author: Bradley, J.

text:
    Elizabeth L. Hyatt, Resp’t and App’lt, v. Joshua K. Ingalls et al., App’lts and Resp’ts.

      (Court of Appeals, Second Division,

      Filed January 14, 1891.)

    1. Patents—When state courts have jurisdiction of actions in RELATION TO.
    Plaintiff having obtained a patent for illuminating basements in 1867, and a reissue in 1878, in the latter year .entered into an agreement with defendants, licensing them to manufacture and sell in a stated territory. On the same day she entered into a second agreement referring to the other and stating among other things that defendants acknowledged the validity of the patent and consented that she might reissue it again whenever she should choose. A. controversy arising between them, in 1881 they reaffirmed the former contract, but in 1888 defendants failing to pay the royalties due plaintiff November 1, 1881, she notified them that she deemed the license forfeited and brought this action. Held, that while the allegations of the complaint contain elements of an action for infringement of the plaintiff’s patent, it is founded upon a contract between the parties and the forfeiture sought for is for a breach of such contract and within the state jurisdiction.
    3. Same—Reissue.
    The first issue of this patent embraced the claims represented by the latter substantially a:..d with sufficient distinction to preserve them within the principle that the reissue' of letters patent embracing more than did those surrendered will he deemed invalid as to the excess or new claim only embraced in the latter; and therefore the defendants were not prejudiced by said reissue.
    8. Same—License.
    As the defendants did not offer to surrender up the license and terminate their relations as licensees or give the plaintiff any notice to that effect, but continued to use and sell the patented articles in the manner authorized by the license, they are not permitted to effectually assert as a defense that they did not proceed under it in doing so.
    4. Same.
    The defendants having entered into the contract with the plaintiff and taken from her a license to use and sell the subject of the patent, cannot for the purposes of their defense to an action to recover the royalties question the validity of her patent.
    5. Same—Construction of contract.
    Under the terms of the contract the defendants were to pay royalties for the use made of the illuminating tiles in the construction of' coverings or roofs over basement extensions. They were not chargeable for such tiles sold unless they were applied to such use And while it was their duty to account for all of these sales which were used for the licensed purposes, they were not necessarily chargeable in that respect for certain of the tile sold by them merely because they did not know or had not ascertained to what use they were in fact applied.
    Gross appeals from judgment of the general term of the superior court of the city of New York, confirming report of referee, and. affirming final judgment entered upon it, and to review the judgment of the general term, affirming as modified interlocutory judgment entered upon the decision of the court at special term.
    The action was founded upon alleged rights secured to the plaintiff by letters patent of the United States of date August 27, 1867, and re-issued. August 6, 1878, for the improvement in illuminated basements and basement extension sidewalks, roofs, etc., and upon agreements between her and the defendants, and the relief sought was that the defendants account to her for royalties under the alleged agreement and license, that such agreement and license be declared forfeited, and that the defendants be enjoined from manufacturing, selling or using the articles embraced in such letters patent.
    On November 21, 1878, the plaintiff, with Thaddeus Hyatt and Theodore Hyatt, entered into an agreement with the defendants and other firms, reciting that letters patent were granted to the plaintiff on the .application of Thaddeus Hyatt August 27, 1867, and re-issued August 6, 1878, and whereby they agreed to license the defendants and such other firms under such letters patent to manufacture or sell to be used in the territory there mentioned the illuminating tile work covered by such letters, and to license no other party without their consent in such territory.
    And the plaintiff agreed not to engage in manufacturing tiling for or laying any basement extension, nor tiling of any kind covered by such letters patent, and Thaddeus and Theodore Hyatt joined with her in such agreement, with certain qualifications. The defendants and such other firms agreed to pay the plaintiff thirty cents per square foot of the illuminated tiles or plates used, of which they were to render accounts quarterly on 1st of February, May, August and November, to the plaintiff. This instrument contained other provisions which it is now unnecessary to mention.
    And on the same day the plaintiff entered into a further agreement with the defendants, reciting as in the other, and further, that the plaintiff had, by the other agreement, agreed to give and. the defendants to take a license under such patent to make illuminated basements and basement extensions and to manufacture illuminating materials of the same. Then followed these provisions :
    “Art. 1. The said Joshua K. Ingalls and Jacob Mark hereby acknowledge the validity of the said letters patent to the said Elizabeth Adelaide Lake Hyatt.
    “ Art. 2. The said Joshua K. Ingalls and Jacob Mark consent that the said E. A Lake Hyatt may, without prejudice to this agreement, hereafter re-issue, when and as often as she shall choose, the said patent of August 27, 1867, as re-issued 6th August, 1878.”
    Then it proceeded that the plaintiff, on the terms and conditions therein mentioned, licensed the defendants to manufacture and sell at any place within such territory; that the license should not be transferred without her consent, etc.; that the defendants should, at the end of each quarter, render an account in writing, under oath, to the plaintiff, and make payments for all illuminating work sold and sent away from their premises to be used for the purpose of making illuminating basements and basement extensions; that if either party should knowingly and intentionally violate the agreement such party should forfeit all rights under it; and that the agreement should be valid and binding during the continuance of the letters patent and any extension of them. The parties proceeded under these contracts and license, and the defendants paid the royalties until in 1879, when a controversy arose between them in which were involved the other parties to the first mentioned agreement, and suits were commenced.
    Afterwards, on November 24,1880, the matters were compromised, and a further contract entered into between all the parties reciting the fact that controversies had arisen, whereupon they made the supplemental agreement to the effect that the agreement first above mentioned was ratified and reaffirmed, except so far as it was inconsistent with the provisions of this one; that such suits should be discontinued; that the plaintiff discharged the defendant’s firm of Mark & Ingalls, and all the other firms and each of them from the payment of all royalties under their several licenses of November 21, 1878, for the period of six months; that nothing in the agreement or licenses shall bind them to the payment of royalties for roofs or roof lights, other than basement extension roofs, until such other roofs or roof lights shall have been judicially determined to be covered by the patent. The defendants rendered their accounts to the plaintiff up to and not later than November-1, 1881, and paid her royalties to and not after August 1, 1881. In January, 1882, the plaintiff caused to be served upon the defendants a notice as follows:

      a Messrs. Ingalls & Marie:

    G-entlemen—In view of your failure to make return in writing and payments of royalties to me, as required by the license granted by me to you November'21, 1878, under my patent for improvement in illuminated basements, basement extensions, etc., ana your expressed determination not to make any further such returns or payments, I herewith notify you that I deem the said license forfeited by you and as no longer existing.
    Yours, etc.,
    ‘E. A. L. Hyatt,
    By Wm. E. Scott, her att’y.”
    Dated, New York, January 14, 1882.
    This action was commenced in October following. And the trial court directed judgment forfeiting the defendants’ license and forever restraining them from manufacturing, etc., illuminating roofs, roof pavements, basements, basement extensions, etc., also that the plaintiff have an accounting and a reference for that purpose, and that she recover the amount found due her from royalties, -with interest and costs, and interlocutory judgment was entered accordingly. On appeal from that judgment the general term so modified it as to strike out the injunctive relief granted, and as to limit the time of accounting to that between November 1, 1881, and the time of entry of the interlocutory decree, and as so modified it was affirmed. Then followed an extended hearing before the referee, his report, final judgment, and its affirmance.

      Edward D. McCarthy, for def’ts; George W. Van Slyck, for pl’ff

       Affirming 11 N. Y. State Rep., 411.

   Bradley, J.

The defendants’ appeal goes to the foundation of the action. The plaintiff’s appeal has relation only to the subject of the direction given for the accounting of the defendants. The plaintiff by her complaint referred to and set forth the granting to her of the letters patent of 1867, the reissuing of them in 1878, and in September, 1881, the agreements with the defendants and the license to them to make illuminating basements and basement extensions under such patent, and alleged that they did sell such work and render accounts quarterly up to November 1, 1881; that they had not paid royalties for the quarter ending on that day; that since then they had refused to render any account; and that they had repudiated their agreement and asserted their right to manufacture and sell such illuminating work without the license and consent of the plaintiff; and she further alleged that the defendants intentionally violated their agreement, and by virtue of the terms and conditions of it and the license, and by reason of such refusal, the rights and privileges of the defendants under those instruments have ceased and become wholly forfeited; that by the continuance of the manufacture and sale by them of the patented articles, and the use and operation by them of the license, the plaintiff was at the time of the commencement of the action suffering irreparable injury and damage; and that the plaintiff has kept and performed such agreements and license on her part. The defendants, amongst various matters of defense, alleged that the letters patent reissued in September, 1881, were void, because they embraced more and other claims than were included in the reissue of 1878, and omitted specifications and claims which were in the latter.

It is contended by the defendants’ counsel that this suit was for alleged infringement of letters patent, and that the state court had no jurisdiction of the subject matter, and the defendant alleged that the issue made by the portion of the answer before mentioned denied to such court jurisdiction to try it. If this were an action for infringement of letters patent, presenting a controversy arising under the patent laws of the United States, it would be a case exclusively in the jurisdiction of the federal court. But while the allegations of the complaint contain elements of an action for infringement of the plaintiff’s patent, it may be observed that it is founded upon a contract between the parties, and the forfeiture sought is for a breach of such contract by the defendants. In that view the controversy does not arise under any act of congress in relation to patents, and is within the state jurisdiction. Hartell v. Tilghman, 99 U. S., 547; Dale Tile Mfg. Co. v. Hyatt, 125 id., 46; Continental Store Service v. Clark, 100 N. Y., 365.

It is urged, however, that the issue as to the validity of the letters patent alleged to have been- re-issued in 1881, is one not within the jurisdiction of the state court; and, at all events, that the plaintiff was not entitled to recover upon the evidence bearing upon that issue. The original letters were those of 1867; and the practical purpose of a re-issue is to make the description of the invention more clear, plain and specific, and to rectify any mistakes inadvertently made in the original, Russell v. Dodge, 93 U. S., 460, but the claim of the patentee in them cannot be effectually enlarged, and so far as it is made substantially to represent a new claim or one greater than that included in the original patent, the re-issue is void. Miller v. Brass Co., 104 U. S., 350; White v. Dunbar, 119 id., 47. And if the re-issue fail to include the entire claim embraced within the original letters the portion omitted may be deemed dedicated to the public and lost to the patentee. Turner & S. Mfg. Co. v. Dover S. Co., I11 U.S., 319. In view of these general principles applicable to patents and to the surrender and reissue of letters, it is argued that by the surrender of those of 1878, existing when the license was made, the right to protection under them was not only lost to the defendants, and all rights founded upon them denied to the plaintiffs, but that those re-issued in 1881 were not effectual to support either, because they were broader in their claims, description and specifications, and therefore invalid. Whether substantially so or not, it is true that the letters re-issued in 1881 were apparently broader and more comprehensive in those respects than were the letters of 1878. But the former embrace the claims represented by the latter substantially and with sufficient distinctness to preserve them within the principle that the re-issue of "letters patent embracing more than did those surrendered, will be deemed invalid as to the excess or new claim only embraced in the latter; and therefore the defendants were not prejudiced by such re-issue. Gage v. Herring, 107 U. S., 640.

This is matter of comparative construction of the two reissues. Beyond that it may be that the determination of the ■ question of the validity of the reissue of 1881 is exclusively within the jurisdiction of the federal court. But the present case is relieved from the embarrassment of that question by the contract between the parties, by which the defendants expressly acknowledged the validity of the letters patent as they existed when the contract and lease were made, and stipulated that the plaintiff might, without prejudice to such agreement, thereafter, when, and as often as she should choose, reissue such patent of 1867 as reissued in 1878. It is, however, urged that the agreement and license are not effectual to estop the defendants in that respect, because the plaintiff by her notice to them to that effect, as was her right to do, had declared their license forfeited and as no longer existing, and not only that, but by allegation in her complaint she charged that the rights and privileges of the defendants under the license were forfeited. This notice may have enabled the defendants to surrender up the license and terminate their relation as licensees. This they did not offer to do, or give the plaintiff any notice to that effect, but continued to use and sell the patented articles in the manner authorized by the license. They are not, therefore, permitted to effectually assert as a defense that they did not proceed under it in doing so. Union Mfg. Co. v. Lounsbury, 41 N. Y., 364. The forfeiture alleged in the complaint and sought for by the action was a right in recognition of, and arising upon, the contract and founded upon its breach; and although such right was expressly given by the contract, it did not necessarily depend upon its terms in that respect, but was properly derivable from a substantial violation of its provisions by the defendants. There was, therefore, nothing essentially of the subject-matter or purpose of the action which barred the controversy from the state court or brought it within federal jurisdiction. Hartell v. Tilghman, 99 U. S., 547. And the defendants having entered into the contract with the plaintiff, and taken from her a license to use and sell the subject of the patent, cannot for the purposes of their defense to an action to recover the royalties, question the validity of her patent. Marston v. Swett, 66 N. Y, 206; 82 id., 526; Hyatt v. Dale Tile Mfg. Co., 8 N. Y. State Rep., 631; 106 N. Y., 651; 125 U. S., 46.

