text:
    In the Matter of the Estate of Ralph F. Gilman, Deceased. Mabel R. Hunnewell, as Administratrix, Appellant; Lester C. Gilman, Respondent.

      (Argued May 27, 1929;
    decided July 11, 1929.)

      David Joyce for appellant.
    It is perfectly proper for an attorney to take a case and advance the necessary expense, so long as this is done on a voluntary basis and not upon a basis to induce the client to retain him, or to induce the client to begin a proceeding. (Fowler v. Callan, 102 N. Y. 395; Ransom v. Cutting, 188 N. Y. 447; Ramsey v. Miller, 202 N. Y. 76.) The decision of the Surrogate that the decree on the first accounting was a bar to any further allowance on the second accounting cannot be sustained. (Heaton on Surrogates, 91; Matter of Knapp, 85 N. Y. 284; Matter of Ross, 123 App. Div. 74; Matter of Wood, 170 App. Div. 533; Matter of Regan, 167 N. Y. 338; Harwood v. La Grange, 137 N. Y. 540; Kennedy v. Steele, 35 Misc. Rep. 105.)

      John J. Crawford for respondent.
    The contract of the attorneys with the administratrix is champertous and void. (Coughlin v. N. Y. C. & H. R. R. R. Co., 71 N. Y. 443; Stedman v. Hartman, 74 App. Div. 126.) The contract of the appellant to pay her attorneys one-third of what should be realized out of the estate of Theophilus Gilman was her personal obligation and not binding upon the estate. (Parker v. Day, 155 N. Y. 383; Matter

      of Meng, 188 App. Div. 69.) All the Surrogate had power to determine was that the sums paid to the attorney were the fair and reasonable value of his services to the estate. (Matter of Atterbury, 222 N. Y. 355; Matter of Meng, 188 App. Div. 69; Bendernagle v. Cocks, 19 Wend. 207; O’Dougherty v. Remington Paper Co., 81 N. Y. 476; Secor v. Sturgis, 16 N. Y. 554; Perry v. Dickerson, 85 N. Y. 347.)
   Cardozo, Ch. J.

A payment by an administratrix to an attorney for services beneficial to the estate has been disallowed on her accounting.

Ralph F. Gilman died intestate in 1909, leaving a father, Theophilus Gilman, and a widow, Mabel R. Gilman (now Mabel R. Hunnewell), who became his administratrix.

Theophilus, the father, died in 1912, leaving the bulk of his estate to his two sons, Ralph F. Gilman, who died before him, and Lester Gilman, who survived him. The will provided in effect that the residuary estate should be held in trust for Ralph and Lester, subject to certain charges or annuities, until Ralph, who was the younger, should attain the age of thirty years, that it should thereupon be divided between the two sons equally, that if Ralph died under thirty, the division should take place when Lester became thirty, and that if either died before division, the share of the one so dying should go to his executors and administrators.

A question arose whether the share bequeathed to Ralph lapsed upon his death before bis father at the age of twenty-six, or passed to Mrs. Gilman, the administratrix, to be held, half for herself as widow and half for Lester, the surviving next of kin. Mrs. Gilman retained an attorney, Mr. Joyce, to begin all necessary actions and take all necessary proceedings ” to enforce her rights and interests individually and as administratrix in the estate of the father, signing an agreement by which she undertook to pay as compensation “ one-third of the amount realized out of the said estate ” (i. e., the estate of Theophilus Gilman), the attorney to bear all the necessary expenses.” Under this retainer, Mr. Joyce established the contention of his client that the legacy had not lapsed, carrying the case twice to this court (Matter of Gilman, 214 N. Y. 666; 220 N. Y. 659), with the result that she became entitled as. administratrix of Ralph F. Gilman to the sum of $82,276. Of this total there was paid to her in 1916 the sum of $62,954, and in 1927 the sum of $19,321.

When the payment of $62,954 was made in 1916, Mrs. Gilman, as administratrix, paid one-third, or $20,984, to her attorney, and thereafter filed an account in which she set forth the payment, describing it as one for “ legal services in proceeding to establish claim of legacy under last will and testament of Theophilus Gilman as per agreement with David Joyce, to wit, one-third of amount of legacy, $20,984.93.” An objection to this item was filed by Lester Gilman, but the objection was overruled by the Surrogate, and the account confirmed. When the additional sum of $19,321 was paid to the administratrix in 1927, she paid one-third, or $6,440, to her attorney, and filed a new account, the present one, setting forth the payment, to which objection was again filed by Lester Gilman as one interested in the estate. The ground stated in the objection was that the earlier payment was in full for all services then rendered. The Surrogate sustained the objection, and surcharged the account accordingly. Upon appeal to the Appellate Division, the decree was unanimously affirmed, four members of the court stating in a memorandum that the agreement relied upon was invalid,” and one member concurring in the result upon the ground that the prior allowance under the agreement precluded any further allowance.” The case is here by permission of this court.

We find nothing in the decree upon the earlier accounting that adjudicates the question in controversy now. The administratrix was then justifying a payment of a stated sum, one-third of the legacy received up to that time. In claiming credit for this payment, she did so with the statement that she had made it under an agreement for a contingent fee of one-third of the value of any benefits received. There was no statement that the payment was in full, and no decree to that effect. On the contrary, there was plain notice in the terms of the disclosed retainer that the payment was on account, and that new payments would be made if new installments were collected. The decree did not decide that such payments, if made, might be charged against the estate. It did not decide the contrary. At the moment of its entry the credit to be allowed to the administratrix could be no greater than the moneys then actually disbursed. Credit for future payments, if there were any, was perforce to wait upon the future.

The former decree being put aside as indecisive, we reach the merits of the controversy upon the record now before us. The respondent insists that the attorney was retained under a champertous agreement. Champertous we think it was. The attorney bound himself by the agreement to pay the expenses of proceedings to enforce his Ghent’s rights. The law is settled that such a promise runs counter to the statute (Coughlin v. N. Y. C. R. R. Co., 71 N. Y. 443; Matter of Clark, 184 N. Y. 222, 227; Matter of Speranza, 186 N. Y. 280, 284; McCoy v. Gas Engine & P. Co., 152 App. Div. 642; 208 N. Y. 631;. Watkins v. Sedberry, 261 U. S. 571, 577; Peck v. Heurich, 167 U. S. 624, 630; Brush v. City of Carbondale, 229 Ill. 144; Roller v. Murray, 107 Va. 527, 528, 531; S. C., 112 Va. 780). We did not hold to the contrary in Fowler v. Callan (102 N. Y. 395) or in Ransom v. Cutting (188 N. Y. 447). The point of those decisions was that the retainer of the attorney was not to attack, but to defend. He was not inciting to litigation. He was protecting the interests of a client against assaults begun or threatened. Here what was promised and exacted was affirmative and ' hostile. The law does not say that an attorney is guilty of misconduct by the voluntary advance of the expenses {of a lawsuit to a client too poor to pay the cost of justice. ; It does say that there is misconduct if he makes or promises the payment to discharge an obligation assumed in return for his retainer. He shall not “ by himself, or by or in the name of another person, either before or after action brought, promise or give, or procure to be promised or given, a valuable consideration to any person, as an inducement to placing, or in consideration of having placed, in his hands, or in the hands of another person, a demand of any kind, for the purpose of bringing an action thereon, or of representing the claimant in the pursuit of any civil remedy for the recovery thereof ” (Penal Law, § 274, subd. 2). ; ]

The statute has its roots in a prohibition and a policy as ancient as our law. Much of the law of maintenance and champerty is of merely curious interest today, at least in this State, though it has still a flourishing life in lands across the seas (Neville v. London “ Express ” Newspaper, Ltd., [1919] A. C. 368; 8 Holdsworth, History of English Law, 399, 400; Winfield, History of Maintenance and Champerty, 35 L. Q. R. 50; Winfield, Neville v. London “ Express ” Newspaper, Ltd., 35 L. Q. R. 233). Even there, however, the maintenance inspired by charity or benevolence has been sharply set apart from maintenance for spite or envy or the promise or hope of gain. It seems to be agreed, that anyone may lawfully give money to a poor man to enable him to carry on his suit (1 Hawkins, Pleas of the Crown, ch. 27 (6), § 26, p. 460, quoted in Neville v. London “ Express ” Newspaper, Ltd., supra, at p. 379, and cf. pp. 383, 389; also 35 L. Q. R. at p. 235). What is feared and forbidden is the oppressive intermeddling of wealth or officialdom for publicity or profit. The statute is a reminder that remnants of the > old distinctions abide with us today. There is to be no barter of the privilege of prosecuting a cause for gain in exchange for the promise of the attorney to prosecute at his own expense.

The retainer being champertous, the question remains whether credit must be denied to the administratrix for payments made in good faith to the extent of the value of the services. This is not a proceeding by the attorney to compel payment by his client either personally or otherwise. This is a proceeding to determine whether the client, who has made the payment, must bear the loss herself. The contract, whether lawful or unlawful, was not binding upon the estate for any sum in excess of the reasonable value. The promisor as an individual might bind herself for more, but she could not go beyond that limit as to the assets in her keeping. Formerly, the rule was that in the absence of extraordinary conditions, an executor or administrator should pay out of his own funds the fees of his attorney, and then after paying them obtain indemnity or allowance upon the settlement of his accounts to the extent that the payments were found to be reasonable and necessary (Jessup v. Smith, 223 N. Y. 203, 207, 208). In 1914 the law was changed by permitting payment in the first instance out of the funds of the estate, subject always, however, to like restrictions as to amount. (Surr. Ct. Act, § 222, formerly Code Civ. Pro. § 2692). Later, in 1923, the remedy was extended so as to permit the liquidation of such expenses in an independent proceeding, apart from an accounting, and at the instance of the attorney if the representative declined to move (Surr. Ct. Act, § 231-a; Matter of Shipman, 116 Misc. Rep. 405 ; 200 App. Div. 896; 234 N. Y. 499; Jessup-Redfield Surrogates’ Courts, §§ 155, 156-a, 1173, 1174). The administratrix, therefore, was acting within her rights if she disbursed the moneys of the estate for reasonable and necessary expenses though in advance of her accounting. She took the risk, however, that a surcharge would follow if the expenses were disallowed as improper or excessive.

