author: Hubbs, J. Lehman, J.

text:
    United States Fidelity and Guaranty Company, Appellant, v. Alfred H. Newburger et al., Copartners under the Firm Name of Newburger, Henderson & Loeb, Appellants and Respondents, and Ray Gleason et al., Respondents.

      (Argued October 10, 1933;
    decided November 21, 1933.)

      William J. McArthur for plaintiff-appellant.
    At common law and in the absence of a statute to the contrary, title to a stolen certificate of stock could not be conveyed by or through the thief, even though received in good faith and for value. (McNeil v. Tenth Nat. Bank, 46 N. Y. 325; Knox v. Eden Musee Co., 148 N. Y. 441; Page v. Clark, 100 Misc. Rep. 395.) Article 6 of the Personal Property Law has no application to the case at bar. (McNeil v. Tenth Nat. Bank, 46 N. Y. 325; Knox v. Eden Musee Co., 148 N. Y. 441; Page v. Clark, 100 Misc. Rep. 395.) Regardless of whether the law of Maine is consistent with the Personal Property Law the defendants-appellants and respondents obtained no property rights in the stolen certificate because the conceded forgery and alteration rendered the certificate void in the hands of any subsequent holder. (Meyer v. Huneke, 55 N. Y. 412; Columbia Distilling Co. v. Rech, 151 App. Div. 128; Booth v. Powers, 56 N. Y. 22; Hauswald v. Katz, 216 App. Div. 92.) Even though the alteration and forgery invalidated the certificate in the hands of any subsequent holder, it does not follow that in its altered condition the certificate could not be the subject of conversion by the defendants-appellants and respondents or that the plaintiff was not substantially damaged by such conversion. (Boyce v. Brockway, 31 N. Y. 490; Mutual Trust Co. v. Merchants Nat. Bank, 236 N. Y. 478; Pierpont v. Hoyt, 234 App. Div. 205; 260 N. Y. 26.)

      Donald A. Gray, Oscar R. Houston and G. Arthur Blanchet for defendants-appellants and respondents.
    The Appellate Division properly sustained the judgment of the trial court that when the certificate came into the hands of the defendants-appellants and respondents it was practically a valueless thing, since the certificate was materially altered, forged and void. (Slingsby v. Westminster Bank, Ltd., [1931] 2 K. B. 583; New York Title & Mortgage Co. v. First Nat. Bank, 51 Fed. Rep. [2d] 485; 284 U. S. 676.) The law of the State of Maine is consistent with article 6 of the Personal Property Law. (Gruntal v. United States Fidelity & Guaranty Co., 254 N. Y. 468; Turnbull v. Longacre Bank, 249 N. Y. 159.)

      Edward A. Coleman for Louisa Kohl, defendant-respondent.
    The defendants-appellants and respondents were not aggrieved by the judgment in their favor and against the defendant-respondent. (Municipal Service

      Real Estate Co. v. D. B. M. Holding Co., 232 App. Div. 183; Marsh v. Standard Accident Ins. Co., 141 Misc. Rep. 484; Munson Realty Co. v. Melrose Bond & Mortgage Corp., 232 App. Div. 832; Hooper v. Beecher, 109 N. Y. 609.)
   Hubbs, J.

On February 7, 1929, the brokerage firm of Moore & Schley was the owner of record of a certificate representing one hundred shares of the capital stock of the Electric Power and Light Corporation, a Maine corporation. The certificate was issued in its name and was numbered 42510. It indorsed the certificate in blank and sent it by a messenger for delivery to a customer. The certificate was stolen from the messenger.

The appellant, United States Fidelity and Guaranty Company, had issued to Moore & Schley a bankers’ blanket bond, indemnifying that company against loss by theft, and upon demand it paid to that company $5,843.75, the conceded market value of the stolen certificate. Moore & Schley then applied to the Guarantee Trust Company, the transfer agent, for the issuance of a duplicate certificate, which was issued upon the delivery of an indemnity bond to the transfer agent, executed by Moore & Schley as principal and the United States Fidelity and Guaranty Company as surety. The duplicate was issued to the firm of Moore & Schley and indorsed by it to the United States Fidelity and Guaranty Company, which surrendered it to the transfer agent and had issued to it in its name a new certificate, No. 50599.

About two months later the stolen certificate came into the possession of the defendant brokerage firm of New-burger, Henderson & Loeb (hereafter referred to as Newburger). It received the stolen certificate from the defendant Gleason, who had received it from the defendant Kohl, who claimed to have taken it as collateral security for a loan. At the time when Newburger received the stolen certificate, it had been altered and forged by erasing the name Moore & Schley from the face thereof and inserting the name “ Otto Schmidt ” and indorsing on the back the name Otto Schmidt, just above the genuine signature of Moore & Schley. Newburger presented the stolen certificate thus forged and altered to the Guarantee Trust Company, the transfer agent, for transfer. Although the books of the company showed that no certificate had been issued in the name of Otto Schmidt and that certificate No. 42510 Still stood in the name of Moore & Schley, the transfer agent canceled the stolen certificate and issued a new one in the name of Newburger. That caused an overissue of the stock of the electric company. When that was discovered by the transfer agent, it demanded from the plaintiff the surrender of the certificate for one hundred shares which had been issued to it and the plaintiff surrendered to the transfer agent that certificate. The plaintiff then demanded of Newburger the stolen certificate or its proceeds. The demand was refused and this action was brought in conversion. At that time plaintiff, which had paid to Moore & Schley $5,843.75 under its agreement to indemnify against damage by reason of theft, was out the money paid and the stock which it had received from Moore & Schley because of such payment and Newburger was in possession of a certificate for one hundred shares which had been issued by the transfer agent upon the surrender of the stolen certificate.

The trial court found in favor of the plaintiff upon the issue of conversion, but decided that the stolen certificate was without value when received by New-burger, as the new certificate, at that time in the possession of plaintiff, evidenced the real ownership of the stock. Judgment was entered in favor of the plaintiff for six cents damage and in favor of Newburger for a like amount against Gleason and Kohl, who had been impleaded. Plaintiff and defendant Newburger each appealed to the Appellate Division where the judgment was unanimously affirmed.

Plaintiff contends that it is entitled to receive from Newburger the sum of $5,843.75 which concededly it has lost by reason of the payment of the market value of the stolen certificate to Moore & Schley. When plaintiff, by reason of its indemnity agreement with the firm of Moore & Schley, paid it the market value of the stolen certificate, its entire interest passed to plaintiff and because of that interest, plaintiff ultimately came into possession of the certificate which it was compelled to surrender after the stolen certificate was surrendered by Newburger to the transfer agent and the fact that it was a stolen certificate was discovered by the transfer agent.

The only certificate in existence when the plaintiff made a demand on Newburger was the certificate which had been issued by the transfer agent to Newburger in place of the stolen certificate.

Newburger, by accepting the stolen certificate of stock, did not obtain title to it as against the true owner, Moore & Schley. The owner had a right to recover possession of the certificate from whoever came into possession of it. The right which it possessed passed to the plaintiff.

In the eyes of the law, the certificate of stock which Newburger received from the transfer agent for the surrender of the stolen certificate stood in place of the stolen certificate and Newburger had no more right to retain it as against the true owner than he would have had to retain the stolen certificate if it had still remained in its possession.

When Newburger, upon the demand of the plaintiff, refused to surrender the possession of the certificate of stock which had been issued to it in place of the stolen certificate, such refusal constituted a conversion of the stock itself and made Newburger liable for the damages resulting from such conversion. Those damages consisted of the market value of the certificate of stock. (Pierpoint v. Hoyt, 260 N. Y. 26.)

Not only was Newburger liable in conversion after demand, but it was also liable for conversion of the stolen certificate before demand. When Newburger surrendered the stolen certificate to the transfer agent for cancellation, and accepted therefor a new certificate issued in its own name, it exercised dominion and control over the stock evidenced by the certificate and assumed to be the owner thereof and was thereby estopped to deny the natural consequence of its act.

Its act of ownership was inconsistent with the ownership and dominion of the true owner. (Pease v. Smith, 61 N. Y. 477; MacDonnell v. Buffalo Loan, Trust & Safely Deposit Co., 193 N. Y. 92.)

The surrender of the stolen certificate for cancellation and the acceptance of a new certificate in its place was equivalent to a sale of the stolen certificate and constituted a conversion thereof. (1 Street on Foundations of Legal Liability, p. 238; Pease v. Smith, supra; Caywood v. Van Ness, 74 Hun, 28; affd., 145 N. Y. 600. Cf. Mahaney v. Walsh, 16 App Div. 601.)

It is contended, however, that even though the acts of Newburger constituted a conversion of the stock, it is only hable for nominal damages because Moore & Schley had secured a duplicate certificate from the transfer agent before the stolen certificate came into the possession of Newburger. True it is that Moore & Schley had obtained a duplicate certificate, but only upon condition of indemnifying the transfer agent. When the transfer agent discovered that the stolen certificate had been surrendered to it and a new certificate had been issued in its place, it required the plaintiff, which stood in the place of Moore & Schley, to return for cancellation the certificate which had been issued to it. Thereafter, the new certificate issued to Newburger, in its name, was the only outstanding certificate which had been issued in place of the stolen certificate. To say that the stolen certificate when it came into the possession of Newburger was a valueless thing ” is to disregard the realities.

The result of the whole transaaction was that the plaintiff, as assignee of Moore & Schley, was left without the stock or its value and Newburger was in possession of the only outstanding certificate which it had obtained by the conversion of the stolen certificate and which it now contends it is entitled to retain upon the payment of six cents damages. That cannot be. Newburger, by its own wrong, has the proceeds of the true owner’s property which is of considerable value and proposes to keep it without compensation to the true owner or its assignee. The statement of the proposition refutes the contention. (Cf. Jackins v. Bacon, 63 Cal. App. 463.)

It mattered not that the certificate had been forged and altered before possession of it was received by New-burger. That it had value to Newburger is conclusively established by the fact that by its exchange for a new certificate Newburger ultimately obtained the only outstanding certificate for one hundred shares of stock issued in place of the stolen certificate.

This action is governed by the common law which entitled the owner of a stolen stock certificate to recover from one who had taken it without notice of the theft in the ordinary course of business. (Knox v. Eden Musee Americain Co., 148 N. Y. 441.)

