text:
    The People of the State of New York ex rel. Elmer H. Lemon, District Attorney of Orange County, Respondent, v. The Supreme Court of the State of New York et al., Appellants.
    (Argued February 21, 1927;
    decided March 29, 1927.)
    Crimes — discovery — prohibition — order for discovery of notes or memoranda in possession of prosecutor improper — order of prohibition properly issued to restrain enforcement of such an order.
    I. Courts are without power to require a district attorney to file in the office of a county clerk for inspection by a defendant before trial, statements, notes or memoranda in his possession relative to the crime charged against defendant but inadmissible as evidence either for prosecution or defense.
    2. An order of prohibition restraining all proceedings for the enforcement and execution of such an order is proper. Even though the order had been entered before prohibition was invoked, its force had not been spent nor its capacity for harm exhausted.

      People ex rel. Lemon v. Supreme Court, 219 App. Div. 725, affirmed.

      Appeal, by permission, from an order of the Appellate Division of the Supreme Court in the second judicial department, entered January 14, 1926, making final and absolute an alternative order of prohibition, theretofore granted, and directing that defendants desist from further proceedings in respect to a motion to compel the district attorney of Orange county to file certain documents.

      Henry Hirschberg for appellants.
    The Supreme Court had inherent power to grant the order of inspection which order has been prohibited by the Appellate Division. (People ex rel. Livingston v. Wyatt, 186 N. Y. 383; People ex rel. Hummel v. Davy, 184 N. Y. 30; People ex rel. Jones v. Sherman, 66 App. Div. 231; 171 N. Y. 684; People ex rel. Weeks v. Platt, 173 App. Div. 451; People ex rel. Martin v. Brady, 168 App. Div. 108; People ex rel. Newton v. Wagner, 193 App. Div. 463; People ex rel. Patrick v. Fitzgerald, 73 App. Div. 339; Nicholas v. Farmers Loan & T. Co., 215 App. Div. 547; Matter of Steinway, 159 N. Y. 250; Jones v. People, 79 N. Y. 45; People ex rel. Swann v. Gen. Sessions Judges, 115 Misc. Rep. 454.) The Supreme Court had jurisdiction under Code of Criminal Procedure to determine if the documents directed to be filed were a part of the support for the Police Court information, and as such filable under said Criminal Code. (People v. Cramer, 22 App. Div. 189; People v. Gardner, 71 Misc. Rep. 335; Tanzer v. Breen, 139 App. Div. 10; People ex rel. Levy v. Preston, 44 Misc. Rep. 267; McKelvey v. Marsh, 63 App. Div. 396; People ex rel. Livingston v. Wyatt, 186 N. Y. 383; People ex rel. Brown v. Tighe, 146 App. Div. 491; People ex rel. Perkins v. Moss, 187 N. Y. 410; People ex rel. Kingsley v. Pratt, 22 Hun, 300; People v. McIntosh, 5 N. Y. Crim. 38; People v. Gage, 149 N. Y. Supp. 43.) The Special Term decided the motion in the criminal case, signed the order directing the filing of the documents so that defendant could have an inspection thereof and the order was entered in the clerk’s office and served upon the district attorney with notice of entry before he instituted the alternative prohibition proceeding in the Appellate Division and hence, there was no jurisdiction in the Appellate Division to grant the order of prohibition as there remained no further judicial action of the Special Term to prohibit. (People ex rel. Livingston v. Wyatt, 186 N. Y. 383; People v. Supervisors, Queen's Co., 1 Hill, 201; Ex parte Braudlacht, 2 Hill, 367; Fiero on Particular Actions & Spec. Pro. [4th ed.] 2773.)

      Elmer H. Lemon, District Attorney, for respondent.
    The order of prohibition was proper, as the lower court had no power to compel the district attorney to turn over his evidence to the defendant. (Swart v. Reckard, 148 N. Y. 264.) There is no inherent power in the Supreme Court to grant the order made in the court below. (People v. Glen, 173 N. Y. 395; People v. Adler, 140 N. Y. 331; People ex rel. Weeks v. Platt, 173 App. Div. 451; Mann v. D., L. & W. R. R. Co., 99 Misc. Rep. 358; People v. Keavin, 123 Misc. Rep. 56; People v. Pirie, 126 Misc. Rep. 254; People v. Steinhardt, 47 Misc. Rep. 252; Matter of Baldwin, 65 Misc. Rep. 153; People v. Gilbert, 118 Misc. Rep. 825.) Prohibition was the proper remedy of the People. (Quimbo Appo v. People, 20 N. Y. 531; People ex rel. Jerome v. General Sessions, 185 N. Y. 504; People ex rel. Newton v. Special Term, 193 App. Div. 463; People ex rel. Sprague v. Fitzgerald, 15 App. Div. 539; 156 N. Y. 689; Matter of Rice, 155 U. S. 396.)
   Cardozo, Ch. J.

The grand jury of Orange county indicted Lucy Earley on October 7, 1926, for the murder of her husband by poisoning his food. The effect of this indictment was to supersede an information, filed by the District Attorney with the Recorder of the city of New-burgh, charging the same crime. The minutes of the grand jury have been inspected by the defendant under an order of the court. Qne Wegley, an accomplice, gave testimony that the defendant had asked him for arsenic to enable her to kill her husband, and had received the poison from his hands. Physicians who had examined the contents of the stomach, gave testimony as to the quantity of arsenic disclosed by the analysis. Other witnesses gave testimony directed to the cause of death and to the methods and agencies through which the poison was administered. A transcript of all this testimony was given to the defendant and is embodied in the record. The defendant was not satisfied with this disclosure of the case against her. She deposed that other evidences not submitted to the grand jury, had been gathered by the District Attorney and she prayed for an order that they be submitted to her scrutiny. The petition was not granted in all its length and breadth. An order was made, however, that the District Attorney file in the office of the clerk of Orange county (1) each and every written statement, affidavit, letter, memorandum and confession made by William Wegley either directly or indirectly to said District Attorney or any of his assistants, subordinates or employees prior to the filing by said District Attorney of said information in the Recorder’s Court of the City of Newburgh; (2) the complete written statements and memoranda of the post-mortem examination of said Daniel F. Earley referred to in said information and all reports made to said District Attorney directly or indirectly or to any of his employees, assistants or agents in connection with this investigation by or on behalf of Dr. Alexander 0. Gettler, Dr. Otto H. Schultze, Dr. James C. Donovan and John J. Perrott; (3) all reports and information made directly or indirectly to said District Attorney with reference to any chemical analysis or examination of the organs or parts of the body of Daniel F. Earley or of any fluids or substances prior to the filing in Police Court of the said information by said District Attorney.” The order further provided that said District Attorney be and he hereby is precluded from giving proof on the trial herein of any facts referred to in any of said documents which he is hereby directed to file and does not file.” The entry of that order was followed by a petition for an order of prohibition (Civ. Prac. Act, § 1341). The Appellate Division granted the petition, and restrained all proceedings for “ the enforcement and execution ” of the order for the filing of the documents. The order of prohibition is now before us for review.

The common-law courts, till aided by statute, professed a lack of power, even in civil causes, to order the inspection of documents in advance of a trial, unless indeed the document to be examined was the very subject of the cause (Denslow v. Fowler, 2 Cow. 593, note; McQuigan v. D., L. & W. R. R. Co., 129 N. Y. 50, 55; Carpenter v. Winn, 221 U. S. 533). To give relief from these defects, the remedy of discovery and inspection was framed by courts of equity (2 Story, Eq. Juris. § 1484). The remedy as framed involved a separate, if ancillary, suit, and in that respect as well as others was awkward and unwieldy. Statutes, long in force in this State, have made a like remedy available in the primary cause itself by motion or petition. This borrowing of equitable remedies began with the Revised Statutes of 1830 (2 R. S. 199, part III, ch. 1, title 3, §§ 21, 22; King v. Leighton, 58 N. Y. 383, • 384, 385). A party to a suit in the Supreme Court might be compelled “ to produce and discover books, papers and documents in his possession or power, relating to the merits of any such suit, or of any defence therein ” (§ 21). The successive Codes of Procedure and the Civil Practice Act, extending the same remedy to other courts of record, have carried it down, unchanged in substance, to our day (Code Civ. Pro. § 342; Code Civ. Pro. § 803; Civ. Prac. Act, § 324; also L. 1841, ch. 38). So familiar in civil causes has the remedy become that many who invoke it have forgotten in all likelihood its origin in history as the creature of a statute. Yet even in civil causes, with all the statutory reinforcement of the sparse and narrow remedy, itself “ in the nature of a usurpation ” (McQuigan v. D., L. & W. R. R. Co., supra, at p. 55), that had grown up at common law, the jurisdiction has its limits (Civ. Prac. Act, § 324). Documents are not subject to inspection for the mere reason that they will be useful in supplying a clew whereby evidence can be gathered. Documents to be subject to inspection must be evidence themselves (Falco v. N. Y., N. H. & H. R. R. Co., 161 App. Div. 735, 737; Woods v. De Figaniere, 25 How. Pr. 522, 526, 527; Knight v. Marquess of Waterford, 2 Y. & C. Ex. 22, 36). No precedent can be found even in civil causes for compelling disclosure, in advance of the trial, of the office notes or memoranda prepared by an attorney after consultation with his witnesses, and summarizing his understanding of the testimony that is likely or expected.

When we turn to criminal causes, we find a jurisdiction that is even more restricted. There are expressions of opinion that deny the jurisdiction altogether. There are others that seem to limit the disclosure to documents that are the subject of the charge, thus assimilating the practice to the jurisdiction in civil causes that was known at common law. Others concede or assume a broader jurisdiction, one adequate to prevent a failure of justice, yet narrower than discovery in equity or under the statutory substitute. Nowhere has there been a suggestion that the jurisdiction can properly be extended to notes or memoranda in the possession of the prosecutor, but inadmissible as evidence either for prosecution or for defense.

The point of departure in any discussion of the subject is the decision of the King’s Bench in Rex v. Holland (4 T. R. [Durnford & East], 691), decided in 1792. An information had been filed by the Attorney-General against an officer of the East India Company upon charges of peculation and corruption. A Board of Inquiry had examined witnesses in India and had made a report upon the matter which was transmitted to England. The defendant applied for an order that he be permitted to examine this report. The court refused the order upon the ground of want of power. “ I am extremely clear,” said Lord Kenyon, Ch. J., “ that we ought not to grant tMs application. There is no principle or precedent to warrant it. Nor was such a motion as the present ever made; and if we were to grant it, it would subvert the whole system of criminal law.” Ashubst, Bulleb and Gbose, JJ., spoke to the same effect. “ The practice on common law indictments, and on informations on particular statutes, shews it to be clear that this defendant is not entitled to inspect the evidence, on which the prosecution is founded till the hour of trial ” (per Bulleb, J.).

