text:
    Sol S. Hand, Respondent, v. Isidore J. Rifkin, Appellant.

      (Argued January 10, 1934;
    decided February 27, 1934.)

      Philip Zierler and A. L. Geilich for appellant.
    The action was prematurely brought because by agreement of the parties the tenant was not discharged from his obligations upon re-entry of the landlord. (Lenco, Inc., v. Hirschfeld, 247 N. Y. 44; Halpern v. Manhattan Ave. Theatre Corp., 173 App. Div. 610; 220 N. Y. 655; International Publications, Inc., v. Matchabelli, 260 N. Y. 451; Gaffney v. Paul, 29 Misc. Rep. 642; Baker v. Donlin, 88 Misc. Rep. 586.)

      Benjamin Bernstein for respondent.
    The action is not prematurely brought. (American Smelting & Refining Co. v. Stettenheim, 177 App. Div. 392; Kottler v. N. Y.

      Bargain House, Inc., 242 N. Y. 28; Reich v. Cochran, 151 N. Y. 122; Wolf v. Rudinsky, 135 App. Div. 172; Chaude v. Shepard, 122 N. Y. 397.)
   O’Brien, J.

Defendant as landlord leased certain premises to two individuals for fifteen years from September 1, 1929, and they assigned their lease to the Sea Gate Service Garage, Inc., which went into possession. The tenants deposited the sum of $12,500 as security for the performance of all the conditions of the lease. The rent was paid until November 1, 1931, when the tenant defaulted and was evicted by a warrant of dispossess'in a summary proceeding. Plaintiff, as assignee of the deposit, brought this action for its return and his motion on the pleadings to the extent of $7,934.17 has been granted.

The conventional relation of landlord and tenant having been terminated by the warrant of dispossess, the question is whether the terms of the lease establish a continuing liability on the part of the tenant subsequent to such termination.

Paragraph 22 of the lease stipulates that the security shall be returned to the tenant “ at the end or termination of this lease, provided the tenant has fully and faithfully carried out and complied with each and every term hereof on its part to be kept and performed.” This clause must be read with paragraph 23 which provides that if the tenant “ is dispossessed or if the tenant violates any of the covenants, conditions and agreements of this lease, then and in that event the said sum of $12,500 shall at the option of the landlord be retained by the landlord as liquidated and stipulated damages.” Considering these clauses together, without reference to other provisions in the lease, their combined significance would force the conclusion that the tenant, having failed to comply with all provisions, is not entitled at this time to the return of the deposit and that the landlord, even when the tenant has been dispossessed, does not become the owner of the deposit as liquidated damages. If no other covenant of the lease is inconsistent with these two covenants, the action must be marked as premature and the issue of damages must necessarily await proof of actual loss by the landlord. (Seidlitz v. Auerbach, 230 N. Y. 167; Lenco, Inc., v. Hirschfeld, 247 N. Y. 44.)

Paragraph 19 craves attention. This clause is verbose but its substance can be compressed. In the event that the tenant shall default in the rent or in the performance of any of the covenants or conditions of the lease, the landlord has the option to terminate the lease by serving a five days’ notice to comply. If, within the five days, the tenant fails to comply, the landlord at his option may serve a second five days’ notice of intention to terminate the lease. Upon the giving of this second notice the term shall end upon a date to be fixed in this notice and the landlord may re-enter by summary dispossess proceeding or otherwise. Notwithstanding such entry the tenant shall at the option of the landlord remain hable and pay rent for said premises for the full term aforesaid and all taxes, assessments, water rents * * * and all reasonable costs and charges for the care of the premises while vacant and of the re-entry and reletting thereof, as well as each and every other payment required to be made by the tenant, and the tenant shall be entitled to be credited with such rent as shall otherwise be actually received and realized by the landlord during the remainder of said term, it being agreed that the landlord may, at the landlord’s option, as agent for the tenant, but in the landlord’s name, rent said premises for the balance of the term or any portion thereof and that the tenant shall be liable for the deficiency and that the landlord may recover at the beginning of each month after such default or violation the damages sustained during the preceding month. The first five days’ notice to comply with any of the conditions above enumerated, and for a default whereof the landlord would be entitled to serve the same need not be given in the event of a default in the payment of rent or any part thereof, or in the making of any payments herein specifically mentioned in a liquidated amount.”

The tenant did default in the payment of rent and the landlord did not give the five days’ notice but did re-enter and remove the tenant by summary dispossess proceedings. According to the provisions of section 19, the landlord is not bound to serve notice in the event of default in the payment of rent. Since a first notice is not required, there is no reason for inferring that an impossible second one is necessary. According to the provisions of section 22, the tenant is not entitled to return of the security at the termination of the lease unless he has fully performed. He has not fully performed. Upon re-entry by the landlord, following dispossess by summary proceedings, the tenant may be held only in such a sum, not exceeding the amount of the security, as represents the actual loss sustained by the landlord, during the remainder of the term as described in the lease, as a result of the tenant’s violation of the terms of the lease and his consequent eviction. (Chaude v. Shepard, 122 N. Y. 397.) The expression such re-entry ” is not, in our opinion, limited to a re-entry following the service of a five days’ notice, for when the tenant’s violation consists in a failure to pay rent, no notice is required. The language is descriptive of such a re-entry as is rightfully established under the terms of the lease by reason of the tenant’s default in payment. Any re-entry resulting from such an established right was, as we interpret the covenant, within the contemplation of the parties. The effect of section 19, when no notice is required, is not different from the clause which was the subject of interpretation in International Publications, Inc., v. Matchabelli (260 N. Y. 451). We think that under these covenants the tenant’s liability survives the severance of the conventional relationship created by the lease, but that the loss, if any, which the landlord may suffer through the tenant’s default has not been and cannot be ascertained until the end of the term denominated in the lease.

This action, therefore, being premature, the judgments should be reversed and the motion denied, with costs to appellant in all courts.

Pound, Ch. J., Crane, Lehman, Hubbs and Crouch, JJ., concur; Kellogg, J., not voting.

Judgments reversed, etc.


source: Caselaw Access Project

author: Pound, Ch. J.

license: Public Domain

text:
    Ruth Stevens, Appellant, v. Roy Hulse, Respondent.
    (Submitted January 18, 1934;
    decided February 27, 1934.)

      S. W. Eager for appellant.
    The question of the liability of defendant was for the jury. (Muller v.
      McKesson, 73 N. Y. 195; Gooding v. Chute, 155 Cal. 620; Marble v. Ross, 124 Mass. 44; Molloy v. Starin, 191 N. Y. 21; Barrett v. State, 220 N. Y. 423; Spring Co. v. Edgar, 99 U. S. 645; Quilty v. Battie, 135 N. Y. 201; Keenan v. Gutta Percha Manfg. Co., 46 Hun, 544; Bundschuh v. Mayer, 81 Hun, 111; Kessler v. Lockwood, 62 Hun, 619; Manger Bros. v. Shipman, 30 Neb. 352; Shaw v. McCreary, 19 Ont. Rep. 39; Bottcher v. Buck, 163 N. E. Rep. 182.) The contributory negligence of the plaintiff was for the jury. (Muller v. McKesson, 73 N. Y. 195; Bottcher v. Buck, 163 N. E. Rep. 182.)

      Fred L. Gross for respondent.
    The plaintiff having voluntarily exposed herself to danger, was not entitled to a recovery and the reversal by the Appellate Division was proper. (Molloy v. Starin, 191 N. Y. 21; Ervin v. Woodruff, 119 App. Div. 603.) The uncontradicted proof is that the defendant did not harbor the bear. (Marsh v. Hand, 120 N. Y. 315; Harrison v. McClellan, 137 App. Div. 508; Laguttuta v. Chisolm, 65 App. Div. 326.)
   Pound, Ch. J.

The plaintiff was injured by a bear which she was feeding while it was chained to a stake on defendant’s farm situate at Rio, Orange county. She brings this action to recover the damages caused by such injuries. A verdict of $900 was rendered by the jury in her favor; By a divided vote the Appellate Division, without opinion, reversed the judgment entered thereon on the law and facts and dismissed the complaint.

The plaintiff’s injuries were sustained on July 30, 1932. The day before, she and her son and daughter-in-law met the defendant who told them he had a bear and asked them to come to bis place to see it. The following day they came there. The defendant was about to take his lunch, and as they sat on the porch of his house he told them to look around. Plaintiff’s son asked him whether they could feed maple sugar to the bear and he said yes. Thereupon they went to the place where the bear was chained. The chain was about twenty feet long and at the time it was taut. After her son had fed the bear, the plaintiff, standing about two feet away from the animal and bending over, was feeding it when it grabbed her knees with its paws, drew her towards it and clawed her legs. The evidence tends to establish that the defendant knew that the bear had shown vicious tendencies when it was in the possession of a former owner, but he did not warn the plaintiff.

On the part of the defendant it was shown that a short time prior to the occurrences above set forth he had leased a part of his farm to a man named Knight. Knight purchased the bear and installed it on the property he had leased. He put up a sign which read, “ Beware of the Bear.”

It is not necessary to consider what effect the leasing of the property by Knight and his ownership of the bear might otherwise have had under the circumstances here disclosed. The implied admission of ownership or control of the farm and of the bear by the defendant; his invitation to the plaintiff to come and see the creature; his assurance that it was safe to feed it; his failure to warn as to its known vicious tendencies were sufficient to present a question of fact for the jury.

So far as plaintiff knew, the defendant was the owner or was in control of the bear. His apparent ownership or control was tantamount to real ownership. (Hannon v. Siegel-Cooper Co., 167 N. Y. 244; Maloney Tank Mfg. Co. v. Midcontinent Pet. Corp., 49 Fed. Rep. [2d] 146, 149, Rhone v. Try Me Cab Co., 65 Fed. Rep. [2d] 834.) Plaintiff had a right to rely on the fact that defendant seemed to be in charge of the premises owned by him and of the bear.

One who keeps wild animals on his premises must see to it at his peril that they do no damage to others. (Barrett v. State, 220 N. Y. 423; Molloy v. Starin, 191 N. Y. 21; Muller v. McKesson, 73 N. Y. 195; Lynch v. McNally, 73 N. Y. 347.)

