author: GtrAy, J.

text:
    Henry J. Negus, Resp’t, v. Louis W. Becker et al., App’lts.

      (Court of Appeals,

      Filed October 9, 1894.)

    1. Party wall—Rights.
    The only restriction upon the use, hy either of the adjoining property owners of a party wall, is that such use shall not be detrimental to the other.
    2. Same.
    A party has the legal right to increase the height of the wall to the point contemplated by the party wall agreement and is not liable, if he provides for the work in a proper, lawful and usual manner, and is not guilty of any act contributing to the injury.
    Appeal from judgment of the general term of the supreme court in the fifth judicial department, entered upon an order, which affirmed a judgment in favor of plaintiff entered upon a verdict directed by the court.

      William H Henderson, for app’lts; Hudson Ansley, for resp’t
   GtrAy, J.

The direction of a verdict for the plaintiff proceeded upon the theory that, in undertaking to have the party wall carried up, in order to provide for the third story of their building, the defendants assumed an unqualified liability to the plaintiff for any occurrence in the course of construction, resulting in an injury to him. There is no charge in the complaint, and there was no evidence to show, that the erection of this wall was something intrinsically dangerous, and, therefore, a matter which imposed upon the defendants a responsibility, in case of resulting damage to their neighbor, from which they could not escape by any plea. The gravamen of the complaint seems to be in the proposition that, because the defendants extended the party wall to the full depth of the boundary line and. carried it higher up, without the plaintiff’s knowledge or consent, they did so at their peril and became absolutely liable, or insurers, for all possible injurious results. In the opinion of the general term, upon the authority of Brooks v. Curtis, 50 N. Y. 639, and of Schile v. Brokhahus, 80 id. 619, it was held that it was unnecessary for the claim in the complaint to be based upon negligence; that, while the defendants had the right to use the wall as they did, they “ insured the safety of the operation.” “ The party making the change,” it was said, “is absolutely responsible for any damage which it occasions.” We cannot agree with the court below íd their view of the question, or that it is controlled by the authorities cited. Schile v. Brokhahus was an action for trespass, in tearing down a portion of a partition wall, and it was tried upon the theory, as Chief J udge Church stated, “that the defendant, in disregard of the plaintiff’s rights, commenced to tear down the old wall, claiming that i't stood ’ entirely upon his own land, and intending to erect a new wall for himself, without giving the plaintiff’s property any benefit from it as a party wall, and that this was a trespass which caused the injury complained of.” It was upon that theory that the jury found for the plaintiff and that the judgment was affirmed. Brooks v. Curtis was an action to compel the defendants to remove certain alleged encroachments, which consisted in making additions to the party wall. The plaintiff was held not to be entitled to relief, so far as the carrying up of the wall was concerned; but because, as the roof of the new building was constructed, it caused water, snow and ice to fall upon the plaintiff’s building, the defendants were held to have been properly restrained from maintaining it in that condition. Judge Rapallo made the following observation: “ We think that the right of either of the adjacent owners to increase the height .of a party wall, where it can be done without injury to the adjoining building, and the wall is clearly of sufficient strength to safely bear the addition, is necessarily included in the easement. The party making the addition does it at his peril; and if injury results he is liable for all damages. He must insure the safety of the operation. But when safe it should be allowed. The wall is devoted to the purpose of being used for the common benefit of both tenants.”

The argument is that this language formulated the rule of liability for this case. The respondent, in his brief, says: " Under the principle there enunciated, the appellants had a legal right to increase the height of the wall; but this was a conditional and not an absolute right. The condition is that he insures the safety of the operation.” We think the opinion in Brooks v. Curtis has been quite misapprehended, in deducing from it any such rule of absolute liability, and that the language quoted, which is relied upon as furnishing the rule, should receive no such reading. In connection with the facts, it was appropriate. The “safety” there alluded to, which the building party insures, has reference to the strength of the wall to support the addition ; or to the manner of its construction, as furnishing thereafter a possible source of danger, or of nuisance to the adjoining owner. It did not mean safety against uncontrollable accidents, or the results of some third party’s negligence. This is clear from the reading of the ballance of the opinion, as well as from a fair consideration of the question.

A party wall is for the mutual convenience and benefit of adjoining property owners and the only restriction upon its use by either is that that use shall not be detrimental to the other. In this case the wall was the joint property of the parties. It was built for the purposes of a building of three stories in height, and if the plaintiff did not avail himself of his right to erect a building of such a size, that fact was no obstacle to the defendants building it up, as it had been intended and agreed upon; in order that it might furnish a wall for their own three-story building. They were within the exercise of their legal right in what they did, and it is impossible to see that they assumed any risk in building a wall of the height originally contemplated; so long as they contracted for one of suitable strength and so adapted as to serve, when built, the purposes of the' defendants’ new building, without detriment to the enjoyment by the plaintiff of his premises. The plaintiff’s agreement bound him to construct a party wall foundation sufficient for the purposes of a three-story building and he may not complain if the wall is carried up to subserve such a purpose. Had the defendants exceeded the height of three stories, it can then be seen that they might have become insurers of the safety of the wall; for they would have been without the protection of the party wall agreement and they would have been undertaking to do a thing, which would possibly, if not probably, be hazardous, in view of the limitations as to strength under which the foundation wall was built.

The peculiarity of this case is that there is no question of negligence involved, and, for his recovery, the plaintiff insists upon the application of the principle that where one of two persons has sustained damage, the one that has caused it, or contributed to it, must make it good; or that where an act is done for the benefit of one party, which damages another, the person to be benefited by the act insures the safety of the work and becomes answerable as an insurer. These principles are inapplicable and the difficulty with the position is that there is no restriction upon the lawful use by a party of his property, if he proceeds with due care in improving it. The defendants had the conceded right to carry up this wall, of which they were joint owners, for the use of their building and they provided for its erection in a lawful, proper and usual way. If there was negligence in the construction of the wall and its fall could be attributed, in any wise, to some negligent act of commission, or of omission, in the process of construction, it is very clear that the party liable for the resulting damage would be the contractor. By the contract between him and these defendants, he undertook to construct the wall. It was not a matter which the defendants were competent to engage in and, in contracting with Bobinson, they placed themselves in a position, which exonerated them from any responsibility for a negligent performance of the work. The performance of the work contracted for was neither dangerous, nor extraordinary, in itself, and hence the rule would apply that for an injury resulting to another, by reason of a negligent performance, the remedy would be solely against the contractor. The owner was innocent of any act contributing to the injury. We have lately discussed this doctrine in Engel v. Eureka Club, 137 N. Y. 100; 50 St. Rep. 188. But, as it has been already observed, no negligence is charged, and the case was left to stand upon the sole proposition that, however innocent the defendants of causing the occurrence, and however lawful their undertaking to build up the party wall, they must, nevertheless, be responsible for what happened. This cannot be, and is not, correct doctrine. If the fall of the wall was through some negligence in its construction, or in securing it, the liability was the contractor’s and not the property owners. If there was no such negligence and the fall was occasioned through some accident as, for instance, by the extraordinary force of the storm, which is mentioned, the defendants were not responsible. If, in the lawful use of one’s property, injury is occasioned to an adjacent owner, which the exercise of due care could not have prevented, there is no remedy. An illustration of this rule is presented by cases of the excavation of land, which deprive adjoining premises of lateral support; Lasala v. Holbrook, 4 Paige, 170; or, more recently, by the case of Booth v. R., W. & O. R. R. Co., 140 N. Y. 267; 55 St. Rep. 656; where the damage was caused by blasting.

Here there was damage, admittedly; but there was no wrong. As the complaint was framed and as the ea,se was tried, the fall of the wall was not laid to the fault of the defendants, or of their contractor, and upon such a case, plaintiff should have been non-suited.

It is our judgment that the judgments below should be reversed and that a judgment should be entered in favor of the defendants, dismissing the complaint; with costs in all the courts to the appellants. All concur, except Andrews, Oh. J., not sitting.

Judgment accordingly.

      Reversing 52 St. Rep. 283.


source: Caselaw Access Project

author: Peckham, J.

license: Public Domain

text:
    Fred C. Eddy, as Receiver, etc., v. London Assurance Corporation, App’lt, and Giles Everson, Resp’t.

      (Court of Appeals,

      Filed October 9, 1894.)

    1. Insurance—Mortgagee—Subrogation.
    Where tlie policy provides that the company’s right of subrogation shall not impair the mortgagee’s right to recover the full amount of his debt, the right to recover means the right to demand and to receive full payment of his debt or claim.
    2. Same—Other insurance.
    The provision that the insurance of the mortgagee shall not be invali- ' dated by any act or neglect of the owner of the property, applies to a case of other insurance of his own interest by the owner, without the knowledge or consent of the mortgagee.
    3. Same.
    His insurance cannot be diminished by insurance, without his assent or knowledge, which does not include his interest.
    4. Contract—Construction.
    When a contract contains provisions somewhat inconsistent, that construction will be adopted which, while giving some effect to all, will plainly tend to carry out the clear purpose of the agreement.
    Appeal from judgment of the' general term of the supreme court in the fourth judicial department, entered upon an order, which affirmed a judgment in favor of the defendant Giles Everson, entered upon the report of a referee.

      A. H. Sawyer, for app’lt; Watson M. Rogers, for resp’t.

       Affirming, 48 St. Rep. 10.

   Peckham, J.