As contended by defendants’ counsel, an action for an accounting for the royalties is not one of equitable cognizance, as it involves no trust, but is simply an action to recover the amount due from a debtor to a creditor upon a contract for the payment of money. This claim of the plaintiff was not merely incidental to or dependent upon the equitable relief asked for in her complaint, although properly united with it. No objection was taken by answer or otherwise to the determination of that portion of the cause of action and the relief, founded upon the theory that the injunctive relief demanded was not available. Nor so far as appears was any such question raised in that respect to the accounting, although the general term had modified the interlocutory judgment by striking out such injunctive relief given by it. No such question, therefore, is here for consideration. Town of Mentz v. Cook, 108 N. Y, 504; 13 N. Y. State Rep., 845. There was, however, another demand for equitable relief to the effect that the license to the defendant be rescinded, and the provision of the decree so determining and directing remains effectual. This certainly rendered the injunctive part of it unnecessary or improper, because on the judicial rescission of the license the defendants could not further proceed under it, and the court had no power to restrain the defendants from acts of mere infringement of the plaintiff’s patent. There is no occasion to consider further the questions raised on this review in respect to the form of the action.

The main exceptions taken by the defendants to the accounting as directed by the referee, confirmed by the final judgment, and affirmed by the general term, had relation to what was the illuminating work referred to in the license. This was somewhat a matter of interpretation of the phrase “ basem'ents and basement extensions,” as used in that instrument. While the plaintiff claimed that it included the illuminating covers of areas as well as basements extended beyond and under sidewalks, the defendants insisted that it did not include areas.

The referee’s finding supported the plaintiff’s claim in that respect. The method of making such extension effectual was to take down the front wall of the area' and put in its stead an iron girder supported by the lateral "walls or by columns or both, and over the extension as well, as over that which before was the area putting the illuminating tile made of iron and glass, thus furnishing sidewalk, treads, platform and risers made of iron and glass having suitable strength and durability for such purposes, and supplying light to the basement and its extension. The import of the provision of the license descriptive of the work, its application and extent in that respect, is not defined with entire clearness by the words used, and whether or not the basement extensions embraced areas was a question of fact upon which the finding of the referee was not without evidence for its support. And as bearing upon the intent of the parties, and in aid of such construction of the instrument in that respect, it appeared that in accounts which the defendants had voluntarily rendered and paid to the plaintiff pursuant to the license, were included royalties for illuminating work over areas. The determination of that question of fact in the court below must be deemed conclusive. And the question (subordinate to that just mentioned) whether a public use of such covering of areas by the inventor before his application was made for a patent had not defeated the right to take an effectual one for it as applied to them, may also have been a question of fact. The conclusion was warranted that such use was in good faith for experimental purposes, and, therefore, not prejudicial to the patentee. Elizabeth v. Pavement Co., 97 U. S., 126. The method of making and allowing to be made objections to the defendants’ account and of surcharging by the plaintiff, and the manner of treating them by the referee, was a matter of practice not subject to the review of this court, inasmuch as there was evidence to support the allowance of the account as made and determined by him.

The only further question upon the defendants’ appeal requiring consideration arises upon their defense alleged of a former action pending at the time this one was commenced. It appears that in January, 1882, an action was "brought by the plaintiff against the defendants in the court of bommon pleas of the city of Mew York to recover the royalties due for the quarter ending Movember 1, 1881, and that such action was pending at the time the interlocutory decree "was entered. It will be observed that such action "did not and could not embrace within its purpose the entire claim for royalties for which this action was brought and" for which recovery was had. The recovery in this action included them up to and in April, 1883. The allegation of the pendency of the former action at law could not, therefore, be treated as a complete defense. And it seems that several years before the "referee’s report was made upon which final judgment was entered, that action was by the consent of the defendants’ attorneys in it discontinued. In view of those facts, there was no error available or prejudicial to the defendants founded upon such alleged defense in the entry of the final judgment for the entire amount due the plaintiff for royalties. Kelsey v. Ward, 16 Abb., 98; Marston v. Lawrence, 1 Johns., Cas., 397; Averill v. Patterson, 10 N. Y., 500.

The plaintiff’s appeal from the portion of the judgment affirming the part of the final judgment appealed from by her, is founded upon her exceptions to the refusal of the referee to find that the defendants were liable to account to the plaintiff for illuminating tiles where they had inserted glasses in iron, which were adapted or could be used for illuminating roofs of areas or basement extensions, and had not shown they were not so used; also, that they were liable to account for all such tiles adapted to such use manufactured and sold by them to others to be used as the defendants had not shown were not so used. The license to the defendants was not to merely manufacture and sell, and the patent as represented by the license was simply one of construction or combination. That is to say, they were to pay royalties for the use made of the illuminating tiles m the construction of coverings or roofs over basement extensions. They were not chargeable under the contract for such tiles sold unless they were applied to such use. And although adapted to that use, they were equally applicable to illuminating roofs on other parts of buildings, over vaults, etc. The plaintiff’s contention is that the burden was with the defendants to relieve themselves from liability to account for all such tiles aá they sold to or glazed for others to be used; and that so much as they failed to prove were not used for such purpose they must account for. It is true it might be difficult for the plaintiff to trace to its destination the tile sold by the defendants over the territory mentioned in their license, to see to what use it was applied, and it was less difficult for the defendants to know where it was taken by the purchasers, but they no more than the plaintiff could control the use made of the articles by the purchasers. There was no violation of any trust relation on the part of the defendants in making the sales for any purpose. And for anything appearing in the contract with the plaintiff it was their right to do so. While it was their duty to account for all of their sales which were used for the licensed purposes, they were not necessarily chargeable in that respect for certain of the tile sold by them merely because they did not know or had not ascertained to what use they were in fact applied. It is unnecessary to determine what bearing a purpose of the defendants by suppression to defraud the plaintiff may have had upon the proposition, as no such question is presented for consideration. There was no error in the refusal of the referee to find as so requested.

