text:
    The City of Schenectady, Resp’t, v. The Trustees of Union College, App’lt.

      (Supreme Court, General Term, Third Department,

      Filed November 22, 1892.)

    1. Municipal corporations—Assessments—Abutting owners.
    Defendant originally owned the land in Schenectady which now constitutes Union avenue and Gillespie street in that city, and dedicated the same to the public and the city accepted such dedication and adopted said land as public streets, and thereafter paved Union street, and a portion of the expense was assessed on defendant for the two corner lots of which the half of Union avenue was one and the half of Gillespie street was the other. Held, that for the purpose of this local improvement the defendant was an abutting owner of the corner lots for “which this assessment was made.
    2. Same.
    Tile charter of the city provides, in a case of assessments for paving, that the common council shall audit and allow the account for the work at such sum as they deem proper and which shall be final and conclusive, and it shall he lawful for the city to sue for and recover from the owner the sum so audited and allowed. Held, that the objection that this provision fails to provide the property owner with an opportunity to be heard on the question of the amount or validity of the assessment was untenable, as the assessment is to be collected by action in which the assessment is only presumptive evidence of the validity or correctness of the tax.
    3. Same—Pavement—Power to pave confers power to choose material.
    When a legislature confers upon a city the power to pave its streets it confer upon it the power of adopting such material in that work as ordinarily might he regarded as proper for that purpose.

      4. Same.
    A city charter which provides that its paving shall be done “ by or under the direction of the superintendent of streets,” is complied with by having the paving done under contract by an asphalt company, under the directions of the street superintendent.
    (Herrick, J., dissents.)
    Appeal from a judgment in favor of the plaintiff, entered upon the report of a referee.

      R. J. Landon, for app’lt; J. Teller Schoolcraft (A. P. Strong, of counsel), for resp’t.
   Mayham, P. J.

The case shows that the defendant originally owned the land in Schenectady which now constitutes Union avenue and Gillespie street in that city and dedicated the same to the public, and the plaintiff accepted such dedication and adopted said land as public streets.

Alter such dedication and adoption, Union street was paved by the plaintiff with asphalt and a portion of the expense of the pavement was assessed by the common council of the plaintiff for the two lots of which the half of Union avenue was one and the half of Gillespie street was the other, in the same manner as if they were private property, and the question upon this appeal brings up for review the validity of that assessment.

This work of paving these streets was done by contract pursuant to a resolution, of the common council of the plaintiff, and the superintendent of streets certified the amount of costs and expenses of this improvement as to each of the plaintiff’s intersecting street lots for this work done in front of them respectively, at the rate of the sum fixed in the contract and paid by the plaintiff to the contractor for making such improvement. The city paid the contractor, and the common council, by resolution, directed the city attorney to prosecute in the name of the city for the sum or assessment not paid by the defendant at a given date.

The defendant failed to pay the amounts audited by the common council, as the same was certified by the superintendent of streets, at the time fixed. This action was commenced, and from the judgment recovered by the plaintiff in this action the defendant appeals.

The appellant objects that in levying this tax or assessment upon the property of the defendant no opportunity was given for a hearing before any board or officer to the appellant, and insists that the enforcement of the same by judgment tends to deprive the defendant of its property without due process of law, and in that respect violates the construction, and that the assessment was, therefore, void.

The proceedings of the city government which led up to the making of this improvement do not seem to be in controversy on this appeal; so that we may start our investigation with the proceedings of the common council in levying or assessing and enforcing this tax.

The plaintiff in fixing the liability of the defendant and in the enforcement of the same assumes to proceed under the provisions of § 48 of title 7 of the charter of the city of Schenectady (chapter 385, Laws of 1862 ); that section provides as follows :

“ If the owner or occupant of any lot or building affected by any such ordinance shall fail to comply with the requii’ements thereof, the common council shall cause the same to be done by or under the direction of the said superintendent for and at the cost and expense of such owner or occupant.

“ The said superintendent shall keep an account of such cost and expense which shall include the cost of survey and shall certify to the correctness of the same, and return it to the common council within thirty days after the completion of the work.

“ The common council shall audit and allow such account and at such sum as it shall deem proper and which shall be final and conclusive, and it shall be lawful for said city to sue for and to recover from such owner or occupant, or his legal representative, the sum so audited and allowed, with interest, at the rate of one per cent per month, from the time of the audit and allowance of such account, in an action for money paid and expended for such owner or occupant by the said city; and the said account with the certificate of the city clerk thereon of the amount so audited and allowed thereon shall be sufficient presumptive evidence to entitle the plaintiff to recover in such action.”

The appellant’s contention is that this provision fails to provide the property owner with any opportunity to be heard on the question of the amount or validity of the assessment, and makes the same in express terms final and conclusive.

We cannot agree with the learned counsel for the appellant in this contention. If the statute had stopped with the provision that the assessment “ shall be final and conclusive,” there would be great force in his position upon that point, or if it had confined the collection of this tax to a proceeding in rem, or if the plaintiff had sought to enforce the tax under the provisions of § 49 of this act which provides for a sale of the premises in reference to which the tax is assessed then we are not prepared to say that the position taken by the appellant might not be upheld.

But we are relieved in this case from the determination of that question, as the defendant is invited by the plaintiff into a tribunal where the assessment is by this statute made only presumptive evidence of the validity or correctness of the tax, and where the whole case is open to the objections and litigations of the defendant. On the trial of the action it cannot, we think, be said that the judgment in such action, if enforced against the defendant’s property would be taking the same without due process of law.

While it is doubtless the duty of the courts to sedulously guard the right of the citizen from invasion without due process of law, it is, at the same time, equally incumbent on the courts to uphold the constitutionality of acts of the legislature unless the same are brought plainly within the constitutional prohibition.

This rule is elementary and has been recently adverted to and enforced by the highest court of this state.

In Sweet v. The City of Syracuse, 129 N. Y., 329; 38 St. Rep., 933, O’Brien, J., quotes with approbation the language of Ruger, J., in People v. Angle, 109 N. Y., 567; 16 St. Rep., 647, as follows : “ Within settled rules it requires a case to be made showing clearly that the statute, when fairly and reasonably construed, is brought into conflict with some provision of the'constitution before the court can be justified in pronouncing it an unauthorized expression of legislative will.

“ If the act and the constitution can be so construed as to enable both to stand, and each can be given a legitimate office to perform, it is the duty of the court to give them such construction.”

We see no difficulty in this case in giving that constitutional provision its fullest effect and finding guaranteed to the defendant in an action prosecuted under § 48 of title 7 of this charter the due process of law guaranteed by the constitution. The law provided a method by which the defendant could have its day in court, and by the prosecution of this action it is furnished that opportunity to be heard of which it has availed itself by its defense.

In Stuart v. Palmer, 74 N. Y, 183, which was an action to set aside an assessment as a cloud upon title on which it was made by the act a specific lien upon the land and no provision was contained in the act for the collection of the tax by action as in this case, nor did the act provide for notice of any kind to the land owner, the assessment was held ’ void, but that its invalidity was so palpable and apparent on the face of the proceedings it constituted no cloud upon the title. But it will be observed that in that statute no action was provided for as in this, and no notice of any kind was authorized by the act.

In Stuart v. Palmer, supra, the court held in broad and most unequivocal terms, that the legislature has no .power in itself and can confer no power upon any subordinate department of the government to arbitrarily seize the property of the citizen or impose upon him a tax without due process of law, and on proper notice to and opportunity by the citizen to be heard before some proper tribunal.

But the learned judge in that case says: “The legislature may prescribe the kind of notice, and the mode in which it shall be given,” and in the same case in defining what is meant in the constitution by due process of law, the learned judge uses this language : “ It may, however, be stated generally that due process of law requires an orderly proceeding adapted to the nature of the case, in which the citizen has an opportunity to be heard and to defend, enforce and. protect his rights.”

If, therefore, in the action prosecuted against the defendant for the collection of this tax, the certificate of the superintendent of streets, and the audit of the common council, and their apportionment of the assessment against the defendant constitute only presumptive or prima facie evidence against the defendant in this action, it was within the power of the defendant to overcome that presumption either as to the regularity or amount of the assessment in this action, and if beaten in that contest, it cannot claim that its property is taken by taxation without due process of law.

Bu-t it is further insisted by the appellant that the common council exceeded its authority in passing a resolution that these streets should be paved with asphalt pavement.

It must be conceded that the common council of a city is a creation of the statute, and has only such powers as are conferred on it by that instrument. The power conferred on the common council in reference to the subject of the pavement of the streets is contained in § 42 of the charter, and is in these words, § 8, title 7, chap. 385, Laws of 1862: “ The common council shall have power from time to time to adopt ordinances directing and requiring any of the streets, highways, lanes, alleys, walks or squares paved, flagged, macadamized, planked or covered with broken stone or gravel, at the expense of the owners or occupants of the lots and buildings lying upon the street, highway, lane or alley when such work shall be required to be done, and may in like manner direct and require the altering and repairing of the same; and said common council shall prescribe the time and manner in which such work shall be done, and which work shall be done under the superintendence and direction of the superintendent of streets.”