We think the payments are not to be condemned as unreasonable or unnecessary within the meaning of the statute because the services were rendered under a champertous retainer. Beneficial and even necessary to the estate they unquestionably were. There would have been no estate without them. We do not go into the question whether the attorney, discarding the agreement with its vitiating taint of champerty, might have maintained an action against the client for the reasonable value. As to this, conflicting decisions have been made by courts of high repute (Wilhston, Contracts, § 1713; Butler v. Legro, 62 N. H. 350; Volger v. Ray, 131 Mass. 439; Roller v. Murray, supra; Willemin v. Bateson, 63 Mich. 309; Grell v. Levy, 16 C. B. [N. S.] 73; Merritt v. Lambert, 10 Paige, 352; affd., sub nom. Wallis v. Loubat, 2 Denio, 607; contra, Stearns v. Felker, 28 Wis. 594; Brush v. City of Carbondale, supra; Goodman v. Walker, 30 Ala. 482; Gammons v. Johnson, 69 Minn. 488; Barngrover v. Pettigrew, 128 Iowa, 533). Distinctions may be necessary between cases where the vitiating element is separable or contingent (Matter of Snyder, 190 N. Y. 66) and cases where it goes to the essence of the service. We make no attempt at this time to draw the fine of demarcation. The problem for us is narrower and simpler. We are to say whether an administratrix, unadvised of a defense, is to be charged upon her accounting with a devastavit of the assets for yielding in good faith to the demand of her attorney and paying him as upon a quantum meruit for work efficiently performed.

A recent case in the Supreme Court is apposite, if not controlling. The attorney for a trustee in bankruptcy conducted a litigation under a champertous agreement to bear the necessary expenses. A creditor learning of the champerty made objection to his fees. The court held that there might be an allowance for the reasonable value (Watkins v. Sedberry, 261 U. S. 571, 577). The making of. the contract was not malum, in se. The attorney’s right to fair and reasonable compensation is not forfeited.” Cases such as Roller v. Murray and Butler v. Legro (supra), though not expressly disapproved, were put aside as inapplicable because of differences in the facts. An order directing payment was accordingly upheld as a just and equitable incident to the administration of the estate.

We do not need to go so far to find support for the credit in controversy here. The question here, unlike the one in the Supreme Court, is not whether the attorney shall be paid, but whether the administratrix is chargeable with waste in paying him. The service that he gave being meritorious and necessary, the omission to take advantage of a technical defense should not defeat the credit unless the administratrix was negligent in failing to know of the defense and to act upon the knowledge (cf. Speight v. Gaunt, 9 A. C. 1, 4). Fault to that degree may not fairly be ascribed to her. The defense was at best a doubtful one, as is attested by the division in the cases, though defense it may be assumed to be. The mere acceptance of the money by the attorney, who was the general adviser as to the administration of the estate, was a tacit representation to his client that the payment was not unlawful. No objection on the ground of champerty had been made by the next of kin on the earlier accounting. We ought not to apply to a payment so made the strict rule that has been enforced at times where error has been made in the payment of a legacy, or even in the payment of a debt incurred, or believed to have been incurred, by a testator during life. In situations such as those, it has been the practice of the representatives, if uncertain, to seek the instructions of the court, and they pay the price of over-confidence (cf. 2 Williams, Executors, p. 1420; National Trustees Co. v. Gen. Finance Co., [1905] A. C. 373). It is significant that the rigor of that rule has been mitigated by the present statute so far as it applies to debts. The representative is now excused though the debt was unreal if he has paid it in good faith and on reasonable grounds (Surrogate’s Court Act, § 210; Matter of Taylor, 251 N. Y. 257). The conclusion is the more plainly necessary where resort to the court for instructions is unusual, if permitted. Here the primary obligation had been assumed by the fiduciary personally, who, as between herself and the attorney, was paying her own debt (O’Brien v. Jackson, 167 N. Y. 31). She would be entitled to indemnity if she had made the payment out of her own funds, discharging in so doing what was reasonably conceived to be the obligation of her promise. ■ The right to credit should be no less when she has paid from the estate.

In thus holding, we. are not to be understood as indicating a belief that the sum fixed by the retainer must be accepted by the Surrogate as a sound estimate of value. Whether it should be accepted or rejected is for the trier of the facts. An administratrix or other fiduciary may not bind the estate by a promise to pay a fee beyond a reasonable sum (Matter of Reisfeld, 227 N. Y. 137, 139, 140). This is so whether compensation is unconditional or contingent. “ The fee may be made contingent (Lee v. Van Voorhis, 78 Hun, 575; 145 N. Y. 603); its size may be increased because of the contingency; but none the less, the bargain must exhibit a measurable degree of providence in the adjustment of reward to service ” (Matter of Reisfeld, supra). The trier of the facts must say whether these precepts were obeyed. If we turn to the record in Matter of Gilman (220 N. Y. 659), we shall find a nice question of testamentary construction, yet one narrow and specific and calling, it would seem, for no extraordinary research. The legacy, as we have seen, was considerable, over $80,000. There is room for difference of opinion whether a third was a fair proportion even on the footing of a payment contingent on success. The need for providence was the more obvious because in default of creditors one-half of the legacy ' after collection by the widow as administratrix, would go back to the same man who was charged with unlawfully withholding it. The fairness of the payment must be adjudged in the light of these conditions. Testimony by the attorney as to the extent and value of his services was offered upon the hearing before the Surrogate and erroneously excluded. A new hearing becomes necessary to reinforce the scanty record.

The order of the Appellate Division and the decree of the Surrogate’s Court should be reversed and a new hearing ordered, with costs to abide the event.

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

Ordered accordingly.


source: Caselaw Access Project

author: Cardozo, Ch. J.

license: Public Domain

text:
    John I. D. Bristol, Appellant and Respondent, y. Kenneth N. Woodward et at, Respondents and Appellants, Impleaded with Others.

      (Argued May 29, 1929;
    decided July 11, 1929.)

      Edwin F. Valentine for plaintiff, appellant and respondent.
    The property owned by the plaintiff in Greeley Park is not subject to any uniform plan restricting the sale thereof in plots of any particular size, and the finding of the Appellate Division that said property is subject to a restriction limiting its sale to plots of not less than one-half acre is erroneous. (Equitable Life Assurance Society v. Brennan, 148 N. Y. 661; Landsberg v. Rosenwasser, 124 App. Div. 559; Gebhardt v. Addison, 87 App. Div. 375; Korn v. Campbell, 192 N. Y. 490; Beach v. Jenkins, 174 App. Div. 813; Davidson v. Dunham, 159 App. Div. 207.)

      Ralph M. Arkush for defendants, respondents and appellants.
    The law of the case was correctly decided by the Appellate Division. (Vogler v. Alwyn Improvement Corp., 247 N. Y. 131; Chesebro v. Moers, 233 N. Y. 75; Tallmadge v. East River Bank, 26 N. Y. 105; Bimson v. Bultman, 3 App. Div. 198; Turner v. Howard, 10 App. Div. 555; Nissen v. McCafferty, 202 App. Div. 528; Weed’s Practical Real Estate Law [2d ed.], 910; La Place v. Ruehl, 206 App. Div. 761; Beach v. Jenkins, 174 App. Div. 813.) The undisputed evidence conclusively establishes that the plaintiff changed the uniform plan of development from half-acres to acres at the time of the conveyance to the company. (Trustees, etc., v. Smith, 118 N. Y. 634.)
   Cardozo, Ch. J.

The action is one for a declaratory judgment.

Plaintiff in 1920 was the owner of a tract of 400 acres in or near the village of Chappaqua, Westchester county. He laid out the tract into fourteen parks ” or subdivisions, of which one, known as Greeley Park, includes the land in suit. His first sale was made in April, 1924. He then conveyed to one Farnham a parcel of approximately five acres described as lot number 1 on a map entitled Greeley Park Subdivision of Greeley Hills.” This map was referred to in the deed as one about to be filed in the office of the Register, and the filing was soon thereafter. Fifteen numbered lots are indicated on the map, and one unnumbered lot marked Lake Reservation.” They vary greatly in size. Lot number 1, as we have seen, was five acres. The others range irregularly from a maximum of about an acre and a third to a minimum of about two-thirds of an acre. Within these limits there is no uniformity either of area or of shape.

The deed to Farnham must be stated in some detail, for it is at the root of the dispute. The premises are conveyed subject to covenants and restrictions hereinafter imposed on said grantee, her heirs and assigns,” which the grantee “ covenants for herself, her heirs, executors, administrators and assigns shall be as follows,” the numerals being inserted in the summary for convenience of reference: (1) a covenant not to suffer any manufactory, business industries or stores upon the premises, but to use them for residential purposes only; (2) a covenant not to suffer any saloon, restaurant, hotel, boarding house or tenement house, with a repetition of the statement that the use shall be residential; (3) a covenant not at any time to sell or subdivide the premises in lots or plots having a less area than one-half acre; (4) a covenant not to allow upon any plot any building whatever (aside from the usual stable or garage appurtenant to dwellings) except one dwelling house to be used for one family only, to cost not less • than $12,000, the style of architecture to be approved by the grantor or in case of his death by his personal representative; (5) a covenant that any dwelling house or outbuildings shall be placed at stated distances from the exterior lines of the lot; (6) a covenant that the resale price of any portion of the premises separately resold shall not be less than at the rate of $3,500 per acre, and that the proceeds will be applied on any mortgage held by the grantor or his assigns; (7) a covenant that the roads shown on the filed map shall be kept open for the common use of all residents of the property abutting thereon, repairs thereto to be made by the grantors, but the lot owners to contribute to the cost in proportion to their acreage; (8) a covenant as to cesspools; and (9) a covenant that the aforesaid covenants are to run with the land until the year 1940.”

