text:
    The City of Utica, Respondent, v. Tony Hanna, Appellant.

      (Argued June 20, 1928;
    decided July 19, 1928.)

      Herbert C. Sholes and D. Francis Searle for appellant.
    The court below erred in determining the defendant was not entitled to have an assessment of damages. (Matter of Meyer, 209 N. Y. 59; Genet v. D. & H. C. Co., 113 N. Y. 472; Eno v. N. Y. El. R. R. Co., 15 App. Div. 620; Kager v. Brenneman, 52 App. Div. 446; 165 N. Y. 674; Sponenburg v. City of Gloversville, 96 App. Div. 157; Witbeck v. Lockport L., H. & Power Co., 214 App. Div. 371.) The obtaining and acceptance of the order staying proceedings practically constituted a contract on the part of the plaintiff that it would pay all damages sustained by the defendant, and bound the plaintiff, (Matter of N. Y., L. & W. R. R. Co., 98 N. Y. 447; Hine v. N. Y. E. R. R. Co., 149 N. Y. 154; Brady v. Nally, 151 N. Y. 258; Matter of Clark, 168 N. Y. 437; N. Y. C. R. R. Co. v. Barnet, 192 App. Div. 784; Hocking U. R. R. Co. v. Barbour, 192 App. Div. 604.)

      Emerson M. Willis, Corporation Counsel (Ernest E. De Rosa and Harry M. Garvey of counsel), for respondent.
    The court at Special Term erred in granting the order appointing a referee to ascertain and determine the damages sustained by defendant by reason of the injunction order. (Lawton v. Green, 64 N. Y. 326; Palmer v. Foley, 71 N. Y. 106; City of Yonkers v. Fed. Sugar Ref. Co., 221 N. Y. 206; Herkimer Lumber Co. v. State of New York, 196 App. Div. 708.) There was no contract made by plaintiff and defendant binding plaintiff to pay all damages sustained by the defendant. (City of Yonkers v. Fed. Sugar Ref. Co., 221 N. Y. 206.)
   Cardozo, Ch. J.

Plaintiff, a municipal corporation, brought an action to restrain defendant from erecting or operating a gasoline station on land bordering upon a city street. A temporary injunction was granted without security or condition. A trial followed, and ended in a judgment dismissing the complaint. Plaintiff moved for a stay of the construction of the station during the pendency of an appeal. The motion was granted on the express condition that the plaintiff pay to the defendant all damages sustained by reason thereof and by-reason of the order made herein restraining the defendant,” provided the appellate court finally decided that the plaintiff was not entitled to the restraining order or to the injunction asked for in the complaint. The plaintiff took the benefit of this order, and acquiesced in its conditions. Upon the affirmance of the judgment the defendant moved for the appointment of a referee to assess the damages. An order for that relief, granted at Special Term, was reversed at the Appellate Division on the authority of City of Yonkers v. Federal Sugar Refining Co. (221 N. Y. 206).

We think the case at hand is untouched by that decision. There the situation was the same as it would be here if a stay had not been granted subject to a condition. What was there attempted was to charge the city of Yonkers with the damages resulting from a temporary injunction though no condition had been imposed and no security given. Liability was thought to follow from Code Civil Procedure, section 1990 (now Civil Practice Act, §§ 162, 820), to the effect that wherever a municipal corporation was exemptéd by the statute from the requirement of security upon procuring an order of injunction, it should be liable for all damages in the same case and to the same extent as sureties to an undertaking would have been if such an undertaking had been given.” We held that liability did not arise by force of the statute without more unless the “ extent ” of the maximum obligation had been measured by the order.

The question before us here is not one of liability by force of the provisions of a statute. It is one of liability by force of the acceptance of a condition imposed in return for the concession of a discretionary remedy. The city was required to assume liability for damages without arbitrary limit, or else give up the stay. We are not concerned to inquire whether the condition was erroneous. At least it was not void. The city was not at liberty to accept the benefit of a discretionary order, and reject the attendant burden. It might have refused the benefit of the stay, and let the judgment take its course. It might have appealed from the order denying relief except upon compliance with an overburdensome condition. It did nothing of the kind. It took the benefit of the stay and now rejects the condition as if the order had been absolute. Condition and benefit are not so easily dissevered.

We assume that the statute imposes a restriction upon power when it forbids a court or judge to require “security ” from a municipal corporation as a condition of an injunction or of any other relief (Code Civ. Pro. § 1990; Civ. Prac. Act, § 162). The purpose of that provision is to relieve a municipal corporation of an obligation to furnish sureties or cash. There is no exaction of “ security ” in the sense of the prohibition when a city is made to pledge its own credit in return for benefits received. The lawmakers cannot have meant that it should be beyond the power of the court to impose equitable terms for an equitable remedy. A distinction must be drawn, moreover, between duty and discretion. Amendments of the statute have put upon the court a duty, when it grants an injunction to a municipal corporation, to give the defendant the benefit of some measure of protection, a personal liability within the limits appropriate for sureties. Failure to make provision to that extent is a denial of a legal right of which a defendant may complain. We do not read the statute as depriving the court of its discretionary power to impose a condition even heavier, to make the stay dependent upon an assumption of liability for damages without arbitrary limit. Such a power has long been exercised by courts of equity as an effective expedient for the adjustment of its plastic remedies ” (City of Yonkers v. Fed. Sugar Ref. Co., supra, at p. 209; Mooney v. Byrne, 163 N. Y. 86, 97). An inroad upon a jurisdiction so inveterate and traditional will not be gathered as an inference from statutes of uncertain meaning.

The case is not affected by Civil Practice Act, section 571, which provides that “ upon an appeal taken by a domestic municipal corporation, * * * the service of the notice of appeal perfects the appeal and stays the execution of the judgment or order appealed from, without an undertaking or other security, unless the court requires security to be given.” The judgment in this case was one for the dismissal of the complaint. A notice of appeal had the effect of staying automatically the collection of the costs. It did not automatically revive or continue an injunction which was to last only during the suit and which fell by its own terms when the suit had been determined.

Authoritative decisions are to the effect that the proceeding is not strictly a motion in the action, but rather one outside of it, and so appealable of right. (Lawton v. Green, 64 N. Y. 326, at pp. 330, 331; Sargent v. St. Mary’s Asylum, 190 N. Y. 394; City of Yonkers v. Fed. Sugar Ref. Co., supra).

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

Pound, Andrews, Lehman, Kellogg and O’Brien, JJ., concur; Crane, J., not sitting.

Judgment accordingly.


source: Caselaw Access Project

author: Kellogg, J.

license: Public Domain

text:
    Irving A. Sartorious et al., Copartners under the Firm Name of Sartorious & Smith, Plaintiffs, v. William W. Cohen et al., Copartners under the Firm Name of William W. Cohen & Company, Appellants, and Louis P. Glass, Respondent, Impleaded with Others.
    (Argued June 7, 1928;
    decided July 19, 1928.)

      James F. Donnelly and Irwin M. Berliner for appellants.
    The defendant Glass, having full knowledge of the execution by the appellant of the trade and having failed to act for eleven days after such knowledge, fully adopted the trade and was bound thereby, especially since the market position changed against the broker. (Rockland-Rockport Lime Co. v. Leary, 203 N. Y. 469; Brown v. Palmer, 111 App. Div. 909; Schorestene v.
      Iselin, 69 Hun, 250; Matter of Aegra, etc., Bank, L. R. 2 Ch. 391; Maitland v. Chartered M. Bank, 2 H. & M. 440; Canada Union Bank v. Cole, 47 L. J. C. P. 100; Crowell v. Hopkinton, 45 N. H. 9; Beckwith v. Brackett, 97 N. Y. 52; Dent v. N. A. S. S. Co., 49 N. Y. 390; Knudtsen v. Remmel, 141 App. Div. 445; Miller v. McKenzie, 95 N. Y. 575; L'Amoreux v. Gould, 7 N. Y. 349.) If Glass desired to repudiate the trade executed by his broker, he owed the duty to the broker, after knowledge, with reasonable promptness to notify the broker of such repudiation, so that the broker might protect himself. (Glor v. Kelly, 49 App. Div. 617; 166 N. Y. 589; Merritt v. Bissell, 84 Hun, 194; 155 N. Y. 396; Hess, etc., Co. v. Baar, 14 Misc. Rep. 286; New York, Prov., etc., R. Co. v. Dixon, 114 N. Y. 80.)

      Max Rosenblum for respondent.
    It was the duty of the defendants William W. Cohen & Co., the appellants, to notify the plaintiffs of the transaction of November 9, 1925, that the plaintiffs were “ given up ” to the extent of 10,000 bushels December old wheat by their customer Glass, the respondent, through them, the defendants. (Rait v. Carpenter, 78 Misc. Rep. 385; Gruman v. Smith, 81 N. Y. 25.) The failure of the defendants-appellants to notify the plaintiffs of the transaction caused the loss which occurred and, therefore, it must be borne by them. (McKay v. Hudson, 118 Fed. Rep. 919; Rugg Co. v. Ormrod, 198 N. Y. 119; Allen v. McConihe, 124 N. Y. 342.)
   Kellogg, J.

This is an action brought by the plaintiffs, a firm of stockbrokers, against its customer, the defendant Louis P. Glass, and other defendants, who are stockbrokers, to declare the rights and liabilities of the parties in reference to a brokerage transaction, initiated by the defendant Louis P. Glass.

The defendant Glass had an account with the plaintiffs, through whom he frequently bought and sold securities and commodities. The books of the plaintiffs’ firm, on November 9, 1925, showed that Glass was long ” twenty thousand bushels of December old wheat. On that day Glass told the defendants Sailing W. Baruch and Company, a firm of brokers, to sell twenty thousand bushels of December old ¡wheat, and to give up ten thousand bushels to H. L. Horton and ten thousand to Sartorius and Smith, through W. W. Cohen and Company.” Pursuant to orders given by Baruch and Company ten thousand bushels of wheat were sold through or for the account of the defendant W. W. Cohen and Company. Immediate notice was given by Baruch and Company to Glass of the sale thus made. The Cohen firm, as has been found, neglected to make immediate report of the sale to Sartorius and Smith, who had been “ given up ” to them. Meanwhile a sale of ten thousand bushels had been made through H. L. Horton, of which the plaintiffs received prompt notice. The price of wheat made an advance. On or about November 20th, Glass asked the plaintiffs how bis account with them stood. They replied that he was long ten thousand bushels. Glass asked if they had had no report of a sale through W. W. Cohen and Company. They replied that they had not. Glass then directed the plaintiffs to sell him out. Whereupon the plaintiffs sold ten thousand bushels of wheat for the account of Glass. When Cohen and Company reported their sale to the plaintiffs, on December 1st, the plaintiffs and Glass declined to accept the transaction. Thereafter Cohen and Company, in order to protect itself, purchased ten thousand bushels of grain at a price far in advance of the price at which it had sold.