The plaintiff commenced the above action against the corporation defendant upon a policy of fire insurance issued by the company by which plaintiff as receiver was insured against loss or damage by fire on certain property situated in Syracuse, and formerly owned by the screw1 company of that city. The defendant Everson was insured in the same policy as mortgagee, as his mortgage interest might appear. He was joined as defendant in order that the whole controversy might as between all the parties be settled at once.

Actions were also commenced against several other insurance companies by the plaintiff as receiver, at the same time and to recover upon policies covering substantially the same premises. The judgments in favor of the plaintiff in these other actions are also now before us for review. “The questions .arising affect generally all the insurance companies, although one or two of such questions are not raised in all the policies.

The plaintiff failed to recover, and his complaint was dismissed in the courts below because of the violation of provisions in the policies in regard to procuring other insurance without the companies’ consent, and also because of the plaintiff’s permitting foreclosure proceedings to be commenced to foreclose certain mortgages upon the insured premises. The plaintiff has not appealed.

The defendant Everson and the corporations defendant served cross-answers upon each other, Everson contending that he should be allowed to recover from the companies to the extent of his policies upon his mortgage interest in the premises, while the companies set up several defenses to such claim, which will be noticed hereafter. The cases were referred for trial and the referee reported in favor of Everson as against the insurance companies, and the judgments were affirmed at the general term of the supreme court after a slight modification as to the amounts of the recoveries, and the insurance companies have appealed to this court. The only questions to be determined arise between defendant Everson and the companies. By the judgment entered upon the report of the referee it is provided in all cases that the insurance companies on making payment of the loss are entitled to be subrogated to the rights of the mortgagee, but such subrogation is not to impair the mortgagee’s right to enforce the collection of his claim in full against the principal debtor, nor by means of any collateral security he may hold. This was placed in the judgments in accordance with the reports of the referee.

First. The companies urge that defendant Everson, the mortgagee, having foreclosed the mortgages upon the premises and sold the same under his judgment of foreclosure and sale subsequent to the time of the fire, has thereby put it out of his power to subrogate them to the rights which he had under these curities held by him at the time of the fire, and he, therefore, cannot recover in this action against them. It appears that the Syracuse Screw Company was the original owner of the premises'and it had given three several mortgages thereon, one dated August 13, 1881, for $4,500; one dated November 3,1883, for $14,000; another dated June 30, 1885, for $10,000. The defendant Ever-son, on the 9th day of June, 1888,.was the owner of all of these mortgages, and on that day commenced one action against the screw company to foreclose them. On the 23d of June, 1888, the screw company was dissolved and Eddy was appointed the receiver. The company was wholly insolvent and had no property Other than the mortgaged premises. In July, 1888, Eddy, as receiver, duly appeared in the foreclosure action and served an answer setting up a defense to the $10,000 mortgage. On the 4th of December, 1888, a fire occurred by which the property covered by the policies was damaged, and appraisers were appointed on the 18th of December, and on the 21st of December, 1888,- they made their award by which they determined the damage resulting to the property from the fire to have been $10,102.90. The companies refused to pay Eddy on the grounds already stated.

Everson severed his foreclosure action after Eddy put in his answer setting up a defense as to one of the mortgages, and on the 17th of December, 1888, obtained judgment by default for the foreclosure of the $4,500 and $14,000 mortgages, and decreeing a sale of the premises in satisfaction thereof. Subsequent to the fire, and on the 9th of January, 1889, the property was sold under, the foreclosure judgment for the sum of $15,400, leaving a deficiency on those two mortgages, including interest and costs, of $4,921.86.

Each of the policies of insurance had a provision therein known as the “New York Standard Mortgage Clause,” and under it the loss, if any, was made payable to defendant Everson, as his mortgage interest might appear. The clause contained a provision that the insurance of Everson’s interest should not be invalidated by any act or neglect of the mortgagagor or owner of the property, nor by any foreclosure or other proceedings or notice of sale relating to the property. The clause also contained the further provision that “whenever this company shall pay the mortgagee (or trustee) any sum for loss or damage under this policy and shall claim that, as to the mortgagor or owner, no liability therefor existed, this company shall, to the extent of such payment, be thereupon legally subrogated to all the rights of the party to whom such payment shall be made, under all securities held as colleteral to the mortgage debt, or may, at its option, pay to the mortgagee (or trustee) the whole principal due or to grow due on the mortgage, with interest, and shall thereupon receive a full assignment and transfer of the mortgage and of all such other securities ; but no subrogation shall impair the right of the mortgagee (or trustee) to recover the full amount of his claim.”

The companies did claim that, as to the owner of the premises, no liability existed. They never in any manner consented to the institution'of foreclosure proceedings.

At the time when they were commenced, June, 1888, no fire had occurred, and the defendant Everson was acting strictly within his legal rights when he commenced them. It must be assumed that the commencement of the foreclosure proceedings terminated any interest which Eddy might have had in the policies up to that time. There was, however, a separate and wholly distinct insurance of the interest of Everson in the property, and, by the terms of that contract of insurance, it was not to be affected by any act or neglect of the mortgagor or owner of the property, or by any foreclosure or other proceedings, or notice of sale relating to the property. The act which forfeited the interest of the owner in a policy was not to affect the interest of the mortgagee. ' Consequently, the mortgagee violated no contract on his part when he commenced the proceedings to foreclose his mortgage, and thus endeavored to collect his debts. Before he had proceeded so far as a judgment of foreclosue a fire occurred. What was he to do ? Was he bound to stay further proceedings and accept payment of the amount of his insurance and then assign to the extent of such payment his rights in the mortgages to the companies? We think not. Such is not the meaning of the clause when read as a whole. Foreclosure proceedings were not to affect his rights. This was expressly provided for and agreed to. Although there was an agreement to subrogate, yet that agreement was also upon- the condition that subrogation should not impair the mortgagee’s right to recover the full amount of his claims. The two rights must be considered together, and though subrogation under certain circumstances may, under the agreement, be insisted upon, yet, unless payment of his mortgage debt is made, the mortgagee must have the right to proceed with the foreclosure and to a sale of the premises, for otherwise it could not be seen whether a subrogation prior to a sale would not impair his right to recover the full amount of the claim of the mortgagee.

If the insurers desired an immediate subrogation, then they had a right, by the terms of their contract, to pay the whole debt and take an assignment of the bond and mortgage and whatever other securities the mortgagee might have for the payment of his whole claim. Otherwise the insurers must wait if the mortgagee desire to continue the foreclosure. The right of the mortgagee to recover his full claim might be pretty sadly impaired if he had to subrogate at once, or, in other words, permit the insurers to collect out of his securities the very amount which they had paid him upon tbe policies issued to increase his security. It is not the mere right to prosecute which is not to be impaired, but the right to payment in full of his claim. This is not to be impaired by any claim of subrogation. Here is a very apt case in which to illustrate the point. The mortgagee sustains a loss upon the sale under the foreclosure decree of the two mortgages of nearly $5,000. There is the third mortgage upon which judgment of foreclosure was obtained, and the amount found due thereon was $12,474, and interest runs on that sum from Ja’buary 15, 1890. The argument of the companies, if allowed, would lead to their sharing in the amount realized upon the foreclosure sale to the extent of the payments made by them on their policies, some ten thousand dollars, and the balance, some five thousand dollars, only would be realized by the mortgagee. In other words, he would receive no benefit whatever from the insurance, for the companies would take out of the proceeds of the foreclosure sale precisely the amount they paid him upon the policies of insurance.

WÉat meaning is given to the words in the mortgagee clause, that no subrogation shall impair the right of the mortgagee to recover the full amount of his claim, if the subrogation can be insisted upon under such circumstances ? Insurance is taken for the purpose of increasing the security of the mortgagee. By the construction contended for by the companies there is really no such insurance. If the sale under foreclosure amounts only to the total of the insurance, but does not reach the full sum of. the mortgagee’s claim, the latter recovers nothing but the insurance money, while the companies are reimbursed their outlay from the proceeds of the foreclosure sale. They lose nothing, and only the mortgagee loses. This consequence is avoided, and, I think, was intended to be avoided, by the provision in question, which makes the right of subrogation dependent upon the fact that its exercise shall not in any manner impair the right of the mortgagee to full payment of his claim. Where the contract provided that it shall not impair the mortgagee’s right to recover the full amount of his debt, the right to recover meant the right to demand and to receive full payment of his debt or claim. If that right is not impaired by the insurers’ right of subrogation, as claimed by them, it is impossible to say under what circumstances it would be impaired. We cannot recognize the correctness of this claim on the part of the insurers.

Second. Another question arises in regard to the so-called contribution. It seems that the plaintiff Eddy, without the consent of these defendant insurers, procured other insurance upon the property. This additional insurance thus procured rendered the policies of these insurers invalid as to the plaintiff. They contend, nevertheless, that in arriving at the proportion of the loss payable by each of them to the mortgagee, this other insurance should be reckoned as part of the insurance on the property. It was procured by plaintiff without the consent or knowledge of the mortgagee, and was not made payable in any event to him, and did not insure his interest in the property. If the claim of these defendant insurers be allowed the effect is to reduce the amount which each is liable to pay to the mortgagee, and thereby to lessen his total recovery, as he has no claim under the other and additional policies. The clause under which this claim is made provides in the body of the policy that the insurer “shall not be liable for a greater proportion of any loss on thedescribed premises than the amount thereby insured shall bear to the whole insurance, whether valid or not.”