The rule has not been changed, under the facts in this case, by article 6 of the Personal Property Law (Laws of 1913, ch. 600; Cons. Laws, ch. 41), which provides that under certain circumstances, the delivery of a certificate of stock may transfer title though made by one having no right to possession or authority from the owner to make the transfer.

That statute applies only to certificates of stock of a corporation organized under the laws of this State, or of another state whose laws are consistent with this act.” (§ 183.) The certificate in question was of a corporation organized under the laws of the State of Maine. That State does not have an act consistent with our statute and our act is not, therefore, applicable.

The judgment should be modified by directing judgment in favor of the plaintiff against the defendants-appellants-respondents for $5,843.75, with interest, and with costs in all courts, and judgment over against the two impleaded defendants-respondents in favor of the defendants-appellants-respondents for the same amount.

Lehman, J.

(dissenting). The action is brought for the conversion of the original certificate of stock owned by the firm of Moore & Schley, and the plaintiff at the close of its evidence obtained leave to amend the complaint to make clear that the action was not for conversion of the new certificate issued to the defendants. Neither pleadings nor proof would support a judgment for the conversion of the new certificate issued to the defendant brokers through the mistake of the corporate transfer agents. At the time the defendants converted the original certificate it no longer embodied or evidenced the rights of any stockholder and even a purchaser in good faith acquired no rights to any stock. Neither the conversion of the original stock certificate nor the issuance to the defendant brokers of a new certificate deprived Moore & Schley of their title to the corporate stock, or to the substituted certificate which even before the conversion by the defendant brokers had been issued to Moore & Schley. Moore & Schley were indirectly damaged by the issuance of the new certificate to the defendant brokers because they had chosen to give to the corporation as a condition for the issuance of a new certificate to them, a bond of indemnity against damages caused by the issuance of a duplicate or duplicates in. lieu (of the stolen certificate) * * * whether or not caused by, based upon or arising out of inadvertence, accident, oversight or neglect on the part of the obligees or their respective officers, agents, clerks and employees.” Since, however, no act done by the defendant brokers with respect to the stolen certificate in any wise affected the right or title of Moore & Schley to the certificate of stock which had been issued to them in place of the old certificate, Moore & Schley were damaged by their own act in giving the indemnity bond but not by the defendant brokers’ technical conversion of the original certificate. The judgment should, therefore, be affirmed.

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

Judgment accordingly.


source: Caselaw Access Project

author: Hubbs, J.

license: Public Domain

text:
    Piedmont Hotel Company, Respondent, v. A. E. Nettleton Company, Appellant.

      (Argued October 5, 1933;
    decided November 21, 1933.)

      Edward Schoeneck for appellant.
    The lease provides for a novation whereby upon the happening of certain contingencies, the occurrence of which is alleged in the answer and asserted in the answering affidavits, defendant was to be relieved from all liability to pay rent and the Georgia corporation was to be substituted as lessee. (Schoonmaker v. Gray, 208 N. Y. 209; Woolsey v. Funke, 121 N. Y. 87; Atwater & Co. v. Panama R. R. Co., 246 N. Y. 519; Poel v. Brunswick-Balke-Collender Co., 216 N. Y. 310.)

      Henry S. Fraser for respondent.
    The contract of lease is not ambiguous, and its provisions do not conflict. The lease allows an assignment by the lessee, without release of liability to the lessor. (Thomas v. Scutt, 127 N. Y. 133; Rosenthal P. Co. v. National Folding B. & P. Co., 226 N. Y. 313; Rochester Lantern Co. v. Stiles, 135 N. Y. 209; Devlin v. Mayor, 63 N. Y. 8.) Clause 3(C) is reconcilable with clause 18 on the ground that the former not only furnishes the lessor’s consent to the assignment, but functions as a requirement, and nothing more, that the proposed assignee shall expressly assume all the covenants in the lease. (Mann v. Munch Brewery, 225 N. Y. 189; Lynch v. Joseph, 228 App. Div. 367; Langel v. Betz, 250 N. Y. 159; Griggs v. Day, 136 N. Y. 152; Lese v. Lamprecht, 196 N. Y. 32; Sayre v. Peck, 1 Barb. 464.)
   Hubbs, J.

This is an action brought by the landlord to recover rent under a lease of premises situate in Atlanta, Ga. The lease prepared on a form furnished by plaintiff-respondent and mailed from Atlanta to appellant at Syracuse, N. Y., contained the following printed clauses:

“ 17. This lease shall not be assigned, nor shall the Lessee sublet the premises or any part thereof without the written consent of the Lessor. This provision shall not be waived except in writing.

“ 18. In the event these premises are subleased, or this contract is assigned under the terms and in the manner herein permitted, such sub-tenant or assignee shall become hable directly to the Lessor hereunder to the same extent as to all things herein mentioned, without relieving any liability of the Lessee.”

The appellant caused to be included the following typewritten clause: “3. * * * C. Lessor understands that the A. E. Nettleton Company will cause to be formed the Atlanta Nettleton Company, Inc., under the laws of the State of New York and that when the same is duly qualified for doing business in the State of Georgia, Lessor agrees that this lease together with all of its rights, duties and obligations shall be assigned and transferred from the A. E. Nettleton Company to said Atlanta Nettle-ton Company, Inc., without any further consent on the part of this Lessor.”

It is alleged in the answer that by the lease set forth in the complaint it was understood and agreed that the defendant should cause to be formed the Atlanta Nettle-ton Company, Inc., that when said corporation was qualified to do business in the State of Georgia, the lease was to be assigned and transferred to it without further consent from the plaintiff, and “the defendant should thereupon be relieved and discharged of all liability on said lease; ” that after the execution of the lease, Atlanta Nettleton Company, Inc., was incorporated, was admitted to do business in the State of Georgia and defendant caused the lease, together with all the rights, duties and obligations ” to be “ assigned and transferred from the defendant to the Atlanta Nettleton Company, Inc.,” which thereupon assumed and agreed to perform all duties and obligations of the lease upon the part of the lessee to be performed; “ that said Atlanta Nettleton Company, Inc., entered into possession of the premises,” and “paid to the plaintiff the rent owing under said lease and plaintiff accepted the same,” and “ that plaintiff duly accepted said Atlanta Nettleton Company, Inc., in place of defendant as lessee, and in full discharge of and substitution for the defendant,” and that “ the defendant was thereby fully and finally discharged from all liability on said lease.”

The plaintiff moved for summary judgment under rule 113 of the Rules of Civil Practice, which was denied at Special Term. The Appellate Division reversed, one justice dissenting, and granted leave to appeal to this court upon the following certified question: “ Was the defendant’s answer sufficient in law to constitute a defense to plaintiff’s alleged cause of action? ”

The answer to that question depends on the interpretation which may reasonably and properly be given to clause 3-C of the lease. May it be said, as a matter of law, that the words “ this lease together with all its rights, duties and obligations shall be assigned and transferred from the A. E. Nettleton Company to said Atlanta Nettleton Company, Inc., without any further consent on the part of this Lessor,” provide for a novation upon the transfer of the lease to the Atlanta Nettleton Company, Inc., or does the inclusion of clause 3-C in the lease which contained clauses 17 and 18 create an ambiguity and present an issue upon a question of fact?

It does not seem to us that upon proof of a transfer of the lease as permitted by clause 3-C, it could be held as a matter of law that obligation to pay the rent reserved would rest upon the transferee to the exclusion of the appellant. However, clause 3-C and clauses 17 and 18 must be read together and whether they are consistent or inconsistent can only be determined upon proof of the intent of the parties. Clauses 17 and 18, by their specific terms, refer to possible assignments of the lease and subletting of the property. They áre contained in the printed portion of the lease and provide for written consent of the lessor before any transfer shall be made thereunder. That clause 3-C was intended to cover other than a usual assignment or subletting is evidenced by the fact that it provides upon the happening of a particular contingency for an assignment and transfer not only of the lease and premises but of all the “ rights, duties and obligations ” of the lease from the appellant to a specified corporation thereafter to be formed, such assignment and transfer to be without any further consent on the part of the respondent. If, by an assignment and transfer of the lease, together with all of its rights, duties and obligations from the appellant to a specified corporation to be formed, nothing more was meant than that consent was given to an assignment or subletting of the premises or an assignment of the contract to an assignee or subtenant, then the clauses are not inconsistent.

If, however, it was intended that the transferee was to assume all of appellant’s obligations under the lease to the exclusion of the appellant, then clause 3-C and clause 18 are inconsistent. That there is ambiguity in clause 3-C and in the lease as a whole seems reasonably clear.

The appellant alleges that it was understood and agreed that upon a transfer of the rights, duties and obligations of the lease to the Atlanta Nettleton Company, Inc., it should thereupon be relieved and discharged of all liability on the lease. There being an ambiguity in the lease under consideration, the pleadings present a question of fact which should not be determined upon a motion for summary judgment, but should be tried in the ordinary manner. '

A somewhat similar question to that here involved is presented in Schulman v. Cornman (221 App. Div. 170,173). In that case a contract of option to purchase provided for the return of a deposit if the title should not be marketable. Pursuant to the option, a contract was entered into with the owner of the fee, in which the property was described, and there was added to the description, being such part of the said parcel of land as exists and is owned by the seller at the time of the signing of this agreement.”

The action was brought to recover the balance of the purchase price. The answer set up that the owner of the premises was not able to deliver title to at least eighty-five per cent of the land approximately described. Plaintiff made a motion for summary judgment which was granted by the trial court. In reversing, the Appellate Division said: there is thus presented an issue requiring evidence to establish in what sense the parties used this ambiguous clause in question, namely, whether to include a variation which was a small proportion of the total amount purporting to be conveyed or to include any variation down to less than one-eighth of the land approximately contracted for” (p. 174).

In the case at bar, evidence is necessary to establish in what sense the parties used the ambiguous clause in question and the defendant is entitled to have that question tried as an issue of fact. In reaching that conclusion we have had in mind that the clause of the lease in question was prepared by a layman. Also the well-established rule that to justify a court in granting summary judgment it must be satisfied that there is in truth nothing to be tried.” (Curry v. Mackenzie, 239 N. Y. 267, 270.)

