, Ch. J., Pound, Crane, Lehman, Kellogg, O’Brien and Hubbs, JJ., concur.

Judgment affirmed.