I think the courts below were right in rejecting this claim of the insurers. Taken in connection with the language in the mortgagee clause the contract is quite plain. The provision in the latter clause, that the insurance of the mortgagee should not be invalidated by any act or neglect of the owner of the property, applies, among others, to a case of other insurance of his own interest by the owner without the knowledge or consent of the mortgagee.

The effect of the mortgágee clause hereinbefore set forth is tp make an entirely separate insurance of the mortgagee’s interestt and he takes the same benefit from his insurance as if he had re: ceived a separate policy from the company, free from the conditions imposed upon the owners.

Where the company agreed that the mortgagee’s insurance should not be “invalidated” by any act or neglect of the owner of the property, it was not intended to limit the application of that word to a case where the whole policy would otherwise be rendered invalid. The plain and obvious meaning of the language is that the insurance of the mortgagee should not be affected or in any wise impaired or lessened by any act or neglect of the owner. Although contained in the same policy issued to the owner, yet the insurer and the mortgagee were nevertheless entering into a perfectly separate contract of insurance, by which the mortgagee’s interest alone was to be insured and it would be most natural to provide that no act or neglect of the owner should invalidate, that is, impair any portion of the insurance thus separately secured. Can it for a moment be supposed that a mortgagee would otherwise ever consent to such a contract? His desire is to obtain security and to that end he insures his interest in the property. Would he knowingly consent that this security should be liable to be wholly frittered away and made valueless by the action of the owner, unknown to him, in procuring insurance upon the owner’s interest in the property ? Would any sane man agree to hazard his security in such a way?- Would he agree that the value of his security should depend upon the acts of a third party over whom he had no control and of whose acts he might be wholly ignorant? The statement of the proposition is its best refutation. These views are supported by both of the opinions in the case of Hastings v. Westchester Fire Insurance Co., 73 N. Y. 141.

There is some difference in the verbiage of the clause in the reported case and that to be found in the clause under examination here. In the Hastings case the clause as to contribution contained the proviso that in case of other insurance, the assured should recover only a proportionate sum from defendant company. The owner of the property had mortgaged it to plaintiff’s testator and had subsequently obtained an insurance upon his own interest as owner, and subsequent to that time the indorsement in favor of the mortgagee was made, and it was in the body of the policy issued to the owner that the language was used as to the assured. In the clause here under consideration it is seen that the word assured is not there, and the condition is .that in case of other insurance'the company shall not be liable under the policy, etc. The court in the Hastings case thought the word assured referred to the person who was first insured when the policy was issued, and was not transferred to the mortgagee when he subsequently by a minute placed in the policy was made an assured also. This is very true, but a perusal of the whole case shows that the controlling idea was a separate insurance of the mortgagee, freed from the conditions attached to the insurance of the owner, and not to be impaired or weakened by any act or neglect of such owner.

Force must be given.to this positive, language of the contract, and no act or neglect of the owner can be permitted to invalidate, i. e., impair or, weaken (73 N. Y. at 149) the validity of the agreement for the full amount named in the policj7. By taking the insurance in the manner the mortgagee herein did, instead of taking out.a separate policy, all the provisions in the policy, which from their nature would properly apply to the case of an insurance of the mortgagee’s interest, would be regarded as forming part of the contract with him, while those provisions which antagonize or impair the force of the particular and specific provisions contained in the clause providing for the insurance of the mortgagee, must be regarded as ineffective and inapplicable to the case of the mortgagee. So when the agreement in regard to contribution, contained in the body of the policy issued to the owner, is compared with the specific statement in the mortgage clause, that his insurance shall not be invalidated by any act or neglect of the owner, we can only give the latter due force by holding that the insurance of the mortgagee is not, in effect or substance, to be even partially invalidated, i. e., reduced in amount, and to that extent impaired and weakened by any act of the owner unknown to the mortgagee. In such case the general agreement in the body of the policy as to contribution does not, and was not, intended to apply. If it did, then the special aud particular contract in the mortgagee clause would be of no effect. If the two are inconsistent, the special contract particularly, relating to the mortgagee’s insurance, must take precedence over the general language used in the policy issued to the owner. For these reasons the claims of the insurers for a deduction in the amount of their liability cannot be allowed.

Third. As to three of the policies, the mortgagee clause itself contained the provision that the company was only to be liable in the proportion which' the sum it insured should bear to the whole amount of insurance on the property, issued to or held by any party or parties having an.insurable interest therein, whether as owner, mortgagee or otherwise. What meaning is to be attached to this provision after taking into consideration the language heretofore quoted that the insurance of the mortgagee will not be invalidated by any act or neglect of the owner of the property ?

The act of obtaining this additional insurance was the act of the owner, and it was unknown to the mortgagee, and of course, not consented to by him. The additional insurance could by no possibility benefit him, as it was not upon any interest of his in the property. He could not, therefore, resort to any of these additional policies for his indemnity. It is not a case of contribution in any sense, but simply one, on the insurers’ theory, of diminution of their liability, caused by the act of the owner and unknown, and with no possible corresponding benefit to the mortgagee. As a general principle it is settled that, before this apportionment of the loss between different companies can be demanded, the different policies must have been upon the same interest in the same property or some part thereof. Lowell Manfg. Co. v. Safeguard Fire Ins. Co., 88 N. Y. 592. Has this principle been changed by this contract? Can it be that the mortgagee would knowingly consent to a diminution of this .liability to an "extent which might leave it of no value, consequent upon a secret act of a third party, and where by no possibility could he protect his security from such danger ? All the reasoning given under the head lasriabove discussed applies with equal force here, at least so far as the probabilities of entering into such a contract by the mortgagee are concerned. • It is clear that the only object of the mortgagee is to obtain a security upon which he can rely, and this object is, of course, also plain and clear to the insurer. Both Íarries proceed to enter into a contract with that one end in view. n order to make it plain beyond question the statement is made that no act or neglect of the owner with regard to the property shall invalidate the insurance of the mortgagee. When, in the face of such an agreement, entered into for the purpose stated, there is also placed in the instrument a provision as to the proportionate payment of a loss, we think the true, meaning to be extracted from the whole instrument is that the insurance which shall diminish or impair the right of the mortgaged to recover for his loss is one which shall have been issued upon his interest in the property, or when he shall have consented to the other insurance upon the owner’s interest. This may not, perhaps, give full effect to the strict language of the apportionment clause, but if full effect be given to that clause, and it should be held to call for the consequent reduction of the liability of the insurers in such a case as this, then full effect is denied to the important and material, if not the controlling, clause in the contract, which provides that the insurance of the mortgagee shall not be injuriously “ impaired or affected ” by the act or neglect of the owner. As used in these mortgagee clauses, this is the meaning of the word “invalidate.” Hastings v. Ins. Co., supra, at page 149.

We must strive to give effect to all the provisions of the contract and to enforce the actual meaning of the parties to it as evidenced by all the language used within the four corners of the instrument. We are also at liberty to consider the purpose for which the contract was executed, where that purpose plainly and necessarily appears from a perusal of the whole paper. That construction will be adopted, in the case of somewhat inconsistent provisiones, which, while giving some effect to all of them, will at the same time plainly tend to carry out the clear purpose .of the agreement; that purpose which it is obvious all the parties thereto were cognizant of and intended by the agreement to further and to consummate. There is no equity in this claim on the part of the insurers, and we think, from a perusal of the whole clause in the policy, that it was not intended to and that it does not cover such claim.

The judgments of the supreme court must be affirmed, with costs in each case.

All concur, except Andrews, Ch. J., not sitting.

Judgment affirmed.


author: O’Brien, J.

text:
    Ernest St. George Lough et al., App’lts. v. A. Emilius Outerbridge et al., Resp’ts.

      (Court of Appeals,

      Filed October 9, 1894.)

    1. Pleadings—Defense—Affirmative.
    A defendant cannot, when sued in equity, avail himself of the defense that an adequate remedy at law exists, unless he pleads such defense in his answer. ■ '
    2. Same—Appeal.
    But it is too late to raise, for the first time, such point after judgment or upon appeal.
    2. Carrier—Refusal to perform duty.
    Common carrier is subject to an action at law for damages in case of refusal to perform its duties to the public for a reasonable compensation.
    4. Same.
    But it may make a discount from its reasonable general rates in favor of a particular customer, or class of customers, in isolated cases for special reasons and upon special conditions.
    5. Same.
    It may, by special agreement, give reduced rates to customers who stipulate to give it all their business, provided that the charge exacted from others is not excessive or unreasonable.
    Appeal from judgment of -the general term of the supreme court in the first judicial department, entered upon an order, which affirmed a judgment in favor of defendants entered upon a decision of the court on trial at special term.

      Treadwell Cleveland, for app’lts; Wilhelmus Mynderse,-for resp’ts.

      Affirming 53 St. Rep. 668.

   O’Brien, J.

