text:
    Lockport Co-operative Dairy Association, Inc., Respondent, v. William Buchner, Appellant.

      Associations — assessments — action by co-operative association to recover assessment levied on members.

      Lockport Co-operative Dairy Assro., Inc., v. Buchner, 217 App. Div. 784, affirmed.
    (Argued January 19, 1927;
    decided February 23, 1927.)
    Appeal from á judgment of the Appellate Division of the Supreme Court in the first - judicial department, entered July 27, 1926, affirming a judgment in favor of plaintiff entered upon a verdict. The action was brought by a. co-operative dairy association formed under article 13-A of the Membership Corporations Law to recover the amount of a per capita assessment levied upon its members by resolution of its board of directors under article 10 of its by-laws which read as follows: “ Emergency capital: If emergency capital is necessary the directors, by a majority vote, may call for additional funds from the members and issue therefor additional certificates of indebtedness.”
    . Defendant contended that the assessment and by-law under which it was alleged to have been levied were invalid; that the plaintiff had no authority to adopt the by-laws under which this assessment was levied; that the by-law was unreasonable and indefinite, and was in conflict with the certificate of incorporation and other provisions of the by-laws.

      Bernard Swartz for appellant.

      William W. Storrs for respondent.
   Judgment affirmed, with costs; no opinion.

Concur: Cardozo, Ch. J., Pound, Crane, Andrews and Kellogg, JJ. Dissenting: Lehman, J.


source: Caselaw Access Project

license: Public Domain

text:
    The People of the State of New York, Respondent, v. John T. Hallin et al., Appellants.

      Crimes — harboring intoxicated persons in refreshment saloon in violation of city ordinance.

      People v. Hallin, 217 App. Div. 816, 817, affirmed.
    (Argued January 20, Í927;
    decided February 23, 1927.)
    Appeal, by permission, from a judgment of the Appellate Division of the Supreme Court in the fourth judicial department, entered September 29, 1926, which affirmed a judgment of the Chautauqua County Court affirming a judgment of the City Court of Jamestown, convicting defendants, who operated a refreshment saloon in the city of Jamestown, of harboring intoxicated persons therein in violation of a city ordinance which provided: “ It shall be unlawful for any person owning, conducting or in charge of any refreshment business as defined in this chapter to harbor intoxicated persons on the premises, or to permit the drinking of intoxicating beverages therein, or to allow intoxicated persons to resort thereto; or to permit any disorderly, indecent, immoral or unlawful conduct on or in such premises.”

      Michael D. Lombardo and Benjamin S. Dean for appellants.

      Glenn W. Woodin, District Attorney {John S. Leonard of counsel), for respondent.
   Judgment affirmed; no opinion.

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


text:
    Empire Produce Company et al., Appellants, v. Harry L. Allen, as Trustee in Bankruptcy of American Railway Brotherhood Association, Inc., et al., Defendants, and Eugene Burns et al., Respondents.

      Stocks and stockholders — corporations — creditors’ suit■ — -action by creditors of bankrupt corporation to recover amounts unpaid on capital stock.

      Granger & Co. v. Allen, 214 App. Div. 367, affirmed.
    (Argued January 20, 1927;
    decided February 23, 1927.)
    Appeal from a judgment of the Appellate Division of the Supreme Court in the fourth judicial department, entered November 25, 1925, modifying and affirming as modified a judgment in favor of defendants entered upon the report of a referee. The action was brought by creditors of a bankrupt corporation to recover, under section 56 of the Stock Corporation Law, from alleged holders of capital stock, not fully paid for, the amounts due thereon.

      John Griffin and Harry K. Brown for appellants.

      James O. Sebring and George A. King for respondents.
   Judgment affirmed, with costs; no opinion.

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


text:
    Michael Cooke, Respondent, v. George Cook, Appellant.

      Negligence — motor vehicles — pedestrian injured by being struck by taxicab at street crossing — defense of contributory negligence not sustained.

      Cooke v. Cook, 217 App. Div. 772, affirmed.
    (Submitted January 21, 1927;
    decided February 23, 1927.)
    Appeal from a judgment of the Appellate Division of the Supreme Court in the second judicial department, entered June 30, 1926, affirming a judgment in favor of plaintiff entered upon a verdict in an action to recover for personal injuries alleged to have been sustained by plaintiff through the negligence of defendant. Plaintiff testified that between dark and daylight on November 30, 1924, plaintiff attempted to cross Fourth avenue at Fifty-sixth street from the southeasterly to the southwesterly corner. Before he started to cross he looked to his left and saw a touring car in the middle of the block between Fifty-sixth and Fifty-seventh streets coming toward him. He started across, proceeded about twenty feet, looked to his left again and saw a taxicab coming very fast turn out from behind the touring car and pass it to the left. He had already passed in front of the touring car. He was unable to avoid the taxicab, and it struck him and knocked him down inflicting the injuries complained of. Defendant argued that on plaintiff’s own testimony he was guilty of contributory negligence as matter of law.

      Joseph A. Fagnant and Robert J. Howard for appellant.

      Arthur J. Levine and William B. Thompson for respondent.
   Judgment affirmed, with costs; no opinion.

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


text:
    George Mord, Respondent, v. New York Indemnity Company, Appellant.

      Insurance (robbery) — action to recover on policy insuring against loss by robbery — defense that books and accounts did not comply with requirements of policy — limitation of liability.

      Mord v. New York Indemnity Co., 216 App. Div. 252, affirmed.
    (Argued January 21, 1927;
    decided February 23, 1927.)
    Appeal from a judgment of the Appellate Division of the Supreme Court in the second judicial department, entered March 27, 1926, affirming a judgment in favor of plaintiff entered upon a verdict in an action to recover upon a policy insuring plaintiff’s assignor, a firm engaged in the fur-dressing business, from loss by robbery. It was alleged that certain merchandise and property belonging to others and held by the Star Fur Dressers Company in trust, while being conveyed in a truck of the assured, was feloniously stolen from the said truck and taken from the possession of the messengers of the assured after the said messengers had been overpowered by force and violence. The defenses were that the books and' accounts kept by the assured did not comply with the requirements of the policy and that by limitation of liability contained in the policy plaintiff could recover only one-half the amount thereof.

      Sidney J. Loeb and Leon M. Prince for appellant.

      Ralph S. Harris, Thomas L. Ennis and John S. Myers for Indemnity Insurance Company of North America, amicus curice.

      Alfred B. Nathan for respondent.
   Judgment affirmed, with costs; no opinion.

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


text:
    William Whitman Company, Inc., Respondent, v. Herbert A. Witcombe et al., Appellants.

      Contract — sale — rescission — action to recover for alleged breach of contract to purchase goods — defense of failure to deliver.

      Whitman Co., Inc., v. Witcombe, 215 App. Div. 766, affirmed, i
    (Argued January 21, 1927;
    decided February 23, 1927.)
    Appeal, by permission, from a judgment of the Appellate Division of the Supreme Court in the first judicial department, entered March 9, 1926, unanimously affirming a judgment in favor of plaintiff entered upon a decision of the court at a Trial Term without a jury. The action was to recover for an alleged breach of contract. It appeared that plaintiff sold and defendant purchased merchandise for future delivery. After part of the goods were delivered and paid for there was a revision of the contract with respect to payment of the balance. Thereafter defendants attempted to rescind on the ground that though plaintiff had sent an invoice thereof it had failed to deliver the goods.

      George Byall and W. J. Magee for appellants.

      Allan B. Campbell and Charles E. Scribner for respondent.
   Judgment affirmed, with costs; no opinion.

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


text:
    Frank D’Aversa, Appellant, v. Alfonso Guido, Respondent.

      Easements — injunction — damages — action to restrain interference with use of sewer — improper award of damages.

      D’Aversa v. Guido, 213 App. Div. 355, affirmed.
    (Submitted January 31, 1927;
    decided February 23, 1927.)
    Appeal from a judgment of the Appellate Division of the Supreme Court in the second judicial department entered July 8, 1925, reversing so much of a judgment in favor of plaintiff, entered upon a decision of the court on trial at Special Term, as awarded damages in an action brought to restrain the defendant from interfering with the use and enjoyment by plaintiff of a sewer constructed by him through defendant’s land.

      William Klein for appellant.

      Philip Wolinsky for respondent.
   Judgment affirmed, with costs; no opinion.

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


text:
    Theodore Krug, Respondent, v. G. Elias & Brother, Inc., Appellant.

      Contract — sale —• action to recover for alleged breach of contract to purchase goods.

      Krug v. Elias & Brother, Inc., 217 App. Div. 783, affirmed.
    (Argued January 24, 1927;
    decided February 23, 1927.)
    Appeal from an order of the Appellate Division of the Supreme Court in the fourth judicial department, entered June 29, 1926, reversing a judgment in favor of plaintiff entered upon a verdict directed, on motion of defendant, for but a small part of plaintiff’s claim and granting a new trial. The action was to recover for an alleged breach of a written contract to purchase gun-stocks. The sale was by sample. The defendant subsequent to the making of the contract examined the stock, obtained other samples and took possession of a number. The Appellate Division held that there was evidence from which the jury might have found that there were enough others of the same general shape and quality to enable plaintiff to make complete delivery of the number defendant agreed to purchase, and that as to minor variances there had been waiver .of objections.

      James M. H. Wallace, Cleveland Pond and Joseph Swart for appellant.

      W. C. Carroll for respondent.
   Order affirmed and judgment absolute ordered against appellant on the stipulation, with costs in all courts; no opinion.

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


text:
    Emma Fowler, as Administratrix of the Estate of Lewis Fowler, Deceased, Respondent, v. International Railway Company, Appellant.

      Negligence — railroads — motor vehicles — collision between railway car and motor truck stalled on tracks.

      Fowler v. International Ry. Co., 217 App. Div. 537, affirmed.
    (Argued January 24, 1927;
    decided February 23, 1927.)
    Appeal from a judgment of the Appellate Division of the Supreme Court in the fourth judicial department, entered July 12, 1926, affirming a judgment in favor of plaintiff entered upon a verdict in an action to recover for the death of plaintiff’s intestate alleged to have been occasioned through the negligence of defendant. Intestate was killed as the result of a collision between one of defendant’s trolley cars and an automobile which he was driving. Just prior to the accident he was driving westerly on Buffalo avenue in the city of Niagara Falls. When he came to the entrance of Half-way crossing he turned his truck to cross defendant’s tracks. A car was approaching 350 to 500 feet distant at from thirty to thirty-five miles an hour. For some unexplained reason the truck came to a stop directly across the tracks upon which the car was approaching. There is testimony by two witnesses that the truck, after coming to a stop, moved forward a foot or two, and then fell back to its original position. There was evidence from which the jury could find that at this moment the approaching car was distant 350 feet or more; that under the conditions then existing, it could have been stopped within 200 feet; that no warning was given of the approach of the car, and that no effort was made to apply the brakes until the car was about five feet from the. truck which it hit squarely, pushing it 100 feet before stopping.

