text:
    James J. Gearns, Adm’r, Appl’t, v. The Bowery Savings Bank, Resp’t.

      (Court of Appeals,

      Filed October 25, 1892.)

    Savings banks—Payment, to holder on pass-book—When negligence A QUESTION FOR THE JURY.
    Plaintiff, as administrator for Marry Ann Gearns, drew $1,500 from defendant and redeposited as administrator, taking a new book. Three years later defendant paid the amount then to plaintiff’s credit to one K. on his presenting the pass book and a power of attorney, with the individual signature of plaintiff, and which described plaintiff as executor of Patrick J. Gearns, deceased. On the trial of this action to recover the amount plaintiff testified that he did not sign the power of attorney, and the court refused, on his request, to submit to the jury, unless the defendant so requested, the question whether, under all the facts and circumstances di s-closed, the defendant’s officers, in making the payment, exercised that degree of care and diligence which the law imposed upon them. Beld, error; that if it was proper to submit the question of negligence at the request of the defendant it was at least equally proper and competent to submit it to the jury at the request of the plaintiff.
    Appeal from judgment of the New York superior court, general term, affirming judgment entered on verdict for defendant.

      Victor J. Dowling, for app’lt; Carlisle Norwood, for resp’t.

       Reversing, 3.8 St. Rep., 1025.

   O’Brien, J.

At the time of the death» of Mary Ann Gearns in the month of February, 1882, there was on deposit to her credit with the defendant about $1,500. This deposit was evidenced by a pass book which the defendant had delivered to her and which contained a statement of the account.

This deposit was to be repaid by the defendant under certain rules and regulations prescribed by the trustees, which it must be presumed the depositor assented to and form part of the contract between the parties. These rules, so far as they bear upon the question involved in this case, provided that all deposits should be entered upon the books of the bank, and" that a pass book should be given to' the depositor, in which the sum deposited should be entered, and should constitute the .voucher and evidence of the property of the depositor in. the bank. They also provided that all payments made to persons producing the deposit book should be deemed good and valid payments to depositors respectively. On the first of December, 1885, the plaintiff was appointed administrator of Mary Ann Gearnsj the original depositor, by the surrogate of New York, and two days thereafter he presented the pass book in .which the deposit had been entered at the bank, with a certificate of the surrogate showing his appointment as administrator and thereupon the defendant transferred to his credit, as such administrator, the" amount of the deposit with the accrued interest, amounting to the sum of $1,769.06. The defendant also took from the plaintiff a receipt for that sum, as administrator, and issued to him in that capacity a new pass book in which that sum was credited and the old book was surrendered. On July 27, 1886; the plaintiff drew from the bank from this deposit $434, giving bis receipt therefor as administrator and no other sum was paid to the plaintiff. This action was brought to recover the balance and the plaintiff has been defeated.

It appears that the balance, amounting-to $1,552.86, including interest, on the 4th day of February, 1889, was paid by the defendant to one Keeler, an attorney, and the validity of this payment as against the plaintiff was the question litigated at the trial. It appears that Keeler presented the pass book to the defendant together with a paper purporting to lie a power of attorney from the plaintiff.^ It purported to bear the signature of the plaintiff, not in his representative, but only in his individual capacity. The plaintiff, however, denied that he ever signed it, and the genuineness of this signature was the only question submitted to the jury. The evidence was conflicting, and as the verdict was in favor of the defendant, the plaintiff is concluded by the finding. The evidence would seem to indicate that if the plaintiff signed the paper, his signature was procured by fraud, but if the defendant had the right to, and did act upon it, the circumstances under which the signature was obtained would0not change its liability. The instrument also purported to be acknowledged before Keeler himself, as a commissioner of deeds, but the plaintiff testifies that he never acknowledged it, and Keeler was not produced at the trial, nor does it appear where he is, farther than a statement in the brief of the learned .counsel for the appellant that he is a fugitive from justice. The plaintiff was also at the time that the money was drawn from the bank by Keeler, and at the date of the'instrument, the executor of the will of Patrick J. Gearns, deceased. The language of the power of attorney, so far as the same is material here, is as follows: “Know all men by these presents, that I, James J. G-earns, as executor of the last will and testament of Patrick J. G-earns, deceased, ■ have made, constituted and appointed, and by these presents do make, constitute and appoint William A. Keeler, attorney at law, my true and lawful attorney for me, in my name, place and stead, hereby authorizing him to draw all moneys credited to me as executor of the estate of- Patrick J. G-earns, deceased, now in the Bowery Savings Bank in the city of New York, as appears from bank book Mo. 610,460 ; and likewise my said attorney, William A. Keeler, hereby is granted full power and authority to have and receive from the Bank for Savings in the city of Mew York, all moneys due me as executor and administrator of the estate of Patrick J. Gearns, deceased, as may appear due me by the bank book Mo. 547,881, and also all moneys now to my credit in the Emigrant Industrial Savings Bank as shown in, book 166,271, giving and granting to my said attorney full power and authority to do and perform all and every act and thing whatsoever requisite and necessary to be done in and about the premises, as fully to all intents and purposes as I might or could if personally present, with full power of substitution and revocation, hereby ratifying •and confirming all that my said attorney or his substitute shall lawfully do or cause to be done by virtue hereof.”

Apart from the fact that this instrument bore the signature of the plaintiff individually and not as the personal representative of the original deposito', and that the person whose name was subscribed to it was described in the body of the paper as the executor of another estate or interest, it did not confer any power to demand or receive payment of the deposit in question. The fund to which-it referred was that of another person, namely, that credited to the plaintiff as the executor of Patrick J. Gearns, deceased. It is true that the power refers to bank book Mo. 610,460, which was the number by which the deposit m question was designated, but that was merely descriptive of the deposit to which the paper related, namely that of Patrick J. Gearns, deceased. "The instrument, therefore, upon its face conferred no power upon the attorney to demand payment of the deposit in question nor any authority upon the defendant to make payment to him. The uefendant’s justification for paying the deposit to Keeler must -rest upon the circumstance that he had possession of the pass book which evidenced the deposit and presented it to the defendant when he demanded the fund. Unless it is protected by this fact, and the rule under which the deposit was received, the defense must fail. It is well settled, however, that payment madq to a person who is not in fact entitled to draw the deposit, though he may have possession of the book and present it at the time of payment, will not discharge the bank, unless it exercised at least ordinary care and diligence in paying'the money to the wrong person.

If at the time a fact or circumstance was brought to the knowledge,^ the defendant’s officers which was calculated to and ought to have excited the suspicion and,inquiry of an ordinarily careful person, it was. clearly their duty to institute such inquiry, and their failure to do so presented a question for the consideration of the jury. Appelby v. Erie County Savings Bank, 62 N. Y., 12; The People v. Third Avenue Savings Bank, 98 id., 661; Allen v. Williamsburgh Savings Bank, 69 id., 314; Smith v. Brooklyn Savings Bank, 101 id., 58; Kummel v. Germania Savings Bank, 127 id., 488; 40 St. Rep., 252.

On the trial the plaintiff’s counsel- requested the court to submit to the jury tne question whether, under all the facts and circumstances disclosed, the defendant’s officers in making the payment exercised that degree of care and diligence which the law imposed upon them. The request was denied and the plaintiff's counsel excepted. The learned trial judge did rule that, though the power of attorney should be found to be a forgery, as claimed -by the plaintiff, still the defendant would be protected by the payment made, if in making it due care and caution was observed, and that he would submit that question to the jury if the defendant so requested, but otherwise not. The defendant’s counsel announced that he did not desire to go. to the jury on that question. The learned judge, held, therefore, as the record shows, that while the defendant might protect itself by proof of due care in making the payment, yet the absence of such care was not an element to be considered in determining the plaintiff’s right to recover. This, we think, was error. The defendant paid the deposit to a person who, upon the evidence, obtained possession of the, pass-book and procured the signature of the plaintiff to the power of attorney by fraud, if he signed it at all. It turned out that the power of attorney was defective in form, in that it did not in terms authorize the payment of the fund in question, but related to another and different fund. ■ The defendant could then fall back upon the defense that payment was made to the holder of the book, and hence, the question of negligence was involved in this branch of the defense, So the plaintiff, when he failed to satisfy the jury that the signature to the power of attorney was forged, could still urge that, though the signature was genuine, it had been procured by fraud, and that by the terms of the instrument, whether genuine or not, no power was conferred upon the beneficiary named therein to draw this money, nor any authority upon the defendant to make payment as it did.

If it was proper to submit the question of negligence to the jury at the request of the defendant, it was at least equally proper and competent to submit it to the jury at the request of the plaintiff. It could not be submitted in either case unless there were facts and circumstances from which an inference could be drawn one way or the other. ' The person who presented the book was a stranger, who evidently deemed it necessary to arm himself with something more, and with it he presented a paper which purported to contain authority to draw money from three, savings banks credited, not to the owner of this deposit, but to another estate, and which, when examined with the requisite care, might furnish reasonable ground for suspicion. It is not the province of this court or of any other court dealing with questions of law to determine the weight and effect of the circumstances brought to the attention of the defendant’s officers by the presence of the person in the bank to whom payment was made with the boojt and the so called power of attorney, nor to point out the inferences which a careful and prudent man might be expected to draw from them. It is sufficient to say that in our opinion they were of such a character as to require their submission to, the jury..