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

Pound, Ch. J., Crane, Lehman, O’Brien and Crouch, JJ., concur; Kellogg, J., concurs in result.

Ordered accordingly.


author: Htjbbs, J.

text:
    In the Matter of Sydney Rothman, an Incompetent Person. Charles Rothman, Appellant; Murray Waldman, as Committee, Respondent.
    (Argued October 2, 1933;
    decided November 21, 1933.)

      Emanuel A. Stern for appellant.
    The field for exercise of discretion in the appointment of a committee for an incompetent person is a limited one. It was a manifest abuse of discretion for the court to disregard the wishes of all of the incompetent’s next of kin and to override the reports of the special guardian and official referee recommending the appellant's appointment. (Sporza v. German Sav. Bank, 192 N. Y. 8; Matter of Andrews, 192 N. Y. 514; Matter of Lamaree, 32 Barb. 122; Half Moon v. Canal Board, 213 N. Y. 160; Forstmann v. Joray Holding Co., 244 N. Y. 22; Matter of Superintendent of Banks, 207 N. Y. 11; Matter of Foster, 254 N. Y. 614; Matter of Cooper, 105 App. Div. 449.)

      Albert Schatz and Murray Waldman for respondent.
    There is ample evidence to sustain the finding by the court below of the possibility of adverse interests. (Matter of Totten, 179 N. Y. 112; Tierney v. Fitzpatrick, 195 N. Y. 433.) The court at Special Term, in view of the various conflicting interests disclosed by the record, properly exercised its discretion in appointing the respondent as successor committee. (Matter of Page, 7 Daly, 155; Matter of Ownes, 47 How. Pr., 150; Matter of Cook, 6 N. Y. Supp. 720.)
   Htjbbs, J.

The committee of the incompetent filed a petition for a settlement of her account, for her discharge and the appointment of a substitute committee. The matter was sent to an official referee to settle her account. The referee and the parties to the proceeding, brothers and an incompetent sister, nephews and a niece, and the special guardian of the incompetent, suggested upon the application for the appointment of a substitute committee that one of the brothers of the incompetent should be appointed. A proposed order containing the name of the brother as substitute committee was submitted to the Special Term. The court struck out the name of the brother from the order and without notice to any of the parties in interest substituted the name of a third party who had not been mentioned. In a memorandum decision the court stated: “ The brother may not be appointed because of the possibility of adverse interest.”

The principles governing the appointment of a conxmittee of an incompetent have long been firmly estabfished by decisions in this court and other courts of the State. We believe those principles are salutary and should be followed in making such an appointment, and when arbitrarily disregarded, the order making the appointment should be reversed.

Such an appointment is not personal to the court, but rests in the exercise of a sound judicial discretion based upon the facts before the court. A disregard of such principles and the arbitrary appointment of one selected by the court without notice can only lead to criticism of the court and resentment on the part of the next of kin and parties in interest.

The proper practice governing the appointment of a committee was stated in Matter of Lamoree (32 Barb. 122, 124, 125) as follows: If the next of kin unite in a petition and name a proper person as committee, or give their consent in writing to the appointment of a particular person, it is usual to select such person. * * *

Considering the close and intimate relations which the committee must maintain with the family and relatives of the lunatic, his power of control — all but absolute — over his person and property, the remote possibility of his ever being in a condition to make any disposition of his estate which shall prevent its descent and transmission to the heirs at law and next of kin, a rule of practice or of positive legislation which would justify the appointment of a stranger to execute the trust of committee without the assent and against the will of his family or other relatives, and without any sufficient or adequate cause, would be oppressive and intolerable.”

The opinion in that case has been followed and approved. (Matter of Cooper, 105 App. Div. 449; Matter of Foster, 230 App. Div. 730; affd., 254 N. Y. 614; Matter of Andrews, 192 N. Y. 514.)

The practice so long firmly established should be followed.

No criticism has been made of the person appointed or of his ability and qualifications to perforin the duties of committee.

While we cannot approve the practice of naming a third person contrary to the expressed wishes of the parties in interest without notice, still we are constrained to affirm the order in this case as we feel that the Special Term was justified in deciding that the members of the incompetent’s family had an adverse interest and for. that reason the brother whom they suggested for appointment to the position should not have been appointed.

The order should be affirmed, with costs.

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

Order affirmed.


text:
    Frederick J. Wheeler et al., as Trustees of Union Free School No. 1 in the Town of Milton, Respondents, v. The Standard Oil Company of New York, Appellant.

      (Argued October 13, 1933;
    decided November 21, 1933.)

      Frank H. Deal for appellant.
    The plaintiff must sustain the fact by evidence that the alleged agent was duly authorized by the defendant to act for it and in the exercise of that authority did legally waive the right of the defendant to exercise its option of purchase under the terms of the lease. (Peoples Broadcasting Corp. v. Batten Co., 231 App. Div. 446; Patten v. Climax Co., 40 App. Div. 607; Edwards v. Dooley, 120 N. Y. 544; Fullerton v. McLaughlin, 70 Hun, 568; Brewster v. Carnes, 103 N. Y. 556; Ritch v. Smith, 82 N. Y. 627; Bickford v. Menier, 107 N. Y. 490; Smith v. Kidd, 68 N. Y. 130; Stilwell v. Mutual Life Ins. Co., 72 N. Y. 385; Lord v. U. S. Transportation Co., 143 App. Div. 437.) The vendee is entitled to compensation, either against the assignee of the vendor, or against the land. (Muck v. Hitchcock, 149 App. Div. 323; Elterman v. Hyman, 192 N. Y. 113; Lovejoy v.
      Potter, 60 Mich. 95; Gibert v. Peteler, 38 N. Y. 165; Price v. Palmer, 23 Hun, 504; Occidental Realty Co. v. Palmer, 117 App. Div. 505; 192 N. Y. 588; Hodge v. Sloan, 107 N. Y. 244; Tulk v. Moxhay, 2 Phil. 774; Trustees of Columbia College v. Lynch; 70 N. Y. 440; R. L. Assn. v. Kellogg, 141 N. Y. 348; Post v. West Shore R. R. Co., 123 N. Y. 580.)

      Spencer B. Eddy for respondents.
    The trial court could not award damages against the plaintiffs. (Langel v. Betz, 250 N. Y. 159; Bailen v. Potter, 251 N. Y. 224; Smith v. Morin Brothers, Inc., 233 App. Div. 562; Mowbray v. Dieckman, 9 App. Div. 120; Standard Fashion Co. v. Siegel-Cooper, 44 App. Div. 121.) The defendant is estopped from exercising its option as against the plaintiffs. (Fulton Bank v. N. Y. & Sharon Canal Co., 4 Paige, 127; Trustees v. Smith, 118 N. Y. 634; Rothschild v. Title Guaranty & Trust Co., 204 N. Y. 458; Wetherell v. Kelly, 195 App. Div. 227; Western N. Y. & Penn. R. R. Co. v. Rea, 83 App. Div. 576; Small v. Housman, 208 N. Y. 115.)
   Htjbbs, J.

The appellant leased a portion of a village lot from Thomas Kerley as trustee and Annie T. Chew, the owners, for a term of five years. The lease contained an option to purchase. The lessee went into possession and erected a gas station and made other improvements on the lot. Thereafter, the respondents, as members of the Board of Education of School District No. 1, purchased the entire village lot, including the land leased to appellant. The premises were purchased by respondents with notice of the terms of appellant’s lease and of the option contained therein. The appellant complied with all the terms of the lease and duly exercised its option and in all respects complied with its terms. The respondents refused to comply with the terms of the option and convey the premises to the appellant-lessee.

After the expiration of the term granted by the lease, the respondents commenced this action in ejectment to obtain possession of the premises covered by the lease. The appellant, in its answer, as a counterclaim, prayed that it be granted a decree for specific performance of the option contained in its lease. The Special Term found as a fact that the respondents purchased the premises with full knowledge of the terms of appellant’s lease, and of the option contained therein, and that the appellant as lessee had fully complied with all of the terms of the lease and option. It also found all facts necessary to establish appellant’s right to a decree for specific performance of the terms of the option. Althoughjt found all of the facts in appellant’s favor, the court declined to grant specific performance.

It decided in effect that although appellant was entitled under the law to a decree of specific performance it would in the exercise of its discretion refuse that relief owing to the peculiar situation, which in its judgment would make such relief inequitable.

It imposed as a condition of exercising its discretion in respondents' favor and refusing the appellant the relief to which it would otherwise be entitled to under the findings that the respondents should pay the appellant such damages as the refusal to grant specific performance caused it and that appellant might retain possession of the leased premises until such time as a referee had computed such damages and the respondents had paid the same. A decree was duly entered in accordance with the decision.

The appellant did not appeal from the judgment, but the respondents appealed to the Appellate Division which reversed the judgment, made new findings, awarded the plaintiff-appellant in that court judgment in ejectment and affirmed the dismissal of the defendant’s counterclaim for specific performance.

The decision of the Appellate Division was based upon the ground that a judgment for damages was improperly awarded against the plaintiffs as they had not assumed the obligation of carrying out the terms of the contract between the lessor and lessee. We believe that the Appellate Division entirely misconceived the decision of the Special Term. Its decision was not to the effect that the plaintiffs were hable to the defendant on contract under the terms of the lease, but that the plaintiffs should pay the damages caused by the court’s refusal to grant to the defendant the relief of specific performance to which it would have been entitled under the findings of fact if the court had not exercised its discretion in plaintiff’s favor and refused that relief. The Special Term clearly had jurisdiction to award the defendant damages as a condition for refusing it specific performance. One who purchases land and accepts a deed thereof, with full knowledge that a lessee in possession has a right under his lease to purchase the land leased, upon complying with the terms of the lease takes the land subject to the terms of the lease and may be compelled in equity to carry out its terms by conveying the land to the lessee upon his complying with the terms of the contract. One who purchases with notice of equities is bound thereby. (Lovejoy v. Potter, 60 Mich. 95; Hodge v. Sloan, 107 N. Y. 244; Story’s Eq. Juris. (Yol. 1, 10th ed.) §§ 395 and 396; Real Prop. Law, § 223; Cons. Laws, ch. 50.)

