author: Ruger, C. J.

text:
    Leland Fairbanks, Jr., App’lt; v. Winthrop Sargent, Exr., Resp’t.

      (Court of Appeals,

      Filed January 18, 1887.)
    1. Assignment — Of chose in action — Rule as to.
    The general rule is that the assignee of a chose in action takes it subject to all the equities existing against it in the hands of his assignor and can acquire no greater light or interest therein than belonged to his transferrer.
    2. Same — Attorney — Special agreement — Assignment— Equitable lien — Purchaser for value.
    One Underwood agreed with the plaintiff (an attorney) to give him one-third of whatever amount should be collected on certain claims as compensation for his services in connection therewith. Underwood retained the right to decide upon the terms and mode of settlement of such of the claims as were put in suit. Plaintiff by Underwood’s direction caused suit to be brought in another state against one Zabriskie to recover a certain one of said claims which was a mere chose in action. Afterward Underwood assigned this claim against Zabriskie to the defendant’s testator as security for the payment of a debt. Subsequently, Underwood, without the knowledge of plaintiff, agreed to a settlement of said claim by authorizing defendant’s testator to accept from Zabriskie certain bonds, which was done and Underwood gave a satisfaction of the claim to Zabriskie. The bonds were retained by defendant’s testator, who in consideration thereof released Underwood from all claim on account of said debt.

      Held, that the plaintiff acquired an equitable lien upon one-third of the proceeds of the collection. That the fact that Underwood reserved the right of naming the attorney who should conduct the prosecution of the claim when sued in a foreign state, or the right to determine the terms and mode of settlement of such claim, did not in any manner detract from the validity of the agreement as an equitable assignment.
    3. Same — Consideration.

      Held, that the only effect of Underwood’s consent to the settlement and execution of the release was to deprive him of the right of subsequently claiming against defendant’s testator that it had been satisfied for less than the real value of the claim. That the consideration paid to Underwood was wholly for this right. That defendant’s testator did not take the bonds as a bona fide purchaser for a valuable consideration, or in the ordinary course of business.
    4. Same — Duty of assignee to guard interest of co-owner — Notice.

      Held, that defendant’s testator was equitably charged with the duty of guarding the interest of his co-owner in the proceeds of the Zabriskie claim, whether he was informed of such interest or not. That the want of such notice did not affect the validity of plaintiff’s claim.
    5. Same — Cannot acquire an indefeasible right to, by assignment.

      I-Ield, that defendant’s testator in collecting a non-negotiable chose in action which he had acquired by assignment, was subject to the liability of being required to satisfy the claims of prior assignees thereof. That he could not acquire an indefeasible right to such a claim by any form of assignment.
    . Appeal from a judgment of the Supreme Court, General Term, First Department, affirming a judgment of the New York County Special Term dismissing the complaint.

      A. C. Brown, for app’lt; John Glinton Gray, for resp’t.

         Reversing 39 Hun, 588.

   Ruger, C. J.

The principal question presented by this, appeal, when reduced to its simplest form, is whether the part owner of a cho^b in action, having authority to collect it, is entitled to retain the whole proceeds of such collection, as a bona fide purchaser, if received by him in non-negotiable securities _ from the debtor. Were it not that the courts below have answered affirmatively, we would have hardly supposed the contrary conclusion susceptible of a reasonable doubt. Other questions, incidentally involved, also appear from the facts,, which, as found by the court, are substantially as follows:

In January, 1869, one Underwood owned a claim resting in open account, against one Zabrislde, arising out of certain stock transactions between them, upon which he claimed a sum exceeding $100,000. Zabrislde disputed his liability thereon, and Underwood, not being able to obtain payment, entered into a contract in writing with the plaintiff, an attorney residing in the city of New York, by which it was agreed between them that the said Fairbanks, for his services in endeavoring to collect certain claims owned by said Underwood, among which was that against Zabriskie, “ is to have one-sixth of whatever amount of money, securities, or property shall be received on account of such claims as shall be settled without suit, and one-third of whatever amount of money, securities, or property shall be collected, or in any way be realized or received, (whether on settlement or without settlement,) on account of such of said claims, as shall be put in suit, either in this or any other state or country.” Said Underwood “ is to decide upon the terms and mode, of settlement as to each and every of said claims, whether such settlement be before or after suit brought.” In January thereafter, Fairbanks, by Underwood’s direction, caused suit to be brought to recover the claim against Zabriskie, in a court of competent jurisdiction, in the state of New Jersey, that being" the state where Zabriskie resided, and the- action was steadily prosecuted by Fairbanks until it was settled as hereafter stated.

In 1871, Underwood, being indebted to Henry W. Sargent, the defendant’s testator, by an assignment in writing, absolute in form, transferred his claim against Zabriskie to Sargent, as collateral security. On or about June 18, 1872, Undérwood, at the urgent request of Sargent, and without the knowledge of the plaintiff, agreed to a settlement of the claim against Zabriskie, by authorizing Sargent to accept from him 40 bonds, being part of a series of 200, for $500 each, having 9 coupons for the payment of half-yearly installments of interest, payable to bearer, attached to each, and purporting to be made by one Sarah R. Haight, as executrix of the estate of Richard K. Haight, her deceased husband. By these bonds Sarah R. Haight agreed, as executrix, at a specified time, to pay the same, and also to pay semi-annual interest thereon, according to tbe terms of said coupons; and also represented thereby that she had secured such payments by a trust mortgage, executed by her as executrix, upon certain real estate situated in the city of New York, and represented to be property belonging to the estate of Richard K. Haight.

In pursuance of this agreement, Underwood wrote and delivered to one Gray, the agent of Zabriskie, a written order, addressed to the attorneys in New Jersey who had charge of the action against Zabriskie, stating that the action had been settled, and directing them to discontinue it upon payment by Zabriskie of their costs and charges, and those of the referee. Underwood also, at or about the same time, executed and delivered a release of all claim against Zabriskie to Gray, to be delivered to Zabriskie upon the payment of the price agreed upon for such settlement.

About June 18th, Sargent, through his agent, Monell, delivered to Gray a duly-executed release from Sargent to Underwood of all claims and demands which Sargent had against Underwood, and also duly executed reassignments of the securities received by him from -Underwood as collateral, with instructions to Gray to deliver them to Underwood after he should have received and forwarded to Sargent the bonds. It •also appears from the evidence that Zabriskie had notice of the •assignment of the claims to Sargent previous to the settlement, and authorized the delivery of the bonds to Sargent upon receiving a discharge from his liabilities to Underwood.

It must under the findings of the trial court, also be assumed that neither Sargent nor Monell at the time of such settlement, had any knowledge of the interest in the proceeds thereof which was claimed by the plaintiff.

Under these circumstances, Fairbanks brings this action .against Sargent to recover one-third of the bonds so received, or the value thereof, upon the ground that the agreement between Mm and Underwood constituted an equitable assignment of one-third of the property received on such settlement.

The first question in the case is as to the nature and extent of the right taken by Sargent in the Zabriskie claim by virtue of the assignment thereof to him by Underwood, and the rights growing out of the subsequent transactions between the parties. Inasmuch as the Zabriskie claim was evidenced by no written acknowledgment from the debtor, and was disputed by him, and was, from its nature, incapable of actual possession or manual delivery, no assignee of Underwood would acquire any superior right over any other assignee by virtue of the possession or apparent ownership of the claim by his assignor. Muller v. Pondir, 55 N. Y. 332. One assignee of such a claim from the owner must necessarily acquire the same interest in it that any other assignee does, and that is, in the absence of other-controlling equities, an interest subject to the rule that he wlm is prior in point of time is prior in right. Such a claim is at common law, non-assignable, and its assignee taires, by virtue of an assignment thereof, an equitable interest only, which must be governed by equitable rules for its protection and enforcement. Moore v. Metropolitan Bank, 55 N. Y. 41; Ford v. White, 16 Beav. 120; Phillips v. Phillips, 4 De Gex, F. & J., 208.

