author:
Andrews, J.
      Crane, J. (dissenting).

text:
    Exchange Bakery & Restaurant, Inc., Respondent, v. Louis Rifkin, Individually and as President of Waiters and Waitresses Union Local No. 1, et al., Appellants.
    Injunction — labor unions — strikes — picketing — labor union may call strike and picket premises of employer — means used must not be unlawful — remedy for unlawful acts — equity may be invoked only for protection in future — quaere whether labor union may lawfully persuade its members or others to end contracts — error to grant injunction restraining picketing where it does not appear that wrongful acts committed at inception of strike will be repeated — appeal — Court of Appeals must review new findings made by Appellate Division and determine whether they are sustained by evidence.
    1. A labor union may call a strike and picket the premises of an employer with the intent of inducing him to employ only union labor. Picketing ” may not be accompanied, however, by violence, trespass, threats or intimidation express or implied. No crowds may bo collected on or near the employer’s property. The free entrance of strangers, customers or employees may not be impeded. There may be no threats — no statements oral or written, false in fact, yet tending to injure the employer’s business.
    2. Where the end or the means are unlawful and the damage has already been done the remedy is given by a criminal prosecution or by a recovery of damages at law. Equity is to be invoked only to give protection for the future. To prevent repeated violations, threatened or probable, of the complainant’s property rights, an injunction may be granted, but unless the need for protection appears, equity should decline jurisdiction.
    3. Quaere, whether a labor union may lawfully persuade its members or others to end contracts of employment where the final intent lying behind the attempt is to extend its influence.
    4. Where, at the commencement of a strike, two isolated wrongs were committed, but, thereafter, activities of the strikers were confined to “ picketing ” by two women bearing placards, containing nothing untruthful, and there was no violence; no intimidation; no obstruction of entrances to the premises; no collection of crowds and no indication that the wrongful acts would be repeated, it was error to grant an injunction restraining the defendants from “ patrolling the sidewalk and street in front of and near the plaintiff’s premises, from approaching, accosting, threatening, assaulting or intimidating any person desiring to enter the premises, from blockading the entrance thereto, from collecting crowds, from exhibiting any signs or notices in the vicinity, from suggesting a boycott, and from coercing or intimidating any person seeking to enter the employment of the plaintiff.”
    (Argued May 10, 1927;
    decided May 31, 1927.)
    5. A court of equity should not intervene where there is no evidence that wrongs have been committed or threatened on the theory that defendants are not harmed by the prohibition of unlawful acts.
    6. Where findings of fact of the trial court are reversed by the Appellate Division and new findings made on which judgment is directed, it becomes the duty of the Court of Appeals, on appeal from that judgment, to review the new findings and determine whether they are sustained by the weight of the evidence. (Civ. Pr. Act, § 589.)

      Exchange Bakery & Restaurant, Inc., v. Rifkin, 216 App. Div. 663, reversed.
    Appeal from a judgment, entered June 18, 1926, upon an order of the Appellate Division of the Supreme Court in the first judicial department, reversing a judgment in favor of defendants entered upon a decision of the court on trial at Special Term and directing judgment in favor of plaintiff.

      Harold H. Corbin, Max D. Steuer and Edward J. Bennett for appellants.
    The evidence clearly established that a bona fide strike "was called by the defendants on the basis of a real and actual grievance. (Hitchman Coal & Coke Co. v. Mitchell, 245 U. S. 229; Bossert v. Dhuy, 221 N. Y. 342; Nat. Protective Assn. v. Cumming, 170 N. Y. 315; Wood Mowing & Reaping Machine Co. v. Toohey, 114 Misc. Rep. 185; Jones v. Maher, 62 Misc. Rep. 388; 141 App. Div. 919; Winich v. Shankland, 59 App. Div. 619.) The evidence showed and the trial court properly found that the picketing maintained by defendants was peaceable, lawful and free from violence, intimidation or other oppressive tactics. (Wood Mowing & Reaping Machine Co. v. Toohey, 114 Misc. Rep. 185; Segenfeld v. Friedman, 117 Misc. Rep. 731; Foster v. Retail Clerks Protective Assn., 39 Misc. Rep. 48.)

      Carl Sherman for respondent.
    The right to strike is not absolute, but relative. The calling of a strike with its accompaniment of picketing here amounted to actionable interference. (Hitchman Coal & Coke Co. v. Mitchell, 245 U. S. 229; Campbell v. Gales, 236 N. Y. 457; Lamb v. Cheney & Son, 227 N. Y. 418; Posner Co. v. Jackson, 223 N. Y. 325; Bossert v. Dhuy, 221 N. Y. 342.) The injunction properly prohibits all picketing since picketing may ,be resorted to only in the case of a legitimate strike. Not only was the “ strike ” called for an unlawful purpose, but it was declared in violation of the union constitution and by-laws. (Truax v. Corrigan, 257 U. S. 312; American Steel Foundries v. Tri-City C. T. Council, 257 U. S. 184.)
   Andrews, J.

A workman may leave his work for any cause whatever. He need make no defense, give no explanations. Whether in good or bad faith, whether with malice or without, no one can question his action. What one man may do, two may do or a dozen, so long as they act independently. If, however, any action taken is concerted; if it is planned to produce some result, it is subject to control. As always, what is done, if slegal, must be to effect some lawful result by lawful means, but both a result and a means lawful in the case of an individual may be unlawful if the joint action of a number.

A combination to strike or to picket an employer’s factory to the end of coercing him to commit a crime, or to pay a stale or disputed claim would be unlawful in itself although for an individual, his intent in leaving work does not make wrongful the act otherwise lawful. His wrong, if wrong there be, would consist of some threat, of something beyond the mere termination of his contract with his employer. Likewise a combination to effect many other results would be wrongful. Among them would be one to strike or picket a factory where the intent to injure rests solely on malice or ill will. Another’s business may not be so injured or ruined. It may be attacked only to attain some purpose in the eye of the law thought sufficient to justify the harm that may be done to others.

The purpose of a labor union to improve the conditions under which its members do their work; to increase their wages; to assist them in other ways may justify what would otherwise be a wrong. So would an effort to increase its numbers and to unionize an entire trade or business. It may be as interested in the wages of those not members, or in the conditions under which they work as in its own members because of the influence of one upon the other. All engaged in a trade are affected by the prevailing rate of wages. All, by the principle of collective bargaining. Economic organization to-day is not based on the single shop. Unions believe that wages may be increased, collective bargaining maintained only if union conditions prevail, not in some single factory but generally. That they may prevail it may call a strike and picket the premises of an employer with the intent of inducing him to employ only union labor. And it may adopt either method separately. Picketing without a strike is no more unlawful than a strike without picketing. Both are based upon a lawful purpose. Resulting injury is incidental and must be endured.

Even if the end sought is lawful, the means used must be also. “ Picketing ” connotes no evil. It may not be accompanied, however, by violence, trespass, threats or intimidation express or implied. No crowds may be collected on or near the employer’s property. The free entrance of strangers, customers or employees may not be impeded. There-may be no threats — no statements oral or written, false in fact, yet tending to injure the employer’s business. We here make no attempt to enumerate all the acts that might make picketing illegal. Doubtless there are others. When the situation in a particular case comes to be reviewed by the- courts there will be no difficulty in drawing the line between acts permissible and acts forbidden.

We have been speaking in terms of the workman. We might equally have spoken in terms of the employer. The rule that applies to the one also applies to the other. The latter may hire and discharge men when and where he chooses and for any reason. But again any combination must be for lawful ends secured by lawful means. If believed to be for their interests employers may agree to employ non-union men only. By proper persuasion they may induce union men to resign from their unions. They may not, however, because of mere malice or ill will, combine to limit the opportunities of any one to obtain employment. The means adopted must be lawful. No violence or intimidation, no threats, no trespass, no harmful false statements, no means that would be improper were the workman the actor.

In writing as we have done, we have in mind cases where the strike, the picketing or the lockout is made use of by associates in the same trade or business; where the end sought, therefore, directly affects those, masters or men, engaged therein. We do not consider so-called sympathetic strikes, boycotts or lockouts where interest is more remote. Questions that may arise under such circumstances are not before us. Neither do we consider strikes or lockouts not connected with labor disputes, but designed to enforce political action.

Where the end or the means are unlawful and the damage has already been done the remedy is given by a criminal prosecution or by a recovery of damages at law. Equity is to be invoked only to give protection for the future. To prevent repeated violations, threatened or probable, of the complainant’s property rights, an injunction may be granted. This is no novel assumption of jurisdiction. For many years, while leaving to the law redress for single or isolated wrongs to property rights, where there is danger of their repetition, the chancellor has used this weapon to protect the innocent. The theoretical basis of this power has been said to be the avoidance of a multiplicity of actions. Whatever the basis, however, the power is undoubted. It has been exercised in many ways. Repeated trespasses have been prevented; the continued pollution of streams; the maintenance of nuisances; the misuse of a trade name. Other instances might be cited. The rule is not different where behind the facts presented to the court lies a labor dispute. Freedom to conduct a business, freedom to engage in labor, each is like a property right. Threatened and unjustified interference with either will be prevented. But the basis of permissible action by the court is the probability of such interference in the future, a conclusion only to be reached through proof contained in the record. Unless the need for protection appears, equity should decline jurisdiction.

In the case before us findings of fact were made by the Special Term resulting in a judgment for the defendants. Most of such findings were reversed by the Appellate Division. As a substitute new findings were made by that court and a sweeping injunction was granted to the plaintiff. It, therefore, becomes our duty to review these findings and to determine for ourselves whether they are sustained by the weight of the evidence. (Civ. Prac. Act, sec. 589.)