The Special Term had jurisdiction to impress an equitable hen upon the land by decreeing that the lessee might remain in possession until the damages awarded should be paid. (Occidental Realty Co. v. Palmer, 117 App. Div. 505; affd., 192 N. Y. 588; Post v. West Shore R. R. Co., 123 N. Y. 580.)

The fact that the trial court referred to the damages awarded as damages for the breach of the contract does not justify the conclusion that the decision was based upon that ground, as the whole record clearly discloses that the basis of the decision awarding damages was that they were awarded in lieu of specific performance.

We are of the opinion that Best, the alleged agent of the defendant, did not possess authority to waive the provisions of the lease or estop the defendant from enforcing the option. The findings made by the trial court to that effect were justified by the evidence.

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

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

Judgment accordingly.


text:
    Eva L. Streeter, as Administratrix of the Estate of Edward Streeter, Deceased, Respondent, v. Graham & Norton Company, Appellant.

      (Argued October 16, 1933;
    decided November 21, 1933.)

      Fred H. Rees for appellant.
    Plaintiff’s alleged cause of action does not exist for the reason that she was not appointed as administratrix until more than two years after the death of decedent, and for the reason that the action was not commenced within two years of the date of his death. (Cons. Laws, ch. 13, § 130; Exchange Mutual Ins. Co. v. C. H. Gas & El. Co., 243 N. Y. 75; Fallert v. Massachusetts Bonding Co., 172 App. Div. 690; 225 N. Y. 647; Leun v. Brimmer, 203 App. Div. 643; Johnson v. Phœnix Bridge Co., 197 N. Y. 316.) Plaintiff is not aided by section 23 of the Civil Practice Act. The plaintiff in the present action is not the same plaintiff and does not represent the same interests as the plaintiff in the prior action. (Claflin v. Middlesex Banking Corp., 113 Fed. Rep. 958; Matter of Schlesinger, 36 App. Div. 77.) The fact that an action for damages for wrongful death cannot be split prevents the maintenance of this action. ( U. S. F. & G. Co. v. Graham & Norton Co., 254 N. Y. 50; Matter of Zirpola v. Casselman, Inc., 237 N. Y. 367.)

      Harry W. Williams for respondent.
    Section 23 of the Civil Practice Act, which grants under certain circumstances the right to bring a new action within one year, although the Statute of Limitations on the original cause of action has expired, applies to an action brought under section 130 of the Decedent Estate Law to recover damages for death caused by wrongful act. (Hoffman v.. D. & H. Co., 163 App. Div. 50; Leun v. Brimmer, 203 App. Div. 643; Connolly v. Hymans, 176 N. Y. 403; Bellinger v. German Ins. Co., 51 Misc. Rep. 463; 189 N. Y. 533; McKnight v. City of New York, 186 N. Y. 35; Ackerman v. Ackerman, 200 N. Y. 73; Titus v. Pool, 145 N. Y. 14; Boffe v. Consolidated Telegraph & Electric Subway Co., 171 App. Div. 392.) Section 23 of the Civil Practice Act must be broadly and equitably construed and is intended to protect an active and diligent suitor until he reaches a judgment on the merits and to protect against mistakes of law including a mistaken belief that the court has jurisdiction. (Gaines v. City of New York, 215 N. Y. 533; Davis v. N. Y. C. & H. R. R. R. Co., 233 N. Y. 242.)
   Hubbs, J.

On April 21, 1927, Edward Streeter, a carpenter employed by the United Metal Products Company, was killed in an elevator shaft in the Home Savings Bank Building in Albany, N. Y. He left him surviving a widow and six children, ranging in age from three to nineteen years. The widow and five youngest children, all dependents within the meaning of the Workmen’s Compensation Law (Cons. Laws, ch. 67), elected to take compensation under that act. The United States Fidelity and Guaranty Company, the insurance carrier, paid the compensation awarded and thereby became a statutory assignee under section 29 of the Workmen’s Compensation Law, of all the rights of the widow and five dependent children against thiso defendant, whose alleged negligent acts are claimed to have caused decedent’s death. Charles Streeter, the oldest child, who was nineteen years of age, was not a dependent within the meaning of the Workmen’s Compensation Law and, therefore, was not entitled to compensation. As to his rights, no statutory assignment resulted.

Within the two-year period specified by section 130 of the Decedent Estate Law (Cons. Laws, ch. 13) for the commencement of an action by an executor or administrator for negligence or wrongful act or default, causing death of a decedent, the United States Fidelity and Guaranty Company began an action to recover upon its assigned claim. That action resulted in a judgment in' favor of the carrier which judgment was entered within j the two-year period. It was later affirmed by the Appellate Division, but upon appeal to this court was reversed on the ground that an executor or administrator, as the statutory trustee of all the next of kin, must prosecute an action brought under section 130 of the Decedent Estate Law. (United States Fidelity & Guaranty Co. v. Graham, & Norton Co., 254 N. Y. 50.)

Shortly after the reversal of the judgment in that case by this court, and more than two years after the death of deceased, plaintiff was appointed administratrix of the estate of her deceased husband. Thereupon this action was commenced to recover for the death of deceased. A verdict in the sum of $40,000 was found in favor of the plaintiff, which was reduced to $15,000, and further reduced to the extent of the interest therein of Charles Streeter upon the ground that as to his interest, the action had not been commenced in time, he having no claim for compensation which could have been assigned to the United States Fidelity and Guaranty Company, the plaintiff in the first action.

The Appellate Division held that although the cause of action is statutory and the present case does not come within the letter of section 130 of the Decedent Estate Law, nevertheless, the cause of action is saved by section 23 of the Civil Practice Act, which reads: “If an action is commenced within the time limited therefor, and a judgment therein is reversed on appeal without awarding a new trial, or the action is terminated in any other manner than by a voluntary discontinuance, a dismissal of the complaint for neglect to prosecute the action, or a final judgment upon the merits, the plaintiff, or, if he dies and the cause of action survives, his representative, may commence a new action for the same cause after the expiration of the time so limited and within one year after such a reversal or termination. This section also applies to the workmen’s compensation law.’’

It is urged that section 23 contemplates that the diligent suitor shall have one adjudication upon the merits of his cause even though through mistake in form, forum or remedy, a prior action has failed, and that this action is within the spirit if not within the letter of the section.

In the case of Travelers Ins. Co. v. Padula Co. (224 N. Y. 397, 404) this court decided that where an insurance carrier is the sole beneficiary, that is the assignee, of all of the next of kin and widow or husband, who would be entitled to share in a recovery of damages as a result of the negligent death, an action may be maintained by the carrier as assignee, to recover such damage. The court said, referring to section 29 of the Workmen’s Compensation Law: “ Those provisions express that within the legislative mind and comprehension the section provided to the dependents of the employee a cause of action, independent of and not that created by section 1902 [Code of Civil Procedure] for the negligently caused death.”

Section 130 of the Decedent Estate Law, now in force, 1 reads the same as section 1902 of the Code of Civil Procedure.

In the case of United States Fidelity & Guaranty Co. v. Graham & Norton Co. (supra), the action brought by the carrier as assignee to recover damages for the death of plaintiff’s intestate, it was decided that the action could not be maintained as the plaintiff in that action was not the assignee of all the persons entitled to share in the damages recovered for the negligent death and that the cause of action could not be split. The opinion said: “ The action should have been brought through an administrator as the statutory trastee of the entire group of beneficiaries” (p. 55).

Section 23 of the Civil Practice Act applies only where the second action is brought by the same plaintiff, “ or, if he dies and the cause of action survives, his representative.”

The present action was not brought by the same plaintiff or representative. Neither is it the same cause of action. The first action was sought to be maintained under section 29 of the Workmen’s Compensation Law, while the present action is under section 130 of the Decedent Estate Law.

If the plaintiff in the present action were the same as in the prior action, seeking to recover for the same cause of action, undoubtedly section 23, Civil Practice Act, would apply and the cause of action wouid be saved although more than two years had expired since the death of decedent before the present action was brought. (Sharrow v. Inland Lines, Ltd., 214 N. Y. 101.)

To grant the right conferred by section 23, Civil Practice Act, to a different party plaintiff, representing in part different interests, would require the placing of a construction upon the section plainly beyond its intent and purpose.

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

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

Judgments reversed, etc.


text:
    Julius Steinberg, Respondent, v. New York Life Insurance Company, Appellant.
    (Argued October 25, 1933;
    decided November 21, 1933.)

      William G. Birmingham, Kenneth Be F. Carpenter and Louis H. Cooke for appellant.
    It was error to strike from the testimony of the doctors called by defendant the words u ailment ” and “ disease.” (Patten v. U. L. & A. Ins. Assn., 133 N. Y. 450; Sparer v. Travelers Ins. Co., 185 App. Div. 861; Klein v. Prudential Ins. Co., 221 N. Y. 449.)

      Ellsworth Baker and Morris M. Oppenheim for respondent.
    A physician is disqualified from testifying concerning the fact of the existence of a disease or ailment in a patient, for such information can only be acquired in attending a patient in a professional capacity. (Patten v. V. L. & A. Ins. Assn., 133 N. Y. 450; Edington v. Mutual Life Ins. Co., 67 N. Y. 185; Grattan v. Metropolitan Life Ins. Co., 80 N. Y. 281; Briggs v. Briggs, 20 Mich. 34; Denaro v. Prudential Ins. Co., 154 App. Div. 840; Sparer v. Travelers Ins. Co., 185 App. Div. 861.) The plaintiff by calling his physician to testify does not waive his objection to the evidence of other physicians who had treated him at other periods. (Hope v. Troy & Lansingburgh R. R. Co., 40 Hun, 438; 110 N. Y. 643; Record v. Village of Saratoga Springs, 46 Hun, 448; 120 N. Y. 646; Barker v. Cunard S. S. Co., 91 Hun, 495; 157 N. Y. 693; Hennessy v. Kelley, 55 App. Div. 449.)
   Htjbbs, J.