      Clarence R. Ruñáis and John J. K. Caslcie for appellant.

      William L. Hunt for respondent.
   Judgment affirmed, with costs; no opinion.

Concur: Gardozo, Ch. J., Pound, Crane, Andrews, Lehman, Kellogg and O’Brien, JJ.


text:
    Watervliet Hydraulic Company et al., Appellants, v. The State of New York, Respondent.

      State — eminent domain — water and watercourses — appropriation by State for canal purposes of dams and water rights in Mohawk river.

      Watervliet Hydraulic Co. v. State of New York, 217 App. Div. 804, affirmed.
    (Argued January 25, 1927;
    decided February 23, 1927.)
    Appeal, by permission, from a judgment of the Appellate Division of the Supreme Court in the third judicial department, entered September 17, 1926, unanimously affirming a judgment of the Court of Claims awarding damages to claimant for the appropriation by the State, in the construction of the Barge canal, of- certain dams in the Mohawk river belonging to claimant and the destruction of its water rights appertaining thereto.

      H. C. McCollom, Charles E. Hotchkiss, John T. Norton, Eugene McLean and Barrett R. Wellington for appellants.

      Albert Ottinger, Attorney-General (Albert J. Danaher of counsel), for respondent.
   Judgment affirmed, with costs; no opinion.

Concur: Cardozo, Ch. J., Pound, Crane, Andrews, Lehman and O’Brien, JJ. Not sitting: Kellogg, J.


text:
    George E. Throckmorton, Respondent, v. Charles G. Meinken, Appellant.

      Nuisance — pedestrian injured by being struck by a shaft cover blown from top of building.

      Throckmorton v. Meinken, 216 App. Div. 807, affirmed.
    (Argued January 25, 1927;
    decided February 23, 1927.)
    Appeal, by permission, from a judgment of the Appellate Division of the Supreme Court in the first judicial department, entered May 3, 1926, unanimously affirming a judgment in favor of plaintiff entered upon a verdict in an action to recover for personal injuries alleged to have been sustained by plaintiff through the maintenance by defendant of a nuisance. The complaint alleged that the defendant was the lessee in possession of premises 427 West Thirteenth street, New York city, and that on January' 24, 1919, while the plaintiff was lawfully upon the public highway, an elevator shaft cover was maintained by the defendant in such a careless, negligent and defective condition that it was caused and permitted to blow from the said premises, striking the plaintiff, and causing the injuries complained of.

      F. A. W. Ireland for appellant.

      Thomas J. O’ Neill and Leonard F. Fish for respondent.
   Judgment affirmed, with costs; no opinion.

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


text:
    Theresa Bunt, as Administratrix of the Estate of William H. Bunt, Deceased, Appellant, v. New York Central Railroad Company, Respondent.

      Negligence ■— railroads ■— passenger killed by being thrown from platform of train —failure to close doors of vestibule while train was in motion. Bunt v. New York Central B. B. Co., 216 App. Div. 821, affirmed.
    (Argued January 25, 1927;
    decided February 23, 1927.)
    1 Appeal from a judgment of the Appellate Division of the Supreme Court in the second judicial department, entered May 11, 1926, affirming a judgment in favor of defendant entered upon a dismissal of the complaint by the court at a Trial Term in an action to recover for the death of plaintiff’s intestate alleged to have been occasioned through the negligence of defendant. Intestate, while riding as a passenger on one of defendant’s trains stepped from the interior of the car in which he was riding, which was immediately next to the baggage car, onto the platform between the two cars and was thrown therefrom by a lurch of the train and killed. Plaintiff contended that defendant was guilty of negligence in having the vestibule doors open while the train was in motion.

      Thomas J. 0’ Neill, John Ambrose Goodwin and Leonard F. Fish for appellant.

      Jacob Aronson, Thomas McCall and Alex. S. Lyman for respondent.
   Judgment affirmed, with costs; no opinion.

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


text:
    John Fives, Respondent, v. Compagnie Generals Transatlantique, Appellant.

      Negligence — ships and shipping — longshoreman injured while clearing loading gear from ship — defective winch.

      Fives v. Compagnie Generate Transatlantique, 216 App. Div. 799, affirmed.
    (Argued January 26, 1927;
    decided February 23, 1927.)
    Appeal from a judgment of the Appellate Division of the Supreme Court in the first judicial department, entered May 28,1926, modifying and affirming as modified a judgment in favor of plaintiff entered upon a verdict in an action to recover for personal injuries alleged to have been sustained by plaintiff through the negligence of defendant, his employer. Plaintiff, a longshoreman who had been engaged in loading cargo on one of defendant’s steamships and was clearing away the gear preparatory to its sailing, was struck by a landing skid which had been hoisted preparatory to its removal to the dock and received the injuries complained of. It was contended that the accident was caused by a defect in the steam winch used for hoisting.

      Joseph P. Nolan, Edward J. Qarity and Frank T. Hendí for appellant.
    , Harold B. Medina and Joseph Levy for respondent.
   Judgment affirmed, with costs; no opinion.

Concur: Cabdozo, Ch. J., Pound, Crane, Andrews, Lehman, Kellogg and O’Brien, JJ.


author: Per Curiam.

text:
    The People of the State of New York ex rel. Western New York and Pennsylvania Railway Company, Respondent, v. The State Tax Commission, Appellant. (Three Proceedings.)

      Tax — State — water and watercourses — riparian rights — railroads — franchise tax — State may not by legislation after it has parted with shores and bed of river destroy riparian rights without compensation — acquisition by State of strip of shore for canal crossing does not make river public navigable stream — right of railroad to erect bridge over norv-navigable stream not a special franchise.

    1. The State cannot by means of statutes declaring a river navigable, enacted after it has parted by grant with title to the shore and bed thereof, diminish or destroy without compensation, rights of property of the riparian owners derived from such grants. Nor does the fact that the State thereafter became the proprietor of narrow strips of shore, where a canal prism crossed the river, result in making the river a public navigable stream in front of such strips, when it was in fact not navigable there for any purpose and at all other points was in private ownership.
    2. The right of a railroad corporation, therefore, to erect its bridges across a river upon the right of way owned by it does not constitute a special franchise where the evidence sustains findings that the river is not and, in its natural state, never has been navigable for any purpose at the places where the bridges have been erected and in the stretches between them.

      People ex rel. Western N. Y. & Penn. By. Co. v. State Tax Comm., 215 App. Div. 728, affirmed.
    (Argued January 24, 1927;
    decided March 1, 1927.)

      Appeal in three separate proceedings, from an order of the Appellate Division of the Supreme Court in the third judicial department, entered December 21, 1925, which affirmed an order entered upon the report of a referee in certiorari proceedings to review the proceedings of the State Tax Commission in levying special franchise assessments against relator for crossings of the .Genesee river by its bridges and tracks in the towns of Leicester, Mt. Morris, Genesee Falls and Portage.

      Albert Ottinger, Attorney-General (Frederick J. Merriman of counsel), for appellant.

      Frank Bumsey for respondent.
   Per Curiam.

The evidence sustains the findings that the Genesee river is not and, in its natural state, never has been navigable for any purpose at the places where the bridges have been erected and in the stretch of twenty-two miles between such bridges. The statutes declaring the Genesee river navigable were enacted after the State had parted by grant with title to the shores and bed of the river. (Commissioners of the Canal Fund v. Kemp-shall, 26 Wend. 404.) The State could not by means of such statutes diminish or destroy without compensation rights of property of the riparian owners derived from such grant. (Morgan v. King, 35 N. Y. 454; United States v. Cress, 243 U. S. 316.) The rights of riparian owners were not affected by the statute. The fact that the State thereafter became the proprietor of narrow strips of shore where the canal prism crossed the river could not result in making the river a public navigable stream in front of such strips when it was in fact not navigable there for any purpose and at all other points was in private ownership. For these reasons we agree with the courts below that the right of the relator to erect its bridges across the Genesee river upon the right of way owned by it does not constitute a special franchise.

No question has been raised as to whether the right to erect a railroad bridge resting on abutments on private property across a stream, the bed of which is in private ownership, even though to some extent the river can be used for navigation, constitutes a special franchise unless the bridge so erected does actually interfere and obstruct the use to which the public could subject the stream. We, therefore, do not pass upon it.

The order should be affirmed, with costs.

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

Order affirmed.


text:
    In the Matter of the Estate of Hugo R. Meyer, Deceased. John T. Wilson, as Conservator and Committee of the Estate of Philip A. Meyer, an Incompetent Person, Appellant; Udona B. Meyer, as Ancillary Executrix, Respondent.

      Surrogate’s Court — decedent’s estate — claim of non-resident creditor of estate for which ancillary executor has been appointed may be entertained by surrogate — may refuse to pass upon all claims and remit local assets to foreign executor — power discretionary and unless abused not renewable by Court of Appeals.

    A surrogate may entertain and direct payment of the claim of a non-resident creditor of an estate for which an ancillary executor has been appointed in this State or he may refuse to pass upon all claims and remit the assets to the foreign executor to be administered and distributed by him. Whether the latter course shall be adopted is a matter of judicial discretion which, where his action is not without justification, cannot be reviewed by the Court of Appeals.

      Matter of Meyer, 216 App. Div. 735, affirmed.
    (Argued February 23, 1927;
    decided March 1, 1927.)
    Appeal from an order of the Appellate Division of the Supreme Court in the first judicial department, entered March 5, 1926, which affirmed a decree of the New York County Surrogate’s Court denying an application for an order directing the ancillary executrix of the estate of Hugo R. Meyer, deceased, to account and directed that the decree to be entered upon her intermediate account provide for the jtransmission of the local assets to the domiciliary executrix of decedent in the State of Victoria, Australia, for administration.

      Carroll Q. Walter and Edward J. Patterson for appellant.

      Herman S. Hertwig and James M. Fassett for respondent.
   Per Curiam.