The report to be examined in that case would have been inadmissible as evidence for prosecution or defense. Later cases exhibit a more conciliatory tendency where the document is one that may be received as an exhibit. Discovery will be ordered if the exhibit is the basis of the charge, as, e. g., where the indictment is for sending a threatening letter (Rex v. Harrie, 6 Car. & P. 105; cf. People v. Bellows, 1 How. Pr. [N. S.] 149). There is some authority for the view that it will be ordered in other cases where the thing to be inspected is admissible in evidence and a failure of justice may result from its suppression. Thus, in Regina v. Dorr (3 Cox C. C. 221) an inspection of the contents of the stomach was permitted in a prosecution for homicide. In People v. Gerold (265 Ill. 448) a county treasurer charged with defalcation was held to have the right to inspect official books and documents. In Commonwealth v. Jordan (207 Mass. 259), a prosecution for murder, there was recognition of the power to permit an inspection of portions of the body taken at the time of the autopsy by the medical examiner and also weapons and other exhibits in the possession of the public prosecutor, though the court refused the order in the exercise of discretion. Other cases point the same way with more or less distinctness (See, e. g., Newton v. State, 21 Fla. 53; Daly v. Dimock, 55 Conn. 579; State v. Howland, 100 Kan. 181). The power frequently asserted to compel the return of property illegally impounded is based upon the assumption of a supervisory jurisdiction over the acts of public prosecutors (Weeks v. U. S., 232 U. S. 383, 398; People v. Chiagles, 237 N. Y. 193, 199; cf. Kenny, Outlines of Criminal Law, 477, citing Regina v. Puddick, 4 F. & F. 497). There may be something of kinship here to the power to compel inspection in furtherance of justice. Argument earnestly upholding the latter jurisdiction, though conceding much authority against it, will be found in Mr. Wigmore’s treatise (3 Wigmore Evidence, § 1859-g; § 1863; cf. 2 Bishop, New Criminal Pro. [2d ed.] § 959-d.) There are pronouncements, however, to the contrary in the works of learned commentators (2 Russell on Crimes, 1985, 2096, 2098; 9 Halsbury Laws of England, p. 387, § 152; cf. State v. Howard, 191 la. 728).

Little aid can come to the defendant from the decisions in our own State, much relied upon by counsel, which maintain an inherent jurisdiction to permit an inspection of the minutes of the grand jury returning an indictment. The object of such inspection is not to supply the accused with evidence in advance of trial. The object is to lay the basis for a motion to dismiss the indictment where there is reason to believe that the evidence before the grand jury is insufficient or illegal (Matter of Montgomery, 126 App. Div. 72). Little aid can come from the decisions which maintain an inherent jurisdiction to compel the service of a bill of particulars explaining or defining an indictment that is general or indefinite (People v. Williams, 243 N. Y. 162; Commonwealth v. Jordan, supra). Remedial devices for the correction of uncertainties in pleadings were worked out by the courts, without resort to statute, in aid of civil remedies. There was no greater need of statute when the same remedy was conceded to one accused of crime. What was done was within an acknowledged head of common-law jurisdiction as shaped by precedent and practice. The power to correct a pleading has a genesis in history that has little, if any, relation to the power to compel a disclosure of the proofs. The development of the latter power was due almost wholly to the activities of the Chancellor, who was careful, none the less, with all his injunctions and discoveries, to hold aloof from interference with prosecutions by the Crown. “A bill of discovery,” said Lord Hardwicks (Lord Montague v. Dudman, 1751, 2 Ves. Sen. 396, 398), lies here in aid of some proceedings in this court in order to deliver the party from the necessity of procuring evidence, or to aid the proceeding in some suit relating to a civil right in a court of common law, as an action; but not to aid the prosecution of an indictment or information, or to aid the defence of it ” (cf. 2 Story, Eq. Juris. § 1494). The supervisory control, whatever it may be, that belongs to courts of common law in respect of a criminal prosecution, is an autochthonous growth, a thing evolving from within. It was not forced upon them from without under pressure of the Chancery.

We have traced'the lines of battle, the terrain of the opposing forces. The survey may help in the future to a solution of the conflict. For the moment,, the clash may be confined to outlying portions of the field. The decision of this case does not require us to affirm or deny the existence of an inherent power in courts of criminal jurisdiction to compel the discovery .of documents in furtherance of justice. The beginnings or at least the glimmerings of such a doctrine are to be found, as we have seen, in courts other than our own. A search of precedents in this State yields results that are largely negative, if our scrutiny is confined to criminal prosecutions. On the other hand, the tendency is unmistakable in the field of civil causes to limit the power strictly within the statutory schedules (McQuigan v. D., L. & W. R. R. Co., supra). Whether apart from statute and beyond it there is a supervisory jurisdiction, as yet unplumbed and unexhausted, in respect of criminal prosecutions, is something that can best be determined at the call of particular exigencies in the setting of the concrete instance. The courts are properly reluctant to abjure the power in advance, or to confine in predetermined formulas the occasions of its exercise. We have a statute to the effect that the rules of evidence shall be the same in criminal as in civil causes (Code Grim. Pro. § 392). The provisions of the civil codes for the discovery of documents are not rules of evidence in the strict sense. They are closely akin, however, to such rules, for they govern and define the remedies whereby evidence is made available. Those remedies are now so inveterate and established that they form part of the warp and woof of the procedural system of the State. The time has arrived, so it is argued, when they should be taken over by the criminal courts, and applied to criminal actions by a process of analogy. The appropriation is justified, we are told, by the germinal developments of a like power in the courts of other Sjtates, by the public policy implicit in the rule of uniformity of evidence, and by the necessities of justice.

We leave the question open, for if the power exists at all, this case is not within it. The most that can be argued with any show of reason in behalf of the defendant is that the remedy of inspection in civil causes as now prescribed by statute is to be applied in consimili casu to criminal prosecutions. The power in criminal prosecutions may not improbably be less. It surely can be no greater. But the defendant, if subjected to that test, fails to make out her title to the remedy. She does not ask, as did the defendant in Commonwealth v. Jordan (supra), that the body of the dead man or any part of it be submitted to her scrutiny or to that of her advisers. Her demand is that a prosecutor who has gathered statements from prospective witnesses shall place the statements in her hands that she may study and repel them. She does not ask that she inspect any confession made in her name and admissible against her. Conceivably such inspection may be necessary at times, as, for instance, to enable a defendant to prove the forgery of a signature. She asks that she examine the incriminating statements of a conspirator whose confessions will not be evidence except against himself. So far as the record shows, he has not even been indicted. If indicted, his trial will be separate from hers. The reason why she asks for a disclosure of the statements of the physicians and the chemists is her belief that their statements to the prosecutor were fuller in all probability than their statements to the grand jury already in her possession. A like reason explains her request for the confessions. In a word, statements and memoranda collected by the prosecutor 'are to be exhibited to the defendant, though none of them will be admissible either for her or against her if offered at the trial. She makes no claim that they will be. She takes the ground that she should have them because study of the evidence will be helpful in preparing her defense. This is to enlarge the remedy beyond anything permitted by analogy or precedent.

If the statute governing inspection were extended in so many words to criminal prosecutions, the defendant would be unable on such a showing to make good her title to relief. We have no occasion at this time to consider to what extent inspection might be directed at the trial as an aid to cross-examination after the witnesses had testified (4 Wigmore, Evidence, § 2224). What concerns us at the moment is the scope of the remedy available in advance. At such a stage of the contest, a remedy so drastic is within the condemnation of the rule that inspection may not be had for the sole purpose of prying into the case of one’s opponent. The documents to be exhibited must be evidence in support of the cause of action or defense of the party seeldng the discovery (1 Pomeroy’s Eq. Juris. § 201; Wigram on Discovery, § 342; Hare on Discovery, pp. 183, 189). But here the objection is even deeper, more incurable. The documents to be exhibited to this defendant are not evidence for any one. They are merely mnemonic instruments whereby the prosecutor may be better able to elicit evidence hereafter. A mandate giving them publicity is something more than error in the exercise of power. It is an assumption of power where none has been confided (Matter of Sawyer, 124 U. S. 200, 221; Quimbo Appo v. People, 20 N. Y. 531; St. Louis R. R. Co. v. Wear, 135 Mo. 230, 256).

We think a proper case is made for an order of prohibition. The order for an inspection of the documents is not the subject of appeal (Code Crim. Pro. § 518). The People are without a remedy unless its enforcement can be checked (Quimbo Appo v. People, supra). We are not unmindful that the order had already been entered when prohibition was invoked. Its force, however, had not been spent, nor its capacity for harm exhausted. The prosecuting officer, failing to obey it, might find himself exposed to prosecution for contempt. The course of the trial might be changed with the possible result that justice would miscarry, for a penalty of disobedience was to be the exclusion of the evidence. There are decisions that excess of jurisdiction will not be corrected by prohibition when the consequences of judicial action are wholly in the past. We have no occasion to consider whether even these decisions are subject to possible exceptions (10 Halsbury Laws of England, §§ 293, 294). The rule is different, at all events, in cases where “ something remained which the court or party to whom the writ was directed might do, and probably would have done, as the collection of costs, or otherwise enforcing the sentence ” (U. S. v. Hoffman, 4 Wall. [U. S.] 158, 162, 163). The court will purge its records when there is menace lurking in the future until the purge is made complete (People ex rel. Sprague v. Fitzgerald, 15 App. Div. 539; 156 N. Y. 689; Ferguson v. Martineau, 115 Ark. 317, 323; St. Louis R. R. Co. v. Wear, supra, at p. 257; Roberts v. Humby, 3 M. & W. 120; Farquharson v. Morgan, 1894, 1 Q. B. 552, 563; Bodenham v. Ricketts, 6 Nev. & M. 170; London Corp. v. Cox, 1867, L. R. 2 H. L. 239, 283, 388; Buggin v. Bennett, 4 Burr. 2035).

The order should be affirmed without costs to either party.

