author: Brady, J.:

text:
    In the Matter of the Arbitration between “THE NATIONAL BANK OF THE REPUBLIC” and “THE FIRST NATIONAL BANK OF THE CITY OF NEW YORK,” Respondents, and ROBERT L. DARRAGH, Appellant.

      Award — will be set aside if the arbitrators receive evidence in the absence of the parties — when the misconduct of an an-bitrator may be shown by the affidamt of one of his associates who refused to sign the award.

    Where, after a case has been closed, one of three arbitrators produces and exhibits to the others, in the absence of the parties, written testimony signed by a competent witness, which relates to one of the controverted issues, the award should be set aside if it could by any possibility have been afEected by the evidence so received.
    The'fact that the strong preponderance of the testimony seems to show that the new evidence was not received or considered by the arbitrators in making their award will not be sufficient ,to sustain it.
    A motion to vacate an award for the wrongful and improper behavior of the arbitrators may be made upon an affidavit of one of the arbitrators, who refused to sign the award because he considered the conduct of the other arbitrators to be illegal and unfair.
    Appeal from an order made at a Special Term refusing to vacate an award.

      Joseph H. Ohoate, for the appellant.

      Fisher A. Baker, for the respondents.
   Brady, J.:

It appears that on the 8th of May, 1880, the appellant entered into a building contract with the respondents, which provided for the settlement by arbitration of all questions or disputes arising during the progress of the work; and certain questions having arisen respecting the settlement of the accounts three arbitrators were appointed pursuant to the provisions of the contract, under a written stipulation dated March 3,1882, who were to adjust their differences.

The appellant claimed that -there was due to him the sum of $40,008.83 and a sum of interest in addition. The respondents asserted that there was nothing due owing to their right, as they contended, to have certain deductions made, and which deductions consisted of five separate items specifically set forth in the submission.

The arbitrators were also invested with power to award the payment of the costs and expenses of the arbitration, to be paid by the parties in equal parts. All the testimony having been taken, the matter was finally closed on the 29th of April, 1882. On the thirteenth of May following an award to the appellant of $26,524.76 was made, which was signed by but two of the arbitrators, Messrs. F. O. "Withers and O. W. Norcross, the third, Leopold Eidlitz, refusing to sign the award, as he asserts, for the reason of his conviction that the conduct of the- other arbritrators was illegal and unfair.

One of the questions, and it would seem an important one, to which the attention of the arbitrators was called and to which the deduction related, was that of the construction of certain arches and ceilings in which cracks and deflections had made their appearance, and for which, as 'they resulted from the alleged imperfect performance of' the contract on the part of the appellant, the respondents claimed an allowance. There can be no doubt of the importance of this feature of the controversy. After the case was closed, and in the absence of the parties,. one of the arbitrators, Mr. Withers, produced and exhibited to the other arbitrators, it is claimed, certain written testimony signed by a competent witness, as to the solid and intact constructive appearance of certain other arches in another building, which were alleged to be constructed of the same material as that which the appellant was required to use in the construction of those under consideration. The occurrence of this incident does not seem to be denied'by the arbitrators, although as to the motive for creating and using it and as to the circumstances of its production they may differ. The appellant affirms that he was never given an opportunity to meét this evidence or to rebut it, although he believes that he might have established its falsity. A motion was made upon tips circumstance, and it would seem upon it alone, to vacate the award, which was denied, the learned justice who presided when it was made disposing of it in an opinion which is as follows :

“ The strong preponderance of testimony seems to "be to the effect that the alleged new evidence was not received or considered by the arbitrators in making their award.”

The appellant insists that the award is void because it is not coextensive with its submission, five questions of difference having been distinctly stated which the arbitrators were to determine separately. But it is not deemed necessary to consider this proposition for the reason that it was not presented for the consideration of the court below, the motion there made, as already suggested, being predicated entirely of the misconduct of the arbitrators in using an item of evidence which was given after the case was closed and in the absence of the parties and without -their consent. It is insisted by the respondents that the affidavit of the arbitrator disclosing the alleged misconduct of his associates cannot be received; and this is-founded upon a proposition which has been sustained by the adjudications in t-liis State, although perhaps somewhat in conflict, that arbitrators like jurors shgll not be permitted to impeach their award. But these cases have no application to the present motion, for the reason that Mr. Eidlitz, the -arbitrator upon whose evidence the appellant relies, refused to sign -the award. It is, therefore, not within the principle of the cases referred to. He is not engaged in 'the effort to impeach his award, but assails an award in which lie-might have participated, but in which he refused to take part and for the reason that it was against his convictions as to the rights of the' appellant.

In the case of Doke v. James (4 N. Y., 575) it was said: “The-award of February twenty-fifth upon the matters submitted was-conclusive between the parties until set aside, and no parol testimony, not even of the arbitrators, was admissible to contradict or impeach it.” And this statement of this rule, as one prevailing in this State, was sustained by numerous cases cited.

In the case of Briggs v. Smith (20 Barb., 418), in which the case júst cited was considered, it was declared, “ and the chancellor said,. in Campbell v. Western (3 Paige, 126, 137), that an arbitrator who* has signed an award cannot be allowed to contradict his solemn act and to say that he did not concur in it any more than a juror who-has concurred in a general verdict would be permitted to swear he-was not convinced it was right.”

This rule, however, is not absolute, 'as will be seen by reference to the following cases: In Matter Williams (4 Denio, 194, 196); Smith v. Briggs (supra); Van Cortlandt v. Underhill (17 Johns., 405).

As already suggested, however, these cases have no- application here, for the reason that the arbitrator upon whose testimony and statement the appellant relied, did not unite in the award, but on the contrary refused to do so.

It has already been suggested that there is no doubt about the incident upon which the appellant relies, and for that reason the award should be set aside. The possibility that two of the arbitrators, or that either of them was influenced by the evidence objected7 to, is sufficient to demand a reconsideration of the controversy.

In Drew v. Drew, (2 Macq. Scotch App. Cas., 1, 8), which was a case in which evidence was received during the absence of the parties, the lord chancellor held that an arbitrator misconceives his duty if’he, in the minutest respect, takes upon himself to listen to evidence behind the back of a party who is interested in controverting, or is entitled to controvert it. And Patterson, J., In re Plews and Middleton (6 Q. B., 845, 852), said: It is true that the erroneous proceeding related to a very small matter; but if it were sanctioned in any instance, the referees in every case of joint arbitration might agree to carry on their inquiries apart.”

In that case it appears that several arbitrators each separately examined a witness in relation to a small matter of difference. And Coleridge, J., said : To uphold this award would be to authorize a proceeding contrary to the first principles of justice.. The arbitrators here carried on examinations apart from each other, and from the parties to the reference; whereas it ought to have been conducted by the arbitrators and umpire, jointly, in presence of the partiés.” And this question has recently been. considered in the case of Fudickar v. The Guardian Mutual Life Insurance Company (62 N. Y., 392), in which the court say (at page 405): “ But any violation of natural justice by an arbitrator, such as receiving material evidence from one of the parties, without the knowledge or consent of the other, should be condemned, and in several cases awards have been set aside for this reason.” The learned justice delivering the opinion of the court cited the cases upon which the proposition rests.

Section 23T4 of the Code specifies the cases in which an award may be vacated, and the first subdivision of that section is: Where the award was procured by corruption, fraud or other undue means.”

The authorities to which reference has been made, and the principle which they establish seem to demonstrate that the receipt of evidence which by any possibility may have influenced the award,' must be regarded as an illustration of undue means.

It cannot be understood why Mr. Withers should have sought thq evidence which was obtained after the case was closed and exhibited it to Mr. Eidlitz, one of his associate arbitrators, unless he considered if important. He says in his affidavit that about two days before the final meeting he saw Mr. Radford and .asked him to make the memorandums set out in the affidavit of Mr. Eidlitz, that he might convince Eidlitz that he (Withers) was not mistaken as to the width of the arches which he (deponent) had seen, and that he made the diagram and got the memorandum for no, other purpose than 'to convince Eidlitz that he had made no mistake in saying that he had seen arches in a house mentioned of greater than six feet span; that he did not intend- to use said memorandum as testimony in the case, and did not get it for that purpose; and, further, that he did not say, as charged against him, that he deemed it proper to use in said case. It is quite apparent that it related to one of the issues, if not the chief issue, in controversy between the parties; and if it was used for any purpose to produce any result affecting the fact, or was likely to do so, the award should not be permitted to stand.

The learned justice in the court below disposed of the application on the proposition that there was a preponderance of evidence to the effect that the new evidence was -not received or considered by the arbitrators in making their award. This does not meet the question presented affecting the validity of the award. It is whether improper evidence has been received, which by any possibility may have affected the conclusion at which the arbitrators arrived who made the award. In this case there is no doubt that the evidence was received, and it is impossible for the court to say that it did not affect the conclusions at which they arrived.

For these reasons it is thought that- the award should be vacated and the order appealed from reversed.

Davis, P. J., and Daniels, J., concurred.

Order reversed.


source: Caselaw Access Project

author: Davis, P. J.:

license: Public Domain

text:
    HENRY DE STUCKLE, Appellant, v. THE TEHUANTEPEC RAILWAY COMPANY and Others, Respondents.

      Additional allowance — can only be granted upon the entry of the final judgment.