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

All concur, except Andrews, J., absent.


source: Caselaw Access Project

author: Earl, Ch. J.

license: Public Domain

text:
    The People, Resp’ts, v. Frank McCormack, App’lt.

      (Court of Appeals,

      Filed October 28, 1892.)

    Criminal law—Evidence.
    On the trial of defendant for murder in the first degree, after he had been examined as a witness in his , own behalf, the trial judge overruled his objection to the following question on cross-examination: “ Is it not a fact that in the month of September, 1890, two months or about prior to Gillespie’s death, in a saloon known as the Manhattan, in Chatham Square, that you drew a pistol on two disreputable women and threatened to shoot them, etc.’’ Held, no error; as defendant had made himself a witness and was subject to the same rules of "examination as any other witness, and the question was competent to aSect his credibility.
    Appeal from judgment of the supreme court, general term, .first department, affirming judgment of conviction of manslaughter in the first degree, entered in the court of general sessions.

      Seaman Miller, for app’lt; Henry B. B. Stapler, asst. dist. att’y, for resp’ts.

       Affirming 46 St. Rep., 694.

   Earl, Ch. J.

The defendant was indicted in the general sessions of' the city and county of New York for murder in the first degree, and was upon his trial convicted of manslaughter in the first degree.- After the verdict and before judgment thereon he moved for a new trial, which was denied. After the entry of the judgment he appealed therefrom to the general term of the supreme court, where his'conviction was affirmed, and then he appealed to this court. Phe appeal brings before us only questions of law raised by exceptions taken upon' the trial to the rulings of the trial judge. Code Grim. Pro., § 5,19.

Our attention is called to but one exception, and that was taken to the ruling of the trial judge overruling defendant’s objection to the following question : “ Is it not a fact that in the month of September, 1890, two months or about prior to Gillespie’s death, in a saloon known as the Manhattan, in Chatham Square, that you drew a pistol on two disreputable women and threatened to shoot them, and didn’t Rowe, the bartender, draw a revolver, and pointing it at you, did heliot say, drop that pistol or I will blow your damned brains out?” The defendant had been examined as a witness on his own behalf, and this question was put to him by the prosecution on his cross-examination. The defendant having made himself a witness was subject to the same rules of examination as any other witness, and the question was competent to affect his credibility. People v. Casey, 72 N. Y., 393; People v. Irving, 95 id., 541.

The judgment should be affirmed.

All concur.


author: Per Curiam.

text:
    Laura F. Bradhurst, App’lt, v. Augusta C. Field et al., Ex’rs, Resp’ts.

      (Court of Appeals,

      Filed October 28, 1892.)

    Will—Construction .
    By the third clause of his will testator directed his trustees to invest an amount of money sufficient to realize an income of $3,000 annually, which, he directed to be paid to S. Subsequently he married S., and by a codicil revoked the third clause, and stating that it was his “ object and purpose to secure her such further sum as may be necessary for her support,” gave S. $l0,0l>0 in lieu of dower. Held, that there was neither language appropriate to the scheme of a trust for thejplaintifE’s life, nor any from which the court could reasonably infer such a plan, and there was no ambiguity which called for the admission of any evidence, and no room for construction.
    Appeal from judgment of the supreme court, general term, first department, affirming judgment entered on decision of the court at special term.

      J. Frederic Kernochan, for app’lt; Abram Kling, for resp’ts.

       Affirming 45 St. Rep., 748.

   Per Curiam.

The plaintiff brought this action to obtain a ■ judicial construction of the will of Thomas C. P. Bradhurst, de-' ceased, and the object sought to be accomplished was to have a trust declared in the executors, under which she should be paid the sum of $10,000 annually during her life. ■ At the trial a motion was made for judgment upon the complaint on the ground that no cause of action was set forth; and the question is whether upon the allegations the plaintiff showed herself entitled to maintain such an action, and to adduce evidence to establish her right to the construction claimed. By the third clause of the will testator directed his trustees to invest an amount of money sufficient to realize ah. income of $3,000 annually from the investment, and to pay such income to Mrs. L. F. Seyton in semi-annual payments during her life. By a codicil to his will he provided as follows, viz.:

Third,. I have, by the third clause of my will, provided that there shall be paid to Mrs. L. F. Seyton, during the term of her natural life, the sum of three thousand dollars; and as I have since my making of my said will become married to her, and have since my said marriage advanced to her large sums of money, and as it is my object and purpose to secure her such further sum as may be necessary for her support, I therefore revoke and declare void the said third clause or subdivision of my said will, which provides for the payment of the said sum of three thousand dollars to said Mrs. L. F. Seyton, and each part thereof.

Fourth. I further provide and give, devise and bequeath to my said wife, and direct my said trustees shall pay to her, the sum of ten thousand dollars, and the same shall be in lieu of dower in my said estate.”

The will is unskillfully drawn and, as the appellant’s counsel points out, nothing in it calls for any trust scheme, or for the appointment of any trustees. But he argues that an examination of the will forces the conviction that the testator’s main intention is to provide a support for the plaintiff, which object is also stated in the codicil, and that to effectuate his intention we must read into the whole instrument a trust scheme for the plaintiff’s support, by meahs of an income paid to her for life. He insists that the codicil does not revoke the trust scheme of the will, and that the court should construe the bequest of the $10,000 as a substitute bequest of such a sum annually. He contends that such a construction could and would be given, if the court were put in possession of extrinsic evidence as to all the facts and circumstances .relating to the testator’s estate and family, and to the matters alleged in the complaint As we read the will, however, we find no ambiguity which calls for the admission of any evidence, and we think that we have no .warrant in its language for turning a plain gift of a sum of money into a trust for the annual payment of an income equal to that sum.

The third clause of the codicil unmistakably revokes the third clause of the will, and though it speaks of a purpose “ to secure her such further sum as may be necessary for her support,” that is either the expression of a purpose to be effectuated outside of a testament, or it is an inapt expression to indicate the subsequent legacy of $10,000. We have gone quite far in upholding a legacy by implication ; but, in the Matter of Vower’s Will, an illustrative case, we laid down the rule that to uphold a legacy by implication, the inference from the will of the intention must be such as to leave no hesitation in the mind of the court, and to permit of no other reasonable inference. So there, where the language was: “ This provision to be accepted by my wife in lieu of her dower right and distributive share in my estate, she to make her election whether she accepts this provision -of my will within sixty days from the time of proving the same,” and the widow made her election rejecting the provision, we held that she was entitled to such share of the personal estate as the law would have given her had the deceased died intestate. The frame and tenor of the will were such as to render the words “ her distributive share of my estate ” meaningless, unless they were given-some force as being actually descriptive of a certain quantity of interest in the intestate’s property. But we have here no such necessity as calls upon us to give effect to pertinent and accurate-language. • We have neither language appropriate to the scheme of a trust for the plaintiff’s life, nor language from which we could reasonably infer such a plan.

The conclusion we have reached is that there was no room for construction in the testator’s last testament, and that we should be doing violence to that rule which forbids the cburt from making a new will for the testator if we were to sustain this appeal.

The judgment should be affirmed, with costs.

All concur-


author: Gray, J.

text:
    Alice Crocker et al., Resp’ts, v. Ervin G. Gollner et al., App’lts.

      (Court of Appeals,

      Filed October 28, 1892.)
    Appeal—Foreclosure.
    This court will not review an order of the general term, affirming an order denying a motion to compel a purchaser at a sale in foreclosure tocomple'e his purchase, where in the affidavits submitted in opposition to* the motion there appeared facts which, while not perhaps exhibiting air-imperfect title, still were sufficient in their nature and as, in part, occurring after the judgment of sale in foreclosure, to move the court to relieve-the purchaser from his agreement to take the property bid off.
    Appeal from order of the supreme court, general term, second department, affirming an order denying a motion to compel a purchaser at a foreclosure sale of real property to complete his purchase.

      Alfred R. Page, for app’lts; Wm. C. Beecher and Brewster Kissam, for resp’ts.

       Affirming 47 St. Rep,, 887.

   Gray, J.

Appeal from an order of the general term, which* affirmed an order denying a motion to compel the purchaser at. the sale in foreclosure to complete his purchase, and relieving him from his bid. The motion was made by the defendants, who were-the mortgagors. Assuming that they had an interest in the sale which would give them a standing in court to insist upon such a motion, a fact about which some doubt fairly exists in view of a, general release executed by them after the mortgage sale to the purchaser, this court will not review the order they complain of.

In the affidavits submitted in opposition to their motion there appeared facts which, while not perhaps exhibiting an imperfect, title, still were' sufficient in their nature and as, in part, occurring after the judgment of sale in foreclosure, to move the court to relieve the purchaser from his agreement to take the property bid off

The court had the undoubted power to control the procgedingsin the foreclosure action and, with all the facts before it upon which its action was invoked in behalf of each party, the motion of the defendants was denied and the purchaser was relieved from, going on with his agreement. It was a matter resting in its discretion and we will not review its action here.

The appeal should be dismissed, with costs.

All concur.


text:
    In the Matter of the Application of Marie Jannette Plumb.

      (Court of Appeals,

      Filed October 28, 1892.)

    Surrogates—Appeal—Commission to take testimony.
    A surrogate has discretionary power under §2588 of the Code of Civil. Procedure to issue a commission to take the testimony of witnesses in A foreign country, and where there is no abuse of discretion, no appeal hesito this court from the order for such commission.