It is undoubtedly the general rule that the assignee of a chose in action takes it subject to all the equities existing against it in the hands of his assignor, and can acquire no greater right or interest therein.than belonged to his transferrer. It was said by Judge Destio in Bush v. Lathrop, 22 N. Y., 535, that “ the purchaser of a chose in action takes the interest purchased subject to all the defences, legal and equitable, of the debtor who issued the security. * * * In the transmission of property of any kind from one person to another, the former owner can, in reason, only transfer what he himself has to part with, and the other can only take what is thus transferred to him. * -* unnecessary to refer to authorities for this general principle, or to point out the exceptions to it which have been created by the custom of merchants, or by positive statutes. It is enough that the present case is not claimed to fall within any of those exceptions. But the rule, if limited in the manner I have stated it, does not aid the plaintiff; for it is. not the equity of the debtor in these securities which is' the question, but of the plaintiff’s intestate against Preston, his immediate assignee, and the question is whether the defendant is to be deemed to have purchased subject to this equity, or whether this assignment confers upon him a better title than his assignors, who were confessedly liable to it, had. The defendant claims that this is a latent equity, available only between the parties to it, and that it did not accompany the security when it passed into the hands of a subsequent owner.” The learned judge quotes the rule laid down by Lord. Thuelow, that “ a purchaser of a chose in action must always abide by the case of the person from whom he buys.” Bush v. Lathrop has been criticised in subsequent cases, and so far modified as to exclude from the operation of the principles there laid down the case of a purchase in good faith of a non-negotiable instrument from an assignee of the real owner, upon whom he has, by assignment, conferred the apparent absolute ownership, when such purchase has been made in reliance upon the title apparently acquired by such assignee. This modification is placed upon the ground of estoppel, and it is held that the real owner has, by his act of investing another with the apparent ownership of the property, estopped himself from disputing the title of one who thereafter-acquires it in good faith from such assignee. McNeil v. Tenth Nat. Bank, 46 N. Y., 325; Moore v. Metropolitan Bank, 55 id. 41; Armour v. Michigan Central R. R. Co., 65 id. 122.

"We understand that the rule stated in Bushv. Lathrop, with the exception mentioned, stands in full force unquestioned. Ballard v. Burgett, 40 N. Y. 314; Weaver v. Barden, 49 id. 286; Moore v. Metropolitan Bank, supra.

Assuming, therefore, that Sargent could acquire from Underwood only such right as remained in him after his agreement with plaintiff, it becomes material to inquire what rights, legal or equitable, were acquired by Fairbanks from Underwood prior to the assignment to Sargent.

It is to be observed that this claim does not rest for its support upon a lien claimed by the plaintiff by virtue of his rights as an attorney rendering legal services for a client, but grows wholly out of the interest transferred to him by force of his agreement. It is also important to notice that this contract does not contain a provision by Underwood to pay plaintiff from the fund produced, or otherwise, but is an engagement that plaintiff shall have one-third of the proceeds of the collections in specie, or in such form as they shall be received from the debtor. In the opinion of the learned judge, writing at general term, and which was concurred in by the whole court, it was held that he did acquire an equitable lien upon one-third pf the proceeds of the collection, and we entirely concur in the' opinion there expressed.

In addition to the authorities relied upon below we also think the case is covered by the decision in Williams v. Ingersoll, 89 N. Y. 508. It' appeared in that case that certain attorneys were employed to transact the legal business required in the prosecution and defense of certain claims by one H. under an agreement that they were to be paid for their services out of any moneys H. should obtain or become entitled to from any of the suits or proceedings, and should have a lien for all sums that might be owing or due them for their said services, which lien should be superior to any right which H. might have.

All of such actions and proceedings,among which was a claim by H. for damages in an action for malicious prosecution, were afterward submitted to an arbitrator, and he awarded to H. damages for such malicious prosecution in the sum of $10,0100, which was attempted to be reached by certain attaching creditors of H.

It was held that the agreement operated as an equitable assignment to the attorneys of the award, and, although not effective to transfer the cause of action for malicious prosecution by reason of its non-assignability, itcyet attached to tlie award when it was made, and was superior to any right of PI., or those of his attaching creditors; that it was not needful, in order to make such assignment or lien valid, that notice thereof should be given to the debtors, as the only effect of a want of notice would be to validate a subsequent bona fide payment of the award by them; and that, as between different assignees of a chose in action by express assignment from the same person, the one prior in point of time will be protected, though'he has given no notice to either the subsequent assignees, or the debtor of such assignment. The court cited Muir v. Schenck, 3 Hill, 228; Greentree v. Rosenstock, 61 N. Y. 583; and Freund v. The Imp. & Tr. Nat. Bank, 76 id. 352. The case of Wylie v. Coxe, 15 How. U. S., 415, seems also to be directly in point.

The fact that Underwood reserved the right of naming the attorney who should conduct the prosecution of the claim when sued in a foreign state, or the right of determining the terms and mode of settlement of such claim does not in any manner detract from the validity of the agreement as an equitable assignment. These provisions might effect the amount recoverable by the assignee in case of settlement, but it would be an unwarrantable construction of the contract to say that they were intended by the parties to defeat the main object of the agreement. Both assignor and assignee were equally interested in swelling the amount to be recovered, and it is not at all strange that Fairbanks should assent to a condition which would not probably affect him, and which Underwood had a right to impose as a limitation upon the interest intended to be conveyed.

It is quité clear that Fairbanks had done all that he could do to protect his interest in the Zabriskie claim; he had taken all the possession of the subject of which it was susceptible; he had evidenced his right by requiring a written agreement from the owner stating its consideration and extent, and he had assumed the control of the claim and was openly engaged in its prosecution to the knowledge of all parties. He was under no obligation to give notice of his rights to any party in order to perfect them, and could not have limited their control over the litigations or the disposition of the proceeds thereof by Zabriskie if he had done so.

By the terms of his agreement with Underwood he had precluded himself from interfering with any mode of settlement which Underwood desired to make, and this right was transferred 'by Underwood to Sargent, and belonged exclusively to him at the time such settlement was made.

It is claimed that Fairbanks should have notified Monell of his interest in the Zabriskie claim when an interview took place between them in July, 1872, and that in some way he has precluded himself from asserting an interest in the proceeds of the settlement by reason of his neglect to do so. There is no foundation for such a claim. In the interview in question Monell informed Fairbanks, in substance, that he wished to obtain information of the condition of the Zabriskie claim, as his client, one Sargent, held a demand against Underwood, and was desirous of knowing what prospects he had of realizing something on it from that source. Although Sargent then, and for some months previous, had been the actual owner of the claim, Mon-ell not only suppressed that fact from the knowledge of Fairbanks, but left it to be inferred that his only interest in the claim was the amount which he expected to obtain from Underwood as voluntary payments out of the proceeds thereof, and Monell then urged Fairbanks to continue the vigorous prosecution of the action. We can see nothing in this statement that imposed any duty upon Fairbanks to disclose to Sargent, or any other creditor of Underwood’s, the conditions of the contract under which he was prosecuting this claim. If Monell had then informed Fairbanks of any intended action on the part of Sargent with reference to such claim Avhich should assume the absence of any interest by Fairbanks in the proceeds thereof, a different question might arise; but this notice to Fairbanks was disingenuous and equivocal, and suppressed the very information which it was important for Fairbanks to know, or for Sargent to give. Fairbanks could not have supposed that Sargent was then the sole owner of the Zabriskie claim, or that he was then, or expected soon to be, engaged in a secret or clandestine effort to settle it, and absorb the proceeds of the litigation, to the exclusion of the attorney who was carrying it on.

Monell was himself a lawyer, and must be presumed to know, from the usual course of such business, that an attorney prosecuting a claim for an insolvent client presumptively has an interest in the subject of the action; and he was under the obligation of good faith and fair dealing to notify him of any disposition then known to him which had been made of the claim involved, or of any attempt to assume control of, and take the fruits of, the litigation, by a settlement thereof. The dispositian with which Monell interviewed Fairbanks is quite evident from the fact that when he set on foot the negotiations by which the litigation was finally settled, although carried on in the same city where plaintiff resided, he was not consulted by any of the parties, or informed as to the negotiations; and his interests therein, although they were known to both Gray and Underwood, and must also to some extent have been suspected by Monell, were wholly ignored by all the parties to the negotiations.

Sargent thus received the whole fruits of a litigation which, it is fair to assume, was the result in a great measure of the services and disbursements of Fairbanks, rendered and expended to a considerable extent after Sargent had acquired his interest in the claim.

Every consideration of equity requires that such a claim should be protected and there is nothing in the facts of the case upon which a superior equity in favor of Sargent’s claim over that of Fairbanks can justly be predicated.

The judgment of the general term, however, was placed upon the ground that Sargent between the bona fide holder of the bonds in question by reason of the delivery thereof to him by Underwood and the execution and delivery to Underwood by Sargent of a release of all claims and demands held by him against Underwood, and the reassignment of certain alleged securities held by Sargent as collateral to Underwood’s debt.

It seems to us that the conclusions of that court are not sustainable. If they are, it is quite clear that the subsequent assignee of a chose in action will be enabled to possess himself of the entire proceeds of the collection thereof, to the exclusion of a junior assignee, provided he obtain payment thereof from the debtor in money, or negotiable securities, and effects the-abrogation of the rule that an assignee of a non-negotiable chose-in action takes it subject to the equities of prior assignees.

We are, however, of the opinion that the court below misconceived the real nature of the transaction through which the collection of the Zabriskie claim was effected, and that Sargent, in fact and in law, received the bonds from Zabriskie and not from Underwood. Even if the theory of the general term were correct as to the person from whom Sargent received the bonds, we are of the opinion that the consideration paid by Sargent to Underwood was not sufficient to make him a bona fide holder thereof.

Upon such settlement Sargent delivered to Underwood three several instruments consisting of two reassignments and a release. The reassignments were of two claims previously assigned to Sargent by Underwood as collateral security for his debt.