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

Order affirmed, etc.


source: Caselaw Access Project

author: Crane, J.

license: Public Domain

text:
    Kate Wilder, Appellant, v. Pennsylvania Railroad Company et al., Respondents.
    (Argued March 2, 1927;
    decided March 29, 1927.)
    Carriers — railroads ■— passengers — contract — provision in pass whereby donee assumes all risk of personal injury not a release — not applicable to joint tort feasor unless contract expressly or by implication so provides — agreement impliedly includes facilities of connecting railroads and affords them protection from liability.
    1. A railroad pass containing the clause “ in consideration of the issuance of this free pass, I hereby assume all risks of personal injuries and all loss of or damage to property from whatever causes arising, and release the Company from liability therefor,” has none of the elements of a release. It is an agreement not to sue and speaks for the future, not the present or past. It does not apply, therefore, to a joint tort feasor unless the contract expressly or by implication so provides.
    2. In an action, however, to recover for personal injuries alleged to have been sustained by the holder of such a pass from a fall on the slippery floor of the waiting room in a station used by the issuing railroad but owned by another connecting railroad, a defense set up in the answer of the latter, that by acceptance of the pass plaintiff had assumed the risk of personal injury in its station, is sufficient. The agreement made with the issuing railroad included and was made for the benefit of all connecting companies and roads on or over which plaintiff would travel by reason and by virtue of her pass. The meaning and purport of the agreement was that, because of the free use of facilities, the plaintiff assumed all risks of injury while using the pass between the points designated. Impliedly it included not only the facilities of the issuing company but of the connecting lines. The contract was a single contract to travel all the way and afforded protection to aJ the lines contributing to that end.

      Wilder v. Pennsylvania R. R. Co., 217 App. Div. 661, affirmed.
    Appeal, by permission, from an order of the Appellate Division of the Supreme Court in the first judicial department, entered July 6, 1926, which affirmed an order of Special Term denying a motion by plaintiff to strike out a separate defense set up in the answer.
    The following question was certified:

      “ Is the separate and independent defense alleged in paragraph 10 of amended answer of the defendant Pennsylvania Tunnel and Terminal Railroad Company sufficient in law upon the face thereof? ”

      R. Randolph Hicks and Thomas F. Compton for appellant.
    The pass issued to the plaintiff was a covenant not to sue and not a technical release. (Rowley v. Stoddard, 7 Johns. 207; Dewey v. Derby, 20 Johns. 462; Catskill Bank v. Messenger, 9 Cow. 37; Frink v. Green, 5 Barb. 455; Ervine v. Milbank, 56 N. Y. 635; Hillas v. Fuller, 143 N. Y. Supp. 15.) To interpret the pass as a release does not accord with the intent of the parties nor with the modern tendency to mitigate the harshness of the common-law doctrine that the release of one joint tort feasor releases all. (Gilbert v. Finch, 173 N. Y. 455; Walsh v. Hanan, 193 App. Div. 580; Hirschfield v. Alsberg, 47 Misc. Rep. 141; Dwy v. Connecticut Company, 89 Conn. 74; Sherburne v. Goodman, 44 N. H. 271; Emerson v. Ziegfeld, 22 Penn. Super. Ct. 79; Walsh v. N. Y. C. & H. R. R. R. Co., 204 N. Y. 58.)

      Morton L. Fearey for respondents.
    The defendants are sued as joint tort feasors. (Anderson v. Erie R. R. Co., 223 N. Y. 277; Kansas City Southern Ry. Co. v. Van Zant, 260 U. S. 459; Hester v. Manhattan Bridge ThreeCent Dine, 214 App. Div. 534; Santa Fe Ry. v. Grant Bros., 228 N. Y. 177.) The release of one joint tort feasor releases the other. (Walsh v. N. Y. C. & H. R. R. R. Co., 204 N. Y. 58; Muse v. De Vito, 243 Mass. 384; Dwy v. Connecticut Co., 89 Conn. 74; Post v. Thomas, 180 App. Div. 627.) Where a contract for through transportation contains valid limitations of liability which are not in terms confined to the initial or contracting carrier, such limitations inure to the benefit of a connecting carrier. (Manhattan Oil Co. v. Camden & Amboy Railroad & Transp. Co., 54 N. Y. 197; Burke v. Union Pacific Railroad Co., 178 App. Div. 783; Hall v. North Eastern

      Ry. Co., L. R. [10 Q. B.] 437; Bicknell v. Grand Trunk Ry. Co., 26 Ontario App. 431.)
   Crane, J.

The plaintiff on July 9, 1921, fell on a soapy and slippery floor of the waiting room of the Pennsylvania station, owned by the defendant Pennsylvania Tunnel and Terminal Railroad Company, in the city of New York, and was injured. She was on the premises for the purpose of boarding a train to Norfolk, Virginia, and was to ride on a pass issued by the Pennsylvania Railroad Company, the other defendant, which read a= follows: „ Not Trmsferable '

„ Not Trmsferable
“ Pennsylvania System
“ Eastern Region Central Region
“ Northwestern Region Southwestern Region
May 28th, 1921 c.
“ Pass Mrs. L. M. Wilder and Sons Stanley,
“ Clerk
“ Acct. S. A. L. Ry.
“ To Washington D. C. or Norfolk, Va.
“ From New York, N. Y.
Good for one trip until August 28, 1921. Not good on Main line trains Nos. 2, 5, 28, 29, 30, and 31 and Congressional Limited Trains Nos. 127 and 130.
Resident Norfolk, Va. Requested by S. D. W.
Valid' when countersigned by I. A. Miller, W. W. Wells and Thos. Z. Heston.
“ Countersigned
Thos. Z. Heston Elisha Lee
In consideration of the issuance of this free pass, I hereby assume all risks of personal,injuries and all loss of or damage to property from whatever causes arising, and release the Company from -liability therefor, and I hereby declare that I am not prohibited by law from receiving free transportation and that this pass will be lawfully used.
“ BK31184 Sgd. MRS. KATE WILDER ”

This statement thus far is taken word for word from the appellant’s brief, as the facts which she desires to have us consider in passing upon the pleadings in this case. We, therefore, should not ignore them. She also states that they are the facts “ as set forth in the complaint and reviewed by the court below.” Her statement is supported by the opinion of the Appellate Division which contains this copy of the pass.

I mention this matter at the outset for the reason that the pleadings do not set forth the pass in full. The amended answer under review alleges that according to the pass on which the plaintiff was traveling, issued by the Pennsylvania Railroad Company, she assumed all risk of personal injury, and released both companies from ‘ liability. The pass thus referred to is that transcribed above. The appellant says so, and we must assume it. We must consider the sufficiency of the answer, therefore, as though the pass itself was fully set forth therein.

It is apparent from this amended answer that the pleader considered this pass a release, and that the release of the Pennsylvania Railroad Company released as a joint tort feasor the Pennsylvania Tunnel and Terminal Railroad Company. This was the ground of the decision below. In our opinion this view is untenable. The. pass had none of the elements of a release. It was an agreement not to sue, made in consideration of the free use of railroad facilities. There was no claim in existence to be released at the time it was given. It spoke for the future, not the present or past. No liability existed, consequently there was none to be released. This contract, therefore, made on sufficient consideration with the Pennsylvania Railroad Company, did not apply to a joint tort feasor unless the contract expressly or by implication so provided. (Morgan v. Smith, 70 N. Y. 537; Barrett v. Third Avenue R. R. Co., 45 N. Y. 628; Gilbert v. Finch, 173 N. Y. 455, 466; Anderson v. Erie R. R. Co., 223 N. Y. 277; Berry v. Pullman Co., 249 Fed. Rep. 816; Williston on Contracts, sect. 1820.)

. We think, however, that the • agreement made with the Pennsylvania Railroad Company included and was made for the benefit of all connecting companies and roads on or over which the plaintiff would travel by reason and by virtue of her pass; that is, in going from New York to her destination the agreement accompanied and attached to the use of the pass in behalf of that company giving the service or transportation. We must view this contract in the light of all the circumstances and the allegations in the pleadings.

The complaint alleges that the two defendants were the owners and in possession of the Pennsylvania Railroad station at Seventh avenue, New York city. Paragraph fourth thereof reads as follows:

That, prior to the 9th day of July, 1921, the defendant, The Pennsylvania Railroad Company, its agents, servants! and employees, had ssued and given to the plaintiff a pass entitling the plaintiff, as a passenger, to one continuous passage from New York City, New York, to Norfolk, Virginia, on passenger trains operated by the defendant The Pennsylvania Railroad Company over and upon the railroad of the said defendant and over and upon the railroads of connecting carriers, including the railroad of defendant Pennsylvania Tunnel and Terminal Railroad Company, and authorizing and permitting the plaintiff as such passenger to ride upon passenger trains operated by the defendants and by connecting carriers between New York City and Norfolk, Virginia; and the plaintiff was at said time the true and lawful holder of said pass.”

The defendant Pennsylvania Tunnel and. Terminal Railroad Company admitted that it was the owner of the Pennsylvania Railroad station in the borough of Manhattan, city of New York, and alleged and set up as a separate and independent defense the pass issued as above set forth, whereby the plaintiff assumed all risk of personal injury in consideration thereof.

The meaning and purport of this agreement was that because of the free use of facilities, the plaintiff assumed all risks of injury while using the pass between New York and Norfolk, Virginia. Impliedly, the agreement included not only the facilities of the Pennsylvania Railroad Company, but of the connecting fines. It had the same effect as if the Pennsylvania railroad owned the station and operated a railroad to the plaintiff’s destination. The contract was a single contract to travel all the way, and afforded protection to all the fines contributing to that end.

The paragraph quoted from the complaint says that the plaintiff by the pass was entitled to a continuous passage over connecting railroads, including the railroad of the Pennsylvania Tunnel and Terminal Railroad Company. We take it that the word “ railroad ” does not exclude depot, and that this pass applies to stations and depots of the defendants in going to and from New York and Norfolk, Virginia, as well as traveling over the rails and roadbeds. In fact, no such point is made by the appellant.

The plaintiff, therefore, concedes by these allegations that her pass entitled her to the use of the Pennsylvania Railroad depot, its waiting rooms and the passage through its gates to the trains. The station and the waiting room were part of the connecting railroad which the plaintiff could use free of charge by reason of her agreement with the Pennsylvania Railroad Company. This she alleges in her complaint. While using this pass, therefore, she assumed all risks of personal injury. This assumption or agreement relieved the company owning and operating the station of liability. By fair implication, if not by express words, it shared the benefits as well as the responsibilities of the pass. In making the contract, the Pennsylvania railroad was the agent of these connecting fines. This is the view taken in Hall v. North Eastern Railway Co. (L. R. 10 Queen’s Bench, 437); Bicknell v. Grand Trunk Railway Company (26 Ontario App. 431, 448). In the former case the contracting carrier’s car was attached to the defendant’s train at an intermediate point, beyond which the plaintiff was injured in a collision; that is, the defendant was a connecting carrier and not the contracting carrier. Blackburn, J., said:

“ It is clear that this is the true construction of the ticket: ‘ In consideration of my being carried the whole way free of charge I agree that I shall be traveling the whole way at my own risk; ’ and it seems to me that the plaintiff did authorize the North British Company to contract for him with the North Eastern Company, and what he authorized was that he should travel at his own risk.”