An ancillary executor being named in this State, what might be the rights of a non-resident creditor of the estate, should the surrogate elect to adjudicate as to the claims of residents we do not attempt to consider. That the surrogate may entertain and direct the payment of his claim we are clear (Surrogate’s Court Act, sec. 165). Equally clear is it that the surrogate may refuse to pass upon all claims, whether of residents . or non-residents. The local assets must then be remitted to the foreign executor to be administered and distributed by him. That the surrogate has done here. No question of discrimination in favor of domestic creditors is before us. Whether this course shall be adopted is a matter of judicial discretion. Such action was not without justification, and it may, therefore, not be reviewed and reversed by us.

The order should be affirmed, with costs.

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

Order affirmed.


text:
    Henri M. Sliosberg, Respondent, v. New York Life Insurance Company, Appellant.

      Constitutional law — insurance companies — constitutionality of section 189-a of Civil Practice Act providing for stay of action on insurance contract payable in Russian money.

      Sliosberg v. New York Life Ins. Co. (Action No. 2), 217 App. Div. 07, affirmed.
    (Argued January 26, 1927;
    decided March 1, 1927.)
    Appeal, by permission, from an order of the Appellate Division of the Supreme Court in the first judicial department, entered May 27, 1926, denying a motion for a stay of proceedings under section 169-a of the Civil Practice Act.
    The following questions were certified:

      “ 1. Would section 169-a of the Civil Practice Act, as sought to be applied by defendant in this action, contravene the provision of section" 10 of article 1 of the Constitution of the United States, that no State shall pass any law impairing the obligation of contracts?

      “ 2. Would section 169-a of the Civil Practice Act, as sought to be applied by defendant in this action, contravene the provision of section 1 of article XIV of the articles in addition to and amendment of the Constitution of the United States, that no State shall deprive any person of property without due process of law?

      “ 3. Would section 169-a of the Civil Practice Act, as sought to be applied by defendant in this action, contravene the provision of section 1 of article XIV of the articles in addition to and amendment of the Constitution of the United States, that no State shall deny to any person within its jurisdiction the equal protection of the laws?

      “ 4. Would section 169-a of the Civil Practice Act, as sought to be applied by defendant in this action, contravene the provisión of section 6 of article I of the Constitution of the State of New York, that no person shall be deprived of property without due process of law, nor shall private property be taken for public use without just compensation?

      “ 5. Would section 169-a of the Civil Practice Act, as sought to be applied by the defendant in this action, contravene the provision contained in section 1 of article III of the Constitution of the State of New York, that ‘ the Legislative power of this State shall be vested in the Senate and Assembly? ’

      “ 6. Would section 169-a of the Civil Practice Act, as sought to be applied by defendant in this action, contravene the provision contained in section 1 of article VI of the Constitution of the State of New York, that 1 the Supreme Court is continued with general jurisdiction in law and equity, subject to such appellate jurisdiction of the Court of Appeals as now is or hereafter may be prescribed by law not inconsistent with this article? ’
    “ 7. Would section 169-a of the Civil Practice Act, as sought to be applied by defendant in this action, contravene the provision of section 2 of article VI of the Constitution of the State of New York, that' the several Appellate Divisions, except as hereinafter provided, shall have and exercise such original or appellate jurisdiction as is now or may hereafter be prescribed by law? ’ ”

      Charles E. Hughes and John Foster Dulles for appellant.

      Albert Ottinger, Attorney-General (Claude T. Dawes and Clarence C. Fowler of counsel), for Superintendent of Insurance.

      John W. Davis and David E. Hudson for Equitable Life Assurance Society, amicus curies.

      Walter H. Poliak, Ruth I. Wilson and Frederic C. Pitcher for respondent. ■

      Louis Marshall, James Marshall and Borris M. Komen, amici curies.

      Osmond K. Fraenkel and Charles Recht for Russian Policyholders, Inc., amici curies.

      Frederick B. Campbell and Paul C. Whipp for First Russian Insurance Company et al., amici curies.

      Samuel Greenbaum, Edward S. Greenbaum and Jonas J. Shapiro, amici curies.

   Order affirmed, with costs, on opinion in Sliosberg v. New York Life Insurance Company (244 N. Y. 482). First question certified answered in the affirmative; other questions not answered.

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


author: Cardozo, Ch. J.

text:
    Minnie B. Berkey, Respondent, v. Third Avenue Railway Company, Appellant. Charles P. Berkey, Respondent, v. Third Avenue Railway Company, Appellant.
    (Submitted February 21, 1927;
    decided March 1, 1927).
    Motion for reargument. (See 244 N. Y. 84.)
   Cardozo, Ch. J.

The question in this case was whether the Third Avenue Railway Company had dominated the business of the Forty-second Street Railway Company in such a way and to such an extent that the liabilities of the subsidiary became the liabilities of the parent.

The prevailing opinion laid stress upon the fact that the control, if it existed, would violate section 54 of the Public Service Commissions Law (Cons. Laws, ch. 48), which prohibits an agreement between street railroad corporations for the use or operation by one of the franchise of the other. The present motion challenges the application of the statute. Acts were done by the parent with the concurrence of the subsidiary. The effect to be ascribed to them determines liability. The statute in its prohibitions assumes a contract or agreement. The defendant, it is said, is liable apart from contract or agreement. Direction by the parent and submission by its creature were adequate in the plaintiff’s view to effect a change of operation; they were inadequate, though voluntary, to effect a contract or agreement within the meaning of the statute.

The acceptance of that conclusion would reduce the statute to futility. The defendant, if it uses or operates its subsidiary’s route, is either a coadventurer or a principal or at least a licensee. Implicit in all these relations is a contract or agreement. A coadventure or an agency or a license is not created in invitum. Implicit in all, therefore, unless approved by the Commission, is a violation of the statute. Illegality remains though the agreement is informal. Illegality remains again, and with it an offense against the policy of the law, though criminal prosecution may fail for lack of criminal intent. The statute would be of little worth if its prohibitions could be evaded by the substitution of a course of conduct for incriminating covenants.

We hold with the plaintiff that a parent corporation, operating legally or illegally the business of a subsidiary, assumes its liabilities or those growing out of what is done. The difficulty with the plaintiff’s argument now as before is the failure to inform us what the act of operation means. There may be operation as a coadventurer or a principal or a licensee or even at times a trespasser. The defendant was none of these. If operation is to be inferred from a relation less specific, there must be some compelling public policy to be served by the extension. One cannot reconcile such a policy with the mandate of the statute (Public Service Commissions Law, § 54).

The motion should be denied, with ten dollars costs and necessary printing disbursements.

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

Motion denied, etc.


text:
    Gertrude Himmelman, Respondent, v. 540 West 146th Street, Inc., et al., Defendants, and Capital City Surety Company, Appellant.
    (Submitted February 21, 1927;
    decided March 1, 1927.)
   Motion for reargument denied, with ten dollars costs and necessary printing disbursements. (See 244 N. Y. 540.)


text:
    In the Matter of the Application of Helen M. O’Brien, Respondent, v. New York State Teachers’ Retirement Board, Appellant.
    (Submitted February 21, 1927;
    decided March 1, 1927.)
   Motion for reargument denied, with ten dollars costs and necessary printing disbursements. (See 244 N. Y. 530.)


text:
    Grace A. Fendler, Respondent, v. Oliver Morosco et al., Appellants.

      Appeal — interlocutory judgment — motion to dismiss appeal granted.

      Fendler v. Morosco, 217 App. Div. 791, appeal dismissed.
    (Submitted February 21, 1927;
    decided March 1, 1927.)
    Motion to dismiss an appeal from a judgment of the Appellate Division of the Supreme Court in the first judicial department, entered August 5, 1926, which affirmed an interlocutory judgment of Special Term granting an injunction and directing an accounting.
    The motion was made upon the ground that the judgment appealed from was interlocutory and that permission to appeal had not been obtained.

      Paul N. Turner for motion.

      Charles H. Tuttle opposed.
   Motion granted and appeal dismissed, without costs.


text:
    In the Matter of the Estate of Otto Kiekebusch, Deceased. Emil Kiekebusch, as Executor, Appellant; Ida Kiekebusch, Respondent.
    (Submitted February 21, 1927;
    decided March 1, 1927.)
   Motion for reargument or to amend remittitur denied, with ten dollars costs and necessary printing disbursements. (See 244 N. Y. 236.)


text:
    The People of the State of New York ex rel. Banner Land Company, Appellant, v. State Tax Commission, Respondent.
    (Submitted February 21, 1927;
    decided March 1, 1927.)
   Motion for reargument denied, with ten dollars costs and necessary printing disbursements. (See 244 N. Y. 159.)


text:
    Mary Judis, Appellant, v. Frank B. Martin, Respondent.

      Appeal — intermediate order —• appeal without permission to Court of Appeals dismissed.

      Judis v. Martin, 218 App. Div. 402, appeal dismissed.
    (Submitted February 21, 1927;
    decided March 1, 1927.)
    Motion to dismiss an appeal from an' order of the Appellate Division of the Supreme Court in the first judicial department, entered December 3,-1926, which modified and affirmed as modified an order of Special Term granting defendant’s motion to set aside certain levies under a warrant of attachment.
    The motion was made upon the grounds that the order appealed from was not a final order and that permission to appeal had not been granted.

      George B. Brooks for motion.

      Abraham Rosenstein opposed.
   Motion granted and appeal dismissed, with costs and ten dollars costs of motion.


text:
    The People of the State of New York, Respondent, v. C. Judson Kirk, Appellant.

      Appeal — failure to serve appeal papers — motion to dismiss appeal granted.

      People v. Kirk, 216 App. Div. 800, appeal dismissed.
    (Submitted February 21, 1927;
    decided March 1, 1927.)
    Motion to dismiss an appeal from a judgment of the Appellate Division of the Supreme Court in the first judicial department, entered April 23,1926, which affirmed a judgment of the Court of General Sessions in the county of New York, rendered upon a verdict convicting the defendant of the crime of rape in the second degree.
    The motion was made upon the ground that the printed papers on appeal had not been served within the time required by section 536 of the Code of Criminal Procedure.

      Joab H. Banton, District Attorney (Edwin B. McGuire of counsel), for motion.
    No one opposed.
   Motion granted and appeal dismissed.


author:
      Per Curiam.
     Lehman, J.

text:
    In the Matter of the Application of the People of the State of New York, by James A. Beha, as Superintendent of Insurance of the State of New York, Respondent. Second Russian Insurance Company et al., Appellants.