The case of Ervin v. Woodruff (119 App. Div. 603) is not in point. There the doctrine of volentia non fit injuria, under the guise of contributory negligence, was applied. It cannot be said, as matter of law, that plaintiff, with knowledge of the vicious propensities of the bear, put herself in harm’s way and brought the calamity on herself. The question is one for the jury, as is also the question of the sufficiency of the notice which Knight had put up.

As the reversal was on the law and the facts, we are unable to reinstate the verdict.

The judgments should be reversed and a new trial granted, with costs to the appellant in this court and in the Appellate Division to abide the event.

Crane, Lehman, O’Brien, Hubbs and Crouch, JJ., concur; Kellogg, J., not voting.

Judgments reversed, etc.


author: Crane, J.

text:
    Charles S. Earley, Jr., by Charles S. Earley, His Guardian ad Litem, Respondent, v. New York Telephone Company, Appellant.
    (Argued January 11, 1934;
    decided February 27, 1934.)

      Irving W. Young, Jr., N. H. Egleston, Edward F. Snydstrup and Charles T. Russell for appellant.
    The judgment cannot be sustained under the doctrine of attractive nuisance. (Walsh v. Fitchburg R. R. Co., 145 N. Y. 301; Mendelowitz v. Neisner, 258 N. Y. 181; O’Callaghan v. Commonwealth E. Corp., 247 N. Y. 127.) The pole was a lawful structure, neither inherently dangerous nor leading to an inherently dangerous appliance or object. (Fitzgerald v. Rodgers, 58 App. Div. 298; Braun v. Buffalo General Electric Co., 200 N. Y. 484; Freeman v. Brooklyn Heights R. R. Co., 54 App. Div. 596; Robertson v. Rockland L. & P. Co., 187 App. Div. 720; O’Callaghan v. Commonwealth E. Corp., 247 N. Y. 127; Parkes v. New York Tel. Co., 120 Misc. Rep. 459; 207 App. Div. 869.) The old pole did not constitute a nuisance. (Robertson v. Rockland L. & P. Co., 187 App. Div. 720; Robert v. Powell, 168 N. Y. 411; Bailey v. Bell Tel. Co., 147 App. Div. 224.)

      Carl K. Mengel, George A. Conroy and Denis Mulligan for respondent.
    The wire dangling from the pole constituted a nuisance. (Mendelowitz v. Neisner, 258 N. Y. 181; Walsh v. Fitchburg R. R. Co., 145 N. Y. 301; Braun v. Buffalo General Electric Co., 200 N. Y. 484; Kunz v. City of Troy, 104 N. Y. 344; Parnell v. Holland Furnace Co., 234 App. Div. 567; 260 N. Y. 604; Johnson v. City of New York, 208 N. Y. 77.)
   Crane, J.

The defendant telephone company in 1929 erected and maintained poles to carry its wires on the west side of One Hundred and Tenth street, between Ninety-fifth avenue and Jerome avenue, Richmond Hill, Queens county, New York city. At about this time the company was erecting a new pole and in the process of making the change, the two poles, old and new, were standing in the street about three feet apart.. Some of the wires had been shifted from the old.pole to the new pole, but the old pole had not yet been taken down. A loose dead telephone wire was left dangling down from the cross-bar to within four or four and one-half feet of the sidewalk. It was harmless, could injure nobody and in no way interfered with the use of the street. It was not dangerous to anybody. The boys playing upon the street, however, found this wire a source of some amusement. They grabbed hold of it and tried to climb the pole.

On the 11th day of September, 1929, the plaintiff, a young boy about eleven years of age, started to go up the wire hand over hand, slipped off and was hurt, and he says the telephone company is to blame for it. The courts below have thought so too, because a judgment in his favor for $1,500 has been recovered and affirmed. We do not share this opinion.

The plaintiff says that he went up the wire hand over hand to the height of about fifteen feet, when he tried to put his foot upon a spike on the pole, which gave way, and he fell. The whole question is this: Could the company, lawfully using the streets in changing its poles and doing work upon them, reasonably anticipate that by a wire or a rope hanging down loosely from the cross-bar children in the neighborhood could or would be injured? The wire did not fall on anybody, was not charged with electricity; it was just like an ordinary painter’s rope hanging down from a scaffold or from any other contrivance used by worldng men. Touching it, handling it, striking it would be harmless. Neither was it incumbering the sidewalk or interfering with travel. True, the wire had been there for some time, children had been playing upon it, and the company had been notified, but we think it is carrying the liability toward children in the streets entirely too far to say that the company in this instance in the exercise of care could have foreseen that boys would try to climb the wire and fall off. That the wire was a danger or a dangerous contrivance or might do harm to people in the street was not reasonably foreseeable.

With equal reason it might be said that the old pole should have been taken down, not left standing in the street for fear boys would climb it. If it had remained so long as to really be a nuisance, even then the company would not be hable to boys who fell off trying to climb it. Of course there would be liability if such a pole or wire fell and injured anybody. Many things are in the street which may be dangerous to children if they attempt to play in and about them, yet there is no liability unless the person who put them there had reason to know and anticipate danger arising therefrom. (O’Callaghan v. Commonwealth Engineering Corp., 247 N. Y. 127; Johnson v. City of New York, 208 N. Y. 77.)

The plaintiff introduced evidence that the old pole was rotting at the bottom, but no one claimed that this had anything to do with the accident.

For these reasons we conclude that the judgment of the Appellate Division and that of the Trial Term should be reversed and the complaint dismissed, with costs in all courts.

Pound, Ch. J., Lehman, O’Brien, Hubbs and Crouch, JJ., concur; Kellogg, J., not voting.

Judgments reversed, etc.


text:
    The People of the State of New York, Respondent, v. Max Parkin, Defendant, and Concord Casualty and Surety Company, Appellant. (Two cases.) The People of the State of New York, Respondent, v. Marcel Poffe, Defendant, and Concord Casualty and Surety Company, Appellant.

      (Argued January 22, 1934;
    decided February 27, 1934.)

      J. Sidney Bernstein, Arthur A. Birnkrant and Fred Flatow for appellant.
    An application for a remission is addressed to the sound judicial discretion of the court. (Code Crim. Proc. § 597; People v. Cohen, 245 N. Y. 419; People v. Phelan, 219 App. Div. 80.) This discretion was properly exercised by the Special Term in favor of the remission of the forfeitures. (People v. Pugliese, 80 Misc. Rep. 75; 164 App. Div. 900; People v. Perlstein, 7 N. Y. Supp. 662.) The surety company was prevented from surrendering the defendants only by reason of their death. (People v. Wissig, 7 Daly, 23; People v. Perlstein, 7 N. Y. Supp. 662; People v. Rich, 36 App. Div. 60; Walsh v. Schultz, 13 Daly, 132; Buckley v. Colton, 1 Johns. 515; Lofflin v. Fowler, 18 Johns. 335; Woolfolk v. State, 10 Ind. 532; Mather v. People, 12 Ill. 9; State v. McNeil, 18 N. J. L. 33; State v. Traphagen, 45 N. J. L. 134; Bank of Mt. Pleasant v. Poliak, 1 Ohio, 36; State v. Cone, 32 Ga. 663.) The People have not been deprived of any rights or prejudiced by the non-appearance of the defendants. (People v. Flegenheimer, 15 N. Y. St. Repr. 376.) The application to the court below having included a showing of no loss of rights to the People, the District Attorney’s certificate that the People have lost no rights is not a condition precedent to the remission of the forfeiture. (Matter of Sayles, 84 App. Div. 210; People v. Levy, 169 App. Div. 571; People v. Abrams, 172 App. Div. 577; People v. Cohen, 229 App. Div. 515; 255 N. Y. 530; People v. Handel, 238 App. Div. 596.) The order appealed from is reviewable by the Court of Appeals. (Gang v. Gang, 253 N. Y. 356; Civ. Prac. Act, § 602; Wetmore v. Wetmore, 162 N. Y. 503; People ex rel. Feeny v. Board of Canvassers, 156 N. Y. 36; Moore v. Vulcanite Portland Cement Co., 220 N. Y. 320; Matter of Shonts, 229 N. Y. 374.)

      William Copeland Dodge, District Attorney (Félix C. Benvenga and Joseph F. McLoughlin of counsel), for respondent.
    The order appealed from is not reviewable by the Court of Appeals. (People v. Bennett, 136 N. Y. 482; People v. Young, 151 N. Y. 651; People v. Clark, 168 N. Y. 676; People v. Baker, 168 N. Y. 677; People v. Russell, 171 N. Y. 655; People v. Levy, 217 N. Y. 672; People v. DiMeo, 224 N. Y. 612; White v. Benjamin, 150 N. Y. 258; Reilley v. President of D. & H. C. Co., 102 N. Y. 383.) The power to remit a forfeiture is discretionary and relief should not be granted where the surety is engaged in the business of furnishing bail bonds. (People v. Spear, 1 N. Y. Cr. Rep. 358; People v. Heir, 152 App. Div. 179; People v. Schwarze, 168 App. Div. 124; People v. DiMeo, 181 App. Div. 893; 224 N. Y. 612; People v. Phelan, 219 App. Div. 80; People v. Licenziata, 230 App. Div. 358; 256 N. Y. 534; People v. Grundy, 218 App. Div. 541; People v. Cohen, 229 App. Div. 515; 255 N. Y. 530.) The District Attorney’s certificate is a condition precedent to the remission of a forfeiture. (People v. Abrams, 172 App. Div. 577; People v. Grundy, 218 App. Div. 541; People v. Martin, 225 App. Div. 572; People v. Cohen, 229 App. Div. 515; 255 N. Y. 530; Consolidation Act [L. 1882, ch. 410], §§ 1480, 1482, 1483; People v. Bennett, 136 N. Y. 482; Matter of Sayles, 84 App. Div. 210.) The death of a principal does not, as a matter of law, entitle the surety to a remission. (Taylor v. Taintor, 83 U. S. 366; De Orozco v. United States, 237 Fed. Rep. 1008; United States v. Van Fossen, 1 Dill. 406; People v. Manning, 8 Cow. 297; People v. Dale, 169 App. Div. 940; People v. Rich, 36 App. Div. 60; People v. Meyer, 9 Misc. Rep. 726; People v. Perlstein, 7 N. Y. Supp. 662; Paynes v. State, 45 Ala. 52; Adler v. State, 35 Ark. 517; State v. Stanley, 104 Kan. 475; McKee v. Comm., 7 Ky. Law Rep. 286; People v. Tubbs, 37 N. Y. 586.)
   Pound, Ch. J.