In 1918 the plaintiff corporation was formed. From the first its intention was to employ only non-union waitresses in its restaurant. Always, with one exception, an applicant for employment was questioned as to her membership in any union and only those who denied such a connection were engaged. No contract as to this matter was then made but the applicant was hired at the rate of $8 per week for full time or $5 for half time. This- hiring was at will and might be ended at any time by either party. (Cuppy v. Stollwerck Brothers, 216 N. Y. 591.) Thereafter the waitresses were asked repeatedly if they had joined a union. They always denied it. If it had been discovered that their denials were untrue they Would have been at once discharged. Also after beginning work each waitress signed a paper stating that it was the understanding that she was not a member of any union, pledging herself not to join one or if she did to withdraw from her employment. She further promised to make no efforts to unionize the restaurant, and says that she will attempt to adjust by individual bargaining any dispute that may arise. This paper was not a contract. It was merely a promise based upon no consideration on the part of the plaintiff. From fourteen to sixteen waitresses were employed and so far as appears the conditions of their work was satisfactory to them.

The three defendants are members of a waiters’ union. Its schedule of wages is $15 a week for full time and $10 for half time. Apparently at their instigation four waitresses joined the union after employment was obtained. They had not been members on the date when they were originally engaged. The fact that they had done so was not known, to the plaintiff. Efforts were also made to induce other employees to take the same course. At the same time the plaintiff was asked to unionize its restaurant, but it refused.

The Appellate Division has based its decision in part upon the theory that the defendants wrongfully attempted to persuade the plaintiff’s employees to break this alleged contract. Even had it been a valid subsisting contract, however, it should be noticed that whatever rule we may finally adopt, there is as yet no precedent'in this court for the conclusion that a union may not persuade its members or others to end contracts of employment where the final intent lying behind the attempt is to extend its influence. In Lamb v. Cheney & Son (227 N. Y. 418) we said that where a specific contract of employment for a definite time exists another may not intentionally, without just cause or excuse, interfere therewith. In Posner Co. v. Jackson (223 N. Y. 325) an employee, having made an express contract to perform specific, unique and extraordinary services for a fixed period, was induced to break it by a rival manufacturer. She might herself have been enjoined from violating her negative covenants. So he who persuaded her to do so might be held in damages. Finally in Reed Co. v. Whiteman (238 N. Y. 545) it was sought to use these cases as authority to support an injunction against a labor union which was persuading employees who were engaged under a written contract from week to week, to strike. In that case, however, there was a finding, binding upon us, to the effect that the action of the union was “with the intent and purpose solely of preventing plaintiff from doing any business and of ruining plaintiff in its business, and bringing disorder into plaintiff’s business.” Contract or no contract such an act, induced solely by malice, was wrongful. Here, however, we do not need to decide whether where the object of the act is to aid in a labor dispute, there is just cause or excuse for such interference with existing contracts, and if not how specific the contract must be, nor how substantial the term of employment contained therein to permit equity to intervene. Nor need we discuss the correlative question as to how far contracts made by unions with their members, providing that they are to work only in union shops, are to be protected.

On April 22, 1925, some of the defendants representing the union entered the plaintiff’s restaurant as ordinary customers. They did this, however, with the preconceived design of causing a strike by blowing a whistle at a time inconvenient to the plaintiff when many patrons were present. In so acting they were clearly trespassers and if such trespasses were to be continued in the future they might be enjoined. It was an isolated wrong, however, and adequate compensation might be recovered in an action at law. When the strike was declared the four waitresses who had joined the union at once stopped work and left the premises. In so doing one of them threatened an officer of the plaintiff and she interfered with the access of a patron of the restaurant. A crowd collected but was soon dispersed. Again we have an isolated instance of intimidation occurring at the outset of the strike. Thereafter there was picketing which consisted of two women walking in the street close to the curb but near the premises, having placards ten by sixteen inches in size pinned to their dresses and bearing the legend: " Waitresses Strike Picket. Waiters Union Local No. 1. Affiliated with the American Federation of Labor and the United Hebrew Trades.” There was no violence; no intimidation; no obstruction of entrances to the premises; no collection of crowds. This course of conduct continued for four days until it was ended by a temporary injunction.

Under such a state of facts the defendants have been enjoined from patrolling the sidewalk and street in front of and near the plaintiff’s premises, from approaching, accosting, threatening, assaulting or intimidating any person desiring to enter the. premises, from blockading the entrance thereto, from collecting crowds, from exhibiting any signs or notices in the vicinity, from suggesting a boycott, and from coercing or intimidating any person seeking to enter the employment of the plaintiff.” In this we think the Appellate Division has erred.

As we have indicated, the action of those defendants who entered the restaurant when the strike was called was a trespass. There is, however, no indication that such acts will be repeated. There was no contract between the plaintiff and. its waitresses in regard to the union with which the defendants can be said to have interfered. There is nothing untruthful in the placards carried by the pickets, even assuming that the word strike ” is to be confined to cases where some of those who have become employees of the plaintiff have left its employment to obtain relief in a labor dispute. Such was the case here. Three of these four waitresses were employed by the plaintiff long before they became members of the union. Their reply to inquiries then made was entirely truthful. To the fourth, no questions were put. If they subsequently joined the union they might have been discharged; but until they were discharged they remained in the plaintiff’s employment. Except on the one occasion the picketing was entirely lawful and for a lawful object, although the plaintiff’s business might be injured thereby. It is said that the strike was not properly called because of the neglect of some preliminaries which the union rules required in such a case, and that the four waitresses referred to were not properly members of the union because their dues had not been paid. This is a question as to which the plaintiff is not interested.

It is quite true that where unlawful picketing has been continued; where violence and intimidation have been used and where misstatements as to the employers’ business have been distributed, a broad injunction prohibiting all picketing may be granted. The course of conduct of the strikers has been such as to indicate the danger of injury to property if any picketing whatever is allowed. Such is not this case. Nor should a court of equity intervene where there is no evidence that wrongs have been committed or threatened on the theory that the defendant is not harmed by the prohibition of such unlawful acts.

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

Crane, J. (dissenting).

I agree with my brother Andrews in his statement of the law, but I disagree in his application of it to the facts of this case. The plaintiff, a man and wife affair, maintained a little bakery and restaurant, employing ten to fifteen waitresses. The proprietor had determined to operate by non-union employees. This was his privilege, and he was entitled to the same protection in the exercise of it as those who maintained union shops. His employees stated when employed that they did not belong to the union and that they would let him know if they joined it. It was understood that a union employee could not work in the place. The plaintiff’s employees were perfectly satisfied; no fault was found either with their pay or with conditions. The defendant, however, determined that this condition should cease, and threatened the proprietor if he did not join the union. For the purpose of carrying out the threat, the union “ planted ” one of its members in the plaintiff’s restaurant. She was there by deception, claiming to be a non-union employee.

One day the defendant’s leader came in and told the proprietor and his wife that they had to join the union, or he would end their business. They refused, he blew a whistle, called a strike, scared the customers and the non-union employees. The planted ” employee and two or three others who had secretly joined the union left. They would have been discharged anyhow, if it were known to the plaintiff that they belonged to the union. Thereafter, employees paraded up and down in front of the plaintiff’s store with placards announcing that there was a strike among the employees; a customer entering the place was seized by the collar and pulled out by the “ planted ” employee with the statement that the employees were on a strike.

These statements and representations were false. There were no members of the defendant union to go on a strike. A strike indicates that the employees are dissatisfied, and that they have walked out from the employment in which they were engaged because of dissatisfaction. In this case, the strike indicated that the defendant union had employees in the store who were dissatisfied. The defendant union had no employees in this non-union shop except through deception. They could not have stayed if the fact was known. How, then, could there be a strike of the union employees? The plaintiff’s non-union workers were perfectly satisfied, and there was no strike among them.

That the defendant and its agents exercised violence for the purpose of breaking up the plaintiff’s business or compelling it to join the union is apparent from reading the prevailing opinion; that the plaintiff had a non-union shop and strived to maintain it is also apparent. To say that he had a right under the law to maintain it as such is of little value unless the law protects the right. The main opinion says that for the violence and the conceded trespass this shopkeeper should have resorted to the criminal law, and not to a court of equity for an injunction. We cannot shut our eyes to the delay of criminal proceedings. By the time the defendant’s agents had been arrested, brought to trial and sentenced, the little shopkeeper would be out of business and his rights under the law to maintain a non-union shop become a mere declaration.

The union had a right to inform people that the plaintiff maintained a non-union shop, and to request them not to patronize it; it could also picket the place with placards to this effect, but to say that the place was on a strike when there was nobody to strike, and to threaten the proprietor and its customers with violence, if it did not join the union, was unlawful. Both the plaintiff and the defendant had equal rights before the law, and all that is called for under the law is fair play on both sides. When a right is violated, it is the duty of the courts to protect it. The protection of one man’s rights, no matter how humble, is the protection of the rights of ah. ’

For these reasons I dissent.

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

Judgment accordingly..


source: Caselaw Access Project

author: O’Brien, J.

license: Public Domain

text:
    Leo J. Gonch, Respondent, v. Republic Storage Company, Inc., Appellant.
    (Argued May 10, 1927;
    decided May 31, 1927.)
    Bailment — conversion — intoxicating liquors — no property-right in whisky transported in violation of National Prohibition Act — owner may not recover from bailee for its conversion through lack of care.
    The owner of whisky shipped to New "York in June, 1922, and placed in defendant’s warehouse without obtaining the permit required by section 3 of the National Prohibition Act (41 Stat. 308) suffers no injury to a lawful property right by its conversion through the neglect of defendant and, therefore, is entitled to no damages. The liquor had been used in violating the statute and under section 25 thereof no property rights exist in liquor so used.