      Appeal- — order of Special Term modifying order directing liquidation of insurance company so as to permit trial of actions pending against it, discretionary — Court of Appeals without power to review order .of reversal.

    An order of Special Term modifying a prior order, directing liquidation of the business of a foreign insurance company, so as to permit the trial of certain actions which were pending against the company, as if the order of liquidation had not been made, though a final order, is one resting in the discretion of the court and where reversed by the Appellate Division, the Court of Appeals has no power of review.

      Matter of Second Russian Ins. Co. (Hamburg Ins. Co.), 219 App. Div. 46, appeal dismissed.
    (Argued February 24, 1927;
    decided March 4, 1927.)
    Appeal from an order of the Appellate Division of the Supreme Court in the first judicial department, entered December 31, 1926, which reversed an order of Special Term granting a motion for modification of an order of liquidation and denied said motion.

      Albert Massey, Frederick S. Titsworth and Michael S. Gleason for Second Russian Insurance Company, appellant.

      Hartwell Cabell, Milton B. Ignatius, Blaine F. Sturgis and William B. Devoe for Hamburg Insurance Company, appellant.

      Frederick B. Campbell and. Paul C. Whipp, amici curice Albert Ottinger, Attorney-General (Clarence C. Fowlei and Joseph H. Flynn of counsel), for respondent.
   Per Curiam.

The order of the Special Term of the Supreme Court directing liquidation of the business of the Second Russian Insurance Company, a foreign corporation, pursuant to provisions of section 63 of the Insurance Law (Cons. Laws, ch. 28), was affirmed by this court under the provisions of subdivision 1-e of that section, which provided for such action when further transaction of business would be hazardous to policyholders, creditors and the public. (243 N. Y. 524.) The order was a final order.

The subsequent order of the Special Term, dated September 25,1926, modifying its previous order of May 22, 1925, is also a final order and reviewable here. (Matter of Board of Education, 169 N. Y. 456.) The modification by the Special Term was to the extent of allowing the plaintiffs in two actions which had been pending against the Second Russian Insurance Company in the Supreme Court to proceed with the trial as if the order of liquidation, May 22, 1925, had not been made. The Appellate Division has reversed this order and denied the modification.

Although the order of modification by the Special Term was a final order, yet it was one which rested in the discretion of the Special Term and the Appellate Division, and we have no power to review discretionary orders.

Even if the appellants were permitted to proceed with their trial and obtain judgment, the procedure to collect it would yet remain to be determined. We have held that after the payment of all domestic creditors, the funds in the hands of the Superintendent of Insurance belong to the creditors and shareholders wherever situated; that if the company is in liquidation at its domicile, the funds must be sent to the home liquidator under proper terms and conditions. Here of course there is no home liquidator, as the Second Russian Insurance Company has ceased to exist as a going concern under Soviet decrees. We do not mean to intimate that the Superintendent of Insurance can hold these surplus funds indefinitely. His duty is defined by the statute, and after the payment of all domestic creditors, he must turn over the funds to the persons entitled to them. We do not attempt at this time to say how this shall be done, nor to suggest what proceedings in equity may be taken to compel a proper distribution of these funds ratably to all creditors, or if none, for their return to the corporation or its stockholders. The appeal for the reasons stated should be dismissed, with costs.

Lehman, J.

(dissenting). The plaintiffs began their action against the Second Russian Insurance Company before the order was made authorizing the Superintendent of Insurance to take possession of the property of the insurance company and conserve its assets. Actions pending against the insurance company might doubtless be stayed for the purpose of preventing interference with the Superintendent of Insurance in the proper exercise of his duties under the order so that the purpose of such .order might be effectuated. Discretion doubtless exists in the Supreme Court to refuse to modify a stay so granted where the effect of permitting the continuance of pending actions might perhaps • have such result. In the present case there is no proof of insolvency on the part of the insurance company and it has not been placed in the hands of a receiver or had its property sequestrated in its domiciliary State or country or in any other State or country. In no forum here or elsewhere can the plaintiffs in these two actions prove their claim and secure satisfaction, if their claims are valid, except by action. So long as the Superintendent of Insurance holds these assets, the plaintiffs cannot share in them even when the classes of creditors described in section 27 have been paid. Until further direction or judgment of the court taken in some other proceeding or action, these assets in the hands of the Superintendent of Insurance could not be reached or used for payment of any judgments which the plaintiffs might obtain if the stay were modified. So long as no forum exists for proof of claims except by action, I do not believe that the court has discretion to continue a stay which prevents proof of claim by the prosecution of the pending actions, so that at the appropriate time the plaintiffs, if they establish their claims, may take proceedings to secure payment out of assets still remaining in the hands of the Superintendent of Insurance. Equality between creditors is not equity unless the debtor is insolvent and its assets are made applicable to the payment of the claims of creditors according to the priority fixed by law.

The orders should be reversed and motion granted.

Cardozo, Ch. J., Pound, Crane, Andrews and O’Brien, JJ., concur; Lehman, J., dissents in opinion, in which Kellogg, J., concurs.

Appeal dismissed.


text:
    Mary D. Ketcham, an Infant, by Clara F. Ketcham, Her Guardian ad Litem, Respondent, v. Fred B. Wilbur, as Executor of Mary B. Hand, Deceased, Appellant. Clara F. Ketcham, Respondent, v. Fred B. Wilbur, as Executor of Mary B. Hand, Deceased, Appellant.

      Trial — actions to recover for breach of alleged contract by decedent to make certain provision for plaintiffs in her will — jury trial a matter of right.

      Ketcham v. Wilbur (2 cases), 218 App. Div. 350, affirmed.
    (Argued February 21, 1927;
    decided March 4, 1927.)
    Appeal, in each of the above-entitled actions, by permission, from an order of the Appellate Division of the Supreme Court in the fourth judicial department, entered November 23, 1926, which reversed an order of the court at a Trial Term striking the case from the calendar on the ground that plaintiff was not entitled to a jury trial. The actions were brought to recover for breach of alleged oral contracts whereby defendant’s testatrix agreed to make certain provisions for plaintiffs by her will.
    The following question was certified in each case:

      “ Is the plaintiff in this action entitled as a matter of right to a jury trial of the issues of fact raised by the pleadings herein? ”

      Charles E. Spencer and George II. Sears for appellant.

      James E. Newell for respondent.
   Order in each case affirmed, with costs; question certified answered in the affirmative; no opinion.

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


text:
    In the Matter of the Claim of William P. McKee against Charles White et al., Respondents. The State Industrial Board, Appellant.

      Workmen’s compensation — master and servant — estoppel — election by injured workman to sue third party — dismissal of action for failure to prosecute — estopped from asserting claim for compensation.

      Matter of McKee v. White, 218 App. Div. 300, affirmed.
    (Argued February 21, 1927;
    decided March 4, 1927.)
    Appeal from an order of the Appellate Division of the Supreme Court in the third judicial department, entered November 30, 1926, reversing an award of the State Industrial Board, made under the Workmen’s Compensation Law, and dismissing the claim. Claimant on September 18, 1922, sustained injuries resulting in partial loss of use of his right hand. He was then nineteen years of age. He elected to sue a third party, which action was dismissed May 14, 1925, for failure to prosecute, whereupon claimant pressed his claim before the Industrial Board. The Appellate Division held that he was estopped from asserting claim for compensation.

      Albert Ottinger, Attorney-General (E. C. Aiken of counsel), for appellant.

      William B. Davis and E. C. Sherwood for respondents.
   Order affirmed, with costs against State Industrial Board; no opinion.

Concur: Cardozo, Ch. J., Pound, Crane, Andrews, Lehman and O’Brien, JJ. Not sitting: Kellogg, J.


text:
    In the Matter of the Claim of Ernest Center against Schenectady Awning Company et al., Respondents. The State Industrial Board, Appellant.

      Workmen’s compensation — master and servant — improper award for facial disfigurement.

      Matter of Genter v. Schenectady Awning Co., 217 App. Div. 807, affirmed.
    (Argued February 21, 1927;
    decided March 4, 1927.)
    Appeal from an order of the Appellate Division of the . Supreme Court in the third judicial department, entered September 28, 1926, reversing an award of the State Industrial Board, made under the Workmen’s Compensation Law, and dismissing the claim. Claimant while setting up a stove pipe was injured by its coming apart and falling, striking him on the bridge of his nose. The resulting cut healed up leaving a scar upon which an award was made for facial disfigurement. The Appellate Division reversed on the ground that there was no evidence of serious facial disfigurement.

      Albert Ottinger, Attorney-General (E. C. Aiken of counsel), for appellant.

      William B. Davis and E. C. Sherwood for respondents.
   Order affirmed, with costs against State Industrial Board; no opinion.

Concur: Cardozo, Ch. J., Pound, Crane, Andrews, Lehman and O’Brien, JJ. Not sitting: Kellogg, J.


text:
    In the Matter of the Claim of Alfred Kittle, Respondent, against Town of Kinderhook et al., Appellants. State Industrial Board, Respondent.

      Workmen’s compensation — master and servant — workman on highway injured from cave-in — question whether he was in employ of town or of third party.

      Matter of Kittle v. Town of Kinderhook, 217 App. Div. 809, affirmed.
    (Submitted February 21, 1927;
    decided March 4, 1927.)
    Appeal from an order of the Appellate Division of the Supreme Court in the third judicial department, entered October 18, 1926, affirming an award of the State Industrial Board made under the Workmen’s Compensation Law. Claimant was injured from a cave-in of a gravel bank while working on the roads of the town of. Kinderhook. The question was whether he was an employee of the town or of a third party from whom the town hired the team which claimant drove.

      George W. Greene and Rollin B. Sanford for appellants.

      Albert Ottinger, Attorney-General {E. C. Aiken of counsel), for respondent.
   Order affirmed, with costs; no opinion.

Concur: Cardozo, Ch. J., Pound, Crane, Andrews, Lehman and O’Brien, JJ. Not sitting: Kellogg, J.


text:
    In the Matter of the Claim of Susan Foster, Appellant, against Mallory Steamship Company, Respondent. State Industrial Board, Respondent.

      Workmen’s compensation — master and servant — workman killed by automobile while on way to deliver pay envelope to fellow-employee after working hours — claim for compensation dismissed.

