author: Cardozo, Ch. J.

text:
    Edwin Smith, Respondent, v. Northwestern Fire and Marine Insurance Company, Appellant. (Two cases.)
    Insurance (marine) — contract — warranty — ships and shipping — contract of marine insurance not vitiated by breach of warranty where thereafter subsequent purchaser of vessel is substituted as party insured — vessel unseaworthy which sails without required complement of men — unseaworthiness ceases upon arrival at pier — breach of warranty does not avoid time contract of marine insurance where loss occurs after defect has been corrected —• voyage policy of insurance on cargo — implied warranty that vessel is seaworthy — insurer discharged by breach.
    1. The arrest of a boat and her unseaworthy condition at the time of the delivery of a binder calling for a time policy of marine insurance on the hull, does not vitiate the contract of insurance, where, after the vessel had been released and repaired, a subsequent purchaser was substituted in the binder as the party insured. The warranties of the new insured must be read as of the time his name was substituted. He did not take the risk of past breaches of warranty by former owners but was answerable only for his own. And the consequences of the substitution are the same whether the insurer acts with notice of the former breach or without.
    2. A vessel is unseaworthy which, at the inception of a voyage, sails without the complement of men exacted by the statute, and an argument that less than the number called for by the certificate of the inspectors sufficed for navigation while the vessel was still within the waters of the harbor, cannot be sustained. She is to start with crew and equipment sufficient for the voyage. But the fact that she is unseaworthy at the start does not mean that she is unseaworthy when navigation has ceased and she is fastened at her pier. The presence of the prescribed number of men is unnecessary when the vessel is resting at her berth.
    3. Under a time contract of marine insurance, wherein the insured warrants that seaworthiness shall continue as long as the policy is in force, the vessel being seaworthy at the inception of the risk, a breach of the continuing warranty does not avoid the contract where a loss occurs after the defect has been corrected. Upon such a breach the obligation of the contract is suspended, if the risk has once attached, and thereafter ’revives when the defect has been removed. Where, therefore, the vessel insured was seaworthy at the time the policy took effect and was seaworthy when destroyed by fire while lying at her pier, an intermediate breach of the warranty is unavailing to forfeit the insurance under the policy covering the vessel.
    4. A voyage policy, however, insuring the cargo on the vessel, differs fundamentally from a time policy in the application of the law of warranties. Irrespective of any express warranty, the law implies a covenant in connection with a voyage policy that the vessel is in seaworthy condition for the necessities of the port, and seaworthy again for the necessities of the voyage when the time for sailing has arrived. Unless each of these implied warranties is satisfied, the insurer is discharged. Where, therefore, the vessel when it started was unseaworthy, the insurance on the cargo ceased to be effective at the moment of her sailing, and no recovery may be had thereon for a subsequent loss.

      Smith v. Northwestern Fire & Marine Ins. Co., 218 App. Div. 858, affirmed.

      Smith v. Northwestern Fire & Marine Ins. Co., 218 App. Div. 858, reversed.
    (Argued October 12, 1927;
    decided November 22, 1927.)
    Appeal, in each of the above-entitled actions, from a judgment of the Appellate Division of the Supreme Court in the second judicial department, entered December 31, 1926, unanimously affirming a judgment in favor of plaintiff entered upon a verdict.

      William F. Purdy and Thomas A. McDonald for appellant.
    On March 10, 1925, the Traffic was not “ in safety ” nor “ free of capture, seizure, arrest,” etc., as warranted by the hull insurance policy, which, therefore, did not attach. (Richards on Insurance [3d ed.], 594.) On March 10, 1925, the date of the hull binder, the Traffic was unseaworthy and the warranty of seaworthiness implied by law was breached. (Van Wickle v. Mechanics’ & Traders’ Ins. Co., 97 N. Y. 350; Wright v. Orient Mutual Ins. Co., 6 Bosw. 269; Walsh v. Washington Ins. Co., 32 N. Y. 427; Higgie v. American Lloyds, 14 Fed. Rep. 143.) The Traffic, on setting out upon the voyage referred to in the certificate of insurance on the cargo, was unseaworthy inasmuch as she was insufficiently crewed and equipped. (Leitch v. Atlantic Mutual Ins. Co., 66 N. Y. 100; Law v. Hollingsworth, 7 T. R. 160.) At the time of the loss the Traffic did not have a competent watchman aboard. This constituted a breach of the warranty contained in each policy that the vessel should at all times when the vessel is loaded “ have a competent watchman aboard.” (Gifford v. Patterson, Inc., 222 N. Y. 4; Snyder v. Home Ins. Co., 133 Fed. Rep. 848; Wheaton Packing Co. v. Ætna Ins. Co., 185 Fed. Rep. 108; Cogswell v. Chubb, 1 App. Div. 93; Couch v. Farmers’ Fire Ins. Co., 64 App. Div. 367; De Hahn v. Hartley, 1 T. R. 345; Ripley v. Ætna Ins. Co., 30 N. Y. 136; Gaines v. Fidelity & Casualty Co., 188 N. Y. 411.)

      Thomas J. Brennan for respondent.
    The claim that when the Traffic left New York she was unseaworthy inasmuch as she had an insufficient crew cannot be sustained. (Louisville Ins. Co. v. Monarch, 99 Ky. 578; Warren v. Manufacturers Ins. Co., 13 Pick. [30 Mass.] 518; Deshon v. Merchants Ins. Co., 11 Mete. [52 Mass.] 199; Cunard v. Hyde, E. B. & E. 670; Redmond v. Smith, 7 M. & G. 457; Stuart v. Powell, 1 Barn. & Adol. 266; Phillips v. Headlam, 2 Barn. & Adol. 380; Flanigen v. Washington Ins. Co., 7 Penn. St. 306; Keeler v. Firemen’s Ins. Co., 3 Hill, 250; Dixon v. Sadler, 5 M. & W. 405; Weir v. Aberdeen, 2 B. & Ald. 320.) Whether the insured complied with the watchman clause was for the jury (Manheim Ins. Co. v. Clarke & Co., 157 S. W. Rep. 291.)
   Cardozo, Ch. J.

The plaintiff in each of these actions is the assignee of the insured under a contract of marine insurance. One action is brought upon a binder covering a hull; the other action is brought upon a certificate covering a cargo. The facts as to each contract must be separately stated.

On March 7, 1925, Joseph F. O’Boyle agreed to sell his steam lighter, the Traffic, to Neptune Trading Company, which was to make a payment of cash and give a purchase-money mortgage. A bill of sale was signed but never delivered, the buyer refusing to complete the purchase. While the contract was still in force, application was made to the defendant for insurance on the hull. The binder, signed by the defendant on March 10, 1925, calls for a time policy in what is known as the inland form, with watchman’s clause added. The insured is stated to be Neptune Trading Company, loss payable to O’Boyle, as mortgagee. The term of the insurance is .stated to be from March 10, 1925, to March 10, 1926. The vessel is privileged to navigate the waters of the Port, Bays and Harbor of New York, East and North or Hudson rivers, and inland waters of New York and New Jersey, Long Island Sound, and waters as far east as Boston, Mass.

At the date of this binder, the Traffic was already beached in New London harbor with several feet of water in her hull. She had been arrested on March 9 by a United States revenue cutter and compelled to proceed to New London because of her unseaworthy condition. There she settled and sank. On being hauled to drydock she was partially repaired. Thereupon she received a temporary permit, allowing her to go to New York, where the repairs were to be completed. She was inspected by the underwriters on April 10, and then reported to be sound.

In the meantime the Neptune Trading Company had withdrawn from its bargain and rejected title to the boat. On April 9, 1925, O’Boyle made a new sale to Gurney, the plaintiff’s assignor. This sale was reported to the defendant, which struck from the binder the name of the Neptune Trading Company, and substituted Gurney’s, adding after his name the figures “ 4/9/25,” to indicate the date of change. A completed policy in the inland form was made out to the new owner on April 23, 1925, though never, it seems, delivered.

We pass now to the application for insurance on the cargo. This application was made on April 24, 1925, in the name of Anthony O’Boyle, account of whom it might concern. The defendant thereupon issued its certificate of insurance covering a cargo of hardware on board the Traffic, subject to the clauses of the New York Lighterage form, at and from New York to Boston.”

The Traffic left New York for Boston on April 29, 1925. Her certificate of inspection, issued by the United States local inspectors under section 4463 of the United States Revised Statutes fixed the complement of the crew in case the vessel was operated not more than thirteen hours out of the twenty-four, and another complement when she was operated longer. In the one case she .was to have one master and pilot, two able seamen, one chief engineer, one fireman, and one person in steward’s and other departments when needed, a total of six men. In the other case, she was to have one master and pilot, one pilot, two able seamen, one chief engineer, one first assistant engineer, two firemen, and one person when needed in steward’s and other departments, a total of nine. The Traffic set out on her voyage with only four men on board, a master, an engineer, a fireman, and a deckhand. She moored for the night at City Island, under orders to pick up a pilot in the morning and two other members of the crew, who were expected to come aboard. During the night the boat took fire, and with its cargo was destroyed.

The defense of breach of warranty set up in each of the two actions makes it necessary to quote some of the provisions of the policies.

The policy on the hull, following the so-called inland form, includes a warranty that the vessel is “ free of capture, seizure, arrest, restraint, pre-emption or detainment and the consequences thereof or any attempt thereat, and whether as an act of war or by civil authority or by any person or persons whatsoever, lawless or otherwise.”

It also includes a warranty as to the condition of the vessel: Warranted by the insured that the said vessel shall at all times during the continuance of this policy be tight and well found in anchors, cable, rigging, tackle and apparel, as is usual and customary; also in all other things and means necessary and proper for safe navigation according to the usage and custom; that she shall at all times have a competent watchman oii board; and that whenever said vessel shall be at anchor in the nighttime she shall show one or more lights in a conspicuous place so as to warn and give notice to approaching vessels.”

By another provision: The watchman’s warranty in this policy is in full force and effect, except that when this vessel is tied up or moored it shall be in charge of a competent watchman, but a breach of this warranty shall void this insurance only as to claims occurring during such breach or arising subsequently as a result of such breach.”

