text:
    RICHARD S. VAN WYCK, Respondent, v. LOUISA M. BAKER and EMILE BENNEVILLE, Appellants.

      Fraudulent conveyances — when grantee not affected by fraudulent intention of his grantor — when conveyance treated as a security for the amount paid — proper form, of judgment.

    Although the statute against fraudulent transfers avoids a voluntary conveyance, made with intent to defraud creditors, though the grantee be innocent of any fraudulent intent, yet when the conveyance is made for a valuable consideration, the title of the grantee is not affected by the fraudulent intent of the grantor not known to, or participated in by him.
    “When, however, the consideration is so inadequate that it would be inequitable to allow the deed to stand as a conveyance, a court of equity will treat it as a security merely for the consideration actually paid.
    To authorize the court to do so, appropriate allegations must be contained in the complaint, and be supported by evidence on the trial.
    The judgment in such a case should declare the conveyance to be a security only, and require the plaintiff to redeem, or leave him to his remedy against the land, or direct the sale of the land subject to the grantee’s claim; a judgment directing the appointment of a receiver and a sale by him of the property, including- the interest therein of the grantee, is unauthorized.
    Appeal from a judgment in favor of the plaintiff, entered upon the trial of this action by the court without a jury.
    The action was brought to set aside a conveyance made by the defendant Baker to the defendant Benneville. as fraudulent. The case has already been before the General Term, the decision being-reported in 10 Hun, at page 39.

      Israel Minor, Jr., for the appellant Benneville.

      John W. Alexander, for the appellant Baker.

      John Gibney, for the respondent.
   Gilbert, J.:

This is a suit in equity, brought by a judgment-creditor of Mrs. Baker, to have a conveyance made by her to her co-defendant Benneville set aside, on the ground that it was made with intent to hinder, delay, and defraud creditors. The conveyance was made February 19, 1874, pursuant to an agreement made October 23, 1873. The plaintiff’s judgment was recovered August 28, 1875. The justice at Special Term found that said conveyance was made and delivered with intent to hinder, delay, and defraud the plaintiff and the creditors of the grantor; that the same was fraudulent and void as to the plaintiff, and that it should be set aside and canceled as null and void. He then decided that the premises so conveyed should be sold, and that out of the proceeds of such sale the defendant Benneville should be paid the sum of $1,036, with interest from the date of said conveyance, and that out of the balance of such proceeds the plaintiff should be paid the amount of his judgment, and the costs and disbursements of the action. Judgment was entered accordingly.

The justice did not, however, find that the defendant Benneville had notice of the fraudulent intent imputed to Mrs. Baker, or that he was in any manner privy thereto. On the contrary, the decision of the justice and the judgment, in effect, affirm the validity of the conveyance to him to the extent of the consideration.actually paid by him. For the provisions for paying him out of the proceeds of the sale aforesaid could not have been directed upon any other principle. As the law affords no protection to a fraudulent grantee, such provision is equivalent to a finding that Mr. Benneville was not one of that character. Being an innocent grantee, his title could not lawfully be affected or impaired by the fact alone, that the conveyance to him was made with a fraudulent intent on the part of his grantor. Such is the express provision of the statute on this subject. (2 R. S., 137, § 5.) It avoids voluntary conveyances made with intent to defraud creditors, although the grantee was innocent of any fraudulent intent, but not conveyances made upon a valuable consideration. (Waterbery v. Sturtevant, 18 Wend., 353; Carpenter v. Muren, 42 Barb., 300.) Was the conveyance in question then made upon a valuable consideration within the meaning of the statute ? The smallest sum of money, or property of any value, is a valuable consideration sufficient to support a contract. But the Legislature evidently did not intend that the rights of creditors might be defeated in that way. Perhaps it would be more logical to regard any pecuniary consideration, however small, a valuable one, and to make the grantor’s willingness to sell for a grossly inadequate consideration, of itself, notice of his intent to defraud creditors, upon the principle that whatever is sufficient to put a man upon inquiry is notice." (Williamson v. Brown, 15 N. Y., 354.) However that may be, it is clear that it is essential to the validity of a conveyance of land, as against the creditors of the grantor, that the consideration paid should be such as to show that the property was not purchased at an unconscionable under-valuation. While a deed cannot be avoided, or its legal effect impaired, because the grantee made an advantageous bargain, yet the amount of the consideration thereof must not be grossly inadequate. If it is, and the other circumstances of the transaction are not such as to warrant the court in avoiding the deed in toto, it may be set aside so far as it purports to be an absolute conveyance, and be permitted to stand as a security only for the moneys actually advanced. (Boyd v. Dunlap, 1 Johns. Ch., 478 ; Bigelow v. Ayrault, 46 Barb., 143 ; Bump’s Fraudulent Conveyances, 564 ; May on Vol. and Fraud. Alienations, 235.) But such relief cannot be afforded unless the complaint contains allegations adapted thereto, and the proof sustains them. If a grantee purchases with notice of a fraudulent intent on the part of his grantor, the deed is void, though he pays the full value of the property. If he purchases without actual notice of such fraud, but for a consideration which is so inadequate that it would be inequitable to allow the deed to stand as a conveyance, a court of equity may give it effect as a security for the consideration actually paid, upon appropriate allegation and proof. (Clements v. Moore, 6 Wall., 312 ; McArthur v. Hoysradt, 11 Pai., 495.) In the case before us, the complaint contains no facts on which the court could properly turn the conveyance into a security for the amount actually paid by the grantee, but it proceeds solely upon the ground of fraud on the part of both grantor and grantee. Nor does the evidence warrant the relief granted. Four witnesses testified that, in their opinion, the promises in controversy were worth, at the time of the conveyance to Benneville, $3,000. These witnesses were not experts, and they were interested in avoiding the conveyance, being creditors of the grantor. They had no special qualifications which should commend their opinions on that subject to the confidence of the court. Opposed to their evidence was the uncontroverted evidence of the actual cost of the property immediately before said conveyance was made, namely, $500 forthe lot, and for the house upon it, $1,400. That the nominal value of real estate and the cost of improvements thereon have greatly diminished since 1874, is a fact of common notoriety. When Mr. Benneville purchased the property, it was incumbered by a mortgage of $500. According to his testimony, which was not contradicted or impeached, he paid for the property, over and above said incumbrance, $1,331. This latter sum was made up by discharging an indebtedness of Mrs. Baker to him for professional services, which had been liquidated and agreed upon between them a week before his purchase, and by a payment of the balance in cash. Assuming the actual cost of the property as a fair criterion of its value, Benueville purchased the property for only $69 less than it was worth, a sum quite too small to justify any interposition of the court on the ground of inadequacy of consideration.

The justice at Special Term found an inadequacy of consideration by giving full effect to the opinions of the plaintiff’s witnesses on that subject, and by reducing the amount of Mrs. Baker’s debt to Benueville. We think that the evidence of the actual'cost of the property shows that those opinions .were grossly exaggerated. Such testimony ought not to be taken without many grains of allowance. No allegation was made, and no evidence was given to show that the indebtedness of Mrs. Baker to Benneville was not actually and fairly incurred, nor that the amount thereof was exaggerated, nor that the items composing the same had been overcharged, nor that the whole amount thereof was not justly due. In the absence of such allegation and evidence, we think that the court had no power to reduce the amount at which such indebtedness was adjusted.

Upon the whole, we are of opinion that a judgment impairing the effect of the conveyance is not warranted by the facts. In any point of view, the form of the judgment is erroneous. The proper judgment for the relief awarded would bo to declare the conveyance to be a security only and require the plaintiff to redeem, or leave him to his remedy upon the land, or to sell the land subject to Benueville’s interest. I know of no authority for ordering a compulsory sale of his interest.

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

BahNARD, P. J., concurred; DyemaN, J., not sitting.

Judgment reversed and new trial granted, costs to abide event.


source: Caselaw Access Project

author: Gilbert, J.:

license: Public Domain

text:
    SARAH M. ACKER, Appellant, v. ALEXANDER ACKER, Impleaded with ROSE ACKER, His Wife, and ISAIAH T. WILLIAMS, Respondents.

      Statute of limitations — extension of time by reason of plaintiff’s disability— Code, section 101.
    Where a person, at the time a cause of action accrued, was disabled, as provided in section 101 of the Code, that section lengthens the period limited five years, provided the disability lasts so long; and if it does not, then it extends such period so as to expire at the expiration of one year after the usual period of limitation would expire, and the disability has ceased.
    A right of action upon a sealed instrument accrued to the plaintiff, then a married woman, on November 1,1857. This action was commenced December 10, 1877. Her husband died in September, 1866.

      Held, that if plaintiff’s disability to sue was removed by the passage of the married woman’s act of 1860 (ch. 90), she could bring the action within twenty-one years from November 1, 1857.
    That if her disability was not removed until the death of her husband, in 1866, she could bring the action within twenty years from November 1, 1862.
    Appeal from a judgment in favor of the defendant, Alexander Acker, entered upon the trial of this action by the com-t without a jury.
    This action was brought to foreclose a bond and mortgage for $5,500, dated the first day of November, 1856, payable one year after date, with interest, executed by the respondents, Alexander Acker and wife, to the plaintiff, Sarah M. Acker. When this bond and mortgage was given, Sarah M. Acker was a married woman, the wife of J ames Acker. J ames Acker died on the 8th of September, 1866. Until his death, he and the appellant resided in the city of New York as husband and wife. The action was commenced December 10, 1877. The defense was the statute of limitations.

      Francis LarJcin, for the appellant.

      J. T. Williams, for the respondents.
   Gilbert, J.:

Tliia is an action to foreclose a mortgage. The defense is the statute of limitations. The period limited for commencing the action was twenty years after the cause of action accrued. (Code of Proc., § 90.) The cause of action accrued November 1, 1857, and the action was commenced December 10, 1877. When the cause of action accrued the plaintiff was a married woman, and under disability to sue. It was provided by section 101 of said Code that “ the time of such disability is not a part of the time limited for the commencement of the action, except that the period within which the action must be brought cannot be extended more than five years by any such disability, except infancy, nor can it” (the period limited) “ be so extended in any case longer than one year after the disability ceases.” I think that the plaintiff's disability was removed by the act concerning the rights and liabilities of husband and wife, passed March 20, I860, which conferred upon married women capacity to sue and be sued. (Laws, 1860, ch. 90, §7; Ball v. Bullard, 52 Barb., 141-146.) Such disability certainly ceased upon the death of the plaintiff’s husband in September, 1866, and it was finally dropped from the enumeration of disabilities contained in the statute of limitations by an amendment of the Code of Procedure passed in 1870.