The judgment should be affirmed, without costs to either party.

All concur.


source: Caselaw Access Project

author: Bartlett, J.

license: Public Domain

text:
    Adolph Goldschmidt et al., App’lts, v. The Mutual Life Insurance Co., of New York, Resp’t.

      (Supreme Court, General Term, First Department,

      Filed December 29, 1890.)

    Insurance (life)—Suicide.
    The insured was found dead, lying in bed, with a very calm expression upon his face and all h';s clothes and surroundings in perfect order. No bottles or phials were found in the room at this time, but there was a pretty strong smell of bitter almonds (the characteristic odor of hydrocyanic acid). Several hours later a policeman who came to the room saw a phial, but could not say there was anything in it. A person, not expressly shown to be a physician, testified to the same cdor being noticed at the autopsy, and on being asked the cause of death said, “it is only an opinion because I had no chemical analysis to go upon.” He then said that his opinion, from the appearance of the stomach and from the odor, was that deceased had died from taking cyanide of potassium. Held, that the question of suicide should have been submitted to the jury.
    Appeal by plaintiffs from judgment entered upon a verdict directed at circuit.

      William G. Wilson, for app’lts ; Robert Sewell, for resp’t.
   Bartlett, J.

The plaintiffs sue as the assignees of two policies of insurance upon the life of Oscar Edler, who died on the 27th day of August, 1876. One policy contained a provision that it should be null and void if the person whose life was insured should die by his own act or hand, whether sane or insane; but in that event the company undertook to return the premiums paid. The other policy declared that the self-destruction of the insured person, whether voluntary ór involuntary, and whether he was sane or insane at the time, was not a risk assumed by the company, but in such case the company agreed to pay the net reserve held upon the policy at the beginning of the year in which the death occurred. The defense, as presented upon the trial, was that Mr. Edler had committed suicide by taking poison, probably hydrocyanic acid. The defendant offered to allow judgment for an amount sufficient to cover the premiums paid on the first policy and the net reserve held on the second; but it contested any further liability. At the conclusion of the evidence on both sides, the trial judge held that the defense had been made out, and that the recovery of the plaintiffs must be limited to - the sum offered by the defendant, which was $250, with- costs. The plaintiffs have appealed and ask for a reversal of the judgment on the ground that the facts proved did not warrant the inference of suicide, or at all events did not absolutely require such inference; and hence they contend that if a verdict was to be directed at all, it should have been directed in their favor, or otherwise the question of suicide should have been left to the jury.

I am unable to agree with the learned counsel for the respondent that the evidence in this case would not support any other conclusion than that the deceased came to his death by his own voluntary act. It is true there is little contradiction among the witnesses as to any material fact; but it seems to me that conflicting inferences may well be drawn by different minds from the uncontradicted proofs, and therefore that it was error to direct a verdict.

It is tolerably clear that the deceased either died from natural causes or killed himself by taking poison. He was found dead in bed in his room at six o’clock in the morning. The door was locked on the inside and was broken open by an officer who had been summoned by some of his friends. Precisely what led them to think there was any occasion to break into the room at that early hour is not stated, but there is a suggestion that it was because they had been unable to get in to deliver some letters or messages which had been brought to the house for the deceased the night before.

Of those who were present when the door was thus opened only-one person is called as a witness, Mr. Emery H. Cahn. He says he went into the room and found Mr. Edler lying dead in bed, with a very calm expression upon his face, and all his clothes and surroundings in perfect order. He saw no bottles or phials or anything about the room which could have contained poison; but both he and a gentleman named Stillwell, who entered. the room with him, noticed a pretty stro'ng smell of bitter almonds as soon as they went in. This odor is relied upon by the defence as evidence of the presence of prussic acid in some form.

The only witness who testifies to seeing any phials in the room of the deceased is Barnard Lamb, a police officer, and this, not when the room was opened, but several hours later, between nine and ten o’clock in the morning. He states that at this time he found a small table at the right of the bed upon which there was a small phial; and also that there were several bottles upon the bureau. “ I did not examine the bottles,” he says, “ I did not smell them. I took some cf them up and looked at them to see what was in them. I can’t say whether there was anything in any of them. There were inscriptions on some of the bottles. I did not notice what was on them. If I did, I don’t recollect, it is so long ago. I did not secure the bottles as evidence for the coroner, but there was nothing touched until the coroner came.'” In the brief for the respondent, referring to the folio at which the testimony of this witness in relation to the phial is printed, we are told that at the right side of the bed there was a small table on which was a small empty phial; but according to the case, the officer did not say it was empty.

The coroner made an autopsy upon the body of Mr. Edler; and one Isaac Adler, who had been present at the autopsy, was called to testify in behalf of the defendant He says he noticed nothing until the body was opened, but then he perceived a pretty strong smell of bitter almonds such as is caused by hydrocyanic acid, and this odor increased in intensity as the heart and stomach were opened. His testimony does not distinctly indicate whether this witness is a physician, physiologist or chemist, but he was questioned as an expert, and is spoken of in the brief of the appellants as a medical man. He could not tell whether there was any hydrocyanic acid in the stomach, or what the result of the autopsy was, although he was satisfied from the smell alone that there was some form of hydrocyanic acid in the stomach.

After making these statements, the witness refreshed his memory by looking at a book which evidently related to his testimony before the coroner, and he was asked to tell what he then found to be the cause of death, in his opinion. He answered: It was only an opinion, because I had no chemical analysis to go upon. By the appearance of the stomach, the congestion of the coats of the stomach, was such, and the smell of hydrocyanic acid to guide me, my opinion was that he had taken cyanide of potassium into his stomach, and that caused his death.”