None of the covenants thus summarized (except covenant number 7) is expressly declared to be binding on the grantors, Bristol and wife, the parties of the first part. Immediately following covenant number 2, there is, however, a clause of reservation on the part of the grantors which amounts by implication to a reciprocal covenant on their part as to some at least of the obligations assumed by the grantee. By this clause, the parties of the first part reserve the right, however, should they so desire, to erect upon any portion of their own property remaining unsold a lodge, apartment house, water supply system, lecture hall or public building, and the erection, rental or disposal of such shall not be deemed by either party as a violation of the covenants and restrictions herein contained, or as a waiver of the rights of either party thereunder.”

In June, 1925, plaintiff conveyed to the defendant Woodward the lot on the Greeley Park map described as the Lake Reservation and also lot number 15 and the westerly portion of lots numbers 13 and 14. The deed contained covenants and restrictions substantially the same as those in the deed of lot number 1 to Farnham, except that the restriction as to sale or subdivision specified one acre, and not one-half acre, as the minimum area of subdivision. The defendant Woodward testified that parol representations were made to him to the effect that the same restriction as to acreage applied to all other lots in Greeley Park, but this was contradicted, and the trial judge refused to find in accordance with his testimony. On the contrary, the finding is that no representations were made at any time.

Some months later, about February 1, 1926, the defendant Woodward made an oral agreement with the plaintiff for the purchase of other portions of lots 12, 13 and 14, about one and a quarter acres, adjoining the land conveyed the year before. The restrictions were the same, including the one-acre limit in the event of subdivision. The deed of this additional land, dated March 1, 1926, was taken in the name of the 1181 Second Avenue Corporation, which Woodward owned and managed.

After the sale to Woodward, but before the sale to the corporation, plaintiff prepared two pamphlets describing the development at Chappaqua, not only at Greeley Park, but at all the other parks, six in number. Included in the pamphlets were photographs of Woodward’s house then in course of construction. There is testimony that a copy was given to Woodward, though the date is left indefinite. I think it was given to me,” he says, after I had moved in my house. I should imagine around February, 1926.” The language of the pamphlets is rhetorical and lacking in precision, yet the fair inference to be drawn from it is that all the Chappaqua parks are to be sold in acre or half-acre lots, a half-acre to be the minimum. There is no direct evidence that Woodward read the pamphlets before buying the additional acreage for the defendant corporation, or that he was influenced thereby. On the contrary, there is an allegation in the answer that the purchase was made in reliance upon representations made in March, 1925, before the pamphlets had been written.

Following the sales to Woodward and to the defendant corporation, the plaintiff made a sale to the defendants Merritt of portions of adjoining lots, numbers 12 and 11. The deed to the Merritts followed the same form as those to Woodward and the corporation, except that it provided that the minimum area of subdivision should be only a quarter of an acre.

Upon threats by the defendants Merritt to subdivide the land accordingly, the defendant Woodward gave notice of protest and resistance. He also gave notice to the plaintiff that the one-acre restriction was applicable to the whole of Greeley Park, and that the sale of any smaller lots would be challenged in the courts.

Thereupon the plaintiff brought this action, joining as defendants all other lot owners in the park, and praying for a declaratory judgment to the effect that the land in the park then remaining in his ownership was not subject to any restriction as to the size of plot to be sold. There was a demand for incidental and general relief.

The trial judge held that no common or uniform plan had been established either by the deeds themselves or by acts or representations extrinsic thereto, and that neither the one-acre nor the half-acre limitation is a restriction upon the plaintiff in disposing of the land retained.

The Appellate Division held that the effect of the deed to Farnham is to impose a restriction upon the whole of Greeley Park so as to make a half-acre lot the minimum unit of subdivision; that the restriction flows from the deed itself, which is of record, and does not result from any parol representations alleged to have been made to purchasers,” and that the plaintiff and his subsequent grantees are bound thereby.

In this court there are cross-appeals. The defendants Woodward and the 1181 Second Avenue Corporation complain that the unit of subdivision applicable to other lots has been declared to be a half acre rather than an acre. The plaintiff complains that subdivision has been limited at all.

We think the Farnham deed standing by itself does not import a covenant on the part of the grantor to charge the land which he retained with the same restriction as to acreage assumed by the grantee. If we have regard to form alone, the covenants of the deed are those of the grantee and no one else. If we go beyond the form, there is no evidence that a uniform size of plot through the whole area of the park was put forward to buyers in the beginnings of the project as a feature of the scheme. No .assurance of uniformity was to be gathered from the map itself, which delineated plots of irregular shape and varying dimensions. No assurance of uniformity was to be gathered from parol representations, for none, so far as it appears, were made. Undoubtedly the inference may be drawn from the deed without more that the grantor conceived himself to be subject to reciprocal burdens of some kind. Up to a certain point at least there was to be a measure of correspondence between his own obligations and those assumed by the grantee. This is manifest from the description of the property as a park. It is manifest again from the reservation of the right to build a lodge, apartment house, water supply system, lecture hall or public building ” upon the property unsold. The implication is that subject to this reservation (which is wrought, as we have seen, into covenant No. 2) there shall be adherence by the grantor in the improvement of the land unsold to the restriction against use for business imposed on the grantee. We cannot say, however, from the form of the deed alone that there has been a disclosure of an intention to make the eight covenants reciprocal in all their length and breadth. What was written in the deed may have been enough in the event of later sales to put a purchaser upon inquiry. It may have charged him with the duty of ascertaining the covenants or restrictions, if any, that were inherent in the plan, though extrinsic to the record. Even so, the deed without more does not tell us what they were (Sprague v. Kimball, 213 Mass. 380, 382).

If the deed be insufficient without supplement or commentary, the question remains whether at the time of its delivery there was disclosure of a purpose to make the covenants reciprocal. We put aside for the moment any question of law as to the effect of the disclosure, and consider the fact alone. The evidence points to the conclusion that at the time of the Farnham deed, the plaintiff had in mind that he would impose like restrictions as to area upon the other lots unsold. This is indicated by the fact that upon copies of the map retained in his possession, he indorsed a printed form of deed similar to the Farnham deed in the substance of its covenants. Indeed, he admits as much in his pleadings in the present suit. The difficulty is that the plan thus conceived never went beyond the stage of conception so as to realize itself in act. A scheme for uniform improvement, if it is to lay the basis for the implication of reciprocal restrictions on the part of a grantor, must at least have been made known to the grantee, and that definitely and clearly (Reid v. Bickerstaff, L. R. [1909] 2 Ch. 305, 319, 320). In saying this, we are assuming provisionally that it becomes operative then. Here the condition of dis- 1 closure is not shown to have been satisfied. The grantor did not exhibit to Farnham the indorsement on the map. At the time of the Farnham deed the map did not exist. He did not even exhibit the indorsement at the time of the later sale to Woodward, though the map (without the indorsement) had then been filed. There is no contention on the part of any one that adherence to the varying lines and shapes exhibited on the map was understood to be a duty whenever sales were made thereafter. As to Farnham and Woodward alike, the scope of the community scheme, except to the extent that it was to be gathered from the deeds themselves, was as much undisclosed as if the project were still locked in the brain of the projector. A statement of a plan, though evidenced by a writing, does not make local law for the lands of a community (Reid v. Bickerstaff, supra), unless brought home to the community members by appropriate disclosure. Till then, it is still in fieri. Servitudes do not result by implication from a subjective state of mind.

General pronouncements in the books as to the purpose and effect of equitable restrictions are likely to mislead unless read with discrimination as to the facts. Before a stranger to a conveyance may assert rights based upon a covenant or restriction, there must be found somewhere the clear intent to establish the restriction for the benefit of the party suing or his grantor, of which right the defendant must have either actual or constructive notice ’ ” (Vogeler v. Alwyn Imp. Corp., 247 N. Y. 131, 136, citing Equitable L. Assur. Soc. v. Brennan, 148 N. Y. 661). The facts must be scrutinized to ascertain whether there is a servitude at all, and, if so, the zone and the incidence of benefit and burden. One who imposes a restriction upon buyers of his land may have in mind benefit to himself, or benefit to others (Korn v. Campbell, 192 N. Y. 490). If all that he has in mind is benefit personal to himself, the buyers, though subject to the restrictions, do not succeed to the right to enforce it inter se (Equitable L. Assur. Soc. v. Brennan, supra; Korn v. Campbell, supra; Stone, The Equitable Rights and Liabilities of Strangers to a Contract, 19 Col. L. Rev. 177, 181). On the other hand, if the purpose of the restriction is benefit to other owners, present and prospective, the right of action is not confined to the nominal covenantee, but passes upon each conveyance to successive buyers of the lots within the area of benefit (Barrow v. Richard, 8 Paige, 351; Brouwer v. Jones, 23 Barb. 153; Parker v. Nightingale, 6 Allen, 341; Lattimer v. Livermore, 72 N. Y. 174; Vogeler v. Alwyn Imp. Corp., supra; Stone, supra, pp. 182, 185). The holders of lots B and C, the subject of later sales, may then enforce the restriction against the first buyer, the holder of lot A, and the holder of lot A may enforce the restriction if thereafter imposed on the buyers of B and C. (Stone, supra, pp. 185, 187; 2 Tiffany on Real Prop. pp. 1442, 1450).

The question before us here is of a very different order. We are not concerned to inquire whether Woodward may enforce the covenant against Farnham or against some holder of a later deed who has been subjected to a like restraint. What concerns us now is whether there has been an implied covenant by Bristol that in every future deed a like restraint shall be contained. To say that the several lot owners are to have the benefit of the servitudes, if created, is one thing. To say that the common grantor is under a continuing duty to create them is obviously quite another (Sprague v. Kimball, supra). If restrictions evidenced by covenant and binding in their terms upon the land of the grantee, are to be read as meaning that the grantor imposes a like restriction upon any land retained by him, the inference may not be drawn without something to show that exact uniformity in respect of all restrictions was of the essence of the project (Spicer v. Martin, 14 A. C. 12; In re Birmingham, etc., Co., [1893] 1 Ch. 342; Reid v. Brickerstaff, supra, at 319, 320; Collins v. Castle, 36 Ch. Div. 243; Shoyer v. Mermelstein, 93 N. J. Eq. 57; De Cray v. Monmouth Beach Club House Co., 50 N. J. Eq. 329, 338; Sanborn v. McLean, 233 Mich. 227; Summers v. Beeler, 90 Md. 474; Bimson v. Bultman, 3 App. Div. 198, 201; Turner v. Howard, 10 App. Div. 555). Buyers must have been invited to come in and purchase on the footing that the whole of the property offered for sale was to be bound by one general law ” as to the size of the lots and the character of the buildings (Spicer v. Martin, supra; Reid v. Brickerstaff, supra). We cannot find that evidence in the Farnham deed alone or in any plan or representations contemporaneously revealed or made. To this we add that Farnham’s successor in interest, Cramer, has been joined as a defendant, and makes no claim for the extension of the restriction throughout the area of the park.

