text:
    JOHN N. HAYWARD, Respondent, v. MARIA L. HOOD and Others, Appellants.

      'Action to restrain the prosecution of another action in the same court — only allowed where full and complete justice cannot be obtained in the first action.

    An action was brought in this court, in Westchester county, hy Maria L. Hood, as executrix under the will of Andrew Hood, against one John U. Hayward, as surety, and one Frederick Hood, as principal, upon a bond given hy the latter as one of the executors of the said Andrew Hood. That action was brought to recover the amount secured hy the bond, because of a decree of the Surrogate of Westchester county, charging the executor with a misappropriation of the moneys of the estate, to an amount exceeding the sum which could be recovered hy the executrix against the said surety upon the bond.
    Yhe present appeal was taken from an order granting an injunction in an action brought hy the said John N. Hayward to restrain the prosecution of the former action upon the ground that the prosecution of that action should be ' restrained during the pendency of an appeal which had been taken from the decree of the surrogate. A discharged surety and certain beneficiaries under the will were with said Maria L. Hood made defendants in the present action.

      Held, that as the action of the executrix on the bond would entirely exhaust the liability of the surety, no necessity existed for bringing in the additional defendants in this suit.
    -That the order should not have been granted, as the plaintiff could have obtained -full and adequate remedy by applying for a stay of proceedings in the first- ' mentioned action

      Appeal from an injunction order restraining the prosecution of an action in this court pending in Westchester county, wherein the defendant Maria L. Hood is plaintiff, and John N. Hayward and Frederick Hood are defendants.

      John J. Maoldin, for the appellants.

      A. J. Hittenhoefer, for the respondent.
   Daniels, J.:

The action restrained by the injunction order was upon a bond éxecuted by the plaintiff as a surety for Frederick Hood, who was an executor under the will of Andrew Hood, deceased. It was brought by Maria L. Hood, as executrix under the same will, to recover the amount secured by the bond, because of a decree of the surrogate of Westchester county, charging this executor with a misappropriation of the moneys of the estate exceeding in amount the sum which could be recovered by her against Flayward as a surety in the bond. Other persons who were beneficiaries under the will, and a discharged surety under the bond, were made defendants in this action in which the injunction lias been issued. But as the action of the executrix on the bond will entirely exhaust the liability of the surety, no necessity existed for making these additional parties defendants in the suit. The controversy is in reality wholly between the executrix and this surety in the bond, the other having been released by a voluntary adjustment of his liability. The ground upon which the injunction was applied for, was that an appeal had been taken from the decreé charging the executor with this liability, and that it was necessary to restrain the trial of the action upon the bond until that appeal should be heard and decided. The complaint in this action, as well as the cases in other proceedings concerning this estate, demonstrate the fact to be that it has suffered the misfortune of a large amount of needless and disastrous litigation. And it may be, from the strict rules which were insisted upon and applied upon the hearing before the surrogate which preceded his decree, that this character of litigation has not yet been terminated; and for that reason, although the executor may in the end be found liable to the full extent reached by the decree, as that was intimated to be the case in Matter of Hood (98 N. Y., 363), a stay of the action on the bond may be very judicious as a salutary direction until the hearing and decision of the appeal taken from the decree.

But to obtain such a stay, an independent action of the nature of that which the surety has brought did not become necessary. It could be as well secured,- and probably would be as the facts appear, by an application to one of the justices of the court for a stay in the action on the execntor’s bond. The interests of the estate appear to require as much as that at the hands of the court. It has already suffered more than it should, by needless litigation, and that which is now pending should be so shaped and controlled as not to add to or increase the series of disasters already experienced.-

But an independent action to obtain such astay is neither required nor sanctioned by the law of this State. It has been supposed that the decision made in Erie Railway Company v. Ramsey (45 N. Y., 637) will sustain this suit, as it was there held that an action may be maintained to restrain proceedings in another suit where the relief demanded in the second action cannot be secured in the one previously commenced. This decision enjoins a salutary degree of caution in permitting independent actions to be maintained to secure even that result, limiting their propriety to cases where full and complete justice cannot be obtained in the first suit. And that was the view which was approved in Savage v. Allen (54 N. Y., 458). For it was there held that “ the proposition that a separate action may, under our present system, be maintained to restrain by injunction the proceedings in another suit in the same or in another court, between the same parties, where the relief sought in the latter suit may be obtained by a proper defense to the former one, has long since been exploded, or if not, should be without delay.” (Id., 463.) This was followed in Matter of McHenry (9 Abb. N. C., 256) and Farmers' Loan and Trust Company v. McHenry (Id., 235).

This principle excludes the right to maintain an independent action to obtain a stay of proceedings in another, in which complete justice can be dispensed to all of the parties. And it cannot be evaded by simply adding other persons not required to be brought before the court, for a complete and effectual as well as a final disposition of the controversy. And the' cases of Reinach v. Meyer (55 How., 283), Claflin v. Hamlin (62 id., 284) and Deen v. Milne (15 Abb. N. C., 350), do not conflict with this principle. The facts in each of them were entirely different, and in their decision do not sustain the right of the defendant in one suit to bring an action to restrain its prosecution, when that may be done by a simple order in the action in which the proceedings should be stayed. To sanction such an action as this, where the design is to obtain a mere stay of proceedings, would be to create an injurious precedent unwisely extending the area of ordinary litigation. It has not of.ten been attempted, and when it is attempted the act should meet the disapproval of the court, where it is evident, as it is here, that all the substantial relief the plaintiff in this suit is entitled to can be secured by an order staying the proceedings made in the other action. Waring v. Yale (1 Hun, 492), unqualifiedly disapproves of such a practice even though it may not be followed on the point of the power of the court.

The order from which the appeal has been taken should be reversed, with usual costs and disbursements, and the motion for the injunction should be denied.

Beady, J., concurred.

Order reversed, with ten dollars costs and disbursements, and motion denied.


source: Caselaw Access Project

author: Daniels, J. Davis, P. J.: Brady, J.

license: Public Domain

text:
    JOHN A. BIGELOW, Respondent, v. THE AMERICAN FORCITE POWDER MANUFACTURING COMPANY, Appellant.

      Evidence — action for breach of contract for personal services — evidence of a refusal of the plaintiff to accept employment offered by his employer after his discharge is admissible in reduction of damages.

    This action was brought by the plaintiff to recover damages for a breach of a, contract, for his personal services, made with the defendant. The employment commenced on March thirty-first and was to continue for a year, but was in fact terminated by the defendant in July. Upon the trial of this action,, brought after the expiration of the year for which the employment was to last,, the defendant offered, but was not alio wed,, to show that after the plaintiff had been discharged from the defendant’s service, he was directed on the part of the defendant, to go to Panama and refused to do so.

      Meld, that it was error to exclude the evidence as it was admissible to diminish the damages. (Daniels, J., dissenting.)

      Appeal from a judgment in favor of the plaintiff, entered upon the verdict of a jury at the New York Circuit. The facts are stated in the following dissenting opinion of Daniels, J.

      Jerfy A. Wernberg, for the-appellant.

      L. Laflin Kellogg, for the respondent.
   Daniels, J.

(dissenting):

The cause of action set forth in the complaint was for the breach of a contract for the personal services and employment of the plaintiff by the defendant. The contract alleged was proved to have been made by letters, and the service of the plaintiff under it commenced on the 31st of March, 1884, the date of the letters, and continued until the second of the following month of June,- when a telegram was sent to him at Cleveland by the defendant informing him that it did not need his services any longer, and directing him to return to the city of New York to settle. He did return but no settlement was made between himself and the defendant, and in the latter part of the month of July, 1884, this action was commenced for the recovery of damages for the failure and refusal of the defendant to continue the plaintiff in its employment. It was not tried until the May circuit in the year 1885, which was after the expiration of the year for which, by the import of the correspondence, the plaintiff appeared to have been- employed; and he was accordingly entitled to recover at that time the salary agreed to be paid him, less the amount earned by him in other employment. Howard v. Daly (61 N. Y., 362), where this was held to be the law; and that the damages were prima faoie the entire amount of the compensation- agreed to be paid by the defendant, and that a recovery on that principle was justiñed after the end of the stipulated term of service, was further held in Everson v. Powers (89 N. Y., 527).