The coroner who held the inquest was also examined as a witness for the defendant. He said the appearance was that the man had died from an unnatural cause and a violent death. The witness was not a physician, however. At the autopsy he did not notice any odor. A chemist testified as to the character of hydrocyanic acid and its effects, and records from the public administrator’s office were put in evidence to show that Mr. Edler’s estate had turned out to be insolvent, and hence that his pecuniary condition furnished a motive for self-destruction.

So much for the evidence tending to sustain the inference of suicide. To my mind, it seems far from conclusive. Without the testimony as to the odor of bitter almonds; which is said to have been observed in the room when the door was opened, and subsequently at the autopsy, there would be no basis for this defense. It is plain that Mr. Adler, the witness who expressed the opinion that the deceased had taken cyanide of potassium, was influenced largely by the smell which he described. Furthermore, his declaration that, in the absence of an analysis, he had “ only an opinion,” suggests that this opinion may really have-been little more than a guess. Such, at all events, is the impression left by his testimony, as I read it. Now, is the presence of the odor on the occasions which have been mentioned such absolutely convincing proof of poisoning as to preclude a jury from adopting any other view in reference to the cause of death? We think not The sense of smell, in common experience, often proves anything but a trustworthy guide to the origin of particular odors. i

Then there is no evidence in the case at bar of the purchase or possession by the deceased of any kind of poison. The presence of bottles and phials in the poom, as to the contents of which we know nothing, does not seem to me a very significant circumstance. No one would seriously argue that it is a necessary inference that a man has killed’ himself because there are bottles and phials in his locked bedroom where he dies suddenly and alone at night, happening at the time to owe more debts than he can pay. Something additional is needed to make out a case of suicide. The respondent points to the proof in regard to the characteristic odor of prussic acid poisoning, and insists that this is enough. The appellants urge that this evidence is far too meagre to warrant the conclusion that the deceased died by his own hand; and they refer to the facts brought out in rebuttal as tending to show that death was due to natural causes. This testimony indicates that Mr. Edler had prepared a fresh clean shirt to wear next day by putting his buttons in it, and that he must have been smoking and reading about the time he retired, for upon the table near his bed lay the stump of a cigar and a little book with his glasses between the leaves. The witnesses say there was nothing unusual about the appearance of the apartments except that its inmate lay there dead. One of them describes his face as looking very calm, as though he was asleep. The plaintiff Goldschmidt testifies that he was asked to look around the room and see whether he could find anything that might have contained poison, but he found nothing, although he made a pretty thorough search.

While the defendant’s view of this man’s death may be the true one, it does not seem to me to be supported by such a preponderance of evidence as to warrant the withdrawal of the question from the consideration of a jury.' The point that it ought to have been submitted to the jury is sufficiently raised by the exception which the plaintiffs took to the action of the trial court in directing a verdict. Trustees of East Hampton v. Kirk, 68 N. Y., 459, 464. In my opinion, therefore, the judgment ought to be reversed and a new trial ordered, with costs to the appellants to abide the event.

Van Brunt, P. J., and Barrett, J., concur.


author: Daniels, J. Van Brunt, P. J.

text:
    Elizabeth Cotting, Ex’rx, v. Katie Schermerhorn et al., App’lts, and Charles Uriah Cotting, Trustee, Resp’t.

      (Supreme Court, General Term, First Department,

      Filed December 29, 1890.)

    1. Will—Trust.
    A testator devised his residuary estate to his brother in trust to pay over to his widow one-third of the net income, rents and profits, and one-third to a daughter, and one-third to a son; in the event of the death of the son or daughter, the widow was to receive one-half of the income, and the surviving son or daughter the other half; and in case of the death of both son and daughter intestate, and without issue, the widow was to receive the whole income. But in regard to the son’s (a minor) share, the trustee was to accumulate the income, and make only certain payments up to certain ages; if the son died during the widow’s life-time, one-half of the income was to go to the widow during life, and the other half to the daughter; if the son be dead at the death of the widow, thereupon the whole net income is to go to the daughter. Held, that the trust was void, as it depended upon three lives in being. Under it, if the son die in the life-time of the widow, and after attaining the age of twenty-one years, he might enjoy one-third of the net proceeds during his life, the widow one-half of this third during her l'fe, and the daughter, if she survive both, one-half of this third during her life.
    2. Same—Accumulations.
    A trust directing accumulations for the benefit of a minor after he reaches majority is void.
    Appeal from a judgment recovered at the special term.

      John G. Cameron, for app’lts; P. H Vernon, for resp’t.
   Daniels, J.

The action was commenced by Joseph Addison Jameson, as one of the executors of the estate of Amos Cotting, deceased, to obtain a judicial construction of his will. The testator died on or about the 12th of May, 1889, leaving his widow and two children surviving him. His son was then of the age of fifteen years, and the daughter had intermarried with J. Egmont Schermerhorn, and they had two children, who are defendants in this action. During the pendency of the action the plaintiff Jameson died, and it was afterwards revived and the widow, who was executrix with him, was made the plaintiff, she having previously been a defendant, owing to her refusal to join as plaintiff m its commencement.

By his will, which was proved before the surrogate of the county of New York, of which the testator had been an-inhabitant, he appointed his brother, Charles Uriah Cotting, the respondent, trustee of his estate, to whom he gave, devised and bequeathed all the rest and residue of his estate not previously and otherwise disposed of, §.nd the rents, profits and issues thereof, in trust for the benefit of his widow and his two children. This trust has been resisted by the persons immediately and beneficially interested therein, as having been illegally created and for that reason void; while the trustee has dissented from that view, and insisted upon the residue of the estate being transferred to him, to be used and employed in the execution of the trade.

The court at the trial held the trust to be valid, except the direction for an accumulation of profits for the benefit of the testator’s son after his attainment of the age of twenty-one years. That was held to be unlawful, as it surely was, and the rents and profits directed to be accumulated were by the judgment made payable to the son after he shall become twenty-one years of age, as the person legally entitled to receive them. And as he was eventually to .become the owner of so much of the estate as would supply these rents and profits, this determination beyond all fair ground for controversy conformed to the statute. Schettler v. Smith, 41 N. Y., 328; Embury v. Sheldon, 68 id., 227, 237.