We perceive no reason why Glass should not reimburse Cohen and Company for the loss sustained. Glass ordered the sale to be made. He named the Cohen firm as the brokers to make it. It was made in accordance with his instructions. Manifestly Cohen and Company were the agents of Glass throughout the transaction. If the market price for grain had ‘receded no doubt the profit would have belonged to Glass. Equally, the loss must have been his when the market rose. It is true that the plaintiffs Sartorius and Smith had been “ given up ” to Cohen and Company. We are advised of no street usage which gives to these words a meaning peculiar to the brokerage business. In the absence of such advice, we take them to mean that the plaintiffs were named by Glass as brokers to whom Cohen and Company were advised to report, in order that the transaction might be charged to the account which Glass had with the plaintiffs. It was a designation of a means by which the Cohen firm, with whom Glass had no account, might relieve itself from possible loss through the transaction to be made. The fact that Cohen and Company did not avail itself of the means proffered for its relief should not operate to exonerate Glass. The credit" of Glass was pledged when the transaction was ordered to be made. The pledge continued until, through payment by Glass or the plaintiffs, the -debt to Cohen and Company was satisfied. No loss resulted to Glass through the failure of Cohen and Company to report to the plaintiffs, for Glass himself received prompt notice of the sale. He admits that he knew of the sale when he ordered the plaintiffs to sell an additional ten thousand bushels of grain. He was asked: “You knew that you had sold these ten thousand bushels through W. W. Cohen and Company, didn’t you? ” The context shows that the question related to the time when Glass ordered the additional sale. His answer was “ Yes.” Clearly, Glass was not induced to make the sale through ignorance of the sale made by Cohen and Company. Why did he make it? The answer seems obvious. The market had risen. If he could successfully disown the Cohen sale, and make another sale at a higher price, he would secure an advantage. He made the sale and hitherto he has been protected in the advantage obtained at the expense of Cohen and Company. We know of no reason in law or good morals why he should be permitted to retain it. The sale was by Glass through Cohen and Company, his agents. It resulted in a loss. No fault of Cohen and Company contributed to that loss. Clearly, the principal, Glass, not the agent, Cohen and Company, should bear the loss.

The judgment should be modified to provide that the defendant Louis Glass is liable to the defendant W. W. Cohen and Company for the loss sustained by it through the purchase and sale of ten thousand bushels of wheat made for the account of Louis Glass, and further modified to reheve the defendant W. W. Cohen and Company from the payment of costs to the plaintiffs, and, as modified, affirmed, with costs in all the courts against the defendant Glass.

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

Judgment accordingly.


author: Crane, J.

text:
    Francis M. Reed, as Administrator of the Estate of David M. Reed, Deceased, Respondent, v. James C. Davis, as Director-General of Railroads, Appellant.

      (Argued June 7, 1928;
    decided July 19, 1928.)

      Frank H. Hiscock for appellant.
    Defendant was not negligent. (Edgar v. Brooklyn, etc., R. R. Co., 146 App. Div. 541; Tsiampras v. Union Pacific R. R. Co., 176 N. W. Rep. 366; Pruitt v. Norfolk, etc., Ry. Co., 221 S. W. Rep. 552; Morris v. Missouri Pacific R. R. Co., 187 N. W. Rep. 130; So. Pac. R. R. Co. v. Stevenson, 218 S. W. Rep. 151; Niles v. N. Y. C., etc., R. R. Co., 14 App. Div. 58.) Plaintiff’s intestate assumed the risks of the accident which caused his death. (C. & O. Railway Co. v. Nixon, 271 U. S. 218; Connelly v. Pa. R. R. Co., 228 Fed. Rep. 322; Dewald v. Hines, 280 Penn. St. 169; Ingraham v. N. Y., etc., R. R. Co., 182 App. Div. 112; Unfried v. Baltimore, etc., R. R. Co., 34 W. Va. 260; Sancer v. Penn. R. R. Co., 205 Penn. St. 609.)

      Paul Shipman Andrews for respondent.
    Reed did not assume the risk as a matter of law. (Dowd v. N. Y., O. & W. R. R. Co., 170 N. Y. 459; Fitzwater v. Warren, 206 N. Y. 355; Felice v. N. Y. C. & H. R. R. R. Co., 14 App. Div. 345; 211 N. Y. 79; Gardner v. Mich. C. R. Co., 150 U. S. 349; Caronoano v. Pomeranz, 210 N. Y. 188; Finn v. Cassidy, 165 N. Y. 584; Eicholz v. Niagara Falls H. P. & M. Co., 68 App. Div. 441; 174 N. Y. 519; Lofrano v. N. Y. & Mt. Vernon Water Co., 55 Hun, 452; 130 N. Y. 658.) The question of the defendant’s negligence was properly sent to the jury. (Conrad v. N. Y. C. R. R. Co., 137 App. Div. 372; 201 N. Y. 514; Biondolillo v. Erie R. R., 215 N. Y. 330; Froehlich v. Interborough R. T. Co., 120 App. Div. 474; DiSario v. N. Y., O. & W. Ry. Co., 142 App. Div. 159; Reid v. N. Y., N. H. & H. R. Co., 17 N. Y. Supp. 801; 63 Hun, 630; 136 N. Y. 638; Fitzgerald v. Erie R. R. Co., 158 App. Div. 801; Lane v. N. Y. C. R. R. Co., 107 App. Div. 166; Blanchard v. D., L. & W. R. R. Co., 211 N. Y. 79; Felice v. N. Y. Central R. R. Co., 14 App. Div. 345; Cincinnati, N. O. & T. P. R. Co. v. McGuffey, 252 Fed. Rep. 25; Miller v. Union Pacific R. R. Co., 17 Fed. Rep. 67.)
   Crane, J.

David H. Reed in February of 1920 was employed as a telegraph lineman by the defendant, at work installing or repairing telegraph lines along the railroad’s right of way about a mile west of the Weedsport station. There was a blizzard blowing at the time and the snow was piled to the height of three or four feet on each side of the tracks. At this point there are four tracks running east and west. At noon the men had returned to a hotel near the station for then lunch. They had made the trip by a motor car which travels on the rails of the track. There was difficulty in getting this motor car through the snow. After lunch the foreman suggested or directed that the men return to work. The motor car, however, was put in a shed near the station as the weather was too severe for its use. To get to the place of work it was necessary for the gang including the deceased to walk along the tracks. The railroad station from which they came was south of the tracks. At that time there was a train standing to the east of the crossing on the third track about ready to start. The whistle had been blown giving the signal for the flagman who had been sent back as a warning, to come aboard the train. Reed and the other men proceeded to walk to the west on .the northerly tracks; their custom was to walk on the fourth track which would be the one furthest to the north. While they were proceeding they heard the train coming on the third track behind them or else had heard the signals indicating that it was coming, and at the same time saw a train coming on the fourth track from the west. Reed and his associates were then in this situation. They were walking west on the third or fourth tracks. The train was coming behind them on the third track and a train was approaching them on the fourth track. They had to get off both of these tracks or else be injured. Perhaps Reed could have jumped over into the snow to the north of the tracks; I do not know. He went in the other direction. He turned at right angles and went to the south, i. e., to his left, crossed the second track which the company calls No. 1 and was proceeding across the first track or the most southerly track, which the railroad company designates No. 2 when he was struck by an express train coming sixty miles an hour proceeding from west to east. ■

As stated before, a blizzard was blowing at the time. The snow was so thick that one could not see very far, and the rumbling of the trains made considerable noise.

Reed' was killed and his administrator brought this action on the ground that the railroad company or the defendant employer was negligent. The action is under the Federal Employers’ Liability Act which removes contributory negligence as a defense and makes the employer liable for the negligence of a superintendent.

The plaintiff recovered a verdict based upon the theory that the boss of this gang of telegraph linemen was negligent in sending them to work in a snow storm under the conditions existing on that day. The trial judge charged that there was no negligence in the operation of the train which struck the deceased. The question left to the jury he phrased as follows: “ * * * but on the question as to whether under the existing conditions these foremen acting in their capacity used and exercised due care, and prudence in doing what they did with the men that were with them and under their control that afternoon, having in view all the evidence that has been given to you upon that subject, I have determined to allow that question to go to you, as to whether under all these conditions there was a negligent act on the part of this company through its foremen in allowing or suggesting, or, if you please ordering these men, if they did, to go up that track to perform the work which was necessary to perform.”

In this particular the trial judge was in error. There was no such question to be submitted to the jury. The men were accustomed to travel on the tracks in going to and from their work, either walking or going by motor car which ran on the rails. We do not think that it was negligence in the foreman to suggest or direct that the men go back to work in the snow storm and without the use of the motor car. The motor car might have proceeded faster but it would have been on the tracks just the same.

For this reason the judgment must be reversed.

We have, however, considered the situation in which the deceased was placed and consider a new trial necessary for the following reason:

This gang of workmen in proceeding back to work in the blinding storm, obliged to walk upon the railroad tracks with trains coming behind and in front of them, and snow piled up on each side of the tracks, was in a place of obvious danger. While ordinarily the track walker or worker upon the tracks assumes the risk of inherent dangers (C. & O. Ry. Co. v. Nixon, 271 U. S. 218), this of course is upon the assumption that the master has performed its full duty; has used reasonable care for the safety of its employees. This assumption cannot, of course, avail to relieve the employee where the risk is plain and obvious so that the failure of duty by the master cannot be ignored, but it may avail where the master’s fault is unknown to the employee, as, for example, where rules might have obviated the danger and the employee does not know whether they have been adopted or not. Did the railroad in this case have any rules governing the protection of men who were obliged to walk upon the tracks under the conditions here existing? What rules and regulations did railroads have for protecting men which this company might have adopted.and used if it had no rules of its own? If there were no rules which governed such a situation was it practicable and reasonable to make some rule or regulation which would give warning of the. approach of trains or notify trains that men were on the track doing work or proceeding to their work, or which would in any other way guard or protect men from death and injury while using tracks under necessity of their work? We do not say or intimate that there are any such rules or that it would be feasible to adopt any such rules, but we do think that the plaintiff in this case should have an opportunity to prove such rules or regulations, if any, or the practicability of adopting some reasonable rule to safeguard such a situation.