The complaint alleged the taking by the plaintiff of the various steps by the common council to authorize the paving of these streets, and charge the defendant with the payment for the same, most of which were not put in issue by the answer, and we are only called upon to consider such questions as are raised by the exceptions to the referee’s findings and conclusions, and discussed on this appeal.

Under the provisions above quoted, the common council was: authorized by ordinance to provide for the pavement of the streets of this city.

This authority carried with it the power to direct by ordinance the kind of pavement to be used, and prescribed no limit to any particular kind of pavement. The charter conferred upon the common council the exercise of a discretion, so long as it kept within the general designation of “ pavement.”

In the Matter of Phillips, 60 N. Y, 22, the court held that “ to pave is to cover with stone, brick, concrete or any other substantial matter, making a smooth and level surface, and that the difference in material could not change the character or general identity of the work embraced in the generic term, pave.’ ”

So the laying of a crosswalk comes within the general designation of paving. Matter of Petition of Burke, 62 N. Y., 224. So paving is held to be a more comprehensive word than flagging; it includes flagging as well as other modes of making a smooth surface for streets and sidewalks. Matter of Burmeister, 76 N. Y., 181. It follows that when the legislature conferred on the common council the power to cause the street of the city to be graded and paved, they conferred upon them the power of adopting such material in that work as ordinarily might be regarded as proper for that purpose.

But it is insisted by the appellant that if this ordinance was valid, yet its provisions were not complied with, and that for that reason the plaintiff could not properly recover in this action. The first objection urged upon this point is that the work was not done in accordance with the provisions of § 48 of the charter, in that the work was done by the contract with the asphalt company, and not done by, or under the direction of the superintendent of streets. Section 6 of the ordinance provides that it will be the duty of the superintendent of streets immediately after the expiration of the time (SO days) to cause the work to be done.”

Section 2 of the agreement between the asphalt company and the common council provides that the work shall be done in accordance with the terms of said ordinance, and that the same shall be done under the supervision and direction of the superintendent of streets of said city. While the work was not done by the superintendent of streets it seems to have been done under his direction, and comes clearly within the letter and we think the spirit of the charter in that respect. When the lot owners failed for thirty days to do this work, it became the duty of the common council to cause the work to be done which any such owner or occupant had failed to do at the cost and expense of such owner or occupant.

It is true that they were required to cause this work to be done within the terms of the charter, by or under the direction' of the superintendent of streets; but the fact that it was done under a contract under his direction does not in itself violate the terms of the charter or the provisions of the ordinance of the common council. The charter provides that the work shall be done by or under the direction of the superintendent of streets, and the disjunctive form of connecting the methods of the performance .of the work makes either allowable, and the complaint is not, therefore, defective in alleging that the work was done under his direction.

It is also objected that the notice required to be published by § 61 of the charter must be deemed as duly and properly given, as that is so alleged in the complaint and does not appear to be' denied in the answer, and there was no such modification of the ordinance after the giving of the notice as it would invalidate or destroy the effect of the notice.

It is true that every requirement having the semblance of benefit' to the owner must be strictly complied with, Newell v. Wheeler, 48 N. Y., 486-490; but we think that we have shown that the work was in fact done under the direction of the superintendent of streets, in compliance with the provisions of the charter. Nor do we think that the pavement provided for by the ordinance under consideration comes within the provision of § 34 of the charter relating to ordinary repairs.

It is also urged on this appeal that the contract imposed upon the property owners the burden of paying for keeping this pavement in repair for five years, and that the contract was, therefore, in excess of the power conferred on the common council in reference to paving streets.

In the People v. Maher, 56 Hun, 81; 29 St. Rep., 639, the common council passed an ordinance requiring the board of contract and apportionment to require the contractor to agree to keep a pavement of granite block to be laid by the contractor in repair for seven years. The charter provided that the repairing of all streets paved with granite block should be a charge upon the city and not on abutting property owners, and the court held that such a provision in a contract for laying granite block pavement was unauthorized and tended to increase the burdens of abutting owners, and the contract was set aside as illegal.

If this contract is subject to the same objection it should share the same fate, if the objection was properly raised in the court below. The referee was not asked to find, and did not find, that this provision in the contract increased the expense of the work or enhanced the amount of the assessment.

But this question was evidently raised and discussed in the court below, and is, I think, fairly here for adjudication. But I am inclined to concur in the views of the learned referee, that this case is substantially different in some of its essential particulars from, that of the People v. Maher, supra. In that case there was no express contract to keep in repair for seven years. In this case the clause referred to in the contract had reference solely to the substantial character of the work performed and materials used in the performance of the contract

The provision to which objection is made reads as follows:

“The party of the second part hereby covenants and agrees that it will do all the work required by such ordinance, and this contract, in such good and substantial manner that no repairs thereto shall be required for the term of five years after its completion.”

If the contract had stopped here it would hardly be claimed that the contract went further than the ordinance, and was anything more than a guarantee that the work should conform to the requirements of the ordinance, and no one would doubt the power of the common council to prescribe the quality of the work to be done by an ordinance; and yet, if the contract had stopped there, it can hardly be doubted that the contractor would be liable to the city to keep and make good to the city the conditions of the warrantee that no repairs thereto shall be required in five years after its completion.

The covenant, therefore, to keep in repair for five years is not an independent obligation, but only a guarantee of the quality of the work contracted to be done. In this respect we think it essentially different from the contract under consideration in People ex rel. Hall v. Maher, supra, and that this case does not come under the condemnation of that decision.

We are, therefore, inclined to the opinion that there was a substantial compliance with the provisions of the charter by the common council in the construction of the pavement in question, and that the provisions of the charter under which they proceeded are not unconstitutional. Uor do we see, any error in the admission or rejection of evidence by the referee 'for which this judgment should be reversed. The remaining and perhaps most difficult question in this case is as to the liability of the defendant to-assessment for the paving of comer lots.

The defendant was originally the owner of all of these lands,, including the lands by it dedicated to and accepted by the plaintiff, for public streets. If this dedication and acceptance is to be considered as absolutely divesting the defendant of title or interest in the lands dedicated and investing the plaintiff with the absolute title in fee of the streets, then it would be difficult to see how the defendant can be said to be abutting owner to these corner lots.

But if the abutting owners of these streets on either side are-deemed to own to the centre of the street, subject only to the easement of the public for the purpose of a street, then such abutting owners become abutting owners of these corner lots and are liable as such for this local improvement.

The fact that no legislation has been directly enacted to meet this question, which has often been raised and yet does not appear to have been judicially settled in this state, leads to the conclusion stated by the learned referee as follows “It may justly be said that the charter was enacted in view of the presumption that each owner’s title and ownership extends to the centre of the intersecting streets.”

We are inclined, therefore, to the conclusion that for the purpose of this local improvement the defendant was an abutting owner to the corner lots for which this assessment was made. We see ¡no error in this case for which this judgment should be reversed.

Judgment affirmed, with costs.

Putnam, J., concurs ; Herrick, J., dissenting.

      [* As amended in 1873 and 1877.—Ed.]


source: Caselaw Access Project

author: Mayham, P. J.

license: Public Domain

text:
    John N. Moore, App’lt, v. Laura M. Nye, Resp’t.

      (Supreme Court, General Term, Third Department,

      Filed November 22, 1892.)

      1. Deed—Mortgage.
    In an action to have a referee's deed in a foreclosure sale, absolute on its face, declared to be a mortgage, and annulled of record, A., an attorney, testified that he had an arrangement with ’the mortgagor in possession to bid off the farm for M., the mortgagor, at the referee’s sale; that defendant offered to do the same, and wait on M. any length of time till he would ;pay the amount, and that he told M. of the offer, and he accepted it; that ■defendant bid in the property, and took an assignment of a mortgage from M. as security. Defendant’s testimony showed that she had received from the mortgage assigned to her and otherwise the amount paid by her at the sale. Held, that the deed should be declared a mortgage and can-celled of record.
    :2. Same—Estoppel.
    In such case, M. being about to transfer the property, defendant told the proposed purchaser that she had been paid, and had nothing more to do with the property. Held, that she was estopped from asserting her title.
    Appeal from a judgment entered upon the decision of a trial judge dismissing plaintiff’s complaint.
    Action to have a referee’s deed in a foreclosure sale, absolute on its face, declared to be a mortgage, and cancelled of record, and to restrain defendant, who was grantee in such deed, from prosecuting summary proceedings for the recovery of the possession of the premises.