    An additional allowance cannot be granted, upon overruling or sustaining a demurrer with leave to answer over, on payment of costs ; but only, if at all, when the final judgment is pronounced that unconditionally'terminates the action and fixes absolutely the right of the succcessful party to tax his costs under the Code.
    Appeal from an order made at Special Term, granting an extra allowance, on directing a judgment for tbe defendants on sustaining a demurrer to the complaint, with leave to the defendants to serve an amended answer upon payment of costs.

      F. JEt. Ooudert, for the appellant.

      Albert Btickney, for the respondents.
   Davis, P. J.:

The judgment of the Special Term sustained the demurrer and ordered an interlocutory judgment thereon for the defendants, but provided that the plaintiff may at any time within twenty days after service of a copy of the order sustaining the demurrer, and upon payment of the costs of this action, serve an amended complaint herein, and that upon failure to do so, and upon proof by affidavit of such failure, the defendants might enter final judgment in their favor. The additional allowance.was made tinder section 3253 of the Code. It’ is not contended that this is not a difficult and extraordinary case, but it is insisted that the granting of the allowance was premature.

We are of opinion that this objection was well taken. The Code contemplates but one allowance, and that only upon final judgment. None can be granted upon an interlocutory judgment sustaining a demurrer with leave to amend, which is the judgment rendered in this case. An additional allowance after it is properly granted, becomes a part of the costs of the action which the successful party is entitled to recover, and if such allowance be granted upon sustaining or overruling a demurrer where leave is given to amend on payment of costs, the unsuccessful party on the demurrer may be compelled to pay, as a condition of leave to answer, an additional allowance in a ease when final judgment may ultimately be rendered in bis favor. We are satisfied that this result was not in contemplation of the Code. There cannot be two extra allowances granted in the same case, although the case may have been tried several times. (Flynn et al., as Admrs., v. Equitable Life Ins. Co., 18 Hun, 212.)

The Superior Court in McDonald v. Mallory (14 J. & S., 58, 63) laid down the correct rule in these words : The test must be that the action has terminated in such form that the successful party can lawfully claim the payment of the costs on such termination, and enforce their payment.”

An additional allowance cannot, therefore, be granted upon sustaining or overruling a demurrer, with leave to answer over on payment of costs, but only, if at all, when the final judgment is pronounced that unconditionally terminates the action and fixes the right of the successful party to tax his costs absolutely under the Code.

The order should, therefore, be reversed, without prejudice to a renewal of the application, whenever the defendants become entitled to apply for final judgment in the action, with ten dollars costs of this appeal, besides disbursements.

Beady and Daitiels, JJ., concurred.

Order reversed, with ten dollars costs and disbursements.


author: Beady, J.:

text:
    RYLAND H. MACDONALD, Appellant, v. MARY E. WOODBURY, Executrix, etc., Respondent.

      Hmderne — deposition of a party taken before the 1/rial — when it may be read in evidence after the death of the adverse prn'ty— Oode of Civil Procedure, sec. 829.
    After issue Fad been joined in this action the depositions of the plaintiff and defendant were taken under a stipulation signed by their attorneys, providing among other things that such depositions might be read upon the trial. The plaintiff was cross-examined by the defendant’s counsel in the defendant’s presence. The defendant died before the trial and his executrix was substituted in his stead.

      Held, that the deposition of the plaintiff should have been received in evidence, when offered by him upon the trial, although it related to personal transactions had with the deceased.

      Bice v. Motley (24 Hun, 143) followed.

      Appeal from a judgment dismissing the complaint, entered upon a nonsuit directed at the circuit.

      Edward O. Graves, for the apjiellant.

      Reuben H. Underhill, for the respondent.
   Beady, J.:

It appears that this action was originally against Henry Woodbury, who died during its pendency. It also aj>pears that after issue was joined the depositions of the plaintiff and of Mr. Woodbury were both taken under a stipulation between the respective attorneys. The examination of the plaintiff was conducted in the nature of a cross-examination by Mr. Underhill, the defendant’s counsel, the defendant being personally present. A similar examination of the defendant was also taken and was signed, acknowledged and sworn to before a justice of this court. The defendant died and his executi'ix was substituted as defendant.

Upon the trial the plaintiff, being disqualified from testifying concerning his personal dealings with the deceased, offered in evidence his deposition which was taken as already mentioned, which was excluded by the court. He then offered the deposition of the defendant, although it was against his interest, which was received and read to the jury, after which the plaintiff’s deposition was again offered and excluded. The complaint was then dismissed upon the ground that the plaintiff had not offered to carry out the contract on which his claim rests, and which seems to have been an essential prerequisite, and as to which there was testimony contained in his deposition. The question presented on this appeal therefore, and indeed the only question presented, is whether the plaintiff’s deposition should have been admitted and read to the jury under the circumstances. The precise question has been decided by the General Term of the Second Department in favor of the plaintiff in the case of Rice v. Motley (24 Hun, 143). Although, perhaps, there may be some room to doubt the accuracy of this decision, yet, nevertheless, we think the reasoning by which it is sustained is such as.to justify us in concurring.

The examination of the plaintiff, as we have seen, took place in the presence of the defendant, and the cross-examination was con- • ducted also in bis presence, and tbe defendant bad an opportunity to respond upon bis examination to all tbe statements made by tbe . plaintiff either upon direct or cross-examination, wbieb it must be supposed be did; and tlius tbe respective parties perpetuated tbeir statements in writing and in a .formal way. In addition to tbe pro- ’ visions of tbe Code relating to tbe subject we bave in this case an ' express stipulation that these depositions, either or both, might be 'read upon tbe trial; and substantial justice would seem to require .that tbe stipulation should be enforced, inasmuch as tbe plaintiff by tbe death of tbe defendant is prevented from giving evidence which .is essential to tbe maintenance of bis action, and as to which tbe deposition is sufficient, and as to which tbe defendant’s evidence is also before this court.

. The judgment should therefore be reversed and a new trial • ordered, with costs to abide tbe event,

Davis, P. J., and DaNiels, J., concurred.

Judgment reversed, new trial ordered, costs to abide event.


author: Beady, J.: Davis, P. J.

text:
    RUSSELL MURRAY, Plaintiff and Respondent, v. WILLIAM H. HANKIN, Defendant, and WILLIAM T. RYLE, Appellant.

      Attachment — the affidavit must show that ño counter-elaiim exists to the knowledge of the plaintiff— what defeats in the affidavit a subsequent attaching creditor may take . • advantage of.

    An attachment was issued upon an affidavit made hy an agent of the plaintiff, „ .who stated that he was personally acquainted with the facts and circumstances Which he therein set forth. He then stated that the plaintiff was justly entitled to recover the sum named upon the various claims set forth “ over and above - ■ all counter-claims, discounts and set-offs existing in favor of the defendant to ■the knowledge of deponent.”

    TJpqn a motion by a subsequent attaching creditor to have the attachment .vacated:

      Held, that the affidavit was defective in failing to state that the sum claimed was due over and above all claims and set-offs existing in favor of the defendant, . ■ “to the knowledge of the plaintiff,” and that it was not sufficient to show that they did not exist to the knowledge of the plaintiff’s agent.

      That the defect was a jurisdictional-one, which was not waived by the failure of the defendant to object to it. (Davis, P. J., dissenting.)

      It seems, that when the action is brought to recover the amount due upon a promissory note, and also for merchandise sold at different times to the defendant, and upon claims assigned to the plaintiff, the affidavit should show that as to each of the items there is no counter-claim existing in favor of the defendant to the knowledge of the plaintiff, notwithstanding the fact that it is made by the plaintiff’s agent or attorney in fact. (Per Brady, J.)
    Appeal from an order denying a motion to vacate an attachment, made by a subsequent attaching creditor.

      Preston Stevenson, for the appellant.

      L. J. Morrison, for the respondent.
   Beady, J.:

The affidavit upon which the attachment was granted in this case was made by the agent of the plaintiff, who alleges that he is personally acquainted with the facts and circumstances, which he proceeds to set forth. The claim consists of a promissory note payable to the order of the plaintiff, and a sale of merchandise made at a date subsequent to that of the note, and of merchandise also sold to various persons who have assigned their demands to the plaintiff. The agent then states that the plaintiff is justly entitled to recover for these various claims the sum named “ over and above all counterclaims, discounts and set-offs existing in favor of the defendant to the knowledge of deponent.” The subsequent attaching creditor, who made the -motion resulting in this appeal, assails the affidavit, because it fails to comply with the statute in not averring that the plaintiff is entitled -to recover the sum demanded over and above all counter-claims known to him, and this objection seems to be well taken.