      Gonch v. Republic Storage Co., Inc., 218 App. Div. 584, reversed.
    Appeal, by permission, from a judgment of the Appellate Division of the Supreme Court in the first judicial department, entered December 22, 1926, unanimously affirming a judgment in favor of plaintiff entered upon a verdict.

      Outerbridge Horsey for appellant.
    The plaintiff’s purchase, as well as importation, of the thirty barrels of whisky for the purpose of transhipment at the port of New York to the city of Mexico were prohibited by ths National Prohibition Act, under the express provisions of which " no property rights shall exist in any such liquor; ” therefore, the loss of the thirty barrels of whisky, whether by the defendant’s negligence, or otherwise, caused the plaintiff no damage which he is entitled to recover from the defendant. (Anchor Line v. Aldridge, 259 U. S. 80; Cunard S. S. Co. v. Mellon, 262 U. S. 100; Grogan v. Walker & Sons, 259 U. S. 80.)

      John T. Loughran and Robert H. Charlton for respondent.
    Section 25 of the National Prohibition Act is merely a police regulation intended solely to protect government officials in their enforcement of the act and affords no excuse for defendant’s private wrongdoing. (People v. Otis, 235 N. Y. 423.) Plaintiff’s right to de facto possession of the whisky supports this recovery against defendant, whose negligence, as custodian of the property, caused the loss. (Armstrong v. Sisti, 242 N. Y. 440; Averill v. Chadwick, 153 Mass. 271; Charles v. McCune, 57 Mo. 166.) Since the whisky was in fact neither used nor intended to be used in violation of law, plaintiff might lawfully have been permitted to dispose of it, and is entitled to its market value. (Boer v. Garcia, 240 N. Y. 9; Ciocca-Lombardi Wine Co. v. Fucini, 204 App. Div. 392; Coolidge v. Choate, 11 Metc. [Mass.] 79; Gulf C. &. S F. Ry. Co. v. Johnson, 25 S. W. Rep. 1015.)
   O’Brien, J.

In. the spring of 1922 plaintiff purchased thirty barrels of whisky in France and caused them to be sent to New York for the declared purpose of transhipment to Mexico. They arrived at New York in June and were stored in defendant’s warehouse. Some time between June and September, twenty-seven of the barrels disappared and a judgment for failure to exercise reasonable care as bailee was entered against defendant. This judgment has been unanimously affirmed and, by permission of this court, the appeal is taken.

Plaintiff suffered no injury to a lawful property right and, therefore, is entitled to no damages. The whisky had no pecuniary value to him. Indeed, it had intrinsic value and thus could be the subject of larceny (People v. Otis, 235 N. Y. 421), but it was as worthless to plaintiff as a gem. in the sea. The National Prohibition Act deprived him of any property in it and forbade him to possess, transport, use or sell it. On May 15, 1922, a month before the whisky arrived at New York for the avowed purpose of transport to Mexico, the Supreme Court had announced that the transportation of intoxicating liquors from a foreign port, through some part of the United States to another foreign port is prohibited. (Grogan v. Walker & Sons, 259 U. S. 80.) Section 3 of title 2 of the act (Mason’s U. S. Code, ch. 2, tit. 27, § 12) forbids the sale, transport or possession of any intoxicating liquor except as authorized in the act and provides that the statute shall be liberally construed to the end that the use of intoxicating liquor as a beverage may be prevented. Liquor for non-beverage purposes and wine for sacramental purposes may be sold, transported and possessed only as provided. By section 6 of title 2 (Mason’s U. S. Code, ch. 2, tit. 27, § 16) no one may sell or transport any liquor without first obtaining a permit from the commissioner to do so. Section 25 of title 2 (Mason’s U. S. Code, ch. 2, tit. 27, § 39) provides that it shall be unlawful to have or possess any liquor which has been used in violating the statute and declares that no property rights shall exist in any such liquor. Concededly, plaintiff did transport the liquor to New York without first obtaining a permit. None could lawfully have been issued. Hé could not, therefore, lawfully have or possess the whisky, for it had been used in violating the statute, and no property rights existed in it. In Armstrong v. Sisti (242 N. Y. 440,452) we expressed doubt whether legal damage is sustained or may be proven for deprivation of property which the plaintiff may not legally hold, use or sell. Now the doubt is dispelled and we answer that no damage is sustained.

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

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

Judgment accordingly.


author: Andrews, J.

text:
    James W. Colt, Respondent, v. The Foundation Company, Appellant.
    (Argued May 12, 1927;
    decided May 31, 1927.)
    Contract — evidence — meaning of words “net profit ” in agreement to pay commission on net profit of work procured — sum for overhead, allocated to particular work done properly deductible from compensation — exclusion of evidence bearing on subject reversible error.
    The words “ net profit,”' in an agreement whereby defendant promised to pay to plaintiff a “ commission of ten per cent of the net profit ” derived from any business he might procure for it, do not mean the entire commissions which should have been or which were received upon a contract secured by plaintiff for defendant, by the terms of which defendant was to receive as compensation fifteen per cent of the cost of the work but which expressly excluded from the definition of “ cost ” any charge for services of officers or engineers, its business or purchasing system, engineering skill, experience and organization. Defendant in determining the actual amount of “ net profit ” might deduct a sum for general overhead properly allocated to this particular contract and confined to such items as might fairly be found to have some relation to the work done. The exclusion of all evidence bearing on the subject, in an action by plaintiff to recover his commissions, was, therefore, reversible error.

      Colt v. Foundation Co., 218 App. Div. 831, reversed.
    Appeal, by permission, from a judgment of the Appellate Division of the Supreme Court in the first judicial department, entered December 28, 1926, unanimously afimning a judgment in favor of plaintiff entered upon a verdict.

      Frank H. Hiscock and Vermont Hatch for appellant.
    The trial court erred in its rulings on the question of what constituted net profits under the contract. (Title Guaranty & Trust Co. v. Pam, 192 App. Div. 268; 232 N. Y. 441; Gaul v. Kiel & Arthe Co., 199 N. Y. 472; Hoggson Bros. v. Spiekerman, 175 App. Div. 144; Curren
      v. Ryan, 187 App. Div. 6; 227 N. Y. 626; Whyte v. McTaggart, 31 Western L. R. 654; Vernon Metal & Produce Co., Inc., v. Joseph & Bros. Co., 241 N. Y. 544; Stilphen v. Elliott, 53 Utah, 579; Boisnot v. Wilson, 109 App. Div. 569; Camp v. Treanor, 142 N. Y. 478; Schraeder v. Frankel, 117 App. Div. 97; 191 N. Y. 545; Hayes v. American Bridge Company, 127 App. Div. 576; Jennery v. Olmstead, 90 N. Y. 363; Burning v. Kittel, 7 N. Y. Supp. 485; Danolds v. Lord, 83 Hun, 359.)

      Evarts L. Prentiss and James G. Moore for respondent.
    The plaintiff properly established the damage to which he was entitled in accordance with the terms of his contract with the defendant. (Porges v. U. S. Mortgage & Trust Co., 203 N. Y. 181.) The evidence of payments made by the defendant, and claimed as deductions in arriving at defendant's net profit upon the French contract, was properly excluded as evidence of payments not connected with the contract. (Stilphen v. Elliott, 53 Utah, 579; Matter of British Columbia & Vancouver Island Spar Lumber & Saw Mill Co. [Ltd.], Stamp’s Claim, 25 L. T. Rep. [N. S.] 653; Daintrey v. Evans, 148 App. Div. 275; Paine v. Howells, 90 N. Y. 661.)
   Andrews, J.

During the years 1917 and 1918 The Foundation Company did a large business. It made many contracts to do specific construction work of all kinds at various places for different persons. It had about 30,000 employees and necessarily maintained large general offices and an executive, engineering and supervising force. Such being the situation known to Mr. Colt in September, 1917, the parties entered into a contract. Therein the defendant agreed " on whatever business you [Colt] may obtain for us abroad we will pay you a commission of ten per cent, of the net profit derived from such business.” Later a contract was in fact made with the French government by the defendant for the construction of certain ships. The jury has found, with testimony to support the finding, that this contract was secured by Mr. Colt. It provided that the government would pay the “cost of the ships,” defining what was meant by such cost in detail. There were many items included, among them the expenses of any local office charged with the execution of the contract; but there was expressly excluded from the definition any charge for services rendered by officers or engineers of the contractor from the main office. The contractor was also to furnish free of charge “ its business and purchasing system, engineering skill, experience and organization, and generally its ability to organize and equip the yards with experienced men- as well as properly to direct the same.” For all this it was to receive a commission of fifteen per cent of the cost of the ships.

Obviously it was hoped that a part of this fifteen per cent would be net profits available for any purpose for which The Foundation Company might choose to use them. Treating this individual contract as an independent transaction, it is equally obvious that the whole might not be so treated. If officers or engineers from the main office, if its purchasing or general supervisory force, if its clerks and stenographers devoted a portion of their time to this particular piece of work, if a part of its main office was now and then devoted to this same purpose, to it, at least, net profits would be diminished by a proper allowance for such time and space.