Whether the action was barred by the statute of limitations depends upon the construction which shall be given to section 101 of the Code of Procedure, or rather to that part of it which has been quoted above. I am of opinion that that section extended —that is, lengthened, the period limited five years, provided the disability lasted so long; but that if the disability did not last so long, then that said section extended the period limited for such a time as would end at the expiration of one year after the period of limitation had elapsed and the disability had ceased. Surely the Legislature did not intend that if the disability ceased more than a year before the time limited had elapsed, there should be no extension of such time. Their intention plainly was to give to married women at least one year in addition to the time limited. Such construction would give the plaintiff twenty-one .years from the time the cause of action accrued, viz., November 1, 1857, in which to bring her action, if her disability ceased in consequence of the passage of the act of 1860 cited ; but if it did not cease until the death of her husband, then by such construction she would have twenty years from November 1, 1862, for that purpose. In either case the time had not expired when the action was brought.

As I understand the decision of the Court of Appeals in Dunham, Ex’r, v. Sage (52 N. Y., 229), the same construction of said section 101 was there adopted. In that case the time limited for commencing the action was six years. The cause of action accrued August 31, 1857, the disability ceased February 4, 1862, and the action was commenced February 18, 1867. The court held that the action had been barred, for the reason that the disability had not continued five years, and that, therefore, the plaintiff had only one year after the disability ceased, in addition to the general limitation of six years, in which to bring her action. The judge, who delivered the opinion of the court, after illustrating the meaning of the statute, or attempting to do so, summed up as follows : “ Thus the party has six years in any event; five years additional, in case the disability so long continue; but in any event only one year additional after the disability ceases.” Such construction corresponds with the change of phraseology adopted by the Legislature in enacting the provision on this subject, contained in the Code of Civil Procedure, § 396. Applying that construction to the 'case before us, the action is not barred. This conclusion being decisive, we need not consider the other questions which have been presented.

The judgment must be reversed, and the usual judgment must be entered for the plaintiff, with costs.

BakNakd, P. J., concurred; DykmaN, J., not sitting.

Judgment reversed and new trial granted, costs to abide event.


author: GILBERT, J.:

text:
    DUDLEY B. HOLBROOK, Appellant, v. JOHN BAKER, Respondent.

      Complaint in County Court —failure to allege that defendant is a resident, does not render it demurrable.

    ■Where a complaint, in an action brought in a County Court, fails to allege that the defendant is a resident of the county, a dismissal thereof on the trial, on the ground that it did not state that the defendant was a resident of the comity, will not be sustained where the defendant has answered on the merits.

      Judge v. Hall (5 Dans., 69), overruled.
    Appeal from a judgment entered, in the County Court of Westchester county, upon an order dismissing the complaint herein, on the ground that it appeared from the complaint that the court had not jurisdiction of the action.
    This action was brought in the Westchester County Court to recover for goods, wares and merchandise sold and delivered. The defendant appeared by his attorney, and answered on the merits. On the trial, after a jury had been impanneled and sworn, a motion was made by defendant’s counsel to dismiss the complaint, on'the ground that it did not state upon its face that the defendant was a resident' of the county of Westchester, which was granted. The complaint alleged, “ that at the several and respective days and times hereinafter mentioned and set forth, the above-named defendant was a resident of the village of Sing Sing, in the county of Westchester.”

      Wm. O. Valentine, for the appellant.

      O. B. Palmer, for the respondent.
   GILBERT, J.:

If the complaint in this case does not show that the County Court had jurisdiction of the person of the defendant, it contains nothing showing that such court had not jurisdiction thereof. The complaint was dismissed on the latter ground. That was error. In the case of Judge v. Hall (5 Lans., 69), this point was, we think, erroneously decided. The Code of Civil Procedure (§ 498) authorizes sucb an objection to be taken by answer. If not so taken, it is waived, for when tbe court has jurisdiction of the subject-matter an appearance will confer jurisdiction of the person. (McCormick v. Penn. Cent. R. R., 49 N. Y., 303.) We are inclined to hold that the complaint shows on its face that the court had jurisdiction of the person of the defendant; but it is not necessary to determine that point.

The judgment must be reversed, with costs.

Barnard, P. «J., and DyicmaN, «JJ., concurred.

Judgment reversed and now trial granted, costs to abide event.


author: Gilbeet, J.:

text:
    JOHN G. HOWARD, Respondent, v. MARGARET HEINERSCHIT, Appellant.

      Executor — liability of, on lease to Ms testator — xohm legatee liable fot' rent.

    A testator left all his property, both real and personal, to his wife, the defendant, and appointed her sole executrix. At the time of his death he was the lessee of certain premises, the lease having1 one year to run. After his death, the defendant continued to occupy a portion of the demised premises as a place of business, and sub-let the remainder thereof for her own profit.

      Eeld, that by these acts she elected to hold the premises as legatee and not as executrix, and that she was personally liable for the rent subsequently accruing. An executor is liable, as such, upon the covenants contained in a lease, executed by his testator, whether he enters into possession of the demised premises or not; but if he does enter into possession, he thereby becomes personally liable, upon such covenants, as an assignee of the lease.
    Appeal from a judgment in favor of the plaintiff, entered upon the trial of the action by the court without a jury.
    The action was brought to charge the defendant, personally, with the payment of rent accrued upon a lease executed by her deceased husband. Her husband left a will giving to the defendant all his estate, both real and personal, and appointing her sole executrix thereof. At the time of his death he was the lessee of the premises in question, under a lease which had been extended from May 1, 1875, to April 30, 1876, by which he had covenanted to pay $2,000 a year in monthly instalments. The justice found “that said defendant occupied the demised premises under the said lease and said extension thereof, from the time of the death of said John Heinerschit until the end of said term, April 30, 1876 ; that she used a portion of said premises as her residence ; that she also carried on business as a licensed liquor dealer therein; that she sub-let portions of said premises and received 'rent therefrom.”

      Jesse Johnson, for the appellant.

      George Q. Blanlce, for the respondent.
   Gilbeet, J.:

The rule at common law was that for rent, which was in arrear in the testator’s life-time ; the executor was liable merely in that character. As the testator’s debt he could be sued for it in the detinet only, and to such action he might plead that he had fully administered ; whereas for the subsequent rent the executor was in general personally responsible. If he entered on the demised premises, as by his office he was bound to do, the lessor might charge him in the debet and detinet for the rent incurred subsequently to his entry. (Toll. Ex’rs, b’k 3, ch. 2, § 3 ; W’ms Ex’rs, part 4, b’k 2, ch. 1, § 2 ; Tay. L. & T., § 332; Platt on Leases, 381.) The principal was that the executor was liable, as such, upon the covenants contained in the lease, whether he entered or not; but if he entered upon the demised premises he became liable as assignee; in other words, that for the debts of the testator, the executor was liable in his representative capacity only, but for debts incurred by him after the death of the testator, he was liable personally, although such debts were incurred for the benefit of the estate. I cannot find that this rule of the common law has been changed by statute, and it could be changed in no other way. (See W’ms Ex’rs, supra, and cases in notes to sixth Am. ed.) Such a rule works no hardship on the executors. The term is assets in his hands. The presumption is that it. is of some value beyond the rent. In that case the executor can convert it into money. If it has no value, the executor can avoid personal liability by refusing to enter, and in the latter event he will be liable only in his representative capacity upon the covenants contained in the loase. The case of Pugsley v. Aiken (11 N. Y., 494), is not in conflict with that rule, for the question in that case was whether the executors were liable in their representative capacity. They were sued upon the covenants of the testator, contained in a lease whereby a tenancy from year to year was created, and which had not been terminated by them by a legal notice. The question whether the entry of the executors made them personally liable was not involved in the case. The remark of Judge AlleN, that the rent reserved was not chai’geable upon the executors in their own right, was proper, for the reason stated by him, namely, that “ they could not retain the possession for their own benefit,” and it meant nothing more than that if the executors paid the rent voluntarily or compulsorily they would be entitled to be reimbursed out of the assets in their hands.

I am of opinion that the defendant is liable upon another ground. The facts found by the court below show that she entered not as executrix, but as legatee. The term was given to her, and she occupied a portion of the demised premises as a place of business until the tenancy ceased, and during that time also she sub-let the residue thereof for her own profit. These acts were unequivocal manifestations of her election to hold the demised premises as legatee and not as executrix. (W’ms. Exrs., part 3, bk. 3, ch. 4, § 3.) The term in this lease was personal estate, and vested in the executrix, but her interest as executrix was not an absolute one. It was temporary and qualified. She was not entitled in her own right, but in auter droit, in right of the deceased. When she elected to take the term as legatee the title vested in her, and her liability for the rent which thereafter accrued followed. (Toll. Exrs., bk. 2, ch. 1; Hudson v. Reeve, 1 Barb., 89.)

The judgment must be affirmed, with costs.

BarNAed, P. J., and Dtkmast, J., concurred.

Judgment affirmed, with costs.


text:
    JAMES G. TIGHE, Appellant, v. HANNAH POPE, Administratrix, etc., of JOHN POPE, Deceased, Respondent.

      Leave to amend complaint — when it should be granted— Code of Civil Procedure, §723.
    This action was brought by the plaintiff to recover for legal services rendered to the respondent as administratrix of her husband’s estate, the summons and complaint describing her as administratrix, and asking judgment against her as such. Before the trial plaintiff moved for leave to amend the summons and complaint by striking out the words “ as administratrix,’’ and to proceed against defendant individually. The motion was denied on the ground that if granted it would introduce a new defendant and a new cause of action, which the court had not power to do.