By still another provision: Any deviation beyond the limits named in this policy shall void this policy, but upon the return of said vessel within the limits named herein, this policy shall reattach and continue in full force and effect, but never beyond the date hereinbefore set for the termination of this policy, and provided only, no disaster has occurred during said deviation.”

The cargo policy, following the New York lighterage form, omits the special provisions quoted from the policy on the hull, but contains the following warranty as to the condition of the vessel: “ Warranted by the insured that the said lighter or vessel shall at all times during the continuance of this policy be tight, and well found in anchors, cable, rigging, tackle and apparel, as is usual and customary; also properly manned and equipped in all other things and means necessary and proper for the safe navigation thereof, according to the usage and custom; and that whenever said lighter or vessel shall be at anchor in the nighttime, she shall show the proper lights as required by law, so as to warn and give notice to approaching vessels; and'that the said lighter and vessel, when loaded with cargo, shall at all times have a competent watchman on board.”

(1) The defendant insists that the arrest of the boat and her unseaworthy condition at the delivery of the binder vitiates the contract for the insurance on the hull though the boat had been released and repaired when Gurney, plaintiff’s assignor, was substituted in the binder as the party insured.

There is no doubt that the boat was under arrest on March 10, 1925, when the binder was delivered. There is none, we think, that at that time she was in an unseaworthy condition, though warranted to be tight and sound. We assume that for breach of these warranties the insurance would never have attached if the binder had not been changed. The binder, however, was changed by the substitution on April 9 of a new party to the contract. We think the warranties of Gurney, the new insured, must be read as of that time. He did not take the risk of past breaches of warranty by former owners of the vessel. He was answerable only for his own. The situation was the same in legal effect as if the company had issued a new binder or had noted upon the old one a waiver of any previous breach of warranty, known or unknown. There is no difference in that regard between policies of marine insurance and policies of insurance against fire. The common practice is, when property is sold, to substitute the name of the' buyer without issuing another policy. Very likely, the insurance company loses something in premiums by this abbreviated form, since the "first policy, if surrendered, would have been canceled at short rates. It gains, however, in convenience, and often by securing a new customer who might otherwise go elsewhere. It must abide by its choice whether the result be gain or loss. Unquestionably the insurer will not be heard to insist upon earlier breaches if it accepts the new owner after notice of the cause of forfeiture (Steen v. Niagara F. Ins. Co., 89 N. Y. 315; Benninghoff v. Agricultural Ins. Co., 93 N. Y. 495, 506; Shearman v. Niagara F. Ins. Co., 46 N. Y. 526; Hooper v. Hudson River F. Ins. Co., 17 N. Y. 424). We think the consequence of substitution is the same whether it acts with notice or without. The result is a new contract between underwriter and owner. The insured may reasonably infer, in the absence of inquiry as to earlier grounds of forfeiture, that the insurer is indifferent as to their existence, and is content to make a fresh start as if a new policy were written. The fault is the insurer’s if it chooses to approve the change without adequate inquiry (Hooper v. Hudson River F. Ins. Co., 17 N. Y. 424, 426). Some of the cases put the stress of the argument upon the theory of a second contract independent of the first' one. Others find in the situation the necessary elements of waiver or estoppel. Upon one ground or the other, and not infrequently upon both, the insurer is charged with liability, whether the earlier causes of forfeiture were known or unknown (Virginia-Carolina Chem. Co. v. Ins. Co., 108 Fed. Rep. 451, 456; Ellis v: Ins. Co., 32 Fed. Rep. 646; Fogg v. Ins. Co., 10 Cush. 345; Bullman v. Ins. Co., 159 Mass. 118; Richards on Ins. p. 354, and cases cited). Any other conclusion would be at war with business practice, and with the beliefs and expectations which that practice has engendered.

(2) The defendant insists that the vessel was unseaworthy at the inception of the voyage in that it sailed without the complement of men exacted by the statute, and that the result was a breach of warranty which forfeits the insurance on the hull and on the cargo.

We think the vessel sailed in an unseaworthy condition (Arnould, Marine Ins. §§ 721, 723; 4 Joyce, Ins. §§ 2164, 2166; Forshaw v. Chabert, 1821, 3 Brod. & B. 158; Silva v. Low, 1799, 1 Johns. Cas. 184). She was without the complement of crew required by the statute. Such a vessel shall not be navigated unless she shall have in her service and on board such complement of officers and crew as may in the judgment of the local inspectors who inspect the vessel be necessary for her safe navigation ” (U. S. R. S. § 4463). The argument is made that less than the complement called for by the certificate of the inspectors sufficed for safe navigation while the vessel was still within the waters of the harbor. The judgment of a jury is thus to supplant the judgment of the public officers who have been charged with the duty of inquiry and decision. The terms of the warranty forbid this exchange of functions, if it might otherwise be proper. The vessel is to be manned with whatever means may be necessary for her safe navigation, according to the usage and custom.” We are not to assume that usage and custom would be satisfied with less than a compliance with the statute. She is to start with crew and equipment sufficient for the voyage (Greenock S. S. Co. v. Maritime Ins. Co., L. R. 1903, 2 K. B. 657). But the problem is not exhausted when we find that the vessel was unseaworthy while navigating the waters between New York and City Island. The fact that she was unseaworthy then does not mean that she was unseaworthy when navigation had ceased and she was fastened at her pier. The prescribed complement of men must be aboard while the boat is on her way, but their presence is unnecessary when she is resting at her berth. Seaworthiness is a relative term (Brick v. L. I. R. R. Co., 245 N. Y. 222, 226). What is essential for the voyage may be superfluous at port (Arnould, Marine Ins. § 687). Equipment must be adapted to the occasion and the risk. The boat was at her pier, and navigation was over, at the moment of the loss. She was not to go farther on her voyage without replenishing her crew. She was seaworthy then, though unseaworthy before. We must say whether the policies were avoided altogether.

The insurance on the hull was a “ time ” policy, from March 10 or April 9, 1925, to March 10, 1926. The insurance on the cargo was a voyage ” policy at and from New York to Boston.” The two classes of insurance are governed by different rules. The effect of a deficient crew will be considered as to each.

(a) The English rule has long been that there is no implied warranty of seaworthiness under a time contract of insurance (Arnould, Ins. § 697; cf. Marine Ins. Act, 1906, § 39, subsec. 5). Many cases in the United States support a different holding, though the conflict of authority is such that the question may still be open (Joyce, Ins. vol. 4, § 2153; Richards, Ins. § 184; cf. N. Y. & P. R. S. S. Co. v. Ætna Ins. Co., 204 Fed. Rep. 255, 258). There is no need to close it now, for in the policy at hand the warranty is express. A warranty of seaworthiness, unless otherwise extended, is satisfied, however, when seaworthiness exists at the inception of the risk (3 Kent Comm. 287; Arnould, Marine Ins. §§ 691, 692). If the insured suffers the vessel to become unseaworthy thereafter, this does not vitiate the policy unless the later condition was due to his neglect or other fault, nor even then unless a causal relation exists between the defect and the loss (Union Ins. Co. v. Smith, 124 U. S. 405, 427; Am. Ins. Co. v. Ogden, 15 Wend. 532; Same v. Same, 20 Wend. 287; Paddock v. Franklin Ins. Co., 11 Pick. 227; Peters v. Phoenix Ins. Co., 3 Serg. & Rawle, 25; 3 Kent Comm. 288; 4 Joyce, Ins. §§ 2174, 2175). His duty in so far as it relates to the future is not in a strict sense a warranty at all, unless he chooses to make it so (Capen v. Washington Ins. Co., 12 Cush. 517, 540; Dabney v. New Eng. M. Ins. Co., 14 Allen, 300, 305; Am. Ins. Co. v. Ogden, 20 Wend. 287, 304; 3 Kent Comm. [12th ed. by O. W. Holmes] p. 288, note; 4 Joyce, Ins. § 2175). Though often characterized as a warranty it is in truth a duty to act according to the measure of his power. The law which creates it keeps it within limits of justice and reason. At the inception of the risk under the time policy of insurance (on April 9, 1925), the Traffic was seaworthy and the policy attached. There is nothing to show that at that time the particular voyage which began on April 29 was in any special sense within the contemplation of the parties. The policy was written, and the risk assumed, without reference to any voyage present or prospective, and this for three weeks before a voyage began (cf. Gibson v. Small, 1853, 4 H. L. Cas. 353, 390).

We have said that the warranty of seaworthiness is confined to the inception of the risk unless otherwise extended. The problem is complicated by the fact that an extension was accomplished here. The insured did not limit himself to a warranty of seaworthiness at the beginning of the term. He chose to add a warranty that seaworthiness would continue as long as the policy was in force. In respect of future happenings, he substituted an obligation absolute in terms for the obligation of diligent endeavor laid upon him by the law. We do not need to hold that reasonable construction might not affix some restrictions to the duty thus assumed with all its seeming generality. The question is not here, for example, whether such a covenant would be broken if seamen died at sea so as to reduce the crew below its complement (Paddock v. Ins. Co., 11 Pick. 227, 233). Certain it is, however, that under a time policy so phrased, the duty must be absolute at the inception of each voyage, or whenever the vessel is at port about to sail anew (Cogswell v. Chubb, 1 App. Div. 93, 96; affd. on op. below, 157 N. Y. 709). The owner chose to warrant, and we must take him at his word.