On January 25, 1933, the defendant Marcel Poffe was admitted to bail in the sum of $10,000 to answer an indictment for assault. On February 23, 1933, the defendant Max Parkin was admitted to bail in the sum of $20,000 to answer an indictment for robbery, assault and grand larceny, and in the sum of $10,000 to answer an indictment for assault. In each case the Concord Casualty and Surety Company executed the bond as surety.

The cases against these defendants appeared on the trial calendar of the Court of General Sessions for trial on February 7th (Part 2), February 14th (Part 2), February 23d (Part 2), May 5th (Part 6). and May 8th (Part 6), on each of which occasions the defendants appeared, but the People were not ready.

On May 18, 1933, the cases again appeared on the trial calendar of Part 6 before Judge Corrigan, but the defendants were not present in person. Their attorney, Mr. Michael I. Winter, at that time, however, submitted an affidavit of his engágement in another court and applied for an adjournment, but the application was denied and forfeiture of the bonds was directed.

An application for the remission of the forfeiture was made under sections 597 and 598 of the Code of Criminal Procedure. An application for the granting of such relief is addressed to the discretion of the court and should be exercised only under exceptional circumstances and to; promote the ends of justice. (People v. Cohen, 245 N. Y. 419, 421.) Facts which address themselves to the discretion of the court in this case are as follows: The failure of the principals to appear in court on May 18th was due to the fact that their attorney had advised them that it would not be necessary for them to appear as he would make an application for an adjournment which he expected would be granted; that negotiations had been entered into to have the defendants appear in court on June 12th; that prior to June 10, 1933, defendants were killed; that if defendants had been alive they would have been in court on June 12th; that no one was prejudiced by the failure to produce the defendants on the day when the order of forfeiture was made and that the People have lost no rights by reason of the delay.

Appellant first contends that as matter of law the death of the defendants exonerated the bail as the surety company was prevented from surrendering the defendants by reason of their death. The court doubtless has power, in the exercise of discretion, to remit a forfeiture in such a case, but the surety is not entitled to such remission as matter of right. It is only where the principal dies before the day of performance that bail is exonerated. (Taylor v. Taintor, 83 U. S. 366, 369; State v. Stanley, 104 Kan. 475.) A forfeiture has not, as a rule, been remitted where the accused was not in custody and produced. (People v. Heit, 152 App. Div. 179.) In People v. Wissig (7 Daly, 23) the court made some pertinent observations to the effect that the ends of justice would in no way be served by requiring the surety to pay the penalty of the bond when death occurs after forfeiture. This obiter, while not a rule of law, might be a guide to judicial discretion.

The Consolidation Act (Laws of 1882, ch. 410, §§ 1482, 1483) requires a certificate of the District Attorney that the People of the State of New York have lost no rights by reason of the failure of a surety to produce a principal in compliance with the terms of a recognizance given by them, and that by reason of the principal being produced the People of the State of New York are in as good a position to prosecute the principal as when such failure occurred. Of course no such certificate is or can be presented here. The principals cannot be produced. They are beyond the reach of earthly process or power. Under such circumstances, the court may proceed without the certificate. Such has been the holding of the lower courts where the District Attorney has arbitrarily refused to grant a certificate. (People v. Handel, 238 App. Div. 596.) A fortiori when by reason of death, the District Attorney cannot certify that the principals have been produced.

The surety may not claim relief as matter of right.

Under the letter of the law, no relief may be granted unless the District Attorney can certify that the defendants are in custody and may be produced. The court may, however, exercise its discretion. The question now arises as to the jurisdiction of this court to review the reversal by the Appellate Division of a discretionary order. Under the Constitution (Art. VI, § 7, as amd. Nov. 3, 1925) the court may review the facts when the Appellate Division in reversing a final order in a special proceeding makes new findings of fact. Such findings may, on appeals from orders, be implied and need not be separately stated. (Matter of Flagler, 248 N. Y. 415, 420.) Here the reversal is not on the law but the appeal is properly before us on the facts. It seems that the ends of justice would in no way be preserved by requiring the surety to pay the penalty where there was an excusable default, an arrangement to produce the principals in court on a certain day and death of the principals before that day. The decision of the Appellate Division takes $40,000 from the surety company only because its efforts to produce the defendants have been frustrated by their violent and sudden death.

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

Crane, O’Brien, Hubbs and Crouch, JJ., concur; Lehman, J., dissents; Kellogg, J., not voting.

Ordered accordingly.


text:
    Fred B. Osborn, Respondent, v. Arthur E. Cline, Appellant.
    (Submitted January 12, 1934;
    decided February 27, 1934.)

      T. Arthur Hendricks for appellant.
    The trial judge erred in his charge to the jury in holding as a matter of law that the relation of bailor and bailee existed. (Van Wagoner v. Buckley, 148 App. Div. 808; Cowen v. Pressprich, 202 App. Div. 796; Thompson v. Mobile Light & R. Co., 211 Ala. 525; Lord v. Oklahoma State Fair Assn., 95 Okla. 294; Hogan v. O’Brien, 123 Misc. Rep. 865; 212 App. Div. 193.) The trial judge erred in charging that the question of the negligence of plaintiff’s wife was to be given no consideration. (Schneps v. Sturm, 25 Misc. Rep. 168; Trowbridge v. Schrovin, 5 Daly, 11; Wall v. Gillin Printing Co., 21 Misc. Rep. 649; Wamser v. Browning, King & Co., 187 N. Y. 87; Pattison v. Hammerstein, 17 Misc. Rep. 375.)

      John M. Reynolds for respondent.
    The relation between the plaintiff and defendant was that of bailor and bailee. Upon the evidence the question was one of law and the charge presents no error. (Galowitz v. Magner, 208 App. Div. 6; Smith v. Economical Garage, Inc., 107 Misc. Rep. 430; Wilson v. Wyckoff, 133 App. Div. 92; 200 N. Y. 561.) There was no error in the action of the trial judge in charging that the question of contributory negligence was not before the court. (Lax v. Onion Ry. Co., 142 Misc. Rep. 545; Fischer v. International Ry. Co., 112 Misc. Rep. 212; Swartout v. Van Auken, 132 Misc. Rep. 89; Van Blaricom v. Dodgson, 220 N. Y. 111.)
   Crane, J.

Arthur B. Cline, the defendant, operated in Franklin street, Watertown, a gas and service station and in connection therewith an open air parking ground for automobiles.- There was an entrance and an exit on each side of a small building which was approximately in the center of the front of the lot and the space used for parking was in the rear of the building. In connection with the service station the defendant operated a taxi service and a store. The yard was fifty feet wide and one hundred and fifty feet deep. The usual fee charged by the defendant for parking by the day was twenty-five-cents. The men operating the gas tank were also charged with the duty of looking after the cars. In various places on the walls inclosing the yard were printed signs reading, “ We are not responsible for loss or damage.” There was no system of checking, so that people coming for their cars took them and drove away. There were means of access to the yard from other points than the main front entrance. All the men at the station had other duties than that of looking after the cars. The defendant had instructed his employees to always tell persons who parked their cars to lock them.

Fred B. Osborn, a resident of the village of Adams, owned a Nash coupe automobile. His wife drove it. On June 25, 1929, she with her sister, Nancy Filson, drove into Watertown about two o’clock in the afternoon and parked in the defendant’s yard; An employee named Bushnell told her where to put it. Mrs. Osborn says that she asked Bushnell if it was necessary to lock the car and that he said no, it was perfectly safe, that there were men around all the time who would watch it. This Bushnell denied, saying that he told her that it was necessary, that it was up to her, and referred her to the sign on the wall. Anyhow, she did not lock it and left the key in the switch. The sign, Mrs. Osborn states, she did not notice. When she came back at three o’clock the car was gone — stolen. Later the car was found in a ditch badly damaged. This action was commenced to recover the cost of the repairs on the ground that the defendant was negligent as a bailee. The defendant insisted that he was not a bailee, that he simply rented out space for parking and that any loss was due to the negligence of the plaintiff’s wife in failing to lock the car and take the key with her.

The trial judge charged the jury as a matter of law that Mrs. Osborn was a bailor and the defendant a bailee, so that the latter was bound to exercise that degree of care and prudence which a reasonably careful man would take for the safety of his own property. He also refused to permit the jury to consider the question of Mrs. Osborn’s contributory negligence.

In both these particulars the judge was in error.-

A person who parks his car in the street of course takes the risk of leaving it unattended. So likewise when it is left in adjoining lots or vacant places. Common knowledge informs us that there are many spots in every city and village where open spaces are used for parking at a very small fee, frequently with only a boy or man in charge to collect the fee. This is better than parking on a busy street. Circumstances vary and instances are graded all the way up to the housed garage where cars may be left at more expense. Whether a person simply hires a place to put his car or whether he has turned its possession over to the care and custody of another depends on the place, the conditions, and the nature of the transaction. (Galowitz v. Magner, 208 App. Div. 6.) We are of the opinion that the jury should have passed upon this question in this case and that the judge could not decide it for himself as a matter of law.

One of the essential elements of a bailment is that the property be taken into the possession of the bailee. (Van Wagoner v. Buckley, 148 App. Div. 808; Cowen v. Pressprich, 202 App. Div. 796.) If the jury believed the defendant and his witnesses the car never left Mrs. Osborn’s possession. She was told to lock it, and shown the sign indicating that the defendant assumed no responsibility. This sign might not reheve the defendant for his negligence if he were in fact a bailee, but it was a circumstance to be considered as bearing upon the question whether for a fee of twenty-five cents the defendant merely permitted auto drivers to use his ground. Any house or lot owner may permit for a fee another to put his car on the premises without becoming a bailee or assuming any responsibility for its safety. It all depends upon the facts. (See Thompson v. Mobile Light & R. R. Co., 211 Ala. 525; Lord v. Oklahoma State Fair Assn., 95 Okla. 294; Hogan v. O’Brien, 123 Misc. Rep. 865; affd., 212 App. Div. 193.)