The question presented by this appeal is one of very great importance. It touches commerce and, more especially, the duties and obligations of common carriers to the public at many points. There was no dispute at the trial and there is none now with respect to the facts upon which it arises. In order to. present the question clearly a brief statement of these facts becomes necessary. The plaintiffs are the surviving members of a firm for many years prior to the transaction upon which the action was based, had been engaged in business as commission merchants in the city of New York, transacting their business mainly with the Windward and Leeward Islands.- The defendant, the Quebec Steamship Company, is Canadian corporation, organized and existing under the laws of Canada, and the other defendants are the agents of the corporation in New York, doing business as partners. The business of the corporation is that of a common carrier, transporting passengers and freight for hire upon the sea and adjacent waters. For nearly twenty years prior to the transaction in question a part of its business was the transportation of cargoes between New York and the Barbadoes and the Windward Islands, the other defendants acting as agents in respect to this business. During some years prior to the commencement of this action the company had in its service a fleet of five or six of the highest class iron steamers, sailing at intervals of about ten days from New York to the islands, each steamer requiring about six weeks to make the trip. The steamers were kept constantly engaged in this service, and sailed regularly upon schedule "days without reference to the amount of cargo then received. The regular and standard rate charged for freight up to December, 1891, from New York to Barbadoes, one of the Windward Islands, was fifty cents per dry barrel of five cubic feet, which was taken as the unit of measurement, and the tariff of charges was adjusted accordingly for goods shipped in other forms and packages. In December, 1891, the regular rate was reduced from' fifty to forty cents per dry barrel. About this time the British steamer El Callao, which had for some years before sailed between New York and Ciudad Bolivar in South America, transporting passengers and freight between these points, began to take cargo at New York for Barbadoes, and sometimes to other points in the Windward Islands which she passed on her regular trips to Ciudad Bolivar, sailing from New York at intervals of five or six weeks. Her trade with South America was the principal feature of her business, but such space as was not required for the cargo destined for the end of the route was filled with cargo for the islands which lay in her regular course. k

The defendants evidently regarded this vessel' as a somewhat dangerous competitor for a part of the business, the benefits of which they had up to this timé enjoyed, and for the purpose of retaining it they adopted the plan of offering special reduced rates of twenty-five cents per dry barrel to all merchants and business men in New York who would agree to ship by their line exclusively during the week that the El Callao was engaged in obtaining freight and taking on cargo. The plaintiffs’ firm had business arrangements with and were shipping by that vessel, and in February, 1893, they demanded of the defendants that they receive three thousand barrels of freight from New York to Barbadoes and transport the same at the special rate of twenty-five cents per barrel upon one of its steamers. The defendants then informed the plaintiffs that the rate of twenty-five cents was allowed by them only to such shippers as stipulated to give all their business exclusively to the defendants’ line, in preference to the El Callao, and that to all other shippers the standard rate of forty cents per dry barrel was maintained. But they further informed the plaintiffs that if they would agree to give their shipments for that week exclusively to the defendants’ line the goods would be received at the twenty-five cents rate. The plaintiffs, however, were shipping by the other vessel and declined this offer. Again, in the month of May, 1892, the El Callao was in the port of New York taking on cargo, as was also the defendants’ steamer Trinidad. The plaintiffs then demanded of the defendants that they receive and carry from New York to Barbadoes about seventeen hundred and sixty dry barrels of'freight at the rate of twenty-five cents. The defendants notified the plaintiffs that a general offer had that day been made by them to the trade to take cargo for Barbadoes on the Trinidad, to sail on June 4, at twenty-five cents per dry barrel, under an agreement that shippers accepting that’ rate should bind themselves not to ship to that point by steamers of any other line between that date and the sailing of the Trinidad. ■ The defendants offered these terms to the plaintiffs, but as they were shipping by the rival vessel the offer was declined. Except during the week when the JEl Oallao was engaged in taking on cargo the defendants have maintained the regular rate of forty cents to all shippers between these points, and when it reduced the rate as above described exactly the same rates, terms and conditions were offered to all shippers, including the plaintiffs, and they carried freight for other parties at the reduced rates, only upon their entering into a stipulation not to ship by the rival vessel. After the plaintiffs’ demand, last mentioned, had been refused, they obtained an order from one of the judges of the court in this action requiring the defendants to carry the seventeen hundred and sixty barrels, and the defendants did receive and transport them, in obedience to the order, at the rate of twenty-five cents, but this order was reversed at general term. The plaintiffs demand equitable relief in the action to the effect, substantially, that the defendants be required and compelled by the judgment-of the court to receive and transport for the plaintiffs their freight at the special reduced rates, when allowed to all other shippers, without imposing the condition that the plaintiffs stipulate to ship during the times specified by the defendants’ line exclusively.

Whether the regular rate of forty cents, for which it is conceded that the defendants offered to carry for the plaintiffs at all times without conditions, was or was not reasonable, was a question of fact to be determined upon the evidence at the trial, and the learned trial judge has found as matter of fact that it was reasonable, and that the reduced rate of twenty-five cents granted to shippers on special occasions, and upon the conditions and requirements mentioned, was not profitable. This finding, which stands unquestioned upon the record, seems to me to.be an element of great importance in the case which must be recognized at every stage of the investigation. ,

A common carrier is subject to an action at law for damages in ease of refusal to perform its duties to the public for a reasonable compensation, or to recover back the money paid when the charge is excessive.

This right to maintain an action at law upon the facts alleged, it is urged by the learned counsel for the defendants, precludes the plaintiffs from maintaining a suit for equitable relief such as is demanded in the complaint. There is authority in other jurisdictions to sustain the practice adopted by the plaintiffs, Watson v. Sunderland, 5 Wall. 74; Manicho v. Ward, 27 Fed. R. 529; 54 T. R. 741; 3 T. R. 775; 49 Ill. 33; 44 O. St. 571, though I am not aware of any in this state that would bring a case based upon such facts within the usual or ordinary jurisdiction of equity. So fas as this case is concerned it is sufficient to observe that it is-now settled by a general concurrence of authority, that a defendant cannot, when sued in equity, avail himself of the defense that an adequate remedy at law exists unless he pleads that defense in his answer. Cogswell v. N. Y., N. H. & H. R. R. Co., 105 N.Y. 319; 7 St. Rep. 203; Town of Mentz v. Cook, 108 N.Y. 504; 13 St. Rep. 845; Ostrander v. Weber, 114 N. Y. 95; 22 St. Rep. 979; Dudley v. Congregation St. Francis, 138 N. Y. 460; 53 St. Rep. 19; Truscott v. King, 6 N. Y. 147.

When the facts alleged are sufficient to entitle the. plaintiff to relief in some form of action, and no objection has been made by the defendant to the form of the action in his answer or at the trial, it is too late to raise the point after judgment or upon appeal. So that, whatever objections might have been urged originally against the action in its present form, the defendants must now be deemed to have waived them. This court will not stop to examine a minor question that does not touch the merits but relates wholly to the form in which the plaintiffs have presented the facts and demanded relief, or to the practice and procedure. The time and place to raise and discuss these questions was at or before the trial, and as they were not then raised the case must be examined and disposed of upon the merits.

The defendants were engaged in a business in which the public were interested, and the duties and obligations growing out of it may be enforced through the courts and the legislative power. Munn v. Illinois, 94 U. S. 113; People v. Budd, 117 N. Y. 1; 26 St. Rep. 533. In England these duties are, to a great extent, regulated by the railway and canal traffic act (17 & 18 Vict. ch. 31), and by statute in some of the states, and in this country, so far as they enter into the business of interstate commerce, by act of Congress. The solution of the question now presented depends upon the general principles of the common law, as there is no statute in this state that affects the question, and the legislation referred to is important only for the purpose of indicating the extent to which business of this character has been subjected to public regulation for the general good. There can be no doubt that at common law a common carrier undertook generally, and not as a casual occupation, tq convey and deliver goods for a reasonable compensation as a business, with or without a special agreement, and for all people indifferently, and in the absence of a special agreement, he was bound to treat all alike in the sense that he was not permitted to charge any one an excessive price for the services. He has no right in any case while engaged in this public employment to exact from any one anything beyond what under the circumstances is reasonable and just. 2 Kent’s Com. [13th ed.] 598; Story on Bailments, §§ 495, 508; 2 Parsons on Cont. 175; Killmer v. N. Y. C. & H. R. R. R. Co., 100 N Y. 395; Root v. L. I. R. R. Co., 114 id. 300; 23 St. Rep. 226. It may also be conceded that the carrier cannot unreasonably or unjustly discriminate in favor of one or against another where the circumstances and conditions are the same. The question in this case is whether the defendants, upon the undisputed facts contained in the record, have discharged these obligations to the plaintiffs. There was no refusal to carry for a reasonable compensation. On the contrary, the defendants offered to transport the goods for the forty cents rate, and we are concluded by the finding as to the reasonable nature of that charge. The defendants even offered to carry them at the unprofitable rate of twenty-five cents, providing the plaintiffs would comply with the same conditions apon which the goods of any other person were carried at that rate. What is reasonable and just in a. common carrier in a given case is a complex question into which enters many elements for consideration. The questions of time, place, distance, facilities, quantity and character of the goods, and many other matters must be considered. The carrier can afford to carry 10,000 tons of coal or other property to a given place for less compensation per ton than he could carry fifty, and where the business is of great magnitude a rebate from the standard rate might be just and reasonable while it could not fairly be granted to another who desired to have a trifling amount of goods carried to the same point. So long as the regular standard rates maintained by the carrier and offered to all are reasonable one shipper cannot complain because his neighbor, by reason of special circumstances and conditions, can make it an object for the carrier to give him reduced rates. In this case the finding implies that the defendants at certain times carried goods at a loss upon the condition that the shippers give them all of their business. Whatever effect may be given to the legislation referred to, in its application to railroads and other corporations deriving their powers and franchises from the state, there can be no doubt that the carrier could at common law make, a discount from its reasonable general rates in favor of a particular customer or class of customers in isolated cases for special reasons and upon special conditions without violating any of the duties or obligations to the public inherent in the employment. If the general rates are reasonable a deviation from the standard by the carrier in favor of particular customers, for special reasons, not applicable to the whole public, does not furnish to parties not similarly situated any just ground for complaint. When the conditions and circumstances are identical the charges to all shippers for the same service must be equal. These principles are well settled, and whatever may be found to the contrary in the cases cited by the learned counsel for the plaintiff originated in the application of statutory regulations in other states and countries. Fitchburg R. R. Co. v. Gage, 12 Gray, 393; Sargent v. B. & L. R. Corp. 115 Mass. 422; Mogul S. S. Co. v. McGregor, Gow & Co., L. R. (21 Q. B. Div.) 544; aff’d, 23 Q. B. Div. 598, and by H. L. (17 Appeal Cases) 25; Evershed v. L. & N. W. Ry. Co., L. R. (3 Q. B. Div.) 135; Baxendale v. E. Co. R. Co., 4 C. B. (N S.) 78; Bramley v. S. R. Co., 12 id. 74.