After the plaintiff had been discharged in this manner from the service of the defendant he was directed on the part of the defendant to go to Panama, which he refused to do. The court, in the submission of the case to the jury, held that such a refusal was not a defense to the action, and as it was for damages for breach of the defendant’s contract the ruling seems to have been right. If the action had been in form for the salary a different principle might have been applicable, but it was not. It was for the refusal of the defendant to perform the contract, and by that refusal the right of the plaintiff to damages became complete. He was not after that time obligated to re-enter into the service of the defendant, or to hold himself subject to its orders or directions. The rights of the parties were ñxed by the voluntary action of the defendant itself, and the court ■was correct, therefore, in holding this refusal to go to Panama, after the contract had been broken by the defendant, not to be defense to the right of the plaintiff to recover. The case in this, as well as the other respects, was legally disposed of at the circuit, and the judgment from which the appeal has been taken should be affirmed.

Davis, P. J.:

I think, notwithstanding what has taken place between the parties, the plaintiff having found no other employment, was bound when called upon after the alleged breach to perform any service within the contract called for by the defendant’s • contract. He claims for the entire year's service, because by the contract lie was employed for a year, and was required by the rule governing such cases to take employment when opportunity offered practically for the benefit of the defendant, and to give credit on his damages for the amount he should earn.

It was the right, therefore, of defendant to call upon him to serve it in the same line of business as the original employment, or to provide employment for him, and his refusal to taire such service without any good reason should operate to diminish his damages.

I am in favor of reversing the judgment and ordering a new trial, with costs to abide the event.

I concur in this view.

Brady, J.

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


author: Daniels, J.:

text:
    GEORGE L. KINGSLAND and Others, Plaintiffs, v. JOHN CHETWOOD and Others, Defendants.

      Distribution of a surplus fund arising on a foreclosure — what claims may be considered by the referee — not ice must be given to all persons interested in the fund — an agent acting under a power of attorney cannot mortgage property of his principal to secure his own debt — the party receiving the mortgage is chargeable with notice of his want of power — lien of one tenant in common upon the share of another in rents wrongfully received by the loiter.

    Appeal from an order directing the distribution of the surplus arising upon the foreclosure of a mortgage given in 1868, upon property then owned by five children of John Chetwood, as tenants in common. One Forster claimed a portion of the surplus under a deed executed by Bradbury and John Chetwood and their wives, and by John Chetwood, as the attorney of Hobart Chetwood, which conveyed three undivided fifths to Forster. The deed was in fact a mortgage to secure an indebtedness owing by John to one Hare, as the executor of one Verplank. The power of attorney executed by Hobart appointed John “ my true and lawful attorney for me, and in my name, place and stead to sell, convey and mortgage.”

      Held, that the instrument did not empower John to apply the property of Hobart to his own use, or dispose of it to pay or secure his own debts.
    That as the deed was executed in the name of Hobart by John, his attorney, Forster was chargeable with knowledge of the contents of the instrument itself, which did not au thor ize the conveyance of Hobart’s interest to secure John’s indebtedness.
    After the execution of the said deed, Forster assumed the control and possession of the entire property, and he and the .executor for whose benefit he held the security collected the rents thereof to a large amount, and thereafter received for three months four-fifths, and thereafter for three months three-fifths of the said rent.

      Held, that they were liable to account for so much of the rents so collected by them as exceeded that portion thereof to which they were entitled under the conveyance of the two-fifths interest of Bradbury and John.
    That as the amount of rents collected and wrongfully appropriated by Forster exceeded in amount the two shares claimed by him in the surplus fund, the said two shares should be distributed among the other tenants in common.
    That the referee did not exceed the limits of his authority in directing this equitable adjustment of the claims to be made.
    In hearing and disposing of claims made in such proceedings, the referee is entitled to exercise an authority as extensive as the claims themselves, and the legal and equitable objections that may be made to their allowance.
    It was proposed before the referee to go into the accounts of John Chetwood against William D. Chetwood and the other tenants in common, and evidence was given tending to show that they were indebted to John.

      Held, that as no proof was offered to show that John had acquired any right to collect the rents due on the shares of his co-tenants, or any lien thereon, and as the deed to Forster did not purport to convey or transfer any interest in these demands to the grantee, the evidence was properly excluded.
    That the report of the referee would not be set aside, for the reason that all the claims heard and passed upon had not been filed with the county clerk.
    It appeared that all the tenants in common had, after the execution of the mortgage, conveyed their interest in the property to one Meyer, in the form of a deed, but in fact to secure the performance of certain acts and the payment of certain sums, which had not, at the time of the hearing, been fully performed or paid. Meyer was not a party to the action of foreclosure, nor had any notice been given to him of the proceedings for the distribution of the surplus.

      Held, that as Meyer’s deed had never been recorded, his rights in the property were extinguished by the sale under the judgment in foreclosure, and transferred to the surplus arising thereon, and that he was entitled to notice of the proceedings taken for its distribution.
    That the case should be remitted to the referee for further proceedings upon timely notice to Meyer to secure him an opportunity to be heard concerning the disposition of the fund.
    Appeal by George II. Forster, J. Montgomery Hare, as executor, etc., Mary II. Hare, Elizabeth O. Hare, J'r., Anna Hare Miller, James M. Hare, Hobart Hare, Charles H. Hare, William Hobart Hare, Hubert Emmett Hare, Chandler Hare and Mary C. Hobart, from an order directing the distribution of surplus moneys.

      Arthur JD. Weeks and Edward Patterson, for the appellants.

      G. M. Marsh, Edward Bartlett and John Henry Hull, for the respondents.
   Daniels, J.:

The surplus, which the order directed to be distributed, amounts to the sum of $9,268.04, and it arose out of the foreclosure of a mortgage executed in 1868 to secure the sum of $50,000. The property was owned at the time the mortgage was given, by five different persons as tenants in common, who were the children of John Olietwood in whom the title was vested at the time of his decease. The appellant Forster, claimed a portion of this surplus. His claim was more especially made under an instrument in the form of an absolute deed executed by Bradbury C. Chetwood and John Chetwood and'their respective wives, and by John Chetwood as the attorney of Hobart Chetwood, in form conveying three undivided fifths of the property to Forster. But while this deed was absolute in form, it appeared by a defeasance executód by Forster on the 16th of October, 1879, which was the day of the date of the deed, that' the deed was in fact delivered to him by way of security and as a mortgage to secure the payment of an indebtedness owing by John Chetwood to James Montgomery Hare as the executor of the last will and testament of Mary H. Yerplanet. These instruments together made a mortgage and nothing more than that of this absolute deed.

As to the one-fifth interest in the land of Hobart Chetwood, one of the grantors named in the deed, it was executed by John Chetwood under a power of attorney, and as the deed from the defeasance, appeared to have been given for the sole purpose of securing the indebtedness of John Chetwood to' whom the power had been given, it was held by the report and order to be inoperative as a conveyance or incumbrance of this interest. And that conclusion appears to be supported by the object and design of the power of attorney. For it in no manner operated as a conveyence of the interest of Hobart Chetwood to John Chetwood, neither did it empower him to convey that interest for his own use or benefit. But by the power of attorney he was expressly appointed and authorized to act for Hobart Chetwood, who executed it, and not for himself. This was expressed in that part of the power making the appointment, and it designated John Chetwood who was the person appointed as “ my true and lawful attorney for me and in my name, place and stead, to sell, convey and mortgage,” etc. This was clearly a delegation of authority to act only for the person creating it. It did not empower the attorney to take the property of the person executing it and appropriate it to his own use, but it empowered him to sell, convey or mortgage it for Hobart Chetwood who executed the power. And where an agent may be appointed to act for another in the management or disposition of property in this manner, the law will not permit him under color of the authority to apply the property to his own use, or dispose of it to pay or secure his own debts. That is a breach of trust which the law will not permit or sanction. (Wright v. Cabot, 89 N. Y., 570.)

The appellant Forster is chargeable with knowledge of the fact, as the deed was executed in the name of Hobart Chetwood by John Chetwood his attorney, that the power had been created to perform that act by a written instrument, for it could not otherwise have been legally delegated. And having that notice he was chargeable with knowledge of the contents of the instrument itself, and that it did not permit the conveyance of this one-fifth of the property by John Chewood for the security of his own indebtedness. And being chargeable with that knowledge the deed is so far inoperative in his favor. (Wetmore v. Porter, 92 N. Y., 76.)

His right to participate in the surplus so far as it was derived from this deed was limited to two-fifths of the amount. He did upon the hearing make a further claim to the one-fifth represented by the interest of William D. Chetwood. That was founded upon the deed executed in form by him to the appellant Forster, but this deed was never delivered to Forster nor to any person for him, or who was authorized to deliver it to him. It was sent by the grantor in it to John Clietwood and remained in his possession to the time of the hearing before the referee. And no authority was conferred upon him or directions given to him at any time either to hold the deed for the benefit of Forster, or to hand it over to him, but so far as the evidence extended the deed seems to have gone into the possession of John Chetwood, to be affected by other and subsequent directions which might be given to him by the grantor. And as no directions whatever were made directing the delivery to Forster, this deed never became effectual in his favor, but the title to this one-fifth still remained in William D. Chetwood, who in legal form claimed one-fifth of the proceeds of the sale, while the hearing was in progress before the referee.