      Shedden & Booth (L. L. Shedden, of counsel), for app’lt; Corbin & Rowe (Royal Corbin, of counsel), for resp’t.
   Mayham, P. J.

This is an appeal from a judgment entered upon the decision of the trial judge dismissing the plaintiff’s complaint. The action was brought to have a referee’s deed in a foreclosure sale, absolute on its face, declared to be a mortgage, and cancelled of record, and to restrain the defendant who was the grantee in such deed, from prosecuting, summary proceedings for the recovery of the possession of the premises. The first and the principal question raised on this appeal, and the one which ought to be decisive of this case, is whether this deed at the time it was given was in fact, as between the purchaser at the referee’s sale and the owner of the equity of redemption, a mortgage in fact although a deed in form.

The learned trial judge has held it was not, and we are asked on this appeal to review that conclusion.

Great weight, in reviewing the determination of a question of fact in the trial court, is due to that tribunal, and in a proper case this court is called upon to review and sometimes to reverse that conclusion. Ensign v. Ensign, 120 N. Y., 655 ; 31 St. Rep., 657; Nostrand v. Knight, 123 N. Y., 614; 34 St. Rep., 96; The Phænix Iron Co. v. The Vessels Hopatcong, etc., 127 N. Y., 206; 38 St. Rep., 66.

The testimony relied on by the plaintiff to establish the claim that this deed was intended as a mortgage is that of Averill, the attorney, who swears that he had an arrangement with Samuel M. Moore and wife, the mortgagors in possession, to bid off the farm in question for Moore on the referee's sate, and that a short time before the sale, at' the solicitation of her son, he had an interview with the defendant in which he informed her of his arrangement to bid off the property for Moore and furnish the money to pay the mortgage claim, and wait on them until it could be paid out of the property.

She said she thought it would be better for her to do that, as she was a sister of Samuel. Averill swears that he told defendant that he had promised Moore and wife that he would take the title' in his own name, and wait on him any length of time until he could pay it, and he did not know how they would feel about her taking it, but that he would see Samuel and yrife, and if they were willing he would consent that defendant should take it in her name.

He also testifies to securing their consent and communicating that fact to the defendant, and that she bid in the property under that arrangement and took the deed in her own name, and as a part of the transaction and as security for her advancement took an assignment of a Pecor mortgage, on which there wasdue$400, held by Samuel.

He also testifies in substance that at the time plaintiff took title from Samuel and agreed to support him and his wife he heard a conversation between the plaintiff and defendant in which the” defendant stated substantially that she had her money in full for what she had advanced, and that she had no farther claim on this place, and this statement is corroborated by the plaintiff. It appears by the testimony of the defendant that she received the $400 on the assigned mortgage, and $200 rent on assigned lease, and the undisputed evidence shows that Samuel Moore continued in possession after the sale and down to the time of his conveyance to the plaintiff.

The defendant in her testimony claims that her brother Samuel remained in possession of the farm by her permission, but she concedes that she received in rent, and on the mortgage assigned to her, the amount paid by her on the foreclosure sale, and it does not appear that the defendant had any other claim on which the money received by her could properly be applied. The law would, therefore apply this money in satisfaction of the mortgage if this deed was in the nature of a mortgage.

On a careful examination of all of the evidence we are of the opinion that the deed, although absolute upon its face, was, as between Samuel M. Moore and the defendant, only a mortgage, and that on the payment of the consideration for the same out of the property of the mortgagor he was reinvested with his title to the premises, and being in possession at the time of his conveyance to the plaintiff, the plaintiff became invested with his interest in these premises, and as against the mortgagee whose mortgage was paid was entitled to the possession of these premises.

There is another view in which, I think, as against the plaintiff the defendant would be estopped from asserting her title against this plaintiff.

At the time of the purchase from his father, Samuel M. Moore, by the plaintiff, the defendant disclaimed any interest in, or claim to these premises; this is proved by the oath of the plaintiff and that of Averill. It is true that the defendant denies that she ever made such admission, but if, in view of her interest and that of the plaintiff in the result of this suit, we balance one against the other, both being equally interested, still we have the apparently disinterested evidence of Averill, establishing the statement. Averill swears that before the deed was executed to the plaintiff he went with him to the defendant and told her of plaintiff’s contemplated purchase and of the whole transaction, and that plaintiff said to defendant at that time, that he had come to her to see if she had any claim on the property before he did anything with his father, and that defendant then and there stated that she had no claim upon the property whatever; that she had received from the property and the Pecor mortgage all she had paid out, and had nothing more to do with the property at all, and advised the plaintiff to make the proposed arrangement with his father.

If this did in fact occur, it cannot be said that the plaintiff did not rely upon her statement

The only motive he could have had in interviewing the defendant upon that subject seems to have been to ascertain whether or not she made any claim to this property under her purchase, after she had been paid the money she invested in the property.

We think this evidence is sufficient to create an estoppel, and that she cannot now be heard to assert her title alter inducing the plaintiff to purchase upon the strength of her disclaimer of interest

In Trustees, etc., of Brookhaven v. Smith, 118 N. Y., 684; 30 St. Rep., 105, the court, in discussing the question of estoppel in pais, says: “ When a party, either by his declarations or conduct, has induced a third person to act in a particular manner, he will not afterwards be permitted to deny the truth of the admission if the consequences would be to work an injury to such third person or to some one claiming under him,” and in support of this propositian the court cites a series of decisions from that of Wendell v. Van Rensselaer, 1 Johns. Ch., 344, to the N. Y. Rubber Co. v. Rothery, 107 N. Y., 310; 12 St. Rep., 53, and the court adds that: “ The general rule deduced from all the authorities is, that if one is induced to purchase lauds by the acts or representations of another designed to influence his conduct, and creating a reasonable belief on his part, under which he acts, that he is thereby acquiring a valid title to the same, the party who thus has influenced him is estopped from setting up his own title, existing at the time of the purchase, against that of the purchaser.” Applying that rule to this case, the plaintiff’s title purchased of his father cannot be defeated by the defendant under her deed held at the time which the plaintiff had a right, from her statement, to believe was but a mortgage, and had been satisfied by payment.

In Thompson v. Simpson, 128 N. Y., 288; 40 St. Rep., 164, the court say: “A party is concluded from denying his own acts or admissions which are expressly designed to influence the conduct of another and did so influence it, and where such denial will operate to the injury of the latter.” “An estoppel may arise although there is no designed fraud on the part of the person so sought to be estopped.”

It is true that in the case at bar, the court say: “ It is evident that the plaintiff did not rely upon the representations of the defendant.” We think the facts in this case clearly establish that he did rely upon such representations.

The plaintiff offered to prove in express terms by his own oath that he did rely upon such statements, but this evidence was objected to by the defendant, and excluded by the court. It may be seriously questioned in this case whether the exclusion of the evidence was not error. In Bayliss v. Cockcroft, 81 N. Y, 371, the court held that it was no error to permit the plaintiff to testify to his belief of the truth of a matter upon which he was called to pass in a business transaction. So in McKown v. Hunter, 30 N. Y, 625, when the defendant was sued for malicious prosecution for making a complaint against another for perjury, he was permitted to state that at the time he made the charge he believed it to be true, and so in many cases when the motive or intent which influenced the act is the subject of inquiry, that may be stated by the party as a witness, and while as the court say in Bayliss v. Cockcroft, supra, the receipt of this kind of evidence is not to be encouraged, yet, in certain cases it is allowable, and if in any case this species of evidence is allowable, it is difficult to see why this is not such case.

But whether the exclusion of the evidence was error or not, we think the evidence received sufficient to establish the fact that the plaintiff in this case relied upon the statement of the defendant that she had no claim to, or interest in this farm, and that as to him she is estopped from now claiming to his prejudice that she owns this farm.

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

Putnam and Herrick, JJ, concur.


text:
    Richard D. Robens, Resp’t, v. Charles R. Barrett, Impleaded, App’lt.

      (Supreme Court, General Term, Third Department,

      Filed November 22, 1892.)

    1. Injunction—Fish m private pond.
    Fish enclosed and propagated in a private pond are the property of him
    • who places them there.
    2. Same.
    In such case, an injunction will not lie to restrain their removal, even if the title be in dispute, or concededly in the plaintiff, but the proper remedy would be either an action for trespass or replevin.
    Appeal from judgment in favor of plaintiff for possession of land and granting injunction against the removal of fish from a pond thereon.

      French & Smith (W. B. French, of counsel), for app’lt; J. W. Crane, for resp’t.
   Mayham, P. J.

This is an appeal from a judgment in favor of the plaintiff for the recovery of the possession of the real estate described in the complaint, and also granting a perpetual injunction against the defendant restraining him from the removal of fish from a pond on the premises so recovered.