      Held, that the motion was proper and should have been granted.
    Appeal from an order of the County Court of Kings county, denying a motion for leave to amend the summons and complaint herein.
    The action was brought to recover for legal professional services performed for the respondent as administratrix of her husband’s estate, in and about the collection of a claim due to the said estate, in filing an inventory and in accounting before the surrogate. The complaint described respondent “ as administra-trix,” etc., and demanded judgment against' her as such. Before trial, a motion was made to amend the summons and complaint so as to recover against respondent in her individual capacity, and to strike from the complaint the description, “ as administratrix,” etc., which was resisted by respondent upon the ground that it introduced a new defendant and a new cause of action, and therefore the court had no power to allow the proposed amendment. The court refused the amendment on that ground.

      James G. Tighe, appellant in person.

      Philip S. Grooke, for the respondent.
   Gilbert, J.:

I am of opinion that the court had the power to grant the amendment, and that such amendment would have been in furtherance of justice. It would have worked no change in the cause of action, except to make it one against the defendant personally instead of one against her in her representative capacity of administratrix. Such a change is, I think, within the purview of section 723 of the Code of Civil Procedure. In Fuller v. The Webster Fire Ins. Co. (12 How. Pr., 293), a suit had been brought against a corporation after it had been dissolved, and an amendment substituting the receiver of the corporation as defendant was allowed after answer. In Haddow v. Haddow (3 N. Y. S. C. [T. & C.], 777 ; affirmed by the Court of Appeals), an action brought by a person in her own right was changed to one in her favor as administratrix. These cases gave to the statute as liberal a construction as that which is asked in this case. Whether the amendment is allowed or not, the same person will be the defendant, and I cannot see that any increased burden will be cast upon her by compelling her to defend personally, instead of allowing her to succeed upon the technical ground that she did not incur the liability claimed, in her capacity of administratrix. I am of opinion, therefore, that it was the duty of the County Court to grant the amendment upon terms, although the language of the statute is not imperative. (Moak’s Van S. Pl., 824, et seq.) When a power is granted for the sake of justice, an exercise of it may be enforced in a proper case. It is not wholly discretionary. (Mayor v. Furze, 3 Hill, 612; MacDougall v. Paterson, 11 C. B., 755; People ex rel. Conway v. Supervisors, 68 N. Y., 119.)

The order appealed from must be reversed, without costs in this court, and an order must be entered allowing the amendment on payment of $10 costs within five days after service thereof.

BarNARD, P. J., and DykíviaN, J., concurred.

Order reversed, with costs and disbursements.


text:
    WILLIAM M. TEBO, as Assignee in Bankruptcy of WILLIAM BROWN, Respondent, v. ELIZA BAKER, Appellant, Impleaded with others.

      Order for examination before trial — must be served, on party as well as attorney, Code of Civil Procedme, section 873.
    An order for the examination of a party before trial under section 873 of the Code of Civil Procedure, must be served upon the party personally, as well as upon his attorney.
    Even if such section does not require personal service upon the party, he cannot be punished for contempt in failing to appear, unless such service has been made upon him.
    Appeal from an order punishing the appellant, by striking out her answer, for a contempt in failing to obey an order requiring her to appear and be examined as a party before trial.

      Moms (& Pearsall, for the appellant.
    The service of the affidavit and order upon the defendant’s attorneys, only, was not a sufficient service to compel the attendance of the appellant to punish her, as for a contempt in not appearing. The order should have been served upon the said defendant, and her witness fees and mileage paid or tendered. {Riddle v. dram,, 3 Abb. [N. C.], 117, note; Fresberg v. Branigan, 3 id., 121; Wood v. Real, 3 id., 122; contra, see Webster v. Stockwell, 3 id., 116; Thompson v. Sickles, 3 id., 121.) The defendant could not be punished for contempt of an order not served upon her; no order to show cause or notice of motion to punish her for contempt was ever served upon her, and it does not appear that she ever had any knowledge of the order requiring her appearance for examination. (Code, § 8, sub. 3; id., § 802; Salterlee v. Be Comean, 7 Robt., 666; 2 R. S., 535, §§ 3 and 5; Rider v. Kidder, 12 Yes., 202; Durante. Moore, 2 Russ. & Mylne, 34; Weston v. Faulkner, 2 Price, 2; 4 Wait’s Pr., 180.)

      J. T. Marean, for the respondent.
   GILBERT, J.:

On the fifteenth of July last, an order for the examination of the defendant, Eliza Baker, before trial, was made in this action, on the application of the plaintiff, pursuant to section 873 of the Code of Civil Procedure. Mrs. Baker had appeared in the action by attorney, and put in an answer. Neither the order, nor the affidavit on which it was made, was served upon her, nor does it ■ appear that she had been informed that the order had been made, but the affidavit and order were served upon her attorney as required by section 874 of the Code of Civil Procedure. Mrs. Baker having failed to appear, as required by the order aforesaid, an order that her answer be stricken out was made. She has appealed from that order, and that is the case before us.

It is insisted on behalf of the plaintiff that service of the order for the examination of a party upon the attorney is sufficient; that such service is the particular mode of service provided by the Code, and that service upon the party is not required thereby. The justice at Special Term so held, and the question is whether he interpreted the statute correctly. I think that he did not. To punish a person for disobedience of an order which had not been communicated to him must strike every one as very unjust. Depriving a party of all defense to an action against him may be a severe punishment. A construction of a statute which leads to such a residt should be very palpable before it is adopted. I am of opinion that a reasonable construction of the provisions of the Code on this subject requires that the order shall be served upon the party, and also upon his attorney, if he has appeared by attorney. The process of amendment to which sections 873 and 874 of the Code of Civil Procedure have been subjected, has obscured their meaning. As passed in 1876, section 873 provided that “the order must require each of the parties to the action except the applicant; or if no action is pending, each of the persons named in the affidavit as the expected adverse parties thereto,” etc., and section 874 provided for the issuing of a subpoena directed to the person to be examined, requiring him to attend at the time and place specified in the order ; and it also provided the same penalty for disobedience as is now provided by that section. By chapter 416 of the Laws of 1877, those sections were amended. The words quoted were stricken out of 873, and in lieu thereof there was inserted the simple provision that “ the order must require the party or person to bo examined to appear,” etc. The provision for a subpoena was stricken out of section 874, and a service of the order was, I think, impliedly substituted therefor. The provisions for compelling attendance of the party to be examined, and for punishing his failure to attend, were in substance retained. It is true that the Legislature, in constructing these amendments, omitted (probably by inadvertence), an express provision requiring service of the order upon the party to be examined in lieu of the service of a subpoena. But that omission is not material, for as the law stood at the time of the amendment no punishment could be imposed for disobedience of an order, without proof of personal service of the order upon the party accused of such disobedience. (2 R. S., 534, § 3 ; Code of Civil Procedure, § 853.) The Code of Civil Procedure (§ 14) has defined what shall constitute a contempt, but it seems that it has left the provisions of the Revised Statutes respecting the remedy therefor in force. The language of section 874 is “if the party or person so served fails to obey the order, his attendance may be compelled, and he may be punished,” etc. This language implies that the provision was enacted under a supposition that a previous provision had been made for a service of the order upon the party, else why was the phrase “so served” used? And I am of opinion that section 873 does require such service, for in no other way can the requirement that the party shall appear be enforced and made effectual, consistently with the just rights of such party, and with immemorial practice in such cases. Section 875 can have full effect by giving to it the interpretation before suggested, namely, that it was intended to provide for a service upon the attorney of each party, as a notice in addition to personal service upon the party who is to be examined. If the Legislature had intended that service upon the attorney should take the place of service upon the party, it seems to me they would have said so in plain terms. The order for the examination of a party to an action before trial is one in the action, and it may be served upon the attorney in the several modes provided by section 799 of the Code of Civil Procederé, namely, personally, through the post-office, by leaving the papers with a clerk, and by other less direct modes of service. Did the Legislature intend that a citizen should be exposed to the hazard of being subjected to punishment for a contempt by such means ? Something like an answer to that question is found in section 802 of the Code of Civil Procedure, whereby the provisions thereof, authorizing and regulating the mode of service of papers upon attorneys, are made inapplicable to the service of a summons or other process, or of a paper to bi’ing a party into contempt, and more pointedly in sections 853 and 874. These sections do not authorize proceedings against a party upon a service on his attorney, but are in terms limited to the person upon whom the service was made. Therefore, whether the construction which I have put on section 875, or that for which the plaintiff contends, be the correct one, it is clear that where the order has been served on the attorney only, no one can be punished for a disobedience thereof. The attorney cannot, because he was not required to obey it; and the party cannot, because the statute authorizes the punishment of the person upon whom the order was served only.

Other considerations might be added, arising out of the inconvenience and unfairness to which the construction of the statute adopted at Special Term might lead, in case of a temporary or permanent absence of the party to be examined from his place of residence, and from the inappropriateness of the restrictions as to service contained in section 873, if service on the attorney were intended. But enough has been said, I think, to show that the order appealed from is erroneous.

The order should be reversed, with ten dollars costs and disbursements.

DykmaN, J., concurred; BarNArd, P. J., not sitting.

Order reversed, with costs and disbursements.


text:
    CHARLES R. DEAN, Respondent, v. DAVID R. DE WOLF, E. B. BENJAMIN, W. H. WHITON, and CORNELIUS H. DELAMATER, Impleaded, etc., Appellants.
    1818, chap. 40, § 18 —who “a laborer or servant” within.