This view of the relationship is further emphasized in this particular case by considering the pass itself, as we can do in view of what I have above stated. The pass is headed Pennsylvania System,” not “ Pennsylvania Railroad.” As the station in Manhattan, New York city, is part of the Pennsylvania system, it was apparently the express intention of the parties to include the station and its owner, part of the Pennsylvania system, within the privileges and obligations of the agreement.

For the reasons here stated, the orders below should be affirmed, with costs, and the question certified answered in the affirmative, giving to the amended answer the meaning and'fullness herein stated.

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

■ Ordered accordingly.


text:
    Marion W. McCarter, Respondent, v. Everitt L. Crawford et al., Appellants.
    (Argued February 25, 1927;
    decided March 29, 1927.)
    Vendor and purchaser — contract — real property — encroachments — sale of land subject to survey — provision for cancellation for defect in title — encroachment of building on adjoining property no cause for action on contract to recover down payment.
    Where a contract for the sale and purchase of real property “ subject to such a state of facts as an accurate survey would show,” contains a provision for cancellation by the purchaser, should the vendor be unable to complete by reason of defects in title, an action on the contract by the purchaser to recover money paid, cannot be maintained solely because of an encroachment of one of the buildings of from two to eight inches on adjoining property. The parties contracted with a survey in mind and the purchaser agreed to take subject to any encroachment a survey might show.

      McCarter v. Crawford, 217 App. Div. 766, reversed.
    Appeal, by permission, from a judgment of the Appellate Division of the Supreme Court in the second judicial department, entered June 23,1926, unanimously affirming a judgment in favor of plaintiff entered upon a verdict directed by the court.

      John A. Kelly, James G. Affleck, Jr., and Grenville S. Sewall for appellants.
    The respondent contracted to take the land “ subject to such a state of facts as an accurate survey would show,” and by reason of such clause the respondent was bound to take the property in spite of the encroachment and forfeited the down payment when she refused to do so. (Fleischman v. Ferguson, 223 N. Y. 235; Levy Corp. v. Dick, 116 Misc. Rep. 145; Urbis Realty Co. v. Globe Realty Co., 235 N. Y. 194; March v. Marasco, 165 App. Div. 348; Baumeister v. Demuth, 84 App. Div. 394; 178 N. Y. 630; Ely v. Matthews, 58 Misc. Rep. 365; Pope v. Thrall, 33 Misc. Rep. 44; Kerschover v. Berger, 119 N. Y. Supp. 737.)

      Richmond J. Reese, George W. Files and George C. Howard for respondent.
    The clause “ subject to a state of facts that a survey may show ” refers only to variances in metes and bounds and to immaterial variances in dimensions. It cannot mean that a purchaser must take an unmarketable title. (Trimbole v. Kinkel, 226 N. Y. 147; Irving v. Campbell, 121 N. Y. 353; Moore v. Williams, 115 N. Y. 586; Snow v. Monk, 81 App. Div. 206.)
   Crane, J.

On the third day of April, 1920, this plaintiff entered into a written contract with Everitt L. Crawford and Mary B. Palmer, as executors of the will of Augustus G. Palmer, deceased, for the purchase of certain property with the buildings thereon erected in the village of Port Chester, town of Rye, county of Westchester, for the sum of $17,000. The description of the property commenced as follows:

All that certain piece and parcel of land, with the buildings and improvements thereon erected, situate, lying and being in the Village of Port Chester, Town of Rye, County of Westchester and State of New York, beginning at the corner formed by the intersection ofi the Easterly line of South Regent Street, with the Northwesterly line of South Main Street, and running thence,” etc. i

Then followed a description of the property by metes and bounds, the last phrase of which read:

“ * * * Containing within said bounds, nine thousand nine hundred and fifty-six ten thousandths of an acre be the same more or less, and being the same premises which were heretofore conveyed by George Quintard Palmer and Edna E. Palmer his wife, to the said Augustus G. Palmer by deed dated, January 24, 1902, and recorded in the office of the Register of the County of Westchester on February 1, 1902, in Liber 1605 of deeds, page 78.”

The contract also contained, following this description, these words: “ Subject to such a state of facts as an accurate survey would show.” On the property was a residence, a stable and a carriage house separate and apart from the stable. When the survey was made, it showed that the carriage house extended over the easterly line of the property two inches on the north, and a little over eight inches on the south end of the building. The carriage house was a small structure setting back in the lot over two hundred and seventy-five feet from South Main street. It was near the rear of the premises and between the residence and the stable. In a word, it projected over onto the adjoining property from two to eight inches.

The purchaser rejected the title as unmarketable because of this encroachment.

The contract also contained this clause:

“ In the event of the parties of the first part being unable to complete this contract by reason of defects in title, the party of the second part shall have the right to cancel the same, but in the event of such cancellation the parties of the first part shall be under no liability to the party of the second part, except to refund that portion of the purchase price already paid and this contract shall be considered terminated without any right to either party for damages against the other.”

The purchaser having paid $1,700 upon the signing of the contract, brought this action to recover the amount, because of the encroachment shown by the survey. The courts below have held with her, the Appellate Division, however, permitting an appeal to this court, certifying that in its opinion a question of law was involved which should be reviewed here.

This is an action at law brought by the purchaser to recover upon the strength of her contract, and according to the terms thereof. She does not seek to set the contract aside for fraud or for any other ground which might be cognizable in equity. The contract as made by her, she says entitles her to cancellation and to repayment. We do not see how it is possible to get away from that provision of the contract regarding the facts to be shown by a survey. It is conceded that she can get all the land contracted for. The defendants are able to convey to her the land described in the contract. The survey tallies with the description. Even a slight variation in this particular might not be fatal, as the words more or less permitted slight variances in description or acreage. It was expected that a survey of the property would be made; anyhow, the parties contracted with a survey in mind, because the purchaser agreed to take the property subject to the facts which a survey would show. To take subject to means to be subordinated to these facts. If a survey showed that one of the buildings encroached upon adjoining property, the plaintiff agreed to take subject to, or under this state of facts. Unless we give this meaning to, the provision, it might just as well'have been left out of the contract. Of course, the encroachment might be of such a substantial nature that the plaintiff would not get the building or the main part of it, which she contracted to purchase. We can always think of extreme cases to which such a phrase would not in justice apply. The parties, however, must have intended something to be shown by a survey, some fact which might affect the property described. This fact did appear. There was a slight encroachment of the carriage house; the plaintiff contracted to take subject to this encroachment. She by her contract assumed these chances.

This is the meaning which has been given to this phrase whenever it has come before the courts for construction. (Kreshover v. Berger, 135 App. Div. 27.) In this case Mr. Justice Scott, writing for the Appellate Division, said:

“ The fact is alleged to be that one wall does encroach upon the adjoining land from one-quarter to one and three-quarter inches. * * * The contract, however, contains a provision that the property is bought ‘ subject to state of facts shown on survey of Chas. A. Meyer and Son, dated Sept. 1, 1905.’ We think that the insertion of this clause indicated an intention to rely on the survey as to the Hues of the property and possible encroachments, and is inconsistent with the contention that plaintiff relied upon the misrepresentation and was led thereby to make the contract.”

See, also, March v. Marasco (165 App. Div. 348), where Mr. Justice Dowling, writing for that court, referred to encroachments objected to as follows:

The encroachments claimed to have existed did not constitute a valid objection in view of the terms of sale under which the property was sold, which recited that it was to be taken subject to any state of facts which an accurate survey might show.”

The encroachment of the carriage house might have rendered the title unmarketable if it were not for this agreement regarding the survey. The contract in Levy Corp. v. Dick (116 Misc. Rep. 145) contained the words: subject to any state of facts the survey may show and subject to existing monthly tenancies, provided said survey does not show facts as would render the title unmarketable.” This latter clause, however, is not to be found in the contract before us, and the courts are not justified in making the contract read as though it were so contained.

For these reasons the judgments below should be reversed and the complaint dismissed, with costs in all courts.

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

Judgment accordingly.


author: Cardozo, Ch. J.

text:
    Henry G. Strong, Appellant, v. American Fence Construction Company, Respondent.
    (Argued February 23, 1927;
    decided March 29, 1927.)
    Contract — surety bonds — jurisdiction — Federal statute requiring contractor for government work to give bond to secure payment for labor and materials and providing for prosecution in Federal court — existence of bond indispensable condition of Federal jurisdiction — failure to give bond — laborer or materialman may maintain action in State court for damages — recovery limited to pro rata share of penalty of bond had one been given.
    1. Under the act of Congress (28 Stat. 278, amd. 33 Stat. 811) requiring a contractor with the United States for construction of a public work to execute a bond obligating him to pay all persons supplying labor and materials in the prosecution of the work and providing for enforcement of the bond by suit in a Federal court, the statutory liability assumes the existence of a bond as an indispensable condition. Till then, there is neither Federal jurisdiction nor any right of action that can rest upon the statute.
    2. Where, however, a contractor has agreed to give the bond required by the statute, and has failed to fulfill such agreement, a beneficiary of the promise, a laborer or materialman for whose protection it was given, has a right of action in the State courts for damages for the breach, but his recovery cannot exceed the pro rata share that would be his if a bond had been given as required. (Fosmire v. National Surety Co., 229 N. Y. 44, distinguished.)

      Strong v. American Fence Construction Co., 218 App. Div. 163, reversed.
    Appeal, by permission, from a judgment, entered November 5,1926, upon an order of the Appellate Division of the Supreme Court in the first judicial department, reversing a determination of the Appellate Term and affirming a judgment in favor of defendant entered upon an order of the City Court of the City of New York, granting a motion by defendant for judgment on the pleadings and directing a dismissal of the complaint.