The appellant, on December 20, 1928, issued and delivered to the respondent an ordinary life insurance policy for $5,000, with disability and double indemnity benefits. Thereafter, it issued and delivered to respondent three other policies of the same type. Before the first policy was issued, a physical examination of. respondent was made by appellant’s medical examiner. At the time of the examination, the respondent answered in writing certain questions in regard to his health and prior physical condition. A copy of the questions and answers were attached to the policies as required by section 58 of the Insurance Law (Cons. Laws, ch. 28). Two of the questions and the answers thereto were as follows:

“ 8. Have you ever consulted a physician or practitioner for or suffered from any ailment or disease of * * * the heart, blood vessels or lungs? No.”

10. Have you ever consulted a physician or practitioner for any ailment or disease not included in your above answers? No.”

Thereafter, three supplemental applications for insurance were made by the insured. The four policies were issued and delivered by the appellant in reliance upon the answers made by respondent to the questions which he answered as part of- the medical examination including the questions and answers quoted above. The two-year incontestability clauses contained in the policies prevent any defense as to the ordinary life insurance provisions in the policies, but do not apply to the disability and double indemnity benefits.

This action was brought upon the policies to recover disability benefits, and for certain other relief which is immaterial at this time. The appellant’s answer so far as material at this time alleged as a defense that answers to questions numbered eight and ten heretofore quoted were false in that prior to the date of the application, plaintiff had suffered from pulmonary tuberculosis on account of which he had consulted, been examined and treated by physicians. At the trial, respondent introduced the policies in evidence and called as a witness a physician who had examined him for the first time on the day of the trial. He testified that he found from such examination that the insured was then suffering from moderately advanced active pulmonary tuberculosis, fie testified that in his opinion he had suffered from that disease and that the same condition had existed since January 1, 1932, seven months before the trial, and that he had been totally disabled from such disease during that period.

The appellant called two physicians, each of whom testified that prior to December, 1928, the respondent had consulted him in a professional capacity on several occasions, and that on those occasions he was sick.

The doctors were not permitted to testify that he was suffering from any ailment or disease or to state from what he was suffering or give any testimony other than that he was sick. The court sustained an objection to any other testimony on the part of the doctors upon the ground that such testimony was prohibited by section 352 of the Civil Practice Act, which reads: “A person duly authorized to practice physic or surgery, or a professional or registered nurse, shall not be allowed to disclose any information which he acquired in attending a patient in a professional capacity, and which was necessary to enable him to act in that capacity.”

Section 354 provides that the prohibition contained in section 352 may be expressly waived upon a trial by the patient. It does not specify what shall constitute a waiver or how it shall be manifested.

At common law, an attending physician who had treated a patient could be compelled upon a trial to disclose the information which he acquired during such treatment. The Revised Statutes of 1830 (2 R. S. 406, § 73) provided that a physician should not disclose any information acquired by him in treating a patient. That statute was embodied in section 834 of the Code of Civil Procedure and has become section 352 of the Civil Practice Act.

In considering the application of the section under the facts of this case, the purpose of the statute and the public policy evidenced by the enactment should be appreciated. Its purpose is to protect those who are required to consult physicians from the disclosure of secrets imparted to them; to protect the relationship of patient and physician and to prevent physicians from disclosing information which might result in humiliation, embarrassment or disgrace to patients. When the original statute was enacted, it was believed that the benefits which would accrue from its enactment by preventing disclosure by physicians of information gained in consultation and by inspiring confidence between patients and their physicians would outweigh any injustice which might result in particular cases caused by the exclusion of testimony by physicians at trials.

The privilege is personal to the patient and may be waived by him upon the trial of an action in open court.

The question in this case is whether the respondent in calling a physician as a witness and thereby disclosing the fact that he was suffering from moderately advanced pulmonary tuberculosis on January 1, 1932, constituted a. waiver of the privilege so that the appellant should have been permitted to introduce the testimony of other physicians who had treated him, for the purpose of establishing that he was suffering from the same disease prior to December, 1928, and had been treated by physicians for that disease.

In the application the question was asked whether the applicant had ever consulted a physician in regard to various diseases, and he answered “ no.” Then followed question 10, heretofore quoted, in which he was asked if he had ever consulted a physician for any ailment or disease not included in the questions which he had already answered, and his answer was no.”

Possibly the questions asked the appellant’s medical witnesses should have been more definite and limited as to time. No such objection was made to the questions, however, and it is apparent from what transpired, that the objections were sustained solely upon the ground that answers were prohibited by reason of section 352 of the Civil Practice Act.

Prior to the decision of this court in Capron v. Douglass (193 N. Y. 11) numerous cases had been decided in this State holding that where a plaintiff called a physician who gave testimony as to his physical condition that fact did not constitute a waiver of the prohibition contained in the statute and did not open the door so that the defendant could call other physicians to testify as to the physical condition which they found in treating the plaintiff.

Many of those cases are collated in the opinion in Hethier v. Johns (198 App. Div. 127; revd., 233 N. Y. 370).

In Capron v. Douglass (supra) the plaintiff had testified in detail in regard to his physical condition. He permitted without objection one doctor who operated upon bim to describe what he discovered during the operation. When the defendant called the physician who assisted the doctor who had testified testimony by him was excluded upon objection by plaintiff that it was privileged.

This court held that ruling to be error and definitely decided that where the evidence of one physician is received without objection, the privilege is waived, and testimony of a physician who was present and assisted in an operation, when offered by the opposing party, is competent and should be received.

While it appears in that case that the plaintiff himself had given testimony as to his physical condition and thus opened the door for testimony by physicians offered by the defendant, the court did not restrict its decision to the facts in that case, but expressly decided that where a plaintiff by testimony given by others with his knowledge and consent has exposed his physical condition to the public, the door is open to the defendant to offer testimony by physicians upon the same subject.

In the case of Heihier v. Johns (233 N. Y. 370, 372) the plaintiff had given testimony as to her physical condition and had called physicians who had described her physical condition. The defendant then called a physician who had examined her when the physicians who had testified in her behalf were not present.

The trial court excluded the testimony offered. This court decided that such ruling constituted reversible error. The opinion after stating that the plaintiff herself had testified to her physical condition and the fact that she had consulted the physician called by the defendant, then said: “ The physician may then be called by the defendant and examined as to any information acquired by him in the course of such consultation or treatment. The rule as it was formerly understood was altered by our decision in Capron v. Douglass.” To hold that a plaintiff who “ tenders to the jury the issue as to his physical condition,” by means of the testimony of a physician who has examined him, has not waived his privilege and opened the door for the receipt of testimony from a physician offered by the defendant, while if the same testimony had been given by himself, the door would be opened and the privilege waived would introduce a refinement not justified by reason, or intended by the decision in Capron v. Douglass [supra).

When the respondent called a physician as a witness who testified that for at least seven months the respondent had been suffering from active pulmonary tuberculosis ” he exposed his condition to the public and disclosed the secret which the statute was enacted to protect and keep secret. By his own act he removed the prohibition of the statute and waived upon the trial the protection which it afforded him.

The contention that a patient may waive the privilege afforded by the statute himself by calling a physician and disclosing his physical condition and at the same time insist that the statute bars the defendant from calling a physician to describe his physical condition, if sustained, would in many cases result in injustice and fraud. It would be making a use of the statute never intended by the Legislature and not now approved by this court. It is urged by respondent that even if it was proper to permit testimony to be given by the doctors called by the defendant as to respondent’s physical condition during the seven months preceding the trial referred to in the testimony given by the doctor called by respondent,- it would not have been proper to allow testimony by them as to his condition over three years before that time when the applications for insurance were signed.

Such contention overlooks or ignores the purpose of the statute.

There would be no more humiliation, mortification or disgrace in having the fact disclosed that he was suffering from pulmonary tuberculosis over three years and seven months before the trial than in the fact that he had that disease for seven months before the trial.

If his condition could not be shown as it existed three years before, could it be shown as it existed three months or three weeks before?

The disease is a progressive one. Respondent may or may not have suffered from it at the time he signed the applications for insurance. That was the issue in the case, and in fairness to the appellant, it was entitled to have received the testimony of doctors who examined him before the application was signed.

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

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

Judgments reversed, etc.


text:
    Charles C. Jacquin, Respondent, v. Syracuse Auto Rental and Taxicab Corporation et al., Appellants.
    (Argued October 19, 1933;
    decided November 21, 1933.)

      Philip T. Young for appellants.
    The jury having been discharged, the trial court was without power or authority to make the order appealed from. (Gilbert v. Finch,
      72 App. Div. 38; 173 N. Y. 455; Caruso v. Metropolitan Store, 214 App. Div. 328; Matter of Continental Guaranty Corp. v. Craig, 212 App. Div. 236; Wilson & Bailie Mfg. Co. v. City of New York, 122 App. Div. 621; Flint Co. v. Malevinsky, 137 N. Y. Supp. 858; Gabler v. Goldman Co., 215 App. Div. 333; Dougherty v. Salt, 227 N. Y. 200; Crowell Corp. v. Baugh & Sons Co., 237 App. Div. 68.) The plaintiff’s remedy being by an appeal from the orders denying his motions for a directed verdict and for a new trial and from the judgment in favor of the defendants, the courts below were in error in granting and affirming the judgment in favor of the plaintiff. (Loebel v. Loebel, 237 App. Div. 591; Maylayne Corp. v. Markantonis, 237 App. Div. 601; Clements v. Beale, 53 App. Div. 416; Shiffner v. Beck, 159 App. Div. 821; Gonzalec v. Schultz, 131 Misc. Rep. 28; Beach v. Beach, 160 App. Div. 229; Stierle v. Union Ry. Co., 11 Misc. Rep. 124; Renouil v. Harris, 4 N. Y. Super. Ct. 641; Bishop v. Empire Transportation Co., 37 N. Y. Super. Ct. 17; O’Brien v. Tilden, 228 App. Div. 502; Happel v. Lehigh Valley R. R. Co., 210 App. Div. 461; People ex rel. Ross v. Dooling, 132 App. Div. 50; Kadelburg v. Hartford Accident & Indemnity Co., 223 App. Div. 169; 248 N. Y. 654.)