Assuming, however, that a bailment were established as a matter of fact, the general rule is that the negligence of the bailor contributing to the loss will exonerate the bailee. (Wamser v. Browning, King & Co., 187 N. Y. 87.) Mr. Osborn would be charged with the negligence of his chauffeur had he left the car with the defendant. Why not the wife? If she left the car unlocked, failing to take the key with her after being told to do so, negligence would not be far to find. The plaintiff avoided this question on the trial by assuming that the wife was his (Mr. Osborn’s) bailee and that, therefore, her negligence could not be attributed to him. The law is that a bailor of property is not liable for the contributory negligence of the bailee if his property is damaged by reason of the joint fault of the bailee and a third person, unless there be some element of principal and agent or master and servant involved in the relationship. (Van Blaricom v. Dodgson, 220 N. Y. 111; Bowen v. N. Y. C. & H. R. R. R. Co., 202 Mass. 263; 6 C. J. 1168.)

We are of the opinion that Mrs. Osborn was her husband’s agent on this occasion or at least the question should have been submitted to the jury and not determined by the judge.

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

Pound, Ch. J., Lehman, O’Brien, Hubbs and Crouch, JJ., concur; Kellogg, J., not voting.

Judgments reversed, etc.


author: O’Bbien, J.

text:
    Frances London, Appellant, v. Charles E. Toney, Respondent.
    (Argued January 16, 1934;
    decided February 27, 1934.)

      Bernard Trencher and Julius D. Tobias for appellant.
    The defense of usury is not available unless there is a loan, or a forbearance of a loan. (Frank v. Davis, 6 N. Y. Supp. 144; 127 N. Y. 673; Orvis v. Curtiss, 157 N. Y. 657; Dry Dock Bank v. American Life Ins. & Trust Co., 3 N. Y. 344; Van Dyk v. Dujardin, 213 App. Div. 791; Forgoiston v. McKeon, 14 App. Div. 342; McAnsh v. Blauner, 222 App. Div. 381; 248 N. Y. 537; Florida Land Holding Corp. v. Burke, 135 Misc. Rep. 341; 229 App. Div. 853; Real Estate Trust Co. v. Keech, 69 N. Y. 248; Tierney Sons, Inc., v. Bajowski, 233 App. Div. 766; 258 N. Y. 563; Patterson v. Birdsall, 64 N. Y. 294.)

      Alan L. Dingle and Aiken A. Pope for respondent.
    The extension agreement was void for usury as to the guarantor thereof. (Cam v. Lancaster, 169 N. Y. 357; Winsted Bank v. Webb, 39 N. Y. 325; Patterson v. Birdsall, 64 N. Y. 294; Wyeth v. Braniff, 84 N. Y. 627; Baldwin v. Moffett, 94 N. Y. 82; Perkins v. Hall, 105 N. Y. 539; Real Estate Trust Co. v. Keech, 69 N. Y. 248; Russell v. Nelson, 99 N. Y. 119; Henry & Co. v. Fry, 78 Misc. Rep. 130; Rosa v. Butterfield, 33 N. Y. 665; Heidenheimer v. Mayer, 42 N. Y. Super. Ct. 506.) The extension agreement was an agreement to forbear within the meaning of the usury statute. (Cam v. Lancaster, 169 N. Y. 357.)
   O’Bbien, J.

Plaintiff’s assignor, Kentucky Holding Co., Inc., held a purchase-money mortgage on real estate belonging to defendant but recorded in his wife’s name. The bond and mortgage had been executed by a predecessor in title but, when defendant’s wife had acquired the record title, neither she nor defendant assumed liability for the debt. On June 11, 1929, the sum of $20,700 was due and on that date the mortgagee and defendant’s wife entered into an agreement whereby she assumed the indebtedness represented by the bond and mortgage and the mortgagee extended the payment of her indebtedness to January 1, 1932. On the same day defendant made this agreement: In consideration of Kentucky Holding Co., Inc., extending the payment of the above described mortgage to my wife, Lily R. Toney, I, Charles E. Toney hereby guarantee payment of the balance due on the bond and mortgage described herein, to wit, the sum of $20,700 with interest from May 15, 1929.” In addition the mortgagee demanded and defendant executed notes for $1,500. Defendant’s wife defaulted and this action is brought on defendant’s guaranty of the debt which his wife had assumed. The defense is usury. The trial court and the Appellate Division have unanimously sustained this defense.

Section 370 of the General Business Law (Cons. Laws, ch. 20) provides that the rate of interest upon the “ loan or forbearance of any money, goods, or things, in action ” shall not be greater than six per cent, and section 373 provides that where any greater sum shall be reserved or taken for the “ loan or forbearance of any money, goods or other things in action ” the agreement shall be void.

The purchase-money mortgage was concededly valid. The issue is whether the extension and guaranty agreements were usurious. (Real Estate Trust Co. v. Keech, 69 N. Y. 248; Church v. Maloy, 70 N. Y. 63; Ganz v. Lancaster, 169 N. Y. 357.) The two agreements must be regarded as constituting a single transaction.

Prior to the execution of the agreements neither defendant nor his wife was indebted to plaintiff or her assignor. Defendant was merely the owner of real estate incumbered by a mortgage and his wife was merely the holder of the record title. By these agreements the mortgage lienor forebore for a time the payment of a money debt which was then due and which would have discharged the lien and it forbore the existing right in foreclosure. Defendant’s wife personally assumed the debt and agreed to pay it and defendant made himself secondarily hable. The consideration for forbearance of this money and of the present right to enforce the debt was the assumption of that debt by defendant and his wife and the agreement by defendant to pay more than the legal rate of interest on the debt. Unless a distinction, never heretofore recognized by this court, respecting the charge of excessive interest for the extension of the payment of a debt secured by a purchase-money mortgage and one secured by another kind of mortgage, is now to be created, the reasoning on the facts in Ganz v. Lancaster (169 N. Y. 357) is in every respect applicable and stamps this transaction as usurious. Our decision in Church v. Malay (supra) rests upon facts so similar to these at bar, that no distinction in principle is possible.

Appellant’s argument is based largely upon the proposition that where there is forbearance of money but no loan there can be no usury and that, since a purchase-money mortgage is not given as security for a loan but merely represents security for a deferred payment, cases of forbearance of money where there is the assumption of a debt other than a debt represented by a purchase-money bond and mortgage and the extension of its payment, have no application. The contention is that in the original transaction, resulting in a purchase-money mortgage contract, are involved no loan and no forbearance; no one borrows and no one desists or refrains from collecting money then due.

Although instances of usury occur more often in loans than in other transactions, a loan, as that term is generally understood, is not a prerequisite of usury. In Van Schaick v. Edwards (2 Johns. 355, 364), a case involving the validity of notes given for the purchase of land, distinguished judges interpreted a usury statute which forbade excessive interest for the loan or forbearance of moneys, or other things actually lent or sold.” In the opinion rendered by Kent, J., occurs this summary of the law: “ Usury is taking more than the law allows, for forbearance of a debt; and whenever a debt is created, and there is an agreement to pay more than legal interest for forbearance of payment of it, such agreement is usurious (1 Ves. Jun. 531; Cowp. 115). If a loan be necessary to constitute a usurious contract, yet it is not necessary to the creation of a loan, that the money should be paid on one hand, and received on the other; for the circumstance of a man’s money remaining in another’s hands, in consequence of an agreement for that purpose, will constitute a loan (Cowp. 113). In the cases of Floyer v. Edwards (Cowp. 112) and of Spurrier v. Mayoss (1 Ves. Jun. 527) no doubt seems to have been entertained in the court of K. B. or by the commissioners in chancery, but that upon the sale of lands or goods, an agreement reserving excessive interest for forbearance of payment of a debt might be usurious. To make an agreement usurious, it was held necessary only that there should be a debt created, on such sale, and a corrupt agreement, to take illegal interest thereon, for forbearance of payment,” (p. 364). Another judge expressed the opinion that the forbearance, or giving time of payment for a debt, is in substance a loan,” (p. 357). A third member of the court assumed that “ the statutes of usury extend to cases of forbearance, where there has been no loan,” (p. 369). The mortgage which was the subject of litigation in Church v. Maloy (70 N. Y. 63) was, as the case on appeal discloses, given to secure part payment of the purchase money of the mortgaged premises. Like the one at bar, it was a valid purchase-money mortgage. An agreement for an extension of time, based upon a consideration which included more than the legal rate of interest, was held to be void for usury. No substantial distinction can be discovered between the principle of that case and the one at bar. In Swartwout v. Payne (19 Johns. 294) a note was given as part consideration for the sale of land. When it became due the parties entered into an agreement whereby the holder forbore the debt and consented, for an excessive consideration, to accept a note of renewal. This second note was void for usury. The principle of Crippen v. Heermance (9 Paige Ch. 211) is peculiarly germane to the facts before us. A purchaser of land on installments obtained an extension of time within which to make the final payment. The transaction by which a pretended resale was made was construed as a mere cover for obtaining more than legal interest for the forbearance of a debt.