    The New York & South American Gold Mining- Co., a corporation created under the act of 1848, is located in the city of New York. One Dow was its agent, his duties "being to superintend the affairs of the company in Venezuela and Guiana, with, power to act in all matters. The plaintiff was appointed an assistant to Dow, in Dow’s absence exersising the same xoowers. as he, at a salary of §700 per month, viz.: §100 in cash and §600 in stock and bonds. Held, that the plaintiff was not “a laborer or servant,” within the meaning of the act rendering stockholders personally liable for debts due to laborers and and servants. v
    laborers or servants, within the meaning of that act, are persons who, in common parlance and according to the general understanding of men, fall under that appellation, in enumerating the different classes of persons employed by a corporation.
    Appeal from a judgment in favor of the plaintiff, entered upon the trial of this action by the court without a jury.
    The action was brought to charge defendants (as stockholders of the New York and South American Gold Mining Company) with an alleged indebtedness of the company to plaintiff, under the statute (§ 18, chap. 40 of 1848), holding stockholders of certain corporations liable to servants and laborers for the value of services rendered by them to such corporations. On the 24th day of October, 1872, plaintiff entered into a contract in writing with one Lorenzo Dow (who was general superintendent of the company in Guiana and Venezuela, with power to act in all matters), whereby he agreed to act as assistant of said Dow in the business of the corporation. On the 8th day of March, 1876, plaintiff recovered judgment against the company for the value of the services alleged to have been performed under this contract. This action was brought to recover the amount of such judgment.

      JEh-cistus Coolee, for the appellants.

      Rufus L. /Scott, for the respondent.
   GILBERT, J.:

The resolution of tbe directors passed April 23d, 1872, conferred ample authority upon Dow to employ the plaintiff; that he did employ him pursuant to such authority, and that the service was rendered for the company was also proved. The contract not being under seal, its form furnishes no obstacle to a recovery. The rights and liabilities of a principal upon a written instrument not under seal, executed by his agent, do not depend upon the fact of the agency appearing on the instrument itself, but upon the fact that the act was done in the exercise, and within the limits of the power delegated, and these are necessarily inquirable into by evidence. (Story Ag. §§ 160, a, 161; Dykers v. Townsend, 24 N. Y., 57; Coleman v. The First Nat. Bank of Elmira, 53 N. Y., 388; Briggs v. Partridge, 64 N. Y., 362.) The contract in this case, however, plainly shows on its face that it was intended to be one between the plaintiff' and the company, and not between the plaintiff' and Dow.

The only difficult question is, whether the plaintiff was a “servant” or “laborer” within the meaning of the statute. lie was the assistant of Dow, and his salary was fixed at $700 per month, namely, $100 in cash and $600 in stock and bonds. Dow’s powers and duties were to superintend the affairs of the company in Guiana and Yenczuola, with power to act in all matters. The company was located in New York. It is very clear that Dow could not recover in an action of this kind, for the reason that in judgment of law he was neither a “servant” nor a “laborer.” (Hill v. Spencer, 61 N. Y., 274.) Why, then, should the plaintiff be placed in either category ? Iiis duties were of the same kind, and in Dow’s absence he exercised the same powers. The fact that he occasionally performed manual labor in the discharge of his duties, did not make him a “laborer” within the meaning of the statute. I am of opinion that the nature of his employment, and his duties under it and the largeness of his compensation, render the classification of him under the designation of “servant” or “laborer” inappropriate, and contrary to the intention of the Legislature. In Aikin v. Watson (24 N. Y., 482), the Court of Appeals unanimously held that the Legislature intended to throw a special protection around that class of persons who should actually perform the manual labor of the company. Hence they held that a contractor for the construction of a railroad was not a “servant” or “laborer,” within the provision of the general railroad act, which in effect is the same as that contained in the statute applicable to this case. In Coffin v. Reynolds (37 N. Y., 640), a construction was given to the latter statute, and it was there hold that stockholders were not liable for services rendered by th< plaintiff “ as secretary of the corporation and otherwise.” Geovee J., said : “ The design of the statute was to afford protection t< a class of employees of the company known cis laborers, servant» and apprentices, and not as officers and agents of the company." These cases are mentioned with approval in the case in 61 N. Y., supra. (See, also, Gurney v. At. & Gt. W. R. Co., 58 N. Y., 358.) No definition of the terms “servant” and “laborer,” which would be applicable to every case arising upon either of the statutes referred to, has been heretofore attempted or can now be given. In construing statutes words are to be taken in their natural and obvious sense, and not in a sense unnecessarily restricted or enlarged. (Sedg. on Construction of Statutes and Const. Law [2d ed.], 220.) Common sense rejects an interpretation which places the operatives in a factory, or the laborers in a mine, and the person whose duties relate to the conduct and superintendence of their work, under the same designation. In one sense they are-all servants or laborers, because they render services or perform labor. But such a construction would include the officers of a company, its attorney and counsellor, and all other persons who should perform any sort of service for it. That construction has been uniformly rejected. Who, then, are laborers and servants ? A proper answer to that question is, that they are persons who, in common parlance and according to the general understanding of men, fall under that appellation in enumerating the different classes of persons employed by a corporation. That test would exclude the plaintiff.

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

BaeNaed, P. J., and DyemaN, J., concurred.

Judgment reversed and new trial granted, costs to abide event.


author: GilbKRT, J.:

text:
    MARY M. MOODY, Respondent, v. SAMUEL H. MOODY and EFFIE, his Wife, Appellants.

      Action to set aside a deed as a aloud upon title— when defendant may show that plaintiff’s deed was procured by fraud— The right to avoid, a deed passes to the heirs, grantees and devisees — Adverse possession.

    December 9, 1876, John Moody executed a deed of certain land to plaintiff, who at once went into possession of the premises conveyed. On January 31, 1877, he executed a second deed of the same land to defendants, which latter deed was recorded before that of the plaintiff. In an action by plaintiff to set aside the second deed as a cloud upon his title, held, that the defendants might allege and prove, as a counter-claim, that the plaintiff’s deed was fraudulently procured, and ask to have the same set aside.
    The right to set aside a conveyance on equitable grounds descends to the grant- or’s heirs, and passes to his grantees and devisees.
    A possession under a deed procured through fraud is not adverse within the meaning of the act against champerty.
    Appeal from a judgment iir favor of the plaintiff, entered upon the trial of this action by the court without 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.
    On December 9, 1876, one John Moody conveyed a lot on the south side of Flushing avenue, in Long Island City, to Mary M. Moody, the plaintiff, who went into possession of the premises thereunder; she and her husband at the same time executing to said John Moody their bond and a mortgage on the premises, to secure a portion of the purchase-price. On January 29th, 1877, the defendant, Samuel H. Moody, received a deed of the same premises from said John Moody, which deed was recorded before that of the plaintiff. In an action brought to have the defendant’s deed adjudged to be void, the defendants, among other defenses, alleged that the conveyance to plaintiff was procured by means of fraud and circumvention, and by way of counterclaim demanded an avoidance of said conveyance. Evidence to establish such defense was, on the trial, held inadmissible, and excluded.

      Frank F. Blackwell, for the appellants.
    If the deed to plaintiff had been procured by fraud, duress, or undue influence on the part of the plaintiff, and was fraudulent and void, the plaintiff took no title legal oi’ equitable by it, and her grantor could have had it set aside. (Root v. French, 13 Wend., 570; Grary v. Goodman, 22 N. Y., 177; Van Gleefv. Fleet, 15 Johns., 147; Gary v. Hotailing, 1 Hill, 311; Allison v. Mcitthieu, 3 Johns., 235 — 238, and cases cited by Cowest, J., in Gary v. Hotailing, supra.) The subsequent conveyance of the same property to the defendant Samuel H. Moody transferred to said defendant the right to have the plaintiff's deed set aside. (McMahon v. Alien, 35 N. Y., 403; Dickinson v. Burrell, 1 Law Nop. Eq. Cas., 337; Harrison v. Guest, 6 De Gf. M. & G., 424; Gresley v. Mousley, 4 De G. & J., 78; Longmate v. Ledger, 2 Giff., 157; Bellamy v. Sabine, 2 Phillips, 425; Stumpy. Gaby, 2 DeG. M. & G., 623.) The possession of the premises by the plaintiff did not render defendant’s deed void for champerty under the statute. The claim must be under a title adverse to the grantor. (Newton v. McLean, 41 Barb., 285; Grary v. Goodman, 22 N. Y., 170; Requa v. Holmes, 26 id., 338; Sayres v. Rathbone, 9 Abb. Pr. [N. S.], 277.) A deed fraudulently obtained is not available, as the foundation of an adverse possession, so as to avoid a subsequent conveyance. (.McMahon v. Allen, supra; Dickinson v. Burrell, supra; Livingston v. The Peru Iron Go., 9 Wend., 511.)

      W J■ Foster, for the respondent.
    An unrecorded conveyance divests the owner of any interest so that a subsequent sale or execution against him passes nothing. (Jackson v. Town, 4 Cow., 599; Tuttle v. Jackson, 6 Wend., 213; Trenton Banking Go. v. Duncan, N. Y. Daily Peg., May, 28, 1878.) The plaintiff having entered and continued in actual possession under her deed, her possession was notice to the world. (Tuttle v. Jackson, 6 Wend., 213; Wright v. Douglass, 10 Barb., 97; Troup v. Hurlbut, 10 id., 354;-Raynor v. Timerson, 54 N. Y., 639; Gavalli v. Allen, 57 id. [opinion], 517.) Plaintiff’s possession was an adverse holding, and the second deed was absolutely void. (1 R. S. [Edmonds], 690, § 147; Schott v. Schwartz, 48 N. Y., 666.)
   GilbKRT, J.:

This is ail action to remove a cloncl upon the plaintiff’s title to certain lands, by avoiding a conveyance to the defendant Samuel. Oil and before December 9, 1876, John Moody was the owner and in possession of the lands in controversy, and on that day he conveyed the same to the plaintiff. On the 31st of January, 1877, John Moody conveyed the same lands to the defendant Samuel. The latter conveyance was first recorded. After the conveyance to the plaintiff, John Moody continued to reside with her, on the premises conveyed, up to the time of the trial. One defense set up was that the conveyance to the plaintiff was procured by her by means of fraud and circumvention, and the defendant, by way of counter-claim, demanded an avoidance of such conveyance. Evidence to establish such defense was held to be inadmissible and excluded, and the defendants excepted.

I think that the evidence was competent. If the deed to the plaintiff was fraudulently obtained, it was a nullity, and gave to her not even a colorable title. The defendants’ title, therefore, was not affected by the provision of the Bevised Statutes respecting champerty. (1 B. S., 739, § 147.) That statute only avoids grants of lands which, at the time of the delivery thereof, are in the actual possession of a person claiming under a title adverse to that of the grantor. Assuming, as we must, in determining this question, that the deed to the plaintiff was void, her claim was not under an adverse title, but under no title at all. (Crary v. Goodman, 22 N. Y., 170; McMahon v. Allen, 35 id., 403.)