      Frederick W. Newton and John C. Wait for respondent.
    This is an action on contract. It is not the suit on the bond which the statute authorizes. The provisions of the statute as to jurisdiction of the suit on the bond are not applicable to this action. (People v. Metropolitan Surety Co., 211 N. Y. 107; U. S. v. McCord, 233 U. S. 157; Illinois Surety Co. v. U. S., 240 U. S. 214; U. S. v. Montgomery, 255 Fed. Rep. 683; U. S. v. Stewart, 288 Fed. Rep. 187; Buffalo Cement Co. v. McNaughton, 90 Hun, 74; Eastern Steel Co. v. Globe Indemnity Co., 227 N. Y. 586; Fosmire v. National Surety Co., 229 N. Y. 44; Babcock & Wilcox v. American Surety Co., 236 Fed. Rep. 340; 263 U. S. 699.) The State courts, rather than the Federal courts, have jurisdiction of this action. (Underhill v. Shenk, 238 N. Y. 7; Wise v. Tube Bending Machine Co., 194 N. Y. 272; Robinson v. Nat. Bank of Newberne, 81 N. Y. 385; Lowkes v. Standard Oil Co., 224 N. Y. 99; Dennick v. N. J. Central R. R. Co., 103 U. S. 11; Hunt v. Hunt, 72 N. Y. 217; York v. Conde, 147 N. Y. 486; Benedict v. Deshell, 177 N. Y. 1.) Plaintiff has a cause of action against defendant upon the obligation created by statute. (Lawrence v. Fox, 20 N. Y. 268; Abounader v. Strohmeyer & Arpe Co., 243 N. Y. 458; Farmers & Merchants, etc., v. Federal Reserve Bank, etc., 262 U. S. 649; Hill v. American Surety Co., 200 U. S. 197; Mankin v. United States, 215 U. S. 533; Cleveland Bankers Surety Co. v. Maxwell, 222 Fed. Rep. 797; Chicago Bonding, etc., Co. v. United States, 261 Fed. Rep. 266; Hill v. American Surety Co., 200 U. S. 197; Mankin v. United States, 215 U. S. 533.)

      Samuel J. Rawak and Cornelius C. Beekan for respondent.
    Neither the Material Men’s Act nor the contract with the United States obligates the contractors to pay the claims of third persons, and no cause of action, therefore, is given by either the statute or the contract.
      (Lawrence v. Fox, 20 N. Y. 268; U. S. v. McCord, 233 U. S. 157; People v. Met. Surety Co., 211 N. Y. 107; Illinois Surety Co. v. U. S., 240 U. S. 213; U. S. v. Am. Fence Co., 15 Fed. Rep. [2d] 449, 450.) The plaintiff not being a party to the contract between the United States and this defendant cannot maintain a cause of action for its breach. (Embler v. Hartford S. B. I. Co., 158 N. Y. 436; Chysky v. Drake, 235 N. Y. 472; Seaver v. Ransom, 224 N. Y. 233; Glawatz v. People’s G. S. Co., 49 App. Div. 465; Buffalo Cement Co. v. McNaughton, 90 Hun, 74; 156 N. Y. 702; Simson v. Brown, 68 N. Y. 355; Pa. Steel Co. v. N. Y. C. Ry. Co., 198 Fed. Rep. 748; German Alliance Ins. Co. v. Home Water Supply Co., 226 U. S. 219; U. S. v. Riffle Co., 247 Fed. Rep. 376.)
   Cardozo, Ch. J.

A contract was made between the United States government and the defendant whereby the defendant was to construct a hospital for United States veterans in the city of New York. The contractor undertook to furnish a surety company bond in the amount of $5,500, insuring the fulfilment of all conditions and stipulations of this contract and covering all guarantees herein provided, and for the prompt payment to all persons or parties furnishing labor or materials required or used in the prosecution of the work. ’ ’ The bond was exacted in accordance with an act of Congress (Act of August 13, 1894, ch. 280, 28 Stat. 278, as amended by the Act of February 24, 1905, ch. 778, 33 Stat. 811). The plaintiff supplied labor and material to one of the defendant’s subcontractors, and would have had the benefit of the bond if one had been given (Hill v. Am. Surety Co., 200 U. S. 197). The bond, however, was not given, and the plaintiff is still unpaid, the subcontractor having made default. The question is as to the remedy, if any, available against the contractor who promised to supply the bond and failed to keep the promise.

The City Court held that there was no remedy whatever, and ordered judgment on the pleadings in favor of the defendant. The Appellate Term took the view that the contractor’s obligation was independent of the bond, which was important only as fixing the obligation and defining the procedure in an action against the surety. This led to a reversal of the judgment and a denial of the motion. The Appellate Division reversed the Appellate Term, holding that the proper remedy was an action in the Federal courts, the procedure to be the same as if the bond were in existence. About the 'same time a ruling was made by the United States Circuit Court of Appeals that in an action in the Federal courts the existence of the bond was the basis of jurisdiction, and that a claimant resting his case upon an executory contract must be remitted for relief to the courts of the State (U. S. v. Am. Fence Constr. Co., October 18, 1926, 15 Fed. Rep. [2d] 450, afiirming 15 Fed. Rep. [2d] 449). The suitor, wherever he went, had the assurance held out to him that a remedy existed, but that he must seek it somewhere else. The tangle of remedies and jurisdictions is now to be unraveled here.

The act of Congress provides (28 Stat. 278, as amended by 33 Stat. 811) that persons contracting with the United States for the construction of public buildings or other public work shall be required before commencing such work to execute the usual penal bond ” with sureties, the bond to contain the additional obligations that such contractor or contractors shall promptly make payments to all persons supplying him or them labor and materials in the prosecution of the work provided for in such contract.” Under a ruling of the Supreme Court, á bond so given inures to the protection of laborers and materialmen employed by subcontractors, and the contractor remains liable to the extent of the penalty though the subcontractors have been paid before notice of the claim (Mankin v. U. S., 215 U. S. 533). The statute goes on to prescribe the form of remedy.. If an action on the bond is begun by the United States, the laborers and materialmen are to have the right to intervene. Whatever is due to the United States is to have priority of payment. The remainder, if any, recovered under the bond is to be distributed pro rata among the intervenors. If no suit is brought by the United States within six months from the completion and final settlement of the contract, laborers or materialmen are authorized to bring suit themselves. The suit is prosecuted in the name of the United States in the Federal court of the district in which the contract is performed. “ Where suit is so instituted by a creditor or creditors, only one action shall be brought, and any creditor may file his claim in such action and be made party thereto ” within a designated time. Provision is made for notice to creditors in such manner as the court may order, ahd also by publication. If the recovery on the bond should be inadequate to pay the amounts found due to all of said creditors, judgment shall be given to each creditor pro rata of the amount of the recovery.” The Supreme Court has held that the remedy intended by the statute is not in equity, but at law (Illinois Surety Co. v. U. S., 240 U. S. 214, 223).

Congress has not said that contractors shall be liable, irrespective of amount, to laborers and materialmen employed by others upon the work. Such a liability would plainly be excessive, since payment to subcontractors is not admitted as a defense (Mankin v. U. S., supra). Congress has said that contractors shall be liable to materialmen and laborers in an amount to be made determinate by the giving of the bond. The statutory liability, which in turn is inseparably linked to the statutory remedy, assumes the existence of a bond as an indispensable condition. Till then, there is neither Federal jurisdiction nor any right of action that can rest upon the statute (U. S. v. Am. Fence Constr. Co., 15 Fed. Rep. [2d] 449; 15 Fed.' Rep. [2d] 450; U. S. v. Stewart, 288 Fed. Rep. 187; U. S. v. Montgomery Heating & Vent. Co., 255 Fed. Rep. 683).

The promise to give a bond is not a bond nor an equivalent. To say this is not to say that it may be broken with impunity. A beneficiary of the promise, a laborer or materialman for whose protection it was given, has a right of action for the damages resulting from the breach (Lawrence v. Fox, 20 N. Y. 268; Seaver v. Ransom, 224 N. Y. 233). The promise was exacted by the promisee in fulfilment of a legal duty. It was exacted for the very purpose of assuring to the plaintiff and to others similarly situated the benefit of the security established by the statute. Within the narrowest interpretation of the rule in Lawrence v. Fox, a beneficiary thus related to the promise has a standing to enforce it (Seaver v. Ransom, supra, at pp. 237, 238). Something more is here than an indirect or collateral advantage, a lucky find or windfall, the accidental consequence of a promise conceived for the good of some one else (Simson v. Brown, 68 N. Y. 355; Wheat v. Rice, 97 N. Y. 296). Security to materialmen and laborers was the end and aim of the transaction. If the promise was not for them, it was without significance or reason. Fosmire v. Nat. Surety Co. (229 N. Y. 44) holds nothing to the contrary. There are many grounds of distinction. Enough for present purposes, that there the bond was not exacted in fulfilment of a duty. Nor is there anything to the contrary in article 13 of the contract whereby rights of action for any breach are reserved to the United States if the contract is annulled for an unauthorized assignment. The sole effect of that provision is to forestall a possible construction whereby annulment would release a liability for damages.

The cause of action thus upheld at the suit of beneficiaries is adequate to the needs of justice. There is little basis for the defendant’s fear that its final liability, enforced in successive lawsuits, will be greater in the aggregate than the penalty of the bond. The plaintiff alleges in his complaint that by the failure to give the bond he has been damaged in the sum of $1,739.34 with interest, the unpaid balance of his bill. He must prove his damages, or fail. His recovery cannot exceed in any event the pro rata share that would be his if a bond of $5,500 had been given in fulfilment of the promise. Proof of his own demand will be sufficient in the first instance to cast the burden upon the other side of going forward with the evidence (see, e. g., Milage v. Woodward, 186 N. Y. 252, 259; 2 Sedgwick on Damages, § 667). The defendant will then be at liberty to show in reduction of the damages that other claimants, still unpaid, may share in the security. The aggregate liability to all must be within the limit of the penalty. To some extent, of course, the defendant’s position is less favorable than it would be in the statutory form of action with notice to all creditors. Claims not presently discoverable may afterwards develop. Others, even if discovered, may be erroneously assessed. In the majority of cases the disparity is not likely to be great. The defendant has brought the risk upon itself as the result of its default.

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

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

Judgment accordingly


author: Crane, J. Pound, J. (dissenting).

text:
    The Manufacturers National Bank of Troy, Respondent, v. United States Fidelity and Guaranty Company, Appellant.
    (Argued February 25, 1927;
    decided March 29, 1927.)
    Insurance — contract — insurance against loss of warrants through misplacement does not insure against loss occasioned by their misplacement — no recovery for loss arising from misplacement where, on search, warrant was quickly found.
    1. A policy of insurance against loss of warrants through misplacement does not insure against a loss occasioned by misplacement of a warrant. To bring the loss or damage within the policy the misplacement must result in a loss of the warrant, which is the risk insured against.
    2. Where, therefore, a bank, through misplacement of a subscription warrant for bonds, failed to forward it in time, whereby the right to subscribe was lost, but upon attention being called to it, the warrant was almost immediately found, an action for the loss occasioned cannot be maintained upon a policy of insurance agreeing to indemnify the bank against loss of “ warrants * * * through * * * misplacement or destruction.”

      Manufacturers Nat. Bank v. U. S. Fidelity & Guaranty Co., 218 App. Div. 455, reversed.
    Appeal from a judgment of the Appellate Division of the Supreme Court in the third judicial department, entered November 16, 1926, affirming a judgment in favor of plaintiff entered upon a decision of the court at a Trial Term, a jury having been waived.