Special favors in the form of reduced rates to particular customers may form an element in the inquiry whether, as matter of fact, the standard rates are reasonable or otherwise. If they are extended to such persons at the expense of the general public the fact must be taken into account in ascertaining whether a given tariff of general prices, is or is not reasonable. But, as in this case, the reasonable nature of the price, for which the defendants offered to carry the plaintiffs’ goods, has been settled by the findings of the trial court, it will not be profitable to consider further the propriety or effect of such discrimination. The rule of the common law was thus broadly stated by the supreme court of Massachusetts in the case of the Fitchburg R. Co. v. Gage, supra. Upon that point the court said : “ The recent English cases, cited by the counsel, for the defendants, are chiefly commentaries upon the special legislation of Parliament regulating the transportation of freight on railroads constructed under the authority of the government there; and consequently throw very little light upon questions concerning the general rights and duties of common carriers, and are for that reason not to be regarded as authoritative expositions of the common law upon these subjects. The principle derived from that source is very simple. It requires equal justice to all. But the equality which is to be observed consists in the restricted right to charge a reasonable compensation and no more. If the carrier confines himself to this no wrong can be done. If, for special reasons in isolated cases, the carrier sees fit to stipulate for the carriage of goods of any class for individuals, for a certain time, or in certain quantities, for a less compensation than what is the usual, necessary and reasonable rate, he may undoubtedly do so without entitling all parties to the same advantage.”

In Evershed v. L. & N. W. Ry. Co., supra, Lord Bramwell remarked“ I am not going' to • lay down a precise rule, but, speaking generally, and subject to qualification, it is open to a railway company to make a bargain with a person, provided they are willing to make the same bargain with any other, though that other may not be in a situation to make it. An obvious illustration may be found in season tickets." The authorities cited seem to me to remove all doubt as to the right of a carrier, by special agreement, to give reduced rates to customers who stipulate to give them all ‘their business, and to refuse these rates to others who are not able or willing to so stipulate, providing, always, that the charge exacted from such parties for the service is not excessive or unreasonable. The principle of equality to all, so earnestly contended for by the learned counsel for the plaintiffs, was not, therefore, violated by the defendants, since they were willing and offered to carry the plaintiffs’ goods at the reduced rates, upon the same terms and conditions that these rates were granted to others, and if the plaintiffs were unable to get the benefit of such rate it was because, for some reason, they were unable or unwilling to comply with the conditions upon which it was given to their neighbors, and not because the carrier disregarded his duties or obligations to the public. The case of Manicho v. Ward, 27 Fed Rep. 529, does not apply, because the facts were radically different. That action was to restrain the carrier from exacting unreasonable charges habitually for services, the charges having -been advanced as to the parties complaining, for the reason that they had at times employed another line. It decides nothing contrary to the general views here stated. On the contrary, the court expressly recognized the general rule of the common law with respect to the obligations and duties of the carrier substantially as it is herein expressed, as will be seen from the following paragraph in the opinion of Judge Wallace :

“Unquestionably a common carrier is always entitled to a reasonable compensation for his services. Hence, it follows that he is not required to treat all those who patronize him with absolute equality. It is his privilege to charge less than a fair compensation to one person, or to a class of persons, and others cannot justly complain so long as he carries on reasonable terms for them. Respecting preference in rates of compensation, his obligation is to charge no more than a fair return in each particular transaction, and, except, as thus restricted, he is free to discriminate at pleasure. This is the equal justice to all which the law exacts from the common carrier in his relations to the public.”

But it is urged that the plaintiffs were in fact the only shippers of goods from New York to Barbadoes by the El Callao, and, therefore, the condition -imposed that the reduced rate should be granted only to such merchants as stipulated to give the defendants their entire business, while in terms imposed upon the public generally, was in fact aimed at the plaintiffs alone. The trial court refused to find this fact, but, assuming that it appeared from the undisputed evidence, I am unable to see how it could affect the result. The significance which the learned counsel for the plaintiffs seems to give to it in his argument is that it conclusively shows the purpose of the defendants to compel the plaintiffs to withdraw their patronage from the other line, to suppress competition in the business, and to retain a monopoly for their own benefit. Conceding that such was the purpose it is not apparent how any obligation that the defendants owed to the public was disregarded. We have seen that the defendants might lawfully give reduced rates in special cases and refuse them in others where the conditions are different or to the general public where the regular rates are reasonable. The purpose of an act which in itself is perfectly lawful or, under all the circumstances, reasonable, is seldom, if ever, material. Phelps v. Nowlen, 72 N. Y. 39; Kiff v. Youmans, 86 id. 324. The mere fact that the transportation business between the two points in question was in the hands of the defendants did not necessarily create a monopoly, if the general rates maintained were reasonable and just. It is not pretended that the owners of the El Callao proposed to give regular service to the general public for any less. When the service is performed for a reasonable and just hire the public have no interest in the question whether one or many are engaged in it. The monopoly which the law views with disfavor is the manipulation of a business in which the public are interested in such a way as to enable one or a few to control and regulate it in their own interest and to the detriment of thepublic by exacting unreasonable charges. But when an individual or a corporation has established a business of a special and limited character, such as the defendants in this case had, they have a right to retain it by the use of all lawful means. That was what the defendants attempted to do against a competitor that engaged in it, not regularly or permanently, but incidentally and occasionally. The means adopted for this purpose was to offer the service to the public at a loss to themselves whenever the competition was to be met and when it disappeared to resume the standard rates, which, upon the record, did not at any time exceed a reasonable and fair charge. I cannot perceive anything unlawful or against the public good in seeking by such means to retain a business which it does not appear was of sufficient magnitude to furnish employment for both lines. On this branch o£ the argument the remarks of Lord Coleridge in the case of fhe Mogul S. S. Co. v. McGregor, supra, are applicable: “The defendants are traders with enormous sums of money embarked in their adventure, and naturally and allowably desire to reap a profit from their trade. They have a right to push their lawful trades by all lawful means. They have a right to endeavor, by lawful means, to keep their trade in their own hands, and by the same means to exclude others from its benefits, if they can. Amongst lawful means is certainly included the inducing by profitable offers customers to deal with them rather than with their rivals. It follows that they may, if they see fit, endeavor to induce customers to deal with them exclusively by giving notice that only to exclusive customers will they give the advantage of their profitable offers. I do not think it matters that the withdrawal of the advantages is out of all proportion to the injury inflicted by those who withdraw them on the customers who decline to deal exclusively with them dealing with other traders.”

The courts, I admit, should do nothing to lessen or weaken the restraints which the law imposes upon the carrier, or in any degree to impair his obligation to serve all persons indifferently in his calling, in the absence of a reasonable excuse, and for a reasonable compensation only. But to hold, as we are asked to in this case, that the plaintiffs were entitled to have their goods carried by the defendants at an unprofitable rate without compliance with the conditions upon which it was granted to all others, and which constituted the'motive and inducement for the offer, would be extending these obligations beyond the scope of any established precedent based upon the doctrine of the common law, and would, I think, be contrary to reason and justice.

The judgment of the court below dismissing the complaint was right, and should be affirmed, with costs.

Finch, Gray and Bartlett, JJ., concur; Peckham, J., dissents.

Judgment affirmed.


author: Bartlett, J.

text:
    The People ex rel. P. J. Marsh, App’lt, v. Frank Campbell, as Comptroller, etc., Resp’t.

      (Court of Appeals,

      Filed October 16, 1894.)

    1. Taxes—Sale—Redemption.
    On application to comptroller to redeem tract of land, sold for unpaid taxes, occupancy of a log house on an island in a lake, included in the tract, as a hunting camp at irregular intervals, without any use of the mainland, except to roam over it in pursuit of game, does not constitute actual occupancy within the meaning of the statute.
    2. Same.
    The provisions of section 70, chap. 427 of 1855 does not permit a stranger to the title to intervene.
    Appeal from order of the general term of the supreme court in the third judicial department, which affirmed a determination of the comptroller of the state of New York denying an application for the redemption of certain lands from a sale for unpaid taxes.
    " A. JD. Wait, for app’lt; T. E. Hancock, Attorney-General, for resp’t.
   Bartlett, J.