The complaint in this action alleged that the plaintiff was the owner in fee of the land described in the complaint, and that on the 7th day of March, 1881, he entered into a contract in writing with the defendant, William H. Hillman, for the sale of such premises to him at a sum specified in the contract, to be paid as therein specified, and giving the purchaser the right to immediate possession, with condition that on default by the purchaser in the payment of the purchase price or performance of any of the covenants contained in the contract, he would deliver to the plaintiff the possession of the premises. The complaint also alleged that the purchaser, the defendant William II. Hillman, went into possession under such contract, and that before the commencement of the action the purchaser made default in payment, and was at the time of the commencement of the action unlawfully withholding the possession of said premises from the plaintiff.

The complaint also alleges that the other defendants in this action have, or claim to have, some interest in the premises sought to be recovered.

The complaint also alleges that there is upon the premises a large pond of water in which the defendants have placed a large quantity of fish called German carp, and that as an inducement for the plaintiff to forbear from enforcing his rights under the .contract, the defendants agreed that as soon as said fish became of marketable size the same should be sold, and the proceeds thereof applied on the payment of the money due .on the land contract, and the complaint alleges that in violation of that agreement the defendants are removing said fish to other premises, and that the premises without such fish are not worth the sum due on the contract, and the complaint asks for a perpetual injunction, enjoining and restraining the defendants from removing such fish.

Upon this complaint and affidavits served with it, a temporary injunction was obtained, restraining the removal of the fish from the pond on the premises in question.

The answer of the defendants, William L. and Walter W. Hill-man, allege in substance that at the time of making the contract there was no pond on the premises contracted to be sold, and that since the contract they, with the other defendants, had constructed a dam across a stream on said land by which the pond thereon was created. They also allege in their answer that the contract mentioned in the plaintiff’s complaint had been mutually abandoned by the parties thereto, so far as the time of payment was concerned, and the time of making the payment was by such agreement extended until April 1, 1892, and so much longer as the parties shall then agree.

The answer also alleges a payment at the time of such extension agreement. The answer also denies that as a consideration for, or an inducement to, the plaintiff to extend the time of payment, they agreed that they would sell the fish in said pond and apply the proceeds in payment of the money due on the land contract.

The defendant, Charles B. Barrett, admits that he has an interest in the pond of water on the premises mentioned in the complaint, and that he has placed therein a large quantity of valuable fish, called German carp, and that he has removed some of such fish to an adjoining pond as he had (as he alleges) a lawful right to do.

He denies that he wrongfully withholds the possession of the premises, and that he ever agreed to apply the proceeds of the sale of the fish upon the land contract, as an inducement for an extension of the time of payment of the plaintiff.

On these pleadings and the affidavits used by the plaintiff in procuring the temporary injunction, and the affidavits prepared and served on a motion to dissolve the same, it was stipulated that a motion to dissolve should stand over and be heard by the judge who should try the issue in the case, and the same accordingly came on with the trial, at which time said motion was made and denied, and on the hearing of the action, upon the merits, the judgment and relief demanded in the complaint was granted, and from that judgment and decree, as well as from the order denying the motion to dissolve the injunction, the defendant, Charles B. Barrett, alone appeals.

While the recovery of the possession of the real estate, agreed to be sold by the plaintiff to the defendant William L. Hillman, was a proper subject of recovery in this action, after default in the payment of the contract price, we do not see upon what principle an action for injunction restraining the taking of fish from this pond can be maintained, either as an independent action or as an adjunct of the action of ejectment, and it is from the judgment and decree enjoining the defendant Barrett from removing the fish and the recovery of costs against him that he appeals.

The action of ejectment is not prosecuted against him that he is in possession, solely or jointly with the other defendants and wrongfully withholding the same from the plaintiff, and the complaint as to him would be entirely insufficient to authorize a recovery in ejectment.

The complaint sets up the contract with William L. Hillman for the purchase of this land, and alleges his default and charges that he is in possession and wrongfully withholding the same.

The complaint does not show, nor does the evidence establish that the removal of fish, placed in this dam, was a part of the real estate, contracted by the plaintiff to the defendant, William L. Hillman, or that their removal by the defendant Barrett was waste or irreparable injury to the freehold.

The case shows that the defendant Barrett assisted the defendant, Morgan Hillman, one of the defendants, in constructing the dam, and that Barrett stocked the same with fish. The fish, under such circumstances, while the property was in the possession of the defendant Hillman, were clearly the private property of the defendant Barrett, if so far reclaimed as to be within his control, and if unreclaimed, and in their wild state, and not within the control or dominion of Barrett, then they were ferae naturae, creatures in which no one could claim or maintain any valid title.

It is quite true, that had the subject of the injunction been a barn upon the premises at the time of making the contract of purchase, or windows in the house, or shelves or drawers in a store, the vendor, after default, could prevent their removal by the vendee or a stranger, on the ground that'their removal would be a waste, or destruction of the freehold. Tabor v. Robinson, 36 Barb., 483. But this would not be so of sheep upon the premises, doves in a dpve-house, or fowls in a hen-house, placed there by the purchaser, and which by corral, cage or house, were within the dominion of the person placing them on the premises, and the same, we think, is true of Herman carp, enclosed and propagated in a private pond.

In Fleet v. Hegeman, 14 Wend., 42, it was held that oysters planted by an individual in a bed clearly designated and marked, in a bay or arm of the sea which is a common fishery,' are the property of him who plants them. And the same doctrine was repeated in Decker v. Fisher, 4 Barb., 592, and to the same effect Lowndes v. Dickerson, 34 Barb., 586, also in Post v. Kreischer, 103 N. Y., 110; 2 St. Rep., 795, and these cases hold that interference with the owner’s right is a trespass for which an action of trespass will lie.

That being so, an injunction would not lie to restrain its removal, even if the title was in dispute, or concededly in the plaintiff. ‘ In that case trespass, or an action at law to recover the value of the property taken, or replevin, an action to recover the possession of personal property wrongfully taken or detained, would be the proper remedy.

The extraordinary power of a court of equity could not be invoked in such case, for the reason that the party has an adequate remedy at law.

This rule is too familiar to require citation of authorities. It is not sufficient to authorize the remedy by injunction that the violation of a naked legal right is threatened, there must be some special ground of jurisdiction, and when the injunction is the final relief sought, the facts entitling the plaintiff to it must be averred in the complaint and proved.

We think that neither of these essential requisites exists in this case, and that the judgment and decree for an injunction, as to the defendant Barrett, should be reversed, with costs.

Putnam and Herrick, JJ., concur.


text:
    Horace J. Allen, Resp’t, v. George C. Clark, App’lt.

      (Supreme Court, General Term, Third Department,

      Filed November 22, 1892.)

    1. Manufacturing companies.
    Articles of incorporation, filed under the act of 1848, specified the objects of the corporation to he the purchase of a certain town and the property and franchises of a defunct iron company, to sell or lease lands or water power, to manufacture and sell trees, wood, timber and lumber produce, and erect mills : to mine and sell ores of iron, lead, etc.; aud to smelt and manufacture the same and sell the produce, and to erect or purchase blast furnaces, etc., to repair, maintain and operate a railroad, etc. Held, that such specifications were all embraced in the terms of the act, and that the provisions of the act apply to the corporation.
    3. Same—Assignment of judgment against corporation carries remedy
    AGAINST TRUSTEES.
    An assignment of a judgment against a corporation organized under the act of 1848 carries with it the claim upon which it was founded, and .all rights and remedies for the recovery of such claim, including the remedy given by the act against trustees.
    3. Same—Report.
    The amendment of 1875 was not intended to relieve corporations organized before that date from making an annual report.
    Appeal from judgment entered upon the report of a referee.
    Action brought against defendant as a trustee of the “Clifton Mining Co.” to recover the amount of a judgment recovered against the company, it being claimed that he is liable therefor by reason of a failure to file an annual report of the company.
    The articles of incorporation of said company show its objects to be, to purchase the town of Clifton in said county or so much thereof as may be found practicable, together with all the property and franchises late of the “ Clifton Iron Company ” under the several acts extending the powers of the same, and including the road bed and right of way thereof, extending through the said town of Clifton and the towns of Russell, Hermon, and Dekalb in said county, to sell or lease lands and water powers and interests in lands and water powers in said town of Clifton.
    To manufacture and sell trees, wood, timber and lumber, produce of said land, and erect and maintain mills for the manufacture thereof.
    _ To mine, raise, transport, ship and sell ores of iron, lead, copper, zinc, tin and silver, and to smelt and manufacture the same or any of them and transport and sell the product thereof.
    To erect, construct or purchase such and so many blast furnaces, cupola furnaces, forges, puddling furnaces, or other structures or works for the manufacture of iron and steel, pig iron, merchant iron, rails or other manufactures of iron and steel as may be found advisable.
    To purchase land or docks, or to construct docks on lands so purchased on the river St. Lawrence at or near the city of Ogdensburgh, and to erect furnaces, forges, or other iron works thereon for the reduction of its iron ore, or other manufacture of its products and to operate the same and deal in the said products.
    And to repair, rebuild or reconstruct, maintain, use and operate the railroad lately owned by the said “ The Clifton Iron Company," and to operate the same with the same engines, cars, rolling stock, fixtures, tools, implements and machinery late of said “The Clifton Iron Company,” or to purchase and use new and other rolling stock, implements and machinery thereon, and to alter the route and construction, and to sell and convey the same if advisable.