This court has frequently touched upon this subject of rules. A case often cited is Berrigan v. New York, Lake Erie & Western R. R. Co. (131 N. Y. 582, at page 584), where we said: “ There is no proof in the case that rules for such a case had ever been promulgated by any other railroad company, or that it was reasonable or practicable to provide against the occurrence of such an accident by a rule. The learned trial judge submitted to the jury the question whether the defendant was at fault in omitting to make and publish such a rule. This opened to the jury a wide field for speculation and conjecture. In the absence of some proof on the part of the plaintiff that such a rule was in operation by other roads or of persons possessing peculiar skill and experience in the management and operation of railroads to the effect that such a rule was necessary or practicable under the circumstances, or unless the necessity and propriety of making and promulgating such a rule was so obvious as to make the question one of common experience and knowledge, the court is not warranted in submitting such a question to the jury.”

In Devoe v. N. Y. C. & H. R. R. R. Co. (174 N. Y. 1, page 9) it was stated: The duty of a master in making rules is measured by the law of ordinary diligence. That law varies with the situation, for what would be ordinary diligence under one set of facts would be negligence in another. If, however, under the circumstances of a particular case, the master has met the obligation of ordinary diligence in making and enforcing a rule he is free from liability, even if some other rule would have been safer and better. The law requires him to make and promulgate reasonably safe and proper rules, and if he does so he is not hable, even if he might have made safer and more effective rules.”

For the limitations of this law see Pearsall v. N. Y. C. & H. R. R. R. Co. (189 N. Y. 474). (See, also, on this point Freemont v. Boston & Maine R. R. Co., 111 App. Div. 831; Doing v. N. Y., Ontario & Western R. Co., 151 N. Y. 579; McCoy v. N. Y. C. & H. R. R. R. Co., 185 N. Y. 276; Dzkowski v. Reynoldsville Carting Co., 216 N. Y. 173.) The absence of any rules in the case of obvious and open danger has been held to present a question for the jury. (Knickerbocker v. General Ry. Signal Co., 209 N. Y. 404, at p. 406.)

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

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

Judgments reversed, etc.


author: Cardozo, Ch. J.

text:
    Sophia Coons, as Administratrix of the Estate of Arthur P. Coons, Deceased, Respondent, v. New York Telephone Company, Appellant.
    (Argued June 7, 1928;
    decided July 19, 1928.)

      Thomas R. Wheeler for appellant.
    The trial court erred in refusing to grant the motion made by the defendant for a, dismissal of the complaint. (McFarlane v. City of Niagara Falls, 247 N. Y. 340; Dwyer v. Neckerman Co., Inc., 223 App. Div. 39; Linzey v. American Ice Co., 131 App. Div. 333; 197 N. Y. 605; Hickok v. Auburn L., H. & P. Co., 200 N. Y. 464; Basmajian v. Bd. of Education, 211 App. Div. 347; McNulty v. Ludwig & Co., 153 App. Div. 206; Pritchard v. Edison Illuminating Co., 92 App. Div. 183.)

      Hamilton Ward for respondent.
    The defendant created and maintained a dangerous nuisance in the nature of a trespass on the premises. (McFarlane v. City of Niagara Falls, 247 N. Y. 340; McNulty v. Ludwig & Co., 153 App. Div. 206; Herman v. City of Buffalo, 214 N. Y. 316; Andrews v. Delhi Tel. Co., 36 Misc. Rep. 23; 66 App. Div. 616; Wiseman v. Lucksinger, 84 N. Y. 31; Long Island R. R. Co. v. Garvey, 159 N. Y. 334; Heeg v. Licht, 80 N. Y. 579; Butler v. Frontier Tel. Co., 186 N. Y. 486; Lamming v. Galusha, 135 N. Y. 239; Wilks v. N. Y. Tel. Co., 243 N. Y. 351; Hayes v. Michigan Central R. R. Co., 111 U. S. 228; Stearn v. International Ry. Co., 220 N. Y. 284; Burrows v. Livingston-Niagara P. Co., 217 App. Div. 206; 244 N. Y. 548; Reed v. N. Y. & N. J. Tel. Co., 151 App. Div. 96.)
   Cardozo, Ch. J.

The action is for injuries resulting in death.

A tenant of a house in Buffalo wished to have a radio connection. He employed Arthur T. Coons to make it. At the rear of the lot was a pole belonging to the defendant. The pole had been set up in 1911 for the carriage of a telephone cable under a license given to the defendant by the owner of the building. -Some years later, in 1919, the defendant without the knowledge of the owner gave a permit to the Buffalo General Electric Company to use the pole for high power electric wires. These were strung by the electric company near the top of the pole, seven or eight feet above the telephone cable maintained by the defendant. Coons climbed the pole, an end of his aerial wire in his hand. He fastened the wire with a screw to the very top of the pole, and let it fall so that it lay across one of the electric wires a foot or so below. Coming down from the pole, he went to the roof of the house, planning to fasten the other end of his aerial wire to the peak in the front. While at work there, he was seen to crumple up and fall. A high voltage had been transmitted from the power wire to the wire in his hand. He received a shock from which he died.

The case was tried and submitted to the jury as an action for a nuisance. According to the theory of the trial, the defendant authorized a trespass when it gave a permit to the electric company to string wires on the pole; the trespass was also a nuisance, since through contact with other wires or in other ways the power wires might be dangerous; Coons, equally with the owner, was aggrieved by the trespass, since he was installing the radio at the order of a tenant; the defendant, in giving the permit, became the tortious creator of a dangerous condition, and so liable for nuisance, though the wires, thus installed with its connivance, were maintained by some one else.

Laying other objections aside, we place our judgment on the ground that when Coons met his death, the power wires had been installed by the electric company with the license of the owner, and that the defendant was neither a trespasser nor responsible for a nuisance by reason of their presence. The pole was erected, as we have seen, in 1911. It belonged to the defendant, and could not lawfully be used by another without the defendant’s consent. In granting such consent in 1919, the defendant could not dispense with any other consent that was necessary from the owner of the land. We do not go into the question whether the form of its permit is to be read as importing anything more than a privilege of use to the extent, and within the limits, of its own capacity and interest. If more than this was meant, the fact remains that any other license necessary at the hands of owner or of tenant, was afterwards obtained. Hartzell, the owner of the building, had made a lease of it to Green. In 1921 the tenant asked to be allowed to have the house wired for electricity. The owner consented, leaving the arrangements to the tenant’s son. In giving this consent he took it for granted that the wires in the house would have to be connected' with power wires outside. He was not concerned, he tells us, whether the connection was made at the rear of the lot or somewhere else. He left all such details to those who were to do the work. The electric company utilized the power wires already strung upon the pole under the permit from defendant. From 1921 to the date of the accident, October, 1925, electricity has been steadily supplied for the lighting of the building upon written applications submitted by successive tenants.

We think the power wires ceased to be either a trespass or a nuisance in 1921, if we assume in favor of the plaintiff that they were something different before. True, of course, it is that the owner did not point out to the electric company the particular points at which its wires were to be run or fastened. The occasions must be rare indeed when anything of the kind is done. What this owner did was to authorize the electric company to run and fasten its wires at places of its own selection. No doubt he expected it, in making that selection, to use a reasonable discretion. There is no evidence of any failure of duty in that regard, no evidence that the place selected was inappropriate or dangerous. The power wires were strung so high that contact with them was not possible except through extraordinary conditions not easily forseeable. But if negligence there was either in connecting the wires or thereafter in maintaining them, the defendant is not at fault. The wrong must then be charged to the company employed. The defendant was not subject to a liability for trespass or for nuisance when it submitted to a use which the owner had invited.

The judgment of the Appellate Division and that of the Trial Term should be reversed, and the complaint dismissed, with costs in all courts.

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

Judgments reversed, etc.


text:
    Anthony L. Walter, Appellant, v. Frank W. Laidlaw et al., Respondents.

      (Argued June 5, 1928;
    decided July 19, 1928.)

      Gardner Le Roy for appellant.
    The making and executing of the contract was in full liquidation and payment of all sums due to defendants Frank W. Laidlaw and Leo G. Laidlaw. (Walters v. Travis, 9 Johns. 450; 30 Cyc. 1185; Brewster v. Baker, 16 Barb. 613.) The Statute of Frauds does not apply in the case at hand. (Thompson v. Dickinson, 12 N. Y. 364; Remington v. Palmer, 62 N. Y. 31.)

      Ellsworth Baker for Leo G. Laidlaw, respondent.
    The case is one in which specific performance should not be granted. (Sherman v. Wright, 49 N. Y. 227; Miles v. Dover Furnace Co., 125 N. Y. 294; Clark v. Rochester Ry. Co., 18 Barb. 350.)

      George L. Cooke and Abram F. Servin for respondents.
    The execution of the contract by Leo, even though it be held to apply to the entire property, could and did not affect Frank’s interest, nor did his presence or acts create an estoppel. (Lyman v. Abeel, 16 Johns. 30; Edwards v. Bishop, 4 N. Y. 61; McLean v. McLean, 96 N. Y. 652; Brustman v. Motrie, 118 App. Div. 395; Driscoll v. Brooklyn Union El. Co., 89 App. Div. 120; Baker v. Mut. Life Ins. Co., 43 N. Y. 283; Jewett v. Miller, 10 N. Y. 402; Gen. Constr. Co. v. Jones, 61 App. Div. 553.) There being no written contract with Frank Laidlaw, the agreement of 1922 cannot be enforced against him. (Real Prop. Law, § 242; McCrary v. Day, 119 N. Y. 1.) Plaintiff cannot recover for failure to carry out the terms of the contract because he knew when he entered into it that this defendant and the defendant Leo G. Laidlaw each owned an undivided one-half of said premises subject to the inchoate rights of dower of their respective wives. (Wald’s Pollack on Contracts [3d ed.], 665; Eickroot v. Powers, 17 N. Y. Supp. 137; Knox v. Spratt, 23 Fla. 646; Peeler v. Levy, 26 N. J. Eq. 330; Lucas v. Scott, 41 Ohio St. 636; Maw v. Topham, 19 Beav. 576; Fairhead v. Soulhee, 2 Week. Rep. 739; Moore v. Lutjeharmis, 91 Neb. 548; Winner v. Reynolds, 6 Paige, 407.)
   Cardozo, Ch. J.

The facts are complicated if followed in all their details. We state them with omissions, but with accuracy sufficient to present the legal problem.

In January, 1919, plaintiff agreed to buy and the defendants Laidlaw to sell a farm of about fifty-seven acres in Sullivan county. The total price was to be $4,000, of which $500 was to be paid at once, $300 on September 1, 1919, and the rest in annual installments of about $300 spread over a period of ten years with interest on all amounts unpaid. A mortgage of $1,300, already on the land, was assumed by Leo Laidlaw. Plaintiff was to be let into possession on the execution of the contract, and when his payments were completed was to have a deed with full covenants.