      Appeal from a judgment of the supreme court, general term, first department, affirming an order of the surrogate in the above entitled proceeding to take the testimony of witnesses in England.

      Henry Thompson, for app’lt; David McClure, for resp’t.

       See 46 St. Rep., 362.

   Per Curiam.

We think there, was no abuse of discretion in granting the order appealed from, such as would enable this court to review the decisions of the surrogate and of the general term of the supreme court on that ground. Á question is made that in such a proceeding as dhis'the surrogate had. no power to grant the order for a commission.

For the reasons stated in the opinion of Judge O’Brien at the general term in this-proceeding, we think the surrogate,-under § 2538 of the Code of Civil Procedure, had such power. The power existing and there being no abuse of discretion, no appeal lies to this court from the order for such commission, and the, appeal must, therefore, be dismissed, with costs.

All concur.


author: Titus, Ch. J.

text:
    Neal J. Quinn, Pl’ff, v. John Neeson, Def’t.

      (Superior Court of Buffalo, Trial Term,

      Filed October 1, 1892.)

    Evidence—Pleadings.
    While the pleadings are before the court for many purposes, they cannot be considered by the jury as evidence in favor of the pleader to prove facts required to establish his case.
    Motion for a new trial after verdict in favor of defendant.

      George W. Cothran, for pl’ff; Laughlin, Ewell & Haupt, for def’t.
   Titus, Ch. J.

The only question presented on this motion for a new trial is the. one raised by the exception taken by the .plaintiff’s counsel to the ruling of the court on the request of the defendant’s counsel. After the charge had been made, the defendant’s counsel "requested the court to charge the jury that the -answer of the defendant may be considered as part of the evidence.” The jury were instructed as requested, and the plaint-, iff’s counsel excepted. The complaint alleged that the defendant •set his dog upon the plaintiff, biting and injuring him. This-was " the gist of the action. The defendant "by his answer denied the allegation. . . "

On the trial the defendant was sworn as a witness, but did not in terms deny the charge that he set the dog upon the plaintiff. It therefore became pertinent and material in the case, and the jury were úndoubtedly influenced by the charge to the prejudice -of the plaintiff, if error was committed.

” I think on examining the authorities that error was" committed. The jury were in effect instructed that the állegation of denial contained in the answer should be taken and considered by them as evidence of the fact that*the defendant'did not set his dog upon the plaintiff.

While the pleadings áre before the court for many purposes, yet they cannot be considered by the jury as evidence in favor of the pleader to prove facts required to establish his case.

In Tisdale v. The D. & H. Canal Co., 116 N. Y., 416; 26 St. Rep., 857, it was said that the pleadings are before the court, not as evidence, but to point out the object to which the evidence is to be directed.

In Holmes v. Jones, 121 N. Y., 461; 31 St. Rep., 379, Judge Earl, in the opinion of the court, in speaking of the right of an attorney to read and comment upon the answer of his adversary-in his address to the jury, says: “To the reading of this the counsel for the defendant objected, for the reason that it had not been read in evidence. The judge overruled the objection, remarking: It is not in evidence, but it is part of the record, and for the purpose of ascertaining what the issue is it may be referred to,’ ” and held that no error had been committed, citing 116 N. Y., 416; 26 St. Rep., 857, and White v. Smith, 46 N. Y., 448.

It will be noticed that the ruling of the trial judge was that it might be referred to, but not as evidence in the case.

In the case under consideration it was expressly charged that the answer might be considered by the jury as evidence in the case.

The verdict of the jury should be set aside, and a new trial granted, with costs to abide the event of the action.


author: White, J.

text:
    John Green, Pl’ff, v. Lucius W. Young, Def’t.

      (Superior Court of Buffalo, Special Term,

      Filed October 31, 1892.)

    ExEcimip-—Body—Release.
    Defendant was arrested upon an execution against his person after return of an execution against property, and was-released the same day by direction of plaintiff on his paying a part of the debt and agreeing in writing that he might be taken in execution at any time after fifteen days. Held, that such release was a voluntar.- one, ana that, notwithstanding the agreeme it, .plaintiff’s right to issue execution against defendant’s person was exhausted.
    Motion by the defendant for an order restraining- the plaintiff from issuing an execution against the person of the defendant on the judgment in the above entitled action.

      Harvey W. Brown, for the motion; George Clinton, opposed.
   White, J.

On September 29, 1892, the plaintiff recovered a judgment against the defendant for one of the* causes of action mentioned in the Code of Civil Procedure which justify the issuing of an execution against the person after the return of an execution against property unsatisfied. On the same day judgment was entered, but after the return of an execution against his property had been properly issued upon the judgment and returned unsatisfied, the defendant was arrested by the sheriff of Erie county upon an execution against his person and taken into close custody. Thereupon he was, on-the same day, voluntarily released from such custody by direction of the plaintiff, on paying a part of the judgment and agreeing in writing that his person might be again taken in execution at any time after the expiration of fifteen days, and that the judgment should remain in full force and effect notwithstanding such release.

At common law, the voluntary release of a judgment debtor charged in execution operated as an absolute satisfaction of the judgment, notwithstanding any agreement to the contrary by the parties. Under the statute law of this state, the defendant could have been discharged from the arrest - in question, leaving the judgment in force and enforceable by any of the remedies provided by law, except an execution against his person, ajier remaining in custody for the space of -thirty days, by the service.of a written notice from the plaintiff to the sheriff, requiring him to discharge the defendant from such custody, as provided in § 1494 of the Code, or at any time upon the petition of the defendant himself, on his making an assignment of his property, etc., as provided by article 3 of title 1 of chapter 17 of the Code. According to the terms of the execution under which he was arrested, he could not have been released from custody “ according to law ” in any other way.

It is claimed by the plaintiff' that the defendant was not, in fact, voluntarily released, but that the execution was simply withdrawn. I am of the opinion that the transaction will admit of but one construction, and that it was in law a voluntary release directed by the plaintiff himself.

I am reluctantly forced to the conclusion that in a case like this the common law rule still prevails in this state, and that, notwithstanding the agreement of the defendant to the contrary, the plaintiff’s right to issue execution against his person has been exhausted, and that for the plaintiff to again enforce an execution against his person would be an abuse of process. For these reasons the motion is granted, without costs.


author: Adams, J.

text:
    In the Matter of the Administration of the Estate of Elmer E. Frye, Deceased.

      (Supreme Court, Chambers,

      Filed October 26, 1892.)

    Suit rocíate— Temporary absence — Designation of officer to perform DUTIES.
    ,, A special county judge in counties where there is no such official as a special surrogate, can be designated to perform the duties of a surrogate temporarily absent from his county, although the abiding place of the surrogate is known at the time the designation is made.
    Motion by creditor of decedent to vacate an order of Mr. Justice Macomber, dated August 12, 1892, designating and authorizing Hon. John F. Kinney, special county judge of Monroe county, to discharge the duties of surrogate of that county, in the above entitled,,proceeding, during the absence of the surrogate from the county.

      George D. Forsyth, for motion ; George A. Carnahan, opposed.
   Adams, J.

The only question which can properly be consicb ered upon. this application involves a j construction: of, those, .provisions of the Code of Civil Procedure which are designed to afford to parties having occasion to institute proceedings in the surrogate court an opportunity to do so during the temporary absence of the surrogate. The question as to whether or not the petitioner Alvord, is a creditor of the decedent is one to be determined by the surrogate and cannot be raised here.

Section 2484 of the Code provides, among other things, that in -any county where, by reason of absence, sickness or lunacy, the surrogate of such county is disabled from the performance of the duties of his office, the saiye may be performed by the special surrogate, if there be one, and if not, then by the special county judge of the county.

By § 2487, as amended in 1887, it is provided that the fact that a, surrogate is so disqualified and the authority of the officer to act in his place may be proved and are deemed conclusively established by an order of a justice of the supreme court of the ■district embracing the county ip. which the surrogate resides and performs his official functions.

At the time this proceeding was instituted, in the month of August last, the surrogate of Monroe county was spending his annual vacation at Fire Island Beach, a point nearly four hundred miles distant from the city of Rochester.

While tifus absent, the creditor, Alvord, found it convenient to apply for letters of administration upon the estate of the decedent, and by his duly authorized attorney made an attempt to find the surrogate. To this end his attorney called at the surrogate’s ■office, which had been left in charge of the clerk, where he was. informed that the surrogate was taking his vacation and was absent from the county. The precise information imparted by Mr; Keifer, the surrogate’s,clerk, is a matter of dispute, but it is sufficient for the purpose of this motion to say that the whereabouts of the surrogate was not disclosed; the attorney being informed by Mr. Kiefer that he was under instructions from the surrogate not to disclose it. Upon receiving this information application was made to Mr. Justice Macomber for the order specified in § 2487, which was duly granted, and it is that order which is ■sought to be vacated by this motion.

That the order was properly granted can hardly be questioned, I am persuaded, unless, the right to grant it is affected by the .amendment to § 2505, contained in chapter 525 of the Laws of 1892. The surrogate was certainly absent from the county of Monroe, and although such absence was temporary in its character, it was nevertheless “absencé” which, prior to the adoption of this amendment, would have prevented the transaction of all business relating to the estates of decedent persons, as long as it continued, unless some other person was authorized by law to perform the duties of surrogate until his vacation terminated.