The question remains whether breach of a promissory warranty that a vessel covered by a time policy shall be kept in a seaworthy condition avoids the contract of insurance in case the loss occurs after the defect has been corrected. The rule is settled in the English courts that a warranty once broken puts an end to the insurance, irrespective of what follows, and this whether the warranty is affirmative or promissory (Arnould, Marine Ins. §§ 628, 688). Where a warranty is broken, the assured cannot avail himself of the defense that the breach has been remedied, and the warranty complied with, before loss ” (Marine Ins. Act, 1906, § 34). In this country the decisions are indecisive and conflicting (4 Joyce, Ins. § 2182; Richards, Ins. § 114). The effect of a breach of some warranties, though promissory in their nature, is to terminate the risk. This is so for example where there is a wrongful deviation, unless the policy contains a provision that the risk shall reattach when the deviation has ended (Fernandez v. Great Western Ins. Co., 48 N. Y. 571; Snyder v. Atlantic M. Ins. Co., 95 N. Y. 196; Cogswell v. Chubb, 1 App. Div. 93; 157 N. Y. 709; Burgess v. Eq. Ins. Co., 126 Mass. 70). The effect of a breach of other warranties is merely to suspend the risk, or so at least it has been adjudged by courts of high authority (Taylor v. Lowell, 3 Mass. 331; Paddock v. Franklin Ins. Co., 11 Pick. 227, 234; Worthington v. Bearse, 12 Allen, 382; Hinckley v. Germania F. Ins. Co., 140 Mass. 38, 45; Ring v. Ins. Co., 145 Mass. 426, 427 [per Holmes, J.]; Lapene & Ferre v. Sun Mut. Ins. Co., 8 La. Ann. 1; cf. M’Lanahan v. Universal Ins. Co., 1 Pet. 170,184; 1 Phillips on Ins. § 734; 3 Kent Comm. 289; 4 Joyce, Ins. § 2182). To determine which effect shall follow we must seek the intention of the parties (cf. 4 Joyce, Ins. § 2240; Imperial F. Ins. Co. v. Coos Co., 151 U. S. 452, 467; Mead v. N. W. Ins. Co., 7 N. Y. 530; Ring v. Ins. Co., supra; Kyte v. Commercial Union Ins. Co., 149 Mass. 116).

We think the intention of the parties must be presumed to be that under a warranty of seaworthiness continuing beyond the inception of the risk and during the whole of many voyages, a supervening breach shall do no more than suspend the obligation of the policy, and that the obligation shall revive when the defect has been corrected unless indeed there is an express provision that the effect of any breach shall be to end the policy forever (cf. Imperial F. Ins. Co. v. Coos Co., 151 U. S. 452; Mead v. N. W. Ins. Co., supra, at p. 531). Nothing more than this is the consequence of a breach of the continuing duty to keep the vessel seaworthy imposed by the law itself in the absence of a covenant, a duty often spoken of as growing out of an implied warranty, though the description may be lacking in technical precision. Indeed, the breach of the implied warranty does not even suspend the risk in the absence of a causal relation between breach and loss (Union Ins. Co. v. Smith, 124 U. S.405, 427). We think the parties had no intention, when substituting an express warranty for the implied one, to invite such disparity of consequences as would follow if every supervening breach were to annul the policy forever. To impute such an intention would be to lead to results almost shocking in their hardship. A time policy for a year or longer may include periods of idleness and then repeated voyages. There may be seasons of closed navigation when the ship is at her pier. There may be seasons of open navigation with a voyage every day or oftener. If the breach of a continuing warranty that a vessel shall be seaworthy is to put an end to the insurance and not merely to suspend it, a defect developing upon the first voyage, though quickly and permanently corrected, will avoid liability for a loss upon the thousandth. The ship may have lost one of her anchors at a time when two anchors were required (Am. Ins. Co. v. Ogden, 15 Wend. 532; 20 Wend. 287). She may have lost a member of her crew, deserting at a port of stoppage. She may have sailed on her home voyage with a temporary defect in her rigging or apparel, unknown to the master. If such defects are remedied before the loss occurs, the intention of the parties will be uhwarted rather than promoted, at least in the vast majority of cases, by a holding that the contract has been ended altogether. That conclusion is fortified when we consider the provisions of this policy as to the effect of deviation. By immemorial tradition, the duty not to deviate unless for sufficient cause is primary and basic. We find, however, that under this policy a breach so fundamental as deviation is not to end the contract, but that liability revives when the ship is again upon her course. One finds it hard to believe that penalties more drastic are to be visited on the owner for the temporary loss of a steward or an anchor. True, indeed, it is that the parties stated the consequences in the one situation and omitted to state them in the other. One may argue that the omission is a sign that the covenant not qualified was to be an absolute condition. More likely there was a tacit assumption that the consequences resulting from the breach of an express warranty to keep the vessel fit would bear some reasonable relation to those resulting from a breach of the warranty or quasi-warranty read into the policy by implication of the law. So we think they do, in the absence of the disclosure of a different intention. Upon a breach of the continuing warranty of seaworthiness the obligation of the contract is suspended, if the risk has once attached, and thereafter revives when the defect has been removed (Deblois v. Ocean Ins. Co., 16 Pick. 303). Since the Traffic was seaworthy on April 9 when the policy took effect, and seaworthy on April 30, when destroyed by fire at City Island, the intermediate breach is unavailing to forfeit the insurance.

(b) We pass now to the consideration of the voyage policy, insuring the cargo on the lighter “ at and from New York to Boston.” Such a policy differs fundamentally from a time policy in the application of the law of warranties. Irrespective of any express warranty, the law implies a covenant in connection with a voyage policy that the vessel is in seaworthy condition at the terminus a quo for the necessities of the port, and seaworthy again for the necessities of the voyage when the time for sailing has . arrived (Arnould, Marine Ins. §§ 685-a, 687,698, 699; Merc. Ins. Co. v. Clapp, 11 Pick. 56). Unless each of these implied warranties is satisfied, the insurer is discharged.

Thus, in DeHahn v. Hartley (1786, 1 T. R. 343; affd., 1787, 2 T. R. 186, n) a vessel was insured on a slaving voyage, at and from Africa to her port or ports of discharge in the British West Indies,” and a memorandum was inserted in the margin of the policy that the vessel had sailed from Liverpool with fourteen six-pounders, swivels, small arms and fifty hands or upwards copper-sheathed.” ; It appeared that the ship had actually sailed from Liverpool with only forty-six men instead of fifty, but that within twelve hours of leaving Liverpool she had taken on board at Beaumaris six additional hands; and evidence was also given that the ship between Liverpool and Beaumaris was quite as safe with forty-six men as she would have been with fifty. The court unanimously held that the policy was void in toto (Arnould, Marine Ins. § 633). Again in Forshaw v. Chabert (1821, 3 Brod. & B. 158) a policy was effected on a voyage at and from Cuba to Liverpool.” The captain having lost some of his outward crew by sickness and desertion at Cuba, and finding it impossible there to engage ten men, his proper complement for Liverpool, sailed from Cuba with only eight men engaged for Liverpool, and two for Montego Bay (Jamaica), where he touched and landed the two men, and whence having procured others to supply their place, he proceeded on his voyage to Liverpool. The court held (inter alia) that the ship was not seaworthy when she sailed from Cuba for a voyage to Liverpool, as she ought then to have had on board a full complement of men engaged for the whole voyage (Arnould, Marine Ins. § 723). Again in Queen Marine Ins. Co. v. Commercial Bank of Canada (1870, L. R 3 P. C. 234) a vessel, covered by a voyage policy, left port with a defective boiler. She stopped at an intermediate port where the boiler was repaired. A loss occurred thereafter. The Judicial Committee of the Privy Council held, after a full review of the authorities, that the underwriters were discharged by force of the breach of warranty at the inception of the voyage.

There are suggestions in the books that the doctrine of suspension and revival may be applied even to a voyage policy if the vessel was seaworthy at the port, though unseaworthy when leaving port at the outset of the voyage (4 Joyce Ins. § 2182; Phillips, Ins. § 734). The weight of authority, however, makes the breach of the implied warranty equally definitive at one stage or the other. The primary purpose of a voyage policy is insurance of the risk during a voyage then in view. Whatever insurance attaches at the home port is incidental and preliminary. There can be little doubt that the reasonable expectations of the insurer are frustrated if the vessel starts on her voyage without suitable equipment. Of course, if the voyage consists of successive stages, the equipment at the outset does not have to be adapted to any stage except the first, though there is a duty in such circumstances when the second stage arrives to add or change as may be necessary (Arnould, Marine Ins. §§ 699, 700, 701; 4 Joyce, Ins. § 2171; Greenock S. S. Co. v. Maritime Ins. Co., 1903, 2 K. B. 657). Here the vessel when it started was unseaworthy for the first stage of the adventure as well as for the others. That being so, the insurance ceased to be effective at the moment of her sailing. In such a situation the express warranty of fitness may be put aside as immaterial. So far as it departs from the implied one by imposing a continuing obligation after the voyage has begun, the consequences of the departure do not have to be considered, for there was a breach at the beginning. So far as the two are coincident, the results must be the same. An express warranty does not exclude an implied one consistent with its terms (Arnould, Marine Ins. § 628; Marine Ins. Act of 1906, § 35).

The action on the cargo policy is subject also to the defense that proofs of loss were not submitted at the time or in the form prescribed.

The defendant makes the point with reference to both the policies that there was no watchman on the boat at the time of the fire. As to this there was a question of fact, which was answered by the verdict of the jury in favor of the plaintiff.

Our conclusion is that in the action on the policy covering the hull, the judgment should be affirmed, with costs to the respondent; in the action on the policy covering the cargo, the judgment of the Appellate Division and that of the Trial Term should be reversed, and the complaint dismissed, with costs to the appellant in all courts.

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

Judgment accordingly.


source: Caselaw Access Project

author: O’Brien, J.

license: Public Domain

text:
    Ernest Caldine, as Administrator of the Estate of Harold E. Caldine, Deceased, Appellant, v. Unadilla Valley Railway Company, Respondent.
    Negligence — master and servant — railroads — Federal Employers’ Liability Act — where several employees are negligent statute imposes liability upon master for death of one of them — defense of contributory negligence good only in mitigation of damages —• erroneous dismissal of complaint where it appears death of railway conductor was caused through his own negligence and that of other employees.
    1. When several employees of an interstate commerce carrier participate in careless operation of a train and death results to one of them, the Federal Employers’ Liability Act imposes liability upon the carrier. Under the statute, the defense of contributory negligence is good only in mitigation of damages.

      2. It was, therefore, error to dismiss the complaint in an action, under the statute, to recover for the death of the conductor of a car killed as the result of a collision, while engaged in interstate commerce, where the evidence shows that though the deceased gave the signal to start the ear in violation of printed orders that it should wait the sidetracking of an approaching train, the motorman also in violation of the orders obeyed the signal and started the ear in plain sight of the station agent, who knew of the approaching train and whose duty it was to inform the deceased. All three were negligent and the negligence of the deceased cannot be viewed as the sole proximate cause of the collision.