On July 5, 1922, the amount yet unpaid was $3,156.47. Many years would have to pass before the deferred installments would mature. The Laidlaws thought they saw a way of helping themselves to ready cash. Word had come to them from the plaintiff that one Goldberg was willing to pay $4,000 for part of the farm, a tract of eight acres. If the Laidlaws could buy back this tract, they might resell it at a profit. A contract was, therefore, made between plaintiff and Léo Laidlaw for the resale of the eight acres, the deed to be accepted in full payment of the balance of $3,156.47 due or to grow due to the Laidlaws jointly as the price of the whole farm. Frank Laidlaw was not a party to_ the new contract, but it was made at his request and with his knowledge. There were judgments of record against him which made it inadvisable that the title be put into his name. The evidence makes it clear that he was to share with his brother in the profits of a later sale to Goldberg or another.

This action is brought for the specific performance of the several contracts stated. The court is asked to direct a conveyance to the plaintiff of the farm of fifty-seven acres upon his delivery to Leo Laidlaw of a deed of the eight-acre tract. It is asked to decree that the deed so made will be in full payment of any moneys due or to grow due to the Laidlaws jointly. There is a prayer for incidental relief in respect of liens and incumbrances.

The trial judge found that the contract of resale did not call for the extinguishment of the full sum of $3,156, the balance owing for the farm, but only for the extinguishment of so much of that sum as would belong to Leo personally. This meant that the plaintiff was in default, for installments, unless canceled, were already overdue. The rights and interests of the parties were adjudged upon that basis by an intricate decree which directed the sale at public auction of the entire farm with distribution of the proceeds according to the equities declared. The case is here upon the plaintiff’s appeal.

We find no basis for the holding that a resale of the eight acres was to satisfy only a part, i. e., the share belonging to Leo, of the price unpaid upon the farm. The contract is explicit that the price shall be satisfied altogether. Its terms are not ambiguous, but if they were, the signpost of the surrounding circumstances would point the same way. The resale, whatever its form, was in truth for the benefit of one brother as much as for that of the other. Each was to share the burdens as he was also to enjoy the benefits.

We think the Statute of Frauds does not stand in the way of a decree for specific performance against Frank as well as Leo. True, indeed, it is that the contract of resale was signed by Leo only. By that contract he undertook to procure the satisfaction of the whole debt in return for the eight acres. In thus contracting, he became bound to supply whatever moneys might be necessary to make his covenant effective. If he could not get from his co-owner a voluntary release, he would have to pay what was due, or put the plaintiff in funds to an equivalent extent. But as. between Frank and Leo, such a payment would result in inequity to Leo. The contract to procure a satisfaction of the debt had been made at Frank’s request. If the share due to Frank were to be paid by the plaintiff out of moneys supplied by Leo, the latter might recover them from Frank, with the result that they would travel back where they had started. Circuity of action is avoided when Frank is required to acknowledge satisfaction, and join with his coadventurer in the execution of a deed.

A point has been made as to inchoate rights of dower. The Laidlaws are married, but the record contains a statement that releases of dower will be given. If such releases are refused, there must be appropriate compensation. Ordinarily, such compensation would take the form of a deduction from the cash payments thereafter to be made (Feldman v. Lisansky, 239 N. Y. 81). Here there are no such payments, for land is to be accepted as a substitute for cash. In the contingency of a refusal of releases, the plaintiff will be entitled to a personal judgment against the sellers of the farm for the value of the unextinguished dower rights computed in the usual way.

A counterclaim asserting fraud in the procurement by the plaintiff of the contract of resale, and praying for rescission, is set up by Leo Laidlaw. He says that he became a party to that contract upon a false representation by the plaintiff that one Goldberg had made an offer of $4,000 for a conveyance of the tract. The trial judge found that the plaintiff made the representation, which by concession was an untrue one, and that Leo Laidlaw relied upon it. Rescission was refused, however, upon the ground that the contract was thereafter ratified with knowledge of the truth. The significance of silence or inaction after discovery of a fraud is too uncertain and variable to be compressed within a formula. It is to be determined by the trier of the facts in the light of all the circumstances. Something less than fraud in the strict sense may justify the refusal of a discretionary remedy. As to this branch of the case a new trial may be helpful in uncovering the truth.

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, Andrews, Lehman and O’Brien, JJ., concur; Kellogg, J., not sitting.

Judgments reversed, etc.


text:
    Erit Realty Corporation, Appellant, v. Sea Gate Association, Respondent.
    (Argued June 20, 1928;
    decided July 19, 1928.)
    I. Maurice Wormser, Harry L. Kreeger and Charles Eno for appellant.-
    Plaintiff was entitled to the injunction granted by the Special Term, and the modification by the Appellate Division which, in effect, destroys plaintiff’s easement by subjecting it to the “ regulations ” of respondent, was error. (Whalen v. Union Bag & Paper Co., 208 N. Y. 1; McCann v. Chasm Power Co., 211 N. Y. 301; Drabinsky v. Sea Gate Association, 239 N. Y. 321; Biggs v. Sea Gate Association, 211 N. Y. 482.) The filing of the map by the Norton Point Land Company in the office of the register of Kings county in 1897 gave the plaintiff an easement in the streets and beach shown on the map, free from the regulatory supervision of the Sea Gate Association. (Biggs v. Sea Gate Association, 211 N. Y. 482; Weeks v. N. Y., W. & B. Ry. Co., 207 N. Y. 190; Lord v. Atkins, 138 N. Y. 184; Stillman v. City of Olean, 228 N. Y. 322; Bissell v. New York Central R. R. Co., 23 N. Y. 61; Donahue v. Keystone Gas Co., 181 N. Y. 313; Haight v. Littlefield, 147 N. Y. 338; Kernochan v. N. Y. E. R. R. Co., 128 N. Y. 559; Johnson & Co. v. Cox, 196 N. Y. 110; Ranscht v. Wright, 9 App. Div. 108; 162 N. Y. 632.)

      Meier Steinbrink and Harold M. Kennedy for respondent.
    The decision of the Appellate Division is in accord with sound principles of law. (Crocker v. Manhattan Life Ins. Co., 61 App. Div. 226.) Plaintiff’s right of access was never unlimited and unrestricted. (Drabinsky v. Sea Gate Association, 239 N. Y. 321; Loeb v. Supreme Lodge, 198 N. Y. 180; Riverdale Realty Co. v. City of New York, 153 N. Y. Supp. 742; Cartwright v. Maplesden, 53 N. Y. 622; Lattimer v. Livermore, 72 N. Y. 174; Woodruff v. Paddock, 130 N. Y. 618; Corning v. Gould, 16 Wend. 531.)
   Kellogg, J.

The plaintiff is the owner of block 34 and the north half of block 35 in a tract of land known as Sea Gate. The tract comprises all the land on Coney Island point, or Norton’s point, which constitutes the extreme westerly end of Coney Island. West Thirty-seventh street, a public street extending from Gravesend bay on the north to the ocean on the south, bounds the tract on the east; Gravesend bay on the north; the Atlantic ocean on the west and south. The inner part of the tract is traversed from north to south by two laid out private streets; it is crossed from east to west by ten such streets. Beyond, to the west, is the private street, Surf avenue, which, following the curve of the ocean beach, circles to the west and north from West Thirty-seventh street. The streets crossing from east to west empty into Surf avenue on the west and into Thirty-seventh street on the east. Beyond Surf avenue, to the west and south, are other short private streets, which give access to the ocean beach encircling the point. The intersecting streets create rectangular blocks of land, forty-two in number, which have been subdivided into building lots, numbering as many as sixty to a block. Block 34, owned by the plaintiff, is at the extreme northeast corner of the tract. Block 35, the north half of which belongs to the plaintiff, is immediately south of it. These two blocks are bounded on the east by West Thirty-seventh street, and on the west by Sea Gate avenue. All the streets to which we have referred, except West Thirty-seventh street, are private streets or ways. Many houses have been erected upon the various lots in the numerous blocks of the tract, and are occupied as homes by many families. That Sea Gate forms an exclusively residential district of a high type is unquestioned.

The defendant owns title to all the private streets in Sea Gate. It owns the ocean beach and many of the building lots in the tract. For the use of residents, it long ago laid down sewers, water mains and gas mains in the streets. It provides the people of Sea Gate with water, gas and light. It has improved and maintained the roadways, and built and maintained sidewalks. Long ago it became necessary for the defendant, in order that the residents of Sea Gate might be secure in the enjoyment of their property rights, to maintain a high fence, running along the westerly border of Thirty-seventh street, or the easterly border of Sea Gate, from Gravesend bay on the north to the ocean on the south. Recently the plaintiff, for some reason manifestly opposed to its self-interest as a proprietor of residential property, objected to the fence. Thereupon, the defendant removed that section of the fence which bounded block 34 and the north half of block 35 upon the east. In other words, the line of fence coming north from the ocean was stopped at the center line of block 35. It also erected a barrier across Sea Gate avenue, which borders the two blocks on the west, at the same center line. It also erected a barrier across Poplar avenue, which divides the two blocks, at a point on its westerly side where it intersects Sea Gate avenue. Thus the plaintiff, in its enjoyment of block 34 and the north half of block 35, was given uninterrupted access to the public street, Thirty-seventh street, but denied access to all the private streets of Sea Gate, except where such streets actually touched its properties.

The Norton Point Land Company, organized in 1892, shortly afterward acquired the Sea Gate tract. It caused the tract to be surveyed and plotted on a map. This map was filed in the office of the clerk of Kings county on June 16th, 1897. The map accurately portrays the property as presently laid out in streets, blocks and building lots. On the 31st day of August, 1898, the Norton Point Land Company deeded, among other lots, block 34 and the north half of block 35, to Theodore S. Jenkins, from whom, by mesne conveyance, the plaintiff derives title. The description of the property conveyed was by their block numbers as shown upon the filed map, to which reference was expressly made. Later, in the year 1901, the Norton Point Land Company deeded to this defendant all its interest in the streets, in the beach, and in various lots not then sold.