It was to meet just such an emergency as this that the legislature designated the persons who were to be authorized to take the place of the surrogate while he was out of the county. By legislative permission, every surrogate is entitled to vacate his ■office during the month of August, but in granting this period of relaxation it certainly could not have have been intended that all business in surrogate courts should absolutely cease, and that however pressing the necessity, no relief whatever could be attainable-for one entire month of each’ year. Occasions might and often do arise, where the delay of a single day in the appointment of an administrator would be attended with disastrous results, and to-give to the statute the construction contended for might involve many estates in absolute ruin. But it is insisted the surrogate,"' although absent from the county, was nevertheless authorized by law to perform the ordinary functions of his office, and to grant, letters of administration upon the decedent’s estate. This is doubtless true, for by the amendment of 1892, just referred to, it is provided that “ The surrogate may sign decrees, letters testamentary of administration and guardianship, and orders during the month of August, or such other month as he may designate-for his vacation wherever he shall be passing such vacation within the state.” Chap. 525, Laws 1892. It will be- observed that the language of this amendment is permissive merely, for it reads, the surrogate may, not must, sign certain papers while absent. Now, what is the reasonable meaning of this language? Obviously, that a surrogate who is enjoying his vacation away from home does not thereby necessarily lose jurisdiction of proceedings pending in his office, nor is he prohibited from entertaining jurisdiction of such as are instituted while thus absent, but that for the greater convenience of parties,interested the papers in any proceeding may be transmitted to the absent surrogate for his signature thereto. If, however, the surrogate is not easily accessible, or if his exact whereabouts is unknown, then, doubtless, resort may be had to the statute which authorizes the appointment of a provisional surrogate.

It is said that if Alvord’s attorney had stated to the surrogate’s-clerk what was required the papers could and would have been forwarded to the surrogate for his adjudication thereon. But. when informed that the surrogate had departed from the county leaving instructions that his temporary abiding place should not be disclosed, it could hardly be expected that further effort to ascertain his whereabouts would be made. The information thus-obtained was accompanied by a pretty strong hint that the surrogate was availing himself of bis legal right to enjoy a well-earned, vacation, undisturbed by official cares and annoyances. As I construe the statute he was under no compulsion to perform any official act, although he might do so if he saw fit, and, 'if this construction is correct, then it follows that the creditor Alvord was under no legal obligation to send his papers on to him, even if he-had known just where to send them. In other words, a special county judge in counties where there is no such official as a special surrogate can be designated to perform the duties of a surrogate temporarily absent from his county, although his abiding place is known at the time the designation-is made.

The motion to vacate is denied, with ten dollars costs.


text:
    Jacob Lorillard, Resp’t, v. William P. Clyde et al., App’lts.

      (New York Superior Court, General Term,

      Filed October 24, 1892.)

    Contract—Agreement to pat interest.
    The .parties hereto, being owners of competing lines of steamers, consolidated the same in pursuance of an agreement by which defendants, were to have the management of the new corporation and were to pay to plaintiff dividends, so called, of not less than seven per cent for seven years. Thereafter plaintiff procured the bringing of an action by the attorney general to dissolve the corporation for misuse^ of the franchise, in which a receiver was appointed. In an action for interest, Held,, that the fact that plaintiff encouraged the state to assert its rights against defendants and indemnified it against costs did not turn the litigation into one of his own, nor did the fact that he was made a party thereto enlarge the scope, of the proceeding; that the contract of defendants was to pay plaintiff interest on the amount of property put in the corporation by him, and that their liability to pay such interest was not affected by the dissolution.
    Appeal from judgment in favor of plaintiff.
    The plaintiff and defendants were engaged in the business of transporting freight between blew York and Philadelphia. The plaintiff owned what was called the outside line, and the defendants ran what was known as the inside route. They were competing for trade, a course detrimental to both. The parties came together and, on May 5, 1874, entered into an agreement in writing for the purpose of consolidating the' conflicting interests and uniting their capital under one management, a scheme supposed to-be mutually’ beneficial. It provided for the consolidation' of the two lines in a corporation to be formed under the laws of the state, with a capital of $800,000. The property put in by Lorillard was valuecVat $170,000. That contributed by the defendants was rated at $130,000. The parties were to take stock to the extent of their respective interests, and the defendants were to purchase $20,000 of Lorillard’s stock, which would bring that-held by him down to $150,000, and increase that possessed by them to an equal amount. The arrangement was carried out, corporation formed, the property conveyed to it, and stock issued and transferred in the manner stated. The agreement further provided that the defendants should have the management of the corporation and business, and that they should guarantee to the plaintiff a dividend of not less than seven per cent per annum for seven years. The agreement went into effect July 1,1874. The defendants were to receive for their management the usual commission of two and a half per cent in and , five per cent out on the freight carried, and it was agreed that the management of the line should be in good -faith, and as economical as consistent with the interests of the business. The defendants have, by force of judgments and otherwise, paid the agreed seven per cent up to the 1st of July, 1879. The present action is to recover the so-called dividends from that time till July 1, 1881, when the time for their payment, according to the terms of the contract, expired.
    The main defense urged by the defendants is contained in the-twelfth paragraph of their amended -answer, as follows“That the consideration for which they entered into the covenant to guarantee to the plaintiff a dividend of not less than seven per ■cent per annum for seven years upon the capital stock held by the'plaintiff was the provision contained in said agreement, that the defendants should have the management of said corporation •'■and business, and receive the commissions and other benefits provided for in said contract for the full period of seven years, for ■which said dividend was guaranteed. That in violation of said agreement the said plaintiff, on or about the 14th day of April, 1872, procured an action to be brought by the attorney-general, the name of the People of the state, in the supreme court, against said corporation and these defendants, arid Benjamin Betts, John A. Leslie and Amos Bogers, as officers and incorporators thereof, forth e dissolution of said corporation. That the action then brought in the name of the People was, in fact, instituted and carried on in the interest and for the benefit of the plaintiff, and was conducted ¿and managed throughout by him and his private counsel, and at his sole expense, and that, shortly after the commencement of this ¿action, the plaintiff was, by an order of the supreme court duly entered in said actiori, made a party plaintiff with the People, and thereafter remained a party thereto. That, on or about the 10th day of July, 1879, by an order of the supreme court, made in ¿said action, one Howard P. Moody was appointed the receiver of the said corporation, and thereupon entered upon the performance of his duties as such receiver, and took possession of all the ■steamers, assets, books and property of the said corporation. That final judgment was thereafter entered in said action dissolving said corporation and vacating its charter, and all the property and assets were sold or disposed of, and its business wound up and destroyed, all of which matters, acts and things were done or procured to be done by the said plaintiff, and that, from and after the appointment of said receiver, the defendants were deprived of all and any management or control of said corporation or its business.” How far the proceedings just referred to furnish the defendants with a legal excuse for not performing their contract with the plaintiff is the main question to be decided.
    The following is the opinion of the court below:
    McAdam, J.—Former adjudications, made in actions between the same parties, on the identical agreement, have conclusively determined several matters which must now be regarded as authoritatively settled:

      First. That the contract sued upon is valid and enforceable. Lorillard v. Clyde, 86 N. Y., 384.

      Second. That the defendants- were liable" upon it, during^ the time the corporation subsisted de facto, although there existed cause for its dissolution. Same v. Same, 16 J. & S., 409; aff’d 99 N. Y., 196.

      Third. That separate actions may be brought on the contract as the instalments fall due, and separate recoveries had in each. Same v. Same, 122 N. Y., 41; 33 St. Rep., 303.

      Fourth. That the plaintiff was in no legal sense a party to the -action by the People of the state, and not concluded by the findings therein. Same v. Same, 16 J. & S., 409; 99 N. Y., 196, supra.

    The only phase of the litigation not fully covered by these determinations is the effect of the final dissolution of the corporation upon the rights and liabilities of the parties. In disposing of this issue the nature and purpose of the special agreement sued upon must be kept prominently in view. The contract was made prior to the formation of the corporation, was not merged in it, but was to exist independently of it It was not an obligation to pay dividends technically so-called, for that term means a Sum which a corporation sets apart from its profits to be divided among its members, Lockhart v. Van Alstyne, 31 Mich., 76; Taft v. H., P. & F. R. R. Co., 8 R. I., 310; Morawetz on Corp., § 457, and no corporation can declare a dividend except from surplus profits, 2 R. S., 7th ed., 1364, § 1, and it is an offense to withdraw or pay a stockholder any part of the capital stock. Penal Code, § 594. It is evident, therefore, that the term dividends was used in the agreement arbitrarily, not in its literal sense, and merely as indicating a profit the plaintiff was to receive, not from the corporation, but from the defendants, for they were to pay the plaintiff the so-called dividends’ whether the corporation made profits or losses, and without regard to the amount of either. The payments were to continue absolutely and at all events for the period bf seven years, the promise to pay being the consideration upon which the plaintiff consented to the consolidation, transferred the competing line to the corporation, and yielded its management to the care of the defendants.
    The plaintiff, did all he agreed to do, and the defendants took the responsibility of every contingency that might happen for seven years thereafter.
    The plaintiff had the right to assume that the defendants, upon taking control of the corporation," would manage it within the limits of the corporate charter. The power to control certainly implied the duty of managing the trust faithfully and with due regard to the state, as well as the individual rights and interests of all concerned. The defendants must be held to have known that in cases of misuser of the corporate franchises, or departure from any of the substantial objects for which the corporation was instituted, it was liable to have its charter annulled at the suit of the state, for, as Justice Story said in Terrett v. Taylor, 9 Crunch, 51, “ a private corporation may lose its franchises by a misuser of them, and they may be resumed by the government under a judicial judgment upon a quo warranta to ascertain and enforce the forfeiture. This is the common law of the land, and a tacit condition annexed to the creation of every such corporation.” The possibility of forfeiture, depending as it did upon the proper management of the corporate affairs by the defendants, was not permitted by the plaintiff to be made a condition upon which the payments promised were to cease, and no such condition -can be added now by implication or otherwise.