      William J. McArthur for appellant.
    The bond in question did not indemnify the bank against damages suffered by reason of misplacement. It only indemnified against the physical loss of specific property through robbery, larceny, misplacement, etc. (Kean v. Nat. Surety Co., 241 N. Y. 252.)

      Thomas H. Guy and John H. Broderick for respondent.
    The defendant indemnified plaintiff against any loss through misplacement. The physical loss of the subscription warrant" was not necessary to the plaintiff’s recovery where the value of the warrant was destroyed through such misplacement. (Van Vechten v. American Eagle Fire Ins. Co., 239 N. Y. 303.)
   Crane, J.

Through the forgetfulness of the plaintiff’s officer, a customer’s securities were misplaced, resulting in a financial loss. The bank made good the loss, and in this action seeks to recover the amount thereof under an insurance policy issued by the defendant. Do the words of the policy cover such a case? Have the parties contracted for insurance against such an event? This appeal involves solely the meaning of the policy and an application of the clauses to the subsequent facts.

Before taking up these clauses of the policy, let us have the facts clearly before us. The bank’s customer, Edward Murphy, had a subscription warrant entitling him to subscribe by reason of his stock ownership to a certain number of convertible debenture bonds. The warrant contained this provision:

A stockholder desiring to exercise his right to subscribe represented by a Full Warrant, should sign one of the forms of subscription on the reverse side thereof, and return the same, so indorsed, to the said The National City Bank of New York, Transfer Department, No. 60 Wall Street, Borough of Manhattan, City of New York, not later than 3 o’clock p. m., January 15, 1926. * * *
“ No subscription will be accepted unless the same shall have been received by the said bank" at or before 3 o’clock p. m., on January 15, 1926, nor unless at least 40 per cent of the subscription be paid at such time.”

In the early part of January, Murphy took the warrant, properly indorsed, to the Manufacturers National Bank of Troy, and gave it to Mr. Delaney, the assistant cashier, with instructions to forward it in accordance with the above requirements. The custom of the bank was to place such subscription warrants in certain compartments under certain dates, so that they would be taken out in time to be sent to the proper place. It was apparently Delaney’s duty, or practice, in other words, to put ■this warrant where it would not be forgotten or overlooked. To classify these papers and securities in compartments was merely a method to prevent their being overlooked, a sort of reminder. Delaney put the warrant on his desk and forgot it. It subsequently was put in the drawer of his desk and overlooked until it was too late to secure for Murphy his subscription rights. He lost thereby about $1,400, which the bank has made good.

In so far as the subscription warrant was not put in the compartment which the practice of the bank required, it was misplaced; that is, it was put in the wrong place. In no sense, however, was it lost, for the reason that as soon as Delaney’s attention was called to it, he made a search and found it in five minutes. He looked on the file, and then in his drawer. Delaney lost recollection of the transaction, but neither he nor the bank lost the warrant. There was a loss to the bank through the forgetfulness or carelessness of Delaney. There was no loss resulting from a lost security or warrant. More will be said by me on this point after we have consulted the wording of the policy. That reads, so far as material:

The Underwriter hereby undertakes and agrees to indemnify the Insured and hold it harmless from and against any loss, to an amount not exceeding Twenty-five thousand dollars ($25,000.00), of money, currency, bullion, bonds, debentures, scrip, certificates, warrants, transfers, coupons, bills of exchange, promissory notes, checks or other similar securities, in which the Insured has a pecuniary interest, or held by the Insured as collateral, or as bailee, trustee or agent, and whether or not the Insured is liable therefor (all of such money, currency, bullion, bonds, debentures, scrip, certificates, warrants, transfers, coupons, bills of exchange, promissory notes, checks or other similar securities being hereinafter referred to as Property), sustained by the Insured subsequent to noon of the date hereof and while this bond is in force and discovered by the Insured subsequent to noon of the date hereof and prior to the expiration of twelve months after the termination of this bond as provided in Condition 11 * * *
“ (B) Through robbery, larceny (whether common-law or statutory), burglary, theft, holdup, misplacement or destruction, whether effected with or without violence, or with or without negligence on the part of any of the Employees while the Property is actually within any of the Insured’s offices covered hereunder. * * *
5. The value of any securities for the loss of which claim shall be made hereunder shall be determined by the average market value of such securities on the day preceding the discovery of such loss. If such securities have no quoted market value, their value shall be determined by agreement or by arbitration.”

What is it that is covered by this policy? It is the loss of a warrant; it is not a loss occurring through any or everything that may happen to a warrant. The warrant must be lost. The words are plain and cannot be read otherwise. The underwriter undertakes to indemnify against any loss of warrants. The warrant must be lost. This loss must occur also in certain ways, provided in clause B, by robbery, larceny, burglary, theft, holdup, destruction or misplacement.

The defendant, therefore, contracted to insure against a loss caused by the loss of a warrant through misplacement; it did not contract to insure against a loss occasioned by misplacement. Misplacement alone was not sufficient to bring the loss or damage within the policy. The misplacement must result in a loss of the warrant; it is the loss of a warrant through misplacement which is the risk insured against.

What do these two words mean, therefore, if they must be coupled together, “ loss ” and misplacement? ” It is apparent at once that the loss of a warrant carries the idea of a permanent disappearance or destruction of it; of having gone for good from the possession of the holder or at least beyond recovery after careful search. Such a loss may occur through misplacement or through theft. Robbery, larceny, burglary, theft and holdup indicate a loss occasioned intentionally; misplacement and destruction may indicate an unintentional act, but the result, nevertheless, must be a loss of the instrument.

On the other hand, we find “ misplacement ” defined by the dictionaries as meaning to put a thing in the wrong place, or to locate unsuitably.”

This policy did not cover losses occasioned by putting a thing in the wrong place, or locating unsuitably. Something more was necessary to bring the facts within the contract; putting the warrant in the wrong place must have resulted in its loss, not merely in damage.

Applying these clauses of the policy to the acts of Delaney, we find that a loss to the bank was occasioned by Delaney’s putting the warrant in the wrong place; putting it in his drawer instead of on the files or in the compartments, and then forgetting it. The warrant was misplaced; it was never lost; the loss to the bank was occasioned by a misplacement, but not by the loss of the warrant through misplacement. There is a vast difference.

Take the case of a customer who has left stock with the bank as collateral security. By reason of market conditions, he wants it at once, and demands it of the bank, paying his loan. It would be the duty of the bank to get it for him at once. The stock is in the vault, but there is some delay in finding it, due to improper filing or recording. The stock has been put in the wrong place, according to the regulations of the bank, and cannot be immediately procured. When it is found, some time later, the price of the stock has dropped; the customer has suffered a loss for which the bank may be hable. The bank has suffered a loss through the misplacement of the stock, but the stock was never lost; it was with the bank among its securities, and required merely diligence and care in the search for it. This policy in question clearly would not cover such a loss, and yet the construction put upon it by the courts below would give it that effect. The policy was never intended to cover losses occasioned by forgetfulness or neglect of employees in temporarily misplacing securities.

A security may be lost through misplacement,' when after careful and diligent search it cannot be found. A lost instrument is described as a paper which has been so mislaid that it cannot be found after diligent search. (Bouvier’s Law Dictionary, vol. 2, p. 2051.) There is a great difference between a thing being mislaid which a diligent search will discover, and a thing being gone where ordinary vigilance' will not regain it. (State Savings Bank v. Buhl, 129 Mich. 193.) We are quite familiar with the actions which have been brought upon lost instruments; also the rule which permits secondary evidence in the case of lost documents. ■ Vigilant and reasonable search must be proved in order to establish the loss. The rule is that in establishing a lost instrument and seeking recovery thereon, the plaintiff must show that he has in good faith exhausted in a reasonable degree all the sources of information and means of discovery which the nature of the case would naturally suggest, and which were accessible to him. (Rogers v. Durant, 106 U. S. 644, 646; Simpson & Co. v. Dali, 70 U. S. 460; Minor v. Tillotson, 32 U. S. *99.)

Under section 75 of fhe Stock Corporation Law (Cons. Laws, ch. 59), an application may be made to the court for the issue of a new certificate of stock to replace one that is lost or destroyed. Proof has always been required of the loss, or that after due diligence it could not be found. (Matter of Biglin v. Friendship Assn., 46 Hun, 223.)

If after careful, vigilant and reasonable search, the warrant in this case could not have been found, there might have been a loss from misplacement within the terms of this policy. The first search, however, revealed its whereabouts. There was consequently no loss.

We think, therefore, that this money loss of the bank was not occasioned by any act covered by the policy, and that the complaint should have been dismissed.

The judgments below should be reversed, and the complaint dismissed, with costs in all courts.

Pound, J. (dissenting).

I dissent on the ground that the warrant, at the time it should have been sent to New York, was lost by misplacement within the meaning of the policy.

Cardozo, Ch. J., Andrews and Lehman, JJ., concur with Crane, J.; Pound, J., dissents in memorandum; O’Brien, J., dissents on opinion of Van Kirk, J., below; Kellogg, J., not sitting.

Judgment accordingly.


author: O’Brien, J.

text:
    Harry Segall, Doing Business under the Trade Name of Butler-Ward & Company, Respondent, v. George H. Finlay et al., Copartners under the Firm Name of G. H. Finlay & Company, Appellants.
    (Argued March 3, 1927;
    decided March 29, 1927.)
    Contract— sale — damages — sale of sugar c. & f. New York, April shipment from Cuba, insurance charged to buyer — place and date of delivery — measure of damages for breach.
    Under a contract, made in February, whereby defendants agreed • to sell a specific lot of sugar to plaintiff “ cost and freight New York, April shipment from Cuba,” insurance to be charged to buyer, Cuba must be considered the place and April thirtieth the time when delivery ought to have been made; and, where defendants repudiated their agreement the day it was made, which repudiation was accepted by plaintiff twelve days later as final, the measure of damages is the difference between the contract price and the market price of the goods at the time when they ought to have been delivered. (Pers. Prop. Law, § 148; Cons. Laws, ch. 41.)

      Segall v. Finlay, 218 App. Div. 723, affirmed.

      Appeal from a judgment of the Appellate Division of the Supreme Court in the first judicial department, entered November 1, 1926, affirming a judgment in favor of plaintiff entered upon the report of a referee.

      Robert H. Neilson and N. F. George for appellants.
    The measure of damages is the difference between the contract price and the market price on the date of the anticipatory breach, February 28, 1923, of the contract for April delivery. (Pers. Prop. Law, § 148; Williston on Sales [2d ed.], §§ 587, 599; Sedgwick on Damages [9th ed.], §§ 636-e, 636-f; Samuels v. Drew & Co., 286 Fed. Rep. 278; Roehm v. Horst, 178 U. S. 1; Weld v. Postal T. C. Co., 199 N. Y. 88; Goldfarb v. Campe Corp., 99 Misc. Rep. 475; Baker v. Drake, 53 N. Y. 211; Gruman v. Smith, 81 N. Y. 25; Colt v. Owens, 90 N. Y. 368; Wright v. Bank of Metropolis, 110 N., Y. 237; Hurt v. Miller, 120 App. Div. 833.)