The Zabriskie debt at the time of its reassignment had been settled and discharged and was necessarily valueless. The other claim is somewhat vaguely described ; but it was testified to by Monell that it was considered of no value both by himself and his client Sargent. The release was one executed by Sargent to Underwood, from all debts and demands owing by Underwood to him. This release was the discharge of an insolvent from an antecedent liability. It was not, however,, executed in consideration of receiving the bonds in question, for those, as we shall hereafter see, were received and held by-virtue of an equitable right already possessed by Sargent, and. not by reason of Underwood’s consent thereto.

The only legal consideration for this release was therefore Underwood’s consent to the settlement, whióli precluded him from afterwards claiming that the Zabriskie claim was more valuable than the amount received in satisfaction thereof.

Even if it be admitted that Sargent delivered this release in consideration of the receipt of the bonds, it would constitute him a bona fide holder to 'the extent only of the value parted with by him. Moore v. Ryder, 65 N.Y. 442; Cardwell v. Hicks, 37 Barb 458; Lawrence v. Clark, 36 N.Y. 128.

Upon the facts stated it is quite apparent, however, that he parted with nothing of value to Underwood.

We think the courts below were misled by looking more at the form of the transaction than at its legal effect. It is immaterial in what form the parties chose to put the transaction if it is not in accordance with its legal effect, for equity will consider and adjudicate the rights of the parties according to the real nature of the transaction, without regard to its form. When the settlement was effected Sargent was the apparent equitable owner of the Zabriskie demand, claiming to be its real owner, but eoncededly possessed of the absolute right to settle and discharge it and receive the proceeds of the collection, and Zabriskie had notice of these rights.

Sargent required no authority or consent from Underwood to' authorize him to effect the settlement, and Zabriskie had no right or authority to settle and pay the claim to any one but Sargent.

• Underwood never actually or theoretically had the bonds in his possession, and the only office he was called on to perform in connection with the settlement was to approve the act of his assignee, Sargent in receiving $20,000 as a satisfaction thereof, and to execute a release to Zabriskie after the settlement was effected. Such a release would have been entirely ineffectual for any purpose if it had not been subsequently ratified by Sargent, and was of no more effect than if executed by any other agent of Sargent’s.

The only effect, therefore, of Underwood’s consent to the settlement and execution of the release was to deprive him of the right of subsequently claiming against Sargent that it had been satisfied for less than the real value of the claim.

The consideration paid to Underwood was, therefore, wholly and exclusively for the acquisition of this right and did not effect in any way Sargent’s right or authority to settle the action or receive the proceeds thereof from Zabriskie.

The cause of action here was not put upon any interest in the bonds claimed to have existed before their transfer to Sargent, or upon the invalidity of the title acquired by him; but it is based upon the claim that they were valid securities in his hands and that plaintiff’s equities attached to them upon his receipt thereof.

Sargent was equitably chargeable with the duty of guarding the interest of his co-owner in the proceeds of the Zabriskie claim, and this whether he was informed of such interest or not. The want of such 'notice did not, as we have seen, affect the validity of plaintiff’s claim.

The question in the case, therefore, is whether, after he had acquired possession of the bonds, he became subject to any liability to third persons by virtue of any equity existing in their .favor in respect thereto.

Underwood in his agreement with Fairbanks, having reserved the power to determine the terms and mode of settlement of the Zabriskie claim, and Sargent, having, by the subsequent assignment to him, become vested with the same power, was subject to the same liability which would have attached to the bonds in the hands of Underwood if the assignment to Sargent had not been made.

He could Uot, therefore, have become a bona fide purchaser of the bonds to any greater extent than the value belonging to him which he parted with. The equitable right of the plaintiff to one-third of the Zabriskie claim cannot be considered as value parted with in good faith to Sargent. Moore v. Ryder, supra. Sargent must be presumed to have known the law, and that in collecting a non-negotiable chose in action which he had acquired by assignment from another, he was subject to the liability of being required to satisfy the claims of prior assignees thereof. He could not acquire an indefeasible right to such a claim by any form of assignment, and in discharging the debtor from his. liability thereon he did so subject to his liability to unknown claimants with equities superior to his own.

We think, therefore, that Sargent did not take the bonds in question as a bona fide purchaser thereof in respect that they were not acquired by him for a valuable consideration, or in the ordinary course of business within the spirit and intent of the rule protecting bona fide purchasers of negotiable securities.

While Zabriskie received a valid discharge from his liability upon the claim in suit because he received it from the apparent owner without notice of any hostile claim, yet, as we have seen, Sargent received the bonds subject to any latent equities existing in the claim which was discharged as the consideration for their receipt, and in that respect did not acquire the character of a bona fide holder by the transaction in question.

We are, therefore, of the opinion that the plaintiff is entitled to a new trial. The judgments of the courts below should be reversed and a new trial ordered, with costs to abide the event.

All concur, except Uajo’OBTH, J., not voting.

Judgment reversed.


source: Caselaw Access Project

author: Danforth, J.

license: Public Domain

text:
    Lewis Le Coulteux De Caumont, Ex’r, etc., et al. Appl’ts; Mary J. Morgan, Exr’x et al. Resp’ts.

      (Court of Appeals,

      Filed January 18, 1887.)
    1. Gift — Advancement — What shows a gift.
    Where' there was oil the part of the testator, before the execution of the will, the expression of an intention to give certain shares of stock to certain persons, and the actual delivery of the written instruments declaring that intention, which were sufficient to warrant the transfer .of title upon the records of the corporation, and which proved to he legally available for that purpose. Held, that every act essential to deprive the donor of his possession and title was performed and the actual as well as the apparent title vested in the donees : That it was not an advancement.
    2. Same — Gift to wife not an advancement — 1 Rev. Stat., 754, § 23.
    A gift by a husband to a wife cannot be affected by any consideration growing out of the statute relating to advancements, for such a set-off is allowed only against children. 1 Rev. Stat., p. 754, § 23.
    3. Tbial practice — Evidence — Objection—When to be made to be EFFECTUAL.
    A party who sits by during the reception of incompetent evidence without properly objecting thereto, and thus takes his chance of advantage to he derived by him therefrom, has not, when he finds such evidence prejudicial, a legal right to require the same to he stricken out. An objection can have no force so far as the testimony which preceded it is concerned. And where there is no question and no offer of evidence an objection is premature as to what follows.
    Appeal from a judgment of the Supreme Court, General Term, First Department, affirming the decree of the Surrogate’s Court of New York County which judicially settled the accounts of Mary J. Morgan as Executrix. The opinion sufficiently states the case.

      John B. Parsons and S. B. Brownell, for Appl’ts; Sullivan Qromwell and Joseph If. Choate, for Resp’ts.

       Affirming 31 Hun, 643 mem.

   Danforth, J.

On the 16th of April, 1878, Charles Morgan made a will in these words: “ All my property, real and personal, is hereby devised and bequeathed as provided by the laws of the State of New York in cases of intestacy.” He appointed his wife, Mary J. Morgan, executrix, and on the eighth of May died. Letters testamentary were duly issued, and in February, 1880, the executrix applied to the surrogate for a judicial settlement of her account. Among other things-r-not material upon any question before us — she charged herself with seventeen thousand nine hundred and forty shares of the capital stock of “ Morgan’s Louisiana and Texas Railroad and Steamship Company.” Objections were filed in behalf of several grandchildren and great-grandchildren to the effect that she should have charged herself with and accounted for thirty-two thousand other shares of that stock. The testator, besides his widow and these objectors, also left surviving two married daughters, Mrs. Frances E. Quintará and Mrs. Maria L. Whitney, and a grandson, Richard J. Morgan, and anticipating a claim that these shares had been transferred by the testator before the execution of his will, the contestants also objected that there never was complete delivery of the shares, but if there were, then it was the result of undue influence; and if not that, the account was wrong because it fails to charge such of the above-named persons and Mrs. Mary J. Morgan, the widow of the testator, with seven thousand five hundred shares of that stock, “ as advancements to each of them by the decedent within thirty days previous to his death.”

By consent of all parties the surrogate sent the account to a referee with directions “ that he proceed to take testimony as to the facts in relation thereto, to examine the account rendered, to hear and determine all disputed claims and other matters relating to said account, and to make report thereon with all convenient speed, subject to the confirmation of the surrogate.”

The referee, after a protracted hearing of testimony offered by all the parties, made a report by which he found that none of the objections were well taken. Upon motion the surrogate confirmed, the report of the referee, -and upon appeal to the general term that decision of the surrogate was affirmed. In all these tribunals it was held that the transfers of the thirty-two thousand shares were complete and effectual before the execution of the will, and that the principle of advancement was not applicable. It thus appears that the arguments of the appellants have failed to convince either one of three tribunals that the positions lying at the bottom of their contention were well founded, and after the most careful consideration, we find no error in the determination of which they now complain. So far, indeed, as Mr. Quintará and Mr. Whitney are concerned, I do not understand that the learned counsel for the appellant makes any claim that the shares transferred to them are to go back to the estate, or be taken account of in any way, as against the executrix. So far as the shares claimed by Mrs. Morgan are concerned, they cannot be affected by any considerations growing out of the statute relating to advancements, for such a set-off as allowed only against children. 1 Rev. St., p. 754, § 23. So far as the validity of the transfer of that portion, and the residue of the 30,000 shares, depends upon a perfected delivery to the donees, the evidence warrants the conclusion that nothing was left undone which was necessary to be done to deprive Mr. Morgan of the title thereto.