This is an appeal from an order of the general term, third department, upon certiorari to review a determination of the comptroller of the state of New York denying an application for the redemption of certain land sold for unpaid taxes, affirming the decision of the comptroller The tax sale of some five thousand four hundred and fifty-five acres in Hamilton county took place in 1881, and premises were bid in by the people of the, state. A subsequent tax sale of a larger tract of land in 1885 included the same premises as sold in 1881, and the people of the state were the purchasers at the sale. The comptroller conveyed to the people, under separate deeds, the premises sold at eacli of these sales. The relator seeks to redeem the five thousand four hundred and fifty-five acres, upon the ground that one Alvah Dunning had been the actual occupant of a part of said premises from 1875 to a period subsequent to the delivery of the comptroller’s deeds, and that no notice had been served upon said occupant affording the opportunity to redeem as required by law. Ch. 427, Laws 1855, §§ 68, 69, 70; 2 R. S. [Banks’ 8th ed.] 1141.

The decision of the general term,- that the occupancy by Dnnning of a loghouse located on a island in the Eighth lake of the Fulton chain as a hunting camp, at irregular intervals and without any use of the mainland, except to roam over it in pursuit of game, did not constitute actual occupancy under the statute, meets with our approval, and we should adopt the opinion below did we not deem it our duty to call attention to an additional reason for affirming the order appealed from.

The application to redeem the premises in question was made to the comptroller by P. J. Marsh, the relator, who signs the same “P. J. Marsh, Agt.” The application does not disclose that Marsh had any interest in the premises sought to be redeemed, nor does the record show the meaning of the word “Agt.” after the signature of the relator to the application to redeem. The relator’s right to intervene is rested upon § 70 of chap. 427, Laws 1855, already referred to. This section reads : ‘‘The occupant or any other person may, at any timé within the six months mentioned in such notice, redeem the said land,” etc. It is insisted that the proper construction of this section entitles any person to redeem, although an entire stranger having no interest in the premises.

This section "admits of no such construction, and is general phraseology was designed to include any other person than the occupant having, or claiming in good faith to have, such substantial interest in the premises as would entitle him to redeem. The pernicious practice that obtains of permitting a stranger to the title to intervene and set the machinery of the comptroller’s office in motion in order that he may redeem lands sold for taxes has no foundation in law.

We affirm this order on the grounds that no part of the premises sought to de redeemed had an actual occupant in contemplation of law, and that the relator has no legal stauding in this proceeding and is not entitled to redeem.

The order should be affirmed, with costs.

All concur. Order affirmed.


author: Andrews, Ch. J.

text:
    John J. P. Read, App’lt, v. Charles N. Brayton, Resp’t.

      (Court of Appeals,

      Filed October 16, 1894.)

    1. Replevin—Who may.
    The owner of a chattel may, in general, replevy from any person, who has it in possession and who has no right to retain it as against him.
    2. Same—Possession oe court.
    The principle that, where the court has gained, through its receiver or other officer, possession of property, it cannot be disturbed without its permission, applies only where there.is a lawful possession under a lawful order of the court.
    3. Same.
    Where property is in the custody of the court, and an action is brought without sueh permission, the court will, if the conduct of plaintiff has not been willful, permit the action to proceed.
    4. Interpleader—Whose duty.
    Whatever may be done to procure the substitution, as defendant, of the real claimant of a title hostile to that of plaintiff, must be done by defendant.
    Appeal from order of the general term of the supreme court n the fifth judicial department, which modified and affirmed as modified an order of special term which perpetually restrained the further prosecution of this action.

      JSdmund P. Cottle, for app’lt; John Cunneen, for resp’t.

       Reversing 54 St. Rep. 869.

   Andrews, Ch. J.

The order from which this appeal is taken perpetually enjoined the plaintiff from further prosecuting the action. The action was replevin to recover the possession of two certificates of deposit issued to the plaintiff by the Marine Bank of Buffalo, payable to his order, one in 1881, and one in '1888. The defendant is the clerk of Erie county, and after the commencement of the action, and before the execution by the sheriff of the requisition requiring him to replevy the certificates, further proceedings were stayed on his application until the executors or representatives of Elizabeth and George Rockwell were brought in as parties defendant. The plaintiff appealed from the order of the special term to the general term, and. the order was affirmed by that court, with a modification, however, by'which the stay was made absolute. The general term proceeded on the ground that the certificates were held by the defendant as the officer of the court, and that the commencement of an action to replevy them, against the defendant, without the leave of the court, which had not been obtained, was a contempt of its authority. We think the orders of the special and general terms were erroneous and that a stay of the plaintiff’s proceedings, either conditional or absolute, was unauthorized.

It must be assumed on this appeal that the certificates were the property of the plaintiff. They are unindorsed, and the title of the plaintiff is asserted in the affidavit in the replevin proceedings. It is admitted that they are in the custody of the defendant and that he refused to deliver them to the plaintiff. The action of replevin was, therefore, brought against him, and it was no defense that he was in possession as agent of another, who had no right to possession as against the true owner. The owner of a chattel may in general replevy from any person who has it in possession and who has no right to retain it as against him. Hall v. White, 106 Mass. 599; Leighton v. Harwood, 111 id. 67; Rose v. Cash, 57 Ind. 278; Herzberg v. Lasher, 6 Mo. 483. The plaintiff, prior to the commencement of this action, brought an action against the Marine Bank to recover the deposits represented by the certificates. The drank, among other defenses, alleged that the certificates were in the possession of George Rockwell as part of the assets of the estate of his deceased wife, the sister of the plaintiff, and that t-he moneys deposited belonged to her and were deposited by the plaintiff as her agent. On the trial of that action the certificates were produced by George Rockwell under a subpoena duces, and were put in evidence by the plaintiff. The court directed a verdict for the plaintiff on the certificates, and at the same time, on its own motion, directed that the certificates be deposited with the clerk of the court and that the clerk should indorse thereon the fact that they were in judgment -.against the Marine Bank, and he -was further directed to seal them up and retain then until the further order of the court. The direction was obeyed, and on the expiration of the term of office of the then cleric, the certificates were by him delivered to the defendant in this, action, his successor in office, who held them under this delivery at the commencement of this action. The judgment in favor of the plaintiff in the suit against the Marine Bank was reversed in this court Read v. Marine Bank, 136 N. Y. 454; 49 St. Rep, 675, on the ground that the plaintiff was not in a posh tiou to surrender the certificates at the timé of the trial, and was not, therefore, entitled to recover. The new trial in the bank case has not yet been had, and this action was brought presumably to enable the plaintiff, if he shall establish his title to the certificates, to place himself in a position on the trial of the bank action, to meet the conditions upon which his right to recover against the bank depends.

We know of no principle which entitled the court, under the circumstances disclosed, to impound the certificates and place them beyond the reach of the writ of ' replevin, at the suit of the trne owner. The purpose of the court in directing the detention seems to have been the protection of the bank which issued them, pending any further litigation as to the validity of the judgment. The reversal of the judgment rendered any further control of the certificates by the court or its officer unnecessary for the purpose indicated. The direction by the trial judge, that the certificates should be retained by the clerk until the further order of the court, was a'Sijmmary assumption of authority, and clothed the clerk with no immunity from liability to respond in an action by the true owner to recover the certificates. The principle that where the court has, in the administration of justice, gained possession through its receiver or other officer, of the property in litigation, it is deemed to be in the custody of the law, and that this custody cannot be disturbed without permission of the court, has here no appropriate application. The principle applies only where there is a lawful possession under a lawful order of the court, and even in cases property is in the hands of the receiver lawfully appointed, courts are very cautious not to embarrass persons claiming title» hostile to the receiver from, pursuing the usual legal remedies for the enforcement of their rights. A receiver is not protected under a general order appointing him receiver of the property of a bankrupt or other person against replevin or other common-law action brought by a third person, claiming paramount title to property in his possession as receiver. Corn Exchange Bank v. Blye, 101 N. Y. 303. So, also, while the property of a judgment debtor taken on execution may be in the custody of the law, so as to prevent any interference by him with the possession of the officer, it may -be replevied by a third person cla ming superior title. Clark v. Skinner, 20 Jo. 468. Even where the property is in the custody of the law it is matter of course for the court, on application made in good faith, to permit suit to be brought by a third person claiming rights therein, which cannot be fairly adjudicated in the original action or proceeding, and in such case, if the action has been brought without such prior permission, the court will, if the conduct of the plaintiff has not been willful, permit the action to proceed. Hills v. Parker, 111 Mass. 508. The direction of the court made on the trial of the Marine Bank case, committing the certificates to the custody of the then clerk, was not made in the course of any contest between the rival claimants of the certifie cates. The question of title was not being tried as between them-It was involved in the issue made between the plaintiff and the bank. The estate of the plaintiff’s sister was not bound by any adjudication of title made in that action. Her husband brought the certificates into court under compulsion of a subpoena. , He could not lawfully be deprived of the possession of the certificates by a summary order of the judge. The order as against him was a nullity, and it was a nullity also so far as it tended to deprive the plaintiff of his right to bring an action in replevin against the clerk or any other person in possession of the certificates. When the judgment of the Marine Bank was rendered, the whole purpose of the order was spent We think the plaintiff was not bound, as a preliminary to his bringing his action against the clerk, to apply for leave to the court. Such an application could not have been justly denied, if leave was necessary, and even in that case it would be a harsh exercise of authority which visits the plaintiff with the penalty of an absolute stay of his proceedings in the action, for the technical omission to ask the leave of the court to bring it, which could not properly have been refused if application had been made.