Appellant’s counsel quotes many excerpts from judicial opinions in which the subject of loans is discussed, and cites them as authority for a contrary doctrine. In those opinions, however, and in the actual decisions the emphasis is placed upon loans of money as distinguished from loans of goods. Loans of money and forbearance of money are the things affected by our usury statute. “ To excerpt a single sentence from a judicial opinion and construe and interpret it apart from the context of the opinion in which it is found, and without regard to the subject matter under discussion, is not. only unreasonable, but, at times, leads to erroneous conclusions.” (Fealey v. Bull, 163 N. Y. 397, 401.) In Dry Dock Bank v. American L. Ins. & T. Co. (3 N. Y. 344, 354) the court discerned a covert loan of money disguised as an exchange of securities. The only question was whether the transaction constituted a loan of money. The discussion in the opinion extended over a wide range, the general effect of which is that the statutory use of the word loan ” means, of course, a loan of money and not a loan of goods or credit. That part of the statute relating to loans is, in the language of the court, applicable, only, to those loans, which are in substance and effect, loans of money.” The actual decision did not proceed beyond the point of holding that, in the case then before the court, there was in fact a usurious loan of money. Forbearance was not an issue in the case, but the court observed that the terms interest ” and “ forbearance ” cannot be predicated on any other than a loan of money actual or presumed, thus coming within the doctrine of Van Schaick v. Edwards (supra). In Meaker v. Fiero (145 N. Y. 165, 170) there was no loan and no forbearance. There was merely a change of securities which was held as a fact not to amount to a loan of money. Although some statements in the opinion standing by themselves and read without relation to the facts in that case and without reference to other expressions in the opinion, might conceivably lead to an inference of an intent to lay down a rule that usury can never occur in the absence of an actual loan, we feel confident that there could have been no such purpose. The statute was correctly interpreted by this statement: “ It is a fundamental principle governing the law of usury that it must be founded on a loan or forbearance of money. If neither of these elements exists, there can be no usury, however unconscionable the contract may be.” By necessary implication the existence of either element may form the basis of usury. In Orvis.v. Curtiss (157 N. Y. 657) the opinion restated the rule and adopted some of the observations embraced in parts of the discussion in Meaker v. Fiero. The facts in the Orvis case are such as to demonstrate that there was not only no loan but no forbearance. In a joint venture or partnership for the purchase of stocks one of the adventurers guaranteed the other a certain profit and also guaranteed against loss of capital. Bearing in mind the fact that defendant’s argument in the Orvis case amounted to an assertion that the advance of capital to the partnership or joint venture by plaintiff was in fact a concealed loan of money, the references to loans necessarily centered around the pivotal point in the case. Since the advance of capital was neither a lending nor a borrowing, there could be no loan. The opinion dealt with the concrete issue before the court and was not intended as a general essay. In Title Guaranty & Surety Co. v. Klein (178 Fed. Rep. 689) the loan was not one of money but was a loan of government bonds. The language of the opinion must reasonably be read in the light of this fact. The court in applying the law of New York necessarily decided that our usury statute, by the use of the words “ interest ” and “ forbearance ” refers to money and consequently does not cover a loan of bonds. Interest is not deemed to accrue on a chattel. Interest and forbearance do relate to a money debt originating otherwise than by a loan. Struthers v. Drexel (122 U. S. 401) is another instance where the absence of a money loan is emphasized. In that case also no question of forbearance was involved. Our recent decision in Tierney Sons, Inc., v. Bajowski (258 N. Y. 563) is suggested as an authority for appellant, but an examination of the records of this court proves the contrary. The action was in replevin of a lunch wagon and at the Appellate Division (233 App. Div. 766) the question argued related to the effect of charging excessive interest for extending a payment due under a conditional contract of sale. The published report in this court (supra) indicates a decision that the usury statute does not apply to such an extension. The unpublished minutes of this court’s proceedings, however, show that no such issue was decided. We affirmed the judgment on the ground that there was no usury in the original contract and that the action in replevin was based thereon. We expressly left open, as unnecessary for a decision on that record, the question whether the bonuses demanded for the extension agreements constitute usury. In the case now before us, the action is not brought on the bond and mortgage, which, like the conditional contract of sale in that case, are valid, but on the extension and guaranty agreements.

The effect of these decisions, from the opinions in which appellant quotes, is certainly not the establishment of a rule that there can be no usury unless there is an actual loan. The authors of the opinions could not have been unmindful of the type of constructive loan which, within the purview of Van Schaick v. Edwards (supra), is presumed to be created by the forbearance of a debt. This thought runs through all the cases. The statute renders void any contract for the “ forbearance of any money ” whereby is reserved or taken any sum greater than the legal rate of interest. No statute and no decision by this court have been called to our attention by which forbearance of money must, in order to constitute usury, be preceded by an actual loan. The contrary is true. (Church v. Maloy, 70 N. Y. 63; Swarthwout v. Payne, 19 Johns. 294; Crippen v. Heermance, 9 Paige Ch. 211.) The statute deals not only with loans; it regulates forbearance of money. Either a loan of money or a forbearance of money may be usurious. This is what the statute says. The decisions of this court declare that it means what it says.

The judgment should be affirmed, with ccsts.

Pound, Ch. J., Lehman and Crouch, JJ., concur; Crane and Hubbs, JJ., dissent; Kellogg, J., not voting. Judgment affirmed.


text:
    C. Hyland Jones et al., as Executors of Charles H. Jones, Deceased, Respondents, v. Philip L. Morrison et al., Copartners under the Firm Name of Chas. H. Jones & Co., Appellants.

      (Argued January 22,1934;
    decided February 27,1934.)

      Frank C. Laughlin, Stewart W. Bowers and Charles Hallett White for appellants.
    The Appellate Division erred in holding that the purpose of the amended agreement was to indicate that the policy in suit was intended to be the absolute property of the deceased in any and all events. (Earle v. McVeigh, 91 U. S. 503; Village of Rome v. Knox, 14 How. Pr. 268; Fire Department of Troy v. Bacon, 2 Abb. Ct. of App. Dec. 127; Genet v. D. & H. Canal Co., 163 N. Y. 173; Patterson v. Meyerhofer, 204 N. Y. 96; Atwater & Co. v. Panama R. R. Co., 246 N. Y. 519; Clayburgh v. Clayburgh, 218 App. Div. 411;
      Bushey & Sons v. American Ins. Co., 237 N. Y. 24; People ex rel. Wells & Newton Co. v. Craig, 232 N. Y. 125; The Clara, .102 U. S. 200.)

      Herman Aaron for respondents.
    The general language of the amending agreement must yield to the special and particular provisions made with respect to the policy in suit. (348 Madison Ave. Corp. v. Marshall, 212 App. Div. 672; 241 N. Y. 520; Townsend v. Little, 109 U. S. 504.)
   Crane, J.

This appeal relates to a $22,000 life insurance policy taken out in the Connecticut General Life Insurance Company to insure the life of a limited partner, Charles H. Jones. He has died and the money is claimed by his general partners and by the executors of his estate. Who is entitled to it depends entirely upon the partnership agreement. Charles H. Jones was a limited partner having contributed $50,000 to the partnership. He was to get this back at some time and the insurance taken out was to secure the repayment. This is the purpose for the insurance which was carried by the partnership. Chas. II. Jones & Co., composed of Philip L. Morrison, William J. Banigan, as general partners, and Charles H. Jones, as limited partner, dealt in stocks, bonds, notes, drafts, loans and other securities in the city of New York. On January 2, 1928, the partnership articles were executed, wherein it is stated that Charles H. Jones as limited partner contributes $50,000 capital. The agreement is for one year, or to terminate sooner in case of the death of any of the partners. On dissolution the limited partner is to be repaid out of the net assets of the partnership his contribution of $50,000, with interest. To insure or secure this repayment, policies of life insurance were taken out upon the lives of all the partners, the premiums being carried as a partnership expense.

As the $22,000 life policy in the Connecticut General Life Insurance Company is the only one in dispute, our attention will be drawn particularly to that one. The partners agreed as follows:

“ 11. Life insurance on the lives of Philip L. Morrison, William J. Banigan and Charles H. Jones is now outstanding and is to be continued as follows:

“ P. L. Morrison
$22,000. — John Hancock Mutual Life
Ins. Co................Policy 818550
“ $28,000.— Aetna Life Ins. Co....... “ P572485
“ W. J. Banigan
“ $50,000.— Aetna Life Ins. Co....... “ P572445
“ Chas. H. Jones
“ $22,000.— Conn. Gen’l Life Ins. Co.. “ 182170
“ $28,000.— Aetna Life Ins. Co....... “ N566100

Premiums thereon shall be treated as an item of expense of the firm.

“ Such policies have been obtained for the purpose of securing repayment of the Limited Partner’s contribution and have been assigned to such Limited Partner or his executors.

Upon the decease of any one of the partners the proceeds of the policy or policies upon the fife of such deceased partner shall be applied in repayment of any unpaid balance of the Limited Partner’s contribution, and any such proceeds not required for this purpose shall be the property of the firm. The Limited Partner agrees that at any time upon the repayment of his contribution in full, he, or in case he is dead, his legal representative, will assign and deliver to the firm all of the above policies then outstanding. It is agreed that if the contribution of the Limited Partner is repaid in full at any time during his fife, the Limited Partner shall have the privilege of paying to the firm the cash surrender value, if any (as of the date of such repayment) of the policies on his fife, and thereupon all policies on the fife of the Limited Partner shall become his sole property,— and the firm shall have no further interest therein.”

The partnership is now terminated by the death of Charles H. Jones, the limited partner. His estate becomes entitled to the $50,000. The partnership assets are charged with this amount. The partners have carried the life insurance policies in order to secure this $50,000. Does the estate of Mr. Jones get the $50,000 from the surviving partners and also the $22,000, the proceeds of the life insurance policy? We think not. If the estate or the beneficiary gets this sum the surviving partners pay just so much less, as it must be credited on the $50,000; or, to put it in another way, if the surviving general partners have paid the $50,000 they become entitled to the proceeds of this life insurance policy. We cannot read this agreement in any other way. It states that the policies are obtained for the purpose of securing repayment to the limited partner of his contribution and that they have been assigned to him or bis executors for this purpose. The partnership paid all the premiums. Upon the death of any partner the proceeds of the policies on his life “ shall be applied in repayment of any unpaid balance of the limited partner’s contribution.” The limited partner agrees, upon the repayment of his contribution, to reassign all the policies to the firm. The limited partner or his estate has no interest in the policy upon his life or upon the lives of his associates beyond the securing of .the $50,000. When this contribution is repaid all interest in any or all of the insurance policies terminates. This is what the agreement says and this is what the courts must say.

Later the Connecticut General life Insurance policy, with the consent of all parties, was changed from a “ term policy ” to a “ straight fife policy,” which cost more money. The partnership evidently did not desire to pay the additional premium, although they were willing to continue paying the original sum. The premium on the term policy had been $885.06. This was increased for the straight life policy to $1,419.88. The balance Mr. Jones agreed to pay himself, the firm at all times to carry the $885.06 as a firm expense as theretofore. The purpose of this policy and the terms of the agreement were in no way to be changed except in this one particular.