If the Farnham deed alone or in its setting does not lay the basis for the inference of a reciprocal covenant on the part of the grantor, the like must obviously be true of the deed to Woodward, since the finding is that there was nothing in the form of covenant or representation beyond the deed itself. Indeed the implication is more difficult in the case of this deed than in that of the other, for both the size of the lots as marked on the map and the covenants of Farnham’s deed repel the acceptance of a one-acre lot as the standard of uniformity, with the result that any covenant to be implied must be something less than reciprocal. When we pass to the later deed of lots 11 and 12 to the defendant corporation, the problem, however, becomes different. Before that deed was made, there had been exhibited to Woodward the two descriptive pamphlets with their florid picture of the beauties of the several parks leading up, as we. shall assume, to what in substance was a statement that sales were to be made in acre and half-acre parcels, but that the latter would be the minimum. Included in the pamphlets were photographs of Woodward’s house. There is no evidence that he looked at the writings except perhaps to glance at the pictures and smile at the hyperboles. There is no evidence that he was moved by anything there read to contract for the additional land and later to acquire the deed. Indeed, as we have already pointed out, his verified answer suggests the contrary. He does not say that he had even received the pamphlets before assenting to the purchase, and there is only a vague statement of his “ imaginings ” to indicate that he had received them before the delivery of the deed. We cannot say that such testimony is so definite and persuasive as to make the promise of a reciprocal restriction an inference of law. Least of all can this be said where the prayer is to a court of equity for its discretionary remedies (Forstmann v. Joray Holding Co., Inc., 244 N. Y. 22; Shakespeare v. Markham, 72 N. Y. 400). Whatever representations had been made were uncertain as to time and meaning. As to this, the Appellate Division did not differ from the trial judge, but put its ruling on the deeds alone. If error was committed, it was not one of law. The facts, if subject to conflicting inferences, have been conclusively adjudged below.

What has been written has assumed that parol representations, if adequately proved, may be effective to add to the obligations of a deed. How far and in what circumstances they have value to that end is an inquiry that brings us to one of the battlefields of the law. Only recently an author of learning has surveyed the terrain of the strife, and has charted the monuments with clarity and precision (Charles E. Clark, Real Covenants and Interests Running with the Land, ch. VI, p. 148, et seq.). One view of these restrictions treats them as contracts concerning or relating to the enjoyment of the land, to be specifically enforced against the promisee or against purchasers with notice, but inoperative as a conveyance of any interest in the land itself (Clark, supra, p. 149; 2 Tiffany, Real Prop. pp. 1425,1438; Stone, The Equitable Rights and Liabilities of Strangers to a Contract, 18 Col. L. Rev. 291; 19 id, 177; Ames, Lectures on Legal History, 381; Giddings, Restrictions on the Use of Land, 5 Harv. L. Rev. 274; Lewis v. Gollner, 129 N. Y. 227; Trustees of Columbia College v. Lynch, 70 N. Y. 440, 447; Hodge v. Sloan, 107 N. Y. 244, 250; Tallmadge v. East River Bank, 26 N. Y. 105). Where that view prevails, the Statute of Frauds is held to be irrelevant (Clark, supra, 157; Tiffany, supra, p. 1430; Lewis v. Gollner, supra, at pp. 233, 235; Mattikow v. Sudarsky, 248 N. Y. 404; Hall v. Solomon, 61 Conn. 476; Johnson v. Mt. Baker Pk. Church, 113 Wash. 458). The other view treats the restrictions, though equitable in origin, as creating interests in the land itself, like easements at common law (Pound, Progress of the Law, 33 Harv. L. Rev. 813; Pomeroy, Eq. Jur. [4th ed.] §§ 1295, 1296; Clark, supra, p. 149). Where that view prevails, the Statute of Frauds is generally applied (Sprague v. Kimball, supra; Davis v. Robinson, 189 N. C. 589; 38 Harv. L. Rev. 967, 971), subject, of course, to the usual exceptions on the ground of fraud or part performance (Newman v. Nellis, 97 N. Y. 285; Canda v. Totten, 157 N. Y. 281).

Difficulties there are in either view if the underlying concept is pressed to the limit of its logic. If we regard the restriction from the point of view of contract, there is trouble in understanding how the purchaser of lot A can gain a right to enforce the restriction against the later purchaser of lot B without an extraordinary extension of Lawrence v. Fox (20 N. Y. 268). Ingenious answers to this objection will be found in a learned essay by Dean (now Mr. Justice) Stone (19 Col. L. Rev. at p. 187) as well as in the writings of Mr. Tiffany and others. Perhaps it is enough to say that the extension of the doctrine, even if illogical, has been made too often and too consistently to permit withdrawal or retreat. It is significant that the whole doctrine of the right of recovery by a third party beneficiary, a stranger to the contract, was anathema in its beginnings to those who were inclined to put symmetry in the first place and efficiency in the second (See Jacobs & Young v. Kent, 230 N. Y. 239, 242; and see Hening, History of the Beneficiary’s Action in Assumpsit, printed in 3 Select Essays in Anglo American Legal History, pp. 339, 340). On the other hand, if a covenant of restriction, laying a burden on the use such as did not run with the land by common-law tests of privity and tenure (Stone, id. 18 Col. L. Rev. at pp. 293, 294; Clark, supra, p. 113; Trustees of Columbia College v. Lynch, 70 N. Y. 440, 449; Miller v. Clary, 210 N. Y. 127; De Gray v. Monmouth Beach Club House Co., supra), is to be viewed as creating what is strictly a servitude or easement, there is difficulty in squaring its present character with its equitable origin (Clark, id. p. 154).

We do not need to choose now between these conflicting methods of approach, though the cases in this State show what is a tendency, if no more, to arrive at a solution of the problem through the avenue of contract (Lewis v. Gollner, supra; Trustees of Columbia College v. Thacher, 87 N. Y. 311, 316). Each of the two methods will doubtless have contributed a share to the ultimate generalization. In the end we may find that they have come together so often and in so many ways that there is no longer space between the paths, no longer choice to make between them. What began as a contractual right may be so protected by remedies, legal and equitable, that it will be indistinguishable from a real interest, a title to the land itself. What has thus developed into an interest may retain such traces and reminiscences of its contractual history that for the purpose of the Statute of Frauds, its quality will be determined according to its origin (as to Personal Prop. Law [Cons. Laws, ch. 41], § 31, subd. 1, see Ward v. Hasbrouck, 169 N. Y. 407, 419; Brick v. Gannar, 36 Hun, 52; Great Western Turnpike Co. v. Shafer, 57 App. Div. 331; 172 N. Y. 662; Worley v. Sire, 111 Ind. 238; Stem v. Nysonger, 69 Iowa, 512).

The ultimate generalization is not for this case, but for the future. We assume for present purposes that parol representations and promises are effective, if proved, to establish a restriction. The defendants appealing are not helped by the assumption, for as to them the proof has failed. We place our judgment on that ground. -

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

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

Judgment accordingly.


author: Hubbs, J.

text:
    Regina V. G. Millhiser, Respondent, v. Beau Site Company, Appellant.
    (Argued June 4, 1929;
    decided July 11, 1929.)

      John Mc Kim Minton, Jr., and Harold R. Medina for appellant.
    The uncontradicted facts in this case bring it squarely within the language of the statute and the determination of the learned justice at Trial Term was correct. (People ex rel. N. Y. C. v. Woodbury, 208 N. Y. 421; People ex rel. L. & N. Y. R. R. Co. v. Sohmer, 217 N. Y. 443; Lake Co. v. Rollins, 130 U. S. 662; Honig v. Riley, 244 N. Y. 105; Harris v. Manischewits Broadway Cent. Hotel, 129 Misc. Rep. 329; Hyman v. South Coast Hotel Co., 146 App. Div. 341; Davis v. Hotel Chelsea, 186 N. Y. Supp. 75.) The appellant fully complied with the provisions of the statute. (Cooper-Snell Co. v. State of New York, 230 N. Y. 249; People ex rel. New York L. Ins. Co. v. Walsh, 198 App. Div. 34; 233 N. Y. 539; People v. Rogers, 183 App. Div. 604.)

      William O. Gennert and George H. Eichelberger for respondent.
    Section 200 of article 12 of the General Business Law does not apply to theft by the innkeeper or his agents. (Wilkins v. Earle, 44 N. Y. 172; Hulett v. Swift, 33 N. Y. 371; Ramaley v. Leland, 43 N. Y. 539; Matter of Soule, 72 Hun, 594; Matter of Herrmance, 71 N. Y. 481; Magnin v. Dinsmore, 62 N. Y. 35; 70 N. Y. 410; D’ Utassy v. Barrett, 219 N. Y. 420; Heuman v. Powers Co., 226 N. Y. 205; Fein v. Weir, 129 App. Div. 299; 199 N. Y. 540.) Defendant cannot limit its liability under section 200 of article 12 of the General Business Law, because it failed to post a printed copy of section 200 in a public and conspicuous place in the office and rooms of the Hotel Biltmore. (People ex rel. Rand v. Craig, 231 N. Y. 216; People ex rel. Mason v. McClave, 99 N. Y. 83; Hancock v. Rand, 94 N. Y. 1; Porter v. Gilkey, 57 Mo. 235; Batterson v. Vogel, 8 Mo. App. 24.) Defendant accepted for safekeeping the valuables offered by plaintiff-respondent under a special agreement, and, therefore, cannot claim a limitation of liability for their loss. (Broadway Realty Co. v. Lawyers T. Ins. & Trust Co., 226 N. Y. 335; Shubert Theatrical Co. v. Gallagher, 200 App. Div. 596.)