      Walter Gordon Merritt and Charles F. Bailey for respondent.
    On the happening of the anticipatory breach, the plaintiff was under no obligation to gamble on the market by purchasing another- contract, but, under section 148 of the Sales Act, is entitled to recover the difference between the contract price and the market price on the date when the sugar ought to have been delivered. (Roehm v. Horst, 178 U. S. 1; Sedgwick on Damages, § 636-d; Williston on Sales, § 585; Saxe v. Penokee Lumber Co., 159 N. Y. 371; Todd v. Gamble, 148 N. Y. 382; Windmuller v. Pope, 107 N. Y. 674; Masterton v. Mayor of Brooklyn, 7 Hill, 61; Ruttonjee v. Frame, 237 N. Y. 115; Second National Bank v. Columbia Trust Co., 288 Fed. Rep. 17; Guaranty Trust Co. v. Meer, 114 Misc. Rep. 327; Continental Co. v. Maun, 117 Misc. Rep. 280; Goldfarb v. Campe Corp., 99 Misc. Rep. 475.)
   O’Brien, J.

In February, 1923, appellants were dealers in sugar in New York and respondent was a sugar broker in Chicago. On the twenty-seventh and twenty-eighth of that month telephone conversations occurred and telegraph messages were exchanged between them in respect to a proposed sale of sugar for future delivery. The complaint alleges a contract whereby defendants agreed to sell and deliver to plaintiff four thousand (4,000) tons at five and one-eighth (5%) cents per pound cost and freight New York. The referee has found on sufficient evidence and the Appellate Division has affirmed by a divided court subsequent to July 15, 1926, that the conversations as confirmed by the messages constitute a contract whereby defendants promised to make such a sale for future delivery, that plaintiff complied in all respects with his agreement, that defendants repudiated it on the day it was made and that plaintiff accepted the repudiation as final on March twelfth.

The only issue seriously to be considered relates to damages. Between February 28th, the date of repudiation by defendants, and March 12th several communications were exchanged between the parties and their attorneys. On the second date plaintiff accepted the repudiation as final and notified defendants that he would hold them responsible for all loss and damage. Under the agreement, defendants were entitled to delay until April 30th to begin transportation from Cuba, for the contract was at five and one-eighth cents cost and freight New York, April shipment from Cuba.” By the usual means of transportation the cargo would, in that event, have arrived at New York May 8th. A Sugar Exchange exists in New York where forward contracts for future delivery could be made. The difference between the contract price and the market value or the market price of a similar contract was $22,400 on February 28th and $50,400 on March 12th. The difference between the contract price and the market price on April 30th was $106,400. The market value on those dates was the same in Cuba and New York. The difference between the contract price and the market price in New York on May 8th was $84,000. This agreement belongs to the class known as open market contracts. Such contracts for future delivery cover an actual quantity of sugar and this one ran against a specific cargo or was, at least, a contract for part of a specific lot of sugar. Its terms, the same as those included within the last contract which had been executed between the parties, provide that insurance was to be covered by the seller and was to be charged to the buyer at the customary rate. In short, it was an agreement to transfer property in a specific lot of sugar which was to leave Cuba April 30th and ,to arrive at New York May 8th, the buyer to pay a price which includes cost and freight (Williston on Sales [2d ed.], p. 621) and also to reimburse the seller for insurance.

Plaintiff urges that the measure of damages is the difference between the contract price and the market price at the time when the sugar ought to have been delivered and that such a time was April 30. Defendants argue that the measure is the difference, on the date of the anticipatory breach, between the contract price and the market price of a similar contract for April delivery and that such a date was February 28th.

February 28th is not the proper date for fixing damages. It is true that defendants repudiated the agreement on that day, but for two weeks thereafter the plaintiff attempted to conduct negotiations with them for the purpose of inducing them to fulfill it. Not until March 12th did he entirely relinquish all hope of success and only then did he accept the repudiation as final. It did not ripen into a complete breach before plaintiff’s election to treat it' as such. The view seems to prevail that as long as plaintiff reasonably entertained hope of compliance and had not accepted the repudiation as final, no anticipatory breach had occurred. (Roehm v. Horst, 178 U. S. 1; Williston on Sales, § 585.) Nor do we think that March 12th, the date of the breach, ought to be regarded as proper. To select that date would require a disregard of section 148 of the Personal Property Law (Cons. Laws, ch. 41). That section provides by subdivisions 1 and 3 that where the property in the goods has not passed to the buyer and where there is an available market for them the measure of damages is the difference between the contract price and the market price of the goods at the time when they ought to have been delivered. No one can reasonably contend that the goods ought to have been delivered either on February 28th or March 12th. The inquiry leads to a consideration of the question whether the date for the fixation of damages is April 30th, when the sugar should have left Cuba, or May 8th, when it should have arrived in New York. The answer to this question is controlled by the intention of the parties relating to the time and place of delivery. No property in the goods ever passed to the buyer for even the sellers had no title at the times they made and repudiated their contract.

This contract in many respects resembles a c. & f. contract. Except for the provision relating to insurance it would constitute nothing else. The agreement that marine insurance from shore to shore including risk of lighters should be charged to the buyer renders difficult any other inference than one of an intent that the buyer would be responsible for loss during the voyage, that the sellers would divest themselves of responsibility when the sugar left the shore of Cuba and that delivery was contemplated there. Under the contract, therefore, Cuba must be considered the place and under the stipulation April 30 was the time when the delivery ought to have been made. Such presumptions as ordinarily arise from commercial usage respecting c. & f. contracts (Williston on Sales [2d ed.], pp. 621, 624) prevail in this case.

The judgment should be affirmed, with costs.

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

Judgment affirmed.


author: Kellogg, J.

text:
    Concetta Bartolomeo et al., as Administrators of the Estate of Joseph Bartolomeo, Deceased, Appellants, v. Charles Bennett Contracting Company, Inc., Respondent.
    (Submitted February 25, 1927;
    decided March 29, 1927.)
    Master and servant — negligence — presumed that general employer retains control of its employees in absence of proof to contrary — party having control must respond for negligence of servants • — ■ steam shovel hired with engineer and fireman to run it — injury to workman through operation of shovel — erroneous holding, as matter of law, that engineer and fireman were servants of hirer of shovel and that owner and general employer was not liable for their negligence.
    1. In the absence of proof that a general employer surrendered Ci ntrol over its employees with respect to giving orders as to care of machinery and the right of discharge for disobedience of such orders, it must be presumed that its power of control continued. The party possessing the power to exercise such control, rather than the party having authority to designate the place and time for the performance of the work, is the master who must respond for the negligence of the servants.
    2. Where, therefore, a contracting firm hired from defendant a steam shovel with an engineer and fireman to run it and, in an action to recover for the death of an employee of the contractor, alleged to have been occasioned through the negligent operation of the shovel, it appeared that the engineer and fireman had previously been hired by the defendant, had been in its employ for many months, that defendant continued to pay their wages after they had been set to work for the contractor, and paid with its own funds for the fuel necessary to operate the shovel, while the contractor directed the engineer where to make excavations but gave no directions as to the details of the work, it was error to hold as matter of law that the engineer and fireman were the servants of the contractor and that the defendant was not hable, as master, for their negligence.

      Bartolomeo v. Bennett Contracting, Co., 218 App. Div. 826, reversed.
    Appeal from a judgment of the Appellate Division of the Supreme Court in the first judicial department, entered December 13, 1926, affirming a judgment in favor of defendant entered upon a dismissal of the complaint by the court at a Trial Term.

      William A. Schacht for appellants.
    The evidence establishes the facts, that the steam shovel was being used in the furthering of the defendant’s business; that the operators thereof were engaged in the defendant’s work and that no such surrender of command, of the servants, had taken place, so as to create a new relation. (Braxton v. Mendelson, 233 N. Y. 122; Charles v. Barrett, 233 N. Y. 127; McNamara v. Leipzig, 227 N. Y. 291; Johnson v. Netherlands A. S. N. Co., 132 N. Y. 576; Standard Oil Co. v. Anderson, 212 U. S. 215; Cattini v. American Ry. Express Co., 202 App. Div. 336; 234 N. Y. 585; Murray v. Dwight, 161 N. Y. 301; Hanrahan v. New York Edison Co., 212 App. Div. 295; 238 N. Y. 194.)

      Abraham Kaplan and David A. Ticktin for respondent.
    The evidence indicates that the defendant neither operated nor controlled the steam shovel which caused the decedent’s death and hence there was no error in dismissing the complaint upon the merits. (McNamara v. Leipzig, 227 N. Y. 291; Miller v. North Hudson Contr. Co., 166 App. Div. 348; Standard Oil Co. v. Anderson, 212 U. S. 215; American Express Co. v. O’Connor, 279 Fed. Rep. 997; Byrne v. Kansas City, Ft. S. & M. R. Co., 61 Fed. Rep. 605; Powell v. Construction Co., 88 Term. 692.)
   Kellogg, J.

This action was brought by the administrators of the estate of Joseph Bartolomeo to recover damages for his death. Bartolomeo was an employee of a firm of contractors known as the Powers-Kennedy Company. That company had a contract to make an excavation for the construction of an underground railway tube. In the prosecution of its excavating work it employed a steam shovel. The shovel was owned by the defendant. It consisted, in part, of a cab, housing a steam boiler and engine, and a long boom carrying a bucket at its end. When the machine was in operation, the cab, the boom and the bucket made a partial or complete revolution. On a certain morning, before the steam shovel had started to operate, Bartolomeo was at work upon a ledge, with his back to the shovel. While he was in this position, without warning, according to some of the proof, the machinery of the shovel was set in motion and the shovel began to turn. As the shovel revolved, some part of the machine struck Bartolomeo a blow which caused his death. The complaint charged that the defendant " failed to notify the said Joseph Bartolomeo of their intention to operate, manage, use, employ, exercise and control the said steam shovel.” The answer,admitted that Bartolomeo was”" struck upon his head by a steam shovel owned by this defendant, whereof he died.” The trial judge dismissed the complaint upon the ground that the steam shovel was operated, not by the defendant, but by the Powers-Kennedy Company, and that the men operating the shovel were the servants of the latter rather than of the former. Upon this appeal the point is not made that the defendant, not being the master of Bartolomeo, owed to him no duty of giving a warning that the shovel was about to operate. Neither is the point made that the record is devoid of credible evidence to the effect that no warning was given; nor that a failure to give warning did not constitute negligence which caused the death of Bartolomeo. The respondent opens its brief with the following sentence: The sole question involved on this appeal is whether the defendant, respondent, Charles Bennett Contracting Company, Inc., operated and controlled the steam shovel which it is conceded fatally injured the plaintiff’s intestate.” We will, therefore, consider that question and none other.