When the Norton Point Land Company acquired the tract, shortly after the year 1892, it immediately began to fill and grade the land. This work was begun in 1895 or 1896 by Theodore S. Jenkins, the grantee from whom the plaintiff derives title. The easterly part of the property as far south as Mermaid avenue was filled to a depth of six or eight feet above the strip of land which now constitutes West Thirty-seventh street. An embankment, six or eight feet high, was constructed along the line of the fill. Mermaid avenue intersects the easterly fine of the tract at a point distant from Gravesend bay about two-thirds of the length of the fine. At this point the fill and embankment began to lower to the level of the strip of land now constituting West Thirty-seventh street. From there to the ocean on the south a high picket fence was erected. At Surf avenue a gate was set up. The embankment and the fence cut off all access to the tract from the east except through the gate. A guard was stationed at the gate who admitted to the tract, with some exceptions, only those persons having property rights therein. It clearly appears that the embankment was built and the fence installed before the summer of the year 1897. Thus the witness Mann, who was president of the Norton Point Land Company in the year 1896, and who was summoned to testify by the plaintiff, was asked: “ When was the fence erected, to the best of your recollection, on the easterly boundary of this tract? ” and he answered: “ I should say it was in the spring of 1897.” This testimony was corroborated by other witnesses and not disputed. That the fence was erected after the embankment was built is not disputed. Thus, prior to the time when Jenkins took title on the 31st day of August, 1898, and prior to the time when on July 19th, 1897, he received a contract for the lots in question, an embankment and fence were physically present upon the ground, at the easterly boundary line, to exclude the public and all persons, other than those having rights, from entrance to the property. Later, when the strip to the east was elevated by a fill and became the public street, West Thirty-seventh street, the fence was extended north to Gravesend bay. Ever since the spring of the year 1897, until shortly before the bringing of this action, when the defendant, at the request of the plaintiff, removed that section of the fence which bordered the blocks owned by the plaintiff, free access to the property has been physically obstructed by an embankment and fence, or a fence alone. Admission to the tract has ever since been denied, by a guard stationed at a gate in the fence, to all persons who have been unable to show that they were lot owners, the guests or servants of lot owners, or were otherwise entitled, in the right of the owner, to make entrance.

Where parcels of land are the subject of a conveyance which describes them by lot or block numbers, as the same may appear upon a filed map, and the designated map shows strips of land, denominated streets, upon some of which the lots abut, undoubtedly easements in the private streets, or some of them, appurtenant to the lots conveyed, pass with the grant. (Lord v. Atkins, 138 N. Y. 184.) Whether there is appurtenant to any lot conveyed an easement in any street other than that upon which the lot has frontage; whether upon that very street the easement extends in either direction farther than an intersecting street; these are questions which we need not, and do not now decide. (See Reis v. City of New York, 188 N. Y. 58; Matter of City of New York [E. 177th St.], 239 N. Y. 119.) It has been held that, in the case of express grants of easements in existing ways, which are obstructed by fences and gates, then physically present upon the ground, the enjoyment of the easement granted is made subject to the right of the grantor reasonably to limit access and egress by maintaining the obstructions. (Connery v. Brooke, 73 Penn. St. 80; Boyd v. Bloom, 152 Ind. 152; Garland v. Furber, 47 N. H. 301; Brill v. Brill, 108 N. Y. 511.) If this be the correct doctrine in reference to easements expressly granted, its correctness in the case of easements resting in implication must be all the more apparent. In such case the intention of the grantor to convey easements is gathered from a pictorial representation of streets. If the map portrayed fences and gates erected across them, no doubt the obstructions depicted would enter into the implication to limit the rights impliedly granted. If this result follows, where mere symbols to denote fences are used, still more surely must it be the consequence where the fences are an actuality physically present upon the ground to obstruct the user. In neither case would the obstructions tend to vary or qualify the express words of a grant, since none have been employed to make it. In the case now presented, we think that sound reasoning compels the conclusion that the plaintiff took its easement in the streets of Sea Gate subject to the right of its grantor, or its successor, this defendant, reasonably to bar access and egress by means of the fence along West Thirty-seventh street, since, when the grant, was made, an obstructing fence had already been set up. However, for this conclusion, resort to general principles is unnecessary, since a precise authority compels it.

In Drabinsky v. Seagate Association (239 N. Y. 321) a conveyance of lots in the Sea Gate tract, made in the year 1900, which referred to the filed map, was under consideration. The court said: “ It is established by the findings that at the time this original grantee took title the defendant already maintained a fence and entrance gate, and kept there ' a guard or special policeman to prevent the admission of the public and to permit the entrance only of the property owners and those having business with them,’ and it enforced regulations for admission through the entrance gate of only persons known to be property owners or persons identified as having business with property owners.’ It must, therefore, have been clear to the grantee that his grantor did not intend to grant him a right to use the street except in the manner that a street in such a private residential colony would be used.” It is true that reference is made in the opinion to circulars, booklets and printed matter, relating to the uses to be made of the Sea Gate property, which had been issued by the then owner, the Norton Point Land Company. However, it is apparent that interest in lands conveyed may not be effectively expanded or delimited by printed advertisements distributed prior to the conveyance by the grantor. (Heyman v. Biggs, 223 N. Y. 118.) The essential facts of the Drabinsky case are the facts which have been proven here. The decision made is conclusive upon the right of the defendant to maintain a fence along the easterly line of Sea Gate, reasonably to regulate admission thereto.

The judgment appealed from makes provision for the maintenance of the existing fences across Sea Gate avenue and Poplar avenue, to exclude the plaintiff’s property from the protected area of Sea Gate, or, at the option of the plaintiff, the re-erection of the old fence along the easterly border of the plaintiff’s lots, to continue the fence line, coming north from the ocean along the west line of West Thirty-seventh street, through to Gravesend bay, thereby to include the plaintiff’s lots within the area. It also makes provision that in either case the plaintiff, and those deriving rights through it, shall have access to the streets of Sea Gate, and egress therefrom, through gates in the fences, subject, however, to regulations adopted by the defendant, whereby persons having rights may be identified and permitted to enter, while those having none may be denied entrance, and Sea Gate, thus protected from invasion by trespassers, may be maintained as a private tract of a strictly residential character. We think that the plaintiff will be protected by the judgment in all the rights to which it is entitled and that the judgment was eminently proper.

For these reasons the order should be affirmed and judgment absolute ordered against appellant on the stipulation, with costs in all courts. -

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

Ordered accordingly.


author: Caudozo, Ch. J.

text:
    Hugo G. A. Von Reitzenstein, Respondent, v. John C. Tomlinson, Jr., et al., as Executors of and Trustees under the Will of John C. Tomlinson, Deceased, Appellants.

      (Argued June 11, 1928;
    decided July 19, 1928.)

      Frank C. Laughlin and Joseph W. Kirkpatrick for appellants.
    The judgment cannot be sustained on the ground, that plaintiff proved a cause of action on quantum meruit for the value of services performed for Tomlinson or his associates over and above twenty-five dollars per day and expenses provided for in the contract of employment, which amount he was concededly paid, for it is perfectly plain that upon no theory was it contemplated that plaintiff was to receive anything more unless benefits or profits resulted from his services; and any negotiations or understanding between the parties to the effect that plaintiff was to receive an indefinite percentage of any benefits or profits derived by Tomlinson and his associates was in the nature of a bonus agreement conditioned on an event which plaintiff failed to prove ever happened. (Yates v. Root, 4 App. Div. 439; Kleb v. Wattach, 6 App. Div. 583; Perrine v. Hotchkiss, 58 Barb. 77; Harrington v. Baker, 81 Mass. [15 Gray] 538; Metz v. Luckemeyer, 12 N. Y. Supp. 550; 128 N. Y. 682; Wendell v. Willetts, 183 Fed. Rep. 1014; 2 Abb. Tr. Ev. [3d ed.] 938; Æna Nat. Bank v. Fourth Nat. Bank, 46 N. Y. 82; Collyer v. Collyer, 113 N. Y. 442; Earle v. Coburn, 130 Mass. 596; Whiting v. Sullivan, 7 Mass. 107; Boston Ice Co. v. Potter, 123 Mass. 28; Municipal Water Works Co. v. Ft. Smith, 216 Fed. Rep. 431.) The court committed errors of law in denying defendants’ motion at the close of plaintiff’s case for a dismissal of the complaint, and the motion at the close of the entire case for a directed verdict on the ground that there was no competent evidence of the value of the Havana Tobacco Company’s bonds or the stocks and bonds of the Cuban Tobacco Company, to which rulings exceptions were duly taken, and in denying defendants’ request to charge the jury that there was no competent evidence of the market value of these securities, and in charging “ there is no evidence of exact value, but there is evidence from which a value may be found. I will so charge.” (MacIlhardy v. Chambers, 117 N. Y. 532; State Bank of Pike v. Brown, 165 N. Y. 216; Taylor v. Friedman, 214 App. Div. 198; Shuck v. Fox, 126 App. Div. 565; Amsterdam v. Gold, 123 Misc. Rep. 300; Whelan v. Lynch, 60 N. Y. 469; Jones v. Jones, 120 N. Y. 589; Watts v. Phillips-Jones Corporation, 211 App. Div. 523; 242 N. Y. 557; Wildes v. Robinson, 50 App. Div. 192; Stein v. Hartshorn, 123 App. Div. 467; Sloan v. Baird, 162 N. Y. 327; Bunte v. Schumann, 46 Misc. Rep. 593;
      Ran v. Seidenberg, 53 Misc. Rep. 386; Galinger v. Galinger, 4 Lans. 473.)

      Benjamin P. De Witt, Roger Hinds and Sidney Pepper for respondent.
    The action was brought on quantum meruit and was properly so brought. Neither plaintiff nor defendant pleaded or proved a contract to pay a specific amount of compensation. (Varney v. Ditmars, 217 N. Y. 223; Winch v. Warner, 186 App. Div. 710; Plattenburg v. Briggs, 166 App. Div. 326.) The evidence as to market value of the bonds and stock of the new company was properly received. (Watts v. Phillips-Jones Corp., 211 App. Div. 523; 242 N. Y. 557; Harrison v. Glover, 72 N. Y. 451.) There is competent evidence in the record as to the value of plaintiff’s services. (Boyd v. Vale, 84 App. Div. 414; Matter of Benton, 71 App. Div. 522; Triangle Waist Co. v. Todd, 223 N. Y. 27; Slocovich v. Orient Mut. Ins. Co., 108 N. Y. 56.) The court did not commit reversible error in its rulings on the admission or exclusion of evidence. (Miller v. Coates, 66 N. Y. 609; Quaker v. Manhattan, etc., Co., 164 N. Y. Supp. 182; Meehan v. Kaplan, 184 N. Y. Supp. 578; Baccaria v. Landis, 84 Misc. Rep. 396.)
   Caudozo, Ch. J.