Upon the question of advancement, the cases cited by the appellants are numerous ; but, upon the circumstances of the case, ineffectual to change the result reached by the court below. They do not show, nor has any case been found to show, that a gift to one, entitled as a child to share in the estate of the donor, will be held to be an advancement when it expressly appears to have been tlie intention of the father that the gift should not be considered as such. The evidence goes to that length in this case, and overcomes the presumption which might otherwise attach. It sustains the finding of the surrogate that “ the transfers were not made by Charles Morgan as advancements, or by way of settlement or portion in life, but were made for business reasons, connected with or growing out of the operations and prospects of the said corporation, and with the intent on his part that, by means of said transfers and other dispositions of property, simultaneously made by him, a controlling interest in the capital stock of the said corporation should be vested in his said transferees.”

The acts of the testator, and his declarations, permit no other interpretation. If by his will it is apparent that he intended all his children to share in the distribution of his estate, his conduct and his words in parting with portions of it before he made the will show clearly that he did not intend they should share equally. Circumstances of his own creation leave no doubt as to his design, and show that in his mind inequality was equity. It would, we think, defeat his purpose if the court should hold that the gift under the will should be impaired or lessened by his previous bounty.

I do not intend, however, to discuss this ease at any length. It has been sufficiently examined and discussed by the courts below, and it would be a useless repetition to do more than announce our conclusions.

In the first place, We are of opinion that the evidence warrants the conclusions of the surrogate that the transfers of stock were complete, and that the legal title of the shares passed to the donees before the execution of the will; (2) that none of the stock thus transferred was intended by the donor to be advances by way of settlement or portion, but the contrary. These propositions depended upon inferences from evidence which, if not all one way, was certainly not altogether in favor of the appellant’s view. On the part of the donor was the expression of an intention to give, the actual delivery of written instruments declaring that intention,, and sufficient to warrant the transfer of title upon the records of the corporation, and which proved to be legally available for that purpose. Every act essential to deprive the donor of his possession and title was performed, and the actual as well as the apparent title vested in the donees. The evidence allows this view. If, as the appellant claims, the testimony of the witness Margaret Dobson, or some expressions in that of others, permits in either respect a different conclusion, neither the referee nor surrogate nor general term deemed it satisfactory or controlling. It follows that neither the shares of stock, nor the value thereof, were to be reckoned as part of the testator’s estate, nor the donees, who were distributees also, to be charged therewith in estimating the amount of their respective shares under his will.'

A single question remains. An exception was taken before the referee to evidence, but, so far as appears, not presented to the general term. One L. was called by the proponent. It appeared at the outset of his examination that he was a lawyer, residing in New Orleans, holding there the relation of attorney and counsel to Mr. Morgan, (the testator,) and that at his request he came to New York, where he was consulted and employed by him, among other things, in relation to the stock in question, its certificates and transfer, and other affairs connected with it, his property, and his plans and desires in regard to it. The examination of the witness on these subjects continued to such length that in the printed record it covers nearly nine pages, with only a single. objection, interjected at a point where the witness was speaking of one of his interviews with Mr. Morgan in regard to the law of this state relating to the distribution of the property of an intestate. The witness had stated that on the second of April he made a brief statement to the testator in regard thereto, and subsequently, on the day before he made his will, a very full statement. He was then asked, “ What was that statement ? ” and the counsel for contestants .objected as immaterial and incompetent. It is obvious that this objection was too general, and did not raise the question now presented. It was overruled and the witness answered fully, and continued in regard to the execution of the transfers the day before the will was executed, saying : “ I did not, at that time, state to him anything about the law of New York as to wills.” “ At this point the contestant’s counsel (Mr. Parsons) objected to any testimony as to what passed between the witness and Mr. Morgan preliminary’to the execution of the will, or anything about the subject of his property, as immaterial and incompetent. Mr. Davison, on behalf of the minors, represented by himself and Mr. Burrill, unites in the objection. Mr. Choate, for the executrix, suggests that the objection ought not to apply to what has already come from the witness. The counsel should not wait'Until they hear what the evidence is before objecting to its incompetency, and that such objection can only be properly applied to what is to come hereafter. Mr. Parsons makes the further objection that what passed between this witness and Mr. Morgan is privileged, and protected by the relation of client and counsel. Mr. Davison joins in the objection, as before. Objection overruled. Exception.”

This is the exception relied upon. It can have no force, so far as the testimony which preceded it is concerned. To that extent the witness had gone without interruption, and he must be deemed to have been thought competent, and his evidence admissible, by both parties. Moreover, at the precise point where the objection was made, the witness was testifying in answer to the question, “ Tell what he [Mr. Morgan] said.” To that question no objection was interposed, and he had completed his answer and narration as to what occurred at the interview of which he was speaking. Then came the objection. If, as would seem, it had reference to testimony already given, it came too late. It is entirely clear that a party who has sat by during the reception of incompetent evidence without properly objecting thereto, and thus taken his chance of advantage to be derived by him therefrom, has not, when he finds such evidence prejudicial, a legal right to require the same to be stricken out. But even if the referee or surrogate could, in their discretion, strike out any of the testimony, no request was made that either should do so. If the objection related to evidence which might follow, it was too general. There was no new question to the witness, nor any offer of evidence. As to what followed, therefore, the objection was premature. It was not repeated. But assuming it to be good as to all that followed in the answer of the witness before the next question was put, it becomes unimportant. So much might be stricken out without impairing the weight of the evidence or in any way affecting the conclusion reached upon the merits by either court. In no aspect could the exception require a new trial. For the evidence admitted under it fails to create even a susnicion that the exceptant was necessarily prejudiced thereby. Code, § 2545.

The judgment should be affirmed, with costs to the respondents to be paid by the appellants.

All concur.


author: Andrews, J.

text:
    Emory A. Chase et al, Executors, etc. App’lts, v. William Belden, Resp’t.

      (Court of Appeals,

      Filed January 18, 1887.)
    1. Ships — COLLISION — Pleasuee taohts are coasting- vessels, — U. S. Rev. Stat., § 4233, rule 7, governs as to lights.
    Where an action was brought against the owner of a steam pleasure yacht for the value of a steamboat sunk in a collision with the said yacht while both vessels were navigating the Hudson river. Held, that the yacht was by proper nomenclature a “ coasting vessel,” and was therefore within the express terms of rule 7, as laid down in U. S. Rev. Stat., § 4233, bound to carry the central range of lights.
    2. Same — Ships papers help to determine class.
    In order to decide upon the classification of a vessel in regard to the lights to be carried by her, reference must be made to the statute and the ship’s enrollment and license.

      3. Same — When- navigating inland watees, a coasting vessel.
    Where the enrollment was in conformity to title 4 of the U. S. Kev. Stat., and her license was a coasting license, with the added privilege of going to sea to foreign ports. Held, that while in the Hudson river she was navigating under her license in the character of a coasting vessel.
    This is an appeal from a judgment of the general term of the third department, affirming a judgment of nonsuit on the trial of the issues before Justice Osborn and a jury at the Ulster circuit. The action was originally brought by William Donahue, the testator of the present plaintiffs, to recover the value of the steamboat Charlotte Vanderbilt, from William Belden, the respondent, owner of the steam yacht Yosemite, for the running down of the Vanderbilt by the Yosemite, near Esopus Meadow light-house on the Hudson river, at between nine and ten o’clock in the evening of July 14, 1882. The value of the Vanderbilt was admitted to be $16,000, and that she was a total loss. The Vanderbilt was a freight and passenger steamboat, running between Albany and New York on the Hudson river, and at the time of the collision was on her way to the city of New York. The Yosemite was an iron steam pleasure yacht, of four hundred and eighty-one tons burden, with two masts, and having sails which were furled at the time of the collision. When the collision happened she was under steam, on a trip from New York to Catskill, and proceeding at the rate of about sixteen miles an hour. She carried the usual red and green lights, and at her foremast a white light, corresponding in character and position with the lights prescribed for ocean-going steamers and steamers carrying sail, by section 4233, rule 3 of the Revised Statutes of the United States. She was enrolled in conformity with title 50, entitled “ regulation of vessels in domestic commerce,” of the Revised Statutes of the United States, and was licensed in pursuance of chapter 2, title 48 of .the same statutes, “ exclusively as a pleasure vessel, and designed as a model of naval architecture,” with leave “ to proceed from port to port of the United States, and by sea to foreign ports, without entering or clearing at the custom-house, but not to be allowed to transport merchandise, or any passengers for pay.”
    There is a great mass of evidence in respect to the circumstances of the collision ; on the part of the plaintiff, for the purpose of showing that the collision was caused by the negligence of the Yosemite, and especially from her failure to carry the proper lights, and on the part of the defendant to show that it was caused by the mismanagement and neglect of the Vanderbilt.