The plaintiff was not-bound to procure the appointment of representatives of the estates of Mrs. Rockwell and her husband and to apply to have them brought in as defendants. The Code gives a remedy where a third person makes a claim to the property involved in a replevin action, Code, §§ 1709 and 1710, and whatever might be done in procuring a substitution of the real claimant of a hostile title to that of the plaintiff, as defendant in place of the original defendant, must be done by the defendant. ¡'That burden he cannot impose on the plaintiff. The clerk may be put to trouble and expense in defending the action, without fault of his own, but he stands as any other custodian of property who has assumed and strives to retain the custody as vagainst the true owner, without lawful authority.

The orders of the special and general terms should be reversed, with costs. All concur. Orders reversed.


author: Beckham, J.

text:
    United States Trust Company, as Trustee, etc., App’lt, v. Miles M. O’Brien, Resp’t.

      (Court of Appeals,

      Filed October 9, 1894.)

    1. Damages—Contract.
    In an action for breach of contract, the damages recoverable are those which the parties may fairly he supposed, when they made it, to have contemplated as naturally following its violation.
    2. Same.
    The loss sustained need not be proved, with the certainty of a mathematical demonstration, to have been the necessary result of the breach of covenant by defendant.
    3. Same—Covenants in lease.
    In inserting in a lease covenants as to posting notice and showing premises, the parties contemplate an amount of rent which may be lost by an inexcusable refusal to perform them.
    4. Same—Defense.
    In an action at law to recover damages for breach of a covenant, it is no defense that plaintiff had a remedy in equity to prevent its violation and did not avail himself of it.

      Appeal from judgment of the general term of the superior court of the city of New York, entered upon an order, which affirmed a judgment in favor of defendant entered upon a verdict directed by the court.

      Edward W Sheldon. for app’lt; Peter A. Hendrick, for resp’t.
   Beckham, J.

The plaintiff commenced this action to recover damages for the breach of certain covenants contained in a lease of premises situated in the city of New York to the defendant for a dwelling house. After the evidence was all in the court directed a verdict for the plaintiff for six cents damages only, and the judgment entered thereon having been affirmed by the general term of the New York superior court, the plaintiff has appealed here, and it now maintains that the question of the amount of damages arising from the breach of the covenant should have been submitted to the jury. The plaintiff is the substituted trustee under the will of William H. Belden, deceased. Its predecessor executed the lease to the defendant for a term of three years expiring on the first of May, 1889. The lease contained a covenant against subletting or assigning on the part of the lessee, and also a covenant on his part that at reasonable hours in the daytime he would permit the lessor or his agent to show the premises to such persons as he desired for the purpose of selling or leasing the same, and that he would permit the usual notice of “ To let ” to be posted on the premises and to remain there without molestation. In November, 1888, the defendant vacated the premises and sublet them to a third party for a portion of the term remaining. This person being in possession refused to permit the posting of any notice and refused entrance to any one for the purpose of looking at the house with a view of purcliasing or leasing the same.. The house remained unoccupied and without being leased or sold until February 1, 1890, when it was leased for $900 a year. Evidence was given that the rental value was in May, 1889, $1,000 a year. When the house was vacated it was not in a habitable condition and repairs were made to it which consumed two or three weeks. In order to secure tenants and as soon as the lease expired, bills were put up and the house was continually offered for rents, without success, until February following. The plaintiff then brought this action to recover damages for the breach of the covenants not to sublet, and to permit the placing of the notice on the house and to allow the premises to be shown for the purpose of selling or leasing the same. The plaintiff recovered a verdict on the first trial, which Was set aside upon appeal by the general term, and upon the second trial the court directed the verdict of six cents as stated. The plaintiff now urges that the direct result of the violation of these covenants was the failure to rent the bouse from May 1, 1889, until February 1, 1890, and that damages might have been awarded to it by the jury on the evidence for that time at the rate of $1,000 per year. The courts below have held as matter of law that the failure to rent could not upon the evidence be regarded as the natural or necessary, consequence of the breach of his covenants by the defendant, .and hence directed a verdict for nominal damages only. It is clear, and so it has been held in many case, that the rule of damages should not depend upon the form of the action. In all civil actions the law gives or ^endeavors to give a just indemnity for the wrong which has been done the plaintiff, and whether the act was of the 'kind designated as a tort or one consisting df a breach of a contract is on the question of damages an irrelevent inquiry. As was said by Rapallo, J., in Baker v. Drake, 53 N. Y. 211, 220, the inquiry is what is an adequate indemnity to the party injured, and the answer cannot be affected by the form of the action in which he seeks his remedy. In special cases where punitive or exemplary damages are allowed, an exception exists to the general rule of indemnity. Swain v. Schieffelin, 134 N. Y. 471, 474; 47 St. Rep. 910. It is a mistake, therefore, to say that liability for breach of covenant is less extensive than for that of tort, if cases of tort be excluded in which punitive damages are allowed.

In an action for a breach of contract, the damages recoverable are those which the parties may fairly be supposed when they made the contract to have contemplated as naturajly following its violation. Rochester L. Co. v. Stiles & Parker P. Co., 135 N. Y. 209, 217; 47 St. Rep. 842.

Speculative,- contingent and remote damages are excluded.

The courts below have agreed that this is the true rule of damages, and in applying the rule to this case have held that the proof of damage and the cause thereof were too uncertain and speculative to authorize a recovery for any other than nominal damages; that there was no solid or substantial basis for the jury to find the fact that the refusal to perform the covenant was the cause of the loss of rent.

In using the words “uncertain, speculative and contingent,” for the purpose of excluding that kind of damage, it is not meant to assert that the loss sustained must be pioved with the certainty of a mathametical demonstration to have been the necessary result of the breach of covenant by defendant. The plaintiff is not bound to show to a certainty that excludes the possibility of doubt that the loss to him resulted from the action of the defendant in violating his agreement. In many cases such proof cannot be given and yet there might be a reasonable certainty found upon inferences legitimately and properly deducible from the evidence that the plaintiff’s loss was not only in fact occasioned by the defendant’s violation of his covenant, but that such loss was the natural and proximate result of such violation. Certainty to reasonable intent is necessary, and the meaning of that language is that the loss or damage must be so far removed from speculation or doubt as to create in the minds of intelligent and reasonable men the belief that it was most likely to follow from the breach of the contract and was a probable and direct result thereof. Such a result would be regarded ns having been within the contemplation of the parties and as being the natural accompaniment and the proximate result of the violation of the contract. Regarding the purpose for which these covenants in the lease were inserted, it is obvious that two of them could only have been placed there to facilitate and aid the lessor in his efforts to obtain another tenant at the expiration of the lease with the least possible delay. Continuous occupation of premises is necessary in order that continuous rent may issue therefrom. In order to secure the renting thereof the custom has become substantially universal to place on the house itself a notice that it is “to let,” and the showing of the house itself to would-be tenants is a necessity which evidence is not requisite to prove. In order to secure these privileges a landlord inserts the covenants in the lease. Can there be any doubt that parties, when inserting in a lease such covenants, contemplate the amount of rent which may be lost through the inexcusable refusal to fulfill them as a proper measure of damages ? It would seem as if it were not only the most natural rule, but that none other could in truth have been in the minds of the parties. The proof may sometimes be rather difficult upon the question whether the damage was the just or proximate result of the breach of the covenant. In such case it does not come with very good grace from the defendant to insist upon the most specific and certain proof as to the cause and amount of the damage when he has himself been guilty of a most inexcusable violation of the covenants which were inserted for the very purpose of preventing the result which has come about. Wakeman v. Wheeler & W. Mfg. Co., 101 N. Y. 205. Reasonable certainty is sufficient. The inference that the result followed because of the prior violation of the contract is sometimes a legitimate one and founded upon the evidence in the case. Looking at the object for which such covenants are inserted and the substantially universal custom adopted for the purpose of renting premises, and it would seem plain enough that the natural and. obvious consequence of a breach might be the failure to rent. I do not say “must” be the failure to rent, because it is equally plain there would be a possibility of renting notwithstanding the Ju'each of such covenants, and if the renting were accomplished there might be no damage sustained because of the breach. In a case, however, where there is a failure to rent, is the cause of such failure necessarily and in all instances so uncertain as to prevent any recovery of damages ? I think not. To hold otherwise is to deprive the covenants of most of their value. If no damages are recoverable for their breach the plaintiff obtains very little security by reason of their insertion in the lease, and the defendant runs very little if any risk from their violation. Mere preventive remedies might be wholly inadequate. If the remedy for such a violation is confined to the preventive one by injunction much of the force and efficacy of these covenants will be taken away. For a short time prior to the first of May in any year in the cities of this state the season for renting houses exists. If during this season the lessor is engaged in litigation over the alleged breach of these covenants by the lessee it is easy to see how ineffectual the remedy by injunction might be. The season for renting is short at best the plaintiff’s allegations might be denied, and, though finally successful, the time spent even in a successful contest might use up the whole season. Yarious colorable compliances with the terms of the covenants might be practiced by the lessee, and if only prolonged a sufficient time the lease would terminate and the season end at the same period, and though it should finally be determined that the covenants had not in fact been complied with, it would be too late for redress to the plaintiff by any form of inj unction or of equitable relief, and as the rule at law would in such case be to give but nominal damages, the plaintiff would be substantially without remedy, and the defendant would escape the proper consequences of his inexcusable refusal to fulfill his obligations. If, however, it be assumed that the plaintiff had an adequate remedy in equity and by injunction, that fact is no answer to his claim for the recovery of damages in an action based upon a violation of the covenants. That a party has an adequate remedy at law has been known to be a good answer to his prayer for relief in equity, but in an action at law to recover damages for a violation of his covenant by the defendant, it is no answer to set up that at one time the plaintiff had a remedy in equity which he did not avail himself of to prevent the violation of such covenant by defendant.