      Matter of Foster v. Mallory >S. S. Co., 217 App. Div. 807, affirmed.
    (Argued February 21, 1927;
    decided March 4, 1927.)
    Appeal, by permission, from an order of the Appellate Division of the Supreme Court in the third judicial department, entered November 23, 1926, affirming a decision of the State Industrial Board dismissing a claim under the Workmen’s Compensation Law. Claimant’s husband, who was in the employ of the Mallory Steamship Company, was struck by an automobile and killed while on his way, after working hours, to deliver a pay envelope to a fellow-employee who resided near him. The claim was dismissed on the ground that the accident did not arise out of and in the course of the employment.

      Chester W. McNally for appellant.

      Morton L. Fearey and Boy H. Caldwell for Mallory Steamship Company, respondent.
   Order affirmed, with costs; no opinion.

Concur: Cardozo, Ch. J., Pound, Crane, Andrews, Lehman and O’Brien, JJ. Not sitting: Kellogg, J.


text:
    Philo A. Kent et al., Appellants, v. Burros Realty Corporation, Respondent, and Harry R. Austin, Appellant, Impleaded with Others.

      Appeal — motion to dismiss appeal denied.

    Reported below, 217 App. Div. 703.
    (Submitted February 28, 1927;
    decided March 4, 1927.)
    Motion to dismiss an appeal from a judgment of the Appellate Division of the Supreme Court in the third judicial department, entered May 21, 1926, modifying and affirming a judgment entered upon a decision of the court on trial at Special Term in an action to foreclose a mechanic’s hen.
    The motion was made upon the ground of failure to file the papers on appeal.

      Láveme M. Twining and Bollin W. Meeker for motion.

      Howard E. Taylor and Ralph L. Emmons opposed.
   Motion denied, without costs.


text:
    In the Matter of the Probate of the Will of George S. Nicholas, Deceased. Grosvenor Nicholas, Appellant; Farmers Loan and Trust Company et al., Respondents.
    (Submitted February 28, 1927;
    decided March 4, 1927.)
   Motion for reargument denied, with ten dollars costs and necessary printing disbursements. (See 244 N. Y. 531.)


text:
    In the Matter of the Application of Cheney Brothers, Appellants, for an Order of Arbitration. Joroco Dresses, Inc., Respondent.

      Appeal — motion to dismiss appeal denied.

    Reported below, 218 App. Div. 652.
    (Submitted February 28, 1927;
    decided March 4, 1927.)
    Motion to dismiss an appeal from an order of the Appellate Division of the Supreme Court in the first judicial department, entered December 31, 1926, which reversed an order of Special Term granting an application to compel an arbitration.
    The motion was made upon the ground that the order appealed from was not a final order.

      Maurice Deiches and Elwood G. Feldstein for motion.

      Robert P. Levis opposed.
   Motion denied, with ten dollars costs and necessary printing disbursements.


text:
    Joseph L. Prager, Appellant, v. New Jersey Fidelity and Plate Glass Insurance Company of Newark, New Jersey, Respondent. (Actions Nos. 1 and 2.)
    Appeal — attorney and client —• services - estoppel — interest— review by Court of Appeals of new findings of fact made by Appellate Division on reversal or modification — actions by attorney for services — bill rendered and complaint served evidence on question of value but no estoppel to deman 1 for larger amount — award properly reduced to amount demanded in bills and first complaint — award in second action made on lower scale than in first increased — interest.
    1. The Court of Appeals may review facts found by the Appellate Division, where that court on reversing or modifying a final judgment in an action or a final order in a special proceeding, makes new findings of fact and renders final judgment or a final order thereon. (Civ. Pr. Act, § 589, subd. 2, amd. L. 1926, ch. 725.)
    2. Neither the bill rendered by an attorney for services nor the complaint, in an action to recover therefor, which complaint has been amended, can have the effect of an estoppel as to the amount of the recovery. They are, however, admissions made in circumstances precluding the likelihood of haste and inadvertence and as such are high evidence in favor of the client on the question of value.
    3. An award in an action by an attorney for services held to have been properly reduced where it greatly exceeds the plaintiff’s own estimate of the value of his services, as shown by bills rendered to his client and by his first verified complaint. An award in another action considered and held as reduced to be inadequate.

      (Argued February 28, 1927;
    decided March 29, 1927.)
    4. Interest should be added to the awards. In an action upon an implied contract to recover compensation measured by the value of services, where the recovery is not subject to counterclaim or setoff, interest must be added from the date of the demand even though the amount demanded is greatly in excess of the amount determined to be due.

      Prager v. N. J. Fidelity & Plate Glass Ins. Co., 217 App. Div. 630, modified.
    ■ Appeal, in each of the above-entitled actions, from a judgment of the Appellate Division of the Supreme Court in the first judicial department, entered June 21, 1926, modifying and affirming as modified a judgment in favor of plaintiff en' ired upon the report of a referee.

      Samuel Seabury and Joseph L. Prager for appellant.
    The findings by he referee as to the reasonable value of the services were amply supported by the evidence and the reduction of said amounts by the Appellate Division ■ vas not justified. (Matter of Plimpton, 186 N. Y. Supp. 257; Matter of Potts, 213 App. Div. 62; Randell v. Packard, 142 N. Y. 47.) The Appellate Division erred in limiting plaintiff’s recovery to the amount of his original bills. (Williams v. Glenny, 16 N. Y. 389; Stryker v. Cassidy, 76 N. Y. 50; Sherwood v. Hauser, 94 N. Y. 626.) The Appellate Division erred in striking out the award of interest made by the referee, and in refusing to allow plaintiff any interest on the reasonable value of the services and on his disbursements paid out and advanced for the defendant. (Blackwell v. Finlay, 233 N. Y. 361; Breymann v. Morris & Cummings Dredging Co., 202 App. Div. 464; De Caricarti v. Blanco, 121 N. Y. 230; Kervin v. Utter, 120 App. Div. 610.)

      Lyman A. Spalding for respondent.
    The findings made by the Appellate Division as to the value of the plaintiff’s services are in accordance with the evidence, and they are fully supported by the evidence. They are not against the weight of the evidence. The findings as to value made by the referee are contrary to the evidence and against the weight of the evidence; The Appellate Division properly modified the judgment entered upon the referee’s report. (Marden v. Dorthy, 12 App. Div. 176; Parsons v. Brown, 5 Hun, 112; Bloom v. Nat. Savings & Loan Co., 152 N. Y. 114; Smith v. Schanck, 18 Barb. 344; Grocers Bank v. Penfield, 7 Hun, 279; Dupont v. Village of Portchester, 204 N. Y. 356; Hamilton v. R. R. Co., 53 N. Y. 25; Maher v. C. P., N. & E. R. R. Co., 67 N. Y. 52; Robert v. Tobias, 120 N. Y. 6.) The Appellate Division properly reversed the conclusion of law made by the referee, allowing plaintiff interest on the amounts of the bills rendered in this action from the dates on which bills were rendered and on the amount awarded in excess of the total of the original bills from the date of the amendment of the complaint, and disallowed such interest. (White v. Miller, 78 N. Y. 393; Sherwood v. Hauser, 94 N. Y. 626; Sweeny v. City of New York, 173 N. Y. 414; Faber v. City of New York, 222 N. Y. 225; Jackson v. City of New York, 210 App. Div. 115; Bradley v. McDonald, 157 App. Div. 573; Dykman v. City of New York, 183 App. Div. 859; Breymann v. Morris & Cummings Dredging Co., 202 App. Div. 464.)
   Cardozo, Ch. J.

The actions are by an attorney against a client to recover the value of professional services.

In action No. 1, the plaintiff sued for $21,930.10, made up of $21,585, which was stated to be the value of the services, and $345.10 disbursements. The latter item was afterwards reduced to $200.90, which made the total $21,729.20. During the pendency of the action, plaintiff served an amended complaint in which he fixed the value of the same services at $52,740.10. The referee gave judgment in plaintiff’s favor for $30,500 with disbursements, interest and costs. The Appellate Division reduced the award to $21,729.20, the plaintiff’s own estimate of valué at the beginning of the action, and gave judgment with costs, but without interest.

In action No. 2, the plaintiff sued for $18,423.73. The referee made an award of $9,500 for services, and $41.96 for disbursements, in all $9,541.96, with interest and costs. The Appellate Division reduced the award for services to $4,500, declined to allow interest, and gave judgment accordingly.

By Civil Practice Act, § 589, subdivision 2 (as amended by L. 1926, ch. 725), this court " may review facts found by the Appellate Division, where the Appellate Division, on reversing or modifying a final judgment in an action or a final order in a special proceeding, makes new findings of fact and renders final judgment or a final order thereon.”

We approve the findings of fact made by the Appellate Division in action No. 1. The sum thereby awarded corresponds to the plaintiff’s estimate of the value of his own services,' not merely in bills rendered to his client, but in a verified complaint. Neither the bill nor the complaint can have the effect of an estoppel (Williams v. Glenny, 16 N. Y. 389; Stryker v. Cassidy, 76 N. Y. 50). None the less, they are admissions made in circumstances precluding the likelihood of haste and inadvertence. As such they are “ high evidence ” (Williams v. Glenny, supra) in favor of the client. The significance of the admissions is heightened when comparison is made between the amount of these bills and that of others previously rendered. We conclude that the recovery was properly reduced.

When we pass to action No. 2, the tests of value are less decisive. The compensation to be paid must bear a due proportion to the compensation payable for like services in action No. 1. Maintaining this proportion, we find the sum awarded by the referee too high and'that awarded by the Appellate Division too low. We increase the award to the extent of $1,500, and place the value of the services at $6,000.

The question of interest remains. The general rule is that a claim for legal services resting on a quantum meruit draws interest to be computed from the date of the demand (Blackwell v. Finlay, 233 N. Y. 361). This rule is plainly applicable to the award in action No. 1. There the defendant has been adjudged to be indebted in the precise amount demanded in the bills and in the original complaint. A closer question is involved in action No. 2 where the demand was greatly in excess of the amount-determined to be due. We think that even there, interest is to be added to the amount of the award. This was the ruling in de Carricarti v. Blanco (121 N. Y. 230), where the plaintiff, suing for $12,000 as the value of his services, obtained an award of $3,568, to which interest was added from the date of the demand. So in Sweeny v. City of New York (173 N. Y. 414) the claim was in excess of $100,000 (p. 416), and the award was $79,229.13, yet again interest was added (cf. Stoddard v. Sagal, 86 Conn. 346; De La Rama v. De La Rama, 241 U. S. 154, 159; Spalding v. Mason, 161 U. S. 375, 396; Miller v. Robertson, 266 U. S. 243, 257, 258). There may be distinctions in that respect between actions on the common counts (Van Rensselaer v. Jewett, 2 N. Y. 135, 140; 1 Chitty, Pleading, 341) and actions where a claim for damages is the basis of recovery (Gray v. Central R. R. of N. J., 157 N. Y. 483, 488). Much may be said for a rule of greater uniformity if regard is had to considerations of symmetry and logic. Here as often the considerations that have been controlling have been those of policy and justice (Bernhard v. Rochester German Ins. Co., 79 Conn. 388; Tuzzeo v. Am. Bonding Co., 226 N. Y. 171, 179). Distinctions have thus developed under a pressure that is stronger than the impulse for coherence.