Although the Code only requires the necessary facts to be shown by affidavit to the satisfaction of the judge granting the attachment, and although the affidavit may therefore undoubtedly be made by an agent who has the necessary knowledge to make the required allegations, nevertheless when the allegations are made they must be in conformity to the statute, and particularly in a case where the attachment is granted upon a variety of claims, in part originating with the plaintiff and in part acquired by him by assignment. The statute requires, among other things, that the plaintiff shall show, either by his own affidavit or by that of somebody in his behalf •conversant with the facts, that there are no counter-claims known to him, i. e., known to him, the plaintiff. The asseveration by the •agent, that there were no counter-claims known to him, might be made with very great propriety; when in fact there were counter■claims known to-the plaintiff; and hence the necessity of the information which is exacted by the statute, non oonstcvt but that in this ■case there was a counter-claim to some one or more of the numerous items set forth, of which the plaintiff'had knowledge, but of which his agent had no knowledge. If the allegation of the agent in his .affidavit had been that the sum demanded was due over and above •all counter-claims, discounts and set-offs existing in favor of the ■defendant to the knowledge of the plaintiff, the affidavit would have been sufficient. But the allegation is, that it was due over ¡and above all counter-claims, discounts and set-offs existing in favor •of the defendant to the “ knowledge of the deponent,” i. e., to the knowledge of the agent, as already suggested. Inasmuch as. in this •case an attachment was demanded for a sum- of money, which rested partly upon merchandise sold by the plaintiff to the defendant, and partly upon claims assigned to him, the affidavits should perhaps •show that as to each of the items there was no counter-claim •existing in favor of the defendant to the knowledge of the plaintiff, notwithstanding that the affidavit on which the attachment is granted may .be made by the plaintiff’s agent or attorney in fact.

The objection taken is not to a mere irregularity which the defendant might be regarded as having waived, because he made no objection to it, so far as the court is advised. It is to a jurisdictional objection. (Donnell v. Williams, 21 Hun, 216; Ruppert v. Haug, 87 N. Y., 141.)

For these reasons the order made by the court below must be. reversed and the motion granted, with ten dollars costs and the disbursements of this appeal.

DaNIEls,-J., concurred.

Davis, P. J.

(dissenting):

I do not think a subsequently attaching creditor ought to be allowed to succeed upon a point of this kind. The defendant in the action, by not taking such an objection, waives it. The junior attaching creditor ought to be required to show that there were counter-claims or offsets which might be interposed. One creditor should not be allowed to trip up the heel of another prior in diligence, without being able to assert some more substantial objection than this. The agent evidently had better, or at least as good, knowledge of the condition of things between the plaintiff and the defendant as the plaintiff himself. ITis affidavit on this point presents facts upon which the judge, in granting the attachment, might find the facts asserted to be substantially proved.

I am of opinion that the court below rightfully disposed of the motion.

Order reversed and motion granted, with ten dollars costs and disbursements., ’


text:
    JOHN MURPHY and JOHN NESBIT, Appellants, v. THE BOWERY NATIONAL BANK, Respondent, Impleaded with JOHN MULHOLLAND and Others.

      Contract with a municipal corporation — lien of persons fw'nishing materials, upon moneys growing due to the contractor — the assignee of the contractor takes subject to their rights.

    One Mulholland entered into a contract with the city of New York for the construction of a sewer. The contract provided among other things as follows : “The party of the second part agrees that he will furnish the said commissioner of public works with satisfactory evidence that all persons Who have done work or furnished materials under this agreement, and who may have given written notice to said commissioners before or within ten days after the completion of the work aforesaid, that any balance for said work or materials is still due or unpaid, have been fully paid or secured therefor, and in case such evidence be not furnished as aforesaid, such amount as may be necessary to meet the claims' of the persons aforesaid, shall be retained from the moneys due the said party of the second part under this agreement, until the liabilities aforesaid shall be fully discharged or such notice withdrawn. ”

      Reid, that one to whom the contractor assigned all moneys due and to grow due under the contract, took them subject to all equities existing between the contractor and the parties doing work or furnishing materials under it,-or having claims which might under its terms be enforced against the moneys in the hands of the city belonging to the contractor.
    That the persons so doing work or furnishing materials was entitled to be paid ' from such moneys in preference to the contractor’s assignee.

      Appeal from a judgment in favor of the defendant, the Bowery National Bank entered upon the trial of this action by the court without a jury.

      Nelson /Smith, for the appellants.

      James JR. Mcwvin, for the respondent.
   Beady, J.:

It appears that upon the 10th of October, 18*16, an agreement was made between John Mulholland and the Mayor, etc., for the construction of a sewer in Forty-second street from the Third avenue to the East river. The contract, amongst other things, provided as follows :

The party of the second part ” (being the defendant Mulholland) “ agrees that be will furnish the said commissioner of public works with satisfactory evidence that all persons who have'done work or furnished materials under this agreement, and who may have given written notice to said commissioners before or within ten days after the completion of the work aforesaid, that any balanee for said work or materials is still due or unpaid, havp been fully paid or secured therefor, and in case such evidence be not furnished as aforesaid, such amount as may be necessary to meet the claims of the persons aforesaid shall be retained from the moneys due the said party of the second part under this agreement until the liabilities aforesaid shall be. fully discharged or such notice withdrawn.”

In the month of March, 18JJ, an agreement was made between the plaintiffs and Mulholland, by which the former were to furnish all the brick, lime and cement necessary to complete the-sewer. And when the application by Mulholland was made to the plaintiffs for these materials, the former said that his contract provided for the retention by the city of thirty per cent of the amount until the completion of the job, for the benefit of the materialmen, which thirty per cent would be for the plaintiffs if he did not pay them the money before that time. On the faith of that understanding, the plaintiffs furnished the materials mentioned, which were used in the construction of the sewer. It was on the faith of what. Mr. Mulholland told them, and what he told, them has just been stated. It is true that nothing was said as to who was to draw the money from the city. The plaintiffs claim that there sprung out of this contract an equitable assignment of the fund which would result from the retention of the thirty per cent mentioned.

It appears further that the materials were furnished between the 12th of March, 1817, and the 24th of September, 1878. It also appears that on the 23d of January, 1877, the defendant Mulholland executed and delivered to the Bull’s Head Bank of this city, a written assignment of all moneys due or to grow due under the contract mentioned, on the faith of which the bank advanced to Mulholland various sums of money, which were used in the construction of the sewer. On the 14th of December, 1877, the Bull’s Head Bank required the payment of the moneys so advanced, whereupon Mulholland delivered to one Charles Devlin a written assignment of all the moneys due or to grow due from the city, and it was thereupon agreed between him and Devlin that the assignment should cover and secure Devlin for the moneys that Mulholland then owed him and such as he should pay to the Bull’s Head Bank in payment of their claims, and such moneys as Devlin might thereafter advance to him, and all the moneys that the Bowery National Bank had advanced or should thereafter advance to Mulholland. This assignment was delivered by Devlin to the Bull’s Head Bank, and he paid to it $3,615.85, at which time the bank executed and delivered to him a written assignment of all moneys due or to grow due under the city contract. Devlin, after these two advances, made further advances to Mulholland from time to time in considerable amount, and received from him from time to time moneys on account of Mulholland’s indebtedness to him.

It appears, further, that there was a settlement between Devlin and Mulholland, and the sum of $4,186.62, as the balance due for moneys advanced to Mulholland under the arrangement between them, agreed upon. These moneys were employed in the construction of the sewer. Previous to May, 1878, the Bowery National Bank had discounted for Mulholland two notes, one for $2,500, indorsed by Devlin, and the other for $2,000, indorsed by John McDermott at Devlin’s request, and which were held by this bank on the 19th of June, 1878, and were unpaid, and for which Mulholland was then indebted to the bank. The moneys advanced on these notes were used in tbe construction of tbe sewer. At tbe same time tbe bank beld two other notes made by Mulholland and indorsed by Devlin, which, previous to May, 1818, had been discounted for Devlin, and these notes were given by Mulholland to Devlin as accommodation notes. They were for $6,000 and $3,200, respectively, and on the 19th of June, 1878, were owned and held by the bank and were unpaid.

On the 19th of June, 1878, Charles Devlin, it appears, executed and delivered to the Bowery National Bank a written assignment of all moneys due or to grow due under the sewer contract, and that at the time this assignment was delivered it was agreed between the bank, Devlin and Mulholland, that by this assignment the payment of the money due to the bank on the two notes of $2,500 and $2,000 should be secured, and also all moneys that Mulholland then owed Devlin, and such moneys as Devlin should advance to Mulholland, subsequent to this assignment.

The assignment from Mulholland to the Bull’s Head Bank was fled with the commissioner of the department of public works, and approved by him on the 23d of January, 1877, and filed with the comptroller of the city on the same day. The assignment of the Bull’s Head Bank to Devlin was filed with the commissioner, and approved by him and filed with the comptroller on the 28th of December, 1877. The assignment from Devlin to the Bowery National Bank was filed with and approved by the commissioner and filed with the comptroller on the 19th of June, 1878. And it appears that, as the result of all these various transactions, there was due to the Bowery National Bank the sum of $7,127.47.

The learned justice before whom the case was tried, found the facts stated and as conclusions of law as follows : ,

“First. That the defendant, the Bowery National Bank of New York, is entitled to recover in this action of the aforesaid balance of $7,429.71, in the hands of the mayor, aldermen and commonalty of the city of New York, and of any balance of the said $468.20 that will not be required for repairs to the c.arriage-way, the aforesaid sum of $7,127.47 and interest from July 18, 1879, with costs of action. Such moneys and costs to be first paid out of the money in the hands of the city.”
“ Second. I further find that the plaintiffs acquired no lien upon or right to any of said moneys under tbe agreement between them and Mulholland, upon which their claim, by way of equitable assignment, was based.”
“ This agreement did not operate as an equitable assignment of any part of the moneys in the hands of the city.”
“ The plaintiffs are entitled to recover the balance of said moneys that may remain after the aforesaid payments to the Bowery National Bank, under their lien notice filed with the comptroller October 24, 1878, Mulholland having made default and thereby admitted the plaintiffs’ claim, thus rendering it unnecessary, as regards Mulholland, to determine the effect of such notice as a matter of law, as against the Bowery National Bank, which claimed under assignments executed and delivered before the filing of the lien, the plaintiffs acquired no lien under the statute. The plaintiffs’ lien under the statute could only attach to the extent of Mulholland’s interest in the money at the time the notice was filed, besides the rights of the. bank and Devlin had accrued before the passage of the act of May 22, 1878, and their claims would be excepted by the terms of the act.”