      Charles E. Spencer for respondent.
    The judge who presided at the trial, sitting at the Trial Term or in Special Term for motions, had full power to direct judgment in accordance with the law applicable to the facts as found by the special verdict of the jury. (Ketcham Nat. Bank v. Hagen, 164 N. Y. 446; Arcady Camps, Inc., v. Berry, 207 App. Div. 63; Vanderbilt v. Schreyer, 81 N. Y. 646; Matter of City of Buffalo, 78 N. Y. 362; Ladd v. Stevenson, 112 N. Y. 325; Flanson Realty Corp. v. Workers’ Unity House, Inc., 229 App. Div. 179.)
   Hubbs, J.

This is an action to recover damages for loss of services sustained by plaintiff by reason of injuries to his infant son and for damage to his automobile caused by the negligence of the defendants. At the time of the accident, the plaintiff’s automobile was being operated by James Loughnot with his permission and consent and an automobile owned by the defendant taxicab corporation was being operated by the defendant Leonard with its permission and consent. The plaintiff was not present at the time of the accident but his infant son was riding in his automobile with Loughnot.

The trial court submitted special questions to the jury in writing. The jury, in answer to those questions, found that Loughnot, the driver of the plaintiff’s automobile, was not free from negligence, that the defendant Leonard was negligent, and fixed plaintiff’s damage at $200. The trial court directed a verdict for the defendants of no cause of action. The plaintiff moved to set aside the verdict as contrary to the evidence, contrary to the law and contrary to the finding of the jury. The motion was not reserved to be heard later, but was entertained by the trial court and denied. Thereafter, a judgment was entered in favor of the defendants.

Before the plaintiff’s time to appeal had expired, he made a motion at a Special Term held by the same justice who presided at the Trial Term, to vacate the judgment and order judgment for the plaintiff for $200, the amount found by the jury to be the plaintiff’s damage, with costs. The basis of the motion was that the trial justice had made an error of law in failing to follow the decision in the case of Gochee v. Wagner (257 N. Y. 344). The motion was granted, the first judgment was vacated and a new judgment entered in favor of the plaintiff upon the order of the Special Term. The Appellate Division affirmed the judgment and order and the case comes here by permission of this court.

The motion made at Special Term, to set aside the verdict and for a new trial because of an error of law, was upon a ground specified in section 549 of the Civil Practice Act. That section provides when"a motion may be made, to set aside a verdict and for a new trial, at the Trial Term upon the judge’s minutes. The motion made upon the coming in of the verdict was made under the power given to the court by that section.

The court at Trial Term entertained and denied the motion. If the plaintiff desired to review that order he had a right to do so by appealing to the Appellate Division. He could not review it by moving before the same justice at a Special Term. The practice upon that question is so definitely settled by authority that discussion of the reasons upon which it is based would be useless. (Clancy v. N. Y., N. H. & H. R. R. Co., 226 N. Y. 213; Herpe v. Herpe, 225 N. Y. 323.)

Section 552 of the Civil Practice Act provides. that " In a case not specified in the last three sections, a motion for a new trial must be heard and decided, in the first instance, at the special term.”

A motion to set aside a verdict for an error of law, made upon the judge’s minutes, comes under section 549 and is, therefore, excluded from the cases where a motion for a new trial may be made at Special Term.

The second judgment of the Trial Term and the judgment entered upon the decision of the Appellate Division should be reversed, the motion denied and the first, judgment reinstated with ten dollars costs of the motion and costs in the Appellate Division and in this court.

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

Judgment accordingly.


author: Crouch, J.

text:
    Bank of Manhattan Trust Company, as Successor Trustee, Appellant, v. 571 Park Avenue Corporation et al., Defendants. Raymond J. Scully, as Receiver, Appellant; Jacob R. Schiff, Respondent.
    (Argued October 2, 1933;
    decided November 21, 1933.)

      Morrell S. Lockhart, Mason H. Bigelow and William F. Reardon for plaintiff, appellant.
    The receiver is entitled to collect and retain, pending the determination of the foreclosure proceedings, rent payable by those in possession of the mortgaged premises. (Metropolitan Life Ins.

      Co. v. Childs Co., 230 N. Y. 285; Hollenbeck v. Donnell, 94 N. Y. 342; Prudence Co. v. 160 West 73d St. Corp., 260 N. Y. 205; Schwarz v. Alexander, 178 App. Div. 641.)

      Peter Klein and August P. Klein for Raymond J. Scully, as receiver, appellant.
    Whatever right the petitioner has in and to the rental of thé apartment, comes to him from and through the mortgagor and his successor in interest, and the rights of the petitioner, as an assignee, in and to the rentals of the apartment, are no better or stronger than the rights of his predecessor in interest. (Conley v. Fine, 181 App. Div. 675; Stevenson Brewing Co. v. Iba, 155 N. Y. 224; Selwyn & Co. v. Waller, 212 N. Y. 507; Prudence Co. v. 160 West 73d St. Corp., 260 N. Y. 205; Rider v. Bagley, 84 N. Y. 461; Hollenbeck v. Donnell, 94 N. Y. 342; Donlon & Miller Mfg. Co. v. Cannella, 89 Hun, 21; Markantonis v. Madlan Realty Corp., 262 N. Y. 354; Wiggins v. Freeman, 174 App. Div. 304; Fletcher v. McKeon, 71 App. Div. 278.)

      Samuel W. Dorfman for respondent.
    Petitioner is entitled to the use of the apartment without obligation to pay rent, or to the proceeds of the subletting to the tenant, until a sale of - the mortgaged premises herein. (Prudence Co. v. 160 West 73d St. Corp., 260 N. Y. 205; Eten v. Luyster, 60 N. Y. 252.)
   Crouch, J.

571 Park Avenue Corporation, then the owner of the leaseholds and apartment hotel in suit, executed and recorded a mortgage upon the premises on April 22, 1926, containing the usual assignment of rents and profits as further security in the event of default. Other covenants in the mortgage provided that no interest or charge prior or equal to the lien or title of this mortgage should be created, and that its lien should not be diminished or impaired in any way by the mortgagor. On December 27, 1928, a successor of the mortgagor, then in possession of and operating the hotel, entered into an agreement with one Banning, reciting that it was indebted to Tanning in the sum of $44,221.78, and was in financial difficulty. After providing for the subordination of this debt to certain other claims, it was agreed that the indebtedness should be paid to Tanning only out of the net proceeds of the debtor’s operation of the property, and that the indebtedness should carry no interest. Finally it was agreed that until the indebtedness should be paid, Tanning was to have the right to use one of the apartments known as apartment 1508 of the mortgaged premises, rent free, or to sublet it. Thereafter this apartment was sublet to one Bissberger at a rental of $4,000 per annum. The lease to Bissberger was executed by the debtor as landlord for and on behalf of' Banning. The monthly rents were paid by Bissberger to the debtor landlord, and were by it transmitted to Banning and later to respondent, Banning’s assignee.

Default in the mortgage occurred May 1, 1931, and a receiver in foreclosure proceedings was appointed October 29, 1931. After the appointment of the receiver he collected $2,000 rental of the Bissberger apartment before foreclosure sale. Respondent, Banning’s assignee, applied for an order directing the payment of this amount to him, it appearing from his petition that the indebtedness due under the contract with Banning was substantially unpaid. The application was granted, the court treating this contract as binding upon the receiver on the authority of Prudence Co. v. 160 West 73rd Street Corp. (260 N. Y. 205). The order was affirmed by the Appellate Division and leave to appeal to this court was granted upon a certified question.

Under the facts of this particular case, we think that the decision in Prudence Co. v. 160 West 73rd Street Corp. (supra) has no relevancy.

Reduced to its simplest terms, what we have here may be' described as an agreement subordinate to the mortgage made by the mortgagor with a general creditor, whereby the mortgagor in consideration of the creditor’s promise to forego payment of the debt except from a particular source and also to forego interest thereon, gives the creditor the right to occupy apartment 1508 hindself, or to sublet it and retain the proceeds. Thus stated, it seems clear that the agreement was in substance a lease, and that the benefits accruing to the mortgagor thereunder were in the nature of rents and profits, the value of which may readily be determined. The rent instead of being paid in cash was paid by being offset against the interest otherwise payable on the debt, and against the other benefits received by the mortgagor under the agreement. But the right thus to offset ceased when the appointment of a receiver required the application of rents to the mortgage debt. They were covered by the assignment clause in the mortgage, and were part of the security to which the mortgagee by means of a receivership was entitled to resort. No valid grant of rents could be made by the mortgagor beyond default and the appointment of a receiver, for they were no longer its to grant.

A further reason requires reversal. Even under our decision in the Prudence Company case the receiver would be entitled to the rents and profits which were an incident to ownership of the premises. We held only that a receiver could not require a person in occupation of the premises to pay to him any sum either for rent or for use and occupation, beyond such sums as were in their nature rents and profits of the premises to which the owner would have been entitled.” (Markantonis v. Madlan Realty Corp., 262 N. Y. 354, 360.) We did not hold that the mortgagor’s agreements with respect to mortgaged premises were conclusive upon the mortgagee where they are in contravention of express covenants or the necessary implications of a prior recorded mortgage. A contract by the mortgagor or its súccessors surrendering the right to receive rent for the mortgaged premises, or assigning, in whatever manner, the rents collectible from those premises, is unquestionably an impairment of the hen of the mortgage upon the rents. It is not necessary to find any collusion in making such an arrangement; it was simply beyond the power of the parties either to appropriate the pledged rents to a different indebtedness, or to defeat the pledge by granting the use of the premises rent free. This was not only expressly forbidden by the mortgage, but it seems a necessary consequence of the assignment of rents contained in it. These rents were expressly made security for the mortgage indebtedness in the event of default, and the scope of the contracts the mortgagor or its successors might make was necessarily limited to that extent. The pledge of these rents could not subsequently be rendered worthless either by another assignment of rents to be received, or by contracting away the right to collect any rent.

The order should be reversed, with costs in all courts, and the question certified answered in the negative.

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

Order reversed, etc.


text:
    357 East Seventy-sixth Street Corporation, Appellant, v. Knickerbocker Ice Company, Respondent.

      (Submitted October 19, 1933;
    decided November 21, 1933.)