    The court, at the conclusion of the case, nonsuited the plaintiffs on the ground that no negligence had been shown on the part of the defendant, and especially that the principal ground of negligence on tbe part of tbe defendant, relied upon by tbe plaintiffs, viz.: That tbe Yosemite did not carry the proper lights, was not true, tbe court bolding that she did carry at the time the lights required.
    As the case turns upon the question of lights, it is only necessary in addition to the foregoing facts to state the rules as to lights upon steam vessels prescribed by section 4233 of the Revised Statutes of the United States, so far as material here :
    “Rule 1. Every steam vessel which is under sail, and not under steam, shall he considered a sail vessel, and every steam vessel which is under steam, whether under sail or not, shall be considered a steam vessel.
    “ Rule 2. The lights mentioned in the following rules and no others shall be carried in all weathers between sunset and sunrise.
    “ Rule 3. All ocean-going steamers and steamers carrying sail shall, when under way, carry _
    “ (A) At the foremast head a bright white light of such a character as to be visible on a dark night, with a clear atmostphere, at a distance of at least five miles, and so constructed as to show a uniform and unbroken light over an arc of the horizon of twenty points of the compass, and so fixed as to throw the light ten points on each side of the vessel, namely: from right ahead to two points abaft the beam on either side.
    “ (B) On the starboard side, a green light of such a character as to be visible •on a dark night, with a clear atmosphere, at a distance of at least two miles, and so constructed as to show a uniform and unbroken light over an arc of the horsion of ten points of the compass, and so fixed as to throw the light from right ahead to two points abaft the beam on the starboard side.
    _ “ (C) On the port side, a red light of such a character as to be visible on a dark night, with a clear atmosphere, at a distance of at least two miles, and so constructed as to show a uniform and unbroken light over an arc of the horizon of ten points of the compass, and so fixed as to throw the light from right ahead to two points abaft the beam on the port side.
    “ The green and red lights- shall be fitted with inboard screens projecting at least three feet forward from the lights, so as to prevent them from being seen across the bow.
    “ Rule 4. Steam vessels, when towing other vessels, shall carry two bright white masthead lights vertically, in addition to their side lights, so as to distinguish them from other steam vessels. Each of these masthead lights shall be of the same character and construction as the masthead lights prescribed by Rule 3.
    “ Rule 5. All steam vessels other than ocean-going steamers and steamers carrying sail shall, when under way, carry on the starboard and port sides lights of the same character and construction and in the same position as are prescribed for side-lights by Rule 3, except in the case provided in Rule 6.
    “Rule 6. River-steamers navigating waters flowing into the Gulf of Mexico, and their tributaries, shall carry the following lights, namely: One red light on the outboard side of the port smoke-pipe, and one green light on the outboard side of the starboard smoke-pipe. Such lights shall show both forward and 'abeam on their respective sides.
    “ Rule 7. All coasting steam-vessels, and steam-vessels other than ferryboats and vessels otherwise expressly provided for, navigating the bays, lakes, rivers, or other inland waters of the United States, except those mentioned in Rule 6, shall carry the red and green lights, as prescribed for ocean-going steamers; and in addition thereto, a central range of two white lights; the after-light being carried at an elevation of at least fifteen feet above the light at the head of the vessel. The head light shall be so constructed as to show a good light through twenty points of the compass, namely: from right ahead to two points abaft the beam on either side of the vessel; and the after-light so as to show all around the horizon. The lights for ferry boats shall be regulated by such rules as the board of supervising inspectors of steam-vessels shall prescribe.

      ■Cantine Hallock and Jennings Chase, for appl’ts; Luther II. Marsh and William, Gr. Wilson, for resp’t.

       Reversing, 37 Hun, 642; Appeal to General Term on First Trial, 37 Hun, 571.

   Andrews, J.

The plaintiffs were nonsuited on tire ground, that the Yosemite, at the time of the collision, had the proper lights, and that no negligence was imputable to her on any other ground. This ruling was affirmed by the general term.

The right of the defendant to maintain this judgment must,, we think, tarn upon the correctness of the ruling that the Yosemite carried the proper lights. The counsel for the defendant, while strenuously maintaining that the Yosemite had the proper lights, also insists that, if the court below erred in this respect, nevertheless the nonsuit should be affirmed on the ground that-the collision did not result from this omission of duty, but was solely attributable to the mismanagement of the Vanderbilt. The question whether there was any negligence on the part of the Vanderbilt, which would bar a recovery, was not considered, or decided on the trial. The nonsuit was put exclusively upon the absence of negligence on the part of the Yosemite, and was affirmed on that ground by the general term. If the ruling on the question of lights was erroneous, the case should, we think, be sent back for a new trial, on which the question as to the negligence of the Vanderbilt can be presented and considered.

The question whether the Yosemite, at the time of the collision, carried the proper lights, depends upon the construction of the rules for preventing collisions on water, prescribed in tit. 48, c. 5, Rev. St. U. S., as applied to the Yosemite while navigating the Hudson river. The rules prescribing the lights to be carried by steam-vessels divide such vessels into three classes: First, “ ocean-going steamers, and steamers carrying sail,” embraced in rule 3; second, “river steamers, navigating waters, flowing into the gulf of Mexico, and their tributaries,” embraced in rule 6; and, third, “ all coasting vessels, and vessels other than ferry-boats and vessels otherwise expressly provided for, navigating the bays, lakes, rivers or other inland waters of the United States, except those mentioned in rule 6,” embraced in rule 7. In addition, rule 4 prescribes the lights to be carried by steam-vessels when towing other vessels, which appears to be of general application. The Yosemite, at the time of the collision,had a green light on her starboard side, a red light on her port side, and at the foremast head a white light, being the light prescribed for “ ocean-going steamers, and steamers carrying sail.

It is insisted on the part of the defendant that the Yosemite was “ an ocean-going steamer, and a steamer carrying sail,” and was bound to carry the lights prescribed in rule 3, whether navigating the' ocean or inland waters. The counsel for the plaintiff, however, denies that the Yosemite was, at the time of the collision, “ an ocean-going steamer, and a steamer carrying sail,” within the meaning of rule 3, and insists that the words “ ocean-going steamer, and a steamer carrying sail,” are descriptive only of steamers while traversing the ocean, and when on the high seas; and that every steamer, except those mentioned in rule 6, while navigating inland waters, is bound to carry a “ central range of two white lights,” as prescribed in rule 7, whatever may be its general character as an ocean or inland vessel. We deem it unnecessary to decide this general question. The Yosemite was, we think, in legal character and by proper nomenclature, a “ coasting vessel,” and was therefore, within the express terms of rule 7, bound to carry the central range of lights prescribed in that rule. Even if this may not be absolutely true of the Yosemite in all situations, it Avas nevertheless true of her when navigating inland waters. If the Yosemite was a coasting vessel, it becomes quite unimportant to determine the true construction of the limiting clauses in rule 7.

The rule, in express words, applies to “ all coasting steam-vessels,” and plainly no vessels of that character are, by the subsequent language, excepted from the obligation to carry the central range lights. The legal character of a vessel is to be determined by a reference to the statute and the ship’s papers. The Yosemite was a yacht used and employed exclusively as a pleasure vessel, and designed as a model of naval architecture, and is so described in her license. By section 1, o. 141, of the United States Statutes of 1848, the secretary of the treasury Avas authorized to cause yachts, “ used and employed exclusively as pleasure vessels, and designed as models of naval architecture,” if entitled to be enrolled as American vessels, to be licensed “ to proceed from port to' port of the United States, Avithout entering or clearing at the custom house.” This statute was amended by section 1, c. 170, of the United States Statutes of 1870, by inserting after the words “United States,” the Avords “ and by sea to foreign ports; ” and the original statute, as amended by the act of 1870, now stands as section 4214 of the Revised Statutes.

It will be observed that under the statute of 1848, yachts licensed thereunder were exclusively coasting vessels. By the amendment they might have a double character, viz., that of coasting vessels, and vessels entitled to go upon the seas to foreign ports. The Yosemite, at the time of the collision, was enrolled at the port of New York, and her certificate of enrollment recited that it was given in conformity to title 50 of the United States Revised Statutes, entitled “ Regulations of Vessels in Domestic Commerce.” She Avas also licensed, and her license recites that it was granted in pursuance of chapter 5, .title 48, entitled “ Regulations of Commerce and Navigation.” By reference to title 50 of the United States Revised Statutes, under which the Yosemite was enrolled, it Avill be found that it relates exclusively to coasting and fishing vessels. The title next preceding, viz., title 49, is entitled “ Regulations of Vessels in Foreign Commerce.” It thus appears that the Yosemite was enrolled under the statute relating to coasting vessels, and her license was a coasting license, with the added privilege of going by sea to foreign ports. It does not seem to admit of reasonable doubt, having reference to the statute and to the enrollment and license, that the Yosemite, while navigating the Hudson river, was navigating under her license in the character of a coasting-vessel. This brought her within the operation of rule 7, and. she was therefore in fault in not carrying the lights prescribed by that rule.