      The plaintiff did not rescind the agreement, and brought no ■ action calculated to terminate it, or to absolve the defendants from its complete performance.
    Suits to determine the forfeiture of corporate franchises must be at the instance and under the authority of the king in England and of the state in this country. Private individuals have no control of the proceedings, for they are matter of public, and not of private concern. The provisions regulating such actions are contained in § 1798 of the Code, and the form of judgment is prescribed by § 1801, and there is nothing in either section, or in the procedure, which operated upon or affects the agreement in suit.
    If it had been an agreemeut where dividends were to be paid from the earnings of the corporation, it would even then be unnecessary to consider the effect of the judgment dissolving the corporation, for the reason that the want of earnings would be a complete defense in itself, without reference to the cause of their nonexistence, but, as before suggested, it is immaterial, under this agreement, whether there were profits or even losses, for, without regard to either, or the source from which losses might arise or profits accrue, the plaintiff was to receive from the defendants a sum equal to seven per cent, upon his capital stock, and this they were to pay absolutely, and without reference to any future possibility. The rule is that when a party has undertaken absolutely to do a thing, he is not excused from liability by the occurrence of events which render the performance of his promise impossible,- or, as Blackburn, J., expressed it: “We think it firmly established, both by decided cases and on principle, that where a party has either expressly or impliedly undertaken, without any qualification, to do a thing, and does not do it, he must make compensation in damages, though the performance was rendered impracticable by some unforeseen cause over which he had no control. Ford v. Cotesworth, L. R., 4 Q. B., 134. If a person create a charge upon himself, he is bound thereby, notwithstanding the occurrence of any contingency, because, if he had chosen, he might have provided against it by the stipulations in his contract. Chitty on Con., 11th Am. ed., 1074, 1075; 3 Am. & Eng. Enc. of Law, 900.
    The claim that the proceeding by the state, which resulted in taking from the defendants the management of the corporation, interfered with their performance of the contract with the plaintiff, is sufficiently answered by the fact that the action of- the state was founded solely on the misconduct of the defendants as managing agents. Morawetz on Corp., § 1016. The defendants should have foreseen and prevented these consequences. Proper management would have averted them, and rendered state or private interference or loss of control impossible. In this aspect of the case reference may be made to another rule, which holds that where performance of a contract is rendered difficult or even impossible by the act of the party who is chargeable thereon, such impossibility furnishes him with no defense to an action founded on the obligation. Chitty, supra, § 1079 ; Woolner v. Hill, 93 N. Y., 576. The action was brought by the state, and Lorillard was subsequently joined as co-plaintiff by consent. His presencé added no force to the proceeding. He did not seek or obtain any personal relief, nor could he receive any in that action. The judgment did not pass on his legal rights under the contract in suit, and nothing was adjudicated against him. The fact that the plaintiff encouraged the state to assert its rights against the defendants and indemnified it against costs, did not turn that litigation into one of his own. Lorillard could gain no personal advantage by that litigation, and should suffer no pecuniary loss from it The state was asserting a sovereign right in an action which it alone could maintain, and joining a private individual as co-plaintiff or relator neither impaired nor enlarged the scope of the proceeding. H the litigation had been one calculated to transfer the management of the corporation from the defendants to the plaintiff, or if Lorillard had been joined as defendant, and had, with the other defendants, been adjudged guilty of the wrongs committed, the judgment in that proceeding might have had some significance, but that is not this case. If the plaintiff’s contract had been with the corporation, its dissolution might, perhaps, have terminated, it. Corporations are born of the state, and may die by expiration of charter or by annulment or dissolution. At common law the assets of a dissolved corporation reverted to the Crown, and the debts due by it were cancelled. 2 Kent’s Com., 307 ; Angeli & Ames on Corp., 667. The statute changed this inequitable principle by declaring that on the dissolution of a corporation the directors or managers thereof (unless some other person be appointed by the legislature or the court) shall be trustees of the creditors and stockholders, 2 R S. (7th-ed), 1531, § 9, so that, although the corporation may die, its estate is to be administered in practically the same manner as the estate of any natural person. Thé expiration of the charter does not terminate the corporate existence in such a sense as to prevent an action in the corporate name by its sole surviving director to establish its rights of property for the benefit of stockholders, Taylor v. Holmes, 127 U. S., 489, nor does a lease to the corporation terminate by its dissolution. People v. National Trust Co., 82 N. Y., 283. The case of The People v. Globe M. I. Co., 64 How. Pr., 240; aff’d 91 N. Y., 174, was a contract for personal services, which, in its nature, was terminable on the death of either of the contracting parties. See People v. O'Brien, 111 N. Y., 54; 19 St. Rep., 173.
    But it is idle to discuss what effect the death of the corporation would have produced if the contract had been made with it or made dependent on its continued existence. The contract was entered into by the defendants on their own behalf, was not dependent on continued corporate life- for vitality or energy, and nothing within the range of possibility excuses its performance. Beebe v. Johnson, 19 Wend., 500; Harmony v. Bingham, 12 N. Y., 99; Booth v. Spuyten D. R. M. Co., 60 id., 487. This principle was settled as far back as Paradine v. Jane, given us by the old reporter, Alleyn, in 23 Charles II. The- defendant there had taken a lease, covenanting to pay rent. He pleaded that a certain German prince, by the name of Prince Rupert, an alien born, enemy to the king and kingdom, had invaded the realm with a hostile army of men, and with the same force had entered upon the defendant’s possessions and him expelled, whereby he could not take the profits. On demurrer, the court resolved that the matter of the plea was insufficient, and that he ought to pay his rent. And this difference, says Alleyn, was taken : That when the law creates a duty or charge, and the party is disabled to perform it without any default in him, and bath no remedy over, there the law will excuse him. * * * But where a party, by his own contract, creates a duty or charge upon himself, he is bound to make it good, if he may, notwithstanding any accident by inevitable necessity, because he might have provided against it by his contract. This was then, has ever , since been, and is now, the law. The obligation the plaintiff seeks to enforce was not created by the law, but by the voluntary act and contract of the parties, and the strict rule in regard to literal performance is applicable, A number of cases affirming the principle stated will be found collated in 2d Smith’s Leading Oases, 8th ed., 39. If unexpected impediments lie in the way of performance and a loss must ensue, the law leaves the loss where the contract places it. If the parties have made no provision for a dispensation, the rule of law gives none. It does not allow a contract fairly made to be annulled, and it does not permit to be interpolated what the parties themselves have not stipulated. To do otherwise would be to make the construction of the contract depend, not upon the intention of the parties when it was entered into, but upon the incidents of the future. Vide Smith Lead. Gas., supra, 40, 41. The exceptions to the rule are clearly stated in Dexter v. Norton, 47 N. Y., 64, 65, and apply only where the parties contemplated the continued existence of a particular person or thing which is the subject of the contract, and such person or thing is, without the fault of either party, rendered incapable of answering the purpose of the contract; as in the case of a particular music hall destroyed by fire, Taylor v. Caldwell, 3 B. & S., 826; the sale of a certain horse to be delivered at a future day, and the horse dies in the interval, Benj. Sales, 424; Carpenter v. Stevens, 12 Wend., 589; in the case of an apprentice who became permanently ill, and of a woman whoj from illness, was unable to perform as a pianist. Boast v. Firth, L. R., 4 C. P., 1; Robinson v. Davison, L. R, 6 Exch., 269. It was unnecessary to guard expressly against these contingencies, for they were excepted by the very nature of the undertaking. To come within the rule excusing performance, the incapacity to perform, must be involuntary and without fault. In the cases put, had it appeared that the hall had been destroyed or the horse killed by the negligent act of the promisor, he would have been clearly liable to make good all loss for not furnishing the thing agreed. So, if the ill- . ness of the apprentice or sickness of the pianist had been caused by their own misconduct, neither would have been excused from responding to damages. The law reasons and acts upon sound logical principles, and considers causes in determining effects, for the legal consequences flowing from one spring may not flow from another. The case at bar, though, near the border line, rests securely on that side which finds recognition in the general rule stated, and does not reach into or invade that domain where the principle illustrated by. the exception finds application. Here the destruction of the corporate franchise was the direct result of wrongful conduct on the part of the defendants in their management of the property intrusted to their care and control. This circumstance affects largely the legal result of the question submitted for decision. Suppose the defendants had wrongfully created corporate liabilities, on which judgment had been recovered against the' corporation, or had, by some neglect, allowed the vessels of the line to be libeled, and the management had, in consequence, passed from them to,, strangers, under execution or marshal’s sales of the corporate property, could it have been seriously contended that such a change in the condition of things would have furnished the defendants with any legal excuse for not performing their contract with the plaintiff ? Certainly not. The plaintiff had $150,000 of his capital invested in the enterprise, and apart from the question of stipulated profits, which were incidents merely, he was interested in having the management conducted within the limits of the law, and had the right to call the attention of the state to any infraction of the charter which imperiled his capital, and this without impairing any of his legal rights, remedies, or collateral obligations against those guilty of the wrongs the state attempted to right. The fact that the proceeding was instituted on information imparted by the plaintiff can have no other effect than if the facts comm uni - * coted had been given by a stranger. The attorney general was charged with a public duty, and how or from-whom he obtains the information upon which he acts is matter .of little concern, so long as the information proves true, and the proceeding results successfully to the state. Much of the fault found with corporations is their increasing tendency to expand their operations beyond their organic purpose. They are mere creatures of the law, their rights and liabilities are defined by it, and it becomes the duty of the state to keep them within the limits of the powers conferred. A corporation organized to manufacture cannot engage in shipping, banking, insurance, or railroading, nor can corporations chartered for either of these specific purposes engage in enterprises foreign to the object of their creation. Corporations are given especial privileges, not to favor those to whom the franchises are granted, but with a view to the advantages that may accrue to the public, as, in this instance, from facilities afforded for travel and the movement of trade and commerce. The state is, as to domestic rights and corporations, a sovereign power. It may, through want of knowledge of an infraction of its laws, or from indifference, tolerate trivial transgressions, for toleration is not license, but when it is called upon to right a wrong its authority is more far reaching than many at times contemplate. This attribute of the state is to be exercised whenever the public good requires its interference, and it matters not who awakened it to its sense of duty.