      Charles J. Campbell for New York State Hotel Association et al., amici curiæ.

    Section 200 of the General Business Law, which limits innkeeper’s habihty to $500 for loss of property from hotel safe “ by theft or otherwise ” applies to a theft by an agent or servant of the innkeeper. (Rosenplaenter v. Roessle, 54 N. Y. 262; Wies v. Hoffman House, 28 Misc. Rep. 226; Purvis v. Coleman, 21 N. Y. 111; Hyatt v. Taylor, 42 N. Y. 258; Davis v. Hotel Chelsea, 186 N. Y. Supp. 75.) The posted notice was sufficient. (Purvis v. Coleman, 21 N. Y. 111; Herter v. Dwyer, 129 N. Y. Supp. 505.)
   Hubbs, J.

The defendant operates the Biltmore Hotel in New York city. It has two hundred safety deposit boxes provided for the use of guests. The plaintiff, a transient guest, delivered to the clerk at the desk a package containing jewelry of the value of $369,800. She did not notify him of the value of the package. He gave her a key to a safety deposit box and placed the package in it. The box could only be unlocked by the use of a master key arid the key given to the plaintiff, or a duplicate thereof. Later the plaintiff called for the package. When the box was opened it was found that jewelry to the value of $50,000 was missing. Thereafter the clerk who had received the package from the plaintiff was convicted of stealing the missing jewelry.

The defendant had posted in the public rooms and guest rooms a notice which read: A safe is provided in the office of this hotel for the use of guests in which money, jewels or other valuables may be deposited for safekeeping.” No other or different notice was posted. The question for determination is whether the defendant is liable for $50,000, the value of the jewelry stolen, with interest, or whether its liability is limited to $250 by section 200 of article XII of the General Business Law (Laws of 1909, ch. 25; Cons. Laws, ch. 20), as it read at that time.

At common law an innkeeper was liable as an insurer of the property of guests lost by theft, unless the loss was "occasioned by the negligence or fault of the guest. (Ilvlett v. Swift, 33 N. Y. 571; Wilkins v. Earle, 44 N. Y. 172.) In order to reheve innkeepers of the heavy burden placed upon them by the common law, the Legislature enacted chapter 421 of the Laws of 1855. (Rosenplaenter v. Roessle, 54 N: Y. 262.) That statute provided that when any hotel shah provide a safe and “ shall notify the guests thereof, by posting a notice [stating the fact that such safe is provided, in which such money, jewels or ornaments may be deposited], in the room or rooms occupied by such guest,” and the guest shah fail to deposit the property, an innkeeper shah not be hable therefor. Under that statute it was decided that the common-law habihty continued in case the hotel failed to post the notice as required by the statute. (Hancock v. Rand, 94 N. Y. 1.) Also that a guest could not recover the value of such articles when stolen if the hotel had posted the notice and the guest had failed to dehver the articles to the hotel for safekeeping. (Hyatt v. Taylor, 42 N. Y. 258.)

The section was amended by chapter 227 of the Laws of 1883 by requiring the notice to be posted in the office and public rooms and in the public parlors, instead of in the bedrooms as theretofore. It was again amended by chapter 284 of the Laws of 1892 by adding a provision to the effect that a hotel shall not be required to receive for safekeeping articles of more than $500 in value, and if a guest shall dehver for safekeeping in the safe such property, the hotel shah not be hable “ for any loss thereof, sustained by such guest, by theft or otherwise, in any sum exceeding the sum of two hundred and fifty dohars, unless by special agreement in writing by proprietor or manager.” The section was again amended by chapter 305 of the Laws of 1897 in a respect not material in this case. By section 200 of article XII of the General Business Law (Laws of 1923, ch. 417) the section was re-enacted without change in regard to the notice to be posted, but increasing the limited liability from $250 to $500.

The Appellate Division has decided that section 200 of article XII of the General Business Law (Laws of 1909, ch. 25) does not protect the defendant or limit its liability because the jewelry was stolen by an employee of the defendant, thereby limiting the-effect of the section to cases where the property of the guest placed with a hotel for safekeeping in a safe is stolen by some one not an employee of the hotel. We cannot agree with that construction of the section. There is nothing in the wording of the section which suggests such a limitation of its meaning. It is plain and unambiguous and provides that “ Said proprietor, manager or lessee shall not be liable for any loss thereof, sustained by such guest or traveller by theft or otherwise, in any sum exceeding the sum of two hundred and fifty dollars, unless by special agreement in writing with such proprietor, manager or lessee.” The purpose of the section is to protect the hotel from an undisclosed excessive liability.

The plaintiff left with the desk clerk jewelry of the value of $369,800 without notifying the clerk of its value, or in any way giving the defendant an opportunity of declining to accept the risk involved, as the section permitted it to do. The risk that the package might be stolen by an employee was greater, possibly, than that it might be unlawfully taken by someone not in the service of the defendant. The facts in this case illustrate the great liability which could be placed upon a hotel under the construction which has been given to the section. It was to enable hotels, without notice of value, to avoid liability, that the section provides that if a guest desires to impose a liability greater than $250, notice must be given of the value of the property deposited, and a written agreement entered into making the hotel liable for more than that amount.

During the many years that a statute has been in existence in this State limiting the liability of a hotel to a guest, no case has been decided by this court indicating that such limited liability did not exist in case the property of a guest deposited for safekeeping was stolen from a hotel by an employee thereof. Such a holding by this court would nullify the purpose of the statute and be in conflict with the spirit and intent thereof.

We do not hold that section 200 limits the liability of a hotel to $250 where the value of the articles left for safekeeping in a safe is not disclosed, and the articles are stolen by the hotel keeper. Such a theft would be by the hotel keeper from the guest and not a theft from the hotel keeper. We read the statute to mean a theft of the articles from the hotel keeper and not a theft by the hotel keeper from the guest. The act of the defendant’s employee in stealing the jewelry was a wrongful act, outside the scope of his employment and for his own enrichment. It was not in any sense the act of the defendant. (D’ Utassy v. Barrett, 219 N. Y. 420.)

The respondent relies upon a statement in the opinion in Honig v. Riley (244 N. Y. 105). The opinion in that case dealt with the construction of section 201 of article XII of the General Business Law (Laws of 1909, ch. 25). That section limits a hotel keeper’s liability as an insurer where it shall appear that such loss occurred without the fault or negligence of such hotel keeper.” The statement in the opinion is: “ The statute is aimed at loss or misadventure. It has no application to theft by the defendant or his agents.” The reference is to the hotel keeper’s liability, not as an insurer, but for negligence, and simply means that under the section in question he remains liable for the negligent acts of himself and his agents under the general rules of law applicable to actions for negligence.

While we are in agreement with the result reached by the Appellate Division, we place our decision upon a different ground. Section 206 of article XII of the General Business Law (Laws of 1909, ch. 25) provides: “ Every keeper of a hotel or inn shall post in a public and conspicuous place and manner in the office or public room, and in the public parlors of such hotel or inn, a printed copy of this section and sections two hundred and two hundred and one.” That provision first appeared in chapter 25 of the Laws of 1909. The section as drafted by the Board of Statutory Consolidation and submitted to the Legislature did not contain a provision for posting a printed copy of sections 200 and 201. The Legislature added that provision to the proposed section. The reason for adding the provision is manifest. A guest, upon reading a notice that a safe is provided in the office of this hotel for the use of guests in which money, jewels and other valuables may be deposited for safekeeping,” would naturally understand that if valuables were deposited in pursuance to the notice, the depositor would be protected to the extent of their value. There is nothing in such notice to indicate any statutory limitation of the liability of the hotel. It is unquestionably misleading and unfair to require the guest to deposit valuables for safekeeping in a safe and in case of loss to permit the hotel to assert a limitation of liability without any notice of such right to the guest. If, however, section 200 is printed and posted with the notice, a guest is notified of the true situation and acts with knowledge.

The statute must be read as a whole. We cannot by construction delete the provision requiring that sections 200 and 201 be printed and posted.

The judgment should be affirmed, with costs.

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

Judgment affirmed.


author: O’Brien, J.

text:
    Benjamin F. Hendricks, Appellant, v. New York, New Haven and Hartford Railroad Company, Respondent.

      (Argued June 4, 1929;
    decided July 11, 1929.)

      Charles D. Lewis, Thomas J. O’Neill and John A. Goodwin for appellant.
    It cannot be said as matter of law that plaintiff should have walked through a concededly undermanned and crowded train and taken the chance on reaching the front platform before the train started or alighting from a moving train upon the roadbed. (Westcott v. Chicago Great Western R. R. Co., 157 Minn. 325; Louisville R. R. Co. v. Walker, 162 Ky. 209; Baltimore R. R. Co. v. Whiteacre, 124 Md. 411; 242 U. S. 269; Knowles v. N. Y., N. H. & H. R. R. Co., 223 N. Y. 513; No. Carolina R. Co. v. Zachary, 232 U. S. 248; Erie R. R. Co. v. Winfield, 244 U. S. 170.)

      E. R. Brumley, E. J. Moore and John M. Gibbons for respondent.
    The means of exit pursued by the plaintiff constituted a deviation from his employment as a matter of law. (Krysiak v. Pennsylvania R. R. Co., 270 Fed. Rep. 758; Bountiful Brick Co. v. Giles, 276 U. S. 154; Phila

      delphia & R. Ry. Co. v. Thirouin, 9 Fed. Rep. [2d] 856; B. & O. R. R. Co. v. Newell, 196 Fed. Rep. 866; Hogan v. N. Y. C. & H. R. R. R. Co., 223 Fed. Rep. 890; Pallacco v. Lehigh Valley R. R. Co., 236 N. Y. 110;. Matter of Mclnerney v. B. & S. R. R. Corp., 225 N. Y. 130; Legge v. N. Y., N. H. & H. R. R. Co., 197 Mass. 88; Westcott v. Chicago Great Western R. R. Co., 157 Minn. 325; Louisville R. R. Co. v. Walker, 162 Ky. 209; Baltimore R. R. Co. v. Whiteacre, 124 Md. 411; 242 U. S. 169; Knowles v. N. Y., N. H. & H. R. R. Co., 223 N. Y. 513.)
   O’Brien, J.