In answer to the claim of the appellant Forster to participate in the distribution of these moneys, it was proved that after the execution and delivery of the deed of the two-fifths to him, he assumed the control and possession of the entire property; and that he, and the executor for whose benefit he held the security, collected and received rents to the amount of $20,488.75. It was also proved that four-fifths of the rent, amounting to the sum of $1,770.38, were in like manner received for the months of December, 1882, and Janu&ry and February, 1883, and from the first of March to the first of June there was in the same manner received three-fifths of the rent. This rent was collected both by the appellant Forster and the executor Hare, for the benefit of the estate for which the incumbrance was created; and it was so collected and received by virtue of the authority derived by Forster under the deed of John and Bradbury Chetwood. This was the source and extent of the right upon which Forster and the executor were authorized to act, and in acting in this manner they were supported only by the title of the two tenants in common of the deed creating the incumbrance. In collecting these rents they acted as the tenants in common themselves, and had no other right nor interest in the rents than the owners of the two-fifths by whom the incumbrance was created. They were accordingly liable to account for the one-fifth of the rents collected after the first of March in the year 1883, and two-fifths of the rents collected in December, 1882, and January and February, 1883, and for three-fifths during the period while the rents were wholly collected and received either by Forster or, under his authority, by Hare, the executor. These were rents they had no legal right to withhold from the other tenants in common who were entitled to them. And such tenants were entitled to a lien for their proportionate part of the rents upon the two shares incumbered by the deed executed and delivered to Forster. For the law seems to be settled where one tenant in common collects and appropriates the rent belonging to his co-tenant, that the latter shall have a lien upon the interest or share of the person collecting and appropriating it for his or her reimbursement. Tnis was considered to be the law in Hannan v. Osborn (4 Paige, 336); and Scott v. Guernsey (60 Barb., 163, 180; affirmed, 48 N. Y., 106-124).

The simple fact that Forster was not seized with the legal title to these shares will not exclude the application of this equitable principle as long as he was in possession, and himself and the executors received and appropriated the rents under the title and authority of the two co-tenants who executed and delivered the deed to him. He obtained the rents by force of their title, and should be subjected to the same measure of responsibility as though they themselves had in fact received these rents. He acted for and as these two tenants in what he did, and must be considered equally as accountable.

The amount of rents collected and without right appropriated in this manner, under this incumbrance, largely exceeded the two shares claimed by Forster in the surplus moneys. And charging him with a corresponding amount of the rents he was not entitled to retain under» his deedyfn. favor of the other tenants in common, extinguished his .claim and entitled such tenants to the distribution of the two shares of the surplus moneys he would have otherwise been entitled to receive.'

It has been objected that the referee was not authorized under the authorities to make this equitable adjustment of the claims made to the surplus money. But the reference provided for in this class of cases is to afford an opportunity to the parties to litigate and dispose of their contesting claims asserted by way of liens upon the fund. And the referee has full power and authority to hear all the evidence which may be offered affecting the adjustment of their controversy. He may'- receive proof that an asserted lien for any cause is without foundation. Or that it has been over-stated in amount, or otherwise satisfied and discharged, either by payment or the dealings of the parties, or that the claimant has placed himself in a position where the law will not permit him to participate in the surplus. In fact the authority the referee is entitled to exercise for the hearing and disposition of the claims, is as extensive as the claims themselves, and the legal and equitable objections that may be made to their allowance. This measure of authority seems to be within the decision of Bergen v. Carman (79 N. Y., 146) and Fliess v. Buckley (90 id., 286), which very much enlarged the rule as it was supposed to exist when Union Dime Savings Institution v. Osley (4 Hun, 657) was decided. The referee did not transcend this authority in the hearing which took place before him, but he acted entirely within its limits.

It was proposed before the referee to go into the accounts of John Chetwood against William D. Chetwood, and the other tenants in common, and evidence was given that they were indebted to John Chetwood, but it was not proved, neither was it proposed to prove, that John Chetwood had acquired any right from the other tenants in common to collect and appropriate to his own use their shares of the rents and profits of the common property; or that his accounts were in any manner charged as liens upon the shares of the other common tenants. Neither did the deed which was executed by Bradberry C., and John Chetwood to Forster convey or transfer any interest in these demands to the grantee. All that it attempted to convey was the undivided three-fifths of the grantees named in it, in this and other property held in common. And as the deed was without authority as to Hobart Chetwood it conveyed in fact but two-fifths, and the rents, issues and profits in those two-fifths afterwards accruing from the property. Evidence as to the state of the accounts, therefore, between John Chetwood and the other tenants in common would have been unimportant for the disposition of the conflicting claims. So far as the appellant Forster, and the executor and the other appellants interested in the Verplanclc estate were concerned, they had no right whatever to the property or to its rents until the deed was executed and delivered to Forster. It was under that deed that the shares’ in the surplus were claimed for the benefit of the Verplanck estate. Antecedent to that, neither Forster nor the executor, nor either of the persons claiming under the deed, had any right or interest or incumbrance upon any part of this property. And as the grantee in the deed and the executor of the estate had received by the way of rents belonging to the other tenants in common a larger amount than two-fifths of the surplus, those twó-fifths were rightly apportioned between these tenants. Whether that apportionment was itself strictly accurate does not require to be considered, for neither of the persons entitled to claim any inaccuracy in its distribution appeal from the order confirming the report of the referee.

[t has been urged, as all the claims were not filed with the county clerk, that they should not have been received or considered by the referee. But that is an objection taken rather to the form than the substance of the proceeding, and so it was considered by the referee who allowed the claims to be made and stated so far as that was necessary while the hearing was pending before him. Neither party was in any respect misled by the course which the referee permitted to be followed, and while it may have been irregular, it affected no substantial rights whatever of the appellants. They were, while the hearing progressed, fully apprised of the claims made for the division of this surplus, and all the evidence was taken which was offered and was appropriate to that object. And as the referee directed the distribution of the surplus, as it was legal and equitable that should be done, his report cannot be set aside or disregarded, or the order confirming it vacated simply on account of this intervening irregularity.

It was further proved upon the hearing before the referee that all the tenants in common in this property executed and delivered a deed to Christian Meyer, in form conveying their respective interests in the property to him. This deed was made after the mortgage, upon the foreclosure of which the property was sold, and probably in the early part of the year 1871. Meyer executed and delivered a defeasance or declaration that the deed had been delivered to secure the delivery of certain corporate shares and bonds specified in the instrument, and the payment to John Chetwood of any sum he had advanced to either of the other tenants in common beyond the value of personal securities held by him belonging to them. Upon these conditions being performed, then Meyer agreed to convey an undivided fifth to each of the five tenants in common. The conditions of this defeasance were only in part performed, and the deed consequently, as no reconveyance was made, still remained as a charge or incumbrance on these interests to the extent of the security created. The deed was never recorded and neither the grantee Meyer, nor L-ieman & Go., to whom the corporate shares and bonds were to be returned-were parties to the foreclosure upon which the sale of the property was made. As the deed was not recorded the title of Meyer under it was extinguished by the foreclosure and sale, for that is the effect as to an unrecorded incumbrance which the filing of the notice of the pendency of the foreclosure suit under section 1631 of the Oode of Civil Procedure is declared to have by section 1671 of this Code. In this particular the provision is the same as that contained in the preceding Oode, and it is declared that “ a person whose conveyance or incumbrance is subsequently executed or subsequently recorded, is bound by all proceedings taken in the action after the filing of the notice to the same extent as if he was a party to the action.” And by the sale of the premises under the judgment in the foreclosure, which was made for an actual consideration in money advanced by the purchaser, the lien of this deed to Meyer was completely extinguished. (2 R. S. [6th ed], 1138, § 1.)

The lien of Meyer, or of Lieman & Co. under the deed to him upon this property, was extinguished by the foreclosure and sale of the preceding mortgage inasmuch as that deed was not recorded. And their claim or interest in the property has been necessarily transferred to this surplus. All the facts concerning this security were made to appear upon the hearing before the referee. And before any disposition was made of the surplus, notice of the proceeding should have been given to Meyer, and as he was out of the country, also to Lieman & Co., who were entitled to a large extent to the benefit of the séeurity created by the deed. The rule of the court providing for these proceedings requires that this course should have been adopted when it was made to appear that Meyer :and Lieman & Co. had acquired these rights. For rule 64 has •directed that “ notice of the hearing shall be given to any person having or appearing to have an unsatisfied lien on the moneys in :such manner as the court shall direct.” And that this was not intended to be restricted to liens appearing by the records is evident from the further requirement contained in the rule that the party “ moving for the reference shall show by affidavit what unsatisfied liens appear by such official searches, and whether any and what •other unsatisfied liens were known to him to exist.”