Whether the conveyance to the defendant Samuel, therefore, was voluntary, or for a valuable consideration, he had a right to institute a suit to set aside the deed to the plaintiff on the grounds set up by him without making the grantor a party. The right to set aside a conveyance on equitable grounds passes by grant or devise and descends to the heirs. Such right is incidental to the property conveyed. (Dickinson v. Burrell, 1 L. R. Eq. Cas., 337; McMahon v. Allen, 35 N. Y., 403.) It is a cause of action arising out of the transaction set forth in the complaint, and constitutes a counter-claim within the words of the Code of Civil Procedure. 501.)

I entertain no doubt that the judgment is erroneous. It must therefore be reversed and a new trial must be granted, with costs to abide the event.

Barnakd, P. J., concurred; DticmaN, J., not sitting.

Judgment reversed and new trial granted, costs to abide event.


text:
    THE PEOPLE OF THE STATE OF NEW YORK ex rel. GEORGE W. KENYON, Respondent, v. JAMES SUTHERLAND, Appellant.

      Discharge undarthe insolvent act — review of, on certiorari — Notice of hearing must he given to all creditors — Affidavit — when'fatally defective.

    Upon a ewtiorari to review a discharge under the insolvent act, granted by the city judge of Brooklyn, the court may review his jurisdiction, power and authoi'ity to do the act complained of, and also all questions as to the regularity of his proceeding.
    A discharge under such act cannot be granted without proof of service of notice of the proceedings upon each of the creditors of the insolvent.
    Although the act requires proof of such fact to be made “ to the satisfaction ” of the cityjudge, yet he is not authorized to receive any other than legal evidence of the fact, or dispense with any formality required to render the proof offered admissible, according to the settled rules of evidence.
    To show service of notice of the hearing upon the creditors, a paper was produced, in the form of an affidavit, signed with the name of one Bower, and perfect in all respects as to its form except that no deponent was named in the body of the affidavit, a blank having been left for that purpose. Held, that the affidavit was insufficient.
    Appeal from a judgment setting aside a discharge under the insolvent act, granted by the city judge of Brooklyn.
    On the 12th day of June, 1860, the appellant obtained from the then city judge of Brooklyn, a discharge from his debts under the two-thirds act of this State. Among his debts, existing at that time, was one merged in a judgment in favor of Charles Storrs, the assignor of the respondent. The statute at that time required, as it now requires, as a preliminary to the granting of the discharge, that notice should be given either personally or by mail of the application, therefor to all the creditors, and that proof of the service of such notice should be made before the officer entertaining the proceedings. (Laws of 1847, chap. 366, p. 470.) ^
    The proof of this service of notice was made by producá -g a paper in the following form :
    “ City op BrooklyN, )

      County of' ISings, (
    “-, being duly sworn, doth depose and say that he served a printed notice, of which the following is a true copy, on each of the following named persons, on the days and in the manner next herein specified, that is to say ******
    “ W- B. BOWER.
    “ Subscribed and sworn to before me, ? this 12th day of April, 1860. (
    “W. W. Fowler,

      “Notary Public.”

    Á certiorari having been granted to review the proceeding before the city judge, the case came on to be heard before Mr. Justice Prati, and he, after hearing all parties, gave judgment for the relator, setting aside the discharge.

      B. F. Sawyer, for the appellant.

      W S. Boyan, for the respondent.
    The writ of certiorari was the proper remedy in this case. (2 R. S., pt. 2, tit. 1. chap. 5, art. 8, § 47, pp. 49 and 50; Moorehead v. Hollister, 6 N. Y., 309.) The case was properly heard at Special Term. (Rule 53 of the Rules of Practice of the Courts of Record, adopted November 24th, 1874; Courtney v. Baleer, 60 N. Y., 1.) If the judge grants the discharge without proof of service of notice of hearing having been given, it is granted without jurisdiction, and is void. (Lewis v. Faye, 8 Abb. [N. S.], 200; Marrow v. Freeman, 61 N. Y., 515; Stanton v. Filis, 16 Barb., 319; see, also, Small v. Wheaton, 4 E. D. Smith, 306.) When the statute says proof must be given, it means legal proof. Nothing else is known to the law. It must be such proof as can be made the foundation of judicial proceeds ings. (Stanton v. Ellis, 16 Barb., 322; Brown v. Huchman, 9 Johns., 75; Vosburg v. Welch, 11 Johns., 175.) The paper is mj^an affidavit. The essential elements of an affidavit are that some one should make oath before a proper officer duly authorized to something, and that this officer should certify that the person had so made oath before him to such facts. (Ladow v. Groom, 1 Denio, 429; Burrells’ Law Dictionary, Title affidavit; Bouvier’s Law Dictionary, Title affidavit.
   Gilbert, J.:

Power to hear the proceeding brought up by this certiorari was conferred upon the city judge by the twenty-sixth section of the City Court Act. (Laws of 1849, ch. 125 ; 2 R. S., 17, § 6 ; id., 34, § 1.) He was prohibited, however, from proceeding to hear the proofs and allegations of the parties, until proof should have been given to his satisfaction of the service of the notice of the proceeding on each of the creditors of the insolvent. (Laws 1847, ch, 366, §§ 1, 2.) It is not material to inquire whether an omission to give such notice is a jurisdictional defect, or a non-compliance with the statute only. For upon a certiorari to review a proceeding like that before us, the court may review all questions of jurisdiction, power and authority of the city judge to do the acts complained of, and all questions of the regularity of his proceedings. (People v. Assessors, 39 N. Y., 81; People v. Betts, 55 id., 600 ; People v. Board of Police, 69 id., 408.)

Independently of the positive requirement of the statute, notice is essential to the validity of all judicial proceedings which affect the person or the property of a citizen. (Bloom v. BurdicJc, 1 Hill, 139.) The insolvent act authorizes the discharge of the debtor without the consent of creditors who do not petition therefor. For that reason it is in derogation of the common law, and must, therefore, be strictly pursued. Another reason why the notice required by the statute is essential to the validity of the proceeding, is that by the terms thereof no discharge can be granted unless the provisions of the statute shall have been complied with. (2 R. S., 16, § 1.)

The only proof of a service of the notice in this case was a paper purporting to be an affidavit, but which did not contain the name of the deponent, unless a signature at the end of the paper and opposite the jurat can be so considered. It has been^hejd that if the deponent’s name be mentioned in the affidavit as deponent., his signature is not absolutely necessary, if he be properly and duly sworn. (Jackson v. Virgil, 3 Johns., 539; Milius v. Shafer, 3 Denio, 60.) But I can find no case in which an affidavit was held to be good which did not mention the deponent’s name in the body of the paper as the person who took the oath.

The provision of the statute which authorizes an affidavit to be read requires that the officer before whom it was taken sba.11 certify that it was taken before him. (2 R. S., 284, § 49.) Such a certificate must show who took the oath, as well as the matter sworn to, otherwise there would be no certainty that the same person who signed the affidavit took the oath. When the name of the deponent is inserted in the affidavit, both of those facts are certified by the usual jurat. But a certificate which leaves the fact by whom the oath was taken uncertain, cannot be deemed a compliance with the statute last cited. I think, therefore, that the affidavit in this case was not legal proof, and that it was improperly received as such. The officer was not authorized to receive any other than legal evidence. Although proof to his satisfaction was sufficient, yet that did not authorize him to dispense with any formality which was necessary to render the proof offered admissible according to the settled rules of evidence. Other objections to the proceedings were insisted on, but as this one is decisive of the case, we have not examined them.

Upon the ground that proof of the service of the notice to the creditors was not given, we are of opinion that the judgment should be affirmed.

BarNArd, P. J., concurred.

Present- — -BarNArd, P. J., Gilbert and DykmaN, JJ.

Judgment affirmed, with costs.


author: Gilbert, J. :

text:
    THE PEOPLE OF THE STATE OF NEW YORK ex rel. THE WILLIAMSBURGH GAS-LIGHT COMPANY, Appellant, v. THE BOARD OF ASSESSORS OF THE CITY OF BROOKLYN, Respondent.

      Surplus profits of corporation — taxation on — issuing certificates to stocMwlders for, does not relieve from.

    The relator, a gas company, in 1870 and 1871, issued to its stockholders certificates representing in the aggregate $1,000,000, each stating that the holder had an interest in the property of the relator to the amount stated therein, upon which amount the relator imomised to pay interest at seven per cent per annum, semi-annually, reserving the right to redeem it by paying its amount in currency or stock of the relator at par.

      Meld, that these certificates did not constitute an actual dividend or division of the relator’s surplus profits among the holders thereof; that the title to such funds still remained in the relator, and that the certificates merely designated the interest of the respective holders in that portion of the relator’s funds which was represented thereby.

      Meld, further, that the amount represented by such certificates, viz., $1,000,000, was properly assessed to the relator as undivided profits or surplus funds.
    The question as to the validity of the certificates not passed upon.
    Certiorari to review an assessment of the board of assessors of the city of Brooklyn, in respect to the personal property of the relator. ■ ‘

      Edgar M. Cullen, for the relator.

      John II. Knaebel for the respondent
   Gilbert, J. :

The assessment roll not being before us, we cannot tell whether the assessors conformed to the statutory directions in making up the same. Nor is the question a material one in this proceeding. Substantial error must be shown before the court can interfere with the tax. A mistake of the assessors in the form of the assessment is not enough. (The People ex rel. v. The U. & B. R. R. Co., 6 Hun, 556.)