In negotiating with the defendant for the use of the steam shovel John Kennedy, a member of the Powers-Kennedy Company, said to Charles Bennett, the president of the defendant: I don’t want to be bothered with the hiring of engineers or firemen or anything. I want a price for 'the shovel and two men to operate it, and we will put it in the work and take care of it, furnish the gangs necessary to run it in the hole and pay so much a day for it.” Accordingly, the defendant provided the shovel, with an engineer and fireman to run it, at the agreed price of $65 a day. The enginéer and fireman had previously been hired by the defendant, had been in its employ for many months and were thoroughly familiar with the process of operating the shovel. The defendant continued to pay their wages after they had been set to work upon the excavation in question. The defendant likewise continued, with its own funds, to pay for the fuel necessarily employed to operate the shovel. The Powers-Kennedy Company, after the shovel had been placed upon the work, directed the engineer of the shovel where to make excavations. It gave no directions as to the details of the work, such as firing the boiler, regulating the steam pressure, applying the levers to start and stop the machinery, maneuvering the boom and bucket, oiling the machinery or giving care to the steam shovel to keep it in working order. It was important to the defendant, as the owner of the machine, in order that the life of the machine might be preserved, that the engineer and fireman, in respect to these and other details, perform their work with care, skill and judgment. When originally employed the engineer and fireman subjected themselves to the orders of the defendant in respect to all such matters and became liable to discharge at the defendant’s hands if its orders were disobeyed. In the absence of proof that the defendant, the general employer, surrendered control, in these respects, to the Powers-Kennedy Company, as special employer, it must be presumed that the defendant’s power of control continued. (Charles v. Barrett, 233 N. Y. 127.) The party possessing the power to exercise such control, rather than the party having authority to designate the place and time for the performance of the work, is the master who must respond for the negligence of the servants. (Matter of Dale v. Saunders Bros., 218 N. Y. 59; Matter of Schweitzer v. Thompson & Norris Co., 229 N. Y. 97; McNamara v. Leipzig, 227 N. Y. 291; Charles v. Barrett, supra; Matter of Sullivan, 202 App. Div. 854; affd., 234 N. Y. 552.)

In McNamara v. Leipzig (supra) the owner of an automobile, for an agreed price, rented the same to the defendant, and furnished the services of a chauffeur, for the period of three months. The car was to be used by the defendant at any hour of the day or night as desired by him. The owner agreed to pay the wages of the chauffeur, to furnish all gasoline and supplies, and to pay for all repairs to the automobile. It was held that the chauffeur was not the servant of the defendant and that the defendant was not hable for damages caused by his negligence. The court said: “A servant lent or let by his master to another does not become the servant of the other because the other directs what work is to be done or in what way it is to be done. If the servant remains subject to the general orders of the person who hires and pays him he is still his servant, although specific directions may be given him by the other from time to time as to the work to be done.” In Charles v. Barrett (supra) the owner of automobile trucks supplied the defendant with a van, and a chauffeur to run it, at a stated hourly rate. The defendant used the truck to make deliveries in its express business. It was held that the chauffeur was not the servant of the defendant to make the defendant liable for his negligence. The court said: Where to go and when might be determined for the driver by the commands of the defendant. The duty of going carefully, for the safety of the van as well as for that of wayfarers, remained a duty to the master at whose hands he had received possession.” In Matter of Sullivan (supra) a manufacturer, in connection with its manufacturing business, operated a farm. It engaged the owner of a gasoline engine and ensilage cutter, at an hourly price, to help fill its silo with ensilage through the aid of his machinery and his own labor. Testimony was given that the manufacturer’s foreman told the owner how to run his machine and how to cut the ensilage. Nevertheless it was held that the owner was not the servant of the manufacturer. These cases clearly establish that it was error, in this case, to hold as a matter of law that the engineer and fireman were the servants of the Powers-Kennedy Company and that the defendant was not liable, as master, for their negligence.

The judgments should be reversed and a new trial granted, with costs to abide the event.

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

Judgment accordingly.


author: Per Curiam.

text:
    Harvey A. Dwight et al., Appellants, v. Bertram H. Fancher et al., as Executors of Emily A. Watson, Deceased, et al., Respondents.
    (Argued March 2, 1927;
    decided March 29, 1927.)
    Will — evidence —■ where language of will, even in light of extrinsic circumstances, admits of but one construction, parol evidence inadmissible to show testatrix did not mean what she said.
    Evidence of extrinsic circumstances may sometimes assist in the construction of language which a testatrix has used to express her testamentary intention; but where the language of the will, even when read in the light of extrinsic circumstances, admits of but one construction, parol evidence is not admissible to show that the testatrix did not mean what she said in words, though these words may have been chosen by the attorney who drafted the will rather than by the testatrix.

      Dwight v. Fancher, 217 App. Div. 377, affirmed.

      Appeal, by permission, from a judgment of the Appellate Division of the Supreme Court in the third judicial department, entered July 12, 1926, unanimously affirming a judgment in favor of defendants entered upon a decision of the court at a Trial Term without a jury. The action was brought to obtain a construction of the tenth paragraph of the will of Emily A. Watson, deceased, which reads as follows:

      “ Tenth. All the rest, residue and remainder of my property, both real and personal, of whatever kind or nature and wherever situate, as well that which I may hereafter acquire as that which I now possess, I give, devise and bequeath to the United States Trust Company of New York, in trust, however, to divide the same into as many shares or portions as there may be children of my cousin, Harvey A. Dwight, and grandchildren of my cousin, George W. Pratt, surviving at the time óf my death, and to invest and keep invested one such share or portion for the benefit of each child of my said cousin, Harvey A. Dwight, and each grandchild of my said cousin, George W. Pratt, then surviving and to pay over the income and profits therefrom to the child or grandchild for whose benefit such fund is so held, during his or her natural fife, and upon his or her death to pay over and deliver the principal of the fund with all accumulated income to his or hen issue, per stirpes, and in default of such issue, I direct that the same be divided equally between said surviving children and grandchildren, and the issue of any who may have died, per stirpes."

    Harvey A. Dwight had five children, one of whom predeceased the testatrix leaving two children, who survived the testatrix. They contend that the words “ children of my cousin, Harvey A. Dwight,” were intended to include grandchildren and that they are, therefore, entitled to share in the residuary estate.

      Lewis E. Carr, J. Harris Loucks and William L. Visscher for appellants.
    The conclusion that the language of the residuary paragraph of the will was so plain there was and could be no room for the admission of parol evidence to aid in its construction was erroneous. (Mann v. Executors of Mann, 1 Johns. Ch. 231; Reynolds v. Robinson, 82 N. Y. 103; Goodwin v. Coddington, 154 N. Y. 286; Weeks v. Cornwell, 104 N. Y. 337; Brown v. Thorndyke, 15 Pick. 388; Carpenter v. Carpenter, 14 N. Y. 284; Stagg v. Atkinson, 144 Mass. 564.)

      Howard Thayer Kingsbury for Victoire L. Niel et al., respondents.
    The tenth paragraph of the will is free from ambiguity and there is no basis for any resort to extrinsic evidence. (Brown v. Quintard, 177 N. Y. 75; Matter of Keleman, 126 N. Y. 73; Reynolds v. Reynolds, 224 N. Y. 429; Matter of Silsby, 229 N. Y. 396; Kellogg v. White, 103 Misc. Rep. 167; Matter of Lake, 109 Misc. Rep. 287; Matter of Gersch, 103 Misc. Rep. 156; Matter of Douglas, 97 Misc. Rep. 208.)

      George L. Shearer and William A. W. Stewart for United States Trust Company, as trustee, respondent.
    The extrinsic evidence excluded upon the trial was properly excluded. (Brown v. Quintard, 177 N. Y. 75; Bigelow v. Percival, 162 App. Div. 831.)

      J. Noble Hayes for Pauline A. de la Metre et al., respondents.
    The tenth paragraph of the will and the entire will being free from ambiguity, there was no basis for the introduction of extrinsic evidence to construe it, and the evidence offered and received was both immaterial and incompetent, and entirely ineffectual for the purpose offered. (Kellogg v. White, 103 Misc. Rep. 167; Reynolds v. Robinson, 224 N. Y. 429; Matter of Parsall, 91 Misc. Rep. 218; Williams v. Freeman, 83 N. Y. 561; Matter of Keleman, 126 N. Y. 73; Brown v. Quintard, 177 N. Y. 75; Williams v. Jones, 166 N. Y. 522; Matter of Silsby,
      229 N. Y. 396; Swert v. Burnett, 136 N. Y. 204; Chemical Bank v. Britt, 123 Misc. Rep. 576; Matter of Douglas, 97 Misc. Rep. 208; Deyer v. Rusman, 202 N. Y. 476; Mann v. Mann, 1 Johns. Ch. 231; Wagner v. Wagner, 96 N. Y. 476; Matter of Lake, 109 Misc. Rep. 287.)

      Charles F. McGovern for Edgar T. Cantwell, guardian ad litem, respondent.
    The extrinsic evidence excluded by the trial court was properly excluded, the tenth paragraph of the will and the entire will being free from ambiguity. (Reynolds v. Robinson, 224 N. Y. 429; Williams v. Freeman, 83 N. Y. 561; Matter of Keleman, 126 N. Y. 73; Brown v. Quintard, 177 N. Y. 75; Williams v. Jones, 166 N. Y. 522; Matter of Silsby, 229 N. Y. 396; Swert v. Burnett, 136 N. Y. 204; Deyer v. Rusman, 202 N. Y. 476; Wagner v. Wagner, 96 N. Y. 476.)

      John A. Stephens for Jeane V. Dwight et al., respondents.
   Per Curiam.

Evidence of extrinsic circumstances may sometimes assist the court in the construction of language which a testator has used to express his testamentary intention; but here the language of the will, even when read in the light of extrinsic circumstances, admits of but one construction. Parol evidence is not admissible to show that the testatrix did not mean what she has said in words, though these words may have been chosen by the attorney who drafted the will rather than by the testatrix. (Reynolds v. Robinson, 82 N. Y. 103.) We do not pass upon the question of whether the attorney was a competent witness in this action. (Civ. Prac. Act, secs. 353, 354.) The evidence would not be admissible though given by a witness who was competent.

The judgment should be affirmed, without costs.

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

Judgment affirmed.