The plaintiffs’ claim under the provisions of the contract specially set forth, and' also assert their title to the money under and by virtue of an equitable assignment, which they contend was created by the transactions between Mulholland and themselves at the time that they agreed to furnish the materials, and to which particular reference has heretofore been made. It will have been perceived that under the agreement between Mulholland and the city of New York, provision was made for the protection of all persons who had done work or furnished materials under the agreement, and that it was also provided that if the contractor failed to furnish evidence that persons having such claims were paid or secured the amount necessary to meet their demands, should be retained from' any moneys due the contractor until the liability should be either discharged or such notice withdrawn. It appears in this action that notice of the existence of the plaintiffs’ claim was given within ten days after the work was completed and prior to the payment of the balance which was due to Mulholland, and which had not been paid at the commencement of this suit, and which was amply sufficient to cover the plaintiffs’ demand.

It is not necessary for tbe plaintiffs to resort to tbe effect of an equitable assignment in order to recover in tliis action, inasmuch as it bas been beld in this court, in a case almost precisely similar to tbe one in band (Mechanics and Traders’ National Bank v. The Mayor, 58 How. Pr., 207; affirmed, 27 Hun, 467), that in a contract having tbe same provisions as those which were inserted in that between Mulholland and the city, the assignee of moneys due and to grow due under the contract, took them subject to all equities existing between the contractor and the parties doing work or furnishing materials under it, or for which, under the terms of the contract, lienors might enforce their claims against him. The claims of the plaintiffs were for materials furnished, and they were expressly within the terms of the agreement.

The learned justice at the Special Term said in the opinion in the case, supra, that it was the intention of the contractor and the corporation of the city that those who had done work and furnished materials in and about the performance of the contract should be protected. In the opinion which was rendered by the General Term it was said the plaintiff, as the assignee of the contractor, must be held to occupy no more favorable position in this controversy than the contractor would if he were the plaintiff; that the work was satisfactorily performed by the contractor and was completed and accepted by the proper officer of the city; and that the respondents had furnished thé materials to the contractor, which were used in the contract, and given the city due notice of their claim, and that they required payment out of the money due the. contractor for his contract with the city. And the court further said: “We discover nothing which renders the contract inoperative or void, either on account of the nature of the contract or the relation of any party to it.” These decisions settle the law in this case.

It may be said, in addition to these views, although not necessary to sustain the plaintiffs’ right of action, that the provisions of the contract, in reference to and in reliance upon which the plaintiff dealt with Mulholland, operated as an equitable assignment of the. balance due for work and materials when the contract was. performed, to the workmen or materialmen who did work in the construction of the sewer, or furnishes materials that were employed • for that purpose and who were not paid. (The People ex rel. Dannat v. Comptroller, 77 N. Y., 45; Munger v. Shannon, 61 id., 251; Gallagher v. Nichols, 60 id., (438). Such balance was by these provisions appropriated for that purpose, and was to be retained until these claims were paid or notice of them was withdrawn, provisions which were designed equally for the protection of the city and the workmen and materialmen. There is no doubt about the fact that the city retained sufficient money to meet the plaintiffs’ claim, and Mulholland did not dispute its right to do so. This was admitted by the answer interposed on the part of the city and found by the court upon the trial of the action.

The learned justice presiding on the trial of this case in the court below does not seem to have passed upon the question arising under the provisions of the contract and by which the materialmen were designed to be protected, his judgment resting, as we have seen, upon the proposition that the plaintiffs acquired no title to the money by virtue of the equitable assignment which they set up. The case of the Mechanics and Traders’ Bank v. The Mayor (supra) is not only an authority for the proposition that the materialmen are entitled to protection over and above the assignees of the contractor, but that there is nothing in the provisions of the contract to which reference has been made which makes it assailable, either as against the law or against public policy.

For these reasons the judgment should be reversed and a new trial ordered.

DaNiels, J., concurred

Present — Beady and Daniels, JJ.


author: Daniels, J.:

text:
    JOHN W. BROOKS, Respondent, v. THE NEW YORK AND GREENWOOD LAKE RAILROAD COMPANY, Appellant.

      JPoretgn corporation — it wanes objections to the jurisdiction of the court by serving a general answer — srhen a corporation is not liable for emempla/ry damages.

    The plaintiff, a resident of New Jersey, brought this action against the defendant which had been incorporated under the laws of that State, to recover damages for injuries sustained while he was there traveling upon one of its trains.

      Held, that the defendant by voluntarily appearing and serving a general answer waived any right it might have to object to the jurisdiction of the court.
    The injury was occasioned by the tram running into a river through the open draw of a bridge, a few minutes after six o’clock in the morning. The bridge-tender it was shown could neither read nor write, but it was not made to appear that the accident was in any degree attributable to his inability so to do. Evidence tending to show inattention on the part of the engineer was also given.
    The court charged the jury: “If you find from the evidence that the conduct of the engineer on the morning of the 4th of November, 1879, or the conduct of the railroad company in the employment of a bridge keeper who could neither read nor write, amounted to such a reckless indifference to human life as to constitute willful and malicious misconduct, then you may be justified in giving exemplary damages.”

      Held, error.
    Appeal from a judgment in favor, of tbe plaintiff, entered on tbe verdict of a jury, and from an order denying a motion for as new trial, made upon tbe minutes of tbe justice before whom tbe action was tried. Tbe defendant was a corporation created and existing under tbe laws of tbe State of New Jersey, and tbe accident, to recover tbe damages resulting from wliicb tbis action was brought, happened in that State.

      Oortlcmdt Parlter, for tbe appellant.

      Theodore F. Miller, for tbe respondent.
   Daniels, J.:

Tbe plaintiff was a passenger upon one of tbe defendant’s trains from North Newark station, in New Jersey, to New York. As this train reached the Hackensack river, a few minutes later than six o’clock in tbe morning, a draw of. the bridge was found to be open and before tbe train could, after tbe discovery of that fact, be stopped, it was precipitated through the open draw into the river. The plaintiff was injured by means of the accident and the recovery was for the amount deemed to be proper by the jury for that injury under the evidence in the case.

At the time of the accident, and also when the action-was commenced, the plaintiff was a resident of the State of New Jersey, and after the proof given in his favor upon the trial was concluded, a motion was made for the dismissal of the complaint upon the ground that the court had no jurisdiction of the action. This was denied and the defendant excepted. The action was commenced while the Code' of Procedure was in force and the motion to dismiss-it seems to have rested on the authority of sections 427 and 148 of that Code. No such objection was taken by the defendant’s answer to the complaint, or in any other form prior to the time when it was made upon the trial. The action itself was what the law has denominated a transitory action. It was for a cause of action which might have arisen at any place and therefore it was not local, and as the law was settled before the Code, such an action might be brought in this State when jurisdiction could be acquired over the defendant by the service of the proper process for that purpose, especially when that service should be followed by a formal submission to-the authority of the court. (Leonard v. Columbia Steam Nav. Co., 84 N. Y., 48, 52). This court, had jurisdiction over the subject-matter of the action, and inasmuch as the defendant failed to object to the authority of the court' over itself as a corporation, formed and .existing under the laws of the State of New Jersey, and put in a general answer in the case in no way* referring to such objection, it waived its right to insist upon it at the time when it was taken at the trial. (McCormick v. Penn. Cent. R. R. Co., 49 N.Y., 303.) Section 427 contains nothing inconsistent with the principle acted upon in this authority, for it has not provided that a foreign corporation may not, when a suit against it shall be in form commenced, voluntarily submit itself to the jurisdiction of the court. It did not consequently abrogate the general principle of law, that a party over whom the court might not have compulsory jurisdiction, could voluntarily submit to its authority in such a manner as to produce a waiver or surrender of the objection.

Tbe person employed to attend tbe bridge and close tbe draw before the arrival of the train could neither read nor write, and there was evidence that the engineer himself was inattentive to the possible danger of the situation. An'd upon these circumstances the court charged the jury in the following language: It is true that ordinarily in actions of this character the plaintiff is limited to compensation for his injury and that nothing further can be given. If you find from the evidence that the conduct of the engineer on the morning of the 4th of November,-1879, or the conduct of the railroad company in the employment of a bridge-keeper who could neither read nor write, amounted to such a reckless indifference to human life as to constitute willful and malicious misconduct, then you may be justified in giving exemplary damages. It is for you upon the evidence to say whether you will or ¿not.” And at the close of the charge the defendant’s counsel excepted to so much of it as related to the subject of punitive damages. This exception was pointed directly to the instructions given by the court to the jury, that they might allow punitive, damages in the case if they believed that the conduct of the railroad company in the employment of the bridge-keeper amounted to a reckless indifference to human life. And upon that it may be presumed from the verdict, which was for the sum of $10,000, that the jury were actuated by the conviction, from the circumstance referred to, that this degree of culpability did exist on the part of the defendant. Without proof of culpable negligence or misconduct on the part of 'the corporation itself, damages of this nature could- not legally enter into the verdict of the jury. (Caldwell v. New Jersey Steamboat Co., 47 N. Y., 282.) And the sole question -upon this part of the case necessarily is, whether the employment of a person to take charge of the bridge and close and open it as the necessities of navigation or of its own business should require, who could not read or write, sustained the charge of wanton or culpable misconduct against the defendant. It did not follow from this inability that’ the person so employed could not accurately discharge all the duties incident to his employment. Neither was it made to appear that the accident itself was in the least degree attributable to this inability. And by no reasonable inference to be deduced from this circumstance can it, therefore, logically be said that this culpability ■ existed on the part of the railroad company. It was not a circumstance tending to establish any positive misconduct which would permit a jury in case of such an accident to include damages in the verdict by way of punishment against the defendant.