Plaintiff was an employee of defendant engaged in interstate commerce. In an action instituted under the Federal Employers’ Liability Act, he recovered judgment for personal injuries. It has been reversed as matter of law and the complaint dismissed. The majority of the Appellate Division held that defendant did not fail in its duty to protect him and that, moreover, at the time of his injury he had deviated from his employment. We are unable to accept either theory.

After the close of worldng hours, plaintiff was given free transportation by defendant to the station nearest his home. The train consisted of seven or eight cars. He occupied the last seat in the car next to the rear. From conflicting evidence, the jury could find that this car was crowded. It stopped on a trestle some distance south of the station. The station platform was located on the right side of the train, north of the car occupied by plaintiff, and separated from it by two main line tracks. Exit from the rear of plaintiff’s car was obstructed on the right by a steel girder which contributed to the support of the trestle. The forward end of the car extended a few feet north of and free from this obstruction. Plaintiff, testifying that he feared that the train would start before he could traverse the length of the car and emerge from the forward end and that he discovered that his exit from the rear end on the right was blocked by the girder, descended from the rear end on the left, alighted upon planks forming part of the trestle’s deck and, breaking through them, fell to the street and sustained serious injuries.

Defendant was bound to provide a way of exit from the car which, as matter of fact, its employees would be able safely to use. If, as the jury must be presumed to have found, the station platform could be reached by plaintiff only at his risk of remaining on a train which might start before he could alight from the forward end, and even then necessarily by crossing two other tracks, such a way could not be said, as matter of law, to conform with the full measure of duty which defendant owed. An obligation is imposed to arrange some mode of egress reasonably safe and not unreasonably inconvenient. Access to the street by way of the station from plaintiff’s car will not be held, as matter of law, to have been either safe or reasonably convenient. The trestle proved, as matter of fact, to be dangerous. No third way existed. The question of fact cannot be excluded from the case whether under the circumstances defendant was negligent in its maintenance of a structure in such a state as to enable it reasonably to foresee danger to those passengers and employees who, the jury could find, not infrequently used it for want of a better passage. The evidence warrants the finding that plaintiff assumed no risk known to him nor one so obvious that he should have been aware of it and that his use of the trestle as a connecting passage to the street would have been safe except for the presence of defective planks. Plaintiff having assumed no known risk and defendant having negligently maintained its structure, he is entitled, under this statute, whether negligent or otherwise, to recover in some amount by way of apportionment of damage, unless his means of exit constitutes a deviation from his employment.

He had not severed his employment with defendant. He was yet on his employer’s premises, the relation of master and servant continued to exist and he was still engaged in discharging a duty of his employment. (Erie R. R. Co. v. Winfield, 244 U. S. 170, 173; Knowles v. N. Y., N. H. & H. R. R. Co., 223 N. Y. 513.) If the master had set aside a determinate path or overhead bridge or other safe way and the servant had ignored it and selected a dangerous way, he might be held to have been engaged in his private concerns and to have lost his status as an employee in interstate commerce. (Krysiak v. Penn. R. R. Co., 270 Fed. Rep. 758.) The facts which the jury found in this case bring it within the principle of Pallocco v. Lehigh Valley R. R. Co. (236 N. Y. 110, 114). ' These facts also especially distinguish it from the actual decision in the Krysiak case and render the caution there delivered at page 760 directly applicable: “ We aré particular to note just here that we are not passing on a case where an employé, leaving employment in interstate commerce, selects one of several more or less dangerous means of exit from his place of employment because his employer had provided him no safe means.” The state of facts which the court found not present in that case is the finding by the jury in the one before us. If, as matter of fact, plaintiff could not safély alight from the right side of the train, he did not, as matter of law, deviate from his employment when he made his exit on the left.

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

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

Judgment accordingly.


text:
    Marjorie G. Rushing, Respondent, v. Commercial Casualty Insurance Company, Appellant.
    (Argued June 4, 1929;
    decided July 11, 1929.)

      Daniel Mungall for appellant.
    The court below misapprehended the law as to delayed notice. (Whiteside v.
      North Am. Acc. Ins. Co., 200 N. Y. 320.) The delay of twenty-two days in this case was fatal as a matter of law. (Haas v. American Fidelity, 226 N. Y. 343; Woolverton v. Ins. Co., 190 N. Y. 41; Utica v. Ins. Co., 210 N. Y. 399; Coleman v. Ins. Co., 247 N. Y. 271; Roth v. Ins. Co., 202 App. Div. 667; Schoenfeld v. Ins. Co., 203 App. Div. 796.)

      Irwin L. Tappen for respondent.
    The court below committed no error in holding that there was no breach of the terms of the policy by the assured. (Greenwich Bank v. Hartford Fire Ins. Co., 250 N. Y. 116; Solomon v. Continental Fire Ins. Co., 160 N. Y. 595; McNally v. Phoenix Ins. Co., 137 N. Y. 389; Paltrovitch v. Phoenix Ins. Co., 143 N. Y. 73; Sergent v. L. & L. & G. Ins. Co., 155 N. Y. 349; Both v. Nat. Auto Mut. Cas. Co., 202 App. Div. 667; Miller v. Union Indemnity Co., 209 App. Div. 455; Killeen v. Gen. Acc. Fire & Life Assur. Corp., Ltd., 131 Misc. Rep. 691; 224 App. Div. 719; O'Connell v. New Jersey Fid. & P. G. Ins. Co., 201 App. Div. 117; 235 N. Y. 583.) The stipulation between the defendant and the assured cannot be interposed as a defense to this action. (Weatherwax v. Royal Indemnity Co., 250 N. Y. 281; Coleman v. New Amsterdam Casualty Co., 247 N. Y. 271; Schoenfeld v. N. J. Fid. & Plate Glass Ins. Co., 203 App. Div. 796; Roth v. Nat. Auto Mut. Cas. Co., 202 App. Div. 667; Lorando v. Gethro, 228 Mass. 181; Merchants Liability Co. v. Smart, 267 U. S. 126; Brassil v. Maryland Casualty Co., 210 N. Y. 235.)
   Cardozo, Ch. J.

In a controversy submitted to the Appellate Division upon an agreed statement of facts, the plaintiff seeks to charge the defendant with liability under Insurance Law (Cons. Laws, ch. 28), section 109.

The defendant issued to a householder its policy of insurance indemnifying against claims for damages. A condition of the policy is that “ upon the occurrence of an accident ” covered thereby, the assured shall give immediate notice, with the fullest information obtainable at the time, to the company or its duly authorized agent.” Plaintiff was injured on October 6, 1920, by falling on the stairs in the house belonging to the assured. She brought action later for her damages. The assured waited till October 28, a space of twenty-two days following the accident, before giving notice to the insurer in compliance with the policy. There was prompt disclaimer of liability, followed by a compromise. The assured consented on his part that because of the dilatory notice the insurer be relieved of liability to him for any judgment to be rendered. The insurer bound itself to defend without cost to the assured the action then pending for the recovery of damages. In the action thus defended plaintiff had a judgment which is still unpaid after return of execution. The question is whether the insurer may be held under the statute.

In the absence of explanation or excuse, a notice of an accident withheld for twenty-two days is not the immedi- " ate notice called for by the policy. There may, indeed, be circumstances, such as absence from the State or lack of knowledge of the accident, that will explain or excuse the delay and show it to be reasonable (Greenwich Bank v. Hartford Fire Ins. Co., 250 N. Y. 116; Solomon v. Continental Fire Ins. Co., 160 N. Y. 595). If so, the burden of going forward with the proof and supplying the data necessary to repel the adverse inference, must rest on the assured. The consequence will be the same whether the condition be classified as precedent or subsequent, its inclusion under the one head or the other being dependent on the wording of the policy (Black Co. v. London Guar. & Acc. Co., Ltd., 190 App. Div. 218, 221; affd., 232 N. Y. 535). If precedent, the assured must prove compliance, which includes, of course, excuse or explanation for delay that would otherwise be unreasonable. If subsequent, he must still prove compliance after a defense sufficient unless rebutted has been proved by the insurer. The plaintiff, the judgment creditor, stands in the shoes of the assured, and must abide by his case when suing on the policy (Coleman v. New Amsterdam Casualty Co., 247 N. Y. 271). She is not, indeed, affected by the compromise, which was unavailing to divest her of rights previously accrued. She is chargeable like the assured, however, with the breach of conditions on which liability depended.

The delay in respect of notice is thus a bar to a recovery unless and until there shall be explanation and excuse. The submission does not tell us whether explanation or excuse is possible. Its silence and obscurity permit, if they do not require, a dismissal without prejudice rather than a judgment on the merits (Civ. Prac. Act, § 548; Marx v. Brogan, 188 N. Y. 431).

We agree with the Appellate Division that the defendant has failed to make out its contention that the assured forfeited the policy by failing to use reasonable efforts to co-operate with the insurer in resistance to the claim.

The judgment should be reversed, with costs in this court, and the submission dismissed without prejudice to a new submission or a new action.

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

Judgment reversed, etc.


author: Pound, J.

text:
    Robert S. Bendell, Respondent, v. Florinda De Dominicis, Appellant.

      (Argued June 7, 1929;
    decided July 11, 1929.)

      Philip J. Cirillo for appellant.
    The trial court erred in refusing to grant the motion of defendant for a nonsuit and for the direction of a verdict. The verdict of the jury was contrary to law. (Roman v. Lobe, 243 N. Y. 51; Goldin v. Shankroff, 211 N. Y. Supp. 569; Stake & Co., Inc., v. Roth, 154 N. Y. Supp. 213; Morgan Munitions Co. v. Studebaker Corp., 226 N. Y. 94.)