The sole question in the case remaining is, whether the relator is liable to be taxed for surplus profits or reserved funds. The statute, on this subject, makes the capital stock of the relator, except such part of it as shall have been excepted in the assessment roll, or as shall have been exempted by law, ¡together with its surplus.profits or reserved funds exceeding ten per cent of its capital, after deducting the assessed value of its real estate, and all shares of stock in other corporations, actually owned by such company, which are taxable upon their capital stock:,' liable to taxation at its actual value. (1 R. S. [Edm. ed.], 3,74, el seq.; 3 id., 373.) In its statement, made to the assessors, pursuant to the requirement of the statute first cited, the relator, stated that it had no surplus profits or reserved funds. Nevertheless, the assessors set down those items in the assessment roll.1 That the assessors had a right, and it was their duty to do, provided they had evidence before them which controverted the statement of the relator. The relator, after delivering its statement aforesaid, furnished other evidence respecting its surplus profits and reserved funds Upon which the assessors acted, and we deem that evidence sufficient. The case shows that in the years 1870 and 1871, the relator issued to its shareholders respectively certificates amounting to the aggregate sum of $1,000,000. Each certificate certifies that the stockholder has an interest in the property of the relator to the amount stated therein, upon which amount the relator promises to pay interest at seven per cent per annum, in semi-annual payments, and also states that the relator reserves the right to redeem the certificate by paying the amount thereof at the option of the relator in currency, or in stock of the relator at par.

The assessors treated those certificates as evidence that a fund existed which was represented by those documents. We do not see how they could have acted otherwise consistently with their duty. The certificates state that the persons to whom they were issued have an interest in the property of the company. Such persons, before they received such certificates, had a ratable interest in all the capital of the company, and such ownership carried with it a ratable interest in its surplus profits and reserved funds. The certificates conferred no additional interest, but merely declared that >vhich the law would have allowed without them. The counsel for the relator cites the cases of Bailey v. R. Co. (22 Wall., 604), and Brown v. Lehigh Coal Co. (49 Penn., 270), to show that the issue of the certificates was legal, and that they operated as ap actual dividend of surplus profits or reserved funds. The Court of. Appeals in Brundage v. Brundage (60 N. Y., 547), declined to pass upon the legality of the scrip referred to in the case in 22 Wallace. This case can be disposed of without deciding whether the certificates are valid or not. We shall, therefore, express no opinion on that subject. The cases cited do not countenance the proposition that such certificates make an actual division of an : existing fund. They merely recognize the obligation created by-scrip, payable out of future earnings, and ultimately redeemable in stock issued by corporations which w'ere restricted as to current dividends. Such scrip is very different from the certificates in this case. In whatever form the property to which such certificates referred existed, it was, in contemplation of law, surplus profits or reserved funds. It could not properly be placed under any other general designation. Property of a corporation must necessarily consist of capital or surplus profits or reserved funds. Money paid in and used, which cannot be withdrawn and divided among the stockholders of the company, is capital. Surplus earnings, or net profits, which have been accumulated over and above the capital, cannot be included in capital. They properly fall, therefore, under the other designation. The form in which capital is invested does not change its nature or function. Nor does an investment of surplus profits or reserved funds make them anything else. (Mut. Ins. Co. v. Supervisors of Erie, 4 Comst., 442; People v. Supervisors, 4 Hill, 20; Bank of Utica v. City of Utica, 4 Paige, 399; People v. Supervisors of N. Y., 18 Wend., 605.) If it had been shown that the fund which the certificates represent had been expended in purchasing real estate, or in improving that which had been before purchased with capital, or otherwise, a different question would have been presented, for real estate forms a distinct subject of taxation. But that fact, if it be one, does not appear. A loss or dissipation of the fund, or any part thereof, by a destruction or depreciation of the property in which it had been invested, would also have entitled the relator to be relieved pro tanto from the tax. But no such casualty was shown or pretended.

The statute regulating taxation was amended in 1853 so as to include surplus profits or reserved funds; for the reason, no doubt, that such property was not included in the word capital. (Lawrence Tax Laws, 26, 29; Owego Starch Factory v. Dolloway, 21 N. Y., 449-455, et seq.; People v. Dolan, 36 N. Y., 62.)

It seems to me to be impossible to maintain the proposition, that the certificates referred to constitute an actual dividend of the relator’s surplus profits or reserved funds. As before intimated, those certificates merely designate the interest of the respective stockholders ; or, if they have been transferred, of the transferees, in that portion of the surplus profits or reserved funds which such certificates represent. Whatever property the relator held as surplus profits or reserved funds, at the time such certificates were issued, it continued to hold afterwards, and for aught that appears before us still holds. The legal title thereto remained vested in the relator, notwithstanding the certificates. No property, nor any right to the specific sum of money passed thereby, and no debt against the relator was created by them. Supposing them to be legal, they are simply the muiiiments and evidence of the holder’s interest in a given share of property of the corporation. (Sun Mut. Ins. Co. v. The Mayor, 4 Seld., 241; Mech. Bank v. N. Y. & N. H. R. Co., 3 Ker., 627, et seq.; Bailey v. Railroad Co., 22 Wall., 636, et seq.) It seems to me, however, to be immaterial whether they can be considered a debt in any sense or not, for the debts of a corporation are not to be deducted from its surplus profits or reserved funds, in order to ascertain the amount of the latter for the purpose of taxation. The certificates themselves may be hable to taxation in addition to the funds represented by them. But so in some cases are the shares of stock held by a stockholder, notwithstanding the cox-poration has been taxed on the property which those shares represent. (Van Allen v. The Assessors, 3 Wall., 573, 583, 584; People ex rel. Kennedy v. Com’rs of Taxes, 35 N. Y., 423; City of Utica v. Churchill, 33 id., 237.) The issuing of the certificates may (but probably will not), subject the holder of them to taxation upon them, in addition to that on his shares of stock; but as the value of those shares ought to be diminished by the amount of the certificates, no apprehension of injustice ought to be indulged on that account.

If we are correct in the views expressed, the tax does not exceed that which the relator is liable to pay.

The proceedings should, therefore, be affirmed, with costs.

Barnard, P. J., and Dyeman, J., concurred.

Order affirmed, with costs and disbursements.


text:
    EDWARD INDIG, Appellant, v. THE NATIONAL CITY BANK OF BROOKLYN, Respondent.

      lAability of a bank receiving a note foi• collection.

    The plaintiff, a customer of defendant, deposited with it for collection a note, payable January 27 at the Lowville Bank. The note was by defendant forwarded for collection to that bank, and at maturity paid, and on the following day it .sent to the defendant a draft on a bank in New York for the amount thereof. On the same day the Lowville Bank failed and made an assignment. The draft was never paid, though duly presented. In an action by plaintiff to recover from the defendant the amount thereof, the court directed a nonsuit.

      Held, that the defendant was liable for any neglect or misconduct on the part of the Lowville Bank, its agent, and that the court erred in granting a nonsuit.
    Appeal from a judgment of the City Court of Brooklyn, entered upon a nonsuit directed at the Circuit.
    The action was removed into the Supreme Court, under the provisions of section 273 of the Code of Civil Procedure The action was brought to recover of the defendant the amount of a draft deposited with it for collection.
    In this case the plaintiff was a customer of the defendant bank. He deposited the note in question with said bank for collection without instructions. Such note was payable at the Bank of Low-ville, and fell due January 27, 1878 ; it was forwarded to that bank and duly paid to the last-named bank on that day. On the following day (28th) the Bank of Lowville remitted the proceeds of the note to the defendant, by its own draft on its correspondent bank in the city of Now York, and on the same day — but whether before or after it sent the draft does not appear — the Bank of Low-yille failed and made an assignment of all its property. The draft was received by the defendant and presented for payment, all in due course, but payment thereof was refused, and it has not been paid. The judge of the City Court of Brooklyn, before whom the cause was tried, nonsuited the plaintiff.

      Blumenstiel <& Ascher, for the appellant.

      William H. Ilollis, for the respondent.
   GILBERT, J.:

The rule of law applicable to this case was established by a resolution of the late court for the correction of errors, as follows: 11 When a bank, broker, or money dealer receives upon a good consideration a note or bill for collection in the place where such bank, broker or dealer carries on business, or at a distant place, the party receiving the same for collection is liable for the neglect, omission or other misconduct of the bank or agent to whom the bill or note is sent, either in the negotiation, collection or paying over the money, by which the money is lost or other injury sustained by the owner of the note, unless there be some agreement to the contrary express or implied.” (Allen v. The Merchants' Bank of New York, 22 Wend., 215.) The rule thus laid down, although not universally adopted, and sometimes questioned, has been uniformly followed by our court of last resort, and must now’be deemed the settled law of this State. (Montgomery Co. Bank v. The Alb. City Bank and others, 3 Seld., 459; Commercial Bank of Penn. v. Union Bank, 1 Ker., 203-211; Ayrault v. The Pacific Bank, 47 N. Y., 570.) It is also in accordance with the principle on this subject as stated by Mr. J. Story. He says (Story Ag., § 231a): “Cases may also arise where agents will be responsible to their principals for money of the latter received by sub-agents, although the money has never reached the hands of the agent. Thus, for example, if an agent is employed to collect and receive payment of bills of exchange due to the principal, and the agent transmits them to his own private agent to recover the money on the same bills, and orders such sub-agent to place the amount, when received, to his (the agent’s) credit, payment to such sub-agent is payment to the original agent, and the principal will be entitled to recover the amount from the agent, although the same may be lost by the failure and insolvency of the sub-agent, for in such case the loss properly falls on the agent and not on the principal.”

I am unable to discover any ground on which this case can be withdrawn from the operation of the principle which has been established by the authorities cited. There is no lack of consideration for the undertaking of the defendant, for the incidental benefit it might receive from the deposit of the proceeds of the note was undoubtedly a sufficient consideration for the implied agreement on the part of the defendant, which has been stated. (Bank of Utica v. McKinster, 11 Wend., 473; 22 id., supra.) Nor has any agreement, express or implied, been shown qualifying the general liability of the defendant. Whether the loss of the proceeds of the note was attributable to negligence or misconduct on the part of the Bank of Low-ville, is, in the view of the evidence most favorable to the defendant, a question of fact to bo determined by the jury. Certainly it would have been error to hold as a legal proposition that negligence or misconduct was not imputable to the Bank of Lowville, for the coincidence of the sending of the draft and the failure of the bank required explanation to relieve the transaction of a taint of fraud. The judge did not so hold, but put his decision solely upon the' ground that the defendant had not been negligent. That, as I have shown, was not the real inquiry on which the rights of the parties depended.