It has been urged that this exception was not sufficiently pointed to present this objection, but it is very plain from the statement of it that it included what the court said to the jury upon this subject of punitive damages, and their right to impose them by their verdict upon the defendant. There could be no rational ground for misunderstanding the subject to which the exception was designed to be pointed. But even if it were otherwise, as an appeal has also been taken from the order denying a motion for a new trial, and this was a misdirection in the case, it would still follow that the verdict should be set aside. As the evidence was given upon the trial, this point should not have been permitted to enter into the consideration of the jury, and as it was, the judgment and order should be reversed and a new trial directed, with costs to abide the event.

Davis, P. J., concurred.

Present — Davis, P. J., and DaNiels, J.

Judgment and order reversed and_ new trial directed, costs to abide event.


author: DáNIels, J.:

text:
    THE MARKET NATIONAL BANK OF NEW YORK, Respondent, v. THE PACIFIC NATIONAL BANK OF BOSTON, Appellant.

      National banks — what is an act of insolvency within section 5242 of the United States Revised Statutes — the property of an insolvent bank cannot Jie attached — Appeal from a refusal to vacate an attachment — is proper after payment of the judgment.

    In this action, brought upon five certificates of indebtedness, amounting to $24,330, issued by the defendant, a National bank located and doing business in Boston, an attachment was, on November 19, 1881, issued and levied upon property belonging to it situated in this State. The day before the service of the attachment the doors of the bank had been closed and it had been placed in the possession of an examiner under the authority of the Bank Department of the United,States, and it so continued until the 14th of March, 1883, when by the permission of the comptroller of the currency, it was allowed to resnme its business*. Thereafter it continued in the management and transaction of its affairs until-! the twenty-second of May, when it was found incapable of proceeding with its* business and placed in the hands of a receiver. It appeared that at the time; when the attachment was issued the assets of the bank were sufficient to pay its debts and liabilities, exclusive ©f its capital stock. On the day the attachment was issued the defendant had'failed and refused to pay, upon due demand, divers legal debts and obligations then due and owing by it to different persons. • .

      Meld, that the defendant had committed acts of insolvency within the meaning of section 5243 of the United States Revised. Statutes, prohibiting the issuing of attachments before final judgment against the property of National banks which have committed such acts, and that the attachment should be vacated.

      It seeim, that any act proceeding from the inability of the bank to pay its debts as they fall due in the ordinary course of business, is an act of insolvency within the meaning of the said section. (Per Daniels, J.)
    An appeal from an order denying a motion to vacate an attachment maybe taken after the attached property, or the proceeds thereof, have been applied under an execution to the payment of the judgment, provided the motion to vacate was made before the property had been so applied.
    Appeal from an order made at a Special Term, denying a motion to vacate an attachment.

      Willard Bartlett, for the appellant.

      Abraham Wakeman, for the respondent.
   DáNIels, J.:

Tbe attachment was issued upon the- ground that the defendant was a banking corporation formed and existing in the State of Massachusetts. Its credit in the State of New York was attached by means of an attachment and finally applied by an execution to the payment of the judgment. This payment was made on the 3d day of October, 1882, while the appeal was not taken from the order until the 2d of November, 1882. For that reason a motion was made with the argument of the appeal itself, to dismiss the appeal.

But by section 682 of the Code of Civil Procedure, a motion to vacate an attachment may be made at any time before the actual application of the attached property or the proceeds thereof, to the payment of the judgment recovered in the action. The motion itself to vacate the attachment was made and decided before this application of tbe attached property to tbe payment of the judgment. It was accordingly within the time for 'that purpose prescribed by rthis section of the Code, and having been decided adversely to the defendant, the absolute right was given to it of appealing from the order, and that appeal has not been subjected to the contingency that the judgment should not, in the meantime, be paid by the appropriation of the attached property. It was sufficient that the motion was made within the time for that purpose allowed. And having been so made, the defendant was authorized afterwards to prosecute its appeal from the order. The appeal cannot be dismissed, but must, under these circumstances, be disposed of upon its merits.

The application to discharge the attachment was made upon the ground that the defendant being a National banking association formed under the laws of congress, was not liable to be proceeded against in that manner, after it had committed an act of insolvency. And in support of the motion it was claimed that acts of this nature had been committed by the defendant before the attachment itself was issued. The action was brought to recover the amount of five certificates of deposit, upon which the sum of $24,390 appeai’ed to be due and payable. This attachment was issued and served on the 19th of November, 1881. The day before its service the doors of the bank had been closed, and it had been placed in the possession of an examiner, under the authority of the bank department of the United States, and it so continued until the 14th of March, 1882, when, by the permission of the comptroller of the currency, it was allowed to resume its business, and after that it continued in the management and transaction of its affairs until the twenty-second of May, when it was finally found incapable of proceeding with its business, and was placed in the hands of a receiver. By the affidavits, reports and statements produced and read upon the hearing of the motion, the assets of the bank appear to have been sufficient to pay its debts and liabilities, excluding its capital stock, amounting to the sum of $961,370.

This was the probable state of its affairs at the time when the attachment was issued, and in a general sense, without reference to the state of its capital, it may be said to have been solvent; that is> by a proper management and disposition of its property .the debts and liabilities existing against it might be paid. But this ability, by careful management to pay its indebtedness, is not what the statute required to protect the corporation against the charge of having committed an act of insolvency, and by reason of such act to be exonerated from the seizure of its property by attachment. For the statute has provided upon the commission of an act of insolvency, or in contemplation thereof, that all transfers or assignments of its property, or securities, or demands,-made by it with a view to prevent the application of its assets, as that has been directed by law, or to give a preference to one creditor over another, except in payment of its circulating notes, shall be void, and that no attachment, injunction or execution shall be issued against such association or its property before final judgment. (IJ. S. R. S., § 5242.)

The object of this section was to prevent any creditor from acquiring a preference over the other creditors of the association, either by the voluntary act of the association or the instrumentality of legal process of the description of that now in controversy, after any act of insolvency shall be committed.. Its purpose was to promote equality among the creditors of the association, and that is not permitted to be evaded or prevented by the attachment of its property. The proper construction of this, section was considered in Robinson v. National Bank of Newberne (81 N. Y., 385, and 19 Hun, 477). And by that construction an attachment against the property of the association can only be maintained where it shall be issued previous to the commission of an act of insolvency, or contemplated insolvency, on the part of the'' association. As to what the act may be which will place the case within the operation and effect of this section it has not in terms been declared, but the phraseology made use of is not uncommon in statutes of this nature. And such a construction has ordinarily been given to it as to render the act containing it applicable to corporations or associations, still having ability by the careful appropriation of their assets to pay their debts. Such ability is not sufficient to prevent the application of the section. Even though the debts may be paid out of its assets, still it may commit an-act of insolvency within1 the obvious intent of the language of this section. A provision of the bankrupt law not as specific or pointed in its enactment as this section, was considered in the case of Toof v. Martin (13 Wall., 40), and .it-was held that “the term insolvency is not always used in tbe same sense. It is sometimes used to. denote tbe insufficiency of the entire property and assets of an individual to pay bis debts. This is its general and popular meaning;' but it is also used in a more restricted sense to express tbe inability of a party to pay bis debts as they become due in tbe ordinary course of business. It is in this latter sense that tbe term is used when traders and merchants are said to be insolvent; and as- applied to them it is tbe sense intended by tbe act of congress.” (Id., 47.) And the'same construction was given to another section of the statute quite similar in its import in Rasin, v. Ammidown (15 Hun, 422), where it was said that insolvency when used in this statute in reference to traders means inability to pay debts as they fall due in the ordinary course of business.” (Id., 426.)