While the dispute as to value was going on, the defendant had the benefit of the money, and the plaintiff was without it. Interest must be added if we are to make the plaintiff whole (Van Rensselaer v. Jewett, supra). No doubt there is difficulty in appraising the value of a lawyer’s services as there is difficulty often in appraising the services of others. None the less, the standards of general custom and particular practice are not lacking altogether. Both parties appeal to these standards, the defendant as much as the plaintiff, in arguing that this court should affirm the judgment or reverse it. The defendant could have limited it's liability for interest by a common-law tender, or by a payment on account without prejudice to the plaintiff’s right to recover the excess. If it chose to keep the money, it should pay for what it kept. There would be obvious injustice if interest were to be lost as the result of a slight discrepancy between the claim and the award. The whole subject is beclouded if the right is made dependent upon considerations of more or less. The test is rendered too uncertain to be in truth a test at all. More and more the courts are coming over to the view that in actions on implied contracts to recover for services or property, interest is a concomitant very nearly automatic, and this though the value has been honestly disputed. Interest is now held to be an incident to just compensation ” where property has been taken in the exercise of the power of the government (U. S. v. Rogers, 255 U. S. 163; Seaboard Air Line Ry. Co. v. U. S., 261 U. S. 299). It is no less such an incident where liability has its origin in the obligation of a contract.

Our ruling is limited to the necessities of the case before us. In an action upon an implied contract to recover compensation measured by the value of the services where the recovery is not subject to counterclaim or setoff (Excelsior Terra Cotta Co. v. Harde, 181 N. Y. 11), we hold that interest must be added from the date of the demand. We do not go into the question of the liability for interest where the cause of action is to recover damages for the violation of a duty (Mansfield v. N. Y. C. & H. R. R. R. Co., 114 N. Y. 331; Gray v. Central R. R. of New Jersey, supra; Faber v. City of N. Y., 222 N. Y. 255). The rule may then be somewhat stricter. The distinction has a possible justification in common modes of thought and practice. A bill for services is felt to cast the burden on the debtor either to pay what is demanded, or, if dissatisfied, to state how much is due. A claim for damages is felt to be more appropriately a subject for assessment by the courts or by some form of arbitration. Even in such circumstances, one marks a growing tendency to make interest an incident where it might once have been excluded (Bernhard v. Rochester German Ins. Co., supra; Darlington v. Gates Land Co., 151 Wis. 461; General Supply & Const. Co. v. Goelet, 241 N. Y. 28, 39). How far the tendency shall be carried is not before us now.

Interest in action No. 1 will run from the dates of demand as fixed in the thirty-eighth finding of fact of the referee’s report, and interest in action No. 2 from the service of the summons.

The judgment in each action should be modified in accordance with this opinion and as modified affirmed without costs to either party.

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

Judgment accordingly.


author: Crane, J.

text:
    In the Matter of the Application of Peter J. Brennan et al., Copartners under the Name of P. J. Brennan & Son, Appellants, against The Board of Education of the City of New York, Respondent.
    (Argued February 21, 1927;
    decided March 29, 1927.)
    New York city — board of education — mandamus — funds appropriated for school purposes disbursed only on audit of board of education — no authority for audit by board of estimate and control — settlement by board of education of claim for damages to building contractor from delay in clearing site — mandamus to compel issuance of vouchers for payment proper — when order denying mandamus not discretionary.
    1. Audit by the board of education of the city of New York of an amount due under an agreement with a contractor for work on a public school is final, unless set aside for fraud, and there is no authority for requiring a second examination and audit by the board of estimate and control. That board may grant or refuse appropriations, but once having made them for school purposes, they are to be disbursed upon the audit of the board of education. (Gunnison v. Bd. of Education, 176 N. Y. 11; People ex rel. Wells & Newton Co. v. Craig, 232 N. Y. 125, followed.)
    2. Where, therefore, the board of education has, by resolution duly adopted, agreed to settle the claim of a contractor for the erection of a public school building for damages from delay in clearing the site, and the contractor has executed and delivered a release in accordance with the resolution, and there is money to the credit of the board sufficient to pay the amount, an application for a peremptory order of mandamus to compel issuance of the appropriate vouchers for payment of the agreed sum should be granted. (Clarke Co. v. Bd. of Education, 156 App. Div. 842; 215 N. Y. 646, distinguished.)
    3. An order denying mandamus cannot rest in discretion when there are no disputed facts, when the law is with the petitioner and when there is no reasonable basis for a holding that other remedies are adequate, and there is no element of hardship or laches or other unequitable conduct.

      Matter of Brennan v. Bd. of Education, 219 App. Div. 703, reversed.
    Appeal from an order of the Appellate Division of the Supreme Court in the first judicial department, entered January 14, 1927, which affirmed an order of Special Term denying a motion for a peremptory order of mandamus to compel the board of education of the city of New York to transmit to the comptroller of that city a voucher or vouchers in favor of petitioners for the several sums constituting their claims, with interest. Also motion to dismiss the appeal.

      Charles L. Craig for appellant.
    The board of education is vested with exclusive authority to administer the school system, to make and perform all contracts in relation thereto and to audit, settle and adjust any claims that arise by reason of the breach of any of such contracts by either party. (People ex rel. Wells & Newton Co. v. Craig, 232 N. Y. 125; Matter of Fuhrmann v. Graves, 235 N. Y. 77; Matter of Fleischmann v. Graves, 235 N. Y. 84; Matter of Reif v. Schwab, 204 App. Div. 50; Matter of Clayton Company, Inc., v. Craig, 209 App. Div. 801; 240 N. Y. 547; Gunnison v. Bd. of Education, 176 N. Y. 11.) The audit and allowance of petitioners’ claim by the board of education is a conclusive and final determination thereof that is not subject to review or collateral attack. (People ex rel. Wells & Newton Co. v. Craig, 232 N. Y. 125; Martin v. Board of Supervisors, 29 N. Y. 645; People ex rel. Smith v. Clarke, 174 N. Y. 259; Albany City National Bank v. City of Albany, 92 N. Y. 363; Osterhoudt v. Rigney, 98 N. Y. 222; Nelson v. Mayor, etc., of New York, 131 N. Y. 16; Foy v. County of Westchester, 168 N. Y. 180; People ex rel. McCabe v. Matthies, 179 N. Y. 242; Smith v. Hedges, 223 N. Y. 176; Hearst v. McClellan, 102 App. Div. 336; Matter of Reif v. Schwab, 204 App. Div. 50.). Mandamus is the proper remedy. (Dannat v. Mayor, etc., 66 N. Y. 585; People ex rel. Satterlee v. Board of Police, 75 N. Y. 38; Swift v. Mayor, etc., 83 N. Y. 528; People ex rel. N. Y. Dock Company v. Delaney, 192 App. Div. 734; People ex rel. Cranford Co. v. Willcox, 153 App. Div. 759; 207 N. Y. 743; People

      ex rel. Dady v. Coler, 171 N. Y. 373; People ex rel. R. T. S. Construction Co. v. Craven, 210 N. Y. 443; People ex rel. Rolf v. Coler, 58 App. Div. 131; People ex rel. Graves v. Sohmer, 207 N. Y. 450; People ex rel. Desiderio v. Conolly, 238 N. Y. 326.)

      George P. Nicholson, Corporation Counsel (Willard S. Allen, J. Joseph Lilly and Joseph L. Pascal of counsel), for respondent.
    The motion for a peremptory mandamus order must be presumed to have been denied in the exercise of discretion. (Matter of Sherrill, 186 N. Y. 1; People ex rel. Flynn v. Woods, 218 N. Y. 124; People ex rel. Dawly v. Wilson, 232 N. Y. 12; People ex rel. Van Iderstine v. Walsh, 239 N. Y. 526; Ellis-Joslyn Pub. Co. v. Common Council, 223 N. Y. 445.) The petitioners have failed to show a clear legal right to the peremptory mandamus order requested. (People ex rel. McMackin v. Board of Police, 107 N. Y. 235; People ex rel. McCabe v. Matthies, 179 N. Y. 242; People ex rel. Lentilhon v. Coler, 61 App. Div. 223; Matter of Hamburger v. Board of Estimate, 109 App. Div. 427; Matter of Eiss v. Summers, 205 App. Div. 691; Matter of Carlson v. Craig, 215 App. Div. 3.) No appropriation has been made by the board of estimate and apportionment, and for this reason the board of education has properly refused to transmit a voucher or vouchers to the comptroller. (People ex rel. Gibbons v. Coler, 41 App. Div. 463; Public Service Commission, Second District, v. International Railway Co., 224 N. Y. 631; People ex rel. Dannat v. Comptroller, 77 N. Y. 45; People ex rel. Daly v. York, 66 App. Div. 453; People ex rel. Woodworth v. Burrows, 27 Barb. 89; Matter of Moses v. Board of Education of Syracuse, 127 Misc. Rep. 477; People ex rel. Burbank v. Robinson, 76 N. Y. 422; O’Neil v. State of New York, 223 N. Y. 40.)
   Crane, J.

This is another dispute between the city of New York and the board of education, regarding the expenditure of appropriations for educational purposes. The real question is whether the board of estimate or the board of education shall audit the claim of a contractor for work on a high school. The claim has been audited by the board of education. ■ -The board of estimate insists that the contractor shall submit to it his claims for re-examination or sub-authorization.” Similar cases have, been here before, and we have consistently upheld the right of the board of education to control its own funds as long as they were disbursed for the purposes authorized by statute. The facts of this case call for no departure from this fundamental principle.