We see no reason why the same rule should not be applied to the plaintiff when he seeks to recover “ ten per cent of the net profit derived from such business.” That is what the parties must have understood. The language is clear. Net profit is to be gained — gained by The Foundation Company. As is said later in this same agreement, a statement of this business is to be rendered from time to time “ showing the profit whatever it may be the Company may make from it.” When its net profits are determined then Mr. Colt is entitled to ten per cent thereof. This percentage is not to be fixed by what the French government may pay by way of commissions. He knew the “ cost of the ships ” did not cover every expense to which the defendant would be put in order to exectite the contract. Certain necessary items were expressly excluded. These he must have had in mind when he spoke of net profit derived from this particular contract. (Vernon Metal & Produce Company, Inc., v. Joseph & Brothers Company, 241 N. Y. 544; Title Guarantee & Trust Company v. Pam, 232 N. Y. 441.)

That this is the proper construction of the contract is illustrated by the decision reached in the courts below. Fifteen per cent on the total cost of the ships would have amounted to $701,367.51. If by “ net profit derived from the business” was meant the entire commissions to which under the contract the defendant would have become entitled, the percentage to Mr. Colt should have been based on this sum. The Foundation Company was allowed, however, to deduct $54,550.79 as liquidated damages for delay. It actually received but $646,816.72. Not only this. It was also allowed to deduct $181,933.33 paid by it to a third party for permission to make use of certain patents. “ Net profit ” does not mean, therefore, the entire commissions which should have been or which were received.

We hold that the defendant in determining the actual amount of these net profits might deduct a sum for general overhead properly allocated to this particular contract. What this sum may be is not now before us. It must be fixed upon a new trial. Doubtless it will be confined to such items as may fairly be found to have some relation to the work done upon these ships. But the exclusion of all evidence bearing upon the subject was an error which requires a reversal of the judgment appealed from.

Other exceptions to the exclusion of testimony appear on the record. Some $30,000, for instance, was paid to one Graham. But the connection of the payment with this contract is not shown. Other alleged erroneous rulings are discussed by the appellant. They may not again appear and, whether right or wrong, we need not now pass upon them.

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

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

Judgment accordingly.


text:
    George Mord, Respondent, v. Hartford Accident and Indemnity Company, Appellant.
    (Argued May 12, 1927;
    decided May 31, 1927.)
    Insurance — principal and agent — cancellation — sufficiency of notice of cancellation of policy — conclusion of law that payment of premium to insurance brokers who procured policy nullified cancellation unsustained by findings.
    1. A letter from the authorized agent of an insurance company to a policyholder, received on June 13, notifying him that the policy “ is hereby canceled * * * such cancellation to take effect on the 16th day of June, 1924, at noon,” and demanding payment of the earned premium to June 13, was effectual to cancel the policy as of that date.
    2. A conclusion of law that payment of the premium by the assured to the firm of insurance brokers that procured the policy for him, made on the morning of June 16, and retained by said brokers, nullified the notice of cancellation and that the policy was in full force on June 19, the date of a loss, is not sustained by a finding that the amount of the premium was received by the brokers as agents of defendant, where there is an additional finding that such brokers were at no time authorized to issue policies or accept or bind insurance risks on behalf of the company and there is no evidence in the record to show intent on the part of the company to confer such powers.

      Mord v. Hartford Accident & Indemnity Co., 217 App. Div. 778, reversed.

      Appeal, by permission, from a judgment of the Appellate Division of the Supreme Court in the second judicial department, entered June 30, 1926, unanimously affirming a judgment in favor of plaintiff entered upon a decision of the court at a Trial Term without a jury.

      Joseph L. Prager and Harris Jay Griston for appellant.
    The policy was canceled, null and void at the time of the alleged loss. (Stone v. Franklin Fire Insurance Co., 105 N. Y. 543; Van Wert v. St. Paul Fire & M. Ins. Co., 36 N. Y. Supp. 54.) The insurance broker had no authority to collect the premium after the policy had been canceled, and its act in accepting the premium from the assured after the notice of cancellation had been received by the assured and by the brokers, did not vitiate the cancellation or reinstate the insurance. (Allen v. German-American Ins. Co., 123 N. Y. 6; Devens v. Mechanics & Traders Ins. Co., 80 N. Y. 168.)

      Alfred B. Nathan for respondent.
    The broker, Sondheim & Son, was the agent of the defendant to receive the policy in suit, to deliver it to the assured and to collect the premium from the assured. Payment of the premium by the assured to Sondheim & Son was a payment to the defendant. (Greenwood v. Schumacher, 82 N. Y. 614; Mott v. Ice Company, 73 N. Y. 543; Smith v. Chapin, 184 App. Div. 102; 229 N. Y. 551; Leinkauf v. Lombard, 12 App. Div. 302; City v. Railroad Co., 190 N. Y. 84; Whalen v. Stuart, 194 N. Y. 495; Insurance Co. v. Casey, 184 N. Y. 554; Railroad Co. v. Railroad Co., 149 N. Y. 51; Berger v. Varrelmann, 127 N. Y. 281; Adams v. Fitzpatrick, 125 N. Y. 124; Seaside Home v. Atlantic Beach, 241 N. Y. 550; Russian, etc., Co. v. Stoddard, 240 N. Y. 149; Aktiebolaget v. Insurance Co., 241 N. Y. 197; Globe & Rutgers Ins. Co. v. Robbins, 43 Misc. Rep. 65; Greenwich Ins. Co. v. Union, 14 Daly, 237; Bini v. Smith, 36 App; Div. 463.) The cancellation notice of the policy in suit having been sent by the defendant at the request of its agent, Sondheim & Son, for the specific purpose of securing payment of the premium from the assured, became void and inoperative after the insured paid the premium within the time fixed by such notice. (Ogden v. Alexander, 140 N. Y. 356; Ostrander v. Hart, 130 N. Y. 406; Helgar v. Warner, 222 N. Y. 449; Sherri v. Insurance Co., 243 N. Y. 266; Burt v. State, 230 N. Y. 351; Dean v. Dean, 241 N. Y. 240; Rewitzer v. Union, 112 App. Div. 708; Magner v. Insurance Co., 17 App. Div. 13; 162 N. Y. 657; Whited v. Insurance Co., 13 Hun, 191; 76 N. Y. 415; Haight v. Insurance Co., 92 N. Y. 51.)
   O’Brien, J.

On February 28, 1924, defendant issued a policy of insurance by which, in consideration of a stipulated premium of $112.50 agreed to be paid, it insured plaintiff’s assignor, Philip Nathan & Co., Inc., in the sum of $10,000 against loss by burglary. The term was for one year from February 11, 1924, and the policy included a provision that it could be canceled by defendant at any time by written notice served upon the assured by the representative of the company and that the assured would, in such an event, be entitled to receive a return of the unearned paid premium computed pro rata. No part of the premium having been paid, defendant on June 12, 1924, through its authorized agent notified Nathan & Co. in a letter received by them the next day that the policy is hereby cancelled for non-payment of premium, pursuant to the terms and provisions contained in said policy, such cancellation to take effect on the 16th day of June, 1924, at noon. * * * For the period which this policy was in force there is due an earned premium of $38.53. Kindly let us have your check for this amount by return mail.” Although the cancellation was not to take effect until June 16 at noon, the policy which “ was ” in force is hereby cancelled ” on June 13. The letter plainly informed the assured that the company’s purpose was to close all relations with them. It does not suggest payment of the premium of $112.50 for the whole year but merely the earned premium of $38.53 from February 11 to June 13 and was effectual to cancel the policy. (Stone v. Franklin Fire Ins. Co., 105 N. Y. 543.) On the night of June 18, burglars entered Nathan & Co.’s premises and stole $6,000 worth of merchandise. The question before us relates to the effect of a payment made by the assured to a firm of insurance brokers on the morning of June 16. Was the notice of cancellation thereby nullified and the policy revived? Unless the brokers were defendant’s agents, the policy remained canceled.

Anton Sondheim & Son were general insurance brokers. For more than fifteen years they had acted as such for Nathan & Co. and had taken out this policy for them. For many years they had dealt also with defendant. The insurance company had extended credit to them for the payment of premiums on insurance procured by them for their customers. There was a running account between them covering such unpaid premiums. Defendant delivered policies to them to be delivered by them to their customers and sent bills for premiums on such policies to them to be delivered by them to their customers. The company sent the bills to the brokers and not directly to the customers for whom the brokers had procured the policies. It delivered to Sondheim & Son a copy of the letter of June 12 canceling Nathan & Co.’s policy and that letter was received by the brokers on the same day. Prior to noon of June 16, Nathan & Co. paid the sum of $112.50 to Sondheim & Son who retained it and did not offer to return it to Nathan & Co. until December 23. The finding of fact is that the amount of the premium was received by Sondheim & Son as the agent of defendant and the conclusion of law is that the brokers were authorized to receive the payment and were authorized to act as agent of defendant to accept the premium. A further conclusion of law is that the acceptance and retention of the premium by the brokers waived and nullified the notice of cancellation and that the policy was in full force and effect on June 19, the time of the loss. There is no express finding or conclusion that the brokers had power to revive a canceled policy.

