author: Davies, J. Sutherland, J.

text:
    Hinds v. Barton et al.

    In an action for the firing of a building by a steam engine, the plaintiff is entitled to give evidence of the distance at which sparks emitted by the engine had kindled fires.
    A notice that the defendant would be a witness in his own behalf “ as to all the alleged facts in the plaintiff’s complaint,” does not specify the points as to which he was to be examined,’ as required by the Code in force in 1857.
    The liability of the owner of the engine turns upon actual negligence in its use, and not upon its being constructed in the form generally adopted, and used in the ordinary manner, with the usual precautions.
    Appeal from the Supreme Court. Action to recover damages for the negligent burning of the plaintiff’s house, barns and outbuildings, and a quantity of hay, &c., by the alleged improper management of a steam-dredge, with which, it was charged, the defendants were at work on the Erie canal, in November, 1856. On the trial, it was admitted that the plaintiff owned the property consumed, and that Barton, one of the defendants, was, on the day of the fire, engaged with a steam-dredge in excavating the canal in the vicinity of the buildings-All the evidence connecting the defendant Richardson with the transaction was, that one of the laborers employed on the dredge testified that he was hired by the defendant Richardson to work generally on said dredge that fall; and it was also proven that the defendants had run the dredge as partners in excavating on the canal previous to the occurrence of the fire in question. The plaintiff offered to prove that, previous to the destruction of the plaintiff’s property, the said dredge, when being operated at different points on the canal, had emitted sparks from its smoke-pipe, which kindled fires upon the land adjacent to the canal, at distances as great, and greater, than the distance from the dredge to the plaintiff’s buildings, on the day of the "said fire. This testimony was objected to by the defendants and admitted, and exception taken.

      . The plaintiff having rested, the defendants moved for a non-suit as to the defendant Richardson, which was denied, and the defendant Richardson excepted. The counsel for the defendant Richardson asked the justice to direct a verdict in his favor, on the ground that there was not evidence sufficient to enable the plaintiff to recover against him; which was refused, and an exception taken. The counsel for said defendant Richardson then offered to examine him as a witness on his own behalf, under section 399 of the Code of Procedure, as it then read (January, 1858), under a notice given in pursuance thereof, •which stated that said defendant Richardson would be examined on his own behalf on the trial, “ as to all of the alleged facts in the plaintiff’s complaint.” The justice held the notice not sufficiently explicit, and excluded the witness; to which the counsel for said Richardson excepted.
    The defendants’ counsel requested the justice to charge the jury that, if the steam-dredge was constructed in the form generally adopted and used for the purposes to which such dredges are generally applied, and it was used and applied in the ordinary manner and with the usual guards and precautions adopted by persons using them, then there had been no such negligence as would render the defendants liable. The court refused so to instruct, to which the defendants excepted; but charged the jury that, if they found, from the evidence, that the defendants were guilty of actual negligence and carelessness in the use of the dredge, and by means thereof had fired the property of the plaintiff, he was entitled to recover.
    The jury found a verdict for the plaintiff, upon which judgment was entered, and the same was affirmed at the general term, and the defendants appealed to this court.

      Henry W. Rogers, for the appellants.

      Sandford E. Church, for the respondent.
   Davies, J.

It will be convenient to consider the questions raised on this appeal in the order they have been above stated. In reference to the testimony given- as to the distance the engine had previously emitted sparks which kindled fires, it is obvious such testimony was offered to meet an objection which was or might be urged, that, at the time of the happening of this particular fire, the engine was at so great a distance from the buildings ignited that they were not, in all reasonable probability, set on fire by sparks from it. In this view, it is difficult to see any sound objection to the testimony. It was the object of the plaintiff to show the cause of the fire; and this, doubtless, had to be established by circumstances. If any one had seen the sparks leave the engine and proceed to and ignite the buildings, this would have been such clear, positive and direct testimony as would, doubtless, have rendered any resort to circumstantial.testimony unnecessary. But if no such positive testimony was given, or, if given, it became necessary to sustain it by other testimony, then it was most pertinent and important to show that on previous occasions the engine had emitted sparks which passed over a greater space than that between it and the buildings consumed on the present occasion, and caused the ignition of other buildings or materials. Such, testimony would show, not only the power of the engine to emit sparks, but the distance they would ttavel in a state of ignition. In any aspect in which the testimony might be regarded, it seems to have been peculiarly proper, and may have been essential, to maintain the plaintiff’s case. It must be borne in mind that the evidence offered related to the capacity of this particular engine to emit igneous matter a distance greater than that intervening between it and the buildings of the plaintiff which were consumed. The testimony was not, therefore, obnoxious to the objection principally urged against evidence of a similar character in the case of Sheldon v. Hudson River Railroad Company (4 Kern., 218). There it was proposed to prove that shortly before the plaintiff’s building was burned, the witness had seen sparks and fire thrown from the engines used by the defendants in running their trains through the witness’s premises, a greater distance than this building stood from the track of the railroad. This evidence was rejected, and an exception taken; and on the ground of such rejection, a new trial was granted by this court. It was argued, then, by the defendants’ counsel, that the evidence offered was too remote and indefinite to have a just influence upon the particular question in issue in the case ;• that it did not refer to any particular engine, and that it might well be that the engine which ran past the plaintiff’s premises just before the fire was quite a different one from those which scattered fire on the occasion to which the evidence offered related. Denio, Ch. J., in the opinion, says: “I think, therefore, it is competent prima facie evidence, for a person seeking to establish the responsibility of the Company for a burning upon the track of the road, after refuting every other probable cause of the fire, to show that, about the time when it happened, the trains which the Company were running past the location of the fire were so managed in respect to the furnaces as to be likely to set on fire objects not more remote than the property burned.” Hubbard, J., says: “ The evidence was competent, and should have been received, upon the proposition whether the defendants caused the fire. It was a primary fact to trace the fire to the defendants, as a ground of liability. There is no pretence in tais case that the construction of the Oneida (the engine supposed to have caused the fire in that case), as it respects the emission of sparks or cinders, differed from that of every other engine used- by the defendants on their road. It must follow, therefore, that, under the same circumstances, the same amount of sparks and coals of fire would issue from every other engine as the Oneida. The proof offered was, therefore, practically the samé as though it had been proposed to show that the Oneida frequently or generally made emissions when running at the usual speed.” It was well remarked in that case—and what was said is applicable to the present— that the admission of such evidence is essential to the administration of justice, inasmuch as circumstantial proof must, in the nature of things, be resorted to, and inasmuch as the jury cannot take judicial cognizance of the fact that locomotive engines do emit sparks and cinders which may be borne a given distance by the wind. The evidence was competent to establish certain facts which were necessary to be established in order to show a possible cause of the accident, and to prevent vague and unsatisfactory surmises on the part of the jury. If the evidence offered in that case was admissible, a fortiori it was in the present case, as here it was confined to proof of what a particular engine did, and had the power and capacity to do.

We think the justice properly refused to nonsuit the plaintiff, as to the defendant Richardson, and to direct the jury to render a verdict in his favor. There was certainly some evidence to go to the jury that he was as liable as the other defendant. Previous to this burning he and the other defendant had used and worked this dredge as partners, and at the time of the fire it was being used in the same way. Ho change in the relations of the defendant Richardson to. the machine having been shown, the presumption would be, from the circumstances, that they continued the same at the time the plaintiff’s buildings were consumed. This presumption is strengthened by the proof of one of the employees on the machine, working then, as I understand the case, at the time, that he was so employed by the defendant Richardson. This proof was sufficient to send the case to the jury, and on it they have found the defendant, Richardson, was concerned in the management of the machine at the time, with the other defendant, and the Supreme Court at general term has refused to set aside the verdict as against evidence. We think it should not be disturbed and that the rulings of the justice at the trial were correct.

We think the judge ruled correctly, in excluding the defendant as a witness on his own behalf. Section 399 of the Code at the time of this trial, allowed the examination of a party on his own behalf, only when previous notice of the intention so to be examined, was given to the opposite party in writing “specifying the points upon which the party is intended to be examined.” The same provision existed, as to the examination of the assignor of a chose in action. In Faber v. Reese (8 How. P. R., 341), it was held by the general term of the fourth district, that the points upon which the assignee was to be examined, must be specified in the notice. Not one word was said as to the points or subject upon which the examination was to be had. In Benham v. New York Central Railroad Company (13 How. P. R., 199), the notice was that the assignee of the plaintiff would be examined as a witness on his behalf as to the liability of the above named defendants, and also as a witness generally in said action. The general term of the eighth district held that there could hardly be a serious pretence that the'notice given in that case, was a compliance with the statute. In Pattison v. Johnson (15 How., 289), the party offered himself as a witness under the Code, as it was at the time of the trial of this action. The notice in that case was that the defendant “ will be examined as a witness on the trial of this action, in his own behalf, on each and every allegation contained in, and fact put at issue by, the pleadings therein.” Marvih, J., held the notice entirely insufficient, and that the notice gave no more information than if it had stated an intention to examine the party generally in the action in his own behalf. He said, “ there is no difficulty in practice in specifying the points upon which it is intended to examine the witness, and it is important to the adverse party that he should be informed of the subject or question in reference to which the examination is to be made. The notice should certainly • be as clear and as definite as is required in a bill of particulars.” The notice in the present case, was almost as general as that in Faber v. Reese, it being qualified as to the matters or facts set forth in the complaint. By no process of reasoning can this be maintained to be a specification of the points, upon which it was intended to examine the party. The object of the provision requiring the specification of the points, to which the assignor or the party was to be examined, is obvious. If examined, then the opposite party could offer himself as a witness on his own behalf; and it was important that he should have ample notice of the specific points upon which the assignor, or the party, proposed to be examined, that he might determine the necessity of attending the trial to be examined on Ms own behalf, or have his testimony taken before a commissioner. This determination could not be safely made if he was partly in ignorance of the points upon which the other side proposed to examine himself or his assignor. The Code, therefore, wisely provided, that ten days before the trial, if he contemplated his own examination or. that of his assignor, he should give full notice of the matters upon which the assignor or party was to be examined, so that the party receiv. ing the notice might attend, or have his evidence there, to rebut or explain such testimony.