Defendants’ testator, who for convenience will be called defendant, was a lawyer in New York. For himself and his clients he held bonds of the Havana Tobacco Company to the extent of $2,000,000 or more. In April, 1922, a foreclosure suit was imminent, for default had been made in the payment of the interest. The notion came to the defendant that he might improve his chance of a favorable settlement by unearthing graft or other wrongdoing in the conduct of the business.

Plaintiff, who was then in Cuba, after a more or less checkered career of miscellaneous activities, was thought of as a fitting man to carry on the search. After a talk with the defendant’s son, he was employed to gather such information as he could, and report to his employer. For this :he was to receive $25 a day besides expenses, and also “ an appropriate percentage ” of the benefits, if any, accruing through his efforts. He was occupied in the work of investigation for thirty-six days. In this period he brought together affidavits and rumors of wrongdoing and mismanagement which were received by his employer with expressions of satisfa'ction. He was paid his expenses as he went along, and also his per diem wage. Then came a term of silence. The defendant acting for himself and his clients filed a petition to intervene in the pending action of foreclosure. Other bondholders, represented by other counsel, petitioned for the same relief. Intervention was permitted in June, 1923. About eight months later a reorganization committee offered a plan of reorganization, which thereafter went into effect. As a result the bonds of the old company were exchanged for those of the new on the basis of $450 of the new for $1,000 of the old. Preferred shares of the new company were allotted besides. Plaintiff made demand of the defendant for an appropriate percentage.” The demand was followed by a refusal, and later by this action. The value of thirty-six days of work in collecting information is fixed by the plaintiff at $125,000, on which he credits $900 paid upon account. He sues for the balance on the footing of a quantum meruit. A verdict for $25,000 has been unanimously affirmed.

The defendant’s promise to pay an appropriate percentage ” in excess of the per diem stipend is too indefinite and meaningless to be enforcible as a promise for the payment of anything more than the reasonable value (Varney v. Ditmars, 217 N. Y. 223). It is, however, significant as rebutting an agreement that value was liquidated by the liquidation of the daily wage. As to what the work was worth, the door is still wide open. Whatever it was worth in excess of payments made, the plaintiff should receive (Varney v. Ditmars, supra; Winch v. Warner, 186 App. Div. 710; Plattenburg v. Briggs, 166 App. Div. 326). The case is to be disposed of as founded on a common count for service rendered at request.

Two errors or classes of error vitiate the judgment. There was error in rulings upon evidence, rulings closely related to the quantum of the verdict. There was error in letting the case go to the jury on the theory that the gains accruing to the defendant upon the reorganization of the company might be found to have accrued to him as the outcome of the plaintiff’s efforts.

To prove the value of the services before reorganization and afterwards, the court received the reports of the National Quotation Bureau, an association supplying its subscribers with quotations of the current prices of bonds and shares of stock.. One Corson, the representative of the bureau, testified that before making its reports as to the securities of the Havana Tobacco Company, it sent out its employees to a group of bankers and brokers, reputed to be dealers, with instructions to ascertain the prices bid and asked. From the returns thus collected, it compiled its figures. There is no evidence that its employees did their work correctly. There is none that its price lists are generally recognized or acted upon as accurate by dealers in the market. This at least must be proved before quotations, not otherwise authenticated, become evidence of value (Watts v. Phillips-Jones Corp., 211 App. Div. 523; 242 N. Y. 557). All that we have here is the fact that the bureau sells its service to subscribers in numbers not disclosed. On this basis without more the witness was allowed to read from the price lists the bid and asked quotations (Harrison v. Glover, 72 N. Y. 451), for actual sales there had been none. In April, May and June, 1922, the quotation for a bond of the Havana Tobacco Company was 20 bid and 30 asked; in December, 1924, the quotation for a bond of the Cuban Tobacco Company, the reorganized corporation, was 40 bid. Evidence was received from the same sheets as to bid and asked prices for the new preferred shares. For these the quotation in January, 1925, was 25 bid and 33 asked.

The use made of these figures in the charge of the trial judge determined the verdict, or so we may reasonably infer. The total number of bonds held by the defendant and his associates, if we reckon the par value, was about $2,500,000. The jury were told that they were to consider the difference between the bid price of the bonds before the reorganization and after, together with the bid price of the preferred shares, and in the light of these figures were to say whether this work of this plaintiff saved the defendant and his associates about $250,000.” If they found such a gain, they were told that they might award to the plaintiff whatever percentage they thought fair, various rates being suggested by way of illustration from one per cent to ten. The result reflects the charge.

Error more deep-seated is here than an infringement of the hearsay rule through the admission of unauthenticated price lists. The use made of these lists, as well as of the reorganization documents received under objection, betrays a fundamental misconception of the basis of the plaintiff’s claim. There is in truth no evidence that what was done by the plaintiff “ saved the defendant and his associates about $250,000,” or any other sum. There is no evidence that the gains accruing to the defendant through the appreciation of the new securities were the fruits of plaintiff’s services. The defendant’s petition to intervene in the foreclosure suit contains a long recital of acts of mismanagement by the promoters and officers of the Havana Tobacco Company, unrelated to any acts uncovered by the plaintiff. There are indeed two or three specifications that were inspired in all likelihood by reports transmitted by the plaintiff, but relatively to the whole they are incidental and subordinate. This sufficiently appears from the record now before us, though the defendant was unduly limited at the trial in bis attempt to show the information that had come to him from others. Only by the merest guesswork could any jury say that these incidental and subordinate charges, the plaintiff’s sole contribution to the defendant’s ammunition, had determined the result, and brought about a reorganization upon terms more favorable to the bondholders than would otherwise have been offered. Still less could they estimate the extent of the difference with even approximate correctness. “ Food for speculation will not serve as the basis of a verdict ” (Pauley v. Steam Gauge & Lantern Co., 131 N. Y. 90, 100).

The case was thus submitted to the jury on a theory fundamentally erroneous. The promise to pay a percentage of gains is void for indefiniteness, as the plaintiff now concedes. If any gains have accrued, there is no evidence that what was done by the plaintiff affected the amount. In such a situation, neither the terms of the reorganization nor the prices of the new securities had anything to do with the value of the services. The plaintiff should be paid for his work according to the standard of the market, or, in the absence of such a standard, according to such fair approach thereto as may be found to be attainable.

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

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

Judgments reversed, etc.


text:
    Lace Selling Company, Appellant, v. Barnet Shapiro et al., Individually and as Copartners under the Name of Barnet Shapiro, Respondents.

      (Argued April 12, 1928;
    decided July 19, 1928.)

      George Zabriskie, William E. Sims and Charles M. Kritzman for appellant.
    The trial court erred in setting aside the verdict and dismissing the complaint as to causes of action 1, 4, 5, 6 and 7. (Blumenthal & Co. v. Gallert & Co., 240 N. Y. 217; Riendau v. Bullock, 147 N. Y. 269; Canda v. Wick, 100 N. Y. 127; DeForest Radio Tel. & Tel. Co. v. Triangle Radio Supply Co., 243 N. Y. 283; Hanging Rock Iron Co. v. Roots, 10 Fed. Rep. [2d] 154; Lagerloef Trading Co. v. American Paper Products Co., 291 Fed. Rep. 947.) The trial court erred in setting aside the verdict and ordering a new trial as to causes of action 2, 3, 8 and 9. (Lyons v. Miller, 10 Misc. Rep. 653; Kellogg v. Baker, 15 Abb. Pr. 286; People ex rel. Crane v. Ryder, 12 N. Y. 433; Beach v. Tooker, 10 How. Pr. 297; Brown v. Cody, 23 App. Div. 210; Carlisle v. Barnes, 102 App. Div. 582; Civ. Prac. Act, § 434; Finch v. Foster, 233 N. Y. 619; Williams v. Freel, 99 N. Y. 666; Babbett v. Young, 51 Barb. 466; Robie v. French, 220 App. Div. 414.)

      Abraham H. Sarasohn for respondents.
    The trial court did not err in dismissing the complaint as to causes of actions 1, 4, 5, 6 and 7. (Southwith v. National Bank, 84 N. Y. 420; Day v. New Lots, 107 N. Y. 142; Romeyn v. Sickles, 108 N. Y. 650; Reed v. McConnell, 133 N. Y. 427; Northam v. Dutchess Mutual Ins. Co., 177 N. Y. 73; Brighton v. Clifton, 180 N. Y. 76; Claflin v. Gerber, 214 App. Div. 245; Fox v. Davidson, 36 App. Div. 159; Stern v. McKee, 70 App. Div. 142; Allen v. Dutchess Co. Mutual Ins. Co., 95 App. Div. 86; Brandt v. Burke, 110 App. Div. 396.) The effect of a repudiation by defendant of the contract of sale was to relieve the plaintiff of the necessity of tendering performance. Plaintiff was still required to show that it was ready and willing to perform. (Strasbourger v. Leerburger, 233 N. Y. 55; Bigler v. Morgan, 77 N. Y. 319.)
   Kellogg, J.

The plaintiff, a lace manufacturer, contracted to sell a quantity of lace goods to the defendants, who were dealers in laces. The obligations of the parties were expressed in nine separate and distinct orders, which, during the months from October, 1919, to April, 1920, were given to the plaintiff by the defendants and accepted by the plaintiff. In each order it was specified that deliveries should be made as soon as possible.” Owing to the scarcity of lace goods, and the insistent demands for deliveries made by other customers of the plaintiff, the quantity of laces delivered by the plaintiff to the defendants prior to June, 1920, in comparison with the contract quantities, was. small. In June, 1920, the lace market collapsed. The defendants then requested the plaintiff to withhold further deliveries for a reasonable time and to this request the plaintiff acceded. In August, 1920, the defendants accepted deliveries of lace goods of the contract value of $3,866.39, making a payment of $1,000 in cash therefor. This left a balance due plaintiff of $2,866.39 for lace goods upon four of the nine orders. These deliveries were the last which the plaintiff made to the defendants. Finally, toward the end of the year, the defendants refused to receive further deliveries upon the nine orders. All goods delivered had then been paid for. The undelivered laces were sold by the plaintiff in a market which was still depressed, so that the plaintiff sustained a substantial loss. This action was then brought by the plaintiff to recover its damages thus sustained. It was tried before a jury which found a verdict for the plaintiff. The trial judge set the verdict aside on the ground that it was against the weight of the evidence. The complaint, in so far as it set up causes of action for breaches of five of the nine contracts, was then dismissed. As to the four other causes of action a new trial was ordered. The order and judgment were affirmed at the Appellate Division.