      'The people are the sequestrators, not the informant through whose agency the machinery is putin motion ; nor are the motives of the informer of any moment so long as the end justifies the means, and a legal result is established which approves the action of, the state in the premises. Motives can never make that wrong which, in its own essence, is lawful. It may be a misfortune to the defendants that they lost-the source from which they expected to realize the' moneys promised to the plaintiff, but after the court, in the action to annul the charter, determined that this individual misfortune was necessary to the public good, it is idle to dwell ■upon this phase of the cáse with solicitude. The efforts to prove ■that the plaintiff was a participator in the wrongs adjudicated to have been committed by the defendants have failed, and, as a result, he stands free from whatever legal consequences might haVe followed if he had been particeps criminis with them. There are ■cases in' the books, and among them Hollingshead v. Woodward, 107 N. Y., 96; 11 St. Rep., 325 ; Sturges v. Vanderbilt, 73 N.Y., 390; Mumma v. Potomac Co., 8 Pet., 281; Read v. Bank, 23 Me., 321, holding that the dissolution of the corporation, is its death ; ■that parties dealing with it contract with reference thereto ; that no judgment can thereafter go against it; that a stockholder therein ceases to be such so far as exemption. from corporate penalties is concerned ; but a discussion of the reasons for these decisions is unnecessary, because the principles decided do not reach the issue presented by the present record. For the same reason- it is unnecessary to consider the rule that, where an act is done by public authority which renders further performance of the contract impossible, the contract is dissolved. Melville v. De Wolf, 82 E. C. L., 842 ; Jones v. Judd, 4 N. Y., 411; Hildreth v. Buell, 18 Barb., 107. The contract was not made with the corporation, nor was it , dependent on its continuance for support. There is no defense to "the action, and the plaintiff is entitled to judgment for $33,757.50, the amount claimed, and interest

      Boardman & Boardman (James C. Carter and William N. Dykman, of counsel), for app'lts; Glover, Sweezy & Glover, (David Leventritt and Asa Bird Gardiner, of counsel), for resp’t.
   Per Curiam.

The judgment appealed from is affirmed, with, costs, on the opinion of the court below.

Freedman, Dugro and Gildersleeve, JJ., concur.


author: Gildersleeve, J.

text:
    Edward Corrigan, Resp’t, v. The Coney Island Jockey Club, App'lt.

      (New York Superior Court, General Term,

      Filed October 24, 1892.)

    1. Injunction—Entry op horse eor racing—Sale.
    Plaintiff purchased at auction a horse, concerning which the catalogue stated “eligible to Coney Island Futurity, 1891.” The vendor afterwards ■cancelled the entry for that race and the defendant refused entry of the horse. Held, that-such statement constituted no part of the conditions of . sale, but was a mere description; that the horse was not sold with his engagements, and that defendant could not he required to allow the horse to run in said race.
    3. Same.
    • The contract of entry being subject to defendant’s rules, one of which was that its executive committee should settle any dispute not provided for by the rules, the decision of such committee was decisive of the question in controversy, and should not be interfered with by the court.
    -- Appeal from an order of the special term granting a mandatory-injunction directing the defendant to permit a certain horse known as “ Huron,” the property of the plaintiff, to take part in a race called “ The Futurity," on the 29tli day of August, 1891.

      A. H. Hummel, for resp’t; John M. Bowers, for app’lt.
   Gildersleeve, J.

The defendant, the Coney Island Jockey Club, is a corporation existing under the laws of the state of New York, owning what is known as the Coney Island Eace Track, and is engaged in the business of running thoroughbred horses over its course at said track for stakes and purses.

Among the stake races, arranged by the defendant, is a race known as “ The Futurity.” The entries of contestants for this race are made before the contesting horses are born. The owner of a mare in foal enters the unborn foal of such mare, to be run at the age of two years.

In the year 1888, pursuant to the provisions and the conditions of said race, one General Jackson, the owner of “ Belle Meade Stud Farm ” of Hashville, Tennessee, entered for the said race the unborn foal of a certain thoroughbred mare, known as “ Brunette,” by the thoroughbred running horse “ Iroquois.” This foal was born in the spring of 1889, and was named “Huron.”

The plaintiff is engaged in the business of breeding, purchasing and running horses for purses and stakes; and, on the 24th day of April, 1890, purchased the said colt Huron ” at public auction.

It is manifest that if the plaintiff has a cause of action here against the defendant, it has its basis in the rights that he acquired by the purchase of said colt “ Huron.” Our first inquiry, therefore, is: what rights in respect of “ The Futurity ” race did the plaintiff get by his said purchase ?

It is the contention of the plaintiff that the colt “ Huron ” was sold “with all of his racing engagements,” among which was “ The Futurity ; ” and that by means of this purchase of the colt, he became entitled to run the said colt in “ The Futurity ” race on August 29, 1891. It must be conceded that, at the time of the sale, in April, 1890, the said colt was eligible as a competitor for “ The Futurity.” In the catalogue of sale, he was described as “ Eligible to Coney Island Futurity, 1891.” We do not understand that any claim is made to the contrary.

We agree with the learned court below that this announcement 6f the colt’s eligibility in respect to “ The Futurity ” race meant that he was “ legally qualified to enter into it.” The question to-be met, however, is this: was he sold with this engagement ?

This right of privilege, called an engagement, had its origin in a contract entered into between General Jackson, the owner of “Belle Meade Stud Farm,” and the defendant: and it cannot be enforced, except in pursuance of the terms and conditions o£ that contract. If, by the purchase, the plaintiff became the owner of the colt’s engagements, and succeeded to the rights of General Jackson, he, in his efforts to enforce those rights, must submit to the rules of the defendant, under and subject to which the contract was originally made.

Bule 61 of defendant provides that when the horse is sold at public auction, the advertised conditions of the sale are sufficient evidence that he was sold with his engagements. As we read the catalogue of the sale, we do not understand the words “ Eligible to Coney Island Futurity, 1891, Brood Mare, Sweepstakes, West Side Park, Nashville, 1891,” as constituting one of the conditions of the sale. It was a portion of the description of the colt, and a statement of the possibilities that a purchaser might realize.

The conditions of the sale, as published in the catalogue, were set forth in five paragraphs, numbered respectively from first to fifth, and contain no reference whatever to the engagements of the colt “ Huron ” or any other horse. In the conditions of sale no engagements are specified, as provided for by “ Section 61. Rules of Racing, Regulations of the Course and Betting Rules,” adopted by the defendant, and in force at the time the contract under consideration was entered into between General Jackson and the defendant We fail to find any evidence in the record tó support the conclusion that the colt “ Huron ” was sold with his engagements.

We cannot agree with the learned court below that the statement, ^ Eligible to Coney Island Futurity, 1891," in the description of the colt “ Huron,” can be read in with the conditions of the sale, and operate as a declaration by the vendor that the colt “ Huron ” was sold with his engagements. We think that it cannot even be said that a representation as to the eligibility to the Futurity race was one of the conditions of sale. Could it be given an interpretation so elastic, it would certainly be unreasonable to make the further claim that this description meant a sale of the colt with his engagements.

Had it been the intention of General Jackson that the sale of the horses in question should be with .their engagements, it was a condition so easily expressed that we are justified in assuming that it would have been set forth in the catalogue with perfect clearness. The engagements of a race horse constitute an important factor with purchasers in placing an estimate upon his value, and is S feature of the business that receives important, and not slight, consideration. Again, the owner of the “Belle Meade Stud Farm ” had good reasons for not selling his horses at public auction with their engagements. The sale was a large one. If the horses were sold with their engagements, he, General Jackson, remained liable for forfeits which would amount to a large sum, and would entail much' trouble and possibly great loss. Purchasers, having bought horses eligible for certain races, could readily, by private treaty with the vendor, in accordance with the rules adopted by the defendant and other racing associations, secure all rights to engagements which the vendor had.