In reference to the request to charge that if the dredge was properly constructed; and used for the purpose to which such dredges were generally applied, and was used in the ordinary manner with the usual guards and precaution, then the defendants were not liable; we think the justice properly refused so • to charge, and that such refusal coupled with the charge which . he actually did make in reference to it, expressed the correct rule of law. A similar request was made in the case of Fero v. The Buffalo and State Line Railroad Company (22 N. Y., 209.) The defendants’ counsel there asked the court to charge that if the engine was in good order and of proper construction and used with ordinary care, the plaintiff could not recover; which request was refused and the defendants excepted; and the court did charge that under the circumstances of that case the defendants were bound to use the utmost care, and if for the want of such care, fire is communicated, the defendants were liable. This court held such charge and refusal to charge correct, and sustained the decision and rulings of the judge at the trial. In the present case, the refusal to charge, and the charge as made in connection therewith, are in accordance with correct principle and established authority, and the judgment should be affirmed, with costs.

Sutherland, J.

The testimony introduced by the plaintiff, to prove that sparks emitted from the smoke pipe of the dredge, had before been carried to as great or a greater distance, and set fire to buildings, was competent and properly received; because the testimony tended to show, what experience had shown to be the nature and operation of the machine; and thus to show what degree of care was required in operating the machine.

I think there was evidence enough to submit to the jury as to the defendant, Richardson. The testimony was that the defendants had operated the dredge as partners previously ; and one of the hands employed on the dredge at the time of the accident, testified that he was hired by the defendant, Richardson, to work generally on the dredge that fall.

I think the evidence of the defendant, Richardson, was prpperly rejected on the ground that the notice of his examination" was defective, in not specifying the points upon which he was intended to be examined. (Code, § 399, amendt., 1857.) The notice in this case was general, specifying no points at all. It was, in effect, merely a notice that he would be examined as a witness in the case. (Patterson v. John, 15 How., 289; Benham v. N. Y. C. R. R. Co., 13 How., 198.)

The charge of the judge to the jury “ that if they found from the evidence, that the defendants were guilty of actual negligence in the use of the dredge, and by means thereof had fired the property of the plaintiff, he was entitled to recover ” was clearly right. It left the whole question of negligence to the jury, whose province it was to pass upon it.

The court properly refused to instruct the jury “ that if the • steam dredge was constructed in the form generally adopted, and was used for the purposes to which such dredges are generally applied; and was used and applied in' the ordinary manner, and with the usual guards and precautions adopted by persons using them; there had been no such negligence as will render the defendants’ liable in this actionbecause such a charge would have partially taken the question of negligence "from the jury; and because such machines or dredges might have been usually used and applied in a careless manner, and not with the guards and precautions which the legal duty of care in the use of such machines required.

It seems .that the jury were properly told that they might allow interest upon the value of the property from the time it was destroyed. (Walrath v. Redfield, 18 N. Y., 457.) This was saying to the jury that they might allow such interest by way of damages.

My conclusion is, the judgment of the Supreme Court should be affirmed, with costs.

All the judges concurring,

J udgment affirmed.


source: Caselaw Access Project

author: Wright, J.

license: Public Domain

text:
    Remsen v. Beekman.
    The neglect of a creditor, when requested by a surety, to prosecute the principal debtor, discharges the surety, irrespective of knowledge or notice to the creditor of any facts suggesting the probability that delay could prove injurious to the surety.
    A surety who, by arrangement between himself and the principal debtor, takes the primary liability upon himself, may, by subsequent arrangements with third parties, re-establish himself in the position and with the rights of a surety without the consent of the creditor.
    Appeal from a j udgment of the Supreme Court. The action was to foreclose a mortgage given by H. F. Penfield, in August, 1835, to secure $25,000, payable October 5, 1840; and judgment was prayed for against the executrix of Henry Beekman,, deceased, for the amount of any deficiency that . might arise upon sale of the mortgaged premises.
    The facts were these: On the 10th August, 1835, Henry F. Penfield, being indebted to Henry Remsen (to whose right the plaintiff had succeeded) in the sum of $25,000, with interest from 5th October, 1834, executed to the latter his bond for $25,000, payable on or before the 5th October, • 1840, with interest at the rate of $1,600 per annum, and which was secured by his mortgage of 888 acres of land in the town of Penfield.

      Subsequently, one James K. Livingston, having .become the owner of a part of the mortgaged property (and the mortgage debt having been reduced by payment to $15,000) applied to the-mortgagee to release all the-mortgaged-premises except about eight acres, on which was a flouring mill. As a condition of such release, Bemsen required, and there was given to him, on the 25th May, 1843, Livingston’s bond conditioned for the payment of the $15,000 in three years, with the guaranty of Henry Beekman (the defendant’s testator) of such bond.
    ' On the 9th April, 1846, Livingston conveyed the mortgaged premises to Beekman “ subject to the lien of the mortgage, and deducted the amount thereof from the consideration paid or allowed for said premises.”
    In the latter part of 1846, Beekman and Livingston being largely indebted to the Bank of Monroe, at Bochester, and to three banks in Hartford (Conn.), an arrangement was made between those parties by which, on the 31st December, 1846, Beekman and wife conveyed the mortgaged premises subject to the mortgage, with other property, to Goodwin, Terry and Beach (financial officers of some of the Hartford banks), as trustees, upon trust to sell the same and divide the proceeds between the four banks in proportion to their debts. This conveyance was given and received in absolute satisfaction of the debts of Livingston and Beekman, to the banks,, and their obligations were canceled.
    Balph Lester, cashier of the Monroe Bank, became the agent of these trustees for the management of the mortgaged premises. On the 11th February, 1847, the trustees sold and conveyed the property to Samuel Miller for $25,000, taking his bond and mortgage for the whole purchase money, and agreed to indemnify him against the $15,000 mortgage to the plaintiff. In April, 1847, the trustees received from Miller, $7,250' on account of his mortgage. He subsequently made default, and the trustees, upon the foreclosure of his mortgage, acquired the property.
    Shortly after Beekman made the conveyance to the trustees he requested the plaintiff to collect his debt by enforcing the mortgage against the property, at the same time informing the plaintiff of his sale of the premises subject to.the mortgage; and the plaintiff accordingly wrote to Lester, the agent of the trustees, requesting payment. In reply, Lester, by letter, of November 10th, 1847, assured the plaintiff that by reason of the position in which the banks stood to the property, the debt was entirely secure even without reference to the value of the mortgaged property.
    «The plaintiff thereupon forbore to require the payment of the principal, and for a period of about ten years continued regularly to collect the annual interest from Lester. After the receipt of Lester’s letter of 10th November, 1847, the plaintiff was induced to continue the loan “ against the wish expressed” of Beekman. In the fall of 1857, Lester having declined further to pay the interest, this suit was commenced.
    . In 1847, 1848 and 1849, the mortgaged premises which had cost $'40,000, were worth from $25,000 to $80,000; and up to the year 1858, they would have sold for more than enough to pay the plaintiff’s mortgage. The referee found, as matter of fact, that if the plaintiff, at any time within three years after Beekman’s request to him to collect the debt, had insisted upon its payment, the trustees or the banks in whose behalf they acted would, upon reasonable notice, have paid it voluntarily, without suit.
    At the time, of the trial, the mortgaged premises, consisting of a flouring mill and appurtenances, had become greatly depreciated, so as to be worth not more than $5,000. The mortgage debt, with interest, then amounted to over $18,000.
    The referee, Addison Gardiner, decided that after the conveyance by Beekman to the trustees, the mortgaged premises became the primary fund for the payment of the debt, and Beekman stood in the relation of surety; and that the refusal or neglect of the plaintiff to collect his debt from the property or trustees, after Beekman’s request to that effect, and his continuing the loan for ten years against the declared wishes of Beekman, discharged the latter from his obligation for the debt.

      He accordingly ordered judgment for the executrix of Beekman. The judgment was affirmed by the Supreme Court, and from that judgment of affirmance this appeal was brought.