      Caldine v. Unadilla Valley Ry. Co., 218 App. Div. 5, reversed.
    (Argued October 18, 1927;
    decided November 22, 1927.)
    Appeal from a judgment, entered September 13, 1926, upon an order of the Appellate Division of the Supreme Court in the third judicial department, reversing a judgment in favor of plaintiff entered upon a verdict and directing a dismissal of the complaint.

      David F. Lee and Glen F. Carter for appellant.
    It was a question of fact for the jury whether the deceased’s violation of the rule was the proximate and sole cause of the collision. (N. Y. Central & St. L. R. Co. v. Niebel, 214 Fed. Rep. 953; Galveston, H. & S. A. R. R. Co. v. Worth, 53 Tex. Civ. App. 351; Union Pac. R. R. Co. v. Hadley, 246 U. S. 330; Chicago, Rock Island & Pacific R. R. Co. v. Ward, 252 U. S. 18; Spokane T. E. & R. Co. v. Campbell, 217 Fed. Rep. 518; Grand Trunk W. Ry. Co. v. Lindsay, 233 U. S. 42; Seaboard Air Line Co. v. Moore, 228 U. S. 433; Central Vt. R. Co. v. White, 238 U. S. 507; Ill. Central R. R. Co. v. Skaggs, 240 U. S. 66.)

      William H. Sullivan for respondent.
    The accident in question was solely and directly caused by the negligent act of the plaintiff’s intestate. Kennedy v. Davis, 266 U. S. 147; Frese v. C., B. & Q. R. R. Co., 263 U. S. 1; Great Northern R. R. Co. v. Wilds, 240 U. S. 444; Sacco v. D. & H. Co., 213 App. Div. 471; 241 N. Y. 545; Great

      Northern Ry. Co. v. Wiles, 240 U. S. 444; Virginia Ry. Co. v. Linksous, 230 Fed. Rep. 88.)
   O’Brien, J.

Plaintiff sued under the Federal. Employees’ Liability Act to recover damages for the death of his son. The statute imposes liability upon a common carrier engaged in interstate commerce for the death of an employee "resulting in whole or in part from the negligence of any of the officers, agents or employees of such carrier.” Defendant, engaged in interstate. commerce, operates trains on a single track from Richfield Junction through Bridgewater and River Forks to New Berlin in this State. Printed orders were issued to all employees: “ Train No. 2 will pass Train No. 15 in Bridge-water yard ” and " Train No. 15 will take turntable siding at Bridgewater to allow Train No. 2 to pass.” Unless countermanded in writing by the superintendent, these orders were permanent. They were not countermanded. Train No. 2 was a gasoline passenger car of which plaintiff’s intestate was conductor. Train No. 15 was a freight train of which Risley was conductor. They collided head-on a short distance south of Bridgewater yard and the conductor of the gasoline car was killed.

Decedent violated the printed permanent orders and Was guilty of negligence. Whether the collision was due proximately and solely to his lack of care or whether it resulted in part from the negligence of other employees of defendant is the question before us. Risley, the conductor of the freight train, was accustomed each morning to telephone from River Forks, two miles south of Bridgewater, to Dawson, defendant’s agent at Bridge-water, informing him that the freight was on its way and asking him to hold the gas car at Bridgewater. The agent’s habit was orally to deliver this message to Caldine, the conductor of the gasoline car. A few minutes prior to the collision, Risley, according to custom, telephoned to Dawson but Dawson omitted to inform Caldine. Dawson asserts that he did tell Dibble, the motorman, but Dibble denies the assertion. Concededly, neither the station agent nor the motorman informed the conductor that the freight was approaching Bridgewater. Nevertheless, the conductor, in violation of printed orders, signaled the gasoline car to proceed toward River Forks and the motorman, also in violation of them, obeyed the signal and Started the car in plain sight of the station agent. The conductor’s negligence cannot be viewed as the sole proximate cause of the collision. The station agent could and should have prevented it. So could the motorman. All three were negligent. If Caldine had not signaled in violation of orders, the collision would not have occurred. Neither would it have happened if Dawson had communicated Risley’s message to Caldine. If Dibble had performed his duty and, in the absence of written abrogation of permanent orders, had refused to obey Caldine’s signal, the gas car would have remained at Bridgewater yard and allowed the freight to take the turntable siding. Dawson knew that the freight was approaching; Dibble ought to have known it and should have kept his car stationary. Negligence was not solely Caldine’s. His death resulted in part from the negligence of Dawson and Dibble.

Contributory negligence by the deceased will not, under the Federal Employees’ Liability Act, necessarily prevent recovery by his personal representative. The defense is good only in mitigation of damages. (C., R. I. & P. R. R. Co. v. Ward, 252 U. S. 18.) When several employees of an interstate commerce carrier participate in careless operation of a train and death results to one of them, the statute imposes Lability upon the carrier. A trainman killed in a collision may be found to have been negligent, yet the carrier is not absolved from blame, when the dispatcher also is at fault. (Union Pac. R. R. Co. v. Hadley, 246 U. S. 330.) If other employees in secondary relation, to the movement of trains might, by mere possibility, be deemed negligent then actual negligence by the deceased is regarded as the sole and proximate cause of his death. (Davis v. Kennedy, 266 U. S. 147.) Here the negligence of decedent’s coemployee Dawson is more than merely possible. It is actual and flagrant. Dibble, the motorman, like Kennedy, the engineer, was in direct control of the car’s movement and his failure to await the arrival of the freight was the primary cause of the collision. His duty bound him to disregard the conductor’s signal until he was certain that the freight had taken the turntable siding. The conductor’s duty was merely secondary to that of the motorman. This, as we understand, conforms with the reasoning in the Kennedy case (supra).

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

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

Judgment accordingly.


author: Cardozo, Ch. J. Kellogg, J.

text:
    Allegheny College, Appellant, v. The National Chautauqua County Bank of Jamestown, as Executor of Mary Y. Johnston, Deceased, Respondent.
    Gift — charitable subscriptions — contract — consideration — bilateral agreement may exist though one promise be implied — duty to perpetuate name of founder of memorial sufficient consideration for subscription — acceptance of payment on account of subscription — improper dismissal of complaint in action to recover balance where subscription directed that fund should be known by a certain name and proceeds used for a certain purpose.
    1. A bilate al agreement may exist though one of the mutual promises be a, promise “ implied in fact,” an inference from conduct as opposed to an inference from words.
    2. The duty assumed by a college to perpetuate the name of the founder of a memorial is sufficient in itself to give validity to a subscription within the rules that define consideration for a promise of that order. When the promisee subjected itself to such a duty at the implied request of the promisor, the result was the creation of a bilateral ag eement, a promise on the one side and on the other a return promise, made, by implication, but expressing an obligation that had been exacted as a condition of the payment.
    3. The complaint was 'improperly dismissed, therefore, in an action by a college to recover the unpaid balance of a subscription made on condition that the gift should be known “ as the Mary Yates Johnston Memorial Fund ” and the proceeds used “ to educate students preparing for the ministry,” a part of which subscription was paid by the donor and accepted by the college, after which the donor gave notice in writing that she repudiated the promise.

      Allegheny College v. Nat. Chautauqua County Bank, 219 App. Div. 852, reversed.
    (Argued October 18, 1927;
    decided November 22, 1927.)
    Appeal, by permission, from a judgment of the Appellate Division of the Supreme Court in the fourth judicial department, entered April 13,1927, unanimously affirming a judgment in favor of defendant entered upon a dismissal of the complaint by the court on trial at an Equity Term.

      Clarence G. Pickard, C. A. Pickard and Arthur L. Bates for appellant.
    The subscription paper executed by Mary Yates Johnston was founded upon a legal consideration. (Barnes v. Perine, 12 N. Y. 18; Matter of Conger, 113 Misc. Rep. 129; Eliassof v. DeWandelaer, 30 App. Div. 155; Coyne v. Weaver, 84 N. Y. 386; Ga Nun v. Palmer, 216 N. Y. 603; Roberts v. Cobb, 103 N. Y. 600; Mechanicville War Chest, Inc., v. Butterfield, 110 Misc. Rep. 257; Richmondville Union Seminary v. McDonald, 34 N. Y. 379; Genesee College v. Dodge, 26 N. Y. 213; Locke v. Taylor, 161 App. Div. 44.)

      Robert H. Jackson, Harry R. Lewis and Benjamin S. Dean for respondent.
    The instrument is only a promise to make a gift or subscription and lacks consideration which the law of New York requires for actionability. (Hamilton College v. Stewart, 1 N. Y. 581; Presbyterian Church v. Cooper, 112 N. Y. 517; Twenty-third St. Church
      v. Cornell, 117 N. Y. 601; Holmes v. Roper, 141 N. Y. 64; Dougherty v. Salt, 227 N. Y. 202; Assets Realization Co. v. Howard, 211 N. Y. 430; Tucker v. Alexanderoff, 183 U. S. 424; Cottage Church v. Kendall, 121 Mass. 528; Montpelier Seminary v. Smith, 69 Vt. 382; New Jersey Hospital v. Wright, 95 N. J. L. 462; U. of Penn. v. Coxe, 277 Penn. St. 512; Galt v. Swain, 9 Geattan [Va.], 633.)
   Cardozo, Ch. J.

The plaintiff, Allegheny College, is an institution of liberal learning at Meadville, Pennsylvania. In June 1921, a “ drive ” was in progress to secure for it an additional endowment of $1,250,000. An appeal to contribute to this fund was made to Mary Y ates Johnston of Jamestown, New York. In response thereto, she signed and delivered on June 15, 1921, the following writing:

Estate Pledge,
Allegheny College Second Century Endowment “ Jamestown, N. Y., June 15, 1921.

In consideration of my interest in Christian Education, and in consideration of others subscribing, I hereby subscribe and will pay to the order of the Treasurer of Allegheny College, Meadville, Pennsylvania, the sum of Five Thousand Dollars; $5,000.

“ This obligation shall become due thirty days after my death, and I hereby instruct my Executor, or Administrator, to pay the same out of my estate. This pledge shall bear interest at the rate of .... per cent per annum, payable annually, from .... till paid. The proceeds of this obligation shall be added to the Endowment of said Institution, or expended in accordance with instructions on reverse side of this pledge.

“ Name MARY YATES JOHNSTON,
Address 306 East 6th Street,
“ Jamestown, N. Y.
Dayton E. McClain Witness
T. R. Courtis Witness
to authentic signature.”