It is possible that neither Meyer nor Lieman & Co. may have any ■claim to this surplus under this deed and defeasance. If they do not then the disposition which has already been directed to be made •of the surplus will remain undisturbed, for as to all parties except Meyer and Lieman & Co., the decision of the referee was right. But if they shall appear upon being summoned to do so, and establish a prior right as they may, to this entire surplus, then the disposition which has already been ordered will be superseded and annulled.

The order which has been made should be reversed, and an ■ ■order entered remitting the case to the referee for further proceedings upon timely notice to Meyer and Lieman & Co., securing to them an opportunity to be heard concerning the disposition of this fund. And the costs and disbursements of this appeal should for :thc present await the result of this further hearing.

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

Order reversed, and order entered remitting the case to the referee ifor further hearing, costs to await the result of the further hearing.


text:
    THE NEW YORK CONSOLIDATED CARD COMPANY, Appellant, v. THE UNION PLAYING CARD COMPANY, Respondent,

      Action to restrain the me of a trade-mark — will not lie, if the plaintiff is chargeable with a false representation in using it — an article cannot be marked as patented after the patent has expired — when an action for an injunction will not be retained as one for damages.

    This action was brought to restrain the use of a trade-mark impressed upon the back of playing cards, manufactured by the plaintiff, and for an accounting of the gains and profits derived by the defendant from the sale of cards alleged to have been impressed in the similitude of those of the plaintiff. It was defended upon the ground that, even if the wrongful acts of the defendant were admitted, yet as the plaintiff iiself was chargeable with a false representation in using the mark or device sought to be protected, it could not maintain the action. It appeared that upon one card in each pack, and upon the wrappers in which the cards were put up and sold, there were stamped the words “patent,” and “squeezers,” and “No. 35,” and on the outside, conspicuously, the words “ Hart’s Patent Squeezers, manufactured by New York Consolidated Card Co., New York.” The term “squeezer” was used to indicate that when the cards are squeezed from the corner they are separated so as to exhibit a small index figure on each card at the corner, and in that manner to enable the player to observe the cards he may have in his hands, without their liability to be seen by others. A patent for this device had been obtained in the year 1864 and assigned to the plaintiff, but it expired in 1881, and at the time in controversy the cards manufactured by the plaintiff were in no respect whatever within'the protection of any patent.

      Held, that the statement upon the cards and wrappers indicated that the cards were at the time of their sale protected by a patent.
    That as the plaintiff had no patent at the time in controversy, this false statement deprived it of the right to restrain by injunction the use of the trade-mark by a competing dealer, for the reasons :
    That it was a material misrepresentation which would ordinarily affect the conduct of buyers of these cards, limiting and restraining their dealings in them as a patented commodity.
    That the marking or affixing to any unpatented article of the word “patent,” or of any word importing that the same was patented, for the purpose of deceiving the public, was a direct violation of section 4900 of the United States Revised Statutes.
    That the intent to deceive would be inferred from the act itself.
    That the right of the plaintiff to use the words patent and patented in this manner in its business, was not affected by the claim that it had recorded its trade-mark under an act of congress, and was at liberty to refer to that as a patent, as there was a wide difference between a patent and a mere trademark, and as the act of congress under which the record was made was unconsti tutional.
    That a dismissal of the complaint was proper, as the complaint was not so framed as to authorize the court to retain the action as one at law for damages, even if the misrepresentation of the article as a patented article would not be a defense to such an action.
    Appeal from a judgment in favor of the defendant, entered on a trial at Special Term.

      John E. Burrill, for the appellant.

      Newell Martin and Charles Róbmson Smith, for the respondent.
   Daniels, J.:

The action was brought to restrain the use of a trade-mark impressed upon the backs of playing cards manufactured by the plaintiff, and for an accounting of the gains and profits derived by the defendant from the sale of cards alleged to have been impressed in the similitude of those of the plaintiff. The center piece of the device impressed upon the cards differed, but upon removing the center piece the residue of the impression upon the c.aid, both in color and design, manufactured and sold by the defendant, was similar to that of the plaintiff. Sufficiently so probably to induce a purchaser making no critical observation or examination to purchase the defendant’s cards, when it may have been the design to obtain those manufactured by the plaintiff. And when that may be the. case and the plaintiff is not chargeable with any substantial misrepresentation in the device relied upon as a trade-mark, there it is the practice of the courts to restrain its use and application in the sale of similarly manufactured articles made and sold by other parties. Good faith and fairness in dealing on the part of the plaintiff is exacted before an action of this description can be maintained. Where that may appear there the law will protect the device adopted as a trade-mark by the plaintiff against its use by other parties. For that use would, in that state of the case be not only a fraud upon the party entitled to the use of the device, but also upon the public so far as purchasers might be induced by ■it to purchase the simulated article in place of that to which the device, or mark, should be legally applied. But where the party complaining of the act of another is himself, or itself, chargeable with a false representation in the use of the device, there the law will not interfere for its protection. For the rule is settled that a party claiming protection against the fraudulent conduct of another, must himself, in the business, be free from the imputation of fraud upon his part. If he is not the court will not aid or assist him, by maintaining his own fraudulent practice, in restraining that of another. This principle has been frequently examined and considered and applied to controversies of this and a similar description. (Pidding v. How, 8 Simons, 477; Fetridge v. Wells, 13 How., 385; Palmer v. Harris, 60 Penn., 156; Hobbs v. Francais, 19 How., 567; Marshall v. Ross, L. R., 8 Eq., 651; Edelsten v. Vick, 11 Hare, 78; Manhattan Medicine Co. v. Wood, 108 U. S., 218, 224.)

In the last case the statement of the legal principle was approved by which it has been held that, “ when the owner of a trade-mark applies for an injunction to restrain the defendant from injuring his property by making false representations to the public, it is essential that the plaintiff should not, in his trade-mark, or in the business connected with it, be himself guilty of any false or misleading representations, for if the plaintiff makes any material false statement in connection with the property he seeks to protect, he looses, and very justly, his right to claim the assistance of a court of equity.” And it was in like manner approved in Hazard v. Caswell (93 N. Y., 259).

This principle was held to have been violated by the plaintiff in the manner in which those cards were put up and sold. This alleged violation consisted in the statement, or representation, that the plaintiff’s cards were patented and sold under the appellation of patent squeezers. This representation was made upon one card included in each pack, upon the left of the lower end of which was the word “ patent; ” in the middle the words “ 35,” and on the right the word “ squeezers.” The wrappers in which the cards were put up also contained upon the left side the words “ patent squeezers,” and at the top squeezers No. 35,” and at the bottom the word “ patented.” The wrappers in which one dozen packs were put up contained upon the left and right side of the paper the words “ patent ” upon one corner and squeezers ” upon the other. And conspicuously on the outside in the center, the words, “Hart’s Patent Squeezers, manufactured by N. Y. Consolidated Card Co., New York.” The term “ squeezers ” was stated to indicate that when the cards are squeezed from the corner they are separated so as to exhibit a small index-figure on each card at the corner, and in that manner to enable the player to observe the cards he should have in his hands, without their liability to be seen by others. A patent for this device had been obtained in the year 1864 and assigned to the plaintiff, but it expired in 1881, and at the time in controversy the cards manufactured by the plaintiff were in no respect whatever within the protection of any patent. The statement, as it was made upon one of t-lie cards of each pack and upon the wrappers in which cards were put up and sold by the plaintiff, was such as to indicate that they were at the time to which the action relates, protected by a patent. That would be the understanding ordinarily produced in the minds of persons dealing with the article, from the use of the term “ patent ” and “ patented,” as they were connected with the sale of the plaintiff’s cards. These words were not used combined with any others importing the fact that they were manufactured or sold under a patent previously existing and which at the time had expired. Upon the face of the wrapper of each pack, and also on the wrapper of a dozen packs of cards, they were called “ patent squeezers.” Wherever the phrase appeal’d it was so employed as to indicate the existing or present protection of a patent. This was an important fact, and as the plaintiff had no patent at the time in controversy, it formed a material misrepresentation which would ordinarily affect the conduct of buyers of these cards, limiting and-restraining their dealings in them as a patented commodity. In addition to the circumstances that this was a material misrepresentation, the laws of the United States have prohibited every person from marking or affixing to any unpatented article the word “ patent,” or any word importing that the same is patented, for the purpose of deceiving the public. (U. S. R. S., 965, § 4900.) And where the prohibited term may be impressed upon or affixed to an article in violation of the law, it may be presumed from the act itself that it was done with the intent to deceive, for that is the natural consequence of its use, and a party is to be presumed to intend what is the natural or necessary result of his act. (Filkins v. People, 69 N. Y., 101, 106, 107.) It is true that this effect was not given to the statute in Wilson v. Singer Manufacturing Company (9 Biss., 173). But it may well be doubted whether that decision can be supported under the very general and plain language of the statute which does not discriminate between a ease where a patent has been issued and expired, and one where the word may be employed in the description or sale of an article for which no patent ever was issued. For the prohibition of the statute includes any unpatented article, and when a patent issued for an article has expired, it necessarily is from that time an unpatented article.