      E. Peshine Smith, for the appellant, argued that, when Beekman, being guarantor of Livingston’s debt, secured by the land, took the land into his own hands, charged with the debt, he became the principal debtor in respect to Livingston. Having himself taken the administration of the fund expressly charged with the debt, the plaintiff was discharged from any responsibility in respect to dealing with that fund with a view to the interests of Beekman: the latter took it wholly upon his own shoulders.
    H. The liability of the latter as principal being once fixed, he could not, as against the plaintiff, resume the position and rights of a surety without the creditor’s consent. ( William and Mary College v. Powell, 12 Grratt. [Ya.], 372.)
    III. Even if Beekman stood as a surety in respect to the land, the absence of any notice of facts from which the plaintiff could have supposed that delay was likely to prove injurious to Beekman is enough to distinguish the case from King v. Baldwin (2 Johns. Oh., 554; S. C. in error, 17 Johns., 384), in which the plaintiff Vas informed of the failing circumstances of the principal debtor. (Cheesebrough v. Millard, 1 Johns. Ch., 414; Niemcewitz v. Calm, 3 Paige, 651; 11 Wend., 323 ; Hollier v. Eyre, 9 Clark & Finn., 45, 51.) The doctrine of King v. Baldvoin is not to be extended beyond the precise case to which it was applied by that decision. (Marsh v. Pike, ■ 1 Sandf. Ch., 210; S C, 10 Paige, 595. .

      William M. Evarts, for the respondent.
   Wright, J.

Whatever may have been the current of decision elsewhere, the principle was settled in this state, more than forty years ago, and has since been steadily maintained, that if a surety request the creditor to collect the debt from the principal, and the creditor refuse or neglect to do so at .a time when it is collectible, and from a subsequent change of circumstances it becomes uncollectible, the surety is by such conduct of the creditor, exonerated from his liability. (King v. Baldwin, 17 John., 383; Paine v. Packard, 13 John., 174.) It is not contended that it makes any difference in the rule, or in the application of the principles on which it is founded, that the principal to which the creditor refuses or neglects to resort when he should, is a fund or property primarily liable for the debt in exoneration of the surety instead of being a person so primarily liable. It is urged, however, that the case of King v. Baldwin, decided in the Court of Errors, in 1819, in which the rule was distinctly settled, has been uniformly repudiated in this state as unsound in principle. I do not so understand the course of decision, but on the contrary, when the facts have -brought the case under review within the rule, it has been uniformly maintained. (Manchester Iron Manf. Co. v. Sweeting, 10 Wend., 397; Hoffman v. Hulburt, 12 Wend., 377.) I am aware that there are dicta of one or two judges condemning the rule as unsound in cases where its application was not necessary to these decisions, and where indeed the facts did not justify its application. (Warner v. Beardslee, 8 Wend., 198, per Walworth, Chancellor; Herrick v. Borst, 4 Hill, 650, per Cowen, J.) Even in these cases, however, it was conceded that the rule was too firmly established to be overturned, that when the principal was perfectly responsible at the time the debt became due, and the creditor, although requested by the surety, refused to proceed and collect his debt until the ■ principal became insolvent, the surety would be exonerated from liability. For myself, were it an original question in a court of equity, I should entertain no doubt of the soundness of the rule. The surety is a guarantee that the principal shall pay the debt, and the creditor is under an equitable obligation to collect his debt from the principal in the first instance if he can. It is conceded that a court of equity, at the instance of the surety, may compel the creditor to coerce paj-ment from a solvent principal, but this could not be so if there were no moral •or equitable duty on the part of the creditor to collect the debt from the principal, or it were not unjust and unconscientious to throw the debt on the guarantor and not on the party primarily liable. It is not in accordance with the intention of the parties that the surety should pay the debt in the first instance, and it is but just that it should be collected from the party or fund primarily liable, if the party have the ability to pay, or the fund be adequate for the purpose, and not from the guarantor. It may be conceded that there is no positive duty incumbent on the creditor to prosecute measures of active diligence;' and hence mere delay unaccompanied by any valid contract (if some other equity does not interfere) will not amount to laches, so as to work a discharge of the surety. If, however, the creditor does any act injurious to the surety or inconsistent with" his .rights, or omits to do any act when required by the surety, which his-duty enjoins him to do, and which proves injurious to the surety, the latter may set up such conduct as a defence to any action brought, at least in equity, against him.

It will not be pretended that, if the creditor actually collude with the principal to cast the debt on the surety, the latter is not exonerated: so also if, by omitting to do an act, on the requirement of the surety, which equity and his duty to the surety enjoins on him to dp, the surety is injured by the omission, the latter ought not to be held. It is inequitable and unj ust that the surety’s liability should continue from improper motives, at the option and for the convenience of the creditor, and against the surety’s will and express wish, until the principal becomes irresponsible. Duty enjoins the creditor to enforce payment from the party primarily liable; and if requested by the surety to collect the debt when it is collectible from such party by measures of active diligence, and the creditor refuses or neglects to do it until it becomes uncollectible.from the principal, such conduct-ought to be a defence in equity to any suit brought against the surety to charge him with the payment of the debt. Regarding Beekman as the surety, the present case aptly illustrates the justice and equity of the rule. In 1847 the plaintiff had a debt of $15,000 past due, secured by a mortgage on land worth from $25,000 to $30,000, or double the amount of such debt. The mortgaged premises were primarily liable for the debt, in exoneration of Beekman, the. surety. Beekman, in 1847, conveyed the premises, subject to the mortgage, to the trustees of four banks, and shortly after the conveyance applied to the plaintiff and requested him to enforce the mortgage against the premises for the purpose of collecting the mortgage debt, and at the same time informing him of his sale and conveyance of the premises subject to the mortgage. In pursuance of such request the plaintiff wrote to the agent of the trustees requiring payment of the sum secured by the mortgage, but upon representations made by such agent of the entire security of the debt, even without reference to the value of the property, he neglected and declined to enforce the mortgage or to collect the same out of the premises, but on the contrary determined to continue the loan of the money secured by the mortgage, against the express wishes of Beekman, for the convenience of the trustees and the banks whom they represented, in one of which the plaintiff was a stockholder. No steps were taken to collect the debt until 1857, and after the trustees refused to pay the annual interest, though for three years succeeding Beekman’s request to the plaintiff, the,, mortgaged premises were worth $10,000 or $15,000 more than the debt, and up to 1853 would have sold for more than enough to pay the amount of the mortgage. Afterwards, and when the fund primarily liable has depreciated in value to less than' one-third of the debt, the creditor proceeds to collect it- by foreclosure and sale of the mortgaged premises, and asks that the estate of the surety may be adjudged liable to pay the deficiency. It is very plain to me that a creditor, who disregards an express request made by a surety to' proceed and collect his debt at a time when it is collectible, and from improper motives willfully or negligently omits a duty to the surety enjoined on him in this respect, until the debt is uncollectible from the principal, has no equitable rights to be enforced against the surety. In this case, when the primary fund for the payment of the debt was ample, when urged by the surety to collect it, and for years afterwards, the creditor chose to let his loan lie, against the quasi surety’s expressed wish, because he considered it an advantageous mortgage investment, until the fund primarily liable for the debt has depreciated to a sum less than .one-third of such debt, it would be wholly inequitable to charge a deficiency upon the surety caused purely by the creditor’s own conduct. The plaintiff refused to comply with the request of Beekman for the reason that he wished to continue the loan, showing by his conduct that he did not rely upon the surety. There would be no equity in allowing him to call upon the surety when it is apparent that if he had complied with his request, he would have secured his debt.

This is not an action upon Livingston’s bond or Beekman’s guaranty of such bond, but the creditor asks the aid of a court of equity to enable him to enforce the payment of his debt. The rule before stated not being founded upon contract between the surety and the creditor, but upon a principle of equity obliging the creditor to act justly towards the surety, when the creditor seeks relief in a court of equity, if his case falls within the rule, it is proper that it should be applied to it. Here, at least, the surety has the right to demand that the creditor neither do, nor omit to do any act enjoined oú him as an equitable duty which injures the surety against his express wish or request. The present presents a very clear and strong case for the application of the rule. It is said that there is the absence of any notice of facts from which the plaintiff could have supposed that delay was likely to prove injurious to Beekman. But this can make no difference. Besides the mortgaged premises were a flouring mill and its appurtenances, subject to depreciation in value by fluctuations in the business to which alone the property was adapted, and by the wear and destruction of its machinery and appendages. These things were doubtless understood by the plaintiff, and after the representations made to him by the agent of the trustees, that the debt was perfectly secure without reference to the mortgaged premises, he gave no heed to their value or their depreciation. In his letter to the agent of the banks holding the premises in November, 1857, after setting forth the agent’s representations in 1847, he distinctly declared that those representations as to perfect security had been his sole inducement against the wish expressed of Beekman and the mortgagor, to continue the loan since the conveyance by Beekman.