Evidence given on behalf of the plaintiff, in relation to the defendants’ refusal to accept deliveries, although disputed in essential particulars, was sufficient to warrant a finding by the jury that the following facts had been established: In August, 1920, the manager of the plaintiff received information that the defendants had become engaged in the business of manufacturing laces in competition with the plaintiff. He told the defendant Shapiro that, while the plaintiff would fill its outstanding orders with the defendants, it never again would do business with them. Shapiro asked the manager to think the matter over as the defendants wished to continue its dealings with the plaintiff. On November 1st, 1920, or thereabouts, Shapiro told the plaintiff that, unless the plaintiff agreed to make further sales to them, the defendants would accept no further deliveries under the nine orders. The plaintiff declined so to agree. On December 9th, 1920, the plaintiff wrote the defendant as follows: “ We find that you owe us $2,866.39, about a month overdue. This amount must be paid by December 20th, 1920, or we will bring suit for same. In addition to the foregoing we have orders for a large quantity of lace which we are ready to deliver but cannot do so because under our contract with you we cannot deliver any more goods while your account is thus overdue. Unless you make payments as aforesaid and bring your account up to date we propose to sell the balance of the goods ordered by you for your account, charge you with the difference and bring suit thereon unless same is promptly paid. Of course, if you make said payments we will at once deliver to you the balance of the goods in accordance with the terms of your order and our contract with you in respect to same.” The sum of $2,866.39 was a balance which, as we have before stated, was due for deliveries upon four of the nine orders. To this letter the defendants made no written response. About a week or ten days later the defendant Friedman told the plaintiff’s manager that the defendants would take the balance of the goods ordered provided the plaintiff would continue to contract with them. The manager said that the plaintiff would fill all outstanding orders but would not agree to make further sales. Whereupon Friedman stated that he could not make arrangements for the defendants to take the deliveries. In January, 1921, the plaintiff sold the remainder of the laces which had been ordered by the defendants and had not been delivered. It thereupon brought this action to recover damages based upon the difference between the prices named in the contracts and the prices seemed from the sales made by it.

Manifestly, the defendants repudiated their contract obligations when, on or about November 1st, 1920, they informed the plaintiff that, unless the plaintiff made an agreement further to contract with them, they would accept no further deliveries. The plaintiff might have treated the repudiation as an anticipatory breach of all the contracts, entitling it to bring immediate suit, without tendering further deliveries, to recover the damages occasioned by the breach. (Wester v. Casein Co. of America, 206 N. Y. 506; Henderson Tire & Rubber Co. v. Wilson & Son, 235 N. Y. 489; Blumenthal & Co. v. Gallert & Co., 240 N. Y. 217; DeForest R. T. & T. Co. v. Triangle R. S. Co., 243 N. Y. 283.) However, the plaintiff did not promptly declare a breach of contract. It did not pronounce itself relieved of performance. It did not bring suit. On the contrary, it announced, in its letter of December 9th, 1920, that it would not perform unless the defendants paid it the sum of $2,866.39. The plaintiff had no right to exact the payment of a sum of money, which was owing upon four contracts, as a condition of its performance of five other contracts, upon which nothing was owing. It further announced, that, if the sum named were paid, it would continue to make deliveries under all nine contracts. The defendants reason that the letter indicated it to be the plaintiff’s purpose not to avail itself of the defendants’ anticipatory breach; that the plaintiff’s offer to perform, upon an untenable condition as to payments to be made, itself constituted an anticipatory breach by the plaintiff of the five contracts, as to which the condition was inappropriate; that the defendants were, therefore, entitled to declare themselves relieved from any obligation on their part to perform the five contracts. (Rubber Trading Co. v. Manhattan Rubber Mfg. Co., 221 N. Y. 120.) The difficulty is that the same argument applied to the defendants’ case destroys their defense. Thus, if it was incumbent upon the plaintiff not to disaffirm its reliance upon the defendants’ breach of November first, it was equally incumbent upon the defendants not to disaffirm their reliance upon the plaintiff’s breach of December ninth. The defendants did not declare that they were no longer bound. On the contrary, acting precisely as did the plaintiff, they made an offer to perform upon an untenable condition, viz., that the plaintiff would agree further to contract with them. They declined to perform otherwise, although the plaintiff, at the time, unconditionally offered to perform. Thus, the defendants committed anew an anticipatory-breach which the plaintiff has never excused or waived. On the contrary, the plaintiff definitely elected to treat the contracts as completely broken by proceeding soon after to sell the contract goods in the market. It is said that the defendants’ breach, made after December 9th, afforded no right of recovery to the plaintiff, for the reason that no such breach was alleged in the complaint. Evidence of the breach was received without objection by the defendants. Evidence to dispute the breach was offered by the defendants. Thus, the issue tendered by the plaintiff was met by the defendants, and its trial was had with the consent of the parties. The defendants cannot now be heard to say that the issue was not within the pleadings.

We may not disturb the judgment appealed from in so far as it affirms an order setting aside the verdict as against the weight of the evidence, and granting a new "trial as to four of the causes of action. In so far as it affirms a judgment of dismissal of five of the causes* of action we think that it was erroneous and that it should be modified to provide a new trial thereof.

The judgment dismissing the complaint as to the causes of action numbered 1, 4, 5, 6 and 7 should be modified by granting a new trial, with costs to abide the event, and the judgment appealed from, as so modified, affirmed.

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

Judgment accordingly.


author: Per Curiam.

text:
    John S. Kedrovsky, Individually and on Behalf of Others, Respondent, v. Archbishop and Consistory of the Russian Orthodox Greek Catholic Church et al., Defendants. Platon Rozdestvensky et al., Appellants.
    (Argued April 18, 1928;
    decided July 19, 1928.)

      George Zabriskie for appellants.
    The orders placing property in the custody of the receiver, on which the plaintiff builds up his case, are not res adjudícala that the Archbishop and Consistory are entitled to the real estate involved in this suit, as the court evidently regards them. (Brown v. Cleveland Trust Co., 233 N. Y. 399; Everett v. Everett, 180 N. Y. 452; Riggs v. Purcell, 74 N. Y. 370; Howell v. Mills, 53 N. Y. 322; Humboldt Exploration Co. v. Fritsch, 150 App. Div. 90; Dutton v. Smith, 10 App. Div. 566; People ex rel. Multer v. Multer, 107 Misc. Rep. 58; Santowsky v. Mc Key, 249 Fed. Rep. 51.) No right or title of the litigant parties has been determined. A receiver pendente lite is a caretaker, a mere custodian, and acquires no title to the property. The property remains in the hands of the receiver subject to a final determination at the trial, in which the issues of title must be properly raised and litigated. (Miles v. New South Building & Loan Assn., 95 Fed. Rep. 919; Union Bank v. Kansas City Bank, 136 U. S. 223; Shrady v. Van Kirk, 51 App. Div. 504; Cobb v. Sweet, 46 App. Div. 375; Barnard v. Kobbe, 54 N. Y. 516; Kenny v. South Shore Gas Co., 201 N. Y. 89; Wiechers v. McCormick, 122 App. Div. 860; Moores v. Townshend, 102 N. Y. 387; Rudd v. Cornell, 171 N. Y. 114; Silberstein v. Silberstein, 218 N. Y. 528; People ex rel. Reilly v. Johnson, 38 N. Y. 63.)

      Ralph M. Frink for respondent.
    The ownership of the properties by the incorporated Archbishop and Consistory was established also by the former adjudication. (Kinnan v. 42nd St. Ry. Co., 140 N. Y. 183; Krekeler v. Ritter, 62 N. Y. 372; Foulke v. Thalmessinger, 1 App. Div. 598; 158 N. Y. 725; Lance v. Shaughnessy, 86 Hun, 411; 153 N. Y. 653; Dwight v. St. John, 25 N. Y. 203; White v. Ewing, 159 U. S. 36; High on Receivers [4th ed.], § 219; Pinkham v. Borst, 24 How. Pr. 246; Irving Bank v. Kernan, 1 Redf. Surr. 1.)
   Per Curiam.

The corporation known as the Archbishop and Consistory did not hold the legal title to the lands in controversy. It did not succeed to any title belonging to the unincorporated association known as the Archbishop and Consistory, for the reason that the latter association had no title to succeed to. The title was either in Archbishop Nemolovsky for the benefit of the faithful of the church within his diocese, or in the defendants to whom he attempted to transfer his trusts (whether successfully or not. we do not now decide), or in the faithful of the church themselves. In none of these views was it in the members of the Consistory who were merely managers or advisers.

The order which is supposed to have established the rights of the body corporate was not an adjudication as to title. This is so even if we assume that the order so far as it goes is to be treated as a final judgment. Things were said by the referee in the course of his report from which we may judge that in his opinion the corporation had the title. The reasons leading up in his mind to the relief which he recommended, must be distinguished from the relief itself. The decretal part of the order made on his report does not involve an adjudication as to title, nor was a finding as to title incidental or necessary thereto. All that the order does is to require the defendants, who had acquired their title, if any, during the pendency of a receivership, to deliver the deeds into the physical possession of the receiver, and to execute such other deeds as might thereafter be required. In other words, the order was merely to the effect that since whatever title they held had been gained pendente lite, their rights and interests were subject, like those of any other purchaser in such conditions, to the final judgment of the court.

In view of the dissensions that have arisen, the Supreme Court may well conclude that the title should be vested in some other trustee who may be relied upon to carry out more effectively and faithfully the purposes of this religious trust (Carrier v. Carrier, 226 N. Y. 114). Whether such trustee should be the plaintiff, who is the present Archbishop, or the incorporated Archbishop and Consistory, or some one else, we do not now determine. This question is one to be passed upon by the Supreme Court in its discretionary supervision of the conduct of trustees. That discretion has not been exercised by any judgment yet pronounced. The case has been determined on the erroneous assumption that deeds to the corporation are nothing more than further assurance for a title already held.

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.

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

Judgments reversed, etc.


text:
    Wawzyn Nowak, Appellant, v. The Brotherhood of American Yeomen, Respondent. Mary Nowak et al., Appellants, v. The Brotherhood of American Yeomen, Respondent.

      (Argued May 1, 1928;
    decided July 19, 1928.)