On the 13th of June, 1923, the board of education awarded to P. J. Brennan. & Son, the petitioners, a contract for the general construction of the School for Deaf, known as Public School No. 47, on East Twenty-third and Twenty-fourth streets, between Second and Third avenues, in the borough of Manhattan, for the ■ sum of $758,700. The work was delayed for over a year by the failure of the city of New York through its sinking fund commission to have the site cleared'of buildings so as to permit construction to proceed. Inaction was in no way attributable to the board of education. In the meantime, the cost of labor and material had very much increased, and the contractor hesitated to proceed. Under these circumstances, the board of education sought the opinion of the corporation counsel. He advised the board under the circumstances to make an arrangement and settlement with the contractor for the delay, and thus enable him to proceed with the work. His opinion was couched in this language: “ In view of the circumstances surrounding the clearing of the site for the first section, ( and the delay of over one year on handing it over to the contractor so that he might proceed with the erection of the first section, I am of the opinion that the Board of Education since the first section has been completed and turned over to the Board of Education may enter into negotiations with P. J. Brennan & Son to adjust any claim that said contractor now may have by reason of the delay occasioned the contractor in the performance of the work for the first section.”

The building of the school was to be carried out in two sections. After clearing the site, the first section was to be erected, which would be used for school purposes vdiile the second section was being built. The contractor declined to proceed with the construction of the second section of the school because of the delay incident to clearing the site. The old buildings on the site were being used for school purposes.

As a result of negotiations between P. J. Brennan & Son and the superintendent of school buildings, the committee on buildings and sites, on the oral advice of the corporation counsel, whq was present, agreed to the settlement of the claims of said contractor on the first and second sections in the sum of $64,000, $21,432 representing damages sustained by the contractor in connection with the first section which had been completed and occupied for school purposes to be paid immediately; and the balance, $42,568, representing damages sustained and to be sustained in connection with the second section to be paid as follows:

$11,000 with the first progress payment

$11,000 with the second progress payment

$11,000 with the third progress payment

$9,568 with the fourth progress payment.

Thereupon the board of education took the following action:

“Resolved, That the Board of Education hereby* agrees .to a settlement of a claim of P. J. Brennan & Son, contractors for the general construction of the School for the Deaf (Public School 47), Manhattan, for delay occasioned the contractors in the performance of the work for the first section of the new building and for damages sustained and to be sustained in connection with the second section of such new building, for the sum of $64,000, in full settlement and» satisfaction of the contractors claims for delay herein actual and prospective, the said contractors to execute a general release of all claims for damages incurred or anticipated by reason of any delays that have heretofore occurred in connection with the performance of the work.”

The contractor thereafter executed and delivered the release in accordance with this resolution.

There was plenty of money with the city of New York to the credit of the board of education to pay this amount. By the appropriations in the budget for the year 1926, together with the amount receivable from the State of New York, there was available to the board of education in that year $103,584,942.77. On April 8, 1926, the board of estimate made an appropriation of $7,482,600 to the board of education for expenditures required for the construction of new schools, and on June 17, 1926, an additional sum of $1,736,000 for a like purpose.

For some reason, the board of education requested the board of estimate and apportionment to set aside from these funds an amount sufficient to pay the $64,000 in accordance with this settlement and agreement made with P. J. Brennan & Son. On June 17, 1926, there was forwarded to the board of estimate a certified copy of the report and resolutions of the board of education, above mentioned, and the board of estimate on that day voted its approval. At a later meeting, on June 22d, the matter was reconsidered and tabled.

No further action having been taken, this mandamus proceeding was commenced to require the issuance of the appropriate vouchers in accordance with the Education Law (Cons. Laws. ch. 16) for the payment of this sum, agreed to and audited by the board of education.

As stated before, the contention of the city is that the board of education to obtain money out of its appropriations for school building purposes must have the consent of the board of estimate and apportionment. The method of - procedure is outlined in the brief of the corporation counsel as follows:

“ That whenever the Board of Education requires funds for a specific purpose it makes an application to the Board of Estimate and Apportionment in conformity with the terms and conditions set forth in the foregoing resolution of the Board of Estimate and Apportionment and that Board after investigation and favorable report thereon by its engineers and investigators adopts a resolution authorizing and setting aside to the Board of Education of specific sums out of the aforesaid fund for specific purposes.”

The resolution referred to authorizéd the issuance of bonds, the proceeds of which were to be used by the board of education for the erection of school buildings, which resolution contained this statement: “ The amounts to be expended therefrom to be sub-authorized by the Board of Estimate and Apportionment from said appropriation, predicated upon requisitions from the Board of Education for stated amounts.”

The board of estimate and apportionment cannot supersede the Education Law by tacking on to its appropriations for school purposes, limitations upon the power of the board of education given to it by the Education Law. The board of estimate may grant or refuse the' appropriations, but once having made them, the Education Law enacts how they shall be used. After these funds have passed to the credit of the board of education, they are to be disbursed upon its audit. The only relation that the city has to the subject of public education is as the custodian and depositary of school funds, and its only duty with respect to that fund is to keep it safely, and disburse the same according to the instructions of the board of education. The city, as trustee, has title to the money, but it is under the care, control and administration of the board of education. We decided this in the case of Gunnison v. Board of Education (176 N. Y. 11), and repeated it in People ex rel. Wells & Newton Co. v. Craig (232 N. Y. 125). In the latter case we reviewed fully all the provisions of the Education Law bearing upon this control and expenditure of public moneys for educational purposes, and the respective powers of the city officials and the board of education. We need not do this again. This court said:

The powers conferred upon the board of education to administer the public educational system within the confines of the city of New York were exclusive. The grant of the same to the board of education negatives authority in the municipality to exercise like powers. * * * We cannot ascribe to the Legislature an intention to provide for two several boards of audit.”

The audit, therefore, by the board of education of this amount due under the agreement with P. J. Brennan & Son for the construction of the public school was final unless set aside for fraud, and there is no authority for requiring a second examination and audit by the. board of estimate. If the latter board by the form of its appropriations could require such an audit or approval, the control of these matters by the board of education would soon pass to the board of estimate, and the whole purpose of the Education Law be subverted. “ The intent of the Legislature in enacting the Education Law is clear. It imposes upon boards of education, as separate corporate bodies representing the State, the responsibility of furnishing an efficient system of public education, * * * and in this respect they are not subject to or controlled by the city authorities. In order to enable such boards to properly discharge the duties thus imposed, they are clothed with authority to act independently of the city authorities.” (Matter of Fuhrmann v. Graves, 235 N. Y. 77; Matter of Fleischmann v. Graves, 235 N. Y. 84.)

The question of classification of funds for the purpose of bookkeeping pursuant to section 880 of the Education Law does not arise in this case. The comptroller may require such classification as will insure upon examination that funds are being used for educational purposes.

The case of Clarke Co. v. Board of Education (156 App. Div. 842; affd., 215 N. Y. 646), relied on by the corporation counsel, passed upon a resolution of the board of education very different from this one now before us. Besides the law has been changed by chapter 786 of the Laws of 1917, since the beginning of that proceeding.

A motion was made to dismiss this appeal on the ground that the orders below were discretionary. The same point is made by the respondent on this appeal. There is no dispute about the facts, and it is apparent from the record that the only question involved is one of law relating to the powers of the board of estimate. The opinion of the judge at Special Term so indicates. An order denying mandamus cannot rest in discretion when there are no disputed facts, when the law is with the petitioner and when there is no reasonable basis for a holding that other remedies are adequate; and there is no element of hardship or laches or other unequitable conduct. (People ex rel. Van Tine v. Purdy, 221 N. Y. 396, 399, 400; People ex rel. Flynn v. Woods, 218 N. Y. 124, 128; People ex rel. Perrine v. Connolly, 217 N. Y. 570, 574.)

If this application were denied as matter of discretion it would mean that the petitioners would have to resort to the remedy of suing the board of education. The contracts having been made with that corporate body, it and not the city of New York would be the proper and only defendant. Such an action would appear to be fatuous, as the board of education has admitted the petitioners’ rights and audited their claim.

For these reasons the orders below should be reversed, and the petition for a peremptory order of mandamus granted as prayed for, with costs in all courts.

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

Ordered accordingly.


author: Pound, J.

text:
    Richard Croker, Jr., Respondent, v. New York Trust Company, as Temporary Administrator of the Estate of Richard Croker, Deceased, Appellant, and Howard Croker et al., Respondents.
    (Argued February 28, 1927;
    decided March 29, 1927.)
    Equity — contract — decedent’s estate — evidence — promisee may maintain action in equity to enforce promise for benefit of third parties — plaintiff in such an action against administrator of deceased promisor a party interested and incompetent to testify to oral agreement with decedent —■ quaere whether plaintiff is “ person from, through or under whom ” third parties derived their title.
    1. A promisee who has parted with a substantial sum in exchange for the promise of another to pay a similar amoupt to third party beneficiaries may maintain an action in equity to enforce the contract.
    2. In such an action, brought against. the administrator of one deceased, an oral contract between decedent and the plaintiff for the benefit of third parties may not be established by the plaintiff’s testimony. Though he has no other direct financial interest in the result, he may be made liable for costs if he fails in his suit and, therefore, is a “ party ” and “ person interested in the event ” within the meaning of section 347 of the Civil Practice Act.
    3. Authorities upon the question whether plaintiff is “a person from, through or under whom ” the third parties derived their title, collated and discussed.

      Croker v. New York Trust Co., 216 App. Div. 832, reversed.
    Appeal, by permission, from a judgment of the Appellate Division of the Supreme Court in the first judicial department, entered May 27, 1926, unanimously affirming a judgment in favor of plaintiff and defendants, respondents, entered upon a decision of the court on trial at Special Term.

      Edmund L. Mooney, Wilber W. Chambers and Jacob Quat for appellant.
    Plaintiff has no cause of action in equity. (Seaver v. Ransom, 224 N. Y. 233; Parsons v.
      Teller, 188 N. Y. 318; McGovern v. City of New York, 234 N. Y. 377; Balfour v. Balfour, 88 L. J., K. B. D. 1054; De Cicco v. Schweizer, 221 N. Y. 431; Wisconsin & Michigan Ry. Co. v. Powers, 191 U. S. 379.) The courts below erred in admitting, over defendant’s objection, the testimony of the plaintiff, in support of the alleged agreement. His testimony was incompetent under section 347 of the Civil Practice Act. The exception taken to the admission of this evidence was well taken and requires a reversal of the judgment. (Kelsey v. Cooley, 11 N. Y. Supp. 745; Allis v. Stafford, 14 Hun, 418; Squire v. Greene, 38 App. Div. 431; Franklin v. Kidd, 219 N. Y. 409; Carpenter v. Soule, 88 N. Y. 251; Albany Co. Sav. Bank v. McCarty, 149 N. Y. 71; Jones v. Thomas, 76 App. Div. 596; Hungerford v. Snow, 129 App. Div. 816; Whitehead v. Smith, 81 N. Y. 151.) Plaintiff was the person from, through or under whom the defendants-respondents derived their interests. (Rosseau v. Rouss, 180. N. Y. 116; Harrington v. Schiller, 231 N. Y. 278; Bouton v. Welch, 170 N. Y. 558; Wadsworth v. Heermans, 85 N. Y. 639; Eisenlord v. Clum, 126 N. Y. 552; Hunter v. Herrick, 26 Hun, 272; 92 N. Y. 626; Miller v. Montgomery, 78 N. Y. 282; Griswold v. Hart, 205 N. Y. 384; Hixson v. Rodbourn, 67 App. Div. 424.)