The point is made that the obligation of Beekman was not one of suretyship •; but that after he took the conveyance of the land from Livingston charged with the debt, and resumed the administration of the fund so charged, his situation was precisely the same as if he had then, as an original transaction, borrowed the $15,000 from the plaintiff and mortgaged his own land as security. The ground, I think, is not maintainable. Beekman was- a surety in fact as well as in form, and it was in that character that the plaintiff sought to charge his estate. Penfield was- the original debtor, and the mortgage Was given to secure his debt. He was personally liable .for the debt unless the subsequent dealing of the plaintiff relieved him from the liability. Livingston became the owner of some eight acres of the mortgaged premises on which the mill was situated, at a time when the debt had been reduced to $15,000 and applied to the plaintiff to release all the land covered by the mortgage except the eight acres of which he was the owner. This the mortgagee consented to do, upon the condition that Livingston would give him his bond conditioned for the payment of the amount unpaid of the mortgage, debt in three years, and that Beekman should guarantee such bond. Accordingly, Livingston gave the bond required, and Beekman guaranteed it. This was in 1843, after the mortgage debt was due, and it was under this guaranty of Livingston’s bond that the only personal liability of Beekman for the mortgage debt ever existed. Livingston, in 1846, conveyed the mortgaged premises to Beekman, subject to the mortgage, and he deducted the amount thereof from the consideration allowed for the premises, but this created no personal liability of-Beekman for. the mortgage debt. (Belmont v. Coman, 22 N. Y., 438.) The only effect of the transaction was, as between Beekman and Livingston, to constitute the mortgaged premises held by Beekman under the conveyance, the primary fund for the payment of the mortgage debt. The taking of the conveyance, such as it was, did not render Beekman personally liable as a principal debtor. But if he did thereby become personally liable for the debt, such obligation was not by any contract with the mortgagee; and the mortgagee has a right to lay hold of, for his own benefit, a contract thus made between Beekman and Livingston, and enforce it, only as such an obligation as it truly and equitably is. In substance and equity Beekman stood in the position of surety to the plaintiff for the mortgage debt.

I entertain no doubt that the sole personal liability of Beekman was upon his covenant of guaranty; but if this were otherwise, it is clear that after the conveyance of the property to the trustees, subject to the mortgage, he stood in substance and in equity in the position of a surety, the property in the hands of the grantees constituting the primary fund for the payment of the debt. (Marsh v. Pike, 10 Paige, 595; Russell v. Pistor, 3 Seld., 171.)

The judgment of the Supreme Court should be affirmed.

Gould, J. The only possible liability of Mrs. Beekman, as executrix, is on the guaranty. And that is the undertaking of a surety. In this State it is too late to question the principle of King v. Baldwin (17 Johns.), that where a surety requests the creditor to proceed to enforce collection from the principal debtor and the, creditor neglects to do so, and the principal debtor thereafter becomes unable to pay, the loss thereby incurred falls on the creditor and not on the surety.

Seldeu, J., did not sit in the case; all the other judges concurring,

Judgment affirmed.


author: Allen, J. Gould, J.

text:
    Wright v. New York Central Railroad Company.
    A master is not chargeable for injuries to one servant by the negligence of another, on the ground of the unskillfulness of the latter, unless the injuries resulted from such unskillfulness.
    The principles regulating the liability of the master for injuries to one servant caused by another, or by the defects in machinery and implements furnished, or arrangements prescribed, by the master, stated,per Allen, J.
    Appeal from the Supreme Court. Action for damages resulting from a collision of two of the defendant’s trains. On the trial it appeared that the plaintiff was in the employ of the defendant as brakeman, and in the night of the 6th of June, 1850, was injured by a collision of the trains at Pekin, eight and a half miles east of the Suspension Bridge, on the road to Rochester. It was claimed by the plaintiff, that the injury in this case, was occasioned by the negligence of the defendant, in employing an incompetent engineer, upon the train 5going east from the bridge, also in arranging the time tables, so that the trains should meet at the same time at Pekin.
    One Adams, was the engineer alleged to have been incompetent. He was employed by Mr. Upton, the managing agent of engineers, and the person authorized by the defendant to employ engineers. Adams was a witness for the plaintiff. He had been an engineer some four years, and had been in the employ of the defendant nineteen months, during which time he had run trains over the road from Suspension Bridge to Rochester about 12 times, and -had ridden on the cars at other times. He had, as engineer, run two trips with passenger cars before the collision. He had for most of the nineteen months been employed in running trains from Buffalo to Lewiston. The evening before the collision, Adams was in Rochester, and Upton told him, that on account of the sickness of the engineer of the “ J. A. Willink,” he would have to come down with the express train the next night. He testified that he told Upton that he did not feel competent to take the train over the road in the night; in the daytime he could take any train over the road. Adams went to the bridge that night with a freight train. Adams stated that he should want three weeks’ knowledge of the road, by running every day, to get acquainted with it; that it is essential to know the objects, so as to know when you are approaching stations; he had not been on that road often enough to know it. The time for leaving the bridge was 9 o’clock and 20 minutes. It actually left at 9-30. Pekin, 8-|- miles from the bridge, was the first station, and the train was due there at 9-40. The night was dark and foggy. On reaching Pekin, he saw a train; it appeared to him to be on the switch, coming west; he thought it was stationary; he had got about half way opposite the station, about the middle of the side track, before he discovered that the other train was not on the side track; there were two switches, one at the east end of the station, and the other at the west; he had shut off steam, reversed the engine and put down the brakes, but not in time to avoid the .collision. Anthony Purvell, was the engineer on the up train. As he approached Pekin, he saw the head light of the down train, and supposed the train stationary. When he first saw the light, it may have been'forty rods distant He was a little ahead of time; his instructions were to get on time and to get on the switch, and wait until the down train came. Both engineers were furnished with time tables, in which both trains were due at Pekin, at 9-40. The up train was to go on to the switch. The collision occurred before it had done so. A part of the injury to the plaintiff was a broken leg, and eight weeks after the injury, it had so far recovered, that he could walk about, when by slipping down upon the sidewalk it was again broken. The leg was badly twisted before the second breaking. The defendant objected to any evidence to show the state of the leg after the second breaking. This was overruled and the defendant excepted.
    The defendant gave evidence tending- to show that Adams was a competent and skillful engineer: also, evidence tending to show, that an engineer who has run over a road two or three times is competent, with a time-table, to take charge of a train.
    When the plaintiff rested, the defendants moved for a non-suit, on the grounds:
    1. That the evidence was not sufficient to justify submitting to the jury the question whether the injury to the plaintiff had been caused by the negligence of the defendant.
    2. If the evidence tended to show negligence in Upton, the defendant is not chargeable with any of the consequences of such negligence.
    3. The evidence did not show negligence in Upton, because Adams is shown to have been competent, and had had abundant means to become acquainted with the road.
    4. That if there were any defects in the time tables calculated to work injuriously, the defect in this case was cured by specific instructions to the engineer, and by the engineer’s own knowledge of the facts.
    The motion was denied, and the defendant excepted. The plaintiff had a verdict and judgment, which was affirmed at general term in the eighth district. The defendant appealed to this court.

      Sidney T. Fairchild, for the appellant.

      George F. Danforth, for the respondent.
   Allen, J.

Certain principles touching the liability of the master to the servant, for injuries sustained by the latter in the course of his employment, have, by the decisions in this state and several of the sister states, as well as in England, become so well settled that they need only to be stated. They cannot be disturbed, neither can their authority be disregarded.

1. A master -is not responsible to those in his employ for injuries resulting from the negligence, carelessness or misconduct of a fellow servant engaged in the same general business. (Farwell v. The Boston & Worcester R. R. Corp., 4 Met., 49; Brown v. Maxwell, 6 Hill, 592; Coon v. Syracuse & Utica R. R. Co., 1 Seld., 492; Sherman v. Rochester & Syracuse R. R. Co., 17 N. Y., 153; Russell v. Hudson R. R. Co., id., 134; Boldt v. The N. Y. Central R. R. Co., 18 id., 432; Hayes v. The Western R. R. Corp., 3 Cush., 270; Albro v. The Agawam Canal Co., 6 Cush., 75; Ray v. Boston and Worcester R. R. Corp., 9 id., 112; Gillshanon v. The Stony Brook R. R. Corp., 10 id., 228; Hutchinson v. The York, &c., Railway Co., 5 Exch. R., 343.)

2. The rule exempting the master is the same, although the grades of the servants or employers are different; and the person injured is inferior in rank and subject to the directions and general control of him by whose act the injury is caused. (Hayes v. The Western R. R. Corp., supra; Albro v. The Agawam Canal Co., supra; Wyman v. Jay, 5 Exch., 352.)

3. Neither is it necessary, in order to bring a case within the general rule of exeinption, that the servants, the one that suffers and the one that causes the injury, should be at the time engaged in the same operation or particular work. It is enough that they are in the employment of the same master, engaged in the same common enterprise, both employed to perform duties and services tending to accomplish the same general purposes, as in maintaining and operating a railroad, operating a factory, working a mine, or erecting a building. (Boldt v. New York Central R. R. Co.; Coon v. Syracuse and Utica R. R. Co.; Farwell v. Boston and Worcester R. R. Corp.; Albro v. The Agawam Canal Co.; Gillshanon v. Stony Brook R. R. Corp.; Wyman v. Jay; Hutchinson v. York and Newcastle Branch Railway Co., supra.) The question is, whether they are under the same general control. (Abraham v. Reynolds, 5 Hurl. & Norm., 142.)

4. The master is liable to his servant for any injury happening to him from the misconduct or personal negligence of the master; and this negligence may consist in the employment of unfit and incompetent servants and agents, or in the furnishing for the work to be done, or for the use of the servant, machinery or other implements and facilities improper and unsafe for the purposes to which they are to be applied. (Priestly v. Fowler, 3 M. & W., 1; Hayden v. Smithville Manuf'g Co., 29 Conn., 548; Roberts v. Smith, 2 Hen. & Munf., 213; Williams v. Clough, 3 id., 257; Griffiths v. Godson, id., 648; Wyman v. Jay, supra; Owens v. Holland, Ellis, Blackb. & Ell., 102; Keegan v. W. R. R. Corp., 4 Seld., 175; Patterson v. Wallace, 28 L. & E., 48; Marshall v. Stewart, 33 id., 1.)