To cover this point the parties executed an additional agreement on the 3d day of August, 1928. It made no changes in the original agreement of January 2, 1928, except to take care of this additional payment of premium and the disposition of the straight fife policy after dissolution, not solely in case of Jones’ death. This supplementary agreement in these particulars reads as follows:

Premiums on the policies of Messrs. Morrison and Banigan and the premium on the $28,000 Aetna Life Ins. Co. Policy N566100 of Mr. Jones shall be treated as items of expense of the firm. Premiums on the $22,000 Conn. Genfl. Life Ins. Co. Policy 182170 of Mr. Jones, which policy was formerly a £ term policy ’ but was converted into a £ straight fife ’ policy upon the payment by Mr. Jones of required additional premiums, shall be paid by the firm in the amount of $885.06 per annum and treated as a firm expense; Mr. Jones shall pay the balance of the premium on said policy in excess of $885.06.

“ All of the above described policies have been obtained for the purpose of securing repayment of the Limited Partner’s contribution. and have been assigned to such Limited Partner or his executors.

Upon the decease of any one of the partners the proceeds of the policy or policies on the life of such deceased partner shall be applied in repayment of any unpaid balance of the Limited Partner’s contribution, and any such proceeds not required for this purpose shall be the property of the firm. The Limited Partner agrees that at any time upon the repayment of his contribution in full, he, or in case he is dead, his legal representative, will assign and deliver to the firm all of the above policies then outstanding, except the $22,000 Conn. Gen’l. Life Ins. Co. Policy 182170 which policy shall be the sole property of the Limited Partner.”

Here • again we have the clear statement that upon the decease of Charles H. Jones (one of the partners) the proceeds of the policies on Ms life shall be applied in repayment of any unpaid balance of the limited partner’s contribution. The Connecticut General Life Insurance Company policy is thus included in tMs disposition for there is no exception to tMs part of the agreement.

What, however, are we to do with the last sentence in tMs paragraph? We must remember that the lives of all the partners were insured for the benefit of Jones. Therefore, when he was paid Ms contribution Ms interest in all the policies terminated. Not so, however, with the Connecticut General Life Insurance Company policy. He had become interested in the continuance of tMs policy for Ms fife so that he was paying part of the premium as well as the firm. Therefore, if he were alive when a settlement with Mm was made, he would want tMs life policy continued, not surrendered. The firm having settled with him would no longer continue to pay on this policy. As to all the other term policies they were to be surrendered to the firm. TMs seems the only rational and consistent explanation of tMs last sentence. The firm was carrying the $22,000 policy by paying the premium of $885.06 annually as a firm expense. If Jones died, the proceeds were to be applied in repayment of Ms contribution. If the firm were dissolved during Ms lifetime, of course there would be the proceeds of no policy on Ms life from wMch Ms contribution could be repaid.. Yet the general partners would owe him $50,000, and it was agreed that if tMs $50,000 were paid he could have the straight life policy, need not surrender it with the others; it would be Ms. Dissolution might come from other causes than the death of Jones —■ by-agreement, expiration of the articles or the death of Morrison or Banigan. Should the latter die, Jones got his $50,000 from Banigan’s life insurance in the Aetna. That would settle Jones’ account. Then he, or, if he subsequently died, his executors, would surrender all the policies except the $22,000 in the Connecticut General which was to belong to Jones after such settlement. This seems plain enough and is only complicated by the terse and limited manner of expression in the agreement. The fundamental provision, that the policies on Jones’ life, if dissolution came by reason of bis death, should pay his contribution, was not altered. A surmise as to the reason: — Jones had established the business; he was leaving it to the younger men and becoming a limited partner. His capital he left in the business, or a part of it. How was his estate to be paid in case he died? The young men insured his life and carried the insurance. This was security for Jones and was reducing the risk for the younger men. The purpose seems clear and we should not now frustrate it.

Note that the $22,000 policy shall be the sole property of the limited partner,” not the estate of the partner or his executors.

We, therefore, hold that the defendants are entitled to the proceeds of this policy and not the executors.

The judgment below should, therefore, be reversed, without costs, and judgment directed in favor of the defendants in accordance with this opinion.

Pound, Ch. J., Lehman, O’Brien and Crouch, JJ., concur; Kellogg and Hubbs, JJ., not voting.

Judgment accordingly.


text:
    In the Matter of Walter J. Lawrence, Respondent, against Village of Mamaroneck, Appellant. In the Matter of Samuel Cohen et al., Respondents, against Village of Mamaroneck, Appellant.
    (Argued January 23, 1934;
    decided February 27, 1934.)

      Anthony Sansone for appellant.
    Under the Village Law (Cons. Laws, ch. 64) damages to real property arising out of a change of grade shall be a charge upon the municipality chargeable with the maintenance of the street or highway in question. (Cons. Laws, ch. 64, § 159, subd. 2; Cons. Laws, ch. 25, § 170.)

      Sidney A. Syme for Walter J. Lawrence, respondent.
    The repeal of section 172 of the Highway Law (Cons. Laws, ch. 25) is not material. (Van Dyne v. Village of Seneca Falls, 227 App. Div. 140.) The village of Mamaroneck is solely responsible to the petitioner for any damages for the change of grade in front of the petitioner’s property. (Matter of Rogers v. Village of Cato, 188 App. Div. 813; Matter of Dupont, 217 N. Y. 612; Matter of Barnes, 216 N. Y. 646; Matter of Moulton, 167 App. Div. 953; 216 N. Y. 647.) Statutory construction demonstrates that the policy of the law that a village is responsible for the maintenance of its streets has not been changed. (Matter of Dupont, 217 N. Y. 612; Matter of Barnes, 216 N. Y. 646; Matter of Moulton, 216 N. Y. 647; Matter of Torge v. Village of Salamanca, 176 N. Y. 324; Matter of Youker, 217 App. Div. 347.)

      John J. Bennett, Jr., Attorney-General (Charles E. McManus of counsel)-, for Commissioner of Highways of the State of New York.
    The village is liable for a change of grade in the construction or reconstruction of a State or county highway within a village. (Matter of Barnes, 216 N. Y. 646; Matter of Moulton, 216 N. Y. 647; Matter of Dupont, 217 N. Y. 612.) The amendments to section 170 of the Highway Law by Laws of 1929, chapter 459, do not place liability for change of grade in village streets upon the State and reheve villages from such liability pursuant to section 159 of the Village Law. (Warner v. State, 132 App. Div. 611; Matter of City of Utica, 73 Hun, 256; Denton v. State, 72 App. Div. 248; People v. Coler, 166 N. Y. 1; Hunter v. Pittsburgh, 207 U. S. 161; Tice v. Atlantic Constr. Co., 52 App. Div. 284; People ex rel. Carlisle v. Bd. of Supervisors, 217 N. Y. 424; Allen v. Village of Holley, 226 App. Div. 294.)

      Enos Throop Geer for Samuel Cohen et al., respondents.
    The first separate and distinct defense in appellant’s answer was properly stricken out. (Matter of Torge v. Village of Salamanca, 176 N. Y. 324; McMullen v. Village of Marlborough, 163 App. Div. 73; Matter of Barnes, 216 N. Y. 646; Matter of Moulton, 216 N. Y. 647; Matter of Dupont, 217 N. Y. 612; Village of Hudson Falls v. State, 111 Misc. Rep. 304.)
   Crane, J.

“ Under the settled law of this state damage caused to an abutter by a change of the grade of a, street by the municipal authorities was damnum absque injuria. (Radcliff’s Exrs. v. Mayor, etc., of Brooklyn, 4 N. Y. 195; Heiser v. Mayor, etc., of N. Y., 104 N. Y. 68.) The hardship of this rule, however, was early appreciated and legislation was passed to secure abutters who improved their property on the faith of the established grade of a street from alteration of that grade without compensation. So, in 1883, a statute (Chap. 113) enacted that whenever the grade of any street or highway in any incorporated village should be changed so as to injure or damage the buildings or real property adjoining such highway, the owners thereof might apply to the Supreme Court for the appointment of three commissioners to ascertain and determine their damages, which damages should be a charge on the village, town or other municipality chargeable with the maintenance of the street or highway so altered or changed.”

These words are taken from the opinion of this court in Matter of Torge v. Village of Salamanca (176 N. Y. 324, 327), decided in 1903.

Chapter 113 of the Laws of 1883 reads as follows:

Section 1. Whenever the grade of any street, highway or bridge in any incorporated village in this state shall be changed or altered so as to interfere in any manner with any building or buildings situate thereon, or adjacent thereto, or the use thereof, or shall injure or damage the real property adjoining such highway so changed or altered, the owner or owners of such building or real estate may apply to the supreme court in the judicial district in which such property is situated for the appointment of three commissioners to ascertain and determine the amount of damage sustained thereby; due notice of such application shall be given to the person or persons having competent authority to make such change or alteration.

ml* *1* «2* *1* *2> *2* •J5 «]* *¡1 my* *f*

“ § 3. All damages ascertained and determined under the provisions of this act, together with the costs of such proceedings, shall be a charge upon the village, town or other municipality chargeable with the maintenance of the street, highway or bridge so altered or changed. * * * * * * * >>

These provisions have been carried forward into the Village Law (Cons. Laws, ch. 64, § 159, subd. 2), so that from 1883 down to date a village has been liable to an abutter for the damage done by change of grade of the highway, unless the Legislature intended to modify this law by chapter 459 of the Laws of 1929.

The liability of the village does not seem to have been made dependent upon that part of the statute relating to the maintenance of the street. The liability and the payment of damages appear to have been distinct considerations. All damages, it is said, shall be a charge upon the village, town or other municipality chargeable with the maintenance of the street, highway or bridge so altered or changed. At no time do we find a village solely chargeable with the maintenance of all streets, highways or bridges within its precincts. Prior to the enactment of chapter 459 of the Laws of 1929, section 172 of the Highway Law (Cons. Laws, ch. 25) provided that each town for the maintenance and repair of the State and county highways must pay fifty dollars for each mile or major fraction of a mile of the total mileage of State and county highways within the town. It further provided that each incorporated village for such maintenance and repair should pay at the rate of one and one-half cents for each square yard of pavement of these improved highways maintained by the State within the corporate limits.