The letter of May 4, 1890, to the secretary of the defendant by Mr. -Carter, General Jackson’s agent, declaring the colt “ Huron ” out of the “Futurity ” for 1891, supports with much force the contention of the defendant that the colt was not sold with his engagements. If he was sold with his engagements, then the vendor, a few days after having made the sale, assumed authority over the engagement with which he had just parted; a very unreasonable and improbable act for the proprietor of such a large establishment as “ Belle Meade Stud Farm.” Furthermore, the letter of May 11, 1891, by Mr. Kuhl to the secretary of the defendant, and the telegram, of May 16, 1891, to the secretary of the defendant from the plaintiff indicate very clearly that if the plaintiff did buy the colt “ Huron ” with his engagements, he did not know it. If credit is to be given to Mr. Carter’s affidavit, we “have direct proof that “ The Futurity” engagement of the colt “ Huron ” was the subject of negotiations between the vendor and plaintiff, and resulted in the plaintiff’s declining to assume the engagement.

If, however, the plaintiff did purchase the colt “ Huron ” with his engagements, and succeededjo all the rights of General Jackson in respect of the colt and the “Futurity ” race, and there was a question whether the plaintiff had, or had not, a right to run the said colt in the “ Futurity ” race of 1891, the executive committee" of the defendant were the only arbiters. The executive committee of the defendant corporation decided that the said colt Huron ” was not eligible to start in the “ Futurity ” race of 1891, and that decision this court will not overturn.

One of the rules in force when the original contract was made, knowledge of which the vendor of the said colt will be presumed to have had, is as follows: “ If any case occur which is not, or which is alleged not to be, provided for by these rules, it shall be determined by the executive committee in such manner as they think best and conformable with the usage of the turf.”

The executive committee of the defendant corporation in denying the right of the plaintiff to run the said colt “Huron” in said race, so 'far as appears, acted in good faith and had sufficient evidence before them to sustain their conclusion.

Courts of equity rarely interfere with the exercise of discretionary powers by corporate bodies or their officers, to whom such, powers are confided, ^here acts requiring the .exercise of judgment, science or professional skill, are confided to the discretion of the officers of a corporation, the exercise of that discretion will not be lightly disturbed; nor will such officers be enjoined, except when abusing their power to the injury of others. See Walker v. Mad. Riv. Co., 8 Ohio, 38 Cooper v. Williams, 4 id., 253; High on Injunctions, § 1186.

Executive committees of Jockey Clubs and social clubs are supreme within themselves, when within the scope of their recognized authority ; and where there is any evidence, and the party concerned has an opportunity to be heard, in the absence of fraud, courts should not interfere with their decisions.

When the original contract was entered into, which secure^ to the owner, of the colt “ Huron ” whatever rights existed in respect to the “Futurity” race,.the owner of the said colt, in effect, subscribed to the defendant’s rules, and they are binding upon his successor. Those rules named the tribunal to which any dispute, that might arise out of the contract, should be submitted. That tribunal was the executive committee of the defendant corporation. They had jurisdiction of the cause of action alleged in'the complaint herein, and it was the duty of the plaintiff to submit to their decision.

The statute laws of this state give the defendant the right to ■conduct races at certain specified times. The right to settle con-, troversies like the one in question is just as firmly established, though it rests upon a different foundation. It has “the support of sound principles of equity, declared in a long line of authorities.

The plaintiff, having rested quietly for over a year and after hun-. dreds had acted upon the situation as it then existed, came forward at the last moment, and demanded an entrance for his horse. His demands could not have been granted without doing great injustice to other competitors and to patrons of the turf generally.

We are of the opinion that the executive committee of the defendant corporation were fully warranted in the course that they pursued.

The order appealed from should be reversed, and the injunction dissolved, with costs and disbursements to the defendant.

Freedman and Dugro, JJ., concur.

       Reversing 40 St. Rep., 142.


author: McAdam, J.

text:
    The Mayor, etc., of New York, App’lts, v. James M. Smith, Impl’d, Resp’t.

      (New York Superior Court, General Term,

      Filed October 24, 1892.)

    1. Judgment—Unauthoeized appeaeance.
    A domestic judgment rendered by a court of general jurisdiction, against a resident party who has not been served with process, but for whom an attorney has appeared, though without authority, is neither void nor irregular. But the party is entitled to relief in such a case if he seeks it by bill or motion promptly.

      2. Same.
    Where the appearance f or.one sued as surety was entitled in the supreme, court, instead of that in which the action was brought, and where no complaint was served, but the plaintiffs waited, twenty-four" years, and until after the attorney died and the financial condition of the principal debtor changed,, before entering judgment, and _ the defendant moved promptly on learning of the judgment, the court is justified in vacating the judgment unconditionally.
    Appeal from order’vacating, judgment as to defendant Smith.
    The plaintiffs claim that the action was commenced by the service of a summons on the defendant Smith on July 21, 1868, and on the other defendants on July 24th an,d 25th, 1868.
    That all the defendants appeared in the action August 4, 1868, by Frank S. Smith, as attorney. The notice of appearance is entitled in the “ supreme ” court, and is for “ the defendants" without naming them. It is dated August 4, 1868. No proceedings seem to have been taken in the action until February, 1890, when the corporation counsel served a notice- of application for judgment as by default, which motion he subsequently abandoned. The plaintiffs thereafter and on January 19, 1892, filed with the clerk of this court a judgment roll as by default, reciting the appearance of all the defendants by attorney, and annexing to the roll the "notice of appearance aforesaid, -whereupon the clerk entered judgment against said defendants for $9,984.18. No proof of the service of the summons or the complaint was annexed, and no legal proof of the service appears in the appeal book.
    The defendant Smith thereupon movéd to vacate the judgment as to him, upon the ground that no process had ever been served upon him, that he had "no knowledge whatever of the action until the service of the notice of application for judgment in 1890, which was abandoned, and that he had never authorized any one to appear in the action for him.
    The court granted the motion and vacated the judgment as to said defendant, and from the order aforesaid the plaintiffs appeal.

      Wm. H. Clark, John J. Delany and T. Farley, for appl’ts; Wm. H. Newman, for resp’t.
   McAdam, J.

The plaintiffs are certainly guilty of great loches in allowing an action commenced in 1868 to slumber twenty-four years, when, according to their theory, they were entitled to take judgment as by default for want of an answer in December, 1868. The defendant was sued as surety on a lease made to one Allerton, who, at the time the plaintiffs claim they were entitled to judgment, owned real estate and was solvent. He is now irresponsible. Under such circumstances, the defendant cannot be censured for being seemingly technical as to the plaintiffs’ practice in regard to the manner and form in which their judgment was entered. The court below, in disposing of the motion, inferentially found that the defendant was- never served with process, that the appearance interposed for him was without authority, that he had no knowledge of the action until February, 1890, when the plaintiffs served'the notice of motion for judgment which they afterwards, countermanded, and that he was out of the jurisdiction of the court during all of July and August, 1868.

On these facts one would naturally suppose that the fundamental rule applied,"Xhat to render a judgment of a court effectual as one in pgrsonam it is necessary that the parties interested be subjected to the process of the court by personal service; that the fiction that an appearance is equivalent to such service applied only to cases wherein the appearance was authorized; and that there cán be no such authority unless the relation of attorney and client actually subsists ; that the suitor had the right to select his-own attorney; that the relation cannot be created by the attorney alone, and that the court in which a judgment was entered must in a direct proceeding for the purpose relieve the defendant unconditionally from a judgment entered wholly on an appearance by an unauthorized attorney; but these principles apply only to foreign and not to domestic judgments. Ferguson v. Crawford, 70 N. Y., 257; Kerr v. Kerr, 41 id., 272 ; Hoffman v. Hoffman, 46 id., 30.

The reason for the distinction seems to be that it would be unreasonable to require the defendant to go to the court of the foreign state which rendered it, and attack it directly by a bill or motion; hence he is permitted to plead the want of_authority in the attorney, defensively and collaterally; whereas, in the case of a domestic judgment, it is deemed better to force the party to assail it directly in the jurisdiction of his domicil (thus giving the court an equitable control over the proceedings), by precluding him from resorting to the plea of want of authority in the attorney collaterally as a defense to a scire facias or direct action on the judgment, Wells on Attorneys, 858; .hence a domestic judgment rendered against a resident by a court of general jurisdiction against a party who has not been served with process, but for whom an attorney of the court has appeared, though without authority, is neither void nor irregular. Denton v. Noyes, 6 Johns., 296, followed as authority in Vilas v. P. & M. R. R. Co., 123 N. Y., 453 ; 34 St. Rep., 67, and see Powers v. Trenor, 3 Hun, 3 ; Adams v. Gilbert, 9 Wend., 499 ; Sperry v. Reynolds, 65 N.Y., 183; Leet v. McMaster, 51 Barb., 242, and kindred cases. Still a party is entitled to relief when an unjust judgment, though a domestic one, has been rendered against him by fraud or collusion, or by the appearance of an unauthorized attorney, if the paity seeks the relief bj' bill or motion promptly, Wells on Attorneys, 359, but unless special circumstances necessitate a resort to a court of equity, relief by motion in the action in which the unauthorized appearance was entered is proper. Vilas v. P. & M. R. R. Co., supra. The practice warrants a party in giving faith and confidence to one who, by law, is authorized to hold himself out as a public officer, clothed with power to represent others in court; and when an attorney appears for a party his appearance is recognized and his authority will be presumed to the extent at least of giving validity to the proceeding, Ferguson v. Crawford, supra; Hamilton v. Wright, 37 N. Y., 504; Brown v. Nichols, 42 id., 26, which is the reason why an appearance by an attorney, without warrant, is good as to the court. Denton v. Noyes, supra.