The trustee has been directed by the will. To pay over to my wife Elizabeth Cotting in equal quarterly instalments, payable on the first days of January, April, July and October, in each and every year, reckoning from the first of said quarter days occurring after my decease, and with power to anticipate any one of said ■quarterly payments at her request, the full and equal one-third part and portion of the whole net income, rents and profits derived from said trust estate.

And, in the event of the death of either my said son or my said daughter during the lifetime of my said wife, then and in such case, to pay the one equal moiety or one-half part of the whole net income, rents and profits of said trust estate to my said wife during her lifetime' and the other moiety or equal one-half part thereof to the survivor of my said children, each to be paid in the same manner and on the days • and months designated in item first of this clause.

And still further, in the event of the death of both my said children intestate and without lawful issue them surviving, prior to the death of my said wife, then and in such case, to pay to my said wife, said Elizabeth Cotting, during her lifetime, the whole net income, rents and profits of said trust estate.

The devise and bequest of the residue of the estate to the trustee for the purpose of conforming to these directions would create an express trust, and if it were lawfully directed would vest him with the title. Vernon v. Vernon, 53 N. Y., 351; Knox v. Jones, 47 id., 389. For the trustee is to take the rents and profits of the estate and apply them in this manner to the support and maintenance of the widow.

The same use of proportionate parts of the income and profits was directed for the benefit, respectively, of the son and daughter of the testator. ■ And for these objects, also, it is necessary that the trustee shall have the legal title to the estate commensurate with the duration of his duties, which would for that time suspend the power of alienation, and absolute ownership of the property. 2 R. S., 6th Ed., 1110, § 78; Cook v. Lowry, 95 N. Y., 108, 111 And that has not been permitted to extend beyond two lives in being at the time of the creation of the trust estate. 2 E. S., 6tli Ed., 1101, §§ 14, 15. This restraint, it has been alleged, has been violated in the present instance, and if it has, then it follows that the trust is void.

To ascertain whether that is the effect of the testator’s directions in favor of these beneficiaries, a further examination of the will must be made. If that restraint has been transcended, it has been done by the provisions affecting the rights of the testator’s son under the trust, and by the contingent directions for the disposition of a part of his interest in favor of the widow and of the daughter before the estate can vest absolutely in her appointees or in her children.

By the second subdivision of the fourth clause of the will, the trustee has been directed to pay to the guardian of the son, for his support, maintenance and education, such yearly sum as the guardian shall think necessary, not exceeding the sum of $1,000, until he attains the 'age of fifteen years, and $1,500 per annum after that until he shall be twenty-one years of age. And by the third sub-division, this yearly amount is then to be increased to $2,500, until the age of twenty-five years, and after that one third of the whole net income, rents and profits of the trust estate are made payable to him, subject to a possible contribution directed by the last paragraph of this division to maintain the income of tne widow at the sum of $12,000 per annum.

And to ensure these payments to the son, the testator, by the third subdivision, further directed that “the remainder of one equal one-third portion of the whole net income, rents and profits of said intestate shall be set aside and be held by said trustee, and reinvested as he may in his discretion deem best, to and for the use and benefit of my said son; which seemed to him a divisible third of the income trust estate. This part of the will also authorized the trustee to advance to the son, after the age of twenty-five years, and before the determination of the trust as to him, a sum not exceeding $50,000. But as this will not affect the continuation of the trust in the residue, no further attention will be bestowed upon this direction.

Upon the decease of the widow, if at that time the son shall have attained the age of twenty-five years, the trustee is directed, by the fifth subdivision of paragraph four, to pay to him one-half the net income, rents and profits of the estate. But if he shall be under that age, then this direction has been subjected to those previously given for payments and accumulations to bo made, -which so far as they relate to what should be done after the son shall become twenty-one years of age would be necessarily inoperative under the statutes restraining the time beyond which accumulations will not be permitted.

It was further directed when the son shall reach the age of thirty years,' if that shall be after the decease of the widow, and if not, then after her decease, and the acquirement of that age, that the trustee shall pay over to him one-half part or share of the estate, subject to any advancement previously made to him, as that has been authorized to an extent not exceeding $50,000. But by the eighth subdivision of paragraph four, if the son shall die during the lifetime of the widow, then the trustee is directed “ to pay the one equal moiety, or one-half part, of the whole net income, rents and profits of said trust estate, to my said wife during her lifetime, and the other moiety, or equal one-half part thereof, to the survivor of my said children.” This direction, if it should be complied with, would give to the widow one-half of one-third of the income, rents and profits, previously directed to be paid to the testator’s son during his_ life for the residue of her life, after his decease.

The further direction has also been added: But if my said son shall be deceased, intestate and without lawful issue him surviving, at the time of the decease of my said wife, then and in such case at, upon, and after the death of my said wife, to pay to my said daughter Katie T. Ootting, during her lifetime, the whole net income, rents and profits of the whole of said estate in the manner and on the days and months designated in item first of this clause, but in all respects subject to the directions given and declared in item fifth' of this clause: and at and upon the death of my said daughter, the whole of said estate shall pass, vest, and be paid over, assigned, transferred, conveyed and delivered as provided for, declared and directed in item seventh of this clause.

And if that, together with those beforé given, should be complied with, then the son dying in the lifetime of his mother after he attains.the age of twenty-one years, will have one-third of the net proceeds of the trust during his lifetime, his mother, the widow, will have one-half of his third during the residue of her life, and the daughter, if she shall survive both, will receive the same proportion of this share of the income, rents and profits, during her life. This is a succession of interests which have all been provided for by the will And as there is a possibility that the son will die during the life of the widow, this devolution of interests if the trust is to be executed may, in the future, take place. He may' enjoy the use of his third of the rents, income and profits during his life, the widow may become entitled, under the language of the will, to one-half of that third after his decease in her lifetime, for the residue of her life, and the daughter, as the final survivor, may take the same after the termination of the life of the widow, for the period of her own life. And the trust estate must all remain together under the control and management of the trustee, to obtain the income,, rents and profits to be in this manner administered and applied, until the decease of the testator’s daughter. At no earlier time could it be terminated, if the directions of the will should be executed. This is clearly the construction required, for while all three of the beneficiaries live the rents and profits to be divided must be obtained from the entire residue of the estate. And if the son shall die in the lifetime of his mother, the same necessity will exist, for all the rents, income and profits are in that event to be divided between the widow and the daughter, .and after the decease of the widow, then all are to be paid to the daughter during her lifetime. And that can only be done by maintaining the trust .as an entirety until the decease of the daughter. And that does provide for the suspension of the power of alienation and absolute ownership for more than two lives in being at the time of the ■creation of the trust estate, which under the law renders this will inoperative and void, for no separation can be made, as the directions have been given, of one part, or share in the trust from that of the others. Colton v. Fox, 67 N. Y., 349; Ward v. Ward, 105 id., 68, 75; 6 N. Y. State Rep., 798. The judgment should accordingly be reversed, and judgment directed declaring the trust which the testator intended to create to be unlawful and void, with costs to the appellant and respondent to be paid out of the estate, and a suitable compensation to the guardian ad litem upon the presentation of his affidavit required by the general rules of practice.