Tbe section of tbe statute applicable to tbe present case is more explicit in its provisions than either of those upon which these decisions were made. And it was probably made so because of the necessity for stricter legislation concerning the business and operations of the financial associations of the country. For that reason the commission of any act of insolvency, or any act. in contemplation thereof, is all that has been required to prevent a banking association from making a transfer of its property, or payment of its money to secure a preference of one creditor over the others. And to permit the same, under the seizure of its property by means of an attachment, was also in like manner prohibited. The act of insolvency, upon which the effect of the other provisions of the section was made dependent, under these authorities must be held to be any act proceeding from the inability of. the association to pay its debts in the ordinary course of its business. Scrupulous punctuality is required to be observed in the financial management of these associations. Their efficiency and usefulness require them to be prepared on all occasions to meet their just and unquestioned obligations, and when they fail to do that in consequence of the want of funds, that is an act of insolvency within this section of the statute. Section 12 of the act of June 22,1874 (ch. 390) enactedfor the purpose of' amending the bankrupt* law, has been brought to the attention of the court, but it justifies no different considerations of the obligations of banking associations. That has provided for the defaults upon which proceedings in bankruptcy might be instituted, and it in no manner modified or qualified the section of the Revised Statutes to which reference has already been made. It provided for an altogether different proceeding upon facts not included within the provisions of this section, and it can have no effect upon the disposition which should be made of this appeal. Under this construction of the statute it becomes a question of fact to be determined, upon the affidavits and papers produced upon the hearing of the motion whether this act of insolvency was committed by this association. It is stated in general terms in the affidavit of Daniel Needham, that “on the 18th day of November, 1881, the defendant committed divers acts of insolvency, to wit: The refusal and failure by said defendant to pay, upon due demand, divers legal debts and obligations then due and- owing by defendant to divers persons and corporations.” This statement was neither denied nor qualified in any form by either of the other affidavits in the case. But by the sworn complaint in this action its correctness has been confirmed by the statement that on-the 19th day of November, 1881, the certificates of deposit held by the plaintiff were duly presented for payment to the defendant, and payment thereof was refused by the defendant.” These facts, as they are set forth in the affidavit, may safely be accepted as a truthful relation of the acts of the defendant preceding the service of this attachment. And they, together with the fact that the association had closed its doors and was placed in possession of an examiner, were evidence of its inability to pay its legal obligations in the ordinary course of its business. (Brown v. Montgomery, 20 N. Y., 287.)

. And such failure proceeding from this inability, was an act of insolvency within the reasonable signification of this section of the statute. Further proof of the accuracy of the statement made in this affidavit is supplied by the report' of the attorney, "W. J. Best, who states that at the time when the bank suspended it had less than $13,000 in cash, arid the report of the examiner .incorporated in the case confirms the truth of this statement. That reported the financial condition of the association on the 18th of November, 1881. In that report the bills of other banks held by this association was stated to be the sum of $9,694, and its gold treasury notes at the sum of $3,049.68, making its total cash on hand to bo the amount of $12,743.68, which was very little in excess of one-balf of that which was due to the plaintiff upon its certificates of deposit. These figures fully sustain the report of the attorney, and prove beyond controversy that at the time when the association failed to pay the certificates of deposit held by the plaintiff, the failure }:>roceeded from its 'financial inability to meet the demands made upon it in the course of its business. And that failure, together with the closing of the doors of the bank, within the language of this section, was an act of insolvency. And by the effect to be given to that act, it prevented the seizure of the defendant’s property by the attachment issued in favor of the plaintiff.

The resumption of the business of the bank under the authority of the comptroller of the currency, in the following month of March, in no manner tended to support the right of the plaintiff to the attachment. For the facts upon which that was permitted did not conflict with the evidence showing the commission of these acts of insolvency on the part of the association. At the time when the business was allowed to be resumed, over a million dollars of its indebtedness had been paid off, and about $500,000 owing to the bank had been secured by mortgages, stocks and bonds, which had been brought into it by the debtors as collateral, and instead of having less than $13,000 in cash on hand, as was the fact when the act of insolvency was committed, its cash had been increased to nearly $1,000,000, and was still steadily increasing. It was because of these favorable changes in the condition of the affairs of the bank, and not for the reason that it had committed no act of insolvency, that this resumption in its business was allowed to take place. It was entirely consistent with these facts that the acts of insolvency alleged in support of the motion had taken place before the attachment was issued.

Neither the delay in finally bringing on the motion, nor the change in the property of the defendant, justified the order from which the appeal had been taken. As a matter of fact a prior motion was made to set aside the attachment which resulted in an order to that effect, but as it was finally entered, it was reversed and the motion denied on appeal to the General Term, but without prejudice to the motion which was made for the same purpose in the summer of 1882. For most of the time since the attachment was served proceedings have been pending to vacate it, because the association was not liable to be .proceeded against in that manner, for the reason that it had previously committed the alleged act of insolvency. Besides that, the section of the Code declaring the time within which such a motion may be made, was applicable to the case when the hearing occurred resulting in the order. It was at that time both authorized and regular, and as the attachment was issued in contravention of the prohibition of the section of the Revised Statutes of the United States which has been referred to, it should have been successful, and the attachment itself then set aside. If the plaintiff’s position had been prejudiced in the collection of its debts, that has been done by its own act, the consequence of which it has no right to require should be transferred to the defendant.

The order should be reversed, but without costs, and an order entered setting aside the attachment.

Brady, J., concurred.

Present — Brady and Daniels, JJ-.

Order reversed and order entered setting aside attachment.


text:
    G. BRUCE BROWN, as Administrator, etc., Respondent, v. GEORGE I. LANDON, Appellant.

      Letters of administration — •the action of a surrogate in issuing them cannot be attaches, coltatei-ally— a power of attorney may be acknowledged before a vice-consul.

    This action was brought upon three promissory notes made by the defendant to the order of the plaintiffs intestate. It appeared that the intestate died in London, leaving a will which it was claimed had been there admitted to probate. The plaintiff applied under a power of attorney executed by a temporary administrator and an executor, who had been appointed in England, for ancillary letters of administration as provided by sections 2695, 2696 of the Code of Civil Procedure. The petition for the letters was in proper form and stated all facts required to sustain the application. The papers produced in support of it, however, were irregular and insufficiently authenticated.

      Meld, that as the subject to which the proof was directed, the granting of ancillary letters of administration, was clearly within the jurisdiction of the surrogate, the validity of the letters granted by him thereon could not be attacked collaterally in this action; even though it could he shown that he erred in granting them and that his determination would have been reversed upon appeal.

      Rodorigas v. Bast Rivw Swings Institution (63 N. Y., 460, and Id., 76 N. Y., 316), followed.
    A power of attorney may he acknowledged before a vice-consul of the United States.
    Appeal from a judgment in favor of tbe plaintiff, entered on tbe verdict of a jury, and also from an order denying a motion for a new trial, made upon tbe minutes of tbe justice before whom tbe action was tried.

      John E. Parsons, for tbe appellant.

      Erwvrí 1. Spink, for tbe respondent.
   Daniels, J.:

Tbe recovery was for tbe amount due upon three promissory notes made by tbe defendant and payable to tbe order of J"ames Landon, tbe decedent. No point bas been made questioning tbe liability of tbe defendant upon the notes; and as that fact appears by tbe evidence to have been reasonably well established on tbe trial, it, will not be taken under consideration in tbe disposition of tbe appeal.

Before tbe commencement of tbe action tbe plaintiff upon bis own petition bad been appointed by tbe surrogate, of tbe county of New York tbe administrator of so much of the goods, chattels and credits of tbe decedent as were left by him in this State at the time of bis decease. And it is tbe legality of that appointment which bas been drawn in question on tbe argument of this appeal.

Tbe decedent died in London, in England, where it was alleged in support of tbe application he left a will making a disposition of bis estate. And tbe application for tbe plaintiff’s appointment resulting in tbe order made by tbe surrogate was made under tbe authority of tbe provisions of the Code, which authorized tbe issuing of ancillary letters testamentary and of administration. (Code of Civil Procedure, §§ 2695, 2696, 2697.) Tbe petition for tbe letters was in proper form and included tbe statements required to sustain tbe application. But tbe papers produced in support of it were irregular and insufficiently authenticated. Eor this purpose tbe law required an exemplified copy of the will and of tbe foreign letters issued upon its probate, together with the judgment or decree admitting it to probate. And by- section 952 of the Code of Civil Procedure the manner in which these documents were to be authenticated was prescribed by the legislature, but there was a failure to comply with these provisions of the Code. A certificate of the registrar of the probate court was added to what was alleged to be a copy of the will, and to hardly .an intelligible statement of the. ■action taken upon the application for its probate. And these certificates were authenticated simply and solely by the certificates of the vice and deputy consul-general of the United States in London, who also certified himself to be a notary public of the United States. But that was not such an authentication ■ of the documents as the statute upon this subject in very plain language directed should be made to authorize the papers themselves to be read in evidence.

The surrogate, however, acted upon this proof, irregular and deficient as it clearly was. But his action was upon a subject-matter confided to his jurisdiction, and his determination and decree upon it cannot be disregarded collaterally because of these defects in the proceedings. It is clear that upon an appeal the determination would be reversed. But it does not follow from that circumstance that it was void. The subject-matter to which the proof was directed was clearly within the jurisdiction of the surrogate, and that was, to grant ancillary letters testamentary or of administration upon the estate of the deceased party; and he did have evidence before him tending to establish the facts upon which his authority was by law required to be exercised; and as he exercised his judgment upon that proof and made his determination directing the issuing of the letters it cannot be disregarded in this action simply because he erroneously allowed this defective and iia-egular proof to be given. To avoid that result it was sufficient that the proof had a legal tendency to establish the facts required to 'be shown, and that it should have been rejected because of the manner of its authentication will not invalidate his decree to such an extent as to allow it to be held void when brought collaterally in controversy as it was upon the trial of this action. This subject Was very fully considered in Roderigas v. East River Savings Institution (63 N. Y., 460), and in Roderigas v. The Same (76 id., 316), where it was held that proof tending to establish the right of tbe applicant to redress, although it may be substantially defective, is sufficient to sustain such letters .against the objection taken to them in this case.