      Sydney M. Heiman and Jacob I. Smith for appellant.
    The plaintiff’s rights in and to the wall continued so long as the wall itself remained standing in a fit and suitable state for further use as a party wall, and the demolition of the wall by the defendant was .an unauthorized destruction of the plaintiff’s property and property rights. (Partridge v. Lyon, 67 Hun, 29; Brooks v. Curtis, 50 N. Y. 639; Varriale v. Brooklyn Edison Co., 252 N. Y. 222; Everett v. Edwards, 149 Mass. 588; Bright v. Bacon, 131 Ky. 848; Bull v. Burton, 227 N. Y. 101; Negus v. Becker, 143 N. Y. 303; Eno v. Del Vecchio, 11 N. Y. Super. Ct. 53; Nashv. Kemp, 49 How. Pr. 522; 12 Hun, 592; Blake Constr. Co. v. Boyle, 140 Tenn. 166.)

      Theodore J. Miller and John J. O’Brien for respondent.
    The plaintiff’s implied easement in the party wall terminated when both buildings were demolished by their respective owners. (Heartt v. Kruger, 121 N. Y. 386; Bull v. Burton, 227 N. Y. 101; De Baun v. Moore, 22 App. Div. 485; Ebert v. Mishler, 234 Penn. St. 609; Hoffman v. Kuhn, 57 Miss. 746; Popper v. Gans, 74 Misc. Rep. 268; Herrman v. Hartwood Holding Co., 193 App. Div. 115; Wechsler v. Elbeco Realty Corp., 119 Misc. Rep. 178; Pierce v. Dyer, 109 Mass. 374.)
   Crouch, J.

The complaint alleges that plaintiff and defendant were the respective owners of adjacent premises, acquiring title through mesne conveyances from a common grantor who erected tenement buildings on both lots, with a party wall equally upon each. The plaintiff subsequently demolished the building on its premises, except the party wall, intending to erect a garage, which should use the party wall for support on that side. Before this was done, defendant, in order to erect an ice plant on its own premises, demolished its building and the entire party wall. Thereby, it is said, plaintiff was obliged to build an independent wall entirely on its own premises, although the party wall was suitable for continued use. In this action recovery is sought for the extra expense of building the independent wall, and for loss of rental space.

The easement in question here had its origin in implications arising out of the severance of a common ownership of two buildings supported by a common wall. The legal limits of the implications are broadly set by the conditions from which they arose. “ When the title to these two lots was severed by their conveyance to separate persons, the purchaser of each lot is presumed to have contracted in reference to the condition of the property at the time * * *. The party-wall of the two buildings was an open and visible condition of the ownership of the property, and, in legal contemplation, its use as such, while the buildings stood, was an element which entered into the contract of the purchaser, and which charged the land with a servitude.” (Heartt v. Kruger, 121 N. Y. 386, 390.)

In that case, upon the destruction of the adjoining buildings and the substantial destruction of the party wall, 'it was held that the easement ceased and that neither •owner could require the other to permit the erection of a new party wall. The explicit basis for the decision was that The easement was measured, in its extent and duration, by the existence of the necessity for it. When the necessity ceased, as it did by the destruction of the buildings and wall, the rights resulting from it ceased also ” ip. 392).

The rule of strict necessity which prevails in some jurisdictions (Cf. Buss v. Dyer, 125 Mass. 287) has been in a measure relaxed in this State. Here it has been held that the right to use a party wall is not restricted like a prescriptive right to the exact limits of the previous user. Considerations of policy, perhaps, in the garb of presumed intention, have led to an interpretation permitting one owner to vary somewhat the original conditions without affecting the continuance of the easement. (Brooks v. Curtis, 50 N. Y. 639; Negus v. Becker, 143 N. Y. 303; Varriale v. Brooklyn Edison Co., 252 N. Y. 222, 224.) Nevertheless, a party-wall easement is one of necessity, and like others stops short of mere «convenience or advantage to either party. (Heyman v. Biggs, 223 N. Y. 118; Root v. Wadhams, 107 N. Y. 384; Ogden v. Jennings, 62 N. Y. 526.)

The essential consideration which impels the continuance of a party-wall easement over the wishes of one of the property owners is the necessity of continued support of an existing building and not an isolated property right in the wall as such. In Heartt v. Kruger (supra) the servitude was to continue in legal contemplation only “ while the buildings stood.” (Cf. opinion of Ingraham, J., in the same case below, 56 N. Y. Super. Ct. 382; 5 N. Y. Supp. 192.) So in Partridge v. Gilbert (15 N. Y. 601, 614) it was said that the easement “ existed as long as * * * the respective buildings remained in a condition to need and to enjoy that support.”

Cases may be found where one of the buildings was remodeled, added to or extensively reconstructed, and the easement was held to continue. We have found no case where the implied grant has been construed as extending the right of support to an entirely new and different building. To say that the right of support of a building survives the building itself is paradoxical. Erecting an entirely new building on an old party wall falls pretty clearly into the category of convenience rather than of necessity. Any other conclusion would place the adjoining owner at a serious disadvantage. Even an express covenant will not be enforced beyond the duration of the conditions which made it desirable (Forstmann v. Joray Holding Co., 244 N. Y. 22; Deeves v. Constable, 87 App. Div. 352), or a grant more broadly than reasonably necessary for the purpose designed. (Dalton v. Levy, 258 N. Y. 161.) Much less should an implied grant be carried beyond the limits fairly and reasonably contemplated when it was made. When the plaintiff demolished its building, it put an end to the necessity of support on its side of the wall. To the defendant, having equal rights with plaintiff, came then the option either to continue the wall for the support of its own existing building or, as it did, to put a definitive end to the easement.

The judgment should be affirmed, with costs.

Pound, Ch. J., Crane, O’Brien and Hubbs, JJ., concur; Lehman and Kellogg, JJ., dissent.

Judgment affirmed.


text:
    Margaret Fox, Appellant, v. George L. Fox, Respondent.
    (Submitted October 18, 1933;
    decided November 21, 1933.)

      David H. Moses and Albert A. Verrilli for appellant.
    The court at Special Term had power under the statute to award counsel fees. (Civ. Pr. Act, § 1169; McBride v. McBride, 119 N. Y. 519; Haddock, v. Haddock, 109 App. Div. 502; Lake v. Lake, 194 N. Y. 179; Matter of letter, 78 N. Y. 601; Matter of Dietz, 138 App. Div. 283; Turner v. Woolworth, 221 N. Y. 425; People v. City Bank of Rochester, 96 N. Y. 32; White v. White, 154 App. Div. 250.) The court at Special Term had inherent power as an incident to its jurisdiction in divorce cases to grant the order appealed from. (Higgins v. Sharp, 164 N. Y. 4; Lake v. Lake, 194 N. Y. 79; North v. North, 1 Barb. Ch. 241; Brinkley v. Brinkley, 50 N. Y. 184; Griffin v. Griffin, 47 N. Y. 134; Jones v. Brinsmade, 183 N. Y. 258.)

      Albert C. Jordan for respondent.
    The status of husband and wife was dissolved by the final decree of divorce from which no appeal was taken and the allowance of alimony is the sole measure of support owed by the divorced husband under all circumstances. The court at Special Term had no power either by statute or common law to make the order. (Matter of Ensign, 103 N. Y. 284; Turner v. Woolworth, 221 N. Y. 425; Lake v. Lake, 194 N. Y. 179; Farnham v. Farnham, 227 N. Y. 155; Naumer v. Gray, 28 App. Div. 529; Bishop v. Bishop, 210 App. Div. 3; Dumproff v. Dumproff, 138 Misc. Rep. 298; Wright v. Wright, 139 Misc. Rep. 423.)
   Crouch, J.

On November 25, 1930, the plaintiff was granted an interlocutory judgment of divorce, which became final on February 25, 1931. By its terms alimony was fixed at twelve dollars a week. Later the defendant moved for a reduction of alimony. The motion • was denied and defendant appealed. Thereupon the plaintiff, with show of the requisite merits, moved for an allowance of counsel fees and the expenses of printing. The Appellate Division reversed an order granting the motion, and has certified the following question to this court: “ Did the Special Term have power to award the plaintiff any sum as counsel fee in the order made? ”

To sustain its decision the Appellate Division relied upon Lake v. Lake (194 N. Y. 179), where, at page 186, it was said that the case did not come within the language of the statutory provision relating to counsel fees and the relation of husband and wife being wholly severed the court has no inherent jurisdiction to award counsel fees as an incident to its general statutory jurisdiction in matrimonial actions.”

In an action for divorce, although the final judgment puts an end to the relation of husband and wife, the duty of the husband to support the wife may in substance be continued in the form of an award of alimony. (Romaine v. Chauncey, 129 N. Y. 566; Wetmore v. Wetmore, 149 N. Y. 520.) Under the present statute (Civ. Pr. Act, § 1170) the court is authorized at any time after final judgment to annul, vary or modify such an award; or, if there was no award, to make one by amendment. The application may be made by either party to the action upon such notice to the other as the court shall prescribe. A similar right was formerly secured by reservation of leave to apply at the foot of the judgment or otherwise. (Cooledge v. Cooledge, 1 Barb. Ch. 77; Forrest v. Forrest, 25 N. Y. 501; People ex rel. Comrs. of Charities v. Cullen, 153 N. Y. 629, 639; cf. 2 Abbott’s New Practice, [1888] 915.) Under such a reservation, jurisdiction over the incidental subject-matter continued. (Hauscheld v. Hauscheld, 33 App. Div. 296; People ex rel. Hauscheld v. Dunn, 38 App. Div. 640; affd., 159 N. Y. 570.) The effect of the statute is to write a reservation into every final judgment of divorce. The jurisdiction of the court over the parties and over the incidental subject-matter is prolonged; and to that extent the action may be said to be pending within the meaning and intent of section 1169 of the Civil Practice Act.

There is nothing in Lake v. Lake (supra) in conflict with this conclusion. In that case the judgment of divorce contained no provision at all relating to alimony. Six months after the entry of final judgment, application was made among other things to insert such a provision. As the statute (Code Civ. Pro. § 1771) then stood, there was no authority to do that. Such authority came only with the enactment of chapter 240 of the Laws of 1925. With no authority, either statutory or by reservation, to deal with alimony after judgment, the court was without jurisdiction to grant counsel fees and properly so held.

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

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

Ordered accordingly.


text:
    Arthur F. Strang, as Administrator of the Estate of Bertha S. Strang, Deceased, Respondent, v. The Prudential Insurance Company of America, Appellant.