If the collision had happened upon the high seas, another question would be presented. In the case of The Glaucus, which came before Lowell, J., in the United States district, court of Massachusetts, referred to in a note in Parsons on Shipping and Admiralty, (vol. 1, p. 562,) which arose under the act of 1866, (14 U. S. St. at Large, c. 234, § 11,) of which section 4233 of the Revised- Statutes is, in substance, a re-enactment, it appeared that the Grlaueus, a steamer bound from New York to Boston, came into collision with a sailing vessel on Long Island sound. The steamer had, in addition to her two side lights, two white lights, one at her bow and one at her masthead. It was contended that she should have had only one white light. Lowell, J., speaking of the act of 1866, said: “Its language does not seem to be very happily chosen. It puts ocean steamers and steamers carrying sail in one class, with one sort of light, and coasting steamers in another, with a different sort, whereas most of the coasting steamers on the Atlantic coast are both ocean going and carrying sail, so that it may sometimes be difficult for the persons concerned to know to which order they belong.” The point, it is said, was not decided. See The Continental, 14 Wall, 345. It is not necessary to decide the point in this case. It is decisive here that the Yosemite, at the time of the collision, was navigating inland waters under a coasting license, and that by the explicit language of Rule 7, she was-bound to carry the central range of lights.

The judgment should be reversed and a new trial granted.

All concur.


text:
    People ex rel. Attorney-General, Resp’t v. New York, Lake Erie and Western R. R. Co., Appl’t.

      (Court of Appeals,

      Filed January, 18, 1887.)
    1. RAILROADS — OBLIGATION TO PROVIDE STATION ACCOMMODATION S — At COMMON LAW.
    At common law the defendant, as á carrier, is under no obligation to provide warehouses for freight offered it, or depots for passengers waiting transportation.
    2. Same — Railroad commissioners — Their powers and duties — Laws-1882, chapter 353.
    Chapter 353, Laws of 18S2, which creates the board of railroad commissioners, gives the commissioners no power to compel any addition to or change of the stations or station houses of the various railroads, which they may deem proper to promote the security, convenience or accommodation of the public. The power of a company to provide such buildings is, under the statutes, a permissive one only. If the corporation choose to exercise it, it may. »
    S. Maotamus — The pebfobmance op what duties can be compelled BY.
    If the duty sought to be imposed upon the defendant is not a specific duty prescribed by statute, either in terms or by reasonable construction, the court cannot, no matter how apparent the necessity, enforce its performance by mandamus.
    Appeal from an order of the supreme court, general term, Fifth Department, affirming an order of the Erie county special Term, directing a peremptory writ of mandamus directing the defendant to erect a certain station-house.
    The facts and questions raised are sufficiently stated in the opinion.

      Sprague, Morey Sprague, for App’lt; Denis O’Brien, Att’yGen’l for resp’t.

       Reversing 2 New Tork State R., 237; 40 Hun, 571.

   Danforth, J.

Upon motion, on notice by the attorney-general, for a mandamus requiring the defendant to construct<and maintain, on the line of its road at the village of Hamburg, a building of sufficient capacity to accommodate its passengers arriving at that place, or departing therefrom, or in waiting to depart, and such freight as is usually received at or shipped from that point, it appeared that the village of Hamburgh contains 1,200 inhabitants, and furnishes to the defendant, at a station established by it, a large freight and passenger business ; that its depot building is entirely inadequate for these purposes, and the absence of a depot building and warehouse, sufficient for the accommodation of passengers and freight, has been, and continues to be, a matter of serious damage to large numbers of persons doing business at that station. These facts were conceded by the defendant. It also appeared that upon complaint made to the railroad commissioners, upon notice to the defendant, that body adjudged and recommended that the railroad company should construct a suitable building at that station, within a 'time named ; but although informed of this determination, the defendant failed to comply, or do anything towards complying with it, not for want of means or ability to do so, but because “ its directors decided that the interests of the defendant required it to postpone, for the present, the erection or enlargement of the station-house or depot at the village of Hamburgh.”

The supreme court, at special term, granted the motion, and, adopting the language of the railroad commissioners, ordered that the defendant “ forthwith construct and maintain a suitable depot building of sufficien^size and capacity to accommodate passengers arriving and departing on said road at tire village of Hambnrgb, as well as such passengers as may be in waiting on ordinary occasions to depart from the said village, on the line and by the way of said defendant’s road, and of sufficient capacity to accommodate sudh quantities of freight as are usually received at said village, or that may be shipped therefrom, by the way of said New York, Lake Erie & Western Railroad.”

Upon appeal to the general term, the order, after very careful consideration, was affirmed. The railroad company appeals.

We agree with the court below that, at common law, the defendant, as a carrier, is under no obligation to provide warehouses for freight offered it, or depots for passengers waiting transportation. But that court has found such duty to be imposed by statute. To this we are unable to assent. The question arises upon the construction of the general railroad act, (Laws 1850, ch. 140,) and its amendments. Under that act may companies many have been formed to construct, maintain, and operate railroads in a manner so affecting persons and private property as to be utterly indefensible, except upon the theory formulated by the express words of the statute, that the roads, when constructed, should be “ for public use in the conveyance of persons and property.” To promote that purpose, and for that purpose, only, such company may take the property of a citizen without his consent, (sections 1, 18;) interfere with his travel and transportation by changing the lines of highways as may be desirable, with a view to the more easy ascent or descent of their own road, (section 24 ;) and even appropriate to its purposes the land of a town or county or the state, (section 25.) All these and other like powers are justified upon the ground that, when exercised, they are the acts of the government, performed indirectly through the medium of a corporate body. It follows, of course, that the legislature has control over it, and may compel the exercise of its functions, and direct the management of its business, and use of the road, as in their judgment will best subserve the public interest.

The court below does not find, nor does the respondent claim, that the legislature has, at any time, in express and specific terms, imposed upon a railroad company the duty of erecting or maintaining a depot or warehouse. It is sought to be implied. The company is empowered to erect and maintain all necessary and convenient buildings, stations, etc., “for the accommodation and use of their passengers, freight, and business,” (Id., § 28, subd. 8 ;) and may acquire and hold real estate and other property for these purposes, “ as may be necessary to accomplish the object of its incorporation.” There are some other provisions in the same direction ; none go further than those cited. But from these, and from the circumstances first referred to, that the company is exercising a public^rst, and to that cause owes its existence and capacity to enjoy and profit by the franchise it has accepted, it is argued by the respondent that the right to construct a station, and its necessity, carries with it an obligation to do so in a proper manner. •

In regard to the facts there is no dispute. A plainer case could hardly be presented of a deliberate and intentional disregard of the public interest and the accommodation of the public. The railroad commissioners have thought that it was essential for those purposes that a new and enlarged building for passengers and freight should be erected. That, it is true, was a question for them to decide. The statute (Laws 1882, ch. 353) created a commission of “ competent personsrequired from them an official constitutional oath ; assigned to them an office for the transaction of business ; provided a clerk to administer oaths to witnesses, and a marshal to summon them ; gave full power of investigation and supervision of all railroads and their condition, with reference not only to the security, but accommodation of the public ; and declared that whenever, in their judgment, it shall appear, among other things, that any addition to or change of the stations or station-houses is necessary to promote the security, convenience, or accommodation of the public, they shall give notice to the corporation of the improvements and changes which they deem to be proper, and, if they are not made, they shall present the facts to the attorney-general for his consideration and action, and also to the legislature. All these things have been done. The commissioners have heard and decided. They can do no more. After so much preliminary action by a body wisely organized to exercise useful and beneficial functions, it might well be thought unfortunate that some additional machinery had not been provided to carry into effect their decision. By creating the statute recognizes the necessity for such a tribunal to adjust conflicting interests and controversies between the people and the corporar tion. It has clothed it with judicial powers to hear, and determine, upon notice, questions arising between these parties, but it goes no further. Its proceedings and determinations, however characterized, amount to nothing more than an inquest of information. We find no law by which a court can carry into effect their decision. At this point the law fails, not only by its incompleteness and omission to furnish a remedy, but by its express provision that no request or advice of the board, “ nor any investigation or report made by it,” shall have the effect to im-pare the legal rights of any railroad corporation. The attorney general is given no new power. He may consider the result of the investigation made by the commissioners, and their decision, and so may the company; but we must look further for his right of action, and the corporation disregarding the judgment of the commissioners, may continue the management of its business in its own way, — may determine in its own direction to> wbat extent, and in what manner, the exercise of a public trust requires it to subserve the “ security, convenience, and accommodation of the public.”