The point has been taken, in support of the appeal, that the use of the word patent and patented, in the manufacture and sale of the plaintiff’s cards, was merely collateral to the device itself, which was made use of as the plaintiff’s trade-mark; and when used in that manner, even though it should be a misrepresentation, the fact would not deprive the plaintiff of an injunction restraining the use' of a trade-mark by a competing dealer. That view of the law, but-upon a different state of facts, was adopted and supported in Ford v. Foster (Eng. L. R., 7 Chan. App., 611), and Millington v. Fox (3 Myl. & C., 338). But this was not a collateral misrepresentation within the rule supported by these and other eases, for the' fact misrepresented accompanied each sale of the article which was-made. It was impressed upon one of the cards, and it was conspicuously placed and repeated upon each of the wrappers, so that it was impossible for a person to buy either a single pack or a dozen packs of the cards without being immediately confronted with the representation that the article was manufactured and sold as a patented article. This representation was immediately connected with the article itself which was sold, and did not, as-it did in the cases to which reference has been made, consist of am advertisement or a mere accompanying invoice.

It was held in Leather Cloth Company v. American Leather Cloth Company (1 Hemming & Miller, 271, 292, 293), that a representation of this description would not deprive the plaintiff of the'right to-an injunction where a patent had been issued for the' invention,, which at the time had ceased to exist. The case was distinguished,, by these circumstances, from one where no patent had ever been issued, and where the representation that the article was patented was held sufficient to deprive the plaintiff of the right to an injunction. (Flavell v. Harrison (19 Eng. Law and Eq., 15.) And a' like distinction was drawn in another action in favor of the same plaintiff against Hirschfield (1 H. & M., 295). And as liberal a ruling was made concerning the use of a fictitious name in Dale v. Smithson (12 Abb., 237), and Stewart v. Smithson (1 Hilt., 119). But this distinction was deemed to be unsound when the decision of the vice-chancellor in the case of the Leather Cloth Company was appealed to the chancellor, for he held that the previous existence of an expired- patent would not sanction the representation, afterwards made, that the article was patented. (Leather Cloth Co. v. American Leather Cloth Co., 33 Law Jour. Chy., 199; 4 De G., J. & S., 142.) And this decision was afterwards affirmed on appeal to the house of lords. (11 House of Lords Cases, 522.) And the legal principle sustained by it was afterwards commended and approved in Manhattan Medicine Company v. Wood (108 U. S., supra). Upon the same subject, in Selchow v. Baker (93 N. Y., 59, 67), it was said by Judge Rapallo, in the opinion of the court, that “ the patentee relies for his protection upon his patent, and cannot, by calling the name of his patent a trade-mark, protect his monopoly after the patent has expired, or where it has no force.” And the same view of the law was taken and followed in Cheavin v. Walker (Eng. L. R., 5 Chan. Div., 850.)

These authorities have the effect of overruling the previous decisions made by the vice-chancellor, tolerating the representation that the article sold was patented, when in fact it was not, provided a patent for it had previously been in existence, and placed the cases upon the same footing, maintaining the law in each instance to be that a misrepresentation of the article manufactured or sold as a patented article, when in fact it is not so, will deprive the parties whose conduct may be in that manner tainted of the right to an injunction interfering with the like business carried on by another party. And there is no good reason why the law should not be uniformly applied in that manner, for the misrepresentation and deception would be the same where a patent had been issued and expired, as it would be where no patent whatever had ever issued for the invention.

The plaintiff also endeavored to maintain this right to use the words patent and patented in this manner in its business, by the fact that it had recorded its trade-mark under the act of congress and was at liberty to refer to that as a patent. But the wide difference between a patent and a mere trade-mark would seem to be sufficient to expose the fallacy of this position. But if it would not, the further fact that the act of congress under which the record was made was unconstitutional, and, therefore, of no effect, would deprive this position of its support. (U. S. v. Steffens, 100 U. S., 82.)

The point has also been taken that the action should have been retained for trial as an action at law for damages, when it was determined that it was not a case for an injunction. But the complaint of the plaintiff was not framed so as to include an action for damages. It was framed for the object alone of obtaining an injunction and an accounting. The allegations inserted in it were appropriate for those objects, and none were made presenting a cause of action for damages. Neither does the attention of the court at the trial appear to have been directed to this position. And in Ford v. Foster (supra) it was held that a misrepresentation of the article as a patented article would be a defense to an action at law for damages.

This misrepresentation, even if the device adopted by the plaintiff as its trade-mark was infringed or used by the defendant, prevented this action from being maintained. The direction given for the dismissal of the complaint was warranted by the law applicable to the facts proved, and the judgment should be affirmed, with costs.

Davis, P. J., and Bjrady, J., concurred.

Judgment affirmed, with costs.


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    ROBERT W. GLEASON, Respondent, v. JAMES W. SMITH, Appellant.

      Senting of machinery — the lessor is not hound to Jceep it in repair.

    This action, brought to recover the price agreed to be paid for the hire of a steam engine, boiler and pump, was defended upon the ground that the steam chest of the engine had in some manner broken down and become incapable of operating, and that the plaintiff had refused to repair it.

      Held, that as there was no express agreement on the part of the plaintiff to keep the machinery in repair, and no representation that it was adapted to any particular purpose or use, the court properly excluded evidence tending to show that it had broken down.
    Appeal from a judgment in favor of tlie plaintiff,, entered upon the verdict of a jury and from an order denying a motion for a new trial, made upon the minutes of the justice before whom the action was tried.

      J. Noble Ilays, for the appellant.

      Charles F. Wells, for the respondent.
   Daniels, J.:

The verdict was recovered for the price agreed to be paid for the hire of a steam engine, boiler and pump. It was stated in the testimony that the engine was hired to the defendant for the price of twenty-five dollars a month, and that the defendant retained it from about the 1st of July, 1881, until the last of March, 1882. That the boiler and pump -were hired at the price of thirty-eight dollars a month, and were retained by the defendant from the 1st of October, 1881, until the latter part of March, 1882. The evidence was sufficient to sustain the contract of hiring upon the terms stated by the plaintiff. But it appeared that the steam chest of the engine had in some manner broke down and became incapable of operating, and it was returned to the plaintiff with a request that he would repair it. lie declined to do that, and for that reason payment of a portion of the demand was resisted by the defendant.

It was alleged in the answer that the plaintiff had made such representations concerning the engine as would obligate him to keep it in repair while it was in the possession of the defendant. But no such representation was proved upon the trial. Neither was it shown that the plaintiff undertook in any manner to keep the machineiy in working order. Even the defendant, in his examination, did not pretend that such an obligation had been assumed by the plaintiff. Neither the engine, pump or boiler was hired to perform any special or particular service. If either had been, a warranty might be implied as to the sufficiency of the machinery for the purpose. (Gautier v. Douglass Manfg. Co., 13 Hun, 514; Hawkins v. Pemberton, 51 N. Y., 198.) But all that appeared to have taken place was that the engine was selected by the agent of the defendant, and then it was hired by the plaintiff to the defendant. There was no agreement on his part that he would keep it in repair, and no representation that it was adapted to any particular purpose or use. And as it was placed in the possession and subject to the use of the defendant, without stipulation concerning its capacity or ability, the rights of the parties are to be determined by the contract which they in that manner made. There was no legal ground upon which the plaintiff could be held liable to keep the machinery in repair. (Riley v. City of Brooklyn, 46 N. Y., 444.) For upon all these matters the obligations of the parties are fixed and to be determined by the agreement which they make.