      Maurice Freedman for respondent.
    The respondent’s cause of action arose with the signing of the contract of purchase and sale between appellant and the buyer. (Roman v. Lobe, 213 App. Div. 162; Glentworth v. Luther, 21 Barb. 145; Folinsbee v. Sawyer, 157 N. Y. 196; Loeffler v. Friedman, 26 Misc. Rep. 750; Forrester v. Price, 6 Misc. Rep. 308; Byrne v. Korn, 25 Misc. Rep. 509; Haase v. Schneuble, 112 App. Div. 336; Levy v. Klottman,
      11 Misc. Rep. 372; Thompson & Co., Inc., v. Madison Square Corp., 225 App. Div. 521.) The respondent was a duly Ecensed real estate broker at the time his cause of action arose within the meaning of article 12-A, section 442-d, of the Real Property Law, and, therefore, may bring and maintain this action. (Roman v. Lobe, 213 App. Div. 16,2; 243 N. Y. 51; Blank v. Longenberger, 132 Misc. Rep. 374; Crilly v. Young, 152 Ill. App. 72; People ex rel. Freligh v. Matsell, 94 N. Y. 179; City of Rochester v. Coe, 25 App. Div. 300; Wehrenberg v. N. Y., N. H. & H. R. R. Co., 124 App. Div. 205; Cody v. Dempsey, 86 App. Div. 335; Sinnott v. German-American Bank, 164 N. Y. 386; Gay v. Seibold, 97 N. Y. 472; Weingast v. Rialto Pastry Shop, 243 N. Y. 113.)
   Pound, J.

On the facts as found by the jury it appears that plaintiff, prior to May 1, 1928, resided at 1060 Madison avenue, Albany, N. Y., and was a tenant of the defendant; there in the year 1926 defendant employed him to sell her property consisting of two parcels known as Nos. 1058 and 1058-a Madison avenue and Nos. 1060, 1062 and 1064 Madison avenue; that sometime thereafter plaintiff procured a prospective purchaser, Lazarus, for the second of the parcels; that Lazarus offered $77,500 therefor, which offer was not then accepted; that on November 15, 1927, a written contract was entered into between defendant and Lazarus, without the further intervention of plaintiff, for the purchase and sale of the property for the sum of $77,500; that the transaction was closed and the purchase money was paid in January, 1928.

Plaintiff was not a licensed real estate broker from September 30, 1926, to November 7, 1927, but was a duly licensed broker when he was first employed and also when the contract of sale between defendant and Lazarus was entered into on November 15, 1927. He has recovered a judgment for commissions. The question is whether he was entitled to maintain an action therefor under the provisions of article 12-A of the Real Property Law (L. 1922, ch. 672, amd. by L. 1926, ch. 831; Cons. Laws, ch. 50), sections 440, 440-a, 442-d, 442-e, which read as follows:

§ 440. Definitions. Whenever used in this article ‘ real estate broker ’ means any person, firm or corporation) who, for another and for a fee, commission or other valuable consideration, lists for sale, sells, exchanges, buys or rents, or offers or attempts to negotiate a sale, exchange, purchase or rental of an estate or interest in real estate, or collects or offers or attempts to collect rent for the use of real estate, or negotiates, or offers or attempts to negotiate, a loan secured or to be secured by a mortgage or other incumbrance upon or transfer of real estate. * * *
“ § 440-a. License required for real estate brokers and salesmen. On and after the first day of October, nineteen hundred and twenty-two, no person, copartnership or corporation shall engage in or follow the business or occupation of, or hold himself or itself out or act temporarily or otherwise as a real estate broker or real estate salesman in any city of the state * * * without first procuring a license therefor as provided in this article. * * *
“ § 442-d. Actions for commission; license prerequisite. No person, copartnership or corporation shall bring or maintain an action in any court of this state for the recovery of compensation for services rendered, in any place in which this article is applicable, in the buying, selling, exchanging, leasing, renting; or negotiating a loan upon any real estate without alleging and proving that such person was a duly licensed real estate broker or real estate salesman on the date when the alleged cause of action arose.
§ 442-e. Violations. Any person who violates any provision of this article shall be guilty of a misdemeanor. The commission of a single act prohibited by this article shall constitute a violation hereof. In case the offender shall have received any sum of money as commission, compensation or profit by or in consequence of his violation of any provision of this article, he shall also be liable to a penalty of not less than the amount of the sum of -money received by him as such commission, compensation or profit and not more than four times the sum so received by him, as may be determined by the court, which penalty may be sued for and recovered by any person aggrieved and for his use and benefit, in any court of competent jurisdiction. It shall be the duty of the court or judge, upon a conviction for a violation of any provision of this article, and within ten days thereafter, to make and file with the department of state a detailed report showing the date of such conviction, the name of the person convicted and the exact nature of the charge.”

The courts below have proceeded on the theory that the meeting of minds of vendor and purchaser on the terms of sale occurred on the date of the signing of the contract of purchase and sale; that the plaintiff was then a licensed real estate broker and, as that was “ the date when the alleged cause óf action [for commissions] arose,” he maintained the burden of proof that he was a licensed real estate broker when such cause of action arose, within the provisions of section 442-d, and is entitled to recover. Plaintiff has, however, failed to show that he was a licensed real estate broker at the time he rendered the services alleged in the complaint and proved on the trial. If he, while unlicensed, engaged in a single act prohibited by the article, he was guilty of a misdemeanor. His contention is that he is, nevertheless, subject only to the penalties imposed by law and that Ms right to recover Ms commissions is not affected by the statute. He relies on the principle enunciated as follows: “ It is true that where the statute prohibits the doing of a particular thing, the courts will not aid in enforcing contracts made in violation of the law, but where a contract, not unlawful in itself has been executed, and the parties have enjoyed the benefits of the contract, the mere fact that one of the parties has violated a penal statute in the approach to the contract, will not prevent a court from enforcing payment.” (Cody v. Dempsey, 86 App. Div. 335; cited in Morgan Munitions Co. v. Studebaker Corp., 226 N. Y. 94, 99.) Thus it was held in Gay v. Seibold (97 N. Y. 472) that a violation of a statute. prohibiting the use of the words “ and company ” except to represent an actual partner did not protect those who had obtained credit from the firm from payment of their just debts, and in Sinnott v. German-American Bank (164 N. Y. 386) it was held that the same statute had no operation on an executed agreement. The purpose of the statute was to prevent fraud by the use of the assumed name, not to permit others to take advantage of the violation of the statute to escape their obligations.

But the doing of the particular thing, the rendering of services by plaintiff under his contract of employment as a real estate broker, when unlicensed, was in itself illegal. One purpose of the statute was to mark off the business of the broker as distinct from occupations which by general acquiescence are pursued of common right without regulation or restriction,” and to make illegal the acts of the unlicensed in the real estate broker’s field. (Roman v. Lobe, 243 N. Y. 51.) Plaintiff in this case, having been left out of the picture from the time he made the offer of Lazarus to the time of the execution of the contract of sale, could not establish his case upon his contract of employment without proving the criminal nature of his services in obtaining Lazarus as a prospective purchaser for the real estate in question. (Morgan Munitions Co. v. Studebaker Corp., supra.) He seeks to avoid the effect of the illegal character of his services when rendered because, after his services ceased, the parties came together on terms first presented to the defendant by him. He comes not within the letter or the spirit of the statute. Parties are not allowed to cheat their licensed brokers by discharging them after a sale has been effected through their agency and at the same time gathering the fruits of their labor (Sibbald v. Bethlehem Iron Co., 83 N. Y. 378, 382), but this case is quite different. Out of services illegally rendered comes a lawful contract of sale. The question is whether, assuming for the purpose of the argument that plaintiff was the producing cause of the agreement although he was absent when it was actually concluded, his claim for compensation is outlawed by the criminal nature of such services. The answer seems conclusively in the affirmative. Illegality is a defense to the action independently of the burden of allegation and proof contained in section 442-d. Otherwise an unlicensed broker might negotiate sales with impunity up to the point of a complete agreement and then obtain his license for the purpose of recovering his commissions on the execution of a formal contract. The law is not so toothless.

Another reason sufficiently deprives plaintiff of his remedy if it were necessary to invoke it. It does not appear on what date the alleged cause of action arose. Commissions ordinarily become due when the broker produces to his principal a party ready, willing and able to purchase on the terms of sale authorized or accepted by such principal. (Davidson v. Stocky, 202 N. Y. 423.) No presumption arises that the commissions became due on the date when the formal contract of purchase and sale was executed. The burden is on plaintiff in any event to show that he was a licensed broker on the date when his commissions were due. He obtained his license seven days before the contract was signed and after some intimation had come to him that the deal had been closed.

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

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

Judgments reversed, etc.


text:
    Robert Colin et al., Copartners under the Name of Colin Bros., Respondents, v. Hamilton Fire Insurance Company of the City of New York, Appellant.
    (Argued June 6, 1929;
    decided July 11, 1929.)

      Martin A. Schenck, Nicholas F. Lenssen and William J. Carr for appellant.
    The representation that the risk was brick was “ indicated ” in the policy as a warranty of description. Its falsity vitiated the policy. (American Surety Co. v. Patriotic Assurance Co., 242 N. Y. 54; Bryce v. Lorillard Fire Ins. Co., 55 N. Y. 240; Burritt v.
      Saratoga Mutual Fire Ins. Co., 5 Hill, 188.) Plaintiffs are not entitled, on any theory of ambiguity, to a construction of this warranty so as to include their twelve frame buildings as extensions and additions to the later built accessory engine house. (Nosonowitz v. Eagle Indemnity Co., 123 Misc. Rep. 667; Chase v. Hamilton Ins. Co., 20 N. Y. 52; Northrup v. Porter, 17 App. Div. 80; Fowler v. Ætna Fire Ins. Co., 6 Cow. 673; Rosalind Realty Co. v. Western Ins. Co., 179 App. Div. 706; Electrone Auto Music Co. v. Richmond Ins. Co., 122 Misc. Rep. 673; Wall v. East River Mutual Ins. Co., 7 N. Y. 370.) .