Nor can the nonsuit be sustained on the ground that the plaintiff had ratified the acts of the Bank of Lowville, for it does not appear that he had any knowledge of those acts. A man cannot ratify what he does not know.

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

BaeNARd, P. J., and DyicmaN, J., concurred.

Judgment reversed and new trial granted, costs to abide event.


text:
    CHARLES R. DEAN, Respondent, v. W. H. WHITON, Appellant, Impleaded with DAVID R. DE WOLFE and others.

      Stockholders of corporation — liability of, for wages of servants — action must be against each separately or against all jointly.

    Where a servant of a corporation seeks to enforce the joint and several liability-imposed upon its stockholders by section 18 of chapter 40 of the laws of 1848, he must sue each stockholder separately, or join them all in one action. After bringing an action, to which all the stockholders are made parties defendants, he cannot thereafter discontinue as to one defendant without the consent of the others.
    Appeal from an order denying a motion to vacate a judgment, entered in favor of the plaintiff.

      Robert F. Little, for the appellant.

      Rufus L. Scott, for the respondent.
   Gilbert, J.:

This action was one against all the stockholders of a corporation which was formed under the general manufacturing act of 1848 (chapter 40), and was brought to enforce the joint and several liability, for wages of a servant or laborer, imposed upon them by section eighteen of that act. Some of the defendants, including Whiton and Chase, appeared and answered. The action was tried by the court without a jury. Intermediate the trial and the decision of the court, the plaintiff, upon the consent of Chase’s attorney, but without the consent of the other defendants, discontinued the action against Chase. A judgment having been entered against all the defendants except Chase, Whiton moved to set it aside upon the ground that such discontinuance was illegal and injurious to him. The motion was denied and Whiton appealed.

At common law, when the liability was ex contractu, and also joint and several, the plaintiff might proceed against the parties jointly, or sue each separately; but if more than two persons were liable, lie was compelled to sue them all jointly, or each of them separately. (1 Chit. PL, 49.) I cannot find that this rule has been changed except with respect to parties severally liable upon the same instrument. (Laws, 1832, ch. 276; Code of Proc., § 120; Code of Civ. Proc., § 454.) As the language of those statutes has been construed, two of these joint and several obligors may bo sued. (Cridler v. Curry, 44 How. Pr., 345, 349.) But the liability in this case does not arise out of any instrument. It is a statutory liability, although it arises indirectly upon contract. The plaintiff, by bringing his action against all, elected to treat the liability as a joint one, and he should be held to such election. (Strong v. Wheaton, 38 Barb., 616; 44 How. Pr., supra.) Such a rule seems to be in accordance with the Code of Civil Procedure (§§ 447, 448, 452, 456), and to be important for the }Drotection of tho right of defendants jointly liable, to have recourse to their co-defendants for contribution. (Wooster v. Chamberlin, 28 Barb., 604.) The discontinuance, although it did not release Chase, rendered another action necessary to enforce the liability against him. (See Bolen v. Crosby, 49 N. Y., 183; Irwin v. Milbank, 56 id., 635; Hoag v. Lamont, 60 id., 96.)

I think, however, that the joint liability of Chase does not sufficiently appear. His answer was verified and contained a denial that he was a stockholder at the times stated in the complaint. The plaintiff, by discontinuing tho action as against him, withdraws the averment on that subject in the complaint. The only remaining evidence is the statement, upon information and belief only, contained in the affidavit of Mr. Little. That is not legal evidence, and is entitled to. no weight against the positive denial of Chase.

The order, therefore, must be affirmed, with ten dollars costs and disbursements.

BaeNaed, P. J., and DykmaN, J. concurred.

Order affirmed, with ten dollars costs and disbursements.


text:
    ISAAC J. VAN AMBURGH and JOHN H. MILLER, Appellants, v. JOHN G. H. KRAMER, Respondent, Impleaded with others.

      Mortgagefrom husband to wife —■ what consideration mil support it — lohen wife, by joining in a deed, does not release the premises from a mortgage thereon owned by her.

    December 11,1S73, Richards and wife executed a bond and mortgage to one Lobenstein, who, on the thirteenth, assigned it to Richard’s wife, Caroline Richards. On Januuary 21, 1874, Richards and wife conveyed the premises, by a deed in the usual form, to defendant’s grantor, the husband alone joining in the warranty. At the same time the husband gave to the grantee an agreement in writing to pay off the mortgage. On May 28th, 1874, Caroline Richards assigned the bond and mortgage to this plaintiff, who brought this action to foreclose the same.

      Held, that the wife by joining in the deed did not release the premises from the lien of the mortgage then owned by her.
    The consideration required to support a mortgage from husband to wife considered.
    Appeal from a judgment in favor of tbe defendants, entered upon tbe report of a referee.
    Tbe action was brought to foreclose a mortgage. The referee found that on the 11th day of December, 1873, the defendant Richards and Caroline, his wife, executed and delivered unto one Emanuel Lobenstein the bond and mortgage set forth in the complaint; that on the 13th day of December, 1873, Lobenstein duly assigned the said bond and mortgage to Caroline Richards; that on the 28th of May, 1874, the said Caroline Richards assigned the said bond and mortgage to the plaintiffs; that on the 21st day of January, 1874, the said defendant Richards and the said Caroline, his wife (she, the said Caroline, being then the holder of said mortgage), by indenture of deed under their hands and seals, conveyed the mortgaged premises unto one William Pleuss, subject only to a mortgage other and different from the one mentioned in the complaint, and that in and by said deed the said Caroline Richards and her husband, the said Alonzo Richards, granted, sold, released and conveyed unto said Pleuss the aforesaid mortgaged premises, and also all the estate, right, title, interest, dower and. right of dower, property, possession, claim and demand whatsoever, as well in law as in equity, of the said Alonzo Richards and Caroline Richards of, in and to said premises; that at the time of the delivery of the said deed from the said Alonzo W. Richards and wife to the said William Pleuss, the said Richards executed and delivered to the said Pleuss an agreement in writing, whereby the said Richards agreed that he would clear and pay off the mortgage mentioned in the complaint on or before the first of February, 1874 ; that Pleuss conveyed the said premises to one Albert Coordes, who conveyed them to the defendant Kramer.
    The referee further found, as a conclusion of law, that in and by the deed first hereinbefore mentioned, the said Caroline Richards released and discharged the mortgaged premises from the lien of the mortgage mentioned in the complaint.

      D. P. Barnard, for the appellants.
    The relation of husband and wife is consideration sufficient to sustain the mortgage in this suit from Richards to his wife, as against every one except creditors. (4 Kent, 465; Hunt v. Johnson, 44 N. Y., 27.) By Caroline Richards joining with her husband iii a deed of the mortgaged premises, she did not sell the bond and the debt the mortgage was given to secure, and she could not sell the mortgage as a lien distinct from the bond. (Jackson v. Willard, 4 J. R., 41; Arymanv. Bill, 5 J. C. R., 570; Packer v. Bochester <& Syracuse R. R. Co., 17 N. Y., 296; Merritt v. Bartholick, 26 id., 44; Cooper v. Rowland, 17 Abb. P. R., 842; Power v. Lester, 17 How. P. R., 413; /S'. C., 23 N. Y., 527; Gittig v. Maass, 28 id., 191.)

      Henry J. Schenck, for the respondent.
    The consideration of love and affection is not sufficient to support an executory contract. There must be a valuable consideration. (2 Kent, 465 [star page]; Fink v. Fink, 18 Johns., 145; Harris v. Clark, 3 N. Y., 93; Howells. Wilson, 9 Barb., 487.) When the bond is invalid, the mortgage is nugatory. (Knickerbocker L. I. Co. v. JSTelson, 6 Wk. Big., 145; Merritt v. Bartholick, 36 N. Y., 44.)
   Gilbert, J.:

The evidence in this case merely shows that the bond and mortgage in suit were not made upon a valuable consideration. But there are other considerations which are sufficient in equity to support transactions between husband and wife, when the cliams of creditors do not intervene. Indeed, it has been held that a bond and mortgage may be made by way of gift. (2 R. S., 137, § 4; 4 Kent, 465 ; Isenhart v. Brown, 2 Edw. Ch., 341 ; Bucklin v. Bucklin, 1 Abb. App. Ca., 42 ; Hunt v. Johnson., 44 N. Y., 27.) And as between the parties, when a mere nominal consideration is inserted in a deed for the pur-pose of supporting it, evidence of the non-payment of such consideration will not destroy the deed. The grantor may sue the grantee and recover it. (Meriam v. Harsen, 2 Barb. Ch., 232, 267.)

■ Moreover, the seals are presumptive evidence of a consideration, and such presumption is not overcome by proof that a valuable consideration was not paid. (2 R. S., 406, § 77; Anthony v. Harrison, 14 Hun, 198 ; S. C., Court App. MSS.) But it is unnecessary to pursue this subject, because the referee did not find that the bond and mortgage were made without any consideration. On the contrary, he refused the defendant’s request that he should find that there was no value or consideration paid therefor.

The only remaining question relates to the effect of the fact that Mrs. Richards, the plaintiff’s assignor, united with her husband in a conveyance of the mortgaged premises. That conveyance purported to convey the land described, and also all the right, title and interest, claim and demand of the grantors, of, in and to the same, to the grantee, to have and to hold the premises granted, with the appurtenances, etc. A mortgage is not either a jus in re or a jus ad rein. ' Whatever form may be given to the instrument, the mortgagor continues to be the owner of the land, and the mortgage is a mere lien. The mortgagee cannot, in any way, convey, devise or incumber the land, for he has no estate in it, or title thereto, nor has he any right to the possession thereof. The mortgagor can maintain an action of trespass against him. The mortgage passes to executors, as a chose in action, and it is extinguished by payment or tender of the debt to which it is incidental. (Korbright v. Cady, 21 N. Y., 343, 364 ; Cholmondely v. Clinton, 2 J. & W., 1, 178 ; Ten Eyck v. Craig, 62 N. Y., 406, 421.) As Mrs. Richards had no estate or interest in the land, she could convey none, and her deed did not for that reason operate as a grant, nor did it operate as a bargain and sale, for she received no consideration therefor. Its only effect was to release her inchoate right of dower. (1 R. S., 739, § 143 ; Teft v. Munson, 63 Barb., 31-37.) Such was manifestly the intention of the parties to the conveyance, and that must govern in the construction of the instrument. (1 R. S., 748, § 2.) 1. The haben-dum is restricted to the premises conveyed and the appurtenances thereto. (4 Kent, 468.) 2. There are no words apt to discharge or release a chose in action. 3. She executed and acknowledged the instrument as wife. 4. She had a dower right, and to release that was a proper and apparently the only purpose of her uniting in the conveyance. (Power v. Lester, 23 N. Y., 527 ; Gillig v. Maass, 28 id., 191.)