On the reverse side of the writing is the following indorsement: In loving memory this gift shall be known as the Mary Yates Johnston Memorial Fund, the proceeds from which shall be used to educate students preparing for the Ministry, either in the United States or in the Foreign Field.

“ This pledge shall be valid only on the condition that the provisions of my Will, now extant, shall be first met.
“ MARY YATES JOHNSTON.”

The subscription was not payable by its terms until thirty days after the death of the promisor. The sum of SI,000 was paid, however, upon account in December, 1923, while the promisor was alive. The college set the money aside to be held as a scholarship fund for the benefit of students preparing for the ministry. Later, in July, 1924, the promisor gave notice to the college that she repudiated the promise. Upon the expiration of thirty days following her death, this action was brought against the executor of her will to recover the unpaid balance.

The law of charitable subscriptions has been a prolific source of controversy in this State and elsewhere. We have held that a promise of that order is unenforcible like any other if made without consideration (Hamilton College v. Stewart, 1 N. Y. 581; Presb. Church v. Cooper, 112 N. Y. 517; 23rd St. Bap. Church v. Cornell, 117 N. Y. 601). On the other hand, though professing to apply to such subscriptions the general law of contract, we have found consideration present where the general law of contract, at least as then declared, would have said that it was absent (Barnes v. Perine, 12 N. Y. 18; Presb. Soc. v. Beach, 74 N. Y. 72; Keuka College v. Ray, 167 N. Y. 96; cf. Eastern States League v. Vail, 97 Vt. 495, 508, and cases cited; Y. M. C. A. v. Estill, 140 Ga. 291; Amherest Academy v. Cowls, 6 Pick. 427; Ladies Collegiate Irist. v. French, 16 Gray, 196; Martin v. Meles, 179 Mass. 114; Robinson v. Nutt, 185 Mass. 345; U. of Pa. v. Coxe, 277 Penn. St. 512; Williston, Contracts, § 116).

A classic form of statement identifies consideration with detriment to the promisee sustained by virtue of the promise (Hamer v. Sidway, 124 N. Y. 538; Anson, Contracts [Corbin’s ed.], p. 116; 8 Holdsworth, History of English Law, 10). So compendious a formula is little more than a half truth. There is need of many a supplementary gloss before the outline can be so filled in as to depict the classic doctrine. The promise and the consideration must purport to be the motive each for the other, in whole or at least in part. It is not enough that the promise induces the detriment or that the detriment induces the promise if the other half is wanting” (Wisc. & Mich. Ry. Co. v. Powers, 191 U. S. 379, 386; McGovern v. City of N. Y., 234 N. Y. 377, 389; Walton Water Co. v. Village of Walton, 238 N. Y. 46, 51; 1 Williston, Contracts, § 139; Langdell, Summary of the Law of Contracts, pp. 82-88). If A promises B to make him a gift, consideration may be lacking, though B has renounced other opportunities for betterment in the faith that the promise will be kept.

The half truths of one generation tend at times to perpetuate themselves in the law as the whole truths of another, when constant repetition brings it about that qualifications, taken once for granted, are disregarded or forgotten. The doctrine of consideration has not escaped the common lot. As far back as 1881, Judge Holmes in his lectures on the Common Law (p. 292), separated the detriment which is merely a consequence of the promise from the detriment which is in truth the motive or inducement, and yet added that the courts “ have gone far in obliterating this distinction.” The tendency toward effacement has not lessened with the years. On the contrary, there has grown up of recent days a doctrine that a substitute for consideration or an exception to its ordinary requirements can be found in what is styled “ a promissory estoppel ” (Willston, Contracts, §§ 139, 116). Whether the exception has made its way in this State to such an extent as to permit us to say that the general law of consideration has been modified accordingly, we do not now attempt to say. Cases such as Siegel v. Spear & Co. (234 N. Y. 479) and DeCicco v. Schweizer (221 N. Y. 431) may be signposts on the road. Certain, at least, it is that we have adopted the doctrine of promissory estoppel as the equivalent of consideration in connection with our law of charitable subscriptions. So long as those decisions stand, the question is not merely whether the enforcement of a charitable subscription can be squared with the doctrine of consideration in all its ancient rigor. The question may also be whether it can be squared with the doctrine of consideration as qualified by the doctrine of promissory estoppel.

We have said that the cases in this State have recognized this exception, if exception it is thought to be. Thus, in Barnes v. Perine (12 N. Y. 18) the subscription was made without request, express or implied, that the church do anything on the faith of it. Later, the church did incur expense to the knowledge of the promisor, and in the reasonable belief that the promise would be kept. We held the promise binding, though consideration there was none except upon the theory of a promissory estoppel. In Presbyterian Society v. Beach (74 N. Y. 72) a situation substantially the same became the basis for a like ruling. So in Roberts v. Cobb (103 N. Y. 600) and Keuka College v. Ray (167 N. Y. 96) the moulds of consideration as fixed by the old doctrine were subjected to a like expansion. Very likely, conceptions of public policy have shaped, more or less subconsciously, the rulings thus made. Judges have been affected by the thought that “ defences of that character ” are “ breaches of faith toward the public, and especially toward those engaged in the same enterprise, and an unwarrantable disappointment of the reasonable expectations of those interested (W. F. Allen, J., in Barnes v. Perine, supra, page 24; and cf. Eastern States League v. Vail, 97 Vt. 495, 505, and cases there cited). The result speaks for itself irrespective of the motive. Decisions which have stood so long, and which are supported by so many considerations of public .policy and reason, will not be overruled to save the symmetry of a concept which itself came into our law, not so much from any reasoned conviction of its justice, as from historical accidents of practice and procedure (8 Holdsworth, History of English Law, 7 et seq.). The concept survives as one of the distinctive features of our legal system. We have no thought to suggest that it is obsolete or on the way to be abandoned. As in the case of other concepts, however, the pressure of exceptions has led to irregularities of form.

It is in this background of precedent that we are to view the problem now before us. The background helps to an understanding of the implications inherent in subscription and acceptance. This is so though we may find in the end that without recourse to the innovation of promissory'estoppel the transaction can be fitted within the mould of consideration as established by tradition.

The promisor wished to have a memorial to perpetuate her name. She imposed a condition that the gift ” should be known as the Mary Yates Johnston Memorial Fund.” The moment that the college accepted $1,000 as a payment on account, there was an assumption of a duty to do whatever acts were customary or reasonably necessary to maintain the memorial fairly and" justly in the spirit of its creation. The college could not accept the money, and hold itself free thereafter from personal .responsibility to give effect to the condition (Dinan v. Coneys, 143 N. Y. 544, 547; Brown v. Knapp, 79 N. Y. 136; Gridley v. Gridley, 24 N. Y. 130; Grossman v. Schenker, 206 N. Y. 466, 469; 1 Williston, Contracts, §§ 90, 370). More is involved in the receipt of such a fund than a mere acceptance of money to be held to a corporate use (cf. Martin v. Meles, 179 Mass. 114, citing Johnson v. Otterbein University, 41 Ohio St. 527, 531, and Presb. Church v. Cooper, 112 N. Y. 517). The purpose of the founder would be unfairly thwarted or at least inadequately served if the college failed to communicate to the world, or in any event to applicants for the scholarship, the title of the memorial. By implication it undertook, when it accepted a portion of the “ gift,” that in its circulars of information and in other customary ways, when making announcement of this scholarship, it would couple with the announcement the name of the donor. The donor was not at liberty to gain the benefit of such an undertaking upon the payment of a part and disappoint the expectation that there would be payment of the residue.. If the college had stated after receiving $1,000 upon account of the subscription that it would apply the money to the prescribed use, but that in its circulars of information and when responding to prospective applicants it would deal with the fund as an anonymous donation, there is little doubt that the subscriber would have been at liberty to treat this statement as the repudiation of a duty impliedly assumed, a repudiation justifying a refusal to make payments in the future. Obligation in such circumstances is correlative and mutual. A case much in point is N. J. Hospital v. Wright (95 N. J. L. 462, 464), where a subscription for the maintenance of a bed in a hospital was held to be enforcible by virtue of an implied promise by the hospital that the bed should be maintained in the name of the subscriber (cf. Bd. of Foreign Missions v. Smith, 209 Penn. St. 361). A parallel situation might arise upon the endowment of a chair or a fellowship in a university by the aid of annual payments with the condition that it should commemorate the name of the founder or that of a member of his family. The university would fail to five up to the fair meaning of its promise if it were to publish in its circulars of information and elsewhere the existence of a chair or a fellowship in the prescribed subject, and omit the benefactor’s name. A duty to act in ways beneficial to the promisor and beyond the application of the fund to the mere uses of the trust would be cast upon the promisee by the acceptance of the money. We do not need to measure the extent either of benefit to the promisor or of detriment to the promisee implicit in this duty. “ If a person chooses to make an extravagant promise for an inadequate consideration it is his own affair ” (8 Holdsworth, History of English Law, p. 17). It was long ago said that when a thing is to be done by the plaintiff, be it never so small, this is a sufficient consideration to ground an action ” (Sturlyn v. Albany, 1587, Cro. Eliz. 67, quoted by Holdsworth, supra; cf. Walton Water Co. v. Village of Walton, 238 N. Y. 46, 51). The longing for posthumous remembrance is an emotion not so weak as to justify us in saying that its gratification is a negligible good.