      Louis Hasbrouck, for app’lt; E. H. Neary, for resp’t.
   Mayham, P. J.

This action was prosecuted by the plaintiff' as the assignee of a judgment rendered against “The Clifton Mining Company ” of which the defendant was one of the trustees. The case discloses that the judgment was for costs in an action unsuccessfully prosecuted by “ The Clifton Mining Company," a corporation duly incorporated under the laws of this state, for alleged trespasses, alleged to have been committed by the plaintiff’s assignors in whose favor judgment was rendered- in the action, and the plaintiff in this action seeks to charge the defendant, under the provisions of § 12 of chapter 40 of the Laws-of 1848, as amended by chapter 510 of the Laws of 1875, on the ground that the trustees of said corporation, of whom he was one, had failed to make and file the report required by that section in the proper county clerk’s office within tvrent-y days after the 1st-day of January, 1886, or within twenty dajrs after the 1st of January in either of the years from 1880 to 1886, both inclusive.

That section provides that every such company “ shall within twenty days after the 1st day of January in each year, * * *" make a report * * * which shall state the amount of capital and the proportion actually paid in, the amount of its existing-debts, * * * and if any of said companies shall fail to do-so all the trustees of the company shall be jointly and severally liable for all debts of'the company then existing, and for all that shall be contracted before such report is made."

That this judgment is a debt coming within the terms of that-section is no longer an open question, as the same has been expressly so declared in Allen v. Clark, 108 N. Y., 272-273; 13 St. Rep., 609. It is objected that the plaintiff in this action did not show title to the judgment in him, and that he was not, therefore, a creditor of the corporation, so as to enable him to maintain this action against' the defendant, as one of the trustees.

We cannot agree with that contention. The complaint of the-corporation in the action in which this judgment was recovered charged the defendants therein as co-partners; and the defendant,, who is a trustee of the corporation, is estopped of record from now denying the existence of that relation, and the judgment, at least as to the plaintiff and defendant in that record, became a judgment in favor of the firm, and we think an assignment by the firm in the firm name by one of its members passed a good title to the same to the plaintiff. He, therefore, became the creditor of the corporation, and in a proper case could proceed against'a trustee for the payment of his debt

The assignment of the judgment against this corporation, organized under the acts above referred to, carries with it the claim or debt upon which it was founded, and all the rights and remedies for the recovery and collection of the same, including the remedy given by the act against the trustees. Bolen v. Crosby et al., 49 N. Y., 183.

It is also urged that the amendment of the act of 1848 by the act of 1875 dispensed with the making of an annual report where the certificate was filed before the passage of that amendment, and in this case was fully complied "with by making a report within twenty days after the 1st of January, 1876.

We do not think the statute capable of that construction in this case. There is no apparent reason for any distinction between corporations organized before the amendment of 1875 and those incorporated after that time, so far as the policy and object of the law requiring this report is concerned; and while the word “ annually ” is omitted from § 12 “ as amended ” in 1875, the words “each year” were, we think, intended to take its place.

The apparent object of the amendment of 1875 was to relieve corporations organized, and the certificates of which were filed but a short time before the 1st of January in any year, from making this report until one full year from its organization had expired, and not to relieve corporations organized before the amendment from making an annual report.

We are aware that the general term of this court in Carr v. Risher, 50 Hun, 146; 19 St. Rep., 718, a case somewhat like this, but different from it in some essential particulars, reached a different conclusion, which we would be inclined, out of respect due to that court, to follow but for the decision of the court of appeals in Allen v. Clark, supra. In that case, Earl, J., in pronouning the opinion of the court, in construing § 12, as amended by chapter 510 of Laws of 1875, uses this language: “The section provides that every such company shall, within twenty days from the 1st day of January in each year, make a report, etc.” Following with the substance of the section. It is true that the judge in this opinion does not quote the literal words of the section, but it is quite apparent that he gives the construction that court places upon the language and effect of the amendment, and reflects the reasonable interpretation of the intention of the legislature and does no violence to the well-settled rule of interpretation expressed by the court, Verona Cheese Co. v. Murtaugh, 50 N. Y, 314-317, that “ A. penal statute will not be extended by implication or construction to cases within the mischief, if they are not at the same time within the terms of the act fairly and reasonably interpreted.”

Mor do we think that the contention oí the learned counsel for the appellant, that at the time of contracting the debt sought to be recovered in this action “ The Clifton Mining Company ” had ceased to be a corporation, can be sustained.” The referee finds, as we think, upon sufficient evidence: “ That ‘ the Clifton Mining Company,’ was duly organized under the general manufacturing act of 1848, as amended and supplemented by other legislation of the state, and continued its corporate existence from the time o i its organization until after the commencement of this action."

It is apparent that the business of the corporation for some years prior to the commencement of this action was not prosperous, and much of its property was suffered to go to waste and decay, but it continued to maintain agencies and carry on the sale of bark and timber and lumber, which was a part of the business specified in the articles of incorporation, and did other acts in reference to its corporate property down to about the time of the commencement of this action.

It is also objected by the appellant, as the action brought against him is in the nature of a penalty, it was not assignable and that no right of action passed by the assignment against this defendant.

But the assignment in this case was of the judgment against the corporation, which was a money claim against it, established by a judgment which imported upon its face absolute verity, and its assignment to the plaintiff carried with it all the incidents attached by law to and benefits connected with it. One of its incidents was the method of enforcing collection against a trustee, and that, we think, passed by the assignment to the assignee.

This was held in Bolen v. Crosby, 49 N. Y., 183, supra. To the same effect is Bonnell v. Wheeler, 1 Hun, 332, wherein Miller, J., writes an elaborate opinion on which the court of appeals affirmed the judgment in 68 N. Y., 294. See also Hoag v. Lamont, 60 N. Y, 96 ; also, 80 id., 128: 89 id., 122 ; 103 id., 429 ; 4 St. Rep., 221; 112 N. Y., 458; 21 St. Rep., 791.

We think the numerous cases cited by the learned counsel for the appellant all distinguishable from the one at bar upon this branch of the case. The remaining question raised by the appellant’s counsel on this appeal is as to whether or not the “Clifton Mining Company ” was properly incorporated under the act of 1848 as amended, so as to subject its trustees to the provisions of § 12 of that act, and its amendments.

While the specifications in their articles of incorporation are more in detail than -those specified in the acts, yet we think that they are all embraced in the general and comprehensive terms of the “ act to authorize the formation of corporations for manufacturing, mining, mechanical or -chemical purposes, and that the provisions of that act with its amendments apply to this corporation and its trustees and officers.

On the whole case we see no error for which the judgment should be reversed.

Judgment affirmed, with costs.

Putnam and Herrick, JJ., concur.


text:
    Abraham P. Zoller, Resp’t, v. Dayton S. Kellogg, App’lt.

      (Supreme Court, General Term, Third Department,

      Filed November 22, 1892.)

    Pleading—Amendment—Form of action changed.
    A court has not the power to allow an amendment to a complaint which changes the action from one at law to one in equity.
    Appeal by defendant from a judgment against him, entered upon the report of a referee.
    Action to recover damages for an alleged violation of a written contract

      George E. Phillips (A. J. Nellis, of counsel), for app’lt; Wendell & Van Deusen (John D. Wendell, of counsel), for resp’t.
   Mayham, P. J.

The original complaint in this action was for an alleged breach of contract set out in the complaint, and asked to recover damages for such breach.

The original answer was a denial, and also an alleged performance of the contract. The issue thus framed was duly referred, by consent and stipulation of the parties, to a referee to hear and determine.

On the appearance before the referee for the trial of the action the attorneys for the plaintiff moved to amend their complaint so as to change the action from one at law to recover damages to one in equity to compel a specific performance of the contract This motion was opposed by the defendant’s attorney, who specifically objected that the proposed amendment changed the nature of the action and that the referee had no power to allow an amendment of that character on the trial; also the further objection that the defendant was surprised by such amendment.

The referee overruled the objection, to which ruling.the defendant duly excepted.