It may admit, as they do in this case, “ the accommodations we furnish are not sufficient, they are not suitable; the omission to furnish different and better, entails injury upon the public; but we will give no better, nor make alterations, until we choose.” The railroad commissioners are powerless, and, as the law now stands, neither the attorney-general of the state nor its courts can make their order effectual.

Cases are cited by the respondent in support of a different contention. Some of them turn upon statutory provisions, as those arising in Connecticut, where the law makes the order of the commissioners effectual by authorizing its enforcement. State v. Railroad Co., 87 Conn., 153. Under our statute, the public gain nothing in any legal sense from the determination of the commissioners. It is not enforceable as a judgment; it is not even a command, if it affects the railroad company at all; it is as advice merely. It can compel them only through the interposition of the legislature, who may, indeed, make it effectual by action upon their report, or by some general law, if it be deemed expedient, giving force and efficacy to their determinations.

In the next place, as the duty sought to be imposed on the defendant is not a specific duty prescribed by the statute, either in terms or by reasonable construction, the court cannot, no matter how apparent the necessity, enforce its performance by mandamus. It cannot compel the erection of a station-house nor the enlargement of one. The power of the company to provide such buildings is, under the statutes, a permissive one only. If the corporation choose to exercise it it may. The statute does not exact it. It specifies certain things which the company shall not do. It specifies many things which it shall do, as, among others, “ start and run its cars for the transportation of passengers and property, at regular times, to he fixed by public notice, and furnish sufficient accommodations for the transportation of all such passengers and property “ as shall, within a reasonable time previous thereto, being offered for transportation at the place of starting and at the junctions of other railroads, and at usual stopping places established for receiving and discharging way passengers and freight for that train, and shall take, transport and discharge such passengers and property at and from and to such places, on the due payment of fare or freight legally authorized therefor, and shall be liable to the party aggrieved, in an action for damages, for any neglect or refusal in the premises; ” and it must do some other specified things for their accommodation.

The statute is peremptory as to many matters, but it nowhere says that for its intending passengers or waiting freights cover by building of any hind shall be provided. As to that, the statute imports an authority only, not a command, to be availed of at the option of the company in the discretion of its directors, who are empowered by statute to manage “ its affairs,” among which must be classed the expenditure of money for station buildings or other structures for the promotion of the convenience of the public, having regard also to their own interest. With the exercise of that discretion the legislature only can interfere. No doubt, as the respondent argues, the' court may, by mandamus, also act in certain cases affecting” corporate matters, but only where the duty concerned in specific and plainly imposed upon the corporation. It was so in People v. D & C. R. R. Co., 58 N. Y., 152, where the defendant was compelled to restore an invaded highway to its former usefulness — a statutory duty — Laws of 1850 cl. 140, § 28, subd. 5; so in People ex rel. Kimball, v. B. & A. R. R. Co., 70 N.Y., 569, to build a bridge as directed to by statute — Laws of 1874, chap. 648; in People, etc., v. R. & S. L. R. R. Co., 76 N. Y., 294, to erect fences as directed by statute 1850, supra. All these cases cited by the learned Attorney-General, and there are many others, go upon the ground above stated.

Such is not the case before us. The grievance complained of is an obvious one, but the burden of removing it can be imposed upon the defendant only by legislation. The Legislature created it upon the theory that its functions should be exercised for the public benefit. It may add other regulations to those now binding it; but the court can interfere only to enforce a duty declared by law. The one presented in this case is not of that character, nor can it by any fair or reasonable construction be implied.

The whole subject of the relation between the company and its passengers and freighters appears to have been in contemplation of the 'Legislature. Certain acts towards them as we have seen are made imperative as duties (§ 36); others, and among them the erection of stations and buildings, are made possible by permission. Sec. 28, sub. 8.

We cannot disregard this difference in language, and give by implication to one phrase the same force and meaning which the Legislature has by express terms conveyed in the other. We are constrained therefore to hold that the appeal must succeed.

The order appealed from should be reversed and the motion denied, with costs.

All concur, Rapallo J., in result.


author: Finch. J.

text:
    Jacob H. Conklin et al., Trustees, Appl’ts, v. Garrett Z. Snider, Exr., Impleaded, etc., Resp’t.

      (Court of Appeals,

      Filed January 18, 1887.)
    1. Practice — Appeal — StiptoatioN for judgment absolute.
    On an appeal from a judgment entered on a referee’s report the general term reversed the judgment and ordered a new trial because of the admission of incompetent evidence. An appeal from this order was taken, and the required stipulation to allow judgment absolute on this order being affirmed, was given. The Court of Appeals held the evidence competent, but that as to certain land included in the judgment the evidence was not sufficiently definite, and that therefore the general term order was not erroneous, but Held, that this order having been a proper one this court cannot reverse, but must affirm it, and that the plaintiff’s stipulation on appeal to said court compels an award of judgment absolute against them, although the court can see that plaintiffs might have been entitled to a part of their relief. (Por exception, see case.)
    2. Same — Affirming conditionally — Discretionary with General Term.
    That although the General Term might have made an alternative order permitting the plaintiffs to limit their judgment to certain of the lands (concerning which there was sufficient proof), and on their stipulating so to do, affirming the-judgment as modified, it was a matter of discretion, and it was not error instead to award a new trial.
    ■3. Evidence — When competent — Code Civ. Pro., § 829.
    In an action brought by a trustee against the executor of his co-trustee to have lands standing in the name of said deceased trustee’s name declared part of the trust estate. One who had been brother-in-law of the deceased trustee, who was not personally interested in the trust estate, but whose children were, was examined as a witness concerning conversations had with the deceased. Held, that he was a competent witness.
    Appeal from an order of tbe supreme court general term second department reversing a judgment of the Kings county special term in favor of the plaintiffs entered on the report of a referee.
    This action was brought for an accounting against the executors of one Edward J. Straut, deceased, and to have certain lands conveyed to the said Edward J. Straut declared to be part of the trust estate created by the will of Jacob Straut, deceased, of which estate the said Edward was trustee previous to his death. The case was tried before a referee, who allowed one John Cooper, a party defendant, to testify in behalf of the plaintiffs, after objection and exception duly taken by defendant to certain conversations had with the said Edward J. Straut relative to the lands in question. John Cooper had married Hannah Straut who was the half-sister of Edward J. Straut and a beneficiary under the will of Jacob Straut. There were several children issue of this marriage who claimed an interest in the trust estate. Mrs. Cooper, their mother, died intermediarte the commencement of the action and the trial.

      Wm. J. Hardy, for applt’s; Irving Browne, for resp’t.

       Affirming 36 Hun, 642 mem.

   Finch. J.

While we do not agree with all the reasons given by the general term for its order of reversal and award of a new trial, we feel bound to affirm that order. The action was brought to reclaim for a trust-estate several groups of real property, alleged to have been purchased by the trustee in his own name, as an individual, but with the trust funds. The referee found in favor of the plaintiffs, determining-that all the lands described in the complaint belonged to the trust. On appeal, the general term reversed the judgment, assigning as reasons that the testimony of one of the parties to personal conversations with a deceased testator was improperly admitted, and that the trust funds were not satisfactorily traced by the evidence into any of the lands referred to. We think the testimony of Cooper was not offered or given in his own behalf, and was admissible, and that the evidence very fully and fairly demonstrated that a portion of the lands, known in the case as the “ Brooklyn property,” did belong to the trust-estate, but that, as to the rest of the property, the proof fell far short of the certainty and definiteness required. It is not needful to explain the grounds of our opinion, so far as it differs from that of the general term, because, if that of the latter had been identical with our own, it would still have been the duty of the court to have reversed the judgment of the referee, and awarded a new trial for the error committed as to the property other than the Brooklyn lands. We cannot say, therefore, that the order of the general term was erroneous. ' Possibly it might have made an alternative order, permitting the plaintiffs to limit their judgment to the Brooklyn lands, and, on their stipulating so to do, affirming the judgment as modified; but that was matter of discretion, and it was not error instead to award a new trial.

The defeated plaintiffs were beaten for lack of evidence, and were entitled to an opportunity to strengthen their case in any of its parts, for the decision left a recovery by them possible. The order of the general term having been a proper one, we cannot reverse, but must affirm it, and the plaintiff’s stipulation on the appeal to this court compels an award of judgment absolute against them. We have once or twice, in cases where the error which might have justified a reversal was merely incidental, capable of accurate correction, modified the judgment by correcting the error, but those were instances in which we thought a new trial ought not to have been awarded, (Wright v. Nostrand, 98 N. Y., 689,) since there could be no recovery for what had been erroneously allowed. Here such a recovery was possible, and the award of a new trial Avas a proper order for the general term to make, and we must affirm it, and order judgment absolute, although we can see that plaintiffs might have been entitled to a part of their relief. Gray v. Board of Sup’rs, 93 N.Y., 608; Thomas v. New York Life Ins. Co., 99 N. Y., 250; Godfrey v. Moser, 66 N. Y. 250. They chose to take the peril of their stipulation.