Van Brunt, P. J.

I concur. It appears conclusively that the provisions of the will depend upon three lives, for until the death •of the widow and both children there can be no distribution of the estate.

Brady, J., concurs.


author: Brady, J. Van Brunt, P. J.—(dissenting).

text:
    George E. Gervias, Resp’t, v. The Chicago, Rock Island & Pacific R. Co., App’lt.

      (Supreme Court, General Term, First Department,

      Filed December 29, 1890.)

    Pleading—Demurrer—Jurisdiction.
    Where it does not appear upon the face of the complaint that plaintiff is a non-resident the objection that the court has not jurisdiction of the person cannot be taken by demurrer.
    (Van Brunt, P. J., dissents.)
    Appeal from judgment overruling defendant’s demurrer to complaint.

      Prescott Hall Butler, for app’lt; George H. Hart, for resp’t
   Brady, J.

This action was brought by the plaintiff against the defendant, a foreign corporation, to recover damages for injuries to his wife caused by their negligence. The complaint was demurred to upon three grounds, first, that the court had not jurisdiction of the person; secondly, that it had not jurisdiction of the subject of the action; and thirdly, that the complaint did not state facts sufficient to constitute a cause of action.

The proposition argued is that the residence of the plaintiff in this state was essential to confer upon this court jurisdiction of the cause of action urged against the defendants. The answer to this is found at once in § 488 of the Code, which provides in distinct terms that the defendant may demur to the complaint when it appears upon the face thereof that it has not jurisdiction of the person, or of the subject matter, or of the subject of the action, as' well as for other causes therein stated.- Now it does not appear upon the face of the complaint that the plaintiff is not a resident of the state of New York, and that disposes of the proposition.

The learned justice in the court below, in disposing of the demurrer, indulged in a somewhat elaborate opiniop covering other grounds, and going more extensively into the consideration of the subject than is deemed to have been necessary for the disposition of the question presented.

The supreme court is, by the constitution, made a court of general jurisdiction of law and equity, Art. 6, § 6, and its jurisdiction cannot be limited either by the legislature or by any power conferred by it upon the court itself. The People ex rel. Mayor v. Nichols, 79 N. Y, 582.

It had unquestionable jurisdiction over the subject matter of this-action, therefore, and its authority to entertain it will be presumed as to the parties and the presumption continued until the question, is disposed of in the manner provided by the laws of the state. The manner provided is by demurrer or by answer. Code, §§ 488, 496; Johnson v. Adams Tobacco Co., 14 Hun, 89. It is one of jurisdiction and always open to inquiry, it is true, but must be presented according to the rules of the forum in which the question is pending. If on the trial it appeared, for example,, that the plaintiff was not a resident of the state, the objection arising therefrom could be immediately urged and the proper result declared.

For these reasons the judgment appealed from should be affirmed, with liberty to the defendant to answer in twenty days on the payment of costs of the demurrer and appeal.

Daniels, J.—I concur in the result.

Van Brunt, P. J.—(dissenting).

The supreme court is, by the provisions of the constitution, a court of general jurisdiction, but that does not imply that it has general jurisdiction over persons not residents of this state. The legislature may regulate the extent of such jurisdiction and determine under what circumstances it may be exercised, and where it provides that the court shall have jurisdiction, provided certain facts appear, it seems to me that such facts must be proven upon a trial, and if necessary to be proven they must be alleged.

I therefore dissent


author: Van Brunt, P. J.

text:
    Margaret A. Oliver, Resp’t, v. William L. Moore, Adm’r, App’lt.

      (Supreme Court, General Term, First Department,

      Filed December 29, 1890.)

    Verdict—When will be set aside.
    Where the court find it impossible to reconcile a verdict with any theory which has any support in the evidence given upon the trial, the verdict must be set aside.
    Appeal from judgment entered on verdict, and from order denying motion for new trial.

      H. KeTtel, for app’lt; J. N. Hayes, for resp’t.
   Van Brunt, P. J.

This action was brought by a boardinghouse keeper to recover under an agreement to let certain rooms with board. The facts as they appeared upon the trial were as follows:

In 1884 the plaintiff, who occupied a house No. 675 Fifth avenue, entered into a sealed agreement, whereby she agreed to let to Harriet Gross two rooms in the third story of her house for the term of eight and a half months from October then next at the rate of $2,725, to be paid in weekly portions of seventy-five dollars each, beginning on October 1st; and also that she would furnish suitable food for the said Harriet Gross in a suitable manner for herself and her waiting maid for the whole term for which the agreement was made without additional charge, or expense to said Harriet Gross other than was therein contained. Miss Gross and her maid entered into the occupation of the two rooms and continued to occupy them until the 27th of November, 1884, when Miss Gross died.

The plaintiff furnished board to the maid up to February 7, 1885. The compensation specified in the agreement was paid to the plaintiff up to about the time of Miss Gross’ death. Thereafter this action was commenced against the executor of Miss Gross to recover the amount specified in the agreement after crediting her estate with $186 received from persons who occupied the rooms after Miss Gross’ death. The plaintiff insisted that the defendant was not entitled to claim any off set upon the theory that the plaintiff had saved money by not being obliged to board the decedent and maid for the whole term. Upon the previous trial of the case this view was taken, which, however, was reversed by the general term, they holding that the defendants were entitled to a deduction for what it would have cost the plaintiff to have boarded Miss Gross and her maid to the end of the term. The case was then again tried and the foregoing facts appeared, and also that the plaintiff had rented the premises in question from the 1st of May to the 15th of June, 1885, at the rate of $45.00 a week. The family consisting of five persons, it was claimed by the plaintiff that although it would have cost little or nothing to board Miss Gross and her maid upon the theory that in a household as large as hers the addition of one or two boarders made no difference in expense of running the house, yet she insisted that the additional three persons in the new tenant’s family entailed an additional expense of $21 a week, or $126 in all.