The learned court below seems to have assumed there was an inadequate remedy at law because of the impossibility of proving that the plaintiff suffered damage and the amount thereof by reason of the breach of’the covenants by defendant, and hence equity provided a full and adequate remedy by injunction. We do not think there is any such impossibility of proof, or that there exists a perfectly adequate remedy in equity. To say that there may be cases where the damages recoverable for a breach of this class of covenants are not nominal only, but may be definite, certain and direct as the result of the breach, we do not mean to say that in all cases of such breach, followed by a failure to rent, the defendant would be liable for the amount of rent lost. The failure to rent might have mo connection with the violation of the covenants. It might be so plainly the effect of some other and more potent cause that it would be the duty of the court to direct a verdict for the defendant upon such an issue. In other cases the question might be one for the jury to decide, under proper instructions from-the court. The question as to what was the direct, immediate, proximate cause of damage is not always simply one of law. In the case at bar we think the plaintiff proved enough to require the submission to the jury of the question whether the failure to rent was the direct result of defendant’s violation of his covenants, and, if so, what amount of damage the plaintiff sustained by reason of such breach of defendant.

There was some dispute as to the rental value of the premises upon the trial, and as to the length of time (if at all) that the premises stood idle by reason of the acts of defendant, and these were questions which the jury should have been permitted to pass upon. They were not of so wholly uncertain, vague or speculative a character as to preclude their submission to a jury.

The plaintiff gave evidence tending to prove the violation of the covenants by the defendant (indeed such violation is substantially conceded), and that directly in consequence of such violation the plaintiff suffered some loss of rent. The evidence on' the part of the defendant was sufficent to raise a question of, fact for the jury upon the issue whether defendant caused the damage, and, if so,' in what amount The jury should have been permitted to decide the question.

For these reasons we think the judgments of the courts below should be reversed and a new trial granted, with costs to abide the event. All concur, except Andrews, Ch. J., not sitting.

Judgment reversed.


author: Cullen, J.

text:
    Daniel Bahr, Resp’t, v. The National Fire Company of Hartford, Connecticut, App’lt.

      (Supreme Court, General Term, Second Department,

      Filed July, 1894.)

    Insurance—Fire—W arranty.
    A stipulation, in a policy of fire insurance, as to tlie location of the articles insure is a warranty, a breach of which avoids the policy.
    Appeal by the defendant from a judgment of the county court of Kings county in favor of the plaintiff, upon the decision of the court affirming the judgment of a justice of the peace.

      Magner & Hughes, for app’lt; Moffett & Kramer, for resp’t.
   Cullen, J.

This is an appeal from a judgment of the county court affirming a judgment for the plaintiff by a justice of the peace of Brooklyn. The action was to recover $200, the insurance on a carriage. The defendant’s policy insured plaintiff on the carriage “ while located and contained as described herein and not elsewhere, to-wit: * * * while contained in the frame building occupied as a wheelwright shop on the south side of Grand street, about sixty feet east of Lagrange street, known as Nos. 884-6 Grand St.” The carriage was burned in a livery stable and horse shoeing shop, No. 856 Grand street, about a block and a half away from the place named in the policy. This judgment cannot stand. The location of the insured property was a warranty, a breach of which avoided the policy. Bryce v. Lorillard Ins. Co., 55 N. Y. 240.

The respondent argues this case upon the theory of a mistake in the description of the premises made in the policy. I cannot find the slightest evidence of that fact The only testimony as to the information given to the defendant when the policy was applied for is that of the defendant’s agent. He says that the location inserted in .the policy is the location stated to him. There is nothing to show that the place where the fire occurred is the place intended to be described in the policy. For aught that appears in the evidence there may be a wheelwright’s shop at the exact location and bearing the street numbers named in the policy.

The judgment of the county court should be reversed, with, costs.

Brown,- P. J., and Dykman, J., concur.

Judgment reversed, with costs.


author: Lawrence, J.

text:
    Magnus Levy, Pl’ff, v. The United States Grand Lodge, Independent Order Sons of Benjamin, Def't.

      (Supreme Court, New York Chambers,

      Filed September, 1894.)

    1. Benevolent society—Remedies.
    A provision in tlie constitution of a benevolent society that a member, in case of dispute with the society, must exhaust all remedies provided by such constitution before resorting to a court of law, is a contract and binding upon him, in the absence of fraud and conspiracy on its part.
    2. Same.
    The decisions of the society as to all questions of policy, discipline and internal government should govern in the absence of fraud or bad faith.
    Motion to continue injunction.

      Otto Irving Wise, for motion; Mitcliel Levy, opposed.
   Lawrence, J.

I am of the opinion that the temporary injunction heretofore granted herein should be dissolved for the following reasons: First. By article 4 of part 4 of the constitution of the United States Grand Lodge of the Independent Order of the Sons of Benjamin it is provided that in the event of any dispute between a member of a lodge and this order, relative to the payment of any endowment or benefit, or any other matter or thing connected with or arising out of such membership in this order, 'it is incumbent for such member to exhaust all the remedies provided by the constitution of this order before resorting to a court of law. This is the contract between the plaintiff and the defendant, and, in the absence of fraud and conspiracy on the part of the defendant, is binding upon the plaintiff and must control in the disposition of this motion. Such allegations as are contained in the plaintiff’s moving papers as tend to show that the grand lodge hás been actuated by improper motives in the action which it has taken in respect to the plaintiff are fully met and denied in the defendant’s affidavits. It is claimed on the part of the defendant that, as charges had been preferred against the plaintiff, he was ineligible to the office of financial secretary of his lodge at the time that he claims to have been elected to that position. He had been notified of those charges, and a copy of the charges had been served upon him. The affidavits of the defendant also show that such charges had been served by the grand secretary of the defendant upon Levy Lodge, No. 65, of which the plaintiff was a member, and that he was, therefore, ineligible for office in said lodge. These notices were served prior to the elec-' tion of the plaintiff, and Levy Lodge, No. 65, must have voted for him with full knowledge of the fact that, under the provisions’ of the defendant’s constitution and laws, the plaintiff w;as ineligible to the said office of financial secretary. It is also claimed by the defendant that any delay which has occurred in the trial of the plaintiff was caused by the plaintiff’s action in challenging the various members of the trial committee which was to pass upon such charges. The constitution of the defendant, part 5, article 1, provides for the election of a court of appeals. It appears that such court of appeals is in existence, and the constitution provides that any lodge or brother of a lodge who is dissatisfied with the decision of the committee on appeals of the executive committee * * * shall have the right to appeal to the court of appeals. Such appeal must, however, be submitted within twenty days after such decisions were received. See § 2, art. 1, part 5. It appears to me that the plaintiff must resort to the court of appeals if he desires to review the decision of the executive committee in his case. That he has not done, and he has not, therefore, exhausted all the remedies of the order, as provided by the constitution and general laws before referred to. Second. E understand the rule to be that in all questions of policy, discipline and internal government, the decisions of the society should govern. This is certainly so in all cases where fraud or bad faith is not made out, and, as I have already stated, the defendant’s affidavits sufficiently refute all allegatiqns imputing bad faith to the executive committee of the defendant. This rule is very clearly expressed by the court of appeals in the case of Lafond v. Deems, 81 N. Y. 514. Miller, J., in delivering the opinion of the court, says: “Courts should not as a general rule interfere with the contentions and quarrels of voluntary associations so long as the government is fairly and honestly administered, and those who have grievances should be required in the first instance to resort to the remedies for redress provided by their rules and regulations.” Third. In any event it may well be doubted whether an action for an injunction is an appropriate remedy for the alleged grievances of the plaintiff. See Hartt v. Harvey, 32 Barb. 55, and cases cited. Draw order in accordance with these views and settle on notice. Motion denied.


author: Gtldersleeve, J.

text:
    In the Matter of the Application of Michael Conway for Final Papers of Naturalization.

      (New York Superior Court, Special Term,

      Filed October, 1894.)

    Naturalization—Final papers.
    Unless the oath of allegiance is signed by the applicant himself, final papers of naturalization will not he granted.
    Motion to compel the clerk of the superior court to issue final papers of naturalization.

      Otto Irving Wise, for motion.
   Gtldersleeve, J.

The clerk declined to make out final papers of naturalization for the petitioner on the ground that the oath of allegiance, purporting to have been signed by him, bears the well-written signature of the applicant; whereas it appears that the applicant is unable to write and signs his name by a mark. In explanation of this the petitioner says that on the day when he took the oath a stranger, whom he had never seen before, and whom he has never seen since, was standing at the desk when the petitioner was given the paper to subscribe, and as the petitioner was not able to sign his name this stranger did it for him. This practice is reprehensible. While it is true that a person may authorize another to subscribe his name to a deed, check or another obligation, and in that way make the act his own, yet, in matters of naturalization, the signature of the applicant is used as the feature which identifies the applicant when he comes for his final papers. The rule is one of practice. It is a safeguard, to protect not only the applicant but the court from having a person other than the applicant claim the benefit of his signature. For this purpose the rule is a wise, if not a necessary one, and it should be strictly enforced; otherwise the door is open for fraud and imposition. While the petitioner may be, and no doubt is, a respectable man, nevertheless the rule, so long in existence, must, even in his case, be enforced. The application to compel the clerk to issue final papers of naturalization must, therefore, be denied. Motion denied.