The power of attorney from the administratrix appointed in the foreign proceedings, and from the son of the decedent, who was nominated as one of his executors, the others having probably declined to act, was also produced in support of the plaintiffs application. This was in like manner proved ..by the certificate of the same vice-consul. But the acknowledgment of this document could properly be taken before such an officer (2 R. S. [6th ed.], 1142, § 11); for while he acted in that capacity he was entitled to exercise the authority vested by law in the consul himself. (U. S. R. S., §§ 1695, 1674, sub. 3.)

This instrument was accordingly in such a condition as allowed it to be legally received as evidence so far as it extended in support of the application, and by that the plain tiff was expressly authorized to make the application to the surrogate and to receive the letters which were issued by him. And as these letters were issued upon proof tending to establish the right to them, although it was defective and irregular, they became conclusive in favor of the plaintiff’s right to maintain this action. (Parhan v. Moran, 4 Hun, 717.) And this is the effect which the Code has prescribed, that letters testamentary, letters of administration and letters of guardianship shall have when they may be granted by a court or officer having jurisdiction to issue them. (Code of Civil Pro., § 2591.) And this provision is rendered applicable to letters of this description by section 2702. For these reasons the defendant cannot successfully resist the right of the plaintiff to maintain this action for the recovery of the amount due upon the notes. The acceptance by the surrogate of the defective proof, as long as it tended to establish the facts required to support the application, was an error only, which could be no otherwise corrected than by an appeal from his order or decree.

The law will not allow his erroneous action to be set aside in this manner. The judgment should, therefore, be affirmed.

Davis, P. J., and Beady, J., concurred.

Judgment affirmed.


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    FRANCIS A. FOGG, Respondent, v. CLINTON B. FISK, Appellant.

      Pkcmination of a party before trial — sufficiency of the affidavits upon which tho motion is made —privileges of the witness, as to refusing to answer, will be enforced, by the court upon the examination — Code of Oivil Procedure, sec, 872.
    Upon an application by the plaintiff for an order requiring the defendant to appear and submit to an examination before trial, it is not necessary that the affidavit should state explicitly that the .plaintiff intended to produce the evidence so to be obtained as a part of the proof of his case upon the trial; it is sufficient if his intention so to do may be reasonably inferred from the statements therein contained.
    The fact that the defendant will be privileged from testifying as to some of the matters as to which the plaintiff desires to examine him is not a reason for denying the application, as the court will, upon the examination, afford the witness such protection as he may be' entitled to.
    Appeal from an order made at Special Term, denying a motion to vacate an order directing the defendant to appear and be examined as a witness before trial.
    Tbe action was brought to recover damages occasioned by certain false and fraudulent representations made by the defendant in regard to the sale of certain mines and mining stock.

      Wheeler H. Peokham, for the appellant.

      John J3. Pos Passos, for the respondent.
   Daniels, J.:

The affidavit on which the order was made very fully complies with all the requirements prescribed by section 872 of the Code, unless that may be that contained in the fourth subdivision of this section. And the appeal has been taken for the reason that the affidavit was considered defective in this respect. That subdivision requires it to be shown by the affidavit that the testimony of the person to be examined is material and necessary for the party making the application, or prosecution, or defense of the action. And by the affidavit detailing the circumstances as to which proof will be required, which it is expected the defendant will be able to give, the materiality of the evidence desired to be obtained has, to a reasonable certainty, been established, and the minute statements made upon this subject are followed by the further statement that, as deponent is advised by his counsel herein, and verily “ believes the examination and testimony of said defendant Fish, relative to the issues herein, are both material and necessary to the plaintiff for the prosecution of this action and for the trial thereof.” From these statements it may reasonably be inferred that a bona fide intention exists on the part of the plaintiff to obtain the evidence of the defendant for the purpose of producing and using it as a part of the proof of his case upon the trial of the action.

It would undoubtedly have been better if this intention had been expressed in more direct terms, but as it may be gathered from the statements which have been made, the plaintiff is entitled to the benefit of such a construction. It is undoubtedly true that the exercise of the authority in question should be carefully guarded, for in a large majority of instances, where the testimony of the adverse party is taken under such an order, the object is simply to discover what he may be able to state as the facts of the controversy, without any intention whatever to read the evidence upon the trial. And that practice it was not the purpose of this provision of the Code to permit. But from the statements made in this affidavit it may reasonably be concluded that the object of the party is to obtain evidence in support of his own case, without which he will not be able to proceed to the trial of the action. In this respect it differs from those contained in the case relied upon in support of the appeal. For in Beach v. Mayor, etc. (4 Abb. N. C., 236), the object was to ascertain the names of witnesses who it might be expected wou,ld be produced upon the trial. And in Chapin v. Thompson (16 Hun, 53) it was to discover simply)what the defendant would probably swear to; and in Crooke v. Corbin (23 Hun, 176) no fact or circumstance showing the examination to be material or necessary was specified.

The present case stands in favorable contrast with those which were determined by the courts in these and other instances.

It may be that as to some of the matters to which the examination is expected to be directed that the defendant will not be obliged to answer. But if the examination should take that range, it will be the province of the court, when the testimony is taken, to afford the witness the protection he may be entitled to under the rules of law applicable to that subject.

The order should be affirmed, with the usual costs and disbursements.

Davis, P. J., and Beady, J., concurred.

Order affirmed, with ten dollars costs and disbursements.


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    WILLIAM T. CUNNINGHAM and Others, Appellants, v. BENJAMIN F. JUDSON, Respondent.

      Contract to ship and deliver — when such a contract requires that the pa/rty selling should himself ship the articles— a refusal on the part of the defendant to perform, excuses afirrmal tender.

    The defendant entered into a contract dated New York, January 20, 1880, by which he acknowledged that he had bought of the plaintiffs " about five hundred (500) tons No. 1 ‘Eglinton’ Scotch pig iron, for shipment in March, 1880, from Great Britain to New York, by sail or steam vessels, at sellers' option, deliverable ‘ex vessels’ on arrival” at New York. The plaintiffs neither owned nor shipped from Great Britain, in March, 1880, any iron of the kind specified in the contract, but in April, 1880, they entered into negotiations, and on May fourteenth received a contract for the purchase of the required quantity of the kind of iron specified in the contract, which had been shipped from a pórt in Great Britain in March, 1880, by other persons, and which had arrived in New York on May seventh. The defendant having refused to accept the iron, upon the ground that it had not been shipped by the plaintiffs as required by the contract, this action was brought to recover the damages thereby sustained by them.

      Held, that the defendant was only bound to aócept iron to be shipped by the plaintiffs themselves; that he could not be compelled to accept that purchased by the plaintiffs in New York, and that the action could not be maintained.
    • The express refusal of a party to perform his contract, or to accept the goods to be delivered thereunder, relieves the other party from the necessity of making any further offer or tender, as required by the contract..
    Appeal from a judgment in favor of tbe defendant, entered upon the verdict of a jury, and from an order denying a motion for a new trial, made upon the minutes of the justice before whom the action was tried.

      Everett P. Wheeler, for the appellants.

      Thomas Dcvrlmgton, for the respondent.
   Daniels, J.:

The recovery was for the difference between the proceeds of the sale of 500 tons of Eglinton Scotch pig iron, and the amount agreed to be paid for it by the defendant.

Eor its purchase a contract was entered into by the defendant in the following form:

New Yoek, Jcmua/ry 20, 1880.

Bought of Messrs. 'Winthrop Cunningham: & Son, for aeooumt Mr. B. F. Judson :

About five hundred (500) tons No. 1 “Eglinton” Scotch pig iron, for shipment in March, 1880, from Great Britain to New York, by sail or steam vessels, at sellers5 option, deliverable “ ex vessels ” on arrival at this port, at thirty-one dollars and seventy-five cents ($31.75) per ton (of 2,240 lbs.), payable by buyer’s note to his own order, with interest at six per cent (6 per cent) per annum, at ninety (90) days from delivery of United States weigher’s returns, which are to decide quantities to be paid for. Interest for three days’ grace to be included.

T. D. HAZARD, Broker.

Across the face is written, “ Accepted : B. F. Judson.”

And it was shown that the iron in controversy was shipped on board the bark Jennie Harkness, from a port in Great Britain, in March, 1880, to be carried to the city of New York. The iron was of the quality and description mentioned in the contract, and the ship arrived at New York on the 7th of May, 1880, and discharged her cargo between the tenth of the month and the first of July.