      David Goldstein, Thomas G. Frost and Alex Davis for respondents.
    Under a proper construction of the policy of insurance sued on herein, plaintiffs were protected against loss by fire on a brick building and on all “ extensions and additions thereto,” whether the latter were of brick or frame structure. (Herrman v. Merchants Ins. Co., 81 N. Y. 184; Allen v. St. Louis Ins. Co., 85 N. Y. 473; Rickerson v. Hartford Ins. Co., 149 N. Y. 313; Gertner v. Glens Falls Ins. Co., 193 App. Div. 841; Exchange Underwriters Agency v. Bates, 195 Ala. 161; Sternaman v. Metropolitan Life Ins. Co., 63 N. Y. Supp. 674; Hoffman v. ¿Etna Ins. Co., 32 N. Y. 413; White v. Hudson River Ins. Co., 15 How. Pr. 288; Legendre v. Scottish Union & National Ins. Co., 95 App. Div. 562.)
   O’Brien, J.

In this action to recover for loss and damage by fire, the defense of material misrepresentation of the risk is pleaded. The policy by its terms insures the “ brick building or buildings, extensions and additions thereto, * * * it being the true intent of this policy to cover everything pertaining to the service of, or belonging to the above mentioned building or buildings, extensions and additions thereto.” It provides that material representations made by or for the assured of facts and circumstances concerning this insurance are so indicated thereon and that none other shall be claimed to have been made and also that the entire policy shall be void if the insured has concealed or misrepresented any material fact or circumstance concerning this insurance or the subject thereof.

The group of buildings owned by plaintiffs and insured by defendant consisted of fourteen structures, only one of which was brick. The others were timber. Many units of this cluster were in direct physical contact. They had formerly been occupied as a tannery but plaintiffs had converted one of the frame buildings into a factory for the manufacture of clothing and left all the others vacant. The brick structure had been erected at a time subsequent to the construction of the wooden buildings and, when the tannery was in operation many years ago, had sheltered an engine and a pump. When this policy was issued, it had been partially dismantled and had fallen into disuse.

We think that, as matter of law, the pleaded defense has been proved. Concluding that the purpose of the policy was to cover the entire plant, no justification can be found for an inference that the property was described with any resemblance to the facts. A group of thirteen frame structures to which is annexed one unused, dismantled brick building, cannot fairly be represented as a brick building or buildings, extensions and additions thereto.” The single brick building might be regarded as an extension or addition to the one occupied wooden building or to the numerous vacant wooden structures. The risk was a frame risk with brick as the most trivial incident. One unfamiliar with the fact and deriving information only from the language inserted in the policy would naturally infer that the risk was brick with wood as a possible incident and would become the victim of the grossest misrepresentation. No evidence indicates that defendant knew the truth to be different from the representation which appears on the face of the policy. The fact that by the exercise of diligence it might have discovered the falsity of the representation does not relieve the person making it from the consequences of his act. (American Surety Co. v. Patriotic Assur. Co., 242 N. Y. 54, 65; Sanders v. Cooper, 115 N. Y. 279, 289; O’Connor Transp. Co., Inc., v. Glens Falls Ins. Co., 198 App. Div. 136, 143.)

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

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

Judgment accordingly.


author: Crane, J.

text:
    Doris K. Bond, as Administratrix of the Estate of Harry A. Bond, Deceased, Appellant, v. Schenectady Railway Company, Respondent.

      (Argued June 11, 1929;
    decided July 11, 1929.)

      George B. Smith for appellant.
    Defendant was negligent. (Mullen v. Schenectady Ry. Co., 214 N. Y. 300.) Decedent was not guilty of contributory negligence. (Buhrens v. Dry Dock, E. B. & B. R. Co., 53 Hun, 571; 125 N. Y. 702; Baker v. Close, 204 N. Y. 92; Edelstein v. Coney Island & B. R. R. Co., 226 N. Y. 168; Sesselmann v. Metropolitan Street R. Co., 76 App. Div. 336; Kentfield v. N. Y. C. R. R. Co., 205 App. Div. 540.) Decedent acted as a reasonably prudent man would. (Smith v. N. Y. C. & H. R. R. R. Co., 117 N. Y. 224; Zwack v. N. Y., L. E. & W. R. R. Co., 160 N. Y. 366; Judson v. Central Vermont R. R. Co., 158 N. Y. 605; Kellogg v. N. Y. C. & H. R. R. R. Co., 79 N. Y. 72; Fowler v. International Ry. Co., 217 App. Div. 537; 244 N. Y; 592.)

      Daniel Naylon for respondent.
    The testimony presented a proper case for a nonsuit and dismissal of the complaint by the court, on the ground that the plaintiff’s intestate was guilty of contributory negligence. (Cassidy v. F., J. & G. R. R. Co., 200 App. Div. 241; 234 N. Y. 599; Barry v. Rutland R. R. Co., 203 App. Div. 287; 236 N. Y. 549; Barnasky v. N. Y., O & W. R. Co., 226 N. Y. 435; Keller v. Erie Railroad Co., 183 N. Y. 67; Raymer v. Rutland Railroad Co., 204 App. Div. 135; Turnier v. N. Y. C. R. R. Co., 207 N. Y. Supp. 316.) Defendant was not negligent. (Miller v. Schenectady Railway Co., 246 N. Y. 650.)
   Crane, J.

The deceased, Harry Austin Bond, was driving a Buick car along the Albany-Schenectady road, when in turning to cross defendant’s tracks he was struck by a car and killed. The crossing was known as Aussicker Crossing, located just east of Stop 15. This main highway and the railroad parallel each other for many miles; in fact, the railroad is in the highway. The macadam or traveled portion used by vehicles is only about eleven feet from the nearest rail of the tracks. The car which Bond was driving was a new Buick. As he slowed down, it was noticed by the witnesses that he was proceeding slowly over the crossing. How near he got to the rails is not stated by the plaintiff’s witnesses, but when they saw him on the Aussicker Crossing, his car was in motion. When we consider that having turned into the Aussicker Crossing, there were only eleven feet between the highway and the track, the automobile, almost that number of feet in length, must have been very near to the rail. At that time it was in motion, and the trolley car, 1,700 feet, about, to the east, approaching at 55 or 60 miles an hour. There was a collision, and Bond was killed. Witnesses heard continuous signals from the trolley car; they say there was no slackening of its speed; that it went a considerable distance after the collision. To approach these numerous crossings on the Schenectady-Albany road at 55 miles an hour, with an automobile attempting to cross the tracks 1,000 or 1,500 feet ahead, without slackening the speed of the trolley, is in itself some evidence of negligence.

As to contributory negligence, the burden was upon the defendant to both plead and prove it, under section 131 of the Decedent Estate Law (Cons. Laws, ch. 13). This the motorman attempted to prove by stating that he first saw the car turning in toward the north-bound rail when he was 150 feet from the crossing. He says the car stopped within two feet of the rail and then suddenly gave a lurch ahead directly in front of his car. Robillard, the motorman, was an interested witness; his testimony is contradicted by the witnesses for the plaintiff, who say that the trolley was 1,500 feet or more away from the automobile when it was in, or turning in to, the Aussicker Crossing.

Again, it may be questionable how the automobile, turning into the crossing when the trolley was 150 feet away, going at 55 miles an hour, could approach within two feet of the track, stop, and then plunge forward. The trolley was going fast, the automobile slow, and the reasonableness of the motorman’,s story as to the happening of the accident required, in our judgment, the submission of this case to the jury. The verdict in favor of the plaintiff should not have been set aside. Negligence and contributory negligence, in our view of the case, were questions of fact to be determined by the jury. The judgment of the Appellate Division and that of the Trial Term should be reversed, and a new trial granted, with costs to abide the event.

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

Judgments reversed, etc.


text:
    Margaret Lloyd, as Administratrix of the Estate of Charles Lloyd, Deceased, Respondent, v. R. S. M. Corporation, Appellant, Impleaded with Another.

      (Argued June 10, 1929;
    decided July 11, 1929.)

      Max Herschaft and Samuel I. Poskanzer for appellant.
    The Special Term had no power to determine the questions of fact on a motion based merely on the disputed oral agreement made out of court. (Kidder v. Hesselman, 196 N. Y. Supp. 837.) The Special Term erred in granting the motion for judgment because the disputed agreement of settlement was oral. (Mutual Life Insurance Co. v. O’Donnell, 146 N. Y. 275; Schlessinger v. Keene, 88 N. Y. Supp. 1042; Cornell v. Stalker, 48 N. Y. Supp. 77.)

      Irving L. Rollins for respondent.
    The Special Term properly granted summary judgment to the plaintiff upon its application. (Lee v. Rudd, 120 Misc. Rep. 407; Potter v. Rossiter, 109 App. Div. 737.)
   Hubbs, J.

In this action to recover damages for negligence, the plaintiff has recovered judgment on the pleadings under that part of section 476 of the Civil Practice Act which reads, “if warranted by the pleadings or the admissions of a party or parties.”

Upon the motion it was alleged by the plaintiff that an adjuster for an adjustment bureau entered into an oral agreement of settlement with plaintiff's attorneys of the cause of action; that relying upon such agreement the plaintiff incurred some expense, and that the defendant thereafter refused to carry out the agreement of settlement. It was contended by the defendant that the adjuster did not have authority to bind it by an agreement of settlement made by him while acting for an adjustment bureau, also that the agreement was made relying upon .false representations. The Special Term sent the matter to a referee to take' proof upon the question of the adjuster’s authority, and on the coming in of the referee’s report awarded judgment for the plaintiff upon the so-called admissions of defendant.

The provision of the Civil Practice Act, section 476, for judgment upon an admission of a party was not intended to cover a situation like this. The Special Term is without jurisdiction to order judgment upon an oral admission made out of court, where there is a question of fact presented as to the authority of the party making the admission or as to its binding effect. The words “ admissions of a party or parties ” refer to admissions made in the action, and intended to be treated as a part of a pleading or made to avoid some question arising on the pleadings. The court cannot, on such a motion, upon affidavits or by a reference, examine into and determine whether a party has made an admission out of court which would constitute evidence against him upon a trial.

The judgment should be reversed and the motion denied, with costs in all courts.

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

Judgment reversed, etc.