The defendant then moved to amend his answer, which motion was granted. The trial proceeded upon the amended issue thus framed, and the plaintiff had a decree of specific performance, with costs, against the defendant. The controversy in this case arises out of a transaction between the parties wherein the . defendant contracted to sell and the plaintiff to purchase a village lot, located on Prospect Hill in the village of Fort Plain, in which contract of sale the defendant agreed as follows: - “ The said party of the first part, in consideration of the sale of said lot, agrees to work the street or dug-way road along the side of said Prospect Hill to the lots conveyed, so that the same may be used to pass up and down the same without any danger, to make said road or street, now under process of construction, fifty feet in width, of uniform grade, and nearly a uniform width; also to straighten the brow of the hill in front of premises already conveyed, as soon as the same can be done, to continue westward to a point opposite the iron creek bridge, and complete the latter part of said work by December, 1882.

The theory of the plaintiff in amending the complaint was,. doubtless, to obtain a decree compelling the defendan to specifically perform the provisions of the contract above quoted, although the proposed amendment does not in all respects follow the language of the contract.

The first and perhaps the principal contention of the appellant on this appeal is that the referee had no power to grant this amendment at the trial.

The powers of, a referee in amending pleadings at the trial are the same as those possessed by the court at the trial. Code of Civil Procedure, § 1018.

The power of the court to amend pleadings at the trial is given and prescribed by § 723 of the Code of Civil Procedure, as follows : “ The court may upon the trial *, * * amend any process, pleading or other proceedings * * * by inserting any allegation material to the case.

The demand for judgment is now an essential part of the complaint, and one of the statutory requirements of what the complaint must contain. Section 481 of the Code provides that “ The complaint must contain * * * 3d. A demand of the judgment to which the plaintiff supposes himself entitled.” It is true that by § 723 of the Code the referee vested with all the powers of the court in that respect could, on the motion of the plaintiff, amend the complaint, “ by inserting any allegation material to the case.” Was this change of the form of action from one at law, to an action in equity, the insertion of an allegation material to the case ? We think not. The case as presented by the original complaint was one for the recovery of money for an alleged breach of contract. The amendment was not one essential or material to that case. It was not necessary to enable the plaintiff to recover the money claimed, but rather to enable the plaintiff to recover on another kind of action in another case.” Rot the case to recover money, but a case for the performance of work. In this view of the case, the amendment was not authorized by the section of the Code referred to. Even if the evidence had been taken in the case and had disclosed real ground for equitable relief, the court would not have been authorized under the succeeding clause of § 723 to so amend the pleading as to make it to conform to the proof, because by that clause of the section an amendment can only be made “ when the amendment does not change substantially the claim or defense.”

Here the claim would be entirely changed from a claim for a money demand to that of the performance of labor in a specific performance of the contract. So that, upon any fair construction of this section, we are unable to find the power conferred upon the court to change an action at law, for the recovery of money, to one in equity for a specific performance. In Sleeman v. Hotchkiss et al., 36 St. Rep., 540, the original complaint was for equitable relief, to have a contract cancelled, and compel the transfer of certain stocks. On the trial the plaintiff ascertained that he could not recover on his complaint, and the trial was suspended, and leave granted to him to move at special term to amend, which he did, asking to substituté a cause of action strictly legal, and the motion was denied for the reason that this was an attempt to change the cause of action, which could not be done under the Code, the court having no power to permit such change, and this ruling was upheld by the general term of this court sitting in the first department.

In Cumber v. Schoenfeld, 34 St. Rep., 770, it was held that the court had not the power on- the trial to change 'by amendment a complaint from one for malicious prosecution to one of false imprisonment, and the court, in discussing that question, say: “ That it is improper to permit at the trial a new cause of action to be introduced into the complaint, is apparent from the terms of the Code, as well as by the uniform current of adjudications.” Citing § 723 of the Code of Civil Procedure; Price v. Brown, 98 N. Y., 388, 389; Reeder v. Sayre, 70 N. Y., 181, and several other cases.

It is true that in the case of Wademan v. The A. & S. R. R. Co., 51 N. Y., 569, it wa held that the trial court did not commit an error in an action for a specific performance in allowing pecuniary damages instead of decreeing such performance ; but in that case damages were claimed in the complaint, and the court, in discussing the question, says that the court will sometimes give damages when asked, where specific performance cannot be decreed. So, too, in Lawrence v. Saratoga Lake R. Co., 36 Hun, 468, this court held that when a specific performance could not be decreed, the court could award damages; and when the vendee claims performance, and the vendor is unable to make complete performance, the vendee is allowed to have all he can get, with compensation for the deficiency.

But these cases proceed upon the theory that part of the equitable relief claimed is pecuniary damages, and no amendment of the complaints were asked for or required.

We are of opinion, therefore, that the learned referee in granting this amendment exceeded his powers and that its allowance was error.

There is also great force in the suggestion made by the appellant that the complaint is too general and indefinite in its terms to enable the court to require a specific performance of the agreement, and that that vice also inheres in the contract itself; just what work is required to be performed and in what manner, and when it is to be performed, is not specified either in the contract or the complaint as amended; and this in part grows out of the fact that defendant appears to have been at work in excavating at the time of, and since the commencement of this action.

How much the judgment entered upon the amended complaint requires the defendant to do is quite uncertain, and the complaint and the decree would furnish no real and accurate guide for the defendant in performing the work which by the decree he is commanded to do.

Great accuracy and precision in averment and proof are required in an action for specific performance, which does not seem to have been adopted in this case.

I am, therefore, of the opinion, that the decree should be reversed, the referee discharged and a new trial granted, costs to abide the event.

Putnam and Herrick, JJ., concur.


author: Van Brunt, P. J.

text:
    William H. Beers, Pl’ff, v. The New York Life Insurance Co., Def’t.

      (Supreme Court, General Term, First Department,

      Filed November 18, 1892.)

    1. Corporations—Contract—Pension fob past services.
    Upon the resignation of the president of a mutual insurance company, the trustees, at a meeting presided over by him, authorized the making of an agreement with him, in view of his long devoted services, to secure his services in an advisory capacity during his life on a salary of one-half the amount paid him as president; which agreement was made, he agreeing to serve in that capacity “so far as strength and health permitted.” Reid, that such agreement was void, as in the nature of a pension for past services.
    2. Same—Perpetual contract.
    Such agreement was also void, as the trustees had no power to make a perpetual contract or one determinable with the life of the employee.
    3. Same.
    Such agreement was also void because made in a manner contrary to that prescribed by the by-laws of the company, and also by reason of the fact that the party with whom it was made presided at the meeting at which it was authorized and put the question, although he did not vote thereon.
    Submission of controversy upon an agreed state of facts.

      Esek Cowen (Frederic R. Coudert, of counsel), for pl’ff: A. Hamilton, for deft.
   Van Brunt, P. J.

The question in difference is stated in the agreed case to be: “ Is the said Beers entitled to be paid and to recover from and have judgment against the defendant, the New York Life Insurance Company, in the sum of $9,875, being the first quarterly payment upon and under an agreement executed by the said Beers' on his own behalf, and by A. H. Welsh, second vice-president, and R. W. Weeks, actuary of said life insurance company, on behalf and under the seal of and by authority of the board of trustees of said company on February 8, 1892 ? ”

The power of the court to decide this question arises from §§ 1279 to 1281 of the Code of Civil Procedure, which provide that parties to a question in difference which may be the subject of action, may agree upon a case containing a statement of facts upon which the controversy depends, which case must be accompanied by the affidavit of one of the parties to the effect that the controversy is real.

If the position attempted to be taken by the learned counsel for the plaintiff is correct, then there is no controversy whatever to be submitted to the court, because it is claimed by him that the board of trustees of the defendant have not repudiated the contract, and that their act agreeing to the submission expressly states that their resolutions, authorizing the president to obtain a decission from a court of competent jurisdiction as to the validity of the contract, are not to be understood as an affirmance or disaffirmance of said • contract. Now, unless there has been a denial, and is a denial, upon the part of this defendant corporation of any liability upon this contract, then there is no controversy. This court is not the advisory counsel of this corporation. It does not occupy any such position, and it does not propose to act in any such capacity; and if it is the purpose of the trustees of this corporation to use this court for that purpose, the court must decline the office.

But, as we understand the position of the corporation, it is a denial of liability upon the contract; and a denial of liability upon the contract is necessarily a repudiation of the same. The fiscal officers of the corporation have refused to pay, and the trustees have not dissented from that refusal. The refusal to pay is based upon the claim that the corporation is not bound by this contract, and the trustees have not dissented from this position. Hence the controversy. And understanding that this corporation, both by its fiscal officers and its trustees, has denied its liability upon this contract, and therefore repudiate the same, this court proposes to discuss the controversy which has thus arisen.