We think the duty assumed by the plaintiff to perpetuate the name of the founder of the memorial is sufficient in itself to give validity to the subscription within the rules that define consideration for a promise of that order. When the promisee subjected itself to such a duty at the implied request of the promisor, the result was the creation of a bilateral agreement (Williston, Contracts, §§ 60-a, 68, 90, 370; Brown v. Knapp, supra; Grossman v. Schenker, supra; Williams College v. Danforth, 12 Pick. 541, 544; Ladies Collegiate Inst. v. French, 16 Gray, 196, 200). There was a promise on the one side and on the other a return promise, made, it is true, by implication, but expressing an obligation that had been exacted as a condition of the payment. A bilateral agreement may exist though one of the mutual promises be a promise “ implied in fact,” an inference from conduct as opposed to an inference from words (Williston, Contracts, §§ 90, 22-a; Pettibone v. Moore, 75 Hun, 461,464). We think the fair inference to be drawn from the acceptance of a payment on account of the subscription is a promise by the college to do what may be necessary on its part to make the scholarship effective. The plan conceived by the subscriber will be mutilated and distorted unless the sum to be accepted is adequate to the end in view. Moreover, the time to affix her name to the memorial will not arrive until the entire fund has been collected. The college may thus thwart the purpose of the payment on account if at liberty to reject a tender of the residue. It is no answer to say that a duty would then arise to make restitution of the money. If such a duty may be imposed, the only reason for its existence .must be that there is then a failure of consideration.” To say that there is a failure of consideration is to concede that a consideration has been promised since otherwise it could not fail. No doubt there are times and situations in which limitations laid upon a promisee in connection with the use of what is paid by a subscriber lack the quality of a consideration, and are to be classed merely as conditions (Williston, Contracts, § 112; Page, Contracts, § 523). “ It is often difficult to determine whether words of condition in a promise indicate a request for consideration or state a mere condition in a gratuitous promise. An aid, though not a conclusive test in determining which construction of the promise is more reasonable is an inquiry whether the happening of the condition will be a benefit to the promisor. If so, it is a fair inference that the happening was requested as a consideration ” (Williston, supra, § 112). Such must be the meaning of this transaction unless we are prepared to hold that the college may keep the payment on account, and thereafter nullify the scholarship which is to preserve the memory of the subscriber. The fair implication to be gathered from the whole transaction is assent to the condition and the assumption of a duty to go forward with performance (DeWolf Co. v. Harvey, 161 Wis. 535; Pullman Co. v. Meyer, 195 Ala. 397, 401; Braniff v. Baier, 101 Kan. 117; cf. Corbin, Offer & Acceptance, 26 Yale L. J. 169, 177, 193; McGovney, Irrevocable Offers, 27 Harv. L. R. 644; Sir Frederick Pollock, 28 L. Q. R. 100, 101). The subscriber does not say: I hand you $1,000, and you may make up your mind later, after my death, whether you will undertake to commemorate my name. What she says in effect is this: I hand you $1,000, and if you are unwilling to commemorate me, the time to speak is now.

The conclusion thus reached makes it needless to consider whether, aside from the feature of a memorial, a promissory estoppel may result from the assumption of a duty to apply the fund, so far as already paid, to special purposes not mandatory under the provisions of the college charter (the support and education of students preparing for the ministry), an assumption induced by the belief that other payments sufficient in amount to make the scholarship effective would be added to the fund thereafter upon the death of the subscriber (Ladies Collegiate Inst. v. French, 16 Gray, 196; Barnes v. Ferine, 12 N. Y. 18, and cases there cited).

The judgment of the Appellate Division and that of the Trial Term should be reversed, and judgment ordered for the plaintiff as prayed for in the complaint, with costs in all courts.

Kellogg, J.

(dissenting). The Chief Judge finds in the expression In loving memory this gift shall be known as the Mary Yates Johnston Memorial Fund ” an offer on the part of Mary Yates Johnston to contract with Allegheny College. The expression makes no such appeal to me. Allegheny College was not requested to perform any act through which the sum offered might bear the title by which the offeror states that it shall be known. The su~\ offered was termed a “ gift r by the offeror. Consequently, I can see no reason why we should strain ourselves to make it, not a gift, but a trade. Moreover, since the donor specified that the gift was made In consideration of my interest in Christian education, and in consideration of others subscribing,” considerations not adequate in law, I can see no excuse for asserting that it was otherwise made in consideration of an act or promise on the part of the donee, constituting a sufficient quid quo pro to convert the gift into a contract obligation. To me the words used merely expressed an expectation or wish on the part of the donor and failed to exact the return of an adequate consideration. But if an offer indeed was present, then clearly it was an offer to enter into a unilateral contract. The offeror was to be bound provided the offeree performed such acts as might be necessary to make the gift offered become known under the proposed name. This is evidently the thought of the Chief Judge, for he says: “ She imposed a condition that the ‘ gift ’ should be known as the Mary Yates Johnston Memorial Fund.” In other words, she proposed to exchange her offer of a donation in return for acts to be performed. Even so there was never any acceptance of the offer and, therefore, no contract, for the acts requested have never been performed. The gift has never been made known as demanded. Indeed, the requested acts, under the very terms of the assumed offer, could never have been performed at a time to convert the offer into a promise. This is so for the reason that the donation was not to take effect until after the death of the donor, and by her death her offer was withdrawn. (Williston on Contracts, sec. 62.) Clearly, although a promise of the college to make the gift known, as requested, may be implied, that promise was not the acceptance of an offer which gave rise to a contract. The donor stipulated for acts, not promises. In order to make a bargain it is necessary that the acceptor shall give in return for the offer or the promise exactly the consideration which the offeror requests. If an act is requested, that very act and no other must be given. If a promise is requested, that promise must be made absolutely and unqualifiedly.” (Williston on Contracts, sec. 73.) “ It does not follow that an offer becomes a promise because it is accepted; it may be, and frequently is, conditional, and then it does not become a promise until the conditions are satisfied; and in case of offers for a consideration, the performance of the consideration is always deemed a condition.” (Langdell, Summary of the Law of Contracts, sec. 4.) It seems clear to me that there was here no offer, no acceptance of an offer, and no contract. Neither do I agree with the Chief Judge that this court “ found consideration present where the general law of contract, at least as then declared, would have said that it was absent ” in the cases of Barnes v. Perine (12 N. Y. 18), Presbyterian Society v. Beach (74 N. Y. 72) and Keuka College v. Ray (167 N. Y. 96). In the Keuka College case an offer to contract, in consideration of the performance of certain acts by the offeree, was converted into a promise by the actual performance of those acts. This form of contract has been known to the law from time immemorial (Langdell, sec. 46) and for at least a century longer than the other type, a bilateral contract. (Williston, sec. 13.) It may be that the basis of the decisions in Barnes v. Perine and Presbyterian Society v. Beach (supra) was the same as in the Keuka College case. (See Presbyterian Church of Albany v. Cooper, 112 N. Y. 517.) However, even if the basis of the decisions be a so-called promisory estoppel,” nevertheless they initiated no new doctrine. A so-called promisory estoppel,” although not so termed, was held sufficient by Lord Mansfield and his fellow judges as far back as the year 1765. (Pillans v. Van Mierop, 3 Burr. 1663.) Such a doctrine may be an anomaly; it is not a novelty. Therefore, I can see no ground for the suggestion that the ancient rule which makes consideration necessary to the formation of every contract is in danger of effacement through any decisions of this court. To me that is a cause for gratulation rather than regret. However, the discussion may be beside the mark, for I do not understand that the holding about to be made in this case is other than a holding that consideration was given to convert the offer into a promise. With that result I cannot agree and, accordingly, must dissent.

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

Judgment accordingly.


text:
    Francis M. Ferrari, Respondent, v. First National Bank of Connellsville, Pennsylvania, Appellant.
    Banks and banking — bills notes and checks — negotiable instruments — foreign credit — establishment of credit need not be effected directly by small bank nor continue for all time — unreasonable delay in presentation of foreign drafts — funds not withdrawn by bank “through its agent” when withdrawn by trustee in bankruptcy of agent — delay in presentation of drafts excused if induced by representations of drawer that promptness was unnecessary.
    1. The establishment of a credit in a foreign country need not be effected directly by a small local bank nor need the credit, once established, continue for all time. An intermediary may be employed and if the conduct of the bank is in accord with the ordinary course of business, it performs its full duty.
    2. In the absence of some agreement between the drawer and the payee by which the latter was induced to delay presentation of foreign drafts for payment, an interval of nine or eleven months between the issuance of the drafts and their presentation must be held, as matter of law, to constitute an unreasonable delay and a loss resulting therefrom should fall upon the one responsible for the fault. (Neg. Inst. Law, § 322; Cons. Laws, ch. 38.)
    3. In an action to recover an amount paid for the establishment of a foreign credit an argument that defendant, “ through its agent,” withdrew the funds from the bank on which the drafts were drawn, cannot be sustained, where it appears that the money was withdrawn by the trustee in bankruptcy of the said “ agent.” The funds wen. withdrawn by operation of the law as represented by the court and trustee and defendant cannot be held responsible therefor.
    4. If the. fact should be found that representations were made by the defendant to the holders of the drafts, by reason of which they were induced to believe that promptness was unnecessary, delay in presentation until after the funds had been withdrawn by order of the court could not be deemed unreasonable within the intent of section 322 of the Negotiable Instruments Law.

      Ferrari v. First Nat. Bank of Connellsville, 219 App. Div. 817, reversed.
    (Argued October 19, 1927;
    decided November 22, 1927.)
    Appeal, by permission, from a judgment of the Appellate Division of the Supreme Court in the first judicial department, entered March 31, 1927, unanimously affirming a judgment in favor of plaintiff entered upon a verdict directed by the court.

      Harold Nathan, John B. Doyle, Mortimer Brenner and Chester Rohrlich for appellant.
    The checks were not presented within a reasonable time, and the drawer, having shown that the delay caused the loss of the funds paid out for the purpose of meeting the checks, was discharged from liability. (Mazukiewicz v. Hanover Nat. Bank, 240 N. Y. 317; Commercial Nat. Bank v. Zimmerman, 185 N. Y. 210; Conroy v. Warren, 3 Johns. Cas. 259; Keith v. Mackey, 5 Rob. [La.] 277; Cory v. Scott, 3 B. & Ald. 619; Mohawk Bank v. Broderick, 10 Wend. 303; Commercial Bank v. Hughes, 17 Wend. 94; Harker v. Anderson, 21 Wend. 372; French v. Bank of Columbia, 4 Cranch, 141; Dickins v. Beal, 10 Pet. 572; Robinson v. Ames, 20 Johns. 146.) The withdrawal of the funds by the trustee in bankruptcy was not the equivalent of withdrawal by the drawer. (Hermann v. Niagara Fire Ins. Co., 100 N. Y. 411; Lamkin v. Rosenthal, 5 App. Div. 532; Metropolitan Aluminum Mfg. Co. v. Lau, 61 Misc. Rep. 105; Walker v. State Trust Co., 40 App. Div. 55; Goodloe v. Fidelity Bank, 183 N. C. 315; Heath v. New Bedford, etc., Trust Co., 184 Mass. 481; McKey v. Clark,
      233 Fed. Rep. 928; Audenried v. Battele, 90 Mass. 302; Cushman v. Snow, 186 Mass. 169; Matter of Wright, 16 Am. Bank. Rep. 778; Matter of Wright, 151 Fed. Rep. 361; 157 Fed. Rep. 544; Robinson v. Lancaster Foundry Co., 136 Atl. Rep. 58; Matter of Gubelman, 13 Fed. Rep. [2d] 732.) The defendant was discharged by reason of the unexcused delay in protesting the checks. (Casper v. Kulne, 79 Misc. Rep. 411; Auerbach v. Barrett, 214 App. Div. 279; Gerding v. Haskin, 141 N. Y. 514; Kennedy v. Rolfe, 174 App. Div. 10.)