The iron was not in fact the property of or shipped by the plaintiffs when it was laden on board the vessel, but they entered into a negotiation with the owners of it in April for the purchase of this quantity of it, and on the fourteenth of May received a contract in writing for its sale to them upon the payment of the purchase-price. Upon this state of facts the defendant’s attention was directed to the arrival of the iron and the plaintiffs desire to deliver it to him in fulfillment of their contract with him, and on the 14th of May, 1880, he replied to them that they had made no shipment of iron within the contract to meet its terms, and had furnished bim with no order for iron owned by them, and in express terms declined their proposals as not being within the contract. This was followed by further correspondence, and in their letter of the seventeenth of May the plaintiffs in terms tendered the defendant 500 tons of iron of the description of that mentioned in the contract, then on board the Jennie Harkness, and asked for his directions whether they should land it on the wharf or deliver it to lighters, and asked his reply to the inquiry. And in answer to that and two succeeding letters of the eighteenth and nineteenth of similar tenor and effect, the defendant responded on the twentieth declaring that he did not sanction any of their proceedings. This state of affairs, so far as they were affected by the conduct of the parties, continued until the first of June, when the iron was again offered with the United States weigher’s return and a negotiable warehouse receipt for it indorsed to him, which he promptly refused and returned to the plaintiffs. In the meantime the iron, not being permitted to remain upon the wharf, was placed in a warehouse on the same pier, and near the place of its delivery from the ship; and by the receipt, indorsed by the plaintiffs, the defendant would have been permitted to have taken it from the warehouse on the production of that document. But apparently for the reason that the iron was not offered to him at the side of the vessel the jury were allowed to infer that the plaintiffs had failed to perform their contract and could not, therefore, recover in the action. But by what had previously transpired between the parties it is clear that the defendant did not intend to accept or receive this iron in fulfillment of the agreement; and did not decline to receive it because of the fact that it had been placed in the warehouse. That was evident from the terms of the letters written by him on the fourteenth and twentieth days of May, for, substantially, they each embodied direct refusals to receive the iron offered to him in performance of the terms of the agreement. And when such a refusal has been made its effect is to dispense with further offers or ceremonials on the part of the other contracting’party. (Cornwell v. Haight, 21 N. Y., 462, 465; Crary v. Smith, 2 Comst., 60, 65; Blewett v. Baker, 58 N. Y., 609, 613; Lawrence v. Miller, 86 id., 131.)

It is very evident from the case that the plaintiffs possessed the ability to obtain and deliver this iron to the defendant, and that he did not refuse to receive it because 'be bad the least suspicion of their inability to do that. He on tbe other hand by his conduct assumed that they could supply him with tbe iron, but he declined to allow them an opportunity to do that. The effect of his conduct was to dispense witB a more formal tender or offer than that which preceded and followed his. letters of the fourteenth and twentieth of May; and the fact that the iron was afterwards allowed to go in store because of the defendant’s failure to receive it would not under any well settled legal principle prevent the plaintiffs from recovering in the action, .for he at no time in any manner declined to receive it on account of that circumstance.

The court at the trial was requested in substance to charge this to be the law, but it refused to do that, and the plaintiffs excepted to the refusal.

But whether this exception was well founded or not it is not necessary to further discuss, for a more important obstacle stood in the way of the plaintiffs’ right to maintain the action, preceding the objections which have already been considered. From the manner in which the contract was expressed, it appears to have been the intention of the parties that the defendant should become the purchaser of 500 tons of iron which it was contemplated the plaintiffs themselves should ship from Great Britain to New York. This intention is clearly to be implied from the terms of the agreement, and the only option or choice reserved to the plaintiffs was whether they would ship the iron by sail or steam vessels, and that was reserved in such a manner as clearly to exhibit the expectation and intention that tire iron which was to be the subject of the sale was to be iron they themselves would ship and consign within the month of March, 1880, from Great Britain to the city of New York. The contract seems to be susceptible of no other reasonable construction, and as the plaintiffs failed to make such a shipment, and, as a matter of fact, had no interest, whatever, in the iron shipped on board the Jennie Harkness, previous to their contract for the purchase of 500 tons of it, after the arrival at New York, they were not in a condition to require the defendant to fulfill the agreement upon his part. To allow them to go into the market at the city of New York and purchase 500 tons of iron of the quality of that mentioned in the agreement, and then require the defendant to receive it, would be to make a .new and different agreement from that which the parties themselves entered into. It might not be important to the defendant, provided he obtained this quality of iron at the time when it should be delivered, whether the plaintiffs purchased it in Great Britain-and shipped it to New Torir, of made the purchase themselves after it had arrived at that point. But that was not what the parties agreed upon by the contract, and the court has no power to make a different contract for them, even though it may appear to be equally as beneficial to the defendant as that which he had entered into. He had a right to insist upon the performance of the contract as it was made, and to refuse to receive the iron from the plaintiffs which they proposed to deliver. For they neither owned or shipped it, but it was owned and shipped by other parties without their privity, during the month specified for that purpose in the agreement. And this objection to the acceptance of the iron was formally taken by 'the defendant in his letter of the 14th of May, 1880. The facts are of such a nature as to render it impossible to remove this objection. The iron was not the iron which the defendant had agreed to receive and pay for, and he gave the plaintiffs timely notice of his refusal to accept it for that reason. And as this objection must necessarily be encountered if another trial of the action shall be ordered, and there is no possibility of obviating it, it may now be allowed to have its appropriate weight .and effect in the disposition of the case. It necessarily, in any view under the agreement, would result in defeating the plaintiffs’ action, and for that reeason, although the case was tried upon a different theory at the circuit, the judgment and order should be affirmed.

Davis, P. J., and Brady, J., concurred.

Judgment and order affirmed.


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    WILLIAM A. MILES and Others, as Executors of JAMES H. SACKETT, Deceased, Respondents, v. JAMES W. SACKETT, Appellant.

      Evidence — cross-examination of witness — questions tending to show his hostility to the pa/t'ty cross-examining him ma/y he ashed.

    This action, was brought by certain executors against a co-executor to recover the amount of a promissory note given by the latter to the testator. Upon the trial a witness was called by the plaintiffs whose testimony tended to establish the defendant’s liability. Upon her cross-examination she was asked by the defendant’s counsel whether it was not after a request by the executors to pay a sum which they alleged she owed the estate that she first gave the inform ation of the facts as to which she had testified.

      Held, that the referee erred in refusing to allow the question to be put; and that as the court could not say that its exclusion had not injured the defendant the judgment must be reversed.
    Appeal from a judgment in favor of the plaintiffs, entered upon the report of a referee.

      Theodore Connoty, for the appellant.

      ■Jacob L. Hanes, for the respondents.
   Daniels, J.:

The recovery was for the amount unpaid upon a note made by the defendant on the 2d of March, 1874, by which he promised to pay to James H. Sackett, the testator, $5,000 on demand, with interest. The making and delivery of the note was proved, and the defendant gave evidence tending to establish the fact that it was afterwards returned to him by the testator as a gift. This evidence . was controverted by further testimony on the part of. the plaintiffs, and the view which the referee adopted was adverse to the defense. He thereupon directed a judgment for the amount unpaid upon the note in favor of the executors.

There was certainly no such weight of evidence in favor of the defense as would justify the'court in differing from the conclusion arrived at by the referee. But during the progress of the trial a witness was produced on the part of the plaintiffs, whose testimony very directly tended to establish the defendant’s liability .upon the note, and upon her cross-examination she was asked whether it was not after a request by the executors to pay the sum they alleged she owed the estate that she first gave the information in relation to the facts to which she testified on the trial.

The defendant himself was one of the executors nominated in and acting under the will, and this question was obviously asked for the purpose of showing that she might have acquired a prejudice or bias against the defendant because of the fact that the executors had insisted upon the payment of a debt by the witness to the estate, and the answer, if it had been allowed to be given, might have exhibited such a state of facts as would warrant the conclusion that the witness had contracted a prejudice against the defendant, and had been influenced to some extent by it in the evidence she gave upon the trial. This question was objected to on the part of the plaintiff as irrelevant and it was not allowed to be answered, and to that ruling the defendant excepted. It was not irrelevant in the case to make this inquiry of the witness. On the contrary, it is always competent for the party against whom a witness may be called to obtain evidence by way of cross-examination to show that such a relation exists between the party and the witness as might lead the witness to testify against him under a bias, which would be unfavorable to the impartiality of the witness in the case.

It is one of the objects of a cross-examination to discover the motives, inclinations and prejudices of the witness for the purpose of reducing the effect which might otherwise be given to the evidence.' (1 G-reenl. on Ev. [12th ed.], § 446.)

In Starks v. People (5 Denio, 106) it was said that “ it is always competent to show the relations which exist between the witness and the party against, as well as the one for, whom he was called.” And this principle was approved in Newton v. Harris (2 Seld., 345). The same point was considered in Cameron v. Montgomery (13 Serg. & Rawle, 128). And it was there stated by Tilghman, C. J., that a party against whom a witness is produced has a right to show everything which may in the slightest degree affect his credit.”

If this question had been allowed to be answered, it might have been made to appear that hostile feelings had been produced on the part of the witness by the action of the executors, and that under their impulse she gave her testimony against the defendant, who was one of these executors, and that would have had a tendency to weaken the effect of the evidence of the witness, and in that manner to produce a corresponding benefit to the defendant. The exclusion of the answer may have made no difference in the result of the case, but that cannot surely be affirmed as a fact. The defendant was entitled to the benefit of the answer proposed to be elicited from the witness, and the ruling improperly deprived him of this right. Upon this subject, in Baird v. Daly (68 N Y., 547), it was stated by Allen, J\, in the course of his opinion, that it cannot be said “ that the exclusion pr admission of any of the evidence to which objection was taken upon the trial, however slight or of little weight it may seem, may not have influenced the result, and if error was committed, either in admitting or rejecting evidence against the objection and exception of the defendant, a new trial should be had.” (Id., 549.)

The defendant had the right under this rule to insist upon the-answer to his question, and because it was excluded, the judgment -in the case should be reversed, and a new trial ordered, with costs to abide the event.

Davis, P. J., and Beady, J., concurred.

So ordered.