The facts bearing upon the submission are substantially as follows:

By a curious metamorphosis, the Nauticlus Insurance Company, incorporated in 1841, for the purpose of exercising the power of an insurance company for marine inland navigation, was, by various statutes, passed in and prior to 1849, changed into a purely mutual life insurance company called the New York Life Insurance Company. It has neither stock nor stockholders. Its assets belong to and are held in trust for the exclusive benefit of policyholders, who, under one of the statutes authorizing the transformation, constitute the members of this corporation. All the corporate powers of the company were to be exercised by a board of trustees, and such officers and agents as they might appoint, the board of trustees consisting of twenty persons, who should elect a president and vice-president annually, who should on their election be ex officio members of said board of trustees, and hold office until others were elected in their stead. The term of office of a trustee was four years; and but five of their terms expired annually, which would require at least three years to elapse before the policyholders could choose a majority of new trustees after any given period or event. By the by-laws it is provided that tlie president shall have the general supervision and direction of the business of the company. The plaintiff, up to and for a number of years prior to the 10th of February, 1892, had been a member of the board of trustees, and the president of the company, and had the general control and management of its affairs. In 1891 the management of the company was severely assailed as injudicious and extravagant, which led to an official examination of its affairs by the superintendent of the insurance department of this state, and which resulted in an official report showing large losses in the management of the affairs of this company, arising from gross neglect and incompetency in its management; but which, fortunately, had not as yet resulted in insolvency.

There was no finding in the report of the department of any personal dishonesty upon the part of Beers, and nothing which showed any corrupt or dishonest use of the profits of the company for the private gain of any of the officers of the corporation. It is stated in the agreed case that the plaintiff denied the charges of mismanagement, wrote an elaborate defense thereof, and - expressed to the board of trustees not only his willingness, but strong desire to have the matter of the propriety of his dealings with agents and in making investments made the subject of a judicial determination, and that he was sustained in his position by a large majority of the trustees of the company.

What this last clause in the submission means we have not been able precisely to determine. If it was his position of willingness and strong desire to be further investigated, this large majority of the trustees seem to have limited themselves to approving the desire, without taking any action to give such desire effect.

Upon this report of the insurance department, on the 25th of January, 1892, at a meeting of the board of trustees over which the plaintiff presided (eighteen members being present, and there being one vacancy) a committee of the board of trustees was appointed, and directed to take into consideration such report and consider what action should be taken in view thereof; the submission stating that Beers did not vote. As the resolution was seemingly carried without any difficulty without his vote, of course there was no necessity of putting himself upon record in favor thereof. This committee reported to the full board at an adjourned meeting on February 8, 1892 (nineteen members being present), over which meeting Mr. Beers presided throughout, which he seems to have done whenever his personal interests were at stake. In their report the committee stated that they had given the matter most careful consideration in order to determine what course was best for the interests of the company, and what changes in the organization or methods of the company were desirable; and they recommended the division of duties of executive officers by the appointment of an auditor, who should report direct to the trustees, the amendment of certain parts of the by-laws, and that a contract, which had already been submitted to the committea, to pay the plaintiff $25,000 per annum for life, in recognition of past services and his future usefulness to the company, be entered into. At the same time there was tendered at the meeting, by Mr. Beers, his resignation of his office as president, to take effect on Wednesday, February 10, 1892 ; but be did not resign his office of trustee, which 'continued until April, 1892. At this meeting the board accepted the resignation of Beers, and after passing a eulogy upon his administration of the affairs of this corporation, notwithstanding the fact that large losses had arisen from gross neglect and incompetency in its management, authorized an agreement to be made with him to secure his services during the remainder of his life in an advisory capacity upon half pay, viz.: an annual salary of $37,500, thus raising the recommendation of the committee by fifty per cent, and authorizing the second vice-president and the actuary to execute the contract submitted under the seal of the company. Thereupon, upon the same day, an agreement was entered into between the plaintiff and the defendant, whereby the plaintiff agreed, so far as strength and health permitted, to serve the company in an advisory capacity, and give its officers all the aid' and assistance that might lie within his power, in said advisory capacity, to maintain and extend its business prosperity, and at all times to use his best efforts for the success and benefit of the company; that he would not become an officer, or enter the employment of any other life insurance company or association, or become connected in any form with any other company or enter into any business, directly or indirectly, which should affect or be in competition with the defendant during the remainder of his life. The defendant thereupon agreed, on the true and faithful performance of the covenants and agreements therein contained on behalf of the plaintiff to be kept and performed, to pay the plaintiff during the remainder of his life the annual salary of $37,500 payable quarterly, to commence on the 10th of February, 1892. The plaintiff continued to act as president up to and including the 10th of February, 1892, and presided over the meeting on that day, and, as already stated, he continued to hold his office as trustee until April, 1892. On the 12th of February, 1892, the vacancy in the office of president was filled, and since that time plaintiff has ceased to act as president, and he has not rendered any services or given any assistance or advice to the company, and has not been called upon to do so. The first payment under the agreement having become due, the plaintiff demanded the same, which the president and fiscal officers of the company refused to make, claiming that the company was not bound by the agreement; and, therefore, the trustees authorized the president to execute the submission of the controversy between the parties to this court; and the question is whether, upon this state of facts, the plaintiff is entitled to recover the sum of $37,500 a year during the continuance of his life from the defendant, being one-half of the enormous salary which he received for managing or mismanaging the affairs of this corporation.

It seems to us that there can be but one answer to this proposition. It is urged upon the part of the plaintiff that the contract in question is not ultra vires, but clearly within the chartered powers of the corporation; that the plaintiff had resigned when the contract was executed, and there is nothing in the case to show that his resignation was any part of the consideration of the contract ; and that, although this contract has been assailed as a pension to the plaintiff for past services, there is no such consideration stated in the contract, nor is there anything in the submission which justifies any such conclusion.

It seems to us that a very brief examination of the facts admitted in the submission justifies the criticisms which have been suggested. The committee appointed at the meeting of the 25th of January, 1892, recommended that “in view of the long and devoted services rendered by Beers to this company, whose untiring energy and ability are shown in building up a company which is second to none, a proper recognition of such services and his future usefulness to the company warrants us to suggest to this board that a salary of $25,000 be given to him, to continue for life, in accordance with the contract already submitted to this committee." This language clearly shows that, in the opinion of this committee, the $75,000 salary which the president had been receiving did not sufficiently compensate him for the faithful services which he had rendered, and they, therefore, recommended this additional compensation, by way of a pension of $25,000 per annum, to continue during his life. ' And this idea permeates the recitals of the contract itself. It says: “ YHiereas the party of the second part has been connected with this company since 1858 (about thirty-four years), and has occupied successfully the position of accountant, cashier, actuary, vice-president and president, and has been largely instrumental in building up this company to its present high position and financial strength. And whereas he has resigned the office of president of this company to take effect the 10th of February, 1892. And whereas it is deemed desirable, in the interests of this company, that the company should retain the benefit of his knowledge, skill and expe- « rience. Now it is hereby mutually covenanted and agreed as follows.” That is, that in consideration of the premises, of the fact of his building up the company to its'present high position and financial strength, the fact that he had lost his salary as president by his resignation, and the other fact that it was deemed desirable in the interests of the company that the company should retain the benefit of his knowledge, skill and experience. And he obligated himself to serve the company in an advisory capacity, so far as strength and health permitted, and not to enter the employment of another life insurance company. This report was acted upon favorably when presented to the board of trustees at their meeting, so far as it related to the contract with Mr. Beers, except that they were-of the opinion that a pension of $25,000 was not sufficient for Mr. Beers’ future compensation, and its-amount was raised to $37,500, one-half of his salary as president. As to this increase, the members of the special committee were recorded as voting in the negative.

It seems to us apparent, from this state of facts, that the true consideration for the payment of this large annuity was that this board of trustees desired to give the plaintiff some recognition, out of the pockets of the policy holders, of the past services which they seemed' to think had been so valuable to the company and inadequately compensated. The idea of past services is the one which permeates the resolutions and the agreement. It is studiously referred to, apparently to fortify the action of the trustees, because they seemed to realize that the payment of such an enormous salary, in order that a man should sit with his arms folded and render no services whatever to the company, could not otherwise be justified. That services to the company were not contemplated is apparent from the very nature of the agreement, which is for life, and is not even dependent upon the ability to render any service to the company, because the obligation to serve is only “ so far as strength and health might permit.” And as it seems to be conceded that the corporation would have no right to make any such agreement founded upon past services, the claim of the plaintiff would necessarily fall because of that infirmity in his contract.