It is the official position of the attorney as an accredited officer of the court that gives rise to the implication that he possesses the authority he assumes to exercise, for in ordinary cases .the presumption does not attach, and where one is sought to be bound by the act of another who assumed to act as his agent, the party seeking to hold him bound by such act must show the agency. The object of the direct proceeding to the court which rendered the judgment is to enable it to give the relief necessary without doing injustice to the plaintiff or to innocent third persons who may have acquired-rights under the judgment.

Whether the judgment ought tobe vacated entirely, or allowed to stand as security, with permission to the defendant to come in and defend, is a question addressed to the discretion of the court in which the judgment was recovered, to be exercised upon equitable principles in furtherance of justice according to the peculiar circumstances of each case, for as the court of appeals in Sperry v. Reynolds, 65 N. Y., 182, said: “ The courts can, in the action in which the unauthorized appearance has Qbeen put in, give a party such relief against it as he ought to have.”

In Ferguson v. Crawford, supra, it was held that while an unauthorized appearance would bind the defendant, he was not precluded from showing that the paper was a forgery.

In Burton v. Sherman, 20 W. Dig., 419, the court held' that there was no distinction between a forged notice of appearance and an appearance by an attorney not authorized to give it, as the notice in neither case reaches the party. This case is not in harmony, however, with the controlling authorities upon the subject.

In Vilas v. P. & M. R. R. Co., supra, the rule in regard to judgments entered on^ unauthorized appearances was re-affirmed, but the case distinguished from those concerning domestic judgments, because the defendant was a resident of another state, and not within the jurisdiction of the court, and it was held that the rule relating to foreign judgments applied to one so situated, and that the.court below ought to have vacated the judgment. See, also, Nordlinger v. De Mier, 54 Hun, 276; 27 St. Rep., 16. The defendant here was out of the jurisdiction of the court at the time of the authorized appearance, but being a resident of the city of New York, the exception in favor of non-residents of the state does not apply.

In some cases the courts have denied all relief in cases of domestic judgments, leaving the injured party to seek his remedy against the attorney (where he appeared to be a responsible person) either by summary application or action. American Ins. Co. v. Oakley, 9 Paige, 499, and kindred authorities. The attorney who appeared for the defendant is dead, and it is not shown whether he left any estate to which the defendant may resort, and it is more than likely he will find no productive remedy in that direction. Denying a defendant injured by an unauthorized appearance any relief in the action, compelling him to pay g judgment of which he knew nothing until an execution was presented for its collection, and then leaving him to the uncertain remedy of .a suit against the attorney who assumed to act for him, seemed so inequitable, that in Ellsworth v. Campbell, 31 Barb., 134, it was held that the inj ured party should not be confined to his remedy .against the attorney, even, though the latter be responsible, and that the court should in any case of unauthorized appearance give the injured party leave to come in and litigate the case on the merits, preserving meanwhile the lien of the judgment. In Blodget v. Conklin, 9 How., 444, it appeared that the attorney was irresponsible, and the court, to protect the defendant, permitted him to come in on swearing to merits, and allowed the judgment to stand as security. In Denton v. Noyes, supra, the relief afforded was to stay proceedings on the judgment and allow the defendant to come in and defend the action. In these cases there were no loches on the part of the judgment creditor; here, we have judgment creditors who have slept on their rights for twenty-four years without a move on their part, the" lips of the attorney who appeared are sealed in death, and Allerton, for whom the defendant became surety, has become insolvent. Under these circumstances, the terms imposed in the cases cited would not reinstate the defendant to the position he occupied when the unauthorized appearance was given. o

The authorities all concede that the court has power in any case -to award proper relief to a defendant against an unauthorized appearance; " they differ only as to the extent of the relief which ought to be granted. None of the cases deny the power of the court to set aside the judgment altogether where that extreme course would not be inequitable to the plaintiff nor infringe on the rights of others. The defendant, knowing nothing to the contrary, had the right to assume that the obligation for which he was surety had been .discharged by payment ox-had ceased to be enforcible by reason of the statute of limitations. The liability is to he continued, if oat all, by force of the unauthorized appearance by an attorney given twenty-four years ago, and never acted upon until recently. This requires us to examine the notice of appearance critically, and to construe it more strictly against ,the plaintiff than we might have done but for this unusual delay. The appearance is in an action in the “ supreme ” court, while the-present litigation is in the “superior” court. Such an error might in many instances constitute a mere irregularity, waived by retaining the "paper. Such was the construction put upon an answer entitled “ supreme ” instead of “ superior ” court, Williams y. Sholto, 4 Sandf., 641; but the plaintiff in that case did not depend upon the answer for the court’s jurisdiction to act, that had been acquired by the personal service of process; for that reason the case is distinguishable from this. In the present' instance the jurisdiction of the court is made to depend exclusively on the appearance of the attorney, and if this did not authorize the superior court to act upon it, the judgment entered is not only .without authority but void. In a jurisdictional aspect the title of the court became an essential and inseparable part of the notice, as much so apparently hs the name of a bank on a check or a particular individual as drawee on a draft The creditor could not in such a case treat the-instrument at his option as drawn upon another institution or individual. If the defendant sued the estate of his attorney, he would have to overcome this objection, and the question is whether such a notice pf- appearance, not followed by the service of a complaint “ as demanded by the terms of the notice,” or of any other papers entitled in the “superior ” court, (and there is no such proof in the appeal book) would make the estate liable for the superior court judgment.

Indeed, nothing whatever was done by the plaintiffs in recognition of the notice as an appearance in this action, and the fact that the complaint demanded by the notice was not served rather indicates that the plaintiffs’, counsel elected to treat the notice as a nullity. Section ISO of the Code in force when the appearance was given provides that “ a copy of the- complaint need not be served with the summons. In such a case the summons must state where the complaint is or will be filed; and if the defendant, within twenty days thereafter, causes notice of appearance to be given, and in person or by attorney demands in writing a copy of the complaint, specifying a place within the state where it may be served, a copy thereof must, within twenty days thereafter, he served accordingly, and after such service the defendant has tivenly days to answer, but only one copy need be served on the same attorney.” The appeal book fails to show by any legal evidence that the complaint was ever served, so as to start the time when the twenty days within which an answer might be served commenced to run. This departure -from practice would make the judgment; irregular, even if the notice of appearance conferred jurisdiction, and if it did not, proof of service of the summons was required before the clerk was authorized to enter judgment. Old Code, § 246 ; New Code, § 1212. It seems to us in view of the facts, that the notice of appearance either binds the defendant in the form -in which it was used, or it is not binding on him at all, and that it cannot be altered or enlarged by any act of the creditor to which he did not assent, in the absence of some authority or ratification on the part of the person to be charged. An appearance entitled in the “ N. Y. Supreme Court ” would hardly be held to confer jurisdiction on the “ Superior court of Cook Co., Illinois,” nor vice versa, yet there is no substantial difference between the illustration put and the case at bar. If such a holding were sustained orderly practice would be disregarded and confusion, worse confounded, welcomed in its place.

In M. & M. B'k v. Boyd, 3 Den., 257, it was held, that a warrant to confess judgment executed by residents of Pennsylvania, which by a fair construction of its terms contemplated a judgment in a court in that state, will not uphold a judgment entered in this state.

The warrant in.that case, like the notice in this, was the sole thing upon which jurisdiction depended, and where it contemplated proceedings in one court they were deemed unauthorized in another.

If the rights of third parties had intervened, there might be some justification in attempting to uphold the judgment, leaving the defendant to whatever remedy there might be against the attorney or his estate, but no such rights have accrued.

If there had been no laches on the part of the plaintiffs or even a reasonable delay, there might perhaps be some reason for permitting the judgment to stand and allowing the defendant to come in and defend on proving merits, as was done in the three cases ci-ted.

But the plaintiffs of their own volition waited until twenty-four years had passed, until the attorney who appeared in the action had passed to his final home, and then ex parte, and on defective proofs, entered their judgment.

_ When informed of. the status of the case by the notice of motion in February, 1890, the defendant sent one Newman to the corporation counsel and told him that the defendant could not be the James M. Smith intended, the notice of motion was withdrawn, and a promise given that nothing further would be done without notice. No notice was given until the defendant was informed of the judgment, and he took prompt measures to have it vacated by direct proceedings in the action. If under such circumstances the plaintiffs are in any manner aggrieved, by reason of the running of the statute of limitations or otherwise, it is the result of inexcusable loches on their part, which cannot be charged to the defendant. In view of all the facts, the long delay on the part of the plaintiffs, the changed financial condition of the principal debtor for whom the defendant was merely surety, the circumstance that the notice of appearance is in an action in the “supreme court,” with the want of authority in the attorney to appear at all, and for the irregularities in practice specified, we think the court below was justified in vacating the judgment unconditionally. There was no absence of power, no abuse of discretion.

The order appealed from must, therefore, be affirmed, with costs.

Gildersleeve, J., concurs.