      A. S. Cutler and David L. Weissman for respondent.
    The delay in presentment for payment did not discharge the drawer, because the delay did not cause the loss. (Carroll v. Sweet, 128 N. Y. 19; Baldwin’s Bank v. Smith, 215 N. Y. 76; Cutler v. American Exchange National Bank, 113 N. Y. 593; Andrus v. Bradley, 102 Fed. Rep. 54; 107 Fed. Rep. 196; Moscowitz v. Deutsch, 46 Misc. Rep. 603; Vitale v. Le Petit Paris, 192 N. Y. Supp. 825; Springer v. Erdman, 210 N. Y. Supp. 244; Harbeck v. Craft, 4 Duer, 122; Steward v. Smith, 17 Ohio St. 82; 2 Daniel on Neg. Inst. § 1589.)
   O’Brien, J.

The complaint alleges that defendant agreed with plaintiff’s assignors to establish a credit with the Banca Commerciale Italiana of Rome, amounting to 38,000 lire, that defendant failed, neglected and refused to establish any credit with that bank and, because no such credit had ever been established, that drafts amounting to 38,000 lire issued by defendant to plaintiff’s assignors were dishonored and payment refused.

By stipulation at the trial and by evidence, certain facts were proved. On September 5, 1922, plaintiff's assignors paid $1,672 to defendant and received in return four checks on the Banca Commerciale aggregating 38,000 lire. On September 8 defendant deposited $1,661.55 with Knauth, Nachod & Kuhne at New York for the purpose of paying the four checks on presentation and on the same day Knauth, Nachod & Kuhne notified the Banca Commerciale to pay the checks on presentation and to debit their account in the amount of the checks. From September 8, 1922, until June 8, 1923, that firm had a credit balance with the Banca Commerciale in excess of all its outstanding debits. It was engaged on a large scale in international banking, exchange and import and export financing. Its main office in the United States was at New York and it had branches in Philadelphia, Chicago, Detroit, Pittsburg and Cincinnati. The extent of its business may be gauged by the fact that its foreign exchange transactions with inland correspondents in this country amounted to $100,000 per business day. On June 8, 1923, a petition in bankruptcy was filed against it and on August 23, 1923, the trustee, acting pursuant to an order of a United States district judge, directed that all balances to its credit in foreign banks, including the Banca Commerciale, be withdrawn and placed in the general funds of the trustee. In compliance with such order and direction the 38,000 fire was withdrawn and returned to the trustee in bankruptcy. On April 2, 1924, after such withdrawal, defendant’s four checks were presented by plaintiff for payment at the bank in Rome and payment was refused for the reason that there were no funds to meet them.

The basis of this action is the alleged failure by defendant to establish a credit with the Banca Commerciale. The allegations of the complaint are disproved by the concessions and by the evidence. Incontestably defendant did establish a credit with the Banca Commerciale. Such a transaction need not be effected directly by a small local bank nor need the credit, once established, continue for all time. An intermediary may be employed. If defendant’s conduct accorded with the ordinary course of business, it performed its full duty. (Mazukiewicz v. Hanover National Bank, 240 N. Y. 317, 322.) Plaintiff does not show that this inland bank in a small Pennsylvania town had foreign correspondents or that other institutions of similar character were accustomed to employ any other process to send money to Europe. Defendant was bound to establish a credit. This it did. It had no right to withdraw the credit. It never did withdraw it. The withdrawal was accomplished by a third party acting under an order of the United States District Court. To hold that defendant’s recourse to the facilities afforded by an organization whose business consisted in large measure in the establishment of foreign credits falls short of its obligations to its customers, would impose upon all the smaller banking institutions of this country a liability approaching that of an insurer. If defendant had a right to expect that these checks would be paid when presented, under ordinary circumstances, that would be sufficient. (Mazukiewicz v. Hanover National Bank, supra.)

The more specific question is whether failure by plaintiff’s assignors to present the checks for payment during the time extending from September 8,1922, to August 23, 1923, places the loss upon the payee or the drawer. In the absence of some agreement between the drawer and the payee by which the payee may be induced to delay presentation, an interval of eleven months or even nine months must be held, as matter of law, to constitute an unreasonable delay. Section 322, Negotiable Instruments Law (Cons. Laws, ch. 38), provides: A check must be presented for payment within a reasonable time after its issue or the drawer will be discharged from liability thereon to the extent of the loss caused by the delay.” What was the loss, if any, caused by the delay? The loss, of course, was 38,000 lire, but was it caused by the delay in presenting the checks for payment or by some other event? That it resulted from delay seems perfectly clear. The funds were in the bank at Rome from September 8, 1922, until August 23, 1923. If the checks had been presented at any time between these dates, they would have been paid. Loss resulting from neglect shou d fall upon the one responsible for the fault. (Baldwin’s Bank v. Smith, 215 N. Y. 76, 85.) Plaintiff argues that defendant through its agent ” withdrew the funds and the courts have so far decided that the withdrawal by the trustee in bankruptcy was the exact equivalent of withdrawal by defendant. We take a different view. While Knauth, Nachod & Kuhne were defendant’s agents for making the deposit, they never were vested with any authority to withdraw. (Hermann v. Niagara Fire Insurance Co., 100 N. Y. 411, 415.) Moreover, the trustee was Knauth, Nachod & Kuhne’s representative only because the law intervened and took from the bankrupt the control of its property. In a more accurate sense he was the representative of the bankrupt’s creditors rather than the bankrupt. The funds were withdrawn by operation of the law as represented by the court and the trustee. Defendant cannot be held responsible for an act accomplished by the arm of the United States District Court.

On the new trial which must be granted, the judgment will rest upon the disposition of an issue of fact. There is evidence for and against the proposition that plaintiff’s assignors, probably ignorant of banking, were promised by defendant that the checks were as good as money and could be used at any time and at any bank. If the fact should be found that such representations were made and that, by reason of them, the holders of the checks were induced to believe that promptness was unnecessary, delay in presentation until after the funds had been withdrawn by order of court could not be deemed unreasonable within the intent of section 322, Negotiable Instruments Law.

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

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

Judgments reversed, etc.


author: Crane, J.

text:
    George R. Psota, an Infant, by Joseph Psota, His Guardian ad Litem, et al, Respondents, v. Long Island Railroad Company, Respondent, and Antoinette D. Andrews, Appellant.
    Negligence — master and servant — motor vehicles — Highway Law — evidence — erroneous exclusion of testimony tending to show that chauffeur was not using car with consent or in employment of owner at time of accident — erroneous exclusion of testimony of owner as to instructions to chauffeur — rule that master is liable for acts of servant only when acting within scope of employment not changed by section 282-e of Highway Law — father’s action for loss of services within meaning of words “ injuries to person or property ” contained in that statute.
    1. Questions asked of a defendant by her counsel, in an action to recover for personal injuries alleged to have been sustained through the negligence of her chauffeur, as to whether he was on duty on that day; whether he was performing any duty for her on that day, and whether he was in fact working for some one else on that day, though vague and calling for conclusions, should have been allowed. They were directed toward the defense defendant attempted to make — that the chauffeur was not using her car with her consent or in her employment at the time of the accident.
    2. It was also error to sustain objections to questions asked defendant by her counsel as to her instructions to the chauffeur and whether she had ever told him not to take anybody in the ear with him, on the ground that the answers called for hearsay and would not be binding on the plaintiffs.
    3. Nor may such ruling be justified on the theory that section 282-e of the Highway Law (Cons. Laws, ch. 25), making the owner liable for injuries resulting from negligence in the operation of a motor vehicle by any person with the permission of such owner, is broad enough to include invited passengers. Section 282-e has not changed the rule that a master is not liable for the acts of his servant unless acting within the scope of his employment. The defendant, therefore, should have been permitted to prove that the chauffeur, in inviting the plaintiffs to ride with him, was acting contrary to her instructions. (Grant v. Knepper, 245 N. Y. 158, distinguished.)
    4. A co'ntention that a father’s action for loss of services does not come within the meaning of the words “ injuries to person or property,” contained in section 282-e of the Highway Law, and that liability under this section applies only to the person who receives the injury, cannot be sustained.

      Psota v. Long Island R. R. Co., 219 App. Div. 836, reversed.
    (Argued October 24,1927;
    decided November 22, 1927.)
    Appeal, by permission, from a judgment of the Appellate Division of the Supreme Court in the second judicial department, entered April 9, 1927, unanimously affirming judgments in favor of plaintiffs and defendant, respondent, entered upon a verdict.