And if in a contract of this description no obligation is entered into by the plaintiff to keep the machinery in repair, he cannot be legally held to do so. The contract was for no particular time, and if the engine for any cause whatever became disabled, the defendant was at liberty to put an end to the agreement and return the machinery to the plaintiff. The authorities cited in support of the appeal do not sustain the position that the plaintiff was legally obliged to keep the machinery) in repair. Those referred to in note 2 (Parsons on Cont. [7th ed.], 127) are, as far as they go, adverse to this position of the defendant’s counsel; and it is not sustained by the observations contained in section 417 of the ninth edition of Story on Bailments. The cases of Million v. Saulsbury (13 Johns., 210), Harrington v. Snyder (3 Barb., 380), and Buchanan v. Smith (10 Hun, 474), were upon contracts for the hire of property to perform a distinct and specified service. In those cases the hirer undertook that the services should be performed by the property which -was hired, and of course he was liable if it was not in the condition which was necessary to perform those services, and the courts did no more in making these decisions than to hold the party to the observance of the obligation he had entered into. There was no such obligation resting upon the plaintiff in this case, and there was no error therefore in excluding the further evidence to prove that the machinery had broken down. For even if it had been received, proof of that fact alone in the case would not have defeated any part of tlie plaintiff’s claim in the action. For the same reason the court was right in declining to charge the propositions presented by the defendant. They were not sustained as the facts appear in the action. There was no legal foundation for the defendant’s resistance to the plaintiff’s bill, or for the counter-claim, made upon the fact that the steam chest at some time while the engine was in the defendant’s possession ceased to operate. The judgment and order should be affirmed, with costs.

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

Judgment and order affirmed, with costs.


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    JOHN S. STUBBS and RICHARD S. JONES, as Executors, etc., of SAMUEL S. STUBBS, Deceased, Respondents, v. EDWARD C. RIPLEY, HATTIE M. RIPLEY and CHRIS. LAURITS, Appellants, Impleaded, etc.

      Practice — power of court to order a reference on amotion to continue an injunction— it may compel the personal appearance of the affiants — may prescribe upon what notice the hearing should be had — may prohibit an application for the examination of witness without the State by a commission.

    In this action, brought to recover trust funds which were alleged to have been appropriated by one of the defendants to his own use and invested in real estate, the title to which had been taken in the name of one of the other defendants, a temporary injunction restraining the defendants from interfering with the real estate, or collecting the rents thereof, was granted. Upon the hearing of a motion to continue the injunction a reference was ordered to take such further proof as might be submitted, the parties being required to produce the affiants making the affidavits used on the motion before the referee for cross-examination. The referee having refused to require the defendants to produce their affiants when requested by the plaintiffs, an order was made upon the plaintiffs' application requiring that certain affiants be produced by the defendants, in the order named, before the referee for cross-examination, unless the referee, in his discretion, should postpone the examination of any affiant for a cause personal to that person.
    It was denied by the plaintiffs that two of the most important persons so required to appear were living natural individuals, and it was claimed by them that the assertion of their existence and conduct was made by the principal defendant to conceal his misappropriation and concealment of the funds of the estate.

      Held, that the order was a proper one and should be affirmed.
    The order directed the parties to proceed upon this part of the reference on two days’ notice.

      Held, that the order should be affirmed, as it seemed to be necessary to secure a speedy determination of the controversy, which there seemed to be a disposition to embarrass and prolong.
    That as the reference of the motion included no part of the issues of the action, and as neither party would under the circumstances of this case be entitled, under the provisions of the Code of Civil Procedure, to take, by commission, the examination of the witnesses required to be produced before the referee, an order prohibiting the defendants from making an application to take beyond the limits of this State, by a commission, the testimony of any of the affiants required to be produced before the referee was proper and should be affirmed.
    Appeal by Edward C. Ripley, Hattie JÜ. Ripley and Chris. Laurits from an order directing that the affiants, whose affidavits were submitted on behalf of the appealing defendants shall be produced by them and be examined and cross-examined in the order in which they are named, unless the referee in his discretion shall postpone the examination of any affiant for a cause personal to that person. And an appeal by the same defendants from an order prohibiting them from making an application to take the testimony by commission of either of such affiants. And an appeal by the defendant Hattie M. Ripley from so much of the order of reference as required the parties to proceed at any time on two days’ notice.
    This action was brought to recover a trust fund of $10,000, which was created by the last will and testament of Samuel N. Stubbs, deceased. It was claimed by the plaintiffs, the executors of Samuel N. Stubbs, that the money had been appropriated to his own use by one Edward C. Ripley, while acting as the attorney of J ames Stubbs, who was entitled to the interest of the fund. It was sought to charge certain real estate with the payment of this amount, it being claimed that the trust fund had been used to purchase it. The plaintiffs sought to have the ¡defendants restrained from collecting the rents or disposing of the property and to have a receiver thereof appointed. Upon the application of the plaintiffs, orders so ”estraining the defendant and appointing a receiver were granted. It appeared from the papers that the defendant Ripley had collected two mortgages upon property in the city of New York, in which the trust funds were invested, and reinvested the money in a mortgage upon property in the State of Michigan.
    The plaintiffs claimed that Ripley had not in fact reinvested the money, and that the western mortgage was a mere device to enable Edward C. Ripley to retain the money in his hands and purchase the real estate described in the complaint herein, the title to part of which was taken in the name of Hattie M. Ripley. It was also claimed by the plaintiffs that the person named as the mortgagor did not in fact exist, and that the mortgage and affidavits used by the defendants in the proceedings were in fact executed by the said Ripley or some other person acting for him, and were not executed by the persons by whom they purported to be executed.
    On the 2d day of March, 1883, on various affidavits and the complaint herein, a temporary injunction was granted, restraining the defendants Edward O. Ripley and Hattie M. Ripley from conveying or incumbering any of their real estate, or in any manner interfering with their accounts in the several banks in the city of New York, accompanied with an order requiring the defendants to show cause why the temporary injunction should not be made permanent, and why a receiver of defendant’s real estate and moneys on deposit should not be appointed.
    The motion to continue the injunction and appoint a receiver came on to be heard before Mr. Justice Lawrence on the nineteenth day of March, 1883, when all the allegations of the complaint were totally denied by the defendants. Thereafter Mr. Justice Lawrence made a decision holding that, in his judgment, all the affidavits used by the plaintiffs upon the motion' to continue the injunction and appoint a receiver had been fully met and answered.
    Upon the application of plaintiffs’ counsel an order was made on April 14, 1884, allowing them to reargue the motion .to continue the injunction upon additional affidavits. The motion was then fully reargued, and the affidavits originally used were read, together with the original affidavits served; and on the fourteenth day of April, 1884, Mr. Justice Lawrence made an order referring the subject-matter of the motion to Joseph A. Bosworth, Esq., “to take such further proof as may be submitted by any of the parties to this action; and that the respective parties by whom affidavits have been submitted upon the hearing of the motion by the court, produce the affiants before the referee for cross-examination, and that the said referee report the facts found by him upon the papers aforesaid, and the proofs taken by him, to the court, with his opinion thereon, with all practicable speed. Mr. Bosworth meanwhile died, and Henry J. Scudder, Esq., was substituted in his place. He declined to act, and by a further order Rastus S. Ransom, Esq, was appointed referee, before whom the motion has from time to time been heard, and is still pending.
    The referee having refused to compel the defendants to produce certain of their affiants as requested by the plaintiffs, the latter applied to the court and procured the following further order.
    It is hereby ordered that the said order of April 14, 1884, be so modified that, upon the reference as to the motion to continue the injunction order herein, after the cross-examination of all the affiants whose affidavits were submitted on the part of the plaintiffs, as set forth in the said order of April 14, 1884, shall have been completed, the affiants whose affidavits were submitted on the part of the defendants, Edward C. Ripley, Hattie M. Ripley and Chris. Laui-its, the parties next named in the said order as having submitted affidavits, shall be produced by the said defendants; and shall be examined and cross-examined in the order in which they are named therein, unless the referee, in the exercise of his discretion, shall postpone the examination of any affiant for a cause personal to such affiant.
    Upon the application of the plaintiffs another ord.er was made, which prohibited the three defendants named in the last order “ from making any application to take/ beyond the limits of this State, by a commission, the testimony .of any of the affiants they are required to produce before the referee for cross-examination.”

      Edward C. Ripley and John F. McIntyre, for the appellants.

      Nelson J. Water'bury, James O. Ciarle and J. 8. Van Qleef, for the respondents.
   Daniels, J.:

The reference to which these orders relate was to take testimony upon, and opposed to the application to continue the injunction order. It was made under the authority of section 1015 of the Code of Civil Procedure, authorizing the court to refer a question of fact arising upon a motion to the hearing and determination of. a referee. And as it was not in any sense a trial of the action, the court had the authority to control the proceedings by its order, and to direct the order in which the persons to be examined should be produced before the referee. There was good reason for such a direction, for it has been denied on behalf of the plaintiffs that two of the most important persons alleged to have participated in the transactions brought in issue in the action and on the motion, were not living, natural individuals, but that the assertion of their existence and conduct was a device adopted by the principal defendant to conceal his misappropriation and conversion of the funds of this estate. There was great propriety for that reason, and because of the inability of the plaintiffs to find or discover any such individuals in giving this direction. For if there were no such persons then it followed that this defendant had not invested the money as it is alleged in his behalf that he did, and the probability would follow that the money had been misappropriated, and may have been diverted to pay the purchase-price in part of the real estate described in the complaint. It was to bring this part of the controversy between the parties to a crisis that this order was made, and it was very surely justified by the facts as they were disclosed in the case.