The employer does not undertake with each or any of his employees for the skill and competency of the other employees engaged in and about the same service, or for the sufficiency and safety of the materials and implements, furnished for the work, or for the convenience or comfort of the laborer, since neglect and want of due care in the selection and, employment of the agent or servant through whose want of skill or competency an injury is caused to a fellow servant, must be shown in order to charge the master; and if the injury arises from a defect or insufficiency in the machinery or implements furtoished ■ to the servant by the master, knowledge of the defect br insufficiency must be brought home to the master, or proof given that he was ignorant of the same, through his own negligence and want of proper care; in other words, it must be shown that he either knew or ought to have known the defects which caused the injury. Personal negligence is the gist 'of the action. (Hayden v. Smithville Manufacturing Co.; Roberts v. Smith; Wyman v. Jay; Keegan v. Western R. R. Corporation; Owens v. Holland, supra.) It is not enough that the foreman and general superintendent of the work is guilty of negligence, causing injury to the subordinates. (Wyman v. Jay, and other cases cited before.)

5. If the servant sustaining an injury through the unskillfulness or insufficiency in numbers or otherwise of his fellow laborers, or defects in the machinery or conveniences furnished by his employer, has the same knowledge, or means of knowledge of the unskillfulness and deficiencies referred to as his employer, he cannot sustain an action for the injury, but will be held to have voluntarily assumed all the risks of the employment, incurred, as they were, by the want of skill and incompetency of those employed with him, or the defective machinery used in the work. (Priestly v. Fowler, 3 M. & W., 1; Hayden v. Smithville Manuf'g Co.; Griffiths v. Godwin; Williams v. Clough; Keegan v. Western R. R. Corporation; Paterson v. Wallace, supra; Skip v. Eastern Counties Railway Co., 24 L. and E., 396; S. C., 9 Exch., 223.)

6. It is not sufficient to charge the master for injuries to his servant that others of his employees were unskillful or incompetent, or the machinery, &c., unsafe and unfit for the purposes, unless the injury complained of resulted from these causes. If it was occasioned, notwithstanding such defects, by the negligence of a fellow servant, the master is not responsible. (Hayes v. The Western R. R. Corporation, 3 Cush., 270; Skip v. Eastern Counties Railway Co., supra.)

There is nothing in any of the cases to which our attention has been called, or which have come under my observation, inconsistent with these propositions, which I think are fairly deducible from all the cases. Keegan v. Western Railroad Corporation, in this court, decides nothing but the conceded doctrine that for personal negligence of the master, which was found by the referee, in the absence of any knowledge of such negligence as well as of any negligence on the part of the injured servant, the master would be liable. The case is a very bald case of gross, even culpable negligence, as stated and found by the referee, and scarcely needed the authority of the court to determine the liability of the defendant. Principles well established and as old as the common law fixed that. Paterson v. Wallace, supra, merely decides that, in that case and under the circumstances," there was a question of negligence proper to be submitted to a jury. If it is claimed that the decision goes further and to the extent of holding the employer liable for any injury which might be permitted by him or his foreman or principal superintendent, it cannot be sustained without overruling the subsequent decisions at Westminster Hall as well as in the courts of this country. Marshall v. Stewart turned upon the point which was mainly considered by Judge Selden in Russell v. Hudson River Railroad Company, supra, to wit, whether a servant was in the employ of his master and within the operation of the rule regulating the liability of the master for injuries received by the servant eundo ei redeundo to and from the place of his labor, and the case is not authority beyond this, and to this extent it is supported by the decision of this court.

Applying these principles to the case in hand, the plaintiff should have been nonsuited. The verdict and judgment were retained .in the court below mainly upon the ground that the defendants, by the improper regulation of their trains, and the times and manner of their passing each other at the point of the collision, had directly and by personal, so to speak, and direct interference caused the collision and consequent injury to the plaintiff. But a little consideration will show the fallacy of this. It is true that by the time table the trains passing each way were to arrive at the point at the same instead of different time; the one going west to pass upon the switch or side track, while that going east retained the main track. If both were on time the former would, at the time indicated, leave the side track, and the main track would be free for the passage of the other train. The length of the side track, or its point of departure on the east from the main track, is not. given, and there is no ground of complaint, therefore, as to the improper construction of the'road with a view to the safe passage of trains of cars meeting as these were appointed to do. If the trains had been run in strict accordance with the time table they could and would have passed each other without stopping and in safety. But the complaint is that it was culpable to rely upon two trains going in different directions reaching a given point at the same instant of time. It will be seen that ample and safe provision was made for a failure in this respect, by an order making a part of the running regulations of the road, and obligatory upon all the employees of the corporation. It was only when they were on time that the trains were to pass without stopping. If the train from the east arrived first, it was to pass on to the side track and await the arrival of the train from the west. If the latter first arrived, it was'to stop'and wait a given time for the arrival of the other. These directions accompanied the time table and were as well understood by the persons in charge of the trains as any other part of the time and running regulations. A compliance with these directions, required each train to ap proach this station cautiously and at a reduced rate*of speed, unless the person in charge could clearly and certainly see that all was clear for a passing without stopping. It required no skill as an engineer or conductor, or experience in running a railway train, to know this; and to disregard so obvious a duty and approach the station in the night at an unusual rate of speed was gross negligence and cannot be resolved into a general ignorance of the road and its peculiarities and way marks. The engineer was not and did not claim to be ignorant of this station or of his approach to it, but he knowingly and recklessly undertook to pass at a high rate of speed without assuring himself that the train was where it should have been, to permit him to do so; and the collision was the result of this wanton act, and not the result of his ignorance of the road or of this station. He says he saw the other train but thought it was stationary. It was culpable negligence to pass on at an undiminished speed before making sure of this. Again, the train going west was a little ahead of time, as is testified by the engineer of that train, so that if the train from the west had not only not been run at a reckless speed, but also had not been run ahead of its time, no collision would have taken place. The time regulations of the company were not, therefore, involved upon the trial, but the collision was solely, upon the undisputed evidence, attributable to the careless, if not wanton, disregard of the running regulations of the defendants and the ordinary rules of prudence which are to be regarded in such cases by the engineer in charge. It is not a case, therefore, to charge the common employer of the careless as well as the suffering servant for the injury. (Hayes v. Western R. R. Corporation, supra.)

But, again, the plaintiff, as appears by his own testimony, had been serving on this same train as brakeman, and under the same running regulations for several weeks, and was familiar with the arrangements for the passing of the trains at Pekin, the point of collision. He knew the perils of the service, and consented to continue in it, and has no claims upon his employer, in respect to injuries resulting from these perils. He .knew, as well as the directors or the defendant could know, the dangers of a collision at Pekin, under the running regulations, which had been in force several weeks before the injury. He, therefore, voluntarily assumed the risks, and must bear the loss consequent upon them. (Priestly v. Newlan; Hayden v. Smithville Manf'g Co.; Griffiths v. Godson; Williams v. Clough; Skip v. Eastern Counties Railway Co., supra.)

The court below were of opinion that but for this supposed imprudent direction for running the trains, the action could not be sustained. The judgment cannot, upon any principle, be sustained upon this ground. *

Upon the other ground, the incompetency of the engineer, conceding all that can be claimed by the plaintiff, that he was incompetent, and the defendant, by reason of negligence in employing him, is liable to the other employees for the consequences of his want of skill, still, for the consequences of the collision, the defendant is not responsible; for the reason, as we have seen, that it was not the result of his ignorance or incompetence, but of his .rashness and reckless want of care. He had been an engineer in charge of railway trains for several years, and it is not disputed that he was in every way competent for the duties of his station. But the complaint is that he was put to do duty in the night timé, and on a road with which he was not familiar, only having such a knowledge of it as could be gained by running trains over it twelve times, and the last occurred the night before. But the collision did not occur by reason of any ignorance of'the road or its peculiarities at the point of collision, or that he was approaching Pekin, and was there to meet and pass another train, which should be on the side track; but because, knowing everything that was needful to the safe running of the train, and having skill in the management of an engine and trains of cars, he negligently and recklessly disregarded the running directions of his employer, and the safety of his train, and passed over the road in advance of the regular time, and at an unusual speed.