The claim of the appellant is that the cases which sustained the liability of the village for damages caused through change of grade were based upon the theory or the fact that the village was chargeable with the maintenance of the highway changed. None of the cases establishing the village’s liability considered this the determining factor. (Matter of Torge v. Village of Salamanca, supra; McMullen v. Village of Marlborough, 163 App. Div. 73; Matter of Barnes [Cuba Village], 216 N. Y. 646; Matter of Moulton [Cuba Village], 216 N. Y. 647.) From a reference to the Appellate Division decision in these cases against Cuba Village (167 App.1 Div. 953), it will be seen that the attention of the court was. particularly called by the dissenting opinion to the fact that the village was not chargeable with the maintenance of the highway in question, yet the Appellate Division and this court upheld the liability of the village for the damages caused by the change of grade. (See, also, Matter of Dupont [Village of Port Henry], 217 N. Y. 612.)

At no time was the village ever charged with the full cost and maintenance of State highways within its territory but was only required to pay for their maintenance and repair a fixed rate of one and one-half cents for each square yard of surface of such improved highway, although the cost of the maintenance and improvement to the State might have far exceeded this fractional assessment. For'nearly fifty years the law as well as the policy of this State has been to charge the villages with the damage caused by the change of grade in a highway.

The appellant claims, however, that in 1929 a change was made in the Village Law by indirection or by implication which not only relieved the villages of this burden but failed to provide any other relief for the abutting owner damaged by change of grade of a State or county highway. We do not understand that chapter 459 of the Laws of 1929, repealing section 172 of the Highway Law, and amending section 170, caused any such change in section 159, subdivision 2, of the Village Law. This amendment relieved the villages of the duty to pay anything toward the cost and maintenance of State and county highways. The maintenance and repair of improved State and county highways in towns and incorporated villages, by chapter 459 of the Laws of 1929, came under the direct supervision and control of the Superintendent of Public Works and he became responsible therefor. The cost of such maintenance and repair is to be borne wholly by the State and to be paid for from moneys appropriated therefor by the Legislature. This did not, however, change, nor was it intended to change, the provisions of section 159 of the Village Law regarding the liability of villages for the change of grade in such highways. True it is that the clause in this section saying that all damages ascertained shall be a charge upon the village, chargeable with the maintenance of the highway so altered or changed, creates some confusion in the law. The village was never chargeable with the whole cost of the maintenance and repair of State and county highways. Perhaps for this reason the clause was of little effect. Now the cost and maintenance are placed entirely upon the State. The appellant reasons that by this change the village of Mamaroneck as well as other villages is relieved not only of this burden of maintenance and repair but of liability for change of grade. This change in the Village Law, if it is to be made, results from implication, not from direct repeal. Never was it the intention of the Legislature to accomplish such a purpose,' and, after fifty years of a remedial right to an abutting owner, to leave him without any remedy. It is conceded that unless the village pays for the damage caused by change of grade, neither the State, county nor town is hable; the abutting owner is without remedy. Had the Legislature intended this complete turn-about in public policy and this radical change in the law it would have said so directly and specifically, not leaving the repeal to inference or implication.

A reference to chapter 365 of the Laws of 1931, which added a new subdivision to section 159 of the Village Law, indicates that the Legislature considered the other provisions of section 159 as still in force and effect. In 1932 a bill was introduced in the Assembly “ repealing subdivision two of section 159 of the Village Law, relating to damages sustained in changing the grade of streets, highways and bridges in villages.” (Assembly Bills, 1932, No. 1563, Int. No.11430.) This act was passed in both houses but was vetoed on March 30, 1932, by Governor Roosevelt. If we look for the intention of the Legislature as an interpretation of its acts, we find here a clear indication that, in the enactment of chapter 459 of the Laws of 1929, the Legislature never considered that it had repealed the provisions of section 159 of the Village Law, subdivision 2, or had in any way modified the liability of villages for damage to abutting owners caused by the change of grade in State highways. Until the Legislature by clear and unmistakeable language takes away the relief and remedy which it has afforded for so many years to abutting property owners in such cases we shall adhere to the provisions of section 159 of the Village Law as giving relief, even though the amendment of section 170 and repeal of section 172 of the Highway Law have lifted the responsibility of villages for the partial maintenance and repair of State highways.

The Appellate Division, in Matter of Lawrence, has certified this question:

(1) “Is the village of Mamaroneck, in this case, liable for damages, if any, to the Lawrence property, for a change of grade of a public highway known as the Boston post road, in said village, under section 159, subdivision 2 of the Village Law and the provisions of the Highway Law and Village Law applicable thereto?

(2) In Matter of Samuel Cohen, a companion case, the Appellate Division has certified this question: “ Is the first, separate and distinct defense contained in the answer of the village of Mamaroneck herein sufficient in law? ”

This defense referred to raises the question of law which we have above discussed, in that it sets forth the statutes and says that the village of Mamaroneck is no longer liable for maintenance and repair and consequently not liable for change of grade.

The question in the Lawrence case we answer in the affirmative. The question in Matter of Samuel Cohen we answer in the negative, which leads to an affirmance of both of the orders of the Appellate Division.

We may say that the facts have not here been presented as they are not in dispute. The State highway in the village of Mamaroneck, the Boston post road, was elevated, the grade was changed so as to shut off access to the property of abutting owners, all to their damage. They applied under the Village Law for the appointment of commissioners, and the orders making the appointment were affirmed by the Appellate Division, that court, however, certifying the above questions to us.

The order of the Appellate Division in each of these cases should be affirmed, with costs; the question certified in the Cohen case answered in the negative and the question certified in the Lawrence case answered in the affirmative.

Pound, Ch. J., Lehman, O’Brien, Hubbs and Crouch, JJ., concur; Kellogg, J., not voting.

Ordered accordingly.


author: Htjbbs, J.

text:
    Genesee County Patrons Fire Relief Association, Respondent, v. L. Sonneborn Sons, Inc., Appellant, Impleaded with Another. The Co-Operative Fire Insurance Company of Wyoming and Genesee Counties, Respondent, v. L. Sonneborn Sons, Inc., Appellant, Impleaded with Another.

      (Argued January 19, 1934;
    decided February 27, 1934.)

      A. S. Gilbert for appellant.
    The appellant was not bound to foresee the use to which the waterproofing preparation was put, or the consequences which followed. (MacPherson v. Buick Motor Co., 217 N. Y. 382; Schfranek v. Moore & Co., 54 Fed. Rep. [2d] 76; Lane v. City of Buffalo, 232 App. Div. 334; Longacre v. Yonkers R. R. Co., 191 App. Div. 770; Ryan v. Cortland Carriage Goods Co., 133 App. Div. 467; Polemenakos v. Cohn, 234 App. Div. 563; 260 N. Y. 524; Hubbell v. City of Yonkers, 104 N. Y. 434.) In no event is property damage recoverable. (P. G. Poultry Farm, Inc., v. Newtown B. P. Mfg. Co., 248 N. Y. 293; Windram Mfg. Co. v. Boston Blacking Co., 239 Mass. 123; Lukens
      v. Freiund, 27 Kan. 664.) The failure of appellant to label the package with a warning against use near an open flame was not the proximate cause of the damage to respondents. (Laidlaw v. Sage, 158 N. Y. 73; Perry v. Rochester Lime Co., 219 N. Y. 60; Leeds v. New York Tel. Co., 178 N. Y. 118; Hall v. New York Tel. Co., 214 N. Y. 49; Flaherty v. Metro Stations, Inc., 202 App. Div. 583; 235 N. Y. 605; Beickert v. G. M. Laboratories, 242 N. Y. 168; Southern Pacific Co. v. Ralston, 62 Fed. Rep. [2d] 1026; Di Biase v. Ewart & Lake, Inc., 228 App. Div. 407; 255 N. Y. 620.)

      Everest A. Judd for respondents.
    Privity of contract was not essential. (MacPherson v. Buick Motor Co., 217 N. Y. 382; Smith v. Peerless Glass Co., 259 N. Y. 292; Winterbottom v. Wright, 10 M. & W. 109; Thomas v. Winchester, 6 N. Y. 397; Kuelling v. Lean Mfg. Co., 183 N. Y. 78; Rosenbush v. Ambrosia, 168 N. Y. Supp. 505; Torgesen v. Schultz, 192 N. Y. 156; Henry v. Crook, 195 N. Y. Supp. 642; Moch v. Rensselaer Water Co., 247 N. Y. 168.) Property damage may be recovered if material was inherently dangerous. (Kalinowski v. Truck Equipment Co., 237 App. Div. 472; Flessher v. Carstens Packing Co., 93 Wash. 48; Quackenbush v. Ford Motor Co., 167 App. Div. 433; Ultramares Corp. v. Touche, 255 N. Y. 170; Pine Grove Poultry Farm v. Newtown B. P. Mfg. Co., 248 N. Y. 293; Mazetti v. Armour & Co., 75 Wash. 622; Weiser v. Holzman, 33 Wash. 87; Murphy v. Sioux Falls Serum Co., 44 S. D. 421; Skinn v. Rentier, 135 Mich. 57.)
   Htjbbs, J.

Charles J. Call owned a farm. He entered into a contract with the defendant Rib-Stone Concrete Corporation to build and install a waterproof water tank in one of his barns. After the construction of the tank an employee of the said defendant was engaged in applying a waterproofing preparation manufactured by the defendant L. Sonneborn Sons, Inc., and known as Hydrocide No. 889 to the interior of the tank when an explosion occurred in the tank which resulted in the destruction of the barn and certain personal property by fire.

In doing the work an ordinary farm lantern with a globe was taken into the tank to furnish light. The fumes from the preparation being used came into contact with the flame in the lantern and caused the explosion. The plaintiffs, insurance companies, carried fire insurance policies on the property destroyed. They paid the loss and became subrogated to the rights of the insured against the defendants.

This action is to recover the amount paid to the insured, on the theory that the loss was occasioned by the negligence of the defendants. At the trial, the complaint against the defendant Rib-Stone was dismissed. A verdict was returned by the jury against the defendant Sonneborn and the judgment based thereon has been unanimously affirmed by the Appellate Division. The trial court submitted two questions to the jury: First, whether Hydrocide No. 889 is an inherently dangerous commodity. Second, if so, whether the defendant Sonneborn was negligent in failing to give notice to the users of the preparation that it was inflammable and should not be brought into contact with an open flame. The defendant Sonneborn is a manufacturer of paints, varnishes and waterproofing materials. The defendant Rib-Stone is engaged in constructing silos, water tanks, etc. It wrote to Sonneborn ordering two gallons of Hydrocide Colorless Waterproofing. In the letter it stated, “ We would like to experiment with your Hydrocide #889 in connection with silos which we erect and would appreciate if you would send us about one gallon of this material.” The two gallons of Hydrocide Colorless Waterproofing,” which is used for outside work where a colorless material is required, was shipped in gallon cans, each bearing a label which read in part, Do not use near flame.” The shipment also contained a one gallon can of Hydrocide No. 889, with a label which read Hydrocide #889.” The label did not contain any warning or notice that the contents were inflammable and should not be used near an open flame.