So much of the order from which the defendant Hattie M. Ripley has appealed as directed the parties to proceed upon this part of the reference on two days’ notice was also within the power and discretion of the court. What it was evident necessarily to secure was a speedy doAnnination of the controversy which there seemed to be a disposition to embarrass and prolong. To correct and avoid that, this order was made, entitling either party to proceed upon the reference of the motion for the continuance of the injunction on two days’ notice." But if the order should prove to be too summary on this subject, the referee was not deprived by it of the usual discretion vested in referees over hearings of this and other descriptions, for he was still left at liberty to adjourn the proceedings whenever that might be found to be necessary or advisable under the circumstances made to appear.

As tbe reference of the motion included, no part of the issues in the action, neither party, under the provisions of the Code, would certainly be entitled to take the examination of the witnesses required to be produced before the referee by commission. For the reference of a question of fact arising upon a motion does not clearly appear to be such a reference as to entitle either party to examine witnesses on commission, under the authority of sections 888, 893 and 891 of the Code of Civil Procedure. A commission, it is true, may be issued in an action where no issue of fact has been framed, but that can be done only in certain specified cases. They have been mentioned and provided for in subdivisions 1, 2 and á of section 888 of the Code. But where a commission may be issued by virtue of this authority the evidence designed to be obtained is probably intended to relate to the controversy in the action itself, as distinguished from one arising upon a special motion. It may be that the court might be disposed to consider itself authorized, under special circumstances to direct the issuing of a commission on the reference of a motion under the general authority of subdivision 1 of this section. But that clearly would never be done where the object of the reference was as it has been in this case, to require the production of the individuals personally whose affidavits had been read, to appear before the referee and in that way reveal their own identity and existence. If they were not to be produced in that manner, then no useful object could be promoted by the reference, for by taking the testimony by commission but little more would be accomplished than already had been by the affidavits themselves. It was important and that was the only importance of the reference for the continuance of the injunction, that the persons whose affidavits had been produced and read should be brought before the referee personally and subjected to the effect of a cross-examination, and that end would be defeated by allowing the testimony of either to be taken by commission. As much as that was also provided for by the order of reference itself. For in that order the referee was directed to take such further proof as any of the parties might submit, and that the parties by whom affidavits had been submitted upon the hearing of the motion by the court, should produce the affiants before the referee for cross-examination and that the referee should report the proofs taken by him and‘the facts lie might find from that proof. No appeal has been taken from this order and it accordingly remains in full force and effect in the case. This order by its language requires that the individuals themselves whose affidavits had been submitted, should be produced before the referee for cross-examination which could not be done if their testimony could be taken by commission. And for that reason it is to be so construed as to forbid the issuing of a commission for the examination of either of these affiants. The order prohibiting in direct language the issuing of commissions did no more than the order of reference itself.

These 'orders were all within the power of the court over the .subject of the reference. The leading circumstances of the litigation required them to be made substantially in this manner, and they should each be affirmed, together with the usual costs and disbursements.

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

Orders affirmed, with ten dollars costs and disbursements.


text:
    JOHN S. STUBBS and RICHARD S. JONES, as Executors, etc., of SAMUEL S. STUBBS, Deceased, Respondents, v. EDWARD C. RIPLEY, Appellant, Impleaded, etc.

      Temporary injunction — when it continues in force until terminated try an order— when the bringing of an action is a legal interference with real estate — a willful violation of an injunction is a criminal contempt — power of the court to punish it— Code of Civil Procedure, secs. 8, 9 — costs.
    .At the time of the commencement of this action an injunction order was issued directing that until the hearing and determination of this motion, or until the . further order of this court, the defendants, naming them, and each of them, and each of their agents and attorneys refrain, and they were thereby restrained and enjoined from conveying, incumbering or in any way interfering with or disposing of the real estate described in the complaint herein, as conveyed to and held by them, or any part thereof, or the rents, profits or avails thereof. Upon the hearing of the motion to continue the injunction an order was made •directing a referee to take proof and providing that the injunction already in •force be for the time continued in force.

      Held, that a failure to serve the second order upon a defendant did not relieve him from complying with the injunction contained in the first order, which was in no way changed, restricted or reduced by the last clause of the order of reference.
    While this injunction continued in operation and effect, one of the defendants, without leave of the court, commenced an action in the Superior Court of the city of JS'ew York for the avowed purpose of settling the rights in the greater part of the land described in the complaint, and obtaining an accounting of its rents and profits.

      Held, that this was a legal interference with so much of the property, and a violation of the injunction.
    That the subsequent settlement and discontinuance of that action did not relieve the said defendant from the liability incurred by the violation of the injunction, although it might serve to palliate or mitigate the act.
    That as the defendant fully understood the nature of his act, he was guilty of a willful disobedience of the injunction, which constituted a criminal contempt under subdivision 8 of section 8 of the Code of Civil Procedure.
    That as the contempt was a criminal one, it was not necessary to justify the infliction of a punishment to show that the plaintiffs had been injured by the violation of the injunction.
    That the court had power under section 9 of the said Code to punish by a fine not exceeding $250, or by imprisonment not exceeding thirty days, or by both, but that it did not have power to impose upon the defendant ten dollars costs of the motion.
    Appeal from an order adjudging the defendant Edward C. Ripley guilty of a contempt and imposing a fine upon biin of $200, and ten dollars costs of motion.

      Edward G. liipley, appellant, in person.

      Nelson J. Walerbury, James O. Ciarle and J. 8. Van Oleef ’ for the respondents.
   Daniels, J.:

At tbe time of the commencement of this action an injunction order was issued in it, containing tlie clause that until the hearing and determination of this motion, or until the further order of this court, made upon notice to the attorney for the plaintiff and duly served, the defendants Edward C. Ripley, Hattie M. Ripley and J. Walter Thompson, and each of them and each of their agents and attorneys refrain and they are hereby restrained and enjoined from conveying, incumbering, or in any manner interfering with or disposing of the real estate described in the complaint herein, as conveyed to and held by the defendants Hattie M. Ripley and J. Walter Thompson, or any part thereof, or the. rents, profits or avails thereof.

And it was served personally upon the defendant Edward C. Ripley. This injunction by its terms continued in force until the hearing of the motion, of which notice was given in the order. No determination of that motion has yet been made, and the injunction as it was originally made still remains in force. Upon the hearing of the motion to continue the injunction, a referee was directed to take such further proof as might be submitted by any of the parties upon the subject-matter of the motion, and directing that the parties by whom affidavits had been submitted on the motion should produce the affiants before the referee for cross-examination, and in that order the injunction already in the case was for the time continued in force. This order is stated by the appealing defendant not to have been served upon him, but that was not necessary to render the injunction obligatory upon him, for by its own language it remained and continued in force until the hearing and determination of the motion. That was not determined by the order of reference, but it was declared that the injunction should continue during the pendency of the reference. This was a needless direction and added nothing whatever to the force or effect of the injunction, as it had been provided in the injunction order itself that it should continue and remain in force until the determination of the motion. That motion has not yet been determined, neither has the hearing before the referee been •completed. And the defendant consequently remained under the restraint of the original injunction, which was in no way changed, restricted or reduced by the last clause of the order of reference.

While this injunction continued in operation and effect the defendant Edward C. Ripley commenced an action in the Superior Court of the city of New York against Charles L. Guilleaume, for the avowed purpose of settling their rights in the greater part of the land described in the complaint, and to obtain an accounting of its rents and profits. This action was brought without leave of the court and it was a legal interference with so much of the property in controversy and might, by proceeding to a trial, have confused and prejudiced the rights or interests of the plaintiffs in this action. To constitute an interference with the real estate, as that was prohibited by the injunction, did not require a proceeding for its disposition, change or sale, but it was sufficient for that purpose that an attempt was made to disturb its condition. And that would have been the effect of the action in the Superior Court if it had proceeded to judgment and it had been sustained, for it would have resulted in a definite disposition of the rents and profits of so much of the property. A somewhat similar injunction order was con. sidered in the case of Fincke v. Funke (25 Hun, 616), and it was held there that bringing an action would violate the injunction and that any exercise of control or authority over the assets or property of the firm in that case would have been an interference therewith. The injunction order in this case was plain and comprehensive, and it prohibited all interference on the part of the parties named in it, their agents, etc., with the property. The act of the appealing defendant was a direct interference with so much of it as was set forth in his complaint, and by commencing and prosecuting his action he violated the injunction. And it was not corrected by the settlement and discontinuance of the action which took place just before the order to show cause for this motion was served upon him. The discontinuance was a palliation or mitigation of the act but in no manner relieved the defendant from the effect of what he had previously done. That was a disregard of the order of the court in the action and exposed this defendant to punishment for it.