But if this difficulty was not in the case, there is another insuperable objection to the plaintiff’s recovery. Without considering whether there is any evidence which should have been submitted to the jury, of the incompetency of the engineer in charge of the train to run it upon that occasion, of which I very much doubt, there is no evidence of the negligence of the defendant in employing him. It is not claimed, as before said, that he was not a competent, if not an accomplished, engineer. He is conceded to have been a fit and proper man to employ as an engineer, and that there was no blame imputable to the defendant or to Upton, the person in charge of the defendant’s locomotives, engineers and machine shop at Rochester, whose duty it was to employ engineers. The duty of Upton was well performed, in the general employment of the engineer; and assuming, for the purpose of this action, that for the proper performance of this delegated power in the selection and hiring of engineers, the defendant may be responsible to the other servants of the company—which is, at least, debatable—there was no neglect, neither, indeed, could there be, in the hiring of this engineer, because he was a skillful man in that service. But in running this particular train, to meet an emergency occasioned by sickness in the family of the regular engineer of the train, he was acting as the foreman or servant of the company, and in concert with every other person having any duty to perform in respect to it, and to accomplish a special purpose, to wit: the running of the train upon that occasion from Suspension Bridge to Rochester. Had he caused the trains to be run short-handed, it would have been an act of negligence on the part of one of the servants of the company, for the consequences of which the defendants would not have been liable to their other employers. All that Upton did upon that occasion, he did as the agent or servant of the defendant, and there is nothing to distinguish the case from any other in which an inferior or subordinate servant is injured by the negligence of a superior agent of the same principal or employer. He was acting in the performance of a special duty, and the fact that he had the hiring of all the engineers for that division of the road, cannot increase the liability of the defendant for his negligent performance of a duty assigned to him, to superintend the running of a locomotive upon a special emergency. There was no negligence in the selection' of Upton for this purpose. The cases cited above show that for the negligence of a foreman or a superintendent, the master is no more liable than for the negligence of any other servant; and it can make no difference in principle that the negligence is in the selection of the materials, the implements or the agents for the performance of a given work instead of directing the time, mode or manner of doing the work.

The judgment must be reversed and a new trial granted, costs to abide event.

Gould, J.

It would seem that the general term of the Supreme Court arrived at a clearly correct conclusion, in holding the weight of evidence to be that Adams, the engineer, was competent; so that there was on the part of the Company and its superintendent, no negligence in employing him as an engineer, or in assigning to him the duty of taking charge of this particular train. That court might have gone still further and held that by the evidence he was plainly competent, but that he was proved to have been angry at what he considered an extra duty, and that in his passion he was careless and did not take proper care in approaching a station where he knew he was to meet a train, and where he was told to be ready to stop as that train might not be on time. Viewing this as the undoubted state of the evidence, not varied by the testimony of Adams, the question of his competency as well as that of the negligence of the Company in employing him was improperly left to the jury.

In the court below nothing prevented their coming to this conclusion, but considering the question of the proper making up of the time table, as being connected with the question of the engineer’s competency. The two questions are entirely independent of each other. And though want of care as to the time table might furnish a cause of action against the defendant, it would have no bearing on the question of want of care in selecting an engineer.

Again, there can- be no doubt that the suffering of the plaintiff by the second breaking of his leg, and the condition of his leg and the permanency of the injury, after such second breaking, could form no part of the considerations "upon which the jury were to award damages. Yet proof on those points was admitted against the defendant’s objection and under an exception. The answer of the general term to this exception is very ingenious, and if consistent with the state of the case, possibly sound. Had the evidence been admitted for the purpose of discriminating between so much of the injury as was caused by the first breaking, and so much of it as was caused by the second, it would have been perhaps barely admissible, although it may well be doubted whether such discriminating process could, by any possibility, be anything but merely uncertain speculation. Still, the answer is, that on the offering of the evidence, no such ground for admitting was ever suggested, nor was any such discrimination hinted at in the charge to the jury." The evidence was admitted in the case generally, and the charge left it, with the other evidence in gross, to the jury.

. As much stress is laid upon the making up of the time-table, it may be well to suggest, that ordinarily, the time set down in the table opposite the name of a station, is the time for leaving that station; so that finding the same minute noted for two trains at the same station, does not mean, that they are to arrive at the station at the same instant, but that they are to leave it at the same instant, when, being on different tracks, there can be no danger of a collision. This, however, can be corrected in a new trial, which should be had.

The judgment should be reversed.

Davies and Weight, Js., concurred; Denio, Ch. J., concurred, except as to the evidence in reference to the condition of the plaintiff’s leg after the second fracture, which he thought was' competent. Sutherland and Smith, Js., dissented; Selden, J., did not sit in the case.

Judgment reversed, and new trial ordered.


author: Denio, Ch. J.

text:
    Leonardsville Bank v. Willard et al.

    As against one who has dealt with a banking association, organized as such under the general law, .its incorporation is sufficiently proved by the recording of its articles in the county clerk’s office, and its user of corporate powers under'color of incorporation, without proof that the articles were filed in the banking department.
    Such association may sue in its corporate name, as well as in the name of its president.
    Appeal from the Supreme Court. Action upon a promissory note against makers and indorser. The answer set up usury, and it denied .that the plaintiff was a corporation. The trial was before a referee, .on whose report judgment was rendered for the plaintiff, which having, been affirmed at general term, the defendants appealed to this court. The facts are sufficiently stated in the following opinion.

      Abbott & Moore, for the appellants.

      David J. Mitchell, for the respondent.
   Denio, Ch. J.

The only questions which remain in this case, since the jury have found against the defence of usury, are, first, whether the plaintiff proved itself to be a corporation ; and secondly, if the proof in that respect was sufficient, whether it was entitled to sue in its corporate name instead of using the name' of its president, as it is permitted to do by the general banking law. >

1. The plaintiff gave in evidence the original certificate of incorporation, which was made, executed and acknowledged in the year 1856, in conformity with the sixteenth section of the general banking law, and showed, by a clerk’s certificate indorsed thereon, that it had been recorded in the county clerk’s office; but it was not proved that a copy had been filed in'the office of the secretary of state. It appeared that the association immediately commenced business by issuing bank notes, and making discounts, and that the paper sued on was discounted by it as a bank of circulation in 1857 ; and that the proceeds were advanced in the currency issued by the bank, by which I understand the notes countersigned at the bank department, and executed by the officers of the association, according to the statutes. The general banking law also requires that a copy of the certificate of incorporation shall be filed in the office of the secretary of state; and subsequent acts forbid a banking association to commence business until it shall have deposited with the bank department, the securities required by law, to the amount of $100,000. (Laws of 1840, 306, § 3; Laws of 1844, p. 416, § 1.) The deféndants’ counsel insist that the plaintiff has not sustained the affirmative of the issue joined, as to the existence of the corporation, because it has not shown the filing of the certificate with the secretary of state, or the depositing of the securities with the department. This might have presented a question of some difficulty when a stricter rule on the subject prevailed than the one which has been established by recent decisions of this court. The case of the Bank of Toledo v. The International Bank (21 Wend., 542), and the two cases referred to in the opinion of the court, show that where a certificate of incorporation has been executed under a general law authorizing the formation of corporations in that manner, and there has been a user of corporate powers under color of. the certificate, and the party setting up the want of corporate existence has recognized the corporation by transacting business with it as such, the proof is, prima facie, sufficient. The present case is fully within the rule, except that it is not shown that the defendant Curtiss, the accommodation indorser of the note, personally participated in the application for the discount of it; but no objection personal to him was taken on the trial. The motion for a nonsuit was made on behalf of both defendants, and the point taken was the general one that the plaintiff had not shown itself to be a corporation. The defendant Willard had transacted business with the bank, and had corresponded with its officers, so as to bring him clearly within the doctrine of the cases. If the objection had discriminated as to Curtiss, it may be that the plaintiff would have proved a participation on his part in procuring the discount.

2. I am of opinion that the association might lawfully sue in the name mentioned in its certificate of incorporation. , The banking law requires that the instrument should state the name assumed to distinguish the association, and to be used in its dealings (§ 16); and the plaintiff’s certificate, which was given in evidence, contains such a statement. The provision, that suits may be prosecuted in the name of the president of the association, is permissive only, and not imperative (§ 21). Then, the association being a corporation, the general rule of the common law applies, that it has a capacity to sue and be sued by its corporate name. It is argued, on behalf of the defendant, that, since the case of Leavitt v. Blatchford (17 N. Y., 521), these associations are not to be considered corporations; but it will be seen, upon examination of that case, and of the opinions in Curtis v. Leavitt, which are substantially adopted in Leavitt v. Blatchford, that the corporate character of the associations is not questioned, but only that they are not embraced in the statutory system provided for the moneyed corporations existing under previous laws. The principle, that they are bodies politic and corporate, with the general attributes conferred upon corporations by the common law, has been an established doctrine ever since their constitutional legality was affirmed by the late Court of Errors. More than twenty years ago it was stated by Bronson, J., in pronouncing the unanimous opinion of the Supreme Court in Delafield v. Kinney (24 Wend., 345), that suits in behalf of those associations might •be brought in the name of the president, or in the collective name of the association, at the pleasure of the party suing. That was not the point involved in the case, though it was pertinent to the reasoning of the judge in discussing the question upon which the casé turned. The opinion of so eminent a judge, uttered with the apparent approval of his brethren, confirmed, to a considerable extent, the practice of using the corporate name, instead of that of the president of the association, in actions by and against this class of banks. (East River Bank v. Judah, 10 How. Pr., 135.) On a pure question of form, we would not overturn a practice thus commenced and so long continued, unless the error was exceedingly clear.

The judgment must be affirmed.

All the judges concurring,

Judgment affirmed.


author: Sutherland, J. Allen, J.

text:
    Willitts v. Waite et al.