There is another ground which seems to be fatal to the obligatory force of the contract in question; and that is that this board of trustees has no power to make a perpetual contract. If they can employ a man to do nothing in a so-called advisory capacity so long as he shall live, there is no reason why they could not employ every clerk, accountant, messenger boy, or other employee for the same length of time, and thus take the managemeht of the business of the corporation out of the hands of the owners of its assets, viz.: the policy holders, with whom the policy of the law supposes the ultimate authority lies. The policy of the law under which this corporation is organized is that every four years its board of trustees may be wholly changed; that five of its members may be compelled to retire at the end of any one year at the wish of the policy holders; and that by this means the policy holders shall have the ultimate control of the manner in which the business of the company shall be conducted, and determine who shall be the agents, employees and servants of the corporation. Of this right the board of trustees cannot deprive the policy holders by making contracts which will extend for long periods of years beyond their terms of office. This principle was recognized in reference to the relations between railroad corporations when it became necessary for the legislature to expressly authorize the leasing for a long term of years of one corporation to another. And even notwithstanding this legislation it was until very recently the settled policy of this state that such power could not be authorized by the board of directors of a railroad company without the assent of the stockholders.

But our court of last resort has recently established the doctrine that the board of directors of a railroad company, elected by the stockholders to manage its affairs for a year, may, without the consent of the stockholders, lease all the property, confided to their management for a year, for an unlimited period, and thus forever deprive the stockholders of any further control over their property.

The right to exercise this extraordinary power has been held to exist in this corporation solely because of the legislation which permitted one railroad corporation to lease its property to another.

The principle of continued control over the officers and employees of this corporation is recognized in its charter and bylaws. By this charter it is provided that a president and vice-president shall be elected annually; and by the by-laws it is provided that a president, vice-president and actuary shall be elected at the next regular monthly meeting of the board after the annual election for trustees. Its resident physicians were to be appointed by the board, to hold their office during the pleasure of the board. The supervisory and agency committee had the appointment and removal of agents and the fixing of their compensation ; and the president and vice-president had the power to appoint, remove and fix the compensation of each'and every person except agents employed by the company, and were required every three months to make a written report to the supervisory committee in respect to all changes made relating thereto.

Under this condition of affairs, it is evidently not within the powers which were committed to the board of trustees by the policy holders that they should be able to fasten upon such, corporation a subordinate so long as he might live.

From this construction of the charter and by-laws, in connection with the provision contained in such by-laws that no alteration of the same might be made without first being proposed at a stated meeting, and that such alterations could be considered only at a subsequent stated meeting, and adopted only by the concurrence of a majority of the whole board, it would seem that, by their own act, the board of trustees were precluded from making any such contract. The by-laws are explicit as to by whom all agents and servants shall be employed. The supervisory and agency committee, as already stated, had the power to appoint and remove agents and fix their compensation. And the president and vice-president had the power to appoint every other employee; but were required every three months to make a written report to the supervisory committee in relation to all changes made relating thereto.

It may be said that the board of trustees who adopted these by-laws might change the same. But they have expressely provided how these by-laws shall be changed, viz.: that any change should be first proposed at a stated meeting, considered at a subsequent stated meeting, and adopted only by concurrence of a majority of the whole board. If this provision means anything'; if these by-laws mean anything; if they have any force and effect for any purposes whatever, the board of trustees could not make any alteration in these by-laws except in the manner therein provided.

We do not think that it will be seriously contended in our day that the regulations' of business, as embodied in by-laws, are only binding so long as a majority of the board of trustees may' see fit, notwithstanding the provisions as to the manner in which alterations therein shall be made. Therefore, this action upon the part of the board of trustees, in attempting to employ this plaintiff in any capacity, was wholly without authority and absolutely nugatory.

The plaintiff, as pregident, must be presumed to have known of these restrictions. He had been so long connected with the corporation, and had so long exercised the duties of president, that he cannot be held to have been ignorant of this important function pertaining to his office.

It is further urged against the validity of this contract that the plaintiff, being the president of the defendant, and a memher of its board of trustees, could not enter into a contract of this description for his own benefit by virtue of resolutions passed at a time when he was present in the meeting of the board, and presiding over its deliberations. Until a comparatively recent period in the history of jurisprudence in this state it was considered the law that no director or trustee of a corporation could contract with the corporation without raising the presumption that such contract was fraudulent.

It may be true that Mr. Morawetz, in his work on Corporations, § 527, after stating that it had been held in some cases that a director cannot enter into a valid contract with the corporation of which he is an agent, although the corporation is represented in the transaction by a majority of the board of trustees, says: “But the weight of authority and of reason appears to indicate that such a contract would be valid.”

It is unfortunately true that, at the present time, the weight of authority is that such a contract may be valid, but the weight of reason is absolutely the other way. And a very brief consideration of the relation of a director or trustee of a corporation to it seems to show that public policy ought to be so shaped that such opportunities for flagrant frauds should not be allowed. The director or trustee is appointed by the owners of the property of the corporation for the purpose of the management of the business of the corporation, and their term is always restricted, ordinarily to one year, but in some cases, in order that there may not be an abrupt change in the whole policy of the corporation, only certain portions of the board are elected at each annual election. These directors or trustees are appointed by the owners of the property because of their confidence in their ability, integrity and business capacity, and because they believe that they will devote • this ability, integrity and business capacity to the furtherance of the interests of the corporation. The director or trustee, when he takes upon himself the duties of the office to which he has been elected by the owners of the property of the corporation, is by them understood to obligate himself to exercise in the management of the business of the corporation all the ability, integrity and business capacity of- which he is possessed; and that upon each and every occasion he shall protect the rights and interests of his constituents. Now it is apparent that the owners of the property of the corporation, having conferred upon a person the office of director or trustee for the purposes above mentioned, and the director or trustee having undertaken the obligations of such office, it is a flagrant direliction of duty for him to deprive the corporation of the benefit of those counsels which he has promised to give the corporation in every contingency, by proposing to enter into a contract for his own benefit. If one director can enter into a contract for his own benefit, then every director can, and instead of the interests of the corporation being studied by the board of trustees, the individual or private interests of each trustee or director would become the main objects of their efforts and enterprise.

The director has no right to deprive the corporation of the benefit of his counsels by his own act, because his advice upon any question of administration, if conscientiously given, although he may originally have stood alone, may change the minds of all his brother directors. And, therefore, it ought to be no answer to the objection to a director entering into a contract with the corporation that his vote was not necessary to the carrying out of the contract, and that he took no part in the meeting of his associates which authorized the same.

But, unfortunately, the rule in this state has been relaxed ; and in the cases of Van Cott v. Van Brunt, 82 N.Y., 535, and Gamble v. Queens County Water Co., 123 id., 90; 33 St. Rep., 88, it is held that a director is at liberty to make a con tract with his corporation so long as he does not, while acting in his own interest, on the one side, also act, on the other, in the capacity of trustee, so that his interest and his duty might conflict. It is difficult to see how his interest and duty do not conflict, when, because of his interest, he does not perform his^duty as director or trustee. But we have' to take the law, in this respect, as we find it. And how does that apply to the case at bar? The plaintiff, at the time these very resolutions were passed, at the time this contract was authorized, did not feel sufficiently confident as to the action of his board of trustees to allow some other officer to preside over their deliberations at these meetings wherein his interests were so deeply involved ; but he felt it necessary, in order that this scheme should be carried out, that he should control the course of deliberation; that he should put the question as to the execution of this contract with himself; that he should superintend the vote upon such resolution, and that he should announce the result. He, therefore, took this part, at least, in the conduct of these meetings, and saw to it that his own interests were duly advanced at the expense of the corporation whose welfare he was supposed to represent. This question might have been a different one had he deemed himself sufficiently strong to have absented himself from these meetings. But, instead of that, he seems to have thought it necessary to keep his board of trustees under his own eye in order that they should do his behests in respect to this contract, and at each meeting he presides throughout; conducts the deliberations as to this pension of $37,500 given to him, and now claims that such a contract is a valid contract because he did not vote. If a contract of this kind is to be recognized and upheld in a court of justice, then the courts may as well take the remaining step, and say that unless a board of trustees can be proven to have acted from a corrupt and fraudulent motive in the making of a contract with one of its own number, such contract shall be upheld, even though the contracting trustee takes part in the deliberations of the board which results in the authorization of the contract, and as a trustee urges and votes for its adoption.

It is further urged, as an objection to this contract, that the plaintiff agreed that he would not become an officer of or enter into the employment of any other life insurance company or association, or become connected in any form with any other company, or enter into or become engaged in any business, directly or indirectly, which should affect or be in competition with the defendant for the remainder of his life; and that this is in restraint of trade, and void as against public policy, unless it is shown to be reasonable and necessary, and the case failing to show that, the plaintiff cannot recover.

In the disposition of this case it has not been considered necessary to discuss this proposition. It has seemed to us advisable to place our decision upon the other points which are so strongly presented by the facts admitted in the case at bar; and they seeming to indicate that no recovery upon the part of the plaintiff can be had upon the contract in question, judgment should be ordered for the defendant, with costs.

O’Brien and Lawrence, JJ., concur.