We cannot agree with the conclusion of law that the payment to the brokers on June 16 nullified the notice of cancellation and restored the policy to full force and effect. Such a conclusion cannot flow from the finding of fact that the brokers were at no time authorized to issue policies. Sondheim & Son were' nothing more than brokers. The finding of fact to the effect that these brokers were at no time authorized to issue or countersign policies of insurance for or on behalf of defendant or to accept or bind insurance risks on their own behalf or on behalf of the defendant in any form or manner whatsoever is inconsistent with the finding of fact that the brokers received the $112.50 on June 16 as agents of defendant. If they had no power to act as agents for issuing or countersigning policies or to accept or bind insurance risks, surely they were not authorized to nullify the cancellation of a policy. Some evidence is necessary to show intent by the company to empower them to issue a policy, for if they cannot issue a new one, they cannot revive a dead one. No such evidence is in the record and no finding is made except the inconsistent one that they were agents. Such a finding is not supported by the previous one respecting the custom existing between the brokers and the company and conflicts with the one which denies their authority in any form or manner whatever in respect to new policies. Sondheim & Son were vested with no broader authority than the broker whose powers were declared limited by this court in Allen v. German American Ins. Co. (123 N. Y. 6, 15, 16). He was there described as a conduit between the assured and the company for the delivery of the policy and its renewals and the collection of the premiums. Only to that extent was he* an agent and he had no powers except as predicated on those facts. Like Sondheim & Son he was never authorized to place insurance risks. Neither was agent except for a limited purpose. The findings of fact herein do not support the conclusion of law.

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

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

Judgment accordingly.


author: Cardozo, Ch. J.

text:
    Kerr Steamship Co., Inc., Respondent, v. Radio Corporation of America, Appellant.
    Transportation corporations — telegrams — negligence — damages — liability of radio company for neglect to transmit cipher message — measure of damages amount of tolls paid — notice of risk must be given to lay basis for special damages — damages recoverable for breach of the contract the measure of amount recoverable for the breach of duty.
    1. Where the terms of a telegram disclose the general nature of the transaction, which is the subject of the message, the company is answerable for the natural consequences of its neglect in relation to the transaction thus known or foreseen. On the other hand, where the terms of the message give no hint of the nature of the transaction, the liability is for nominal damages or for the cost of carriage if the tolls have been prepaid, in an action, therefore, to recover damages sustained through the failure to transmit and deliver in a foreign country a cipher message unintelligible on its face, the limit of recovery is the amount of the tolls paid. (Hadley v. Baxendale, 9 IDxeh. 341, followed.)
    2. A contention that the transaction has been revealed within the meaning of the rule if the length and cost of the telegram or the names of the parties would fairly suggest to a reasonable man that business of moment is the subject of the message, cannot be sustained. Notice of the business, if it is to lay the basis for special damages, must be sufficiently informing- to be notice of the risk.

      (Argued May 10, 1927;
    decided May 31, 1927.)
    3. Nor may an argument be upheld, that the action is one in tort for the breach of a duty owing from a public service corporation, and that the rule does not protect the carrier unless sued upon the contract. Though the duty to serve may be antecedent to the contract, yet the contract when made defines and circumscribes the duty, and the damages recoverable for non-performance of the contract are the damages recoverable for non-performance of the duty.

      Kerr Steamship Co. v. Radio Corporation, 216 App. Div. 839, reversed.
    Appeal, by permission, from a judgment of the Appellate Division of the Supreme Court in the first judicial department, entered June 7, 1926, unanimously affirming a judgment in favor of plaintiff entered upon a verdict.

      Peter F. McAllister and Vincent R. Impellitteri for appellant.
    The message in question being in code and defendant having no knowledge or notice that failure to deliver would result in special damage to plaintiff, defendant would not be liable in any event for more than nominal damages. (Hadley v. Baxendale, 9 Exch. 341; Baldwin v. U. S. Telegraph Co., 45 N. Y. 744; Hart v. Direct United States Cable Co., 86 N. Y. 633; Bertuch v. U. S. & Haiti Tel. & Cable Co., 79 Misc. Rep. 10; McColl v. Western Union Tel. Co., 44 N. Y. Super. Ct. 487; Taggart v. Western Union Tel. Co., 198 App. Div. 368; Primrose v. Western Union Tel. Co., 154 U. S. 1; Wheelock v. Postal Tel. Cable Co., 197 Mass. 119; Western Union Tel. Co. v. Coggin, 68 Fed. Rep. 137.) The trial court erred in refusing to recognize any distinction between gross and simple negligence, since the unrepeated message stipulation is binding on the sender of a message in the absence of gross negligence. (Halstead v. Postal Tel. Cable Co., 193 N. Y. 293; Weld v. Postal Tel. Cable Co., 210 N. Y. 59; Dalton v. Hamilton Hotel Operating Co., 242 N. Y. 481.)

      Elkan Turk, Benjamin Wiener and Herman Goldman for respondent.
    Appellant is not relieved from full liability for respondent’s loss by reason of the circumstance that the message was sent in part as a code message and as an unrepeated message even disregarding the element of gross negligence. (Landsberger v. Magnetic Tel. Co., 32 Barb. 530; Taggart v. Western Union, 198 App. Div. 360.) Appellant had ample notice of the purport and importance of the message. (Rittenhouse v. Independent Line of Telegraph, 44 N. Y. 263; Leonard v. New York, etc., Tel. Co., 41 N. Y. 544; Hoye v. Pennsylvania R. R. Co., 114 App. Div. 821; Pearsall v. Western Union Tel. Co., 124 N. Y. 256; U. S. Tel. Co. v. Wenger, 55 Penn. St. 266; Parks v. Alta, etc., Tel. Co., 13 Cal. 422; Mowry v. Western Union Tel. Co., 51 Hun, 126; Jones on Telegraph & Telephone Companies [2d ed.], § 542; Bryant v. American Tel. Co., 1 Daly, 576; Sprague v. Western Union, 6 Daly, 200; Western Union v. Blackwell, 24 Okla. 535; Marriott v. Western Union, 84 Neb. 443; Postal Tel. Co. v. Louisville, 136 Ky. 843.) The action in the case at bar sounding in tort, the rule of Hadley v. Baxendale cannot in any event have application. (Western Union Tel. Co. v. Lawson, 182 Fed. Rep. 369; Ehrgott v. The Mayor, 96 N. Y. 264; Putnam v. Broadway, etc., R. R. Co., 55 N. Y. 108; Tice v. Munn, 94 N. Y. 621; Coy v. Indianapolis Gas Co., 146 Ind. 655; Hill v. Winsor, 118 Mass. 251; Stewart v. City of Ripon, 38 Wis. 584; Baltimore, etc., R. W. Co. v. Kemp, 61 Md. 74.)
   Cardozo, Ch. J.

On May 15, 1922, the plaintiff, Kerr Steamship Company, Inc., delivered to defendant, the Radio Corporation of America, a telegram consisting of twenty-nine words in cipher to be transmitted to Manila, Philippine Islands.

The telegram was written on one of the defendant’s blanks, and is prefaced by the printed words: “ Send the following radiogram via R. C. A., subject to terms on back hereof which are hereby agreed to.”

The defendant had no direct circuit for the transmission of radiograms to the Philippine Islands. A radiogram could have been sent to London, where by transfer to other companies it might have reached its destination. This was expensive for the customer. To reduce the expense and follow a more direct route, the defendant forwarded its Philippine messages over the line of the Commercial Cable Company, which transmitted them by cable. When messages were thus forwarded, the practice was to send them upstairs to be copied. One copy was then handed to the cable company, and one kept for the defendant’s files. That practice was followed in this instance except that the copy intended for the cable company was mislaid and not delivered. As a consequence the telegram was never sent.

The telegram on its face is an unintelligible cipher. It is written in Scott’s code. Translated into English, it remains at best obscure, though some inkling of the transaction may be conveyed to an ingenious mind. Untranslated, it is jargon. The fact is that one Macondray, to whom the telegram was addressed, had cabled the plaintiff for instructions as to the loading of a ship, The Blossom. The instructions were contained in the undelivered message. As a result of the failure to transmit them, the cargo was not laden and the freight was lost. The trial judge directed a verdict for $6,675.29, the freight that would have been earned if the message had been carried. He held that the cipher, though the defendant could not read it, must have been understood as having relation to some transaction of a business nature and that from this understanding without more there ensued a liability for the damages that would have been recognized as natural if the transaction had been known. The defendant insists that the tolls which the plaintiff was to pay, $26.78, must be the limit of recovery.

The settled doctrine of this court confines the liability of a telegraph company for failure to transmit a message within the limits of the rule in Hadley v. Baxendale (9 Exch. 341). Where the terms of the telegram disclose the general nature of the transaction which is the subject of the message, the company is answerable for the natural consequences of its neglect in relation to the transaction thus known or foreseen (Leonard v. N. Y. Tel. Co., 41 N. Y. 544; Rittenhouse v. Ind. Line of Telegraph, 44 N. Y. 263). On the other hand, where the terms of the message give no hint of the nature of the transaction, the liability is for nominal damages or for the cost of carriage if the tolls have been prepaid (Baldwin v. U. S. Tel. Co., 45 N. Y. 744). This is in accord with authority elsewhere (Primrose v. W. U. Tel. Co., 154 U. S. 1, 29; Wheelock v. Postal Tel. Cable Co., 197 Mass. 119; Sanders v. Stuart, L. R. 1 C. P. 326; 3 Sutherland on Damages, § 959).

We are now asked to hold that the transaction has been revealed, within the meaning of the rule if the length and cost of the telegram or the names of the parties would fairly suggest to a reasonable man that business of moment is the subject of the message. This is very nearly to annihilate the rule in the guise of an exception'. The 'defendant upon receiving from a steamship company a long telegram in cipher to be transmitted to Manila would naturally infer that the message had relation to business of some sort. Beyond that, it could infer nothing. The message might relate to the loading of a cargo, but equally it might relate to the sale of a vessel or to the employment of an agent or to any one of myriad transactions as divergent as the poles. Notice of the business, if it is to lay the basis for special damages, must be sufficiently informing to be notice of the risk (Primrose v. W. U. Tel. Co., supra; Tel. Co. v. Sullivan, 82 Ohio St. 14; 3 Sutherland on Damages, §§ 959, 970).

At the root of the problem is the distinction between general and special damage as it has been developed in our law. There is need to keep in mind that the distinction is not absolute, but relative. To put it in other, words, damage which is general in relation to a contract of one kind may be classified as special in relation to another. If A and B contract for the sale of staple goods, the general damage upon a breach is the difference between the market value and the price. But if A delivers to X a telegram to B in cipher with reference to the same sale, or a letter in a sealed envelope, the general damage upon the default of X is the cost of carriage and no more. As to him the difference between price and value is damage to be ranked as special, and, therefore, not recoverable unless the message is disclosed. The argument for a larger liability loses sight of this distinction. It misses a sure foothold in that it shifts from general damage in one relation to general damage in another. The bearer of a message who infers from the surrounding circumstances that what he bears has relation to business of some kind, is liable, we are told, for any damages that are natural with reference to the character of the business as to which knowledge is imputed. When we ask, however, to what extent the character of the business will be the subject of imputed knowledge, we are told that it is so much of the business only as will make the damage natural (cf. W. U. Tel. Co. v. Way, 83 Ala. 542, 557, 558; Daugherty v. Am. Union Tel. Co., 75 Ala. 168). Thus we travel in a circle, what is natural or general being adapted to so much of a putative business as is constructively known, and what is constructively known being adapted to what is general and natural. One cannot build conclusions upon foundations so unstable. The loss of a cipher message to load a vessel in the Philippines may mean to one the loss of freight, to another an idle factory, to another a frustrated bargain for the sale or leasing of the cargo. We cannot say what ventures are collateral till we know the ventures that are primary. Not till we learn the profits that are direct can we know which ones are secondary. There is a contradictio in adjecto when we speak of the general damages appropriate to an indeterminate transaction.

The key to Hadley v. Baxendale is lost if we fail to keep in mind the relativity of causation as a concept of the law (McLaughlin, Proximate Cause, 39 Harv. L. R. 149; Edgerton, Legal Cause, 72 U. of Pa. L. R. 211, 343; Bohlen, Studies in the Law of Torts, p. 503; Haldane, The Reign of Relativity, pp. 125,126). The argument for the plaintiff mistakenly assumes that the test of what is general damage in a controversy between the sender of a message and the receiver is also the test between the sender and the carrier. To unify the two relations is to abandon Hadley v. Baxendale in its application to contracts for the transmission of' a message. If knowledge that a message is concerned with business of some kind is by imputation knowledge of those forms of business, and those only, that are typical or normal, there must be search for a definition of the normal and the typical. The quest is obviously futile. Every effect is natural when there is complete knowledge of the cause (Haldane, supra). Every damage becomes natural when the transaction out of which it arises has been fully comprehended. Imputed knowledge cannot stop with imputed notice of transactions that are standardized by usage. In the complexities of modern life, one does not know where the ordinary ends and the extraordinary begins. Imputed knowledge, if it exists, must rest upon an assumption less timid and uncertain. The assumption cannot be . less than this, that whatever a carrier could ascertain by diligent inquiry as to the nature of the undisclosed transaction, this he should be deemed to have ascertained, and charged with damages accordingly. We do not need to consider whether such a rule might wisely have been applied in the beginning, when the law as to carriers of messages was yet in its infancy. Most certainly it is not the rule announced in our decisions. We cannot accept it now without throwing overboard the doctrine that notice is essential. Notice may indeed be adequate though the transaction is indicated in outline only (3 Sutherland on Damages, § 970, and cases cited; cf. Bailey & Co. v. W. U. Tel. Co., 227 Penn. St. 522; Milling Co. v. Postal Tel. Co., 101 Kan. 307; Leonard v. N. Y. Tel. Co., 41 N. Y. 544). The carrier must draw such reasonable inferences in respect of the character of the business as would be drawn by men of affairs from condensed or abbreviated dispatches. Something, however, there must be to give warning that the subject of the message is not merely business in general, but business of a known order (Sutherland on Damages, § 959). '

We are not unmindful of the force of the plaintiff’s assault upon the rule in Hadley v. Baxendale in its application to the relation between telegraph carrier and customer. The truth seems to be that neither the clerk who receives the message over the counter nor the operator who transmits it nor any other employee gives or is expected to give any thought to the sense of what he is receiving or transmitting. This imparts to the whole doctrine as to the need for notice an air of unreality. The doctrine, however, has prevailed for years so many that it is tantamount to a rule of property. The companies have regulated their rates upon the basis of its continuance.

They have omitted precautions that they might have thought it necessary to adopt if the hazard of the business was to be indefinitely increased. Nor is the doctrine without other foundation in utility and justice. Much may be said in favor of the social policy of a rule whereby the companies have been relieved of liabilities that might otherwise be crushing. The sender can protect himself I by insurance in one form or another if the risk of non-! delivery or error appears to be too great. The total | burden is not heavy since it is distributed among many,! and can be proportioned in any instance to the loss likely

to ensue. The company, if it takes out insurance for itself, can do no more than guess at the loss to be avoided. To pay for this unknown risk, it will be driven to increase the rates payable by all, though the increase is likely to result in the protection of a few. We are not concerned to balance the considerations of policy that give support to the existing rule against others that weigh against it. Enough for present purposes that there are weights in either scale. Telegraph companies in interstate and foreign commerce are subject to the power of Congress (36 Stat. 539, 544). If the rule of damages long recognized by State and Federal decision is to give way to another, the change should come through legislation.

The plaintiff makes the point that the action is one in tort for the breach of a duty owing from a public service corporation, and that the rule of Hadley v. Baxendale does not protect the carrier unless sued upon the contract. There is much authority the other way (Primrose v. W. U. Tel. Co., 154 U. S. 1; W. U. Tel. Co. v. Hall, 287 Fed Rep. 297; Bertuch v. U. S. & Hayti Tel. Co., 79 Misc. Rep. 10, 15; Fitch v. Tel. Co., 150 Mo. App. 149; W. U. Tel. Co. v. Hogue, 79 Ark. 33; Newsome v. W. U. Tel. Co., 153 N. C. 153; cf. 3 Hutchinson on Carriers, §§ 1360, 1367, 1368, 1370). Though the duty to serve may be antecedent to the contract, yet the contract when made defines and circumscribes the duty (Gardner v. W. U. Tel. Co., 231 Fed. Rep. 405; 243 U. S. 644; W. U. Tel. Co. v. Czizek, 264 U. S. 281, 284). Possibly the existing rule of damage would have been rejected at the beginning if the carrier's default had been dissociated from the law of contracts/ and considered as a tort (cf. Bohlen, Studies in the Law of Torts, p. 87; Ehrgott v. Mayor, 96 N. Y. 264, 281; Bird v. St. Paul F. & M. Ins. Co., 224 N. Y. 47, 54; W. U. Tel. Co. v. Lawson, 182 Fed. Rep. 369). As it is, there is little trace of a disposition to make the measure of the liability dependent on the form of action. A different question would be here if the plaintiff were seeking reparation for a wrong unrelated to the contract, as e. g., for a refusal to accept a message or for an insistence upon the payment of discriminatory rates. The plaintiff alleges in the complaint that the defendant did accept the message and “ promised and agreed ” to transmit it, and that the plaintiff has “ duly performed each and every condition of the agreement ” on its part to be performed, and is willing to pay the charges. We do not stop to inquire whether such a complaint is turned into one in tort by the later allegation that the defendant was negligent in the performance of its promise (W. U. Tel. Co. v. Rowell, 153 Ala. 295, 310; Austin v. Rawdon, 44 N. Y. 63; Vilmar v. Schall, 61 N. Y. 564, 568). Upon the acceptance of the message the defendant’s duty was to deliver it in accordance with the contract, and the damages recoverable for noh-performance of the contract are the damages recoverable for non-performance of the duty (cf. Webber v. Herkimer R. R. Co., 109 N. Y. 311; Carroll v. Staten Island R. R. Co., 58 N. Y. 126, 134, 135).

The conclusion thus reached makes it unnecessary to consider whether a limitation of liability has been effected by agreement. On the back of the message is the warning, “ to guard against mistakes, the sender of every message should order it repeated,” followed by these words: It is agreed between the sender of the message on the face hereof and this company, that said company shall not be hable for mistakes or delays in transmission or delivery, nor for non-delivery to the next connecting telegraph company or to the addressee, of any unrepeated message, beyond the amount of that portion of the tolls which shall accrue to this company; and that this company shall not be hable for mistakes or delays in the transmission or delivery, nor for delay or nondelivery to the next connecting telegraph company, or to the addressee, of any repeated message beyond the usual tolls and extra sum received by this company from the sender for transmitting and repeating such message; and that tins company shall not be liable in any case for delays arkmg from interruption in the working of its system, nor for errors in cipher or obscure messages.”