      Frederick R. Ryan, Samuel A. Adamson and Sydney Ehrlich for respondents.
    The contract in suit is an agreement on a valuable consideration and enforcible as such; it is also a valid contract for the sole benefit of third parties. This action is properly brought in equity with all the parties before the court. (Borland v. Welch, 162 N. Y. 104; De Cicco v. Schweizer, 221 N. Y. 431; Galvin v. O’Neill, 108 Misc. Rep. 297; Seaver v. Ransom, 224 N. Y. 233; Todd v. Weber, 95 N. Y. 181; Glanzer v. Shepard, 233 N. Y. 236; Little v. Banks, 85 N. Y. 258; Rochester Telephone Co. v. Ross, 195 N. Y. 429; Smyth v. City of New York, 203 N. Y. 106; Pond v. New Rochelle

      Water Co., 183 N. Y. 330; Rigney v. N. Y. Central & H. R. R. R. Co., 161 App. Div. 187; 217 N. Y. 31.) Plaintiff was a competent witness under section 347 of the Civil Practice Act since he did not testify in his own behalf or interest, and the interests of defendants-respondents were not derived from, through or under him. (Whitehead v. Smith, 81 N. Y. 151; Harrington v. Schiller, 231 N. Y. 278; Albany County Savings Bank v. McCarty, 149 N. Y. 71; Hungerford v. Snow, 129 App. Div. 816; Jones v. Thomas, 76 App. Div. 596; Moore v. Oviatt, 35 Hun, 216; Franklin v. Kidd, 219 N. Y. 409.)
   Pound, J.

Plaintiff sued in equity to recover on an oral contract made by him with his father, Richard Croker, deceased, whose administrator, the New York Trust Company, is one of the defendants, for the benefit of the other defendants, his brother Howard and his sister Ethel, whereby in consideration of plaintiff’s promise to transfer to Howard his share in his mother’s estate, Richard Croker agreed, upon being notified of the amount of such share, to pay a like amount to Howard and to Ethel. Plaintiff established the amount of his one-fourth interest in the estate of his mother at $76,191.15 and the payment thereof to Howard. The total of each share with interest has been computed at $114,587.29 and plaintiff has recovered for the benefit of his brother and his sister the sum of $229,174.58. After the unanimous affirmance by the Appellate Division prior to July 15, 1926, no question of fact remains for our consideration.

Appellant contends that although the defendants Howard and Ethel might have recovered the amount of their shares in an action at law against Richard Croker or the administrator of his estate as third party beneficiaries under the rule of Lawrence v. Fox (20 N. Y. 268) and Seaver v. Ransom (224 N. Y. 233), the plaintiff may not maintain an action in equity for the enforcement of their cause of action. That plaintiff’s remedy in law would be inadequate is obvious. He has suffered no pecuniary damage by the failure of the promisor to perform his agreement. His injury in law is, therefore, purely technical. It has been suggested (Williston on Contracts, §§ 358, 359) that a court of equity is the only proper forum for such actions so that. all parties in interest may be before the court. Although the right of the beneficiary in such a contract to maintain an acfton thereon has been upheld, and although no reported case has been cited where equity has been invoked by the promisee to enforce the liability of the promisor to the third party beneficiaries, the suit in equity should be sustained in principle. The contract is with the promisee and the promisor was under an equitable obligation to him to perform. The promisee, while not financially interested in the result, except as to the question of costs, is interested in asserting the duty of the promisor to carry out the terms of the contract. “ Equity insists upon the conscientious obligations of the suitors.” Otherwise we must hold that a promisee who has parted with a substantial sum in exchange for the promise of another to pay a similar amount to third party beneficiaries is remediless. The procedure adopted provides adequately for the situation and should be upheld.

When it comes to the competency of proof to sustain plaintiff’s cause of action, questions of substance arise under Civil Practice Act, section 347, formerly Code of Civil Procedure, section 829. The oral contract between plaintiff and his father was established by plaintiff’s evidence. At common law parties and persons interest sd in the event of the suit were disqualified from being witnesses in their own behalf. The common-law rule has been almost universally abolished, but in New York an important exception is preserved by section 347, Civil Practice Act. The intention of this statute is that the surviving party to an action against the deceased’s estate shall not have the advantage of giving his version of the matter in controversy in his own behalf or interest or in behalf of those who derive their title or interest from him when the other party is prevented by death from being heard to contradict or explain it. To hold otherwise has been thought to imperil the estates of the dead by subjecting them to the uncontradicted per j mies of the mendacious. Meritorious claims have thus been sacrificed to the general interest in order to prevent fraud and injustice. We still find the meaning of “ party ” and “ person interested ” as disqualifying terms in the old common-law decisions.

Three questions present themselves:

1. Is plaintiff a party “ examined as a witness in his own behalf or interest? ”

2. Is he a person “ interested in the event?

3. Is he “ a person from, through or under whom ” his brother and sister derive their interest or title by assignment or otherwise?

The first two questions become on examination practically one and inseparable in meaning and application. It is contended that plaintiff is neither a party examined in his own behalf or interest nor a person interested in the event because, as stated in Eisenlord v. Clum (126 N. Y. 552, 556), he had, although nominally called to testify in his own behalf, no “ direct and certain interest in the event of the cause or an interest in the record for the purpose of evidence; was merely a titular party; and in the words of His cock, Ch. J., in Harrington v. Schiller (231 N. Y. 278, 285) had no financial interest in the event of the litigation which would be supported and forwarded by the testimony which ” he gave. Parties were disqualified at common law not so much as parties as because of their interest in the event of the litigation. Every person so circumstanced, however small and insignificant the amount of his interest, was presumed to be incapable of resisting the temptation to perjury; and every judge and juryman was presumed to be incapable of discerning perjury under circumstances peculiarly calculated to excite suspicion and watchfulness.” (See 1 Wigmore on Evidence [2d ed.], p. 999.) Parties are now clearly competent under section 347 to testify against their own interest as to personal transactions with a deceased person, as when called by an adverse party. As at common law, the fact that the witness is a party to the record is not controlling. An interest in the question is not enough to disqualify as that is not an interest in the event. “ Unless the witness will gain or lose by the event, either directly, as in money, or indirectly, because the record could be used as evidence for or against him, he is not disqualified.” (Albany Co. Sav. Bank v. McCarty, 149 N. Y. 71, 84.) A witness might be biased. He might be solicitous for the success of the party for whom he testified or he might feel a deep interest in the result of a trial. His credibility might be thereby affected but he was not disqualified for interest.

Plaintiff was called nominally in his own behalf but he had no direct financial interest in the result, except in the costs. If he had a financial interest to this extent, we need not determine whether his interest in vindicating his contractual right would disqualify without more. At common law a party was disqualified by interest because of the possibility that costs might be taxed against him in the event of an adverse decision. In Rue v. Sprague (1 Johns. 510) the court said: “ One of the plaintiffs was sworn as a witness, and though a mere trustee, he was liable for costs, and so far interested.” It has been held below that as costs in an equity action are in the discretion of the court, plaintiff’s interest in the event by reason thereof is not direct and certain but contingent and doubtful. The common law does not recognize this distinction. Walworth, Ch., in Eckford v. DeKay (6 Paige, 565, 569) states the “ well settled rule ” without qualification as follows: “A person in whose name a suit is brought, and who may be made hable for the payment of costs if he fails in his suit, is not a competent witness to establish the facts necessary to sustain such suit.” Plaintiff might have been made hable for the payment of costs if he had failed in his suit. It follows that he was a person interested in the event. (Poucher v. Scott, 33 Hun, 223; affd., 98 N. Y. 422.)

We need not consider definitively the remaining question whether plaintiff was “ a person from, through or under whom ” his brother and sister derived their title or interest by assignment or otherwise, except to note the state of the authorities under that head. Plaintiff was the medium through whom the contract was entered into on behalf of Howard and Ethel; the person to whom the promise was made on their behalf; yet they did not derive their interest by assignment or anything resembling assignment from him. It was held that the medium was competent as a witness in Healy v. Healy (55 App. Div. 315; affd., 166 N. Y. 624, on opinion in Winne v. Winne, 166 N. Y. 263); and again in Bouton v. Welch (170 N. Y. 554). The court decided that when a third person sues on a contract made for his benefit he does not derive his interest from the party who furnished the consideration for the contract within the meaning of former section 829 of the Code of Civil Procedure. The contrary doctrine was upheld in Rosseau v. Rouss (180 N. Y. 116) although the prevailing opinion sought to distinguish the earlier cases rather than to discredit them. The court, speaking by His cock, Ch. J., in Ward v. N. Y. Life Ins. Co. (225 N. Y. 314, 319), without discussing the earlier cases on this point, refused to exclude the evidence of the wife as to personal transactions between herself and her husband for the purpose of establishing an assignment to her of an insurance policy although in a substantial sense it was due to the act of the insured that the beneficiary became entitled to the proceeds of the policy. The broad authority of Rosseau v. Rouss (supra) has thereby by implication been somewhat shaken. But, as stated by Cullen, Ch. J., in his blunt and vigorous concurring memorandum in that case, the general rule remains, that when a third person sues on a contract made for his benefit he derives his interest from the party who furnishes the consideration for the contract and is incompetent as a witness to personal transactions and communications between himself and the deceased. Under this rule, plaintiff, promisee, was clearly incompetent to testify to personal transactions with the deceased promisor for the benefit of the third party beneficiaries. Whether it would be applied if necessary to a decision or whether the closer if less ethical reasoning of the earlier cases would now be accepted, we need not determine.

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

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

Judgment accordingly.