Rib-Stone had never used the preparation and did not know anything about it. Sonneborn wrote Rib-Stone that Hydrocide No. 889 was suitable for waterproofing the interior of silos and that it could be applied in the same manner as paint, either with a brush or a spraying machine. When applied with a brush by an employee of Rib-Stone, as stated, it exploded and burned the barn in which it was being used.

It is conceded that the commodity was a secret preparation which contained fifty-two per cent benzine and six and seven-tenths per cent kerosene and was highly inflammable.

There is no evidence that the smell of benzine was noticeable by one using the preparation. The employee using it at the time of the accident testified that he did not distinguish the odor of benzine but that it to him smelled like paint. An expert for the plaintiff made various tests of the preparation under varying conditions and testified that it was highly volatile and inflammable, that benzine is 'a hydro-carbon, that fumes therefrom when they reach the inflammable stage are toxic, and that an over exposure will cause death.

The evidence justified the finding of the jury that the preparation was an inherently dangerous commodity and that, under the circumstances, the defendant Sonneborn was negligent in selling it to Rib-Stone without notice of its dangerous quality.

If this were an action by the employee to recover damages for personal injuries received as a result of the explosion, we would have no doubt that a judgment in his favor would have been justified. The old rule that there must be privity of contract between the manufacturer and the person injured to justify recovery of damages for the manufacturer’s negligence has long been departed from in this jurisdiction.

In general terms, the rule of liability in this State established by numerous decisions of this court is that where a manufacturer supplies an article or preparation, for immediate use in its existing state, which is inherently dangerous, the danger not being known to the purchaser and the danger not being patent, and where notice is not given of the danger or it cannot be discovered by a reasonable inspection, the manufacturer is legally hable for personal injuries received by one who uses the same in an ordinary, expected manner. (Thomas v. Winchester, 6 N. Y. 397; MacPherson v. Buick Motor Co., 217 N. Y. 382; Smith v. Peerless Glass Co., 259 N. Y. 292. Cf. Restatement of the Law of Torts, section 267; Thornhill v. Carpenter-Morton Co., 220 Mass. 593.)

Here the manufacturer knew or should have known that the preparation was to be used by employees of the corporation purchaser in an inclosed structure. True it is that the correspondence^ referred to silos, but the water tank in which it was used was constructed of the same materials as silos but was not as large. Plaintiff’s expert testified, however, that the same effect would be produced by its use in a silo.

The manufacturer also knew or should have known that the preparation contained fifty-two per cent of benzine and six and seven-tenths per cent of kerosene and was inherently dangerous if exposed to an open flame in an inclosed structure. At least, the jury could have found that in the exercise of reasonable care, the manufacturer could have acquired such knowledge.

With that knowledge which it had or should have had, it shipped the preparation, knowing the purpose for which it was to be used, without disclosing by label or otherwise the danger of using it in an inclosed structure near an open flame, although the two cans of “ Hydrocide Colorless Waterproofing ” shipped in the same package each bore a label stating “ Do not use near flame.”

Since the manufacturer knew or should have known that the preparation was highly inflammable, the jury was justified in finding that it should have reasonably anticipated that it might be used near an open flame which would cause an explosion and fire which would destroy property and injure the person using it. Plaintiff’s expert testified that lighting a match in the tank would have produced the same effect.

It is earnestly contended by appellant that even though liability might exist for personal injuries resulting from the explosion there is no legal liability for the property damage resulting.

It is urged that the rule imposing liability upon a manufacturer for damage to a third person, resulting from its negligence, is an exception to the general rule; that such liability does not exist in the absence of privity of contract; and that the liability should not be extended so as' to make a manufacturer liable for damage to property upon the principle which establishes liability for personal injuries.

The argument leads to an illogical conclusion. If it were reasonably presumable that the preparation would be used near a flame and result in an explosion and fire which might fairly be expected to injure the person using the material, it would also be reasonably foreseeable that the same fire would cause property damage.

To hold that an owner of a building injured by an explosion and fire caused by the use of the material could recover for his personal injury but could not recover for the damage to his clothing or the destruction of his building would be anomalous. • ■

While it is true that if appellant’s neglect was wrongful and threatened some injury, it is only liable for the natural consequence flowing from the wrong, still we believe that it was a question of fact whether a reasonably foreseeable explosion and fire in a silo or water tank in or adjacent to a barn would result in the burning of the bam. In other words, the burning of the barn was properly found to be a natural result of the appellant’s wrongful conduct.

“In a civil action the wrongfulness of the defendant’s acts ■ are not measured by the extent of the damage threatened.” (Bohlen’s Studies in the Law of Torts, p. 134.)

The question presented has never been directly passed upon by this court. In fact, it has been expressly reserved. (Pine Grove Poultry Farm v. Newtown By-Products Mfg. Co., 248 N. Y. 293, 296; Ultramares Corp. v. Touche, 255 N. Y. 170, 191.) It must now be decided. We believe that the reasoning of the court in the personal injury cases heretofore cited and in many other cases decided by this court points the way.

The general rule of law is that whoever does an illegal or wrongful act is answerable for all the consequences that ensue in the ordinary and natural course of events.” (Shinn v. Reutter, 135 Mich. 57, 60.)

In that case the defendant sold hogs to a dealer, knowing that they were afflicted with a dangerous and infectious disease. The dealer did not know that the hogs were diseased. He sold them to plaintiff. It was decided that the defendants were liable to the plaintiff upon the ground that they committed a wrong imminently dangerous to human life and that they were, therefore, liable for damage to property.

In Wellington v. Downer Kerosene Oil Co (104 Mass. 64) the defendant, a manufacturer, sold to a retailer a barrel of oil to be resold for use in lamps. The barrel contained naphtha. Plaintiff purchased a quantity of the liquid and used it in a lamp. The lamp exploded and injured plaintiff and his property. The court held that the defendant was liable for the damage to both the person and the property as the liquid was a dangerous commodity. Gray, J., writing for the court said: “ It is well settled that a man who delivers an article, which he knows to be dangerous or noxious, to another person, without notice of its nature and qualities, is liable for any injury which may reasonably be contemplated as likely to result, and which does in fact result, therefrom, to that person or any other, who is not himself in fault ” (p. 67).

In the case of Murphy v. Sioux Falls Serum Co. (44 S. D. 421) the defendant manufacturer sold a serum which contained poison which, when used by a veterinarian, killed plaintiff’s animals. It was decided that, as the substance was imminently dangerous, the defendant was liable for the property damage. (See, also, Ellis v. Lindmark, 177 Minn. 390; Pennsylvania Steel Co. v. Elmore & Hamilton Contg. Co., 175 Fed. Rep. 176; Quackenbush v. Ford Motor Co., 167 App. Div. 433; 60 Am. Law Review, 536; Mazetti v. Armour & Co., 75 Wash. 622.)

A case recently decided in England extended the rule of liability to cover property damages. In Anglo-Celtic Shipping Co. v. Elliott & Jeffrey (42 T. L. R. 297) the facts were that a secret preparation manufactured by the defendants was used near a lighted, candle by a third person not the defendants’ vendee. An explosion occurred which resulted in the burning of plaintiff’s ship. A recovery was permitted for the property damage. The preparation was sold without warning of its dangerous nature. The case cannot be distinguished from the case at bar on the facts.

Professor Harper, in his late work on Torts, says: “ Several cases have established a duty on the part of manufacturers of patent medicines and other compounds made under a secret formula which is similar to that under discussion. This duty is, in substance, to adopt reasonable means of giving such information and. instructions as will make it reasonably safe for those intended to use it. * * *

“ In one English case (Anglo-Geltic Shipping Co. v. Elliott & Jeffrey, supra) the defendants, who were manufacturers of a cleansing fluid for machinery, were held liable for- property damage due to chemical reactions of which the user had not been warned. A Massachusetts case (Windram Manufacturing Co. v. Boston Blacking Co., 239 Mass. 123), however, refused to apply the principle to make the manufacturer of a cement for fabrics hable for damages done to the plaintiff’s goods in the absence of a sale by the defendant direct to the plaintiff. The Massachusetts decision is clearly an undesirable result and the case,, on its facts, is much less favorable to the defendant than the Anglo-Celtic case, as in the former case the manufacturer actually knew of the dangerous quality of his product, while in the English case, the defendant was ignorant thereof. Since, however, the manufacturer is in a better position to discover such qualities, he should be held to reasonable care in ascertaining them and giving adequate notice thereof.” (Harper, Law of Torts, § 106, pp. 244, 245.)

It should be noted that in the Windram case the material sold was not inherently dangerous to life and limb, which distinguishes it from the Massachusetts rule as laid down in Wellington v. Downer Kerosene Oil Co. (supra).

As Hydrocide No. 889, manufactured by defendant, was a secret,- highly explosive preparation, imminently dangerous to life and property, sold without warning of its dangerous nature, intended to be used in the condition it was in when delivered and was used for the purpose for which it was recommended in a way that should have been reasonably anticipated, we believe that the defendant manufacturer is legally responsible for the damage to property which resulted, from its use.

We also believe such decision is in harmony with the public policy of the State as embodied in chapter 50 of the Laws of 1921 (Labor Law; Cons. Laws, ch. 31, art. 16, §§ 451, 452) which defines the word “ explosives,” regulates their use, storage, transportation, etc., and provides that “ every container shall be plainly marked with the name of the explosive contained therein,” and makes the violation of the provisions of the article a misdemeanor. We do not mean to decide that a manufacturer of a secret product would be legally hable in all cases for failure to warn of a hidden danger in the use of the product by one other than a vendee. We confine our decision to cases in which the use of the product is imminently dangerous .to fife and property.

In each case, the judgment should be affirmed, with costs. Pound, Ch, J., Crane, Lehman, O’Brien and Crouch, JJ., concur; Kellogg, J., not voting.

Judgments affirmed.