Order of the general term affirmed, and judgment absolute •directed against plaintiffs.

(All concur.)


author: Ruger, Ch. J.

text:
    Frederick S. Heiser, Exr., Appl’t, v. Mayor, Aldermen, Etc., of New York City, Resp’ts.

      (Court of Appeals,

      Filed January 18, 1887.)
    I. Taxes ajstd Assessments — Municipal Corporation — New York (City of) Local improvement — Grading streets — Awards and assessments — Setting aside for fraud — Laws 1872, Chap. 729.
    The complaint in an action against the city of New York for damages (done to real property hy the change in grade of Eighth avenue in said city; under chapter 729, Laws 1872) alleged fraud on the part of the assessors in “ that the said hoard of assessors without due and proper or any actual notice to the plaintiff proceeded to and did make the assessment and file the certificate required by said act.” Even assuming that this was fraudulently done; held that it constituted an irregularity merely which was open to review and correction upon certiorari and afforded no ground for an independent action to assail the award, the board having acted in a judicial capacity. That the complaint was properly dismissed.
    .2. Same — Separate action.
    'The plaintiff had a simple and sufficient remedy at law for the injuries complained of and gave no reason why such relief was not obtained in a direct proceeding to review the determination of the assessors. Held, that his failure to prosecute this remedy to a successful termination furnishes no ground for a court of equity to entertain an independent action to set aside the award.
    -3. Same — Assessors under chapter 129, laws 1872, not city officers.

      Held that the members of the board of assessors did not, in performing the duties enjoined upon it by said statute, act as the servants or officers of the defendant but constituted an independent tribunal, deriving their whole authority from the statute and owing no duty to and subject to no direction or control by the defendant.
    -4. Same — Mode of compensation.
    In the csae of public improvements authorized by statute in the course of which a mode of compensation is provided for persons injured thereby; Reid, that such mode is exclusive, and no right of action exists - in their favor except that directed in the statute.
    Appeal from a judgment of tbe supreme court, general term, first department, affirming a judgment of tbe New York county special term", dismissing a complaint in an action to vacate an assessment for damages for changing the grade of Eighth avenue, in New York city.

      Nathaniel C. Moak, with H. M. Whitehead, for appl’t; David J. Dean with JE. Henry Lacombe, for resp’ts.
   Ruger, Ch. J.

At the trial the complaint was dismissed upon the opening, on the ground that no cause of action was stated.

The language of the opening is not set forth in the case, but is conceded to have been no broader than the complaint, and that if no legal canse of action is stated therein the action must fail.

The complain alleges substantially that by chapter 729 of the Laws of 1872, the defendant became liable to persons owning lots on Eighth avenue in the city of New York, upon which buildings were erected for such damages as had been or might be occasioned to them by reason of change of grade in that street; the plaintiff’s testator was the owner of a certain lot and buildings on said avenue which had been seriously damaged by such changes, and that the board of assessors of the city of New York, with intent to injure and defraud the plaintiff, did on the 28th of March, 1876, illegally, covertly and fraudulently make and file in the finance department in the city of New York, a statement and award of the amount of damages, loss and injury sustained by Christina E. Smith, the plaintiff’s testator, for damages to her said property, amounting to $5,000, and at or about the same time the board made and filed in the said finance department an assessment and certificate thereof against said property for benefit by reason of said changes of grade of said avenue in the sum of $5;000; ” that said assessors proceeded without any notice and in violation of the promise and agreement of said board with the plaintiff, to fix a time for hearing the proofs and arguments of the plaintiff; “that the said board, of assessors without due and proper, or any actual notice to the plaintiff, proceeded to, and did make the assessment, and file the certificate required by said act; ” that said assessments and certificates were so made and filed “ unlawfully and fraudulently, and with the intent to deprive the plaintiff of the damages ” inflicted upon her premises.

The relief prayed for was that the certificate of assessment for damages and for benefit might both be vacated and that the plaintiff might recover damages against the defendant for $150,-000.

In dismissing the complaint the court below acted upon the assumption that the gravamen of the complaint was fraud, and the damages claimed were those suffered by the plaintiff from the illegal and fraudulent conduct of the board of assessors in making the award and assessment in the manner described, and held that the defendant was not responsible for such damages.

It was very properly held that the members of the board of assessors did not, in performing the duties enjoined upon it by the act of 1872, act as the servants or officers of the defendant, but constituted an independent tribunal deriving their whole authority from the statute, and owing no duty to and subject to no direction or control by the defendant. Maxmilian v. Mayor, 62 N. Y., 160; Tone v. Mayor, 70 id. 157.

Before the act of 1872, no liability, either at common law or by statute, existed on tbe part of the defendant to owners of real estate for injuries occasioned to them by changes of grade in the streets adjoining their premises. Conklin v. N. Y., Ont. & West R. Co. 102 N. Y., 109; S. C., 1 N. Y. St. Rep. 677; Radcliff’s Ex’rs v. Mayor, 4 N. Y., 195; Wilson v. Mayor, 1 Denio, 595; Lynch v. Mayor, etc., 76 N. Y., 60. Neither did the act of 1872 purport to create any such liability, except in the mode pointed out and to the extent prescribed by such act. '

An approval by the board of assessors was by the statute made a condition precedent to the recovery of any compensation on the part of the injured party; the amount thereof was required to be assessed upon the premises thereby benefited; the right to enforce payment was predicated upon such approval, and was limited to a claim for' the delivery of assessment bonds by the comptroller for the amount of the award made. No provision was made for the payment of such damages by the city at large, or in any other manner.

The statute assumed to create a right where none existed before, and it defined not Only the extent of the right but also the method of its enforcement.

It is well settled in the case of public improvements authorized by statute in the course of which a mode of compensation is provided for persons injured thereby, that such mode is exclusive ; and no right of action exists in their favor, except that directed in the statute. Dillon, Municipal Corp. § 993; Calking v. Baldwin, 4 Wend. 668; Dudley v. Mayhew, 3 N. Y., 9.

As was said by the court below, “ The only means of redress afforded to the plaintiff, therefore, were those provided for by this Act.”

It follows, therefore, that no right of action existed against the defendant, either at common law or by statute, to recover by an action at law the damages incidentally occasioned to the land in question by changes in grade in Eighth avenue ; and unless some other cause of action is discovered, the judgment of the court below must be sustained.

It was insisted before us that such a cause was found in the claim made to vacate and annul the" award and assessment of the board of assessors by reason of the alleged fraud of the assessors in making it.

It cannot be questioned that courts have the power in proper cases in actions brought for that purpose, to investigate, set aside and vacate the judicial declarations of other tribunals when they have been obtained by fraud. The rule as stated in Dobson v. Pearce, 12 N. Y., 165, is, “ That a court of chancery has power to grant relief against judgments when obtained by fraud. Any fact which clearly proves it to be against conscience to execute a judgment, and of which the injured party could not avail himself at law, but was prevented by fraud or accident, unmixed with, any fault or negligence in himself or his agents, will justify an interference by a court of equity.”

Assuming, for the purpose of the argument, that the complaint was framed upon this theory, we are still unable to see that a sufficient cause of action is stated therein. It does not appear therefrom but that the plaintiff had a simple and sufficient remedy at law for the injuries complained of, and, although it was necessary for him to set aside the award referred to before he could avail himself of the remedy provided by statute, no reason is suggested why such relief rvas not obtainable in a direct proceeding to review the determination of the assessors. His failure to prosecute this remedy to a successful termination furnishes no ground for the exercise of the jurisdiction of this court to entertain an independent action to set aside the award. The allegations of the complaint in respect to the alleged fraud are quite indefinite and vague, and do not suggest the idea that they were draughted for the purpose of setting aside the award alone. The only fraud suggested is that implied from the conduct of the board of assessors in proceeding to a hearing of the claim for damages without notice to or affording the plaintiff an opportunity to be heard thereon. Even assuming that this was fraudulently done, it constituted an irregularity merely, which was open to review and correction upon certiorari, and afforded no ground for an independent action to assail the award of a judicial tribunal.

It was said by Judge ANDREWS, in Smith v. Nelson, 62 N. Y., 288, that “the jurisdiction in one court to vacate, in an independent proceeding, the judgment of another having power to render it, is, in its nature, so extraordinary as to demand a close adherence to principles and precedents in exercising it. Courts do not exercise it when there has been negligence on the part of the party seeking the relief. That a judgment is final and conclusive of the right or thing which is adjudicated by it is the rule, and judgments and decrees of a competent court will not be annulled for a suspicion of fraud, or because the party complaining may, in fact, have been unjustly cast in judgment.” See also, Stilwell v. Carpenter, 59 N. Y., 414.

The statements in the complaint are manifestly insufficient to bring it within the rule regulating actions to set aside judicial determinations for fraud, and it is not sustainable upon such a theory. The judgment should therefore be affirmed.

All concur.