That the conveyance did not operate as an estoppel against her is shown by the fact that she gave no warranty. (Sparrow v. Kingman, 1 Coms., 246.) That the mortgage was impliedly excluded from the operation of such conveyance, we think is shown by the instrument executed by Richards, the husband and the principal grantor, and delivered to the grantee simultaneously with the delivery of the conveyance, whereby Richards, the husband, agreed to pay off the mortgage. This paper and the conveyance, together, constitute but one transaction, the legal effect of which was a conveyance of the land, subject to the mortgage, to be afterwards paid by Richards.

The judgment must be reversed and a new trial must be granted at Special Term, with costs to abide the event.

BakNard, P. J., and DykmaN, J., concurred.

Judgment reversed and new trial granted at Special Term, costs to abide the event.


author: Pratt, J.:

text:
    MARTHA E. VAN WYCK and others, Trustees under Will of HENRY L. VAN WYCK, Deceased, Appellants, v. PHILIP WALTERS and ELIZA JANE WALTERS, his Wife, Impleaded with CHARLES M. PINE and others, Respondents.

      Usury — when a bonus reserved by one trustee does not avoid a mortgage held by the estate.

    Where, in an action to foreclose a mortgage owned by a trust estate, it appears that one of the trustees received an usurious bonus, the mortgage is not avoided thereby, unless it be shown that the same was received by the authority or with the knowledge of the other trustees.

      Stotit v. Rider (12 Hun, 574), followed.
    Appeal from a judgment in favor of the defendants, entered upon the trial of this action by the court without a jury, and from an order denying a motion for a new trial, made upon the ground of surprise and newly discovered evidence.
    The action was brought to foreclose a mortgage. The defense was usury. The defense was founded upon the fact that at the time of the loan an usurious bonus thereon was received by one of the trustees.

      E. Ellery Anderson, for the appellants.

      A. R. Dyett, for the respondents.
   Pratt, J.:

Stout v. Rider (12 Hun, 574), and cases there cited, seem' to be authority that the trust fund will not be damnified by the unauthorized act of one of three trustees, in taking more than seven per cent per annum for the forbearance of money.

The respondent argues that we should not apply that doctrine to the case at bar, for the reason, as he claims, that affirmative proof was not given that the two other trustees were ignorant of the usury charged upon Blunt. But the testimony of Blunt, to the effect that he did accept usury, certainly tends to show that the other trustees did not know of his accepting it, and there is no testimony to show that they did not know of his taking it.

If a presumption of law exists that the act of one trustee is the act of all, it certainly cannot extend to the case of an act that is expressly forbidden by law. It will not be contended that the other trustees could be convicted criminally of taking usui-y, upon proof that their co-trustee had taken it. Why should a different rule be applied in civil cases?

It follows from these views that the fourth finding of fact, to wit, that the moneys were retained by Odell as agent for the plaintiff,” is not sustained by the evidence, and the judgment should be reversed upon the facts, and a now trial ordered, with costs to abide the event.

Present — Barnard, P. J., and Pratt, J.

Judgment reversed and new trial granted, costs to abide event.


author: Gilbert, J.: DyicmaN, J. :

text:
    MARY H. STEVENSON as Administratrix, etc., of JAMES L. STEVENSON, Deceased, Appellant, v. HUGH J. JEWETT as Receiver of the Erie Railway Company, Respondent.

      When a railroad emporation is liable to its servant for an in/jury occasioned by the negligence of the superintendent of its repair shop.

    This action was 'brought to recover damages for the death of plaintiff’s intestate, a fireman in defendant’s employ, caused by the explosion of a boiler. Evidence was given tending to show that the explosion was caused by defects in the boiler, and that it was out of repair; that it had been to the reiiair shop some six months before the accident; that its defects and want of repair could have been discovered by a proper examination, and that the necessary repairs were not then made.

      Held, that it was error to nonsuit the plaintiff, and that the question of defendant’s negligence should have been left to the jury.
    That the superintendent having the management of the business of making repairs stood in the place of the company; and that any fault on his part was the fault of the company.

      Appeal from a judgment in favor of tbe defendant, entered upon a nonsuit directed at tbe Circuit.
    Tbe action was brought to recover damages for tbe death of plaintiff’s husband, who was killed by tbe explosion of a locomotive engine upon tbe defendant’s road. Tbe intestate was in the defendant’s employment as a fireman.

      John W. Lyon, for tbe appellant.

      Lewis B. Ocirr, for tbe respondent.
   Gilbert, J.:

Tbe evidence showed very satisfactorily that tbe explosion of tbe boiler was attributable to broken stay-bolts, and the corroded outside sheet of tbe boiler. There was also evidence tending to show that such a condition of tbe boiler would not be produced by ordinary use short of five years. Moreover, it appeared that tbe locomotive was in tbe shop for general repairs, and was turned out repaired about six months before the explosion occurred. Tbe condition of tbe boiler after the explosion warranted tbe inference that tbe repairs which tbe boiler most needed were not done. I think that a very strong prima fade case of negligence was made out. Tbe matter spoke for itself. It is not a case where tbe master is excused, because the injury arose from tbe negligence of a fellow-servant. Tbe negligence was that of the superintendent of repairs, to whom tbe defendant had intrusted tbe superintendence and management of tbe business of making repair’s. He stood in tbe place of tbe company itself, and any fault ou bis part was tbe fault of tbe defendant. Tbe evidence is clear that he could, by an examination inferior to tbe most vigilant one, have discovered tbe defects in tbe boiler. His omission to do so, and to cause those defects to be remedied, constitutes negligence for which tbe defendant is bable. The rule that tbe servant takes tbe risk of tbe service, supposes that the master has secured proper servants and proper machinery for tbe conduct of tbe work. Tbe decision of the Court of Appeals in the recent case of Booth v. Boston & Alb. R. Co. (MSS. Op., March 19,1878), is a full authority for tbe plaintiff on this subject. Tbe court there held in so many words, that while it may be necessary for the master to commit the selection of servants, and the purchase and providing of machinery to servants and agents, yet the duty to use reasonable care in performing these acts always remains the duty of the master, and .negligence in performing it is his negligence, whether he acted himself or by others j and that if the immediate negligence is that of an agent or servant, and a co-servant is injured thereby, the law imputes the negligence to the master, in the same way and to the same extent, as if the injury had been sustained by a stranger. To the same extent are the cases of Flike, Administrator, v. The Same (53 N. Y., 550), and Malone v. Hathaway (64 id., 5). In the latter case the rule is laid down thus: “ When the,servant, by whose acts or negligence, or want of skill, other servants of the common employer have received injury, is the ‘ alter ego ’ of the master, to whom the employer has left everything, then the middleman’s negligence is the negligence of the employer, for which the latter is liable.” This is not a hovel doctrine, but constitutes a well-established exception to the general rule, which exempts an employer from liability for an injury to his employee arising from the negligence of a co-employee. (Laning v. N. Y. C. R. R. Co., 49 N. Y., 521-533.)

As the nonsuit may have been granted upon the ground that the negligence of the defendant was not the cause of the accident, it must be sot aside, the judgment must be reversed, and a new trial granted, with costs to abide the event.

DyicmaN, J. :

The defendant is the receiver of the Erie Railway Company, and the railroad is operated under his direction. The intestate of the plaintiff was a fireman on the road and was killed by the explosion of the boiler of a locomotive upon which he was at work at the time. The explosion of the boiler resulted from defective stay-bolts and the corrosion of the outside sheets. There is no claim in this case that the deceased had any knowledge of the defects in this boiler, or had any opportunity to know them. The plaintiff cannot, therefore, be defeated in this action, because his intestate voluntarily continued to use the engine after such knowledge. Every master is under a legal obligation to his servants to furnish them with suitable and safe machinery and appliances in conducting the business in which they are engaged (Mehan v. Syracuse, etc., R. R., Court of Appeals [MSS. Op., March 19, 1878], not yet reported), and the person whose duty it is to see that such machinery is furnished and is reasonably safe and secure, stands in the place of a company, in the case of a railroad or other corporation. His negligence in that respect is the negligence of the principal, and not that of a fellow-servant. He is the general agent and representative of the principal, and not a mere fellow-servant with others who are employed for a specific service. (Leming v. N. Y. C. R. R Co., 49 N. Y., 521.)

The locomotive engine whose boiler exploded and caused this accident had been to the shop for repairs, and the testimony tended to show that the defects might have been discovered by the use of proper care and means, and if there was any negligence in the superintendent of the department of repairs, in failing to make the proper examination to discover the defects, or to repair them, such negligence is attributable to the defendant in this instance. This is upon the principle that a master is liable to his servant for negligence in respect to such acts and duties as he is himself bound to perform as principal; such as furnishing proper machinery, and the like. In such case it makes no difference what the rank of the servant is to whom the performance of the duties is intrusted. He stands in place of the principal, and his acts in such behalf are in no just or strict sense those of a fellow-servant. What he does must be done for the principal, and he does it for him. If negligently, he is responsible. There was testimony sufficient to take this question to the jury, and the nonsuit was error. New trial granted, with costs to abide the event.

Present — Gilbeet and DykmaN, JJ.; BaeNAED, P. J., not sitting.

Judgment reversed and new trial granted, costs to abide event.