The plaintiff argues that this provision, is inapplicable where the telegraph company has omitted to transmit the telegram at all, and moreover that it is unreasonable and oppressive in the limitation affixed to .liability where the message is repeated. We leave these questions open (cf. Sprague v. W. U. Tel. Co., 6 Daly, 200; affd., on opinion below, 67 N. Y. 590; W. U. Tel. Co. v. Czizek, 264 U. S. 281; Postal Tel. Co. v. Dickerson, 254 U. S. 609, reversing 114 Miss. 115; Kilthau v. Int. Merc. Marine Co., 245 N. Y. 361; W. U. Tel. Co. v. Esteve Bros. & Co., 256 U. S. 566, 574, 575).

The judgment, of the Appellate Division and that of the Trial Term should be reversed, and judgment directed in favor of plaintiff for $26.78, to be offset against costs in all courts, which are awarded to defendant.

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

Judgment accordingly.


author: Pound, J.

text:
    Felix Pascual, Respondent, v. Greenleaf Park Land Company, Inc., et al., Appellants.
    Lien — mechanic’s lien — notice — sufficiency of notice of mechanic’s lien — notice must state value or agreed price of labor performed and materials furnished at time of filing — ■ complaint in action to enforce lien dismissed for insufficiency of notice.
    1. Statements in a notice of lien of labor to be performed and materials to be furnished, no longer required under the Lien Law (Cons. Laws, eh. 33, § 9, subd. 4), may not be rejected as surplusage if the notice fails elsewhere to state, by implication, at least, the agreed price or value of the labor performed and materials furnished, exclusive of labor to be performed or materials to be furnished in the future. A statement of the character and extent of the demand is the sine qua non of a valid notice and extrinsic evidence may not be received to cure its omission. (Finn v. Smith, 186 N. Y. 465, followed.)

      (Argued May 13, 1927;
    decided May 31, 1927.)
    2. A notice of lien, therefore, stating only the nature and agreed price and value of labor performed and to be performed and of materials furnished and t.o be furnished, the amount unpaid and the time when the first and last items of work were performed and materials were furnished, is insufficient, and the complaint in an action to enforce the lien is properly dismissed.

      Pascual v. Greenleaf Park Land Co., 218 App. Div. 548, reversed.
    Appeal from a judgment, entered January 3, 1927, upon an order of the Appellate Division of the Supreme Court in the second judicial department, which reversed a judgment in favor of defendant entered upon an order of Special Term granting a motion for judgment on the pleadings and directed judgment in favor of plaintiff.

      William Walzer and Raymond Gitlin for appellant.
    The notice of lien set forth in the supplemental complaint is fatally defective in that it fails to comply with section 9, subdivisions 4 and 5, of the Lien Law. (Bradley & Currier Co. v. Pacheteau, 71 App. Div. 148; New Jersey Steel & Iron Co. v. Robinson, 85 App. Div. 512; 178 N. Y. 632; Finn v. Smith, 186 N. Y. 465; Levine v. Hessberg, 135 App. Div. 155; Bachmann v. Spinghel, 164 App. Div. 725; Copp v. Firemi, 182 App. Div. 289; Weaver Hardware Co. v. Solomovitz, 98 Misc. Rep. 420; Storch v. Marginal Realty Corp., 109 Misc. Rep. 669; Flaum v. Picarretto, 226 N. Y. 468.) The Appellate Division erred in reading the allegations of the complaint to supplement and explain the contents of the notice of lien. (Gray Marble & Slate Co. v. Schaefer, 237 N. Y. 576; Toop v. Smith, 181 N. Y. 283; Mahley v. German Bank, 174 N. Y. 499; Riley v. Durfey, 145 App. Div. 583; Ball v. Doherty, 144 App. Div. 277; Fanning v. Belle Terre, 152 App. Div. 718; Leske v. Wolf, 154 App. Div. 233; Armstrong v. Chisholm, 100 App. Div. 443.)

      John Alfred Valentine and Emory F. Dyckman for respondent.
    The notice of lien under review fully complies with section 9 of the Lien Law. (Fyfe v. Sound Development Co., 235 N. Y. 266; Hurley v. Tucker, 128 App. Div. 580; 198 N. Y. 534; Gilmour v. Colcord, 183 N. Y. 342; Barrett v. Schaefer, 162 App. Div. 52; Felgonhauer v. Haas, 123 App. Div. 75; Martin v. Gavigan, 107 App. Div. 279; Mahley v. German Bank, 174 N. Y. 499; Clarke v. Heylman, 80 App. Div. 572; Woolf v. Schaefer, 103 App. Div. 587; Gates v. National Assn., 172 App. Div. 581.) The matter not required by the statute is surplusage and as such must be ignored. (Chester v. Rumsey, 26 Ill. 97; Stuart v. Dutton, 39 Ill. 91; Reed v. Bank of Ukiah, 148 Cal. 96; Whitney v. Arnold, 10 Cal. 531; Middlebrooks v. Stephens, 148 Ala. 230; Barker v. Circle, 60 Mo. 258; Chauvin v. Wagner, 18 Mo. 531; Delassus v. Poston, 19 Mo. 425; Perkins v. Carter, 20 Mo. 465; Owen v. Baker, 101 Mo. 407.)
   Pound, J.

This is an action to enforce a mechanic’s lien which was discharged by undertaking under the provisions of Lien Law (Cons. Laws, ch. 33), section 19, subdivision 4. The plaintiff is the lienor. Defendant Greenleaf Park Land Co., Inc., is the owner of the premises against which the lien was filed. Defendant New Amsterdam Casualty Company is the maker of an undertaking “ conditioned for the payment of any judgment which may be rendered against the property for the enforcement of the hen.” The only question is whether the notice is invalid for indefiniteness.

Prior to the amendment of the Lien Law by Laws of 1916, chapter 507, the Lien Law provided that the notice of hen should state: “ The labor performed or to be performed, or materials furnished or to be furnished and the agreed price or value thereof.”

When the law so read it was held that a notice of hen which stated a lump sum unpaid on labor and materials “ furnished and to be furnished ” was invalid as failing to state an agreed price or value of labor performed or materials furnished at the time of filing the notice. (Bossart v. Fox, 89 App. Div. 7; affd., 180 N. Y. 546; Finn v. Smith, 186 N. Y. 465.)

As the Lien Law now reads (§ 9, subd. 4), the notice of lien must state the labor performed or materials furnished at the time of filing the lien and the agreed price or value thereof. It is neither necessary nor proper to include in the notice of lien any statement as to labor to be performed or materials to be furnished.

The notice of hen filed herein on June 13, 1923, contains the following:

“ (4) The labor performed was brick work on houses. The labor to be performed is brick work on houses. The material furnished was bricks, cement and other materials in brick work on houses. The material to be furnished is bricks, cement and other materials for brick work on houses. The agreed price and value of said labor and materials is six thousand and ten dollars. The agreed price and value of said materials is * * *.
“ (5) The amount unpaid to the lienor for such labor and material is Four thousand eight hundred and ten dollars.
“ (6) The time when the first items of work were performed was April 30, 1923, and the time when the first items of material were furnished was April 30, 1923. The time when the last items of work were performed was the 12th day of June 1923, and the time when the last items of materials were furnished was the 12th day of June, 1923.”

Appellant contends that the notice is invalid; that, while the Lien Law no longer requires the statement of labor to be performed or materials to be furnished, the notice includes such statement and is, therefore, to be governed by the authorities cited supra. The case comes before us on a stipulation which in substance concedes that the amount of the lien was not exaggerated and that the notice might have been properly filed for the full amount thereof as being the agreed price and value-of the labor then performed and material then furnished.

The Special Term held that the notice was defective on the authority of cases decided on the law as it was prior to the amendment of 1916. The Appellate Division, recognizing the authority of such cases when decided, reversed and granted judgment for the plaintiff on the theory that whatever statements the notice contained in addition to the statutory requirement should be regarded as surplusage. They may not be so rejected if the notice fails elsewhere to state, by implication, at least, the agreed price or value of the labor performed and materials furnished, exclusive of labor to be performed or materials to be furnished in the future. I cannot read the statement of the court in Finn v. Smith (supra) as conveying any other meaning. “ Under the statute,” says the court, “ any notice of hen must state explicitly or by plain inference the value or agreed price of the labor performed or materials furnished at the time of filing thereof.” The amendment, so far from changing the law in this connection, makes- the statement the sine qua non of a valid notice. Extrinsic evidence may not be received to cure the defect. A notice of hen must be sufficient in essentials in and of itself. The actual interest of the claimant must be spelled out therefrom and will be whenever possible, but those who have a legal interest in the subject of the character- and extent of the demand upon which the hen is based are entitled to be advised thereof by the notice of lien. (Toop v. Smith, 181 N. Y. 283, 287.) As was said in Fanning v. Belle Terre (152 App. Div. 718, 723) the notice may not be “ construed to mean one thing to whomsoever knowledge or notice can be attributed, and something else to the uninformed.” If we strike out the objectionable clauses from the notice in this case we have the statement, which the Lien Law required both before and after the amendment, that the time when the last items of work were performed was the 12th day of June, 1923, and the time when the last items of material were furnished was the 12th day of June, 1923. Under the most liberal rule of construction I can find nothing in this statement, without the aid of extrinsic evidence, to show that the value or agreed price of the labor then performed and the materials then furnished was the value or agreed price of all the labor and materials which were to be furnished by the claimant.

While the defense is technical to the last degree, the defendant surety company is not liable if no judgment can be rendered against the property for the enforcement of the hen. This is a hard case but “ even a court of equity has not the power to breathe the breath of life into a notice of lien that is insufficient under the statute, much less a court whose function it is not to administer equity, but to make the law as stable and certain as it may be.” (Toop v. Smith, supra, p. 289.) I would be glad to apply the maxim surplusagium non nocet but here we have a case of swrplusagium nocet as we may not strike out words material on their face in order to conform the notice to the facts agreed on. To make a good notice the statute must be substantially complied with. (Mahley v. German Bank, 174 N. Y. 499.) This notice is insufficient.

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

Cardozo, Ch. J., Andrews, Lehman, Kellogg and O’Brien, JJ., concur; Crane, J., dissents on opinion of Kapper, J., below.

Judgment accordingly.


author: Crane, J.

text:
    Elsie Finch et al., Respondents, v. David Goldstein, Appellant.
    (Argued May 13, 1927;
    decided May 31, 1927.)
    Incompetent persons — vendor and purchaser — real property — mortgage — foreclosure — acts of incompetent person before appointment of committee voidable, not void — action by committee to foreclose purchase-money mortgage on land conveyed by incompetent before he was so adjudged —■ defense of insanity insufficient.
    1. The acts of a person of unsound mind before the appointment of a committee are voidable, not void. If as a fact he be incompetent at the time he acts, Ms transactions may be set aside at his election either by himself or by a committee when appointed. The inquisition resulting in the appointment of a committee under the provisions of the Civil Practice Act and not a commitment of the person under the Insanity Law determines the. question of incompetency. (Blinn v. Schwarz, 177 N. Y. 252; Smith v. Ryan, 191 N. Y. 452, explained and followed; Sporza v. German Savings Bank, 192 N. Y. 8, distinguished.)
    2. In an action by the committee of an incompetent person to foreclose a purchase-money mortgage on land sold by the incompetent prior to the inquisition wherein he was adjudged incapable of handling Ms. property, a defense that the incompetent was insane at the time of the conveyance is insufficient and a counterclaim demanding that the transaction be declared null and void and the' purchase price returned is properly dismissed.

      Finch v. Goldstein, 217 App. Div. 707, affirmed.
    Appeal from a judgment, entered September 9, 1926, upon an order of the Appellate Division of the Supreme Court in the third judicial department, reversing a judgment in favor of defendant entered upon a dismissal of the complaint by the court on trial at Special Term and directing judgment in favor of plaintiff.

      Michael Gold, Homer I. Harris and Irving B. Feinberg for appellant.
    Howard Finch having been committed under the provisions of the Insanity Law of the State of New York, the order of commitment was an adjudication in itself of his inability to execute the deed in question, and the violation by the plaintiffs of a general order of the State Hospital Commission, in procuring the deed to be executed, made it a nullity entitling the defendant to judgment. (Martello v. Cagliostro, 122 Misc. Rep. 306; Trerio v. Franklin Savings Bank, 124 Misc. Rep. 38; Hughes v. Jones, 160 N. Y. 67; McCarthy v. Bowling Green Storage & Van Co., 182 App. Div. 18; Carter v. Beckwith, 128 N. Y. 312; Blinn v. Schwarz, 177 N. Y. 252; Smith v. Ryan, 191 N. Y. 452; Merry Realty Co., Inc., v. Shamokin & Hollis Real Estate Co., 186 App. Div. 538; Lasall v. Patti, 25 Misc. Rep. 581.)

      George F. Kaufman for respondents.
    The deed of Howard Finch before office found was not void but voidable. It could be avoided only at the election of said Howard Finch or his duly constituted representative. Howard Finch by his committee having elected to ratify the deed, it could not be avoided at the election of the defendant. (Blinn v. Schwarz, 177 N. Y. 252; Smith v. Ryan, 191 N. Y. 452; Skinner v. Schwab, 188 App. Div. 467; 229 N. Y. 549; German Savings Bank v. Wagener, 164 App. Div. 234; 220 N. Y. 608; Jackson v. Gumaer, 2 Cow. 552; Bool v. Mix, 17 Wend. 119; Yates v. Lyon, 61 N. Y. 344; Wamsley v. Darragh, 12 Misc. Rep. 199.)
   Crane, J.

Howard Finch was the owner of a farm of 237 acres situated at Cairo, Greene county, New York, subject to the dower of his mother, Elsie Finch. He became mentally deranged and on September 16, 1920, was summarily committed to' the Hudson River State Hospital for the insane at Poughkeepsie on an order of the county judge of Greene county pursuant to the provisions of section 80 of the Insanity Law (Cons. Laws, ch. 27).

Thereafter and on June 30, 1921, while still confined in the State hospital, the said Howard Finch conveyed the property to the defendant in this case, David Goldstein, by deed duly executed, talcing back a purchase-money mortgage which is being foreclosed in this action. The defendant knew that Finch had been committed as an insane person and that at the time of the conveyance he .was confined in the hospital. The grantee entered into possession of the property and still retains the same.

On the 4th day of April, 1925, in proceedings duly instituted in the Supreme Court of this State, an inquisition was taken pursuant to the provisions of section 1356 of the Civil Practice Act, wherein said Howard Finch was adjudged an incompetent and incapable of handling his property, and Winnie Finch was thereupon appointed committee of his person and property and duly qualified. The committee brings this action ratifying the conveyance made by Howard Finch to the defendant and seeking a foreclosure of the purchase-money mortgage. The defendant has pleaded the insanity of Howard Finch at the time of the conveyance to him' in a counterclaim wherein he asks that the transaction be declared null and void and his purchase price returned with interest.

If the deed made by Howard Finch while in the State hospital and before the appointment of the committee were void, the defendant is entitled to the relief asked for, passing the question of his estoppel. If the deed were only voidable at the election of the incompetent or his committee the plaintiff is entitled to foreclosure. What effect did the order of commitment of the county judge on the 16th day of September, 1920, have upon the capacity of Howard Finch to make the deed to the defendant before' the inquisition and appointment of the committee.

This court said in Blinn v. Schwarz (177 N. Y. 252, at page 262): “ Although the decisions of the courts upon the subject are not uniform, according to the weight of authority in this State, as well as elsewhere, the deed of a lunatic before office found is voidable only and not void.” Again in Smith v. Ryan (191 N. Y. 452) we followed this decision, saying: The law is settled in this state that the deeds and contracts of a person of unsound mind, who has not been judicially declared incompetent, are voidable, not absolutely void * * *, and the same doctrine generally prevails throughout this country and in England.”

What is meant in these decisions by “ office found ” or “ judicially declared incompetent? ” They have reference to proceedings under the Civil Practice Act for the appointment of a committee to take possession of ánd care for the property of an incompetent. Until the appointment of a committee neither the State nor any one else has any power or control ovei his property or any authority to act in his behalf. He alone remains in possession of his property and can dispose of it. If as a fact he be incompetent at the time he acts, his transactions may be set aside at his election either by himself or by a committee subsequently appointed. His acts before the appointment of a committee are thus voidable, not void.

The provisions of article 4 of the Insanity Law and those of article 81 of the Civil Practice Act have two distinct objects in view. Under the Insanity Law a person alleged to be insane may be committed to an institution for the custody and treatment of the insane upon an order made by a county judge or justice of the Supreme Court. The commitment is upon a certificate of lunacy made by two qualified medical examiners in lunacy, accompanied by a verified petition. The insane person may be committed to a State hospital or to the care and custody of a relative. He may be discharged by the superintendent of the State hospital on certifying to the State Commission that the patient has recovered, or the superintendent may grant a parole to the patient not exceeding six months. These general provisions of the Insanity Law indicate that its purpose is to care for and treat the insane person and to protect his family and the public. These commitments at times, as we all know, must be made without delay. The law even dispenses with notice to the alleged incompetent in cases of necessity (Section 82). At other times the condition of the patient is not serious and discharge follows soon after Commitment. The purpose of the Insanity Law is to look after the person of the incompetent and has nothing to do with his property except as it may be charged with the expense of his maintenance.

On tlie other hand the provisions of the Civil Practice Act (Sections 1356-1384) have relation to the property of the incompetent and the appointment of a committee to preserve it. Upon the presentation of a petition the court inquires by means of a jury or commission into the question of insanity and the property of the alleged incompetent. The finding of the jury or the commissioners is termed “an inquisition ” (Section 1368), and upon it the court appoints a committee to take charge of the incompetent’s property.

Having in view the provisions as well as the purposes of the Insanity Law and the Civil Practice Act it is quite apparent that when this court said that the deed of a lunatic before office found is voidable pnly, and not void, it meant by office found the inquisition resulting in the appointment of a committee under the provisions of the Cavil Practice Act, and did not refer to the commitment of the person under the Insanity Law.

Further reasons may be found for this decision in the origin and history of article 81 of the Civil Practice Act as fully stated by this court in Hughes v. Jones (116 N. Y. 67) and in the opinions in Sporza v. German Savings Bank (192 N. Y. 8). (See, also, Boschen v. Stockwell, 224 N. Y. 356; Matter of Dowdell, 169 Mass. 387; Wolcott v. Connecticut General Life Insurance Co., 137 Mich. 309; Weeks v. Reliance Fertilizer Co., 20 Ga. App. 498; 93 S. E. Rep. 152; Williston on Contracts, sec. 257.)

The Sporza case is not an authority for the appellant’s contention; it did not deal with the question here presented. The opinions discussed and decided the constitutionality of section 2323-a of the Code of Civil Procedure. The point was whether under our State Constitution a committee could be appointed without the question of incompetency being determined by a jury. The power of an incompetent to dispose of his property after commitment under the Insanity Law or the effect of such an act was not mentioned or passed upon.

For the reasons here stated the judgment appealed from should be affirmed, with costs.

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

Judgment affirmed, etc.