      Charles D. Miller and Ernest P. Hoes for appellant.
    The trial court erred in refusing to permit the defendant Mrs. Andrews to testify as to her instructions to Nash, and whether he was on duty or performing any duty that Sunday, and as to whether he was working for someone else. (Ferris v. Sterling, 214 N. Y. 249; Rose v. Balfe, 223 N. Y. 481; Obrien v. Stern Bros., 223 N. Y. 280; Fluegel v. Coudert, 244 N. Y. 393; Baker v. Allen & Arnink Auto Renting Co., 231 N. Y. 8; Rolfe v. Hewitt, 227 N. Y. 486; Cohen v. Neustadter, 221 App. Div. 102.) Section 282-e of the Highway Law was not intended to apply to invitees of the agent of an owner. (Endlich on Interp. Stat. §§ 113-127; Davis v. Davis, 75 N. Y. 221; Dean v. M. E. R. Co., 119 N. Y. 540; Henavie v. N. Y. Co., 154 N. Y. 278; White v. Wager, 32 Barb. 250; Kennedy v. Travelers Ins. Co., 127 Misc. Rep. 665; People v. Steuben County, 146 N. Y. 107; People ex rel. Collins v. Spicer, 99 N. Y. 225; People ex rel. Earl v. England, 16 App. Div. 97; Drake v. State, 144 N. Y. 414; Spencer v. Myers, 73 Hun, 274; Ayers v. Lawrence, 59 N. Y. 192.) Section 282-e of the Highway Law does not authorize the recovery by a parent against the owner of an automobile for loss of services and medical expenses of infant children. So much of the judgment appealed from as affirms the judgment in favor of Joseph Psota for loss of services, etc., of his children, should be reversed. (Goodier v. National Surety Co., 125 Misc. Rep. 65; Price v. National Surety Co., 221 App. Div. 56.)

      Harold R. Medina and John R. Vunk for plaintiffs, respondents.
    Every consideration of statutory interpretation and public policy sustains the construction of section 282-e of the Highway Law adopted by the Appellate Division herein as this tends to make the highways safe by affording the same protection to those invited to ride upon an automobile as is afforded to pedestrians or others injured through the negligence of a person to whom the owner of an automobile has intrusted its operation. (Cohen v. Neustadter, 221 App. Div. 102; Grant v. Knepper, 245 N. Y. 158.) The provision of section 282-e of the Highway Law making the owner of a motor vehicle liable “ for death or injuries to person or property ” was intended to include liability to a parent for medical expenses and loss of services. (Price v. Nat. Surety Co., 221 App. Div. 56.)

      Rowland Miles and Joseph F. Keany for defendant, respondent.
   Crane, J.

On Sunday, September 20, 1925, one Nash was driving a Ford station wagon belonging to the defendant Antoinette D. Andrews, along one of the roads of St. James, Long Island. He overtook two children, Rosalie Psota and George Psota, who were walking along the road, and asked them if they wanted a ride. They got into the car, which a few minutes later was struck by a train of the Long Island Railroad Company, coming into the station at St. James. Nash was killed and the two children suffered injuries, for which they and their father have brought suit against the railroad and the defendant Andrews. The jury exonerated the railroad company and found three verdicts in varying amounts against Mrs. Andrews.

Although the Appellate Division unanimously affirmed the judgments, nevertheless it allowed an appeal to this court believing that there were questions involved which should be further reviewed.

Nash had been employed by Mr. Andrews in his lifetime, and had continued in the general employ of the widow, Mrs. Andrews. On the trial she attempted to show that at the time of the accident Nash was not using the car with her consent, express or implied, was not engaged in operating it in the course of his employment, and further, that his inviting the Psota children to ride with him was in violation of and contrary to her express instructions to him. Both of these defenses were good if established, and she should have been permitted a full opportunity to offer this testimony if it were available. As to the first defense, the Appellate Division was of the opinion that, the questions asked by counsel were not proper in form, and the answers, therefore, properly excluded. We must admit that the questions are not to the point and are very vague. They are the following: “Q. Was Mr. Nash on duty on that day, on this Sunday? Did he or was he performing any duty for you on that day? Was he in fact on that day working for somebody else? ” Objections to these questions were sustained. We think these questions could very well have been allowed. Mrs. Andrews should have been permitted to testify that on that day Nash was not on duty or at work for her. No doubt the answers would have led to other and better directed questions. At least, these were introductory matters bearing upon Nash’s employment at the time of the accident. It was not a subject to be dealt with strictly. A certain latitude must be allowed in the examination of witnesses, and a certain indulgence to the characteristics of counsel. There is no set or artificial method for asking questions. While the questions no doubt called for conclusions, yet further examination or cross-examination would have brought out the exact facts and the actual employment of Nash at the time. At least, the questions were directed toward the defense which Mrs. Andrews attempted to make — the defense that Nash was not using her car with her consent, or in her employment at the time, and they should have been allowed. However, we might not consider the exclusion of the answers to these questions as sufficient to require reversal if it were not that along with them were other rulings compelling reversal.

Mrs. Andrews attempted to show through her counsel that she had given instructions to Nash not to invite strangers to ride in her car. Numerous questions were asked of Mrs. Andrews as to her instructions to Nash, and whether she had ever told him not to take anybody in the car with him. Q. Had you ever told Mr. Nash not to take anybody in the car with him,” may do as an example of the questions asked, to all of which objections were made and sustained and the answers excluded. The grounds of the exclusion were stated to be that the answers called for hearsay and would not be binding on the plaintiffs. Of course no such ground is urged to sustain the rulings on this appeal. Here it is pleaded that the exclusion of this evidence can be justified by reason of section 282-e of the Highway Law (Cons. Laws, ch. 25), which it is said is broad enough in its terms to include invited passengers, if the car was being operated with the consent of the owner. Section 282-e reads as follows:

Negligence of operator other than owner attributable to owner. Every owner of a motor vehicle operated upon a public highway shall be liable and responsible for death or injuries to person or property resulting from negligence in the operation of such motor vehicle, in the business of such owner or otherwise, by any person legally using or operating the same with the permission, express or implied, of such owner.”

These words are broad enough to cover this case, provided the chauffeur was operating the car with the permission of Mrs. Andrews. When, however, we read this section in the light of our previous decisions and of the evil which the statute sought to remedy, we will readily see that it does not apply. Prior to the enactment of this section, the law was that an owner was not liable for the negligence of a person to whom he had loaned his car, whether that person were a member of his family, a servant on a personal errand or a stranger. (Potts v. Pardee, 220 N. Y. 431; Van Blaricom v. Dodgson, 220 N. Y. 111.) The Legislature determined to change this law and did change it by this section of the Highway Law so as to make the owner liable for the negligence of a person to whom he loaned the car in connection with its operation upon the highway. Such person was no longer a stranger to the owner, but became to this extent the owner’s agent. The owner assumed this liability under the law and took this risk in loaning bis car. (Fluegel v. Coudert, 244 N. Y. 393.) But the Legislature went no further; it did not otherwise change any of the rules of liability; that is, it did not extend the liability of the master for the acts of his servant. It placed the borrower of a car in the same position toward the lender as that of master and servant, principal and agent, but it did not increase the liability of the lender beyond that of the master for those acts of his servant coming within the scope of his employment. The Legislature may not be presumed to make any innovation upon the common law further than is required by the mischief to be remedied. (Dean v. Metropolitan Elevated Railway Co., 119 N. Y. 540, p. 547.)

The law has always been that a master is not liable for the acts of his servant or agent unless acting within the scope of his employment. In applying this rule it has been frequently held that an owner of an automobile is not hable to strangers invited by the chauffeur to ride, especially if contrary to orders and instructions. (Rolfe v. Hewitt, 227 N. Y. 486, p. 491; Goldberg v. Borden’s Condensed Milk Co., 227 N. Y. 465.)

Section 282-e of the Highway Law, therefore, has not changed this rule of law. Even though Nash was driving the Ford car with the permission, express or implied, of Mrs. Andrews, he was not acting within the scope of his employment if he invited these children to ride contrary to her ‘instructions. Mrs. Andrews should have been permitted to prove these facts. A chauffeur of an automobile is employed to drive it according to his employment and his instructions, express or implied.

While, therefore, the Psota children were hurt through the negligence of Nash, yet Mrs. Andrews is not hable if he were acting without the scope of his employment or contrary to her instructions.

Stress has been laid upon our decision in Grant v. Knepper (245 N. Y. 158). In that case the driver was using the car with the permission of the owner and in the owner’s business. He negligently permitted a stranger to drive it, resulting in injury to another on the highway. We said that the owner was liable at common law and also under the statute as the negligence was that of the driver using the car with the express authority of the owner. The driver could not shift his duty to the public. A different question would have arisen had the invited guest been hurt, and had sought redress of the owner.

The argument has been made that section 282-e of the Highway Law was intended to- protect only travelers on the highway, and did not apply to persons riding in a car. ■ The previous law has been modified, it is said, only in favor of persons injured on a highway, and that as to occupants of a car the law remains the same as it always has been. This would mean that even if the Psota children were riding with the consent, express' or implied, of Mrs. Andrews she would not be hable for Nash’s negligence. The same would apply to Nash’s family, if the car had been loaned to him to take his family out for a ride. In other words, as to these people riding in the car, they would still be in the position of one to whom the car had been loaned, under the law previously existing. The owner would not be liable to such persons for the negligence of the driver. This of course assumes that the persons were riding on their own pleasure or business and not for the business or purpose of the owner. (See Cohen v. Neustadter, 221 App. Div. 102.)

We do not think these questions are presented by this appeal, and we will not decide them until they arise. The reversal of this case is placed upon the ground that Mrs. Andrews was prevented from proving that Nash in taking in the children acted contrary to her instructions and without the scope of his employment.

As a new trial must be had, another question has arisen which we must decide for the guidance of the trial court. It is said that as section 282-e of the Highway Law makes the owner liable and responsible for death or injuries to person or property resulting from negligence in the operation of a motor vehicle, the father’s action for loss of services does not come within the meaning of the words injuries to person or property.” The liability under this section, it is insisted, applies only to the person who receives the injury. We do not give this limited meaning to the words. Injuries to the person ” were no doubt intended to be covered by the broad definition of personal injury ” as found in section 37-a of the General Construction Law (Cons. Laws, ch. 22), “ other actionable injury to the person either of the plaintiff, or of another.” Actions by a father for the loss of the services of his child, or a husband for the loss of the services of his wife have in legal parlance been classed with personal injury cases. ' We see no reason for drawing a distinction between such actions when section 282-e of the Highway Law is applicable. The father’s action is based upon and arises out of the negligence which pauses the injury to the child. The injury to the child results in a twofold action, one for the father and one for the child. The liability referred to is, therefore, a full, not an incomplete one. We are holding herewith that such words used in section 282-b of the Highway Law relating to undertakings include an action by the father. (See Price v. National Surety Co., 221 App. Div. 56; 246 N. Y. 586.)

For the reasons here stated, the judgments below should be reversed as to the defendant Antoinette D. Andrews, and a new trial granted, with costs to abide the event.

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

Judgment accordingly.