    The acceptancé by a corporation of a charter whereby, upon its committing an act of insolvency, all its property is to vest forthwith in receivers, to be distributed in a prescribed mode, does not give to the transfer thus effected the character of á voluntary conveyance.
    Held, accordingly, that the receivers of .an Ohio bank, organized under such a charter, took its assets in this State subject to the claims of creditors who had attached'them subsequent to the act of insolvency.
    This action was commenced in the Supreme Court for the purpose of compelling the defendants to interplead as to their claims upon moneys in the American Exchange Bank, to the credit of the Commercial Bank of Toledo. Two of the defendants were the receivers of the assets of the latter bank, and others were creditors of that bank, who had attached its funds.
    The cause was first heard before Judge Cowles, at special term, who decided that the only defendants who had any liens or claims upon the fund, were the receivers and the several attaching creditors; and by an interlocutory judgment rendered, it was decreed that they should interplead. From this decision there was no appeal. The cause was then brought to> a hearing at a special term, before Judge Clerke, on the pleadings and proofs in respect to the claims of the interpleading parties;. and the j udge decided that the attaching creditors had liens upon the funds in the plaintiff’s bank in preference to any claim of the receivers, and directed the funds to be so applied; and an order to this effect having been entered, the receivers-appealed therefrom, and the order was affirmed at the general term.
    Subsequently a final judgment was made at a special term, before Judge Clerke, disposing of all the equities, and settling the conflicting claims of the receivers and of the attaching creditors in favor of the latter.
    From this judgment the receivers appealed, and the court at general term affirmed the judgment.
    From this judgment of affirmance the receivers appealed to this court, and in their appeal brought up for review the intermediate order made at special term, and its affirmance at the general term.
    The title of the receivers rested upon an alleged act of insolvency of the Commercial Bank of Toledo, occurring ¡November 27, 1854, and a statute of the State of Ohio, claimed to have vested the property of the bank in the receivers appointed under it, subsequent to the commission of such act of insolvency.
    On the 27th day of ¡November, 1854, the Commercial Bank of Toledo suspended payment and became insolvent. On that day the American Exchange Bank was indebted to the Commercial Bank of Toledo, on account of the proceeds of collec-' tion paper, in the sum of $4,208.88. The Commercial Bank of Toledo was a branch of the State Bank of Ohio, and was organized under an act of the legislature of Ohio, passed February 24, 1845, entitled “An act to incorporate the State Bank of Ohio and other banking companies.” By sections 13-17 of the act, a board of control was created, which was declared to be a body corporate. By another section of the act it was declared:

      “•If any branch of the State Bank of Ohio shall refuse to pay its notes of circulation, or any of them, in gold or silver, &c., such branch shall be deemed to have committed an act of insolvency, and thereupon all its property, credits, securities, liens and assets of every description, shall forthwith vest in and be the property of the board of control, for the uses and purposes declared in this act.”
    Another section of the act declares that the board of control, on being satisfied that any branch of the State Bank of Ohio-had suspended the payment of its notes'in gold and silver, “ shall forthwith appoint a suitable receiver or receivers, who shall take immediate possession of the books, records, money, choses in action, and property of said branch of every descrip ■ tion, and hold the same for the joint use and benefit of the other branches of the State Bank of Ohio, and the creditors of said failing branch,” &c.
    Another section, of the act declares that the receiver or receivers, under the direction of the board, shall proceed to settle up its affairs, and to convert its assets into money, the money to be applied: First. To reimburse all moneys which shall have been advanced by the several branches for the redemption of the notes and bills of the insolvent bank, and which may not previously have been reimbursed from the safety fund. Second. To reimburse all moneys advanced from the safety fund, other than moneys derived from that portion of the safety fund furnished by the failing branch. Third. To the payment and discharge of all the remaining liabilities of such branch; and, Fourth. The residue to be divided among the stockholders of the failing branch, in proportion to the stock by them respectively held.
    ■ In pursuance of the provisions of the act, the defendants, Morrison R. Waite and Samuel M. Young, were appointed receivers of the Commercial Bank of Toledo, on the day following the supension, namely, the 28th day. of November, 1854.
    The receivers made a demand of the fund in dispute, of the American Exchange Bank, its depositary, on the 29th Novemher, 1854, and commenced an action against said bank, to gain possession of the same, January 16, 1855.
    The defendant, the Metropolitan Bank, a creditor of the Bank of Toledo, commenced an action against it December 23, 1854, in the,Superior Court of the city of New York, in which an attachment was issued and served on the American Exchange Bank on the same day.
    Subsequently the defendants, O. H. Bliss and Kelsey, and the defendants Powers, Martin and Sheridan, creditors 'of the Toledo Bank, commenced actions in the Supreme Court against it, in which actions attachments were issued and served on the American Exchange Bank.
    The defendants, Finlay E. Bliss, and Hubbard, and Worthington, were the holders of checks, or bills of exchange, drawn by the Toledo Bank upon the American ExchangeBank, previous to its failure, but which had not been accepted or paid at the time of its failure, and, prior to the commencement of this action, they had commenced suits against the American Exchange Bank to recover the amount of their respective checks or bills; and, as to them, Judge Cowles decided, at the first hearing, that they had no liens on the fund in question, from which decision there was no appeal.
    The statute of the State of Ohio was read in evidence on the trial, and there did not appear to have been any controversy about the facts, at any or either of the hearings in the court below; nor did it appear that the point was at any time taken in the court below that the attachments were not duly served, or that the Superior Court had not power or jurisdiction to issue the attachment in the action of the Metropolitan Bank.

      Edwards Pierrepont, for the appellants.

      William M. Evaris, for the respondents.
   Sutherland, J.

Judge Cowles, on the hearing before him, found, as matters of fact, that on the 23d of December, T854, the Metropolitan Bank sued the Toledo Bank as a foreign corporation, and attached the funds of that bank in the hands of the American Exchange Bank; that on the 5th of January, 1855, O. H. Bliss and Joseph Kelsey commenced a similar suit against the Toledo Bank, and attached the funds of that bank in the hands of the American Exchange Bank; that on the 5th February, 1855, the defendants, Powers, Martin and Sheridan, also sued the Toledo Bank in like manner, and attached the funds of that bank in the hands of the Amerisan Exchange Bank, and that all of the above' attachments were levied by John Orser, sheriff of New York.

In view of these findings of fact, it is very plain to me that the counsel for the receivers cannot now, for the first time, take or urge the point, that the attachments were not duly levied or served. It must.be presumed that they were.

So, also, as to the point taken by the counsel for the receivers, that the Superior Court had no jurisdiction of the action of the Metropolitan Bank, and that, therefore, the attachment issued in the action was void. If the counsel is right in supposing that section 427 of the Code does not extend or enlarge the jurisdiction of the Superior Court as to actions against foreign corporations, given or conferred by subdivision 3 of section 33 of the Code, yet, in the absence of anything in the case to show the contrary, it must be presumed' that the Superior Court had jurisdiction of that action, under section 33 of the Code, and that the attachment in the action was duly issued. The presumption must be in favor of the jurisdiction of the court, and the regularity of the attachment, particularly as it does not appear that this point was at any time taken of urged in the court below.

It is plain, too, that there is no force in the point taken by the counsel for the receivers, that all the proceedings in the suits against the Toledo Bank were void, on the ground that that bank had ceased to exist as a corporation before the suits were commenced. The Ohio statute does not decláre, nor do I see any ground upon which it can be said, that its insolvency and the consequent transfer of its property was, or should be, deemed a dissolution of the corporation. It is plain to me that, notwithstanding its insolvency and the consequent transfer of its property, it continued to have a name and existence as a corporation, so far, at least, as to be capable of being sued as such.

The question, then, in this case, is whether the court below erred in deciding that the attaching creditors had acquired liens upon the funds in question, in. preference to any claim of the receivers, and in directing the funds to be applied in payment of the claims of the attaching creditors.

The decisions of the courts of this State leave no'room for doubt on this question.

Assuming that the Ohio statute, upon the insolvency of the Commercial Bank of Toledo, vested all its property, in the first instance, in the board of control, and then in the receivers, on their appointment under the act, this transfer of its property, as to the insolvent bank, was and must be deemed to have been- an involuntary transfer.

It would be absurd to say or to presume that the bank purposely committed the act of insolvency for the purpose of so transferring its property, and, therefore, that the transfer was, or should be, deemed voluntary.

This statutory proceeding as to the courts of this State was a foreign statutory bankrupt proceeding, by which the bankrupt or insolvent corporation was divested of all its property, by the statute, without its consent.

It may be conceded that, as between the receivers and the insolvent bank,'the statute vested in the receivers, on their appointment, the title to the funds in question in the American Exchange Bank; but as the Ohio statute, and the proceedings under it, could have no force or operation in this State," except such as might be conceded to it by the authorities and courts of this State, on the principle of comity, it follows that such title must be deemed to have vested in the receivers subject to the control of the authorities and courts of this State over. the funds, under the laws and regulations of this State.

The question, then, is one of comity, to be settled by the decisions of the courts of this State, as determining how far they will recognize a foreign involuntary bankrupt proceeding.

In Holmes v. Remsen (20 John., 259), it was said that the assignees of a bankrupt take “ subject to the remedies provided by the laws of the foreign country where the debt is due,” &c. Again: The law of the domicile having sequestered the bankrupt’s estate, so as to divest' him of the control over it, and appointed them (the assignees of the bankrupt) to administer it, they stand here on the footing of administrators merely, with a right of suing in common with other creditors; but our law' will not regard the chose in action as exclusively appropriated to their use; and the preference can only be gained by pursuing the remedies which our. laws afford.”