      Merritt N. Baker for appellants.
    The answers were not false as a matter of law and the direction of verdicts was erroneous. (Dilliber v. Home Life Ins. Co., 69 N. Y. 256; Higgins v. Phoenix Mut. Ins. Co., 74 N. Y. 6; Travelers Ins. Co. v. Pomerantz, 246 N. Y. 63; Valentini v. Metropolitan Life Ins. Co., 106 App. Div. 487; Crosby v. Security Mutual L. Ins. Co., 86 App. Div. 89; Genung v. Metropolitan Life Ins. Co., 69 App. Div. 424; Cushman v. U. S. Life Ins. Co., 70 N. Y. 72; Schmitt v. Michigan Mutual L. Ins. Co., 101 App. Div. 12; Fletcher v. Bankers Life Ins.
      Co., 62 Misc. Rep. 546; 135 App. Div. 295; Edinglon v. Mutual Life Ins. Co., 67 N. Y. 185; Eastern D. F. Dye Works v. Travelers Ins. Co., 234 N. Y. 441; Smith v. Travelers Ins. Co., 76 Misc. Rep. 441.)

      John H. Clogston for respondent.
    The complaints were properly dismissed on account of the breach of warranty in the application. (Preston v. Ætna Ins. Co., 193 N. Y. 142; Saad v. N. Y. L. Ins. Co., 201 App. Div. 544; Stanulevich v. St. Lawrence Life Assn., 228 N. Y. 586.)
   Kellogg, J.

Two life certificates were issued by the defendant association to Apolonia Adamszyk, a member of the association. Death benefits were made payable upon the death of Apolonia Adamszyk, in the instance of one certificate, to the plaintiff in the first action, and, in the instance of the other certificate, to the plaintiffs in the second action. The death of the assured occurred, and thereupon these actions were brought to recover the stipulated death benefits. They were defended upon the ground that the assured, in her applications for certificates, had falsely warranted that she had never consulted a physician. The trial court, deeming that the falsity of the warranties had been conclusively proven, dismissed the actions. ■

The evidence showed that Josephine Zielinska, a daughter of the assured, upon her own initiative, requested Dr. Lehnis, a woman doctor, to call upon her mother. She stated that her mother had complained to her of constipation; consequently, she called the doctor. Her statement, on motion of the defendant, was stricken from the record, and the plaintiff excepted. Dr. Lehnis was called as a witness by the defendant. She stated that, at the request of the daughter, she attended the assured. Questions were asked and answered as follows: Q. And were you called in your professional capacity? A. Yes, sir. Q. Did she consult with you? ■ A. Yes, sir. Q. And was she ill? A. Yes, she was. Q. And did you treat her? A. Yes.” Having adroitly placed this proof in the record, without obj ection made, defendant’s counsel, when the plaintiff’s counsel asked the witness concerning the nature of the disorder from which the assured was suffering, expressed his solicitude lest anything improper be allowed in the case, and objected to the proof. The objection was sustained. Later, when Josephine Zielinska, the daughter, was asked to give the talk between Dr. Lehnis and her mother, an objection was made. Notwithstanding the fact that the bar of section 352 of the Civil Practice Act, prohibiting the revelation of confidential communications made to a physician, runs only against the physician himself, the objection was sustained, the court, curiously enough, remarking that if Dr. Lehnis was re-examined he would permit her to tell the conversation. No exception, however, was taken to the ruling. It appears further that Dr. Lehnis spoke only English while the assured spoke only Polish. The only communication made by the physician to the assured, or by the assured to the physician, was through the daughter, Josephine Zielinska, who interpreted the questions put and the answers made. It does not appear, therefore, that the topic of conversation was the sickness of the assured. The defendant relies, to support the judgment, upon the bare statement of a physician that the assured consulted with her, although the physician understood no word of the conversation between herself and her supposed patient. So far as the record discloses, or the physician knew, the assured may have talked only concerning the weather, or may have gossiped about her neighbors without more. It must be remembered, also, that the assured did not herself call the physician to attend her. We cannot even infer, therefore, that the conventional relationship of doctor and patient had been established between them.

What was the purpose of the question, “ Have you ever consulted a physician? ” which the defendant propounded to the assured? To the assured, who was questioned, what answer did it reasonably seem to call for? The assured was sixty years of age. Did the question require the assured to recall the occasion of every illness, great or little, every childish disease, every headache or cold, throughout her long life, when a physician had prescribed for her a cathartic, a quinine pill, or other simple remedy? She had already stated in the questionnaire presented to her that she had had a daughter. Naturally she must have had a physician in attendance. The questioner must have known it. Why then did it ask if she had ever consulted a physician? Evidently, it did not mean her to specify a consultation of that character, for the fact that she had borne a child would not of necessity affect her present health.

In Cushman v. U. S. Life Ins. Co. (70 N. Y. 72) an assured, who warranted the truth of his answers, had stated that he had never had a disease of the liver, although upon several occasions he had been treated for congestion of the liver, and that was the malady from which he died. It was held that his answer was not untruthful. Earl, J., said: “By the questions inserted in the application, the defendant was seeking for information bearing upon the risk which it was to take, the probable duration of the life to be insured. It was not seeking for information as to merely temporary disorders or functional disturbances, having no bearing upon general health or continuance of life. • Colds are generally accompanied with more or less congestion of the lungs, and yet in such a case there is no disease of the lungs which an applicant for insurance would be bound to state.”

The question, “ Have you ever consulted a physician? ” was immediately preceded by the question, “Are you in good health? ” What more natural than for the assured, who had just answered the latter question in the affirmative, to think that the former question required of her an affirmative answer only provided a previous consultation with a physician was in relation to a disorder which affected her present state of health. It might well have appeared to the assured that the defendant was not “ seeldng for information as to merely temporary disorders or functional disturbances, having no bearing upon general health or continuance of life.”

The nature of the conversation between Dr. Lehnis and the assured, as we have shown, was not revealed. Without knowledge upon the subject we do not think thát a court could justly say that, as a matter of law, there was a consultation by the assured with Dr. Lehnis. True, Dr. Lehnis testified flatly that the assured did consult with her. Whether she did or not is in part a legal question as to which the physician possessed no judgment. Moreover, we think it was error for the tria] court to strike out the testimony of Josephine Zielinska as to the nature of the disorder of which she complained. Such evidence was not hearsay for it was not offered to prove the nature of the mother’s complaint. (Wigmore, sec. 1361.) It was tendered to show the motive which prompted the daughter to call the physician. It tended to prove the purpose with which the doctor called; that she attended to treat a case of constipation. It tended to offset the inference, which otherwise might arise from the bare fact of her attendance, that there was consultation between doctor and patient.

The judgment of the Appellate Division and that of the Trial Term in each action should be reversed and a new trial granted, with costs to abide the event.

Cardozo, Ch. J., Crane, Lehman and O’Brien, JJ., concur; Andrews, J., concurs in the result; Pound, J., dissents on the ground that the insured had consulted a physician within the meaning of the policy.

Judgments reversed, etc.


text:
    In the Matter of E. Arthur Tutein, Inc., Appellant, against Hudson Valley Coke and Products Corporation, Respondent.
    (Argued June 21, 1928;
    decided July 19, 1928.)

      Milton P. Kupfer and Leo Oppenheimer for appellant.
    It is only when the method of appointment specified in an arbitration contract has completely failed, that the power of appointment devolves upon the court. To hold otherwise would not only contravene the parties’ own agreement, but would be at war with the very purpose of the enactment of the Arbitration Law and the policy of the statute, as laid down by the decisions of this court. (Matter of Berkowitz v. Arbib & Houlberg, 230 N. Y. 261; Matter of Wenger & Co. v. Propper S. H. Mills, 239 N. Y. 199; Matter of Kelley, 240 N. Y. 74; Matter of A. E. Fire Ins. Co. v. N. J. Ins. Co., 240 N. Y. 398; Matter of Red Cross Lines v. Atlantic Fruit Co., 264 U. S. 109; Trippet v. Eyre, 3 Lev. 263; 83 Eng. Reprint, 681; Cloud v. Sledge, 17 S. C. L. [1 Bailey] 105; Lesser v. Pallay, 96 Ore. 142; Armstrong v. Sacramento Valley, 52 Cal. App. 110; Matter of Tolins (Klein), N. Y. L. J. Oct. 21, 1926; Morse on Arbitration & Award, 245.)

      Vermont Hatch and James Lawrence Fly for respondent.
    Under section 4 of the Arbitration Law, the duty of appointing a third arbitrator devolves not upon the person or persons who originally had the authority to appoint, but upon the Supreme Court of the State of New York. (Hines v. Ziegfeld, 222 App. Div. 543; Matter of Bullard v. Grace Co., 240 N. Y. 388; Binsse & LaFarge v. Wood, 47 Barb. 624; American Eagle Ins. Co. v. New Jersey Ins. Co., 240 N. Y. 398; Tryspet v. Eyre, 3 Lev. 263; Oliver v.
      Collings, 11 East, 367; Kedy v. Davison, 34 N. S. L. R. 233; Wilson v. Cross, 7 Watts, 495.)
   Per Curiam.

Under the contract between the parties, upon the refusal of Mr. Schulte to act as third arbitrator, before any evidence was produced, Mr. Schwab was empowered to name another to serve in his place. The orders should be reversed, with costs in all courts; the first question certified answered in the affirmative and the second and third questions in the negative.

■ Cardozo, Ch. J., Andrews, Lehman, Kellogg and O’Brien, JJ., concur; Pound, J., dissents; Crane, J., not sitting.

Ordered accordingly.


text:
    The People of the State of New York, Respondent, v. Samuel Friedman, Appellant.
    (Submitted June 15, 1928;
    decided July 19, 1928.)

      Benjamin F. Spellman, Howard, Hilton Spellman and A. Lionel Levy for appellant.
    Under the construction given to the statute by the court below, appellant was denied due process of law and the benefit of the law of the land, to the protection of which he is entitled, both under the State and Federal Constitutions. (Temenent House Dept. v. McDevitt, 215 N. Y. 160; State v. Strasburg, 60 Wash. 106; People ex rel. Kipnis v. McCann, 199 App. Div. 30; 234 N. Y. 502; People ex rel. Pinchback v. Warden, 184 App. Div. 777; People ex rel. Koplitz v. Warden, 112 Misc. Rep. 598.)

      Joab H. Banton, District Attorney (Edwin B. McGuire of counsel), for respondent.
    The statute is constitutional. (People ex rel. Kipnis v. McCann, 199 App. Div. 30; 234 N. Y. 502; People ex rel. Quinn v. Schleth, 180 App. Div. 319; People ex rel. Tulp v. McCann, 206 App. Div. 700.)
   Per Curiam.

Section 445 of the Penal Law must be construed in the light of the heading of the article “ Business and Trade ” as referring to sales made in the usual course of business or trade, and not to occasional or sporadic transactions, as, for example, sales by an executor or administrator in winding up an estate.

So construed the section is reasonable and valid, and the defendant was properly convicted of a violation of its provisions.

The judgment should be affirmed.

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

Judgment affirmed.