The law did not require to justify the punishment inflicted, as it has in civil contempts, proof on the part of the plaintiffs that they had been injured by means of this violation of the injunction. Such proof is essential where the object is to punish the party by way of indemnifying another against the loss or injury sustained. (Fischer v. Rabb, 81 N. Y., 235.) This was not a proceeding of that description, for as the defendant fully understood the nature of his act he was guilty of a willful disobedience of the injunction, and by subdivision 3, section 8, of the Code of Civil Procedure, that has been made a criminal contempt. Por the word mandate which has been there employed has been declared by subdivision 3 of section 33f 3 to include “ a writ, process, or other written direction, issued pursuant to law out of a court, or made pursuant to law by a court or a judge, or a person acting as a judicial officer and commanding a court, board or other body or an officer, or other person named, or otherwise designated therein to do or to refrain from doing an act therein specified,” and that plainly made a mandate of this injunction. The defendant therefore was guilty of a criminal contempt, and was not entitled to be released from the legal effect of his act by reason of the fact that he had previous to its' performance obtained the advice of counsel. For he was a lawyer of experience himself and not dependent upon advice for the understanding of the duty to which he was subjected of obeying the order and direction of the court.

Where a criminal contempt appears to have been committed, there the court may impose a fine upon the delinquent persons, although the act may have caused no loss or injury to the party intended to be protected by the injunction. (People ex rel. Negus v. Dwyer, 90 N. Y., 402.) For such violation of an injunction punishment for the act itself may be imposed. This has been provided by' section 9 of the Code of Civil Procedure. That punishment may bo by a fine not exceeding $250, or by imprisonment not exceeding thirty days, or both, in the discretion of the court. And it was evidently under that authority that the order was made from which the appeal has been taken, for it contains an adjudication that the defendant had willfully violated the injunction order, and further adjudges that he be punished for such offense by a fine of $200. The fact of adjudging that there had been a willful violation of the injunction, and the defendant was thereby guilty of a contempt, and that he should be punished for the offense, and the punishment should be by a fine, all demonstrate that the proceeding had and the order finally made was for a criminal contempt. The order further directed that until the fine should be paid all proceedings on the part of the defendant Ripley should be stayed ; and that the court was fully authorized to direct as one of the legal disabilities created by the contempt. (Walker v. Walker, 82 N. Y., 260.)

But this part of the order did not prevent the other defendants from bringing on the trial of the action. It was personal to this defendant. And so far as it operated upon him the stay seems to have been vacated by another order now before the court made five days after the order imposing this punishment upon the defendant. For by the order of the 25th of April, 1885, he as well as the other defendants were allowed to proceed with the trial of the issues before the referee.

In but one respect does the order seem to have been without authority. And that is in the imposition of ten dollars costs of motion upon the defendant. Authority to add these costs has not been given to the court by the section of the .Code of Civil Procedure declaratory of the power of the court in the way of imposing punishment. In that respect the case is quite similar to People v. Gilmore (88 N. Y., 626). In all its other provisions the order was made in strict conformity to the facts and law of the case.

But the direction for the payment of costs should be reversed, and the residue of the order should be affirmed, without costs of the appeal to either party.

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

Order adjudging defendant in contempt modified as directed in opinion and affirmed as modified, without costs to either party.


author: Brady, J.:

text:
    THE PEOPLE OF THE STATE OF NEW YORK, Respondent, v. DANIEL KERIN, Appellant.

      Act to prevent deceit in the sale of dairy products —1885, chap. 458, sec. 3 — an intent to sell, what the seller knows is not dairy butter, must be shown.

    Section 8 of tlie act to prevent deception in the sale of dairy products, as the same was amended by section 3 of chapter 458 of 1885, provides that “no person shall * * make or manufacture any oleaginous substance not produced from milk or cream, with intent to sell the same for butter or cheese made from unadulterated milk or cream, or have the same in his possession, or offer the same for sale with such intent, nor shall any article or substance, or compound so made or produced, be sold for butter or cheese, the product of the dairy.”
    Upon the trial of the defendant upon an indictment charging him with a violation of this section, it was conceded by the prosecution that the compound which was sold by him as dairy butter, and which was not such, was purchased by him as and for, and was believed by him to be, such butter and was sold by him as butter in that belief.

      Held, that he could not be convicted of a violation of the act; that to justify a conviction thereunder the person must intend to sell some other substance than dairy butter, as butter, knowing that it is not such.
    The constitutionality of so much of the said section as provides that the possession by any person, of any of the said products so colored, or coated in semblance of, or to resemble butter or cheese, shall be conclusive evidence of an intent to sell the same for butter or cheese, the product of the dairy, doubted but not passed upon. (Brady, J.)
    Appeal from a judgment of the Court of Sessions, convicting the defendant of a violation of the act, chapter 458 of 1885, to prevent deceit in the sale of dairy products.

      Reynaud <& Harris, for the appellant.

      He Laney Nicoll, for the respondent.
   Brady, J.:

The appellant was indicted for a violation of the laws of the State relating to the manufacture and sale of a substance known as oleomargarine, which is not a product of the dairy; and although the indictment contained several counts, the people elected to proceed under the first count, which was framed upon the act of 1885. (Chap. 458.) It was conceded by the prosecution that the compound which was sold by the appellant as dairy butter, and which was not such, was purchased by him as and for butter; was believed by him to be butter, and was sold as butter in that belief. This concession disposes of the conviction. It cannot be maintained. The chapter referred to (supra) by section 3 amends section 8 of chapter 183 of the Laws of 1885; and by its terms prohibits the manufacture by any person of any oleaginous substance not produced from milk or cream, with intent to sell the same for butter or cheese made from unadulterated milk or cream, and from having the same in his possession or offering the same for sale with such intent; and declares that no article or substance or compound so made or produced shall be sold for butter or cheese, the product of the dairy. This section is the only one under which the appellant can be held to account, if at all; and it will at once occur to the reader that the violation of its provisions depends upon an intent to impose one article for another, both in the manufacture and in the sale of the simulated article. No person shall manufacture the substance described with intent to sell the same for butter, or have the same in possession or offer the same for sale with such intent. The appellant did not violate this law. He bought the article he sold for butter, believed it to be butter, and sold it for butter. He did not intend to sell oleomargarine or any other substance for butter when it was not butter. He intended to sell what he believed to be butter, as and for butter; and his intention and his acts leading to it were lawful and unexceptionable under the provisions of the section referred to. He must intend to do wrong; that is, to sell some other substance than dairy butter for butter, which he does not do when he buys butter, receives it as such, and sells it in such belief. It may be said that under further provisions of the section referred to than those named, he may, nevertheless, be convicted for the reason that having such a compound in his possession as he sold, such possession is declared to be conclusive evidence of an intent to sell the same for butter, but this answer is not responsive. The latter provisions relate to the coloring by any process whereby the product shall be made to resemble butter, and when that is added to the manufacture and the article prohibited is in possession, such possession is conclusive evidence of an intent to sell. The effect of this extraordinary legislation is that in order to convict a person for a violation of its acts in relation to oleomargarine, there must be an intent to sell the same for dairy butter; but if the product be colored so ás to resemble butter, then the intent required exists as the result of the coloring. In this case there was no proof on that subject, and hence the statute does not supply the proof of intent, which would have been furnished if evidence of the use of coloring matter had been given. This view renders it unnecessary to consider the constitutionality of the provisions, making possession an intention to do wrong, that is, to sell one article for another and thus to perpetrate a fraud. It may well be seriously doubted whether the legislature can say that an article which may be lawfully manufactured and sold, when so manufactured and in possession may be regarded as designed to be sold for something else, aud therefore for a fraudulent and criminal purpose. This would in effect prohibit the manufacture which the legislature has not the power to accomplish, it would seem. (The People v. Marx, 99 N. Y., 384.) Without further discussing this element of tlie case, however, the decision must be a reversal of the conviction for the reasons assigned.

Ordered accordingly.

Davis, P. J\, and Brady, <L, concurred.

Judgment reversed, new trial ordered.