It would probably follow, from the principles laid down in Holmes v. Bemsen, that the court below was right in awarding the funds in question to the attaching creditors; but the Court of Errors, in Abraham v. Plestoro (3 Wend., 540-548), went much further in refusing to recognize a title under a foreign bankrupt law. I understand that in this case the court held, that such title will not be recognized by the courts of this State, even where the question arises entirely between the bankrupt and his assignee and creditors, all residing in the country under whose laws the assignment was made.

Abraham v. Plestoro was an appeal from an order of the Chancellor, denying a motion to dissolve an injunction. (1 Paige Ch., 236.) The Chancellor conceded that had the contest arisen between creditors abroad, claiming under the proceedings in bankruptcy, and creditors here claiming adversely under our laws, the preference would be due to the latter.

The same principles apply to bankrupt proceedings under a statute of one of the States of the Union. (Johnson v. Hunt, 23 Wend., 87; Hoyt v. Thompson, 1 Seld., 329, 330; Beardsley, arguendo, and cases cited by him; Hoyt v. Thompson, 19 N. Y., 224, 225.)

The cases cited will not permit a doubt that the judgment of the Supreme Court should be affirmed, with costs.

Allen, J.

The title of the claimants, Waite and Young was a title by act and operation of law; and not by the act and consent of the corporation whose property was transferred. It was acquired ininvitum, as.distinguished from a title derived from the voluntary act and transfer of the owner. The law distinguishes only between these two classes, in determining the effect to be given to transfers of movable property at the time actually within a j urisdietion 'foreign to that of the owner. The law of the domicile of the owner will control and give effect to every voluntary conveyance by the owner of personal property, wherever such property is situated. By a sort of fiction, that which is known as personal property adheres to the person and has no fixed situs, and hence the maxim, mobilia sequunter personam ; and the law which governs the person of the owner will control as to the disposition or transmission of it. (Story Confl. Laws, §§ 378, 380, 381.) But not so as to devolution of title by act and operation of' law, whether by forfeiture, bankruptcy, insolvency or otherwise. In such case, the transfer, depending upon positive law, is only operative where such law prevails and is obligatory; and as the laws of' a state or government have no extra-territorial force, it follows that title to property in one state does not pass by virtue of a law of a foreign state, although it be the state and domicile of the owner. The law operates, if at all, in rem, and the state by whose legislation it is enacted having no jurisdiction over property without its territorial limits, it is entirely inoperative in respect to it. A quasi effect may be. given to the law, as a matter of comity and inter-state or national courtesy, when the rights of creditors or bona fide purchasers or the interests of the state do not interfere, by allowing the foreign statutory or legal transferree to sue for it in the courts of the state in which the property is; but he is regarded in such case as representing the original owner, and to this extent effect is given, in one state or country, to the laws of another. (Story Confl. Laws, § 413.) This has come to be the well-established rule of this State, the United States and most of the States of the Union; and although it differs essentially frpm the rule in Great Britain and in other countries of Europe, it is no longer an open question here. The question in other countries than our own has generally, if not exclusively, arisen in, cases of bankruptcy and in contests between the assignees in bankruptcy and creditors pursuing their remedy under foreign attachment laws, and where there have been bankrupt or insolvent laws similar and substantially the same in the several States between the citizens of which the controversy existed. And as it is conceded that the rule is not one of strict legal right, but of decision, and has been adopted in the exercise of an international comity which is recognized in the jurisprudence of all civilized governments, it is not entirely certain that the same rule would be applied even in Great Britain when the foreign bankrupt or insolvent law was essentially'different from their own, or when the distribution of the estates of insolvents was upon an essentially different principle. (Story Confl. Laws, § 415.) Be that, however, as it may, we have departed from the rule of the English courts, and in the disposal of the movables of foreigners within this State have, for the protection of the citizens of the state, restricted the operation of foreign laws, and hold that a judicial transfer only operates infra territoriam, and has no binding influence abroad: which was originally the rule elsewhere. (Per Lord Meadowbank, Stein's case, 1 Rose’s Bank. Cas., app., 462; Mawdsly v. Park, cited 1 H. Bl., 680.) The earliest case in the courts of this State was that of Holmes v. Remsen (4 Johns. Ch., 460), in which Chancellor Kent, following the decisions in the English courts, decided that the effect of the transfer of personal property within this State was the same whether made by the owner residing abroad or by the law of his domicil for him. But this distinguished jurist, at a later period, upon a review of all the cases decided before as well as after the case of Holmes v. Remsen, yields the question, and concedes that the weight is now the other way, and says that “it may now be considered as part of the settled jurisprudence of this country that personal property, as against creditors, has locality, and that lex loci rei sites prevails over the law of the domicile with regard to the rule of preferences in the case of insolvent estates. The laws of other governments have no force beyond their territorial limits; and if permitted to operate in other States, it is upon a principle of comity, and only when neither the State nor its citizens would suffer any inconvenience from the application of the foreign law. A prior assignment in bankruptcy under a foreign law will not be permitted to prevail against a subsequent attachment by. an American creditor of the bankrupt’s effects found here.” (2 Kent Com., 406, 407.) A series of cases in other States, commencing before the Revolution, hold to this doctrine. (Burk v. McLean, and Wallace v. Patterson, from the Maryland Reports [1 Hare & McHen., 236; 2 id., 463]; Taylor v. Geary, decided in Connecticut in 1787 [Kirby’s Rep., 313] ; Milne v. Martin, 6 Berry, 353; Mulliber v. Aughenbargh, 1 Penn., 117; McNeil v. Colquhoun, 2 Hayw. [N. C.], 24; Topham v. Chapman, So. Car., 283; Robinson v. Carow, 4 McCord, 519; Ingraham, v. Geyer, 13 Mass., 146—all cited by Chancellor Kent, in his Commentaries, supra.) The rule, as settled in this State and in the United States, is that, in cases of assignment by operation of law, the assignees are in the same situation as the bankrupt himself in regard to foreign debts. They take subject to every equity and subject to the remedies provided by the laws of the foreign country where the debt is due and the property is situated. (Story Confl. Laws, § 412, et seq.; Westlake Confl. Laws, § 281.) The reasoning of our courts would, doubtless, carry the rule further, and prohibit assignees under foreign bankrupt laws from suing in our courts. (Mossleman v. Caen, 34 Barb., 66.) In Harrison v. Story (5 Cranch, 298; affirmed in Ogden v. Saunders, 12 Wheat., 213), it was adjudged “that in the case of a contract made with foreigners in a foreign country, the bankrupt laws of the foreign country are incapable of operating a legal transfer of property in the United States.” A foreign bankrupt law is not paramount in disposing of the rights of the bankrupt in this State. (Abraham v. Plestero, 3 Wend., 538.) In Johnson v. Hunt (23 Wend., 87), the principle was applied against trustees appointed in this State under the statute authorizing proceedings against absconding debtors; which is in the nature. of a bankrupt law. It is, like the proceedings under which the receivers of the Commercial Bank of Toledo were appointed, a statutory proceeding for the administering the estate of the debtor for the benefit of creditors. It was then held that the statutory assignment did not work a legal transfer of the property of the debtor so as to invalidate a Iona fide conveyance of .property by him in another state to a citizen of that state. Hoyt v. Thompson (1 Seld., 320; S. C., 19 N. Y., 207), is directly in point, and decisive of the question here, being the deliberate judgment of this court upon the very question before us. In Massachusetts the courts have gone so far as to deny effect to a voluntary assignment of property in that State by a citizen of this State to a trustee for the benefit of creditors, giving preference to creditors, also citizens of this State. (Zipcey v. Thompson, 1 Gray, 243.) The legislature of Ohio assumed the disposition of the property of the insolvent bank in invitum, and undertook to vest the title in ' the receivers; but this statutable conveyance cannot operate upon'any subject not within the territorial limits of Ohio. It is none the less a conveyance in invitum because the authority for the proceeding was a part of the organic law of the corporation. It was, nevertheless, a proceeding in the nature of a proceeding in bankruptcy. The acceptance of the charter, .with this provision" for a distribution of its effects upon the happening of insolvency, cannot operate to give to the transfer the effect of a voluntary conveyance of the assets. The title of the trustees is a statutory title,-and must defer to the lien acquired by the creditors attaching the property in this state. Creditors within this State having acquired a lien under our laws upon property within the State, will not be deprived of their lien and sent to a foreign state to seek such portion of the insolvent estate as the laws of that state will, upon distribution, give them. The State will do justice to its own citizens So far as it can be done by administering upon property within its jurisdiction, and will yield to comity in giving effect to foreign statutory assignments only so far as may be done without impairing the remedies or lessening the securities - which our laws have provided for our own citizens. (Story Confl. Laws, § 414.)

It is also urged in behalf of the receivers: 1. That the Superior Court of the city of Hew York had not jurisdiction of one of the' actions in which an attachment was issued, and under which one of the respondents claims to have acquired a lien; and, 2. That neither of the attachments was duly served by the sheriff of the city of Hew York so as to bind the funds on deposit with the American Exchange. It is sufficient to say that, so far as the record shows, these objections are taken for the first time upon this appeal. They were not suggested either by answer or upon either of the hearings below. They must be regarded as waived. But it would seem, from a cursory examination of the questions made, that the appellants have lost nothing by the1 omission earlier to take the objections. The judgment must be affirmed, with costs.

All the judges concurring,

Judgment affirmed.