      (Argued October 23, 1933;
    decided November 21, 1933.)

      Ralph Earl Prime, Jr., and A. J, Prime for appellant.
    Plaintiff’s suit as administrator must fail on the ground that he concededly failed to comply with the policies by filing due proof of death; or he must be held to have adopted proofs of death which he presented as an individual prior to his appointment, and be thereby bound by the statements and admissions contained therein. (Cirrincioni v. Metropolitan Life Ins. Co., 223 App. Div. 461; Vecchio v. Metropolitan Life Ins. Co., 224 App. Div. 301; McCarthy v. Prudential Ins. Co., 252 N. Y. 459; Rudolph v. John Hancock Life Ins. Co., 251 N. Y. 208.)

      Myron J. Shon and Benjamin W. Moore for respondent.
    After the plaintiff had pleaded and proven the filing of due proofs of death „ as required by the policy, their retention without objection and the disclaimer of liability by the offer of compromise on such proofs, the plaintiff made out a prima facie case. (Glazer v. Home Ins. Co., 190 N. Y. 6; Hunter v. Federal Casualty Co., 191 N. Y. Supp. 474; Cummer Lumber Co. v. Associated Mfgrs., 73 N. Y. Supp. 668; Ampersend Hotel Co. v. Home Ins. Co., 115 N. Y. Supp. 1108; Davis v. America Ins. Co., 158 N. Y. 688; Snell v. North British Ins. Co., 203 Pac. Rep. 521; Hessler v. North River Ins. Co., 207 N. Y. Supp. 529; Post v. A. F. Ins. Co., 43 Barb. 351;
      Goodwin v. M. M. L. Ins. Co., 73 N. Y. 480; Kernochan v. Bowery Ins. Co., 17 N. Y. 428; Goodwin v. Massachusetts Life Ins. Co., 73 N. Y. 480.) The plaintiff as administrator was not required to adopt the contents of the proofs of death after his appointment as administrator, after having proved a waiver of the materiality of such contents on the part of the defendant. (Smith v. Prudential Ins. Co., 132 N. Y. Supp. 529; Buffalo Loan & Trust Co. v. Knights Templar, 126 N. Y. 450; Devan v. Commercial Travellers, 36 N. Y. Supp. 931.)

      Irving A. Cook, amicus curiae.

    It is not necessary for the administrator to supply the proofs of death for they may be supplied by any one, or at least any one in the facility of payment class of the policy. (Kelly v. Metropolitan Life Ins. Co., 15 App. Div. 222; Lemmer v. Metropolitan Life Ins. Co., 225 App. Div. 823; O’Neill v. Buffalo Fire Ins. Co., 3 N. Y. 122; DeWitt v. Agricultural Ins. Co., 157 N. Y. 353; O’Malley v. People’s Building Assn., 13 Misc. Rep. 688; Kernochan v. Bowery Ins. Co., 17 N. Y. 428; Trieger v. Commercial Travelers Mut. Accident Co., 122 Misc. Rep. 159; Walsh v. Washington Marine Ins. Co., 32 N. Y. 427; O’Brien v. Phœnix Ins. Co., 76 N. Y. 459; Wuesthoff v. Germania Life Ins. Co., 107 N. Y. 580; McDowell v. St. Paul F. & M. Ins. Co., 207 N. Y. 482; Delamater v. Prudential Ins. Co., 5 N. Y. Supp. 586.)
   Crouch, J.

The defendant on February 13, 1928, issued two industrial policies on the life of Bertha Strang. Its contract was to pay to the executors or administrators oí the Insured the amount of the insurance immediately upon receipt of due proof of the death of the Insured during the continuance of this Policy.” But there was also a provision that This policy shall not take effect if the Insured die before the date hereof, or if on such date the Insured be not in sound health, but in either event the premiums paid hereon, if any, shall be returned.”

Bertha Strang died on January 16, 1929. The plaintiff was appointed administrator on November 30, 1930, and shortly after brought this action on the policies. It is conceded that subsequent to his appointment plaintiff furnished defendant no proof of death. The complaint, however, alleges that on or about the 17th day of January, 1929, due proof of death * * * was duly furnished to the defendant.” The answer denies that allegation and alleges the fact to be that the plaintiff in this action has never made any proof whatsoever to this defendant of any claim under said policy.” Further defenses are fraud in the procurement of the policies, breach of the provision as to sound health at the date of issuance, and tender refused of all premiums received.

Receipt by the defendant of due proof of death was a condition precedent to recovery on the policies. (Acee v. Metropolitan Life Ins. Co., 219 App. Div. 246, 248.) The only evidence offered to prove that fact was that the plaintiff on January 17, 1929, which was the day after his wife’s death, obtained from the defendant’s local office a printed blank form which he filled out, signed and delivered, with another paper, to defendant; that neither of those papers was returned to him; and that later the defendant offered to return the premiums which had been paid. The two papers were produced by the defendant on notice, and at plaintiff’s instance were marked for identification. Plaintiff did not offer them in evidence. They were offered by defendant, but were ruled out under the specific objection that they were the act of plaintiff individually and were not binding upon the plaintiff as administrator.

It may well be doubted whether that evidence was sufficient to permit anything but a guess that the papers received by the defendant were proofs of death. And a guess is not a proper substitute for proof. (Idel v. Mitchell, 158 N. Y. 134, 138.) Giving plaintiff the benefit of the doubt, however, we are then bound to assume that plaintiff in his capacity as administrator had adopted the proofs of death which he had furnished when seeking payment as husband under the facility of payment clause. These proofs consisted of a so-called claimant’s certificate signed by Arthur F. Strang as claimant and a standard certificate of death signed by the physician in attendance. The physician’s certificate disclosed the cause of death as carcinoma of the left breast. There was no provision of the policies which required such a certificate. When payment was sought under the facility of payment clause, the defendant had the right no doubt to exact one, since such payment was its privilege and not claimant’s right. (McCarthy v. Prudential Ins. Co., 252 N. Y. 459, 463.) When payment was sought by the administrator nothing beyond due proof of death ” was required; and that does not necessarily mean a physician’s certificate stating the cause of death. But the administrator chose to stand on the proofs already furnished. Those were the proofs which he pleaded and which we are assuming he proved. We come then to the more or less vital question of whether the damaging admission made in the proofs of death was available to the defendant as against this plaintiff.

In Buffalo Loan, Trust & Safe Deposit Co. v. Knights Templar & Masonic Mut. Aid Assn. (126 N. Y. 450, 457), where a guardian of the property of an infant made a similar admission, it was excluded largely because “ His [the ward’s] interests are under the protection of the court and it will intervene to relieve the ward from prejudicial conduct on the part of the guardian.” There are well established distinctions between an administrator and a guardian, which widen the scope of the former’s authority and in substance make applicable to him the general rule applying to admissions by an agent against Ms principal. (Breese v. Graves, 67 App. Div. 322, 327, per Hiscock, J.) If the admission is pertinent to the performance of an act relating to the estate, so as to be part of the res gestse, it may be binding on the estate. (Church v. Howard, 79 N. Y. 415, 419; Whiton v. Snyder, 88 N. Y. 299; Davis v. Gallagher, 124 N. Y. 487; Fitzmahony v. Caulfield, 87 Hun, 66; Breese v. Graves, supra; and cf. Mooers v. White, 6 Johns. Ch. 360, 373.) That was the rule applied in the more recent cases of Cirrincioni v. Metropolitan Life Ins. Co. (223 App. Div. 461) and Vecchio v. Metropolitan Life-Ins. Co. (224 App. Div. 301), though the policies involved in those cases exacted by way of proof of death more than the policies here do. Nevertheless, the physician’s certificate now in question was relevant and pertinent to the end in view, that end related to the estate, and the act was part of the res gestse. We think the proofs of death were admissible and that the admission was prima facie proof against plaintiff.

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

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

Judgments reversed, etc.


author: Per Curiam.

text:
    In the Matter of the Claim of May A. Keenholts, Respondent, against The Bayer Company et al., Appellants. State Industrial Board, Respondent.
    (Argued October 3, 1933;
    decided November 21, 1933.)

      F. A. W. Ireland, for appellants.

      Ransom H. Gillett for claimant, respondent.
    Where an injured employee has been awarded compensation and subsequently dies as a result of the accident, so much of the award as was not paid to him in his lifetime is payable to the widow or other dependents. (Matter of Bogold v. Bogold, 218 App. Div. 676; 245 N. Y. 574; Matter of Hughes v. St. Patrick’s Cathedral, 218 App. Div. 796; 245 N. Y. 201; Matter of Sienko v. Bopp & Morgenstern, 222 App. Div. 398; 248 N. Y. 40.)
   Per Curiam.

Upon appeal to the Appellate Division the parties stipulated “ That the issue on this appeal is whether a schedule award under Par. (E), Sub-div. 3 of Sec. 15, W. C. L., made for the loss of claimant’s left eye is payable to the widow of the deceased claimant in addition to the death benefits provided for in SecM.6, W. C. L., where death resulted from the injuries.’"

The Appellate Division apparently accepted the statement of the stipulation that the award had in fact been made, and held that it was payable to the widow in addition to death benefits. The parties have taken this to mean that when the schedule award was made there was a vested right to full payment for one hundred and sixty weeks, which right passed in full to the widow upon the death of claimant. The contention of the appellants here is that where death results from the injury the widow is entitled, in addition to death benefits, only to the compensation due at the time of the death.

We take the case as it comes to us under the stipulation and hold upon the authorities cited by the Appellate Division (Workmen’s Compensation Law; Cons. Laws, ch. 67, § 33; Matter of Sienko v. Bopp & Morgenstern, 248 N. Y. 40; Matter of Hughes v. St. Patrick’s Cathedral, 245 N. Y. 201) that the contention of the appellants is right. Assuming that a schedule award was made during the lifetime of the claimant, upon the death of the claimant, resulting from the injuries, the award was supplanted by the death benefits and all the widow could claim was the portion, if any, of the award unpaid down to the time of claimant’s death.

The order of the Appellate Division should be reversed and the claim remitted to the State Industrial Board for an award in accordance with this opinion and upon the facts as they may exist, without costs.

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

Ordered accordingly.