The claim of the plaintiff, after deducting certain credits, amounted with interest to $1,353.02. The jury rendered a verdict for $1,227.02, apparently deducting the $Í26 which the plaintiff stated had been the additional cost of boarding the three additional persons in the family of her new tenant.

After a careful examination of the evidence it has been impossible to reconcile the verdict with any theory which has any support in the evidence.

It certainly did not cost the plaintiff any more to board the three additional persons in her new tenant’s family, in proportion, than it cost to board Miss Gross and her maid, although she-says that- Miss Gross ate very little, and the maid had a remarkably good appetite. The plaintiff testified that the additional cost for those three persons was twenty-one dollars per week, or a dollar a day, and yet that it cost nothing to board Miss Gross and her maid. This shows how utterly unreliable this story isas, to there being no additional cost in the boarding of one or two additional persons. If it cost nothing additional to board Miss Gross, and her maid, it certainly should have cost nothing additional to board at least two more than Miss Gross and her maid. Thus-we see that the jury have disregarded each and every theory which is possible to be deduced from the evidence; which either shows that it cost nothing to board Miss Gross and her maid, or that it cost, a dollar a day at least for each. There was evidence from which it might be found that the expense of board would have-been more than that, but taking the case most favorable to the plaintiff, there is no theory whatever which can be derived from the evidence which would support the verdict. The jury aré to-be guided by the evidence. They cannot guess at an amount which should be due to the plaintiff. They must find their verdict upon the evidence, and upon the evidence alone, and if there is no evidence to support their verdict, it has no foundation and must fall. There is no evidence to support the verdict in question. It may have been difficult for them to arrive at a conclusion from the meagreness of the evidence,' and its uncertain and unsatisfactory character, but that fact does not justify the rendition of an arbitrary verdict, unsupported by any evidence which has been adduced in the case.

There is nothing whatever to justify a deduction of $126, and it seems to be evident that such deduction was made without realizing the relations of the parties or the effect of the evidence, and that the verdict was not an intelligent deduction of the jury from'the evidence introduced on the trial.

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

Daniels and Beady, JJ., concur.


text:
    John Garvey, Adm’r, App’lt and Resp’t, v. Margaret Owens et al., Impl’d, Resp’ts and App’lts.

      (Supreme Court, General Term, First Department,

      Filed December 29, 1890.)

    1. Guardians—Trust company—Disbursements.
    A trust company acting as guardian for infants must employ agents in the collection of rents, and can lawfully charge the sums paid them. And, when acting as trustee for the real owners, it must keep the premises insured, and is entitled to be allowed for premiums paid,
    2. Same—Interest.
    But where, upon an- accounting, it is allowed interest upon its disbursements, it should also be charged Interest upon its receipts.
    3. Same—Costs.
    Where an action for an accounting is brought, and is a necessary method of closing up a matter, and it appears that a small balance is due defendants from plaintiff, it is not a proper case for costs against plaintiff.
    Appeal by the plaintiff and defendant from, judgment entered herein.

      George C. Genet, for pl’ff; M. A. Forster, for def’ts.
   Van Brunt, P. J.

The principal grounds which are urged by the defendants appellants upon this appeal are those which have been disposed of "by this court upon a previous appeal and it is not necessary to consider the same here.

This judgment was the result of an accounting between the parties as to the rents, etc., of certain premises of which the plaintiff’s deceased had been adjudged to be entitled to a conveyance.

In the course of the accounting the referee allowed the defendants to charge a percentage for the collection of the rents of the premises in question.

It was clear that the trust company was entitled to employ agents for the collection of these rents; and having that legal right they could lawfully pay for the services of such agents. The point made by the appellant seems to be that the defendants were collecting rents upon their own account. But it appears that the trust company, as guardian of the infants, were in reality managing the estate and as such had a right to employ all suitable agents.

There is some question in regard to certain expenses incurred for repairs ; and it is claimed that they were excessive and were more than repairs. But the evidence shows them to have been absolutely necessary to the full enjoyment of the premises and that without them it would have been impossible to rent the same.

It is urged that the allowance for insurance was error. If these parties were trustees for the real owners they were bound to keep the premises insured and were entitled to an allowance for the expense thereof.

It is further urged that the allowance for taxes paid on the 28th December, 1882, for the year 1877 was error. These taxes were paid by the trustees within the period limited for the accounting and although they were past due yet they were disbursements which it was necessary to make and for which they should have credit.

"Upon the question of costs we do not think, fluff costs should have "been allowed against the plaintiff. It was necessary in order that the rights of the parties should be adjudicated that this action should be brought.

There was no voluntary accounting, and although as a result of the accounting which was absolutely necessary in order to settle the rights of the parties it was found that a small balance was due to the defendants, yet it does not appear that a proper case was made out for the allowance of costs, and this portion of the decree should be modified.

It is claimed, upon the part of the defendants, that error was committed in charging -them with interest upon the amount of rents received, and it is urged that by the terms "of the decree under which this accounting took place it was clearly contemplated that they should not be charged with interest. We think, on the other hand, that no such intention is manifest by the language of the decree; and that the defendants being allowed interest upon all their disbursements, it is but just that they should be charged with interest upon the receipts. "0

All. the payments which they made were made from moneys they had received from these premises, except a very small sum; and it is not just that they should receive interest for payments made out of moneys belonging to the plaintiff which they had received unless interest is also charged upon the receipts.

The judgment as modified should therefore be affirmed, without costs.

Daniels and Brady, JJ., concur.


author: Brady, J.

text:
    Newman Cowen et al., App’lts, v. Christina Arnold et al., Resp’ts.

      (Supreme Court, General Term, First Department,

      Filed December 29, 1890.)
    1. Foreclosure—Apportionment oe rents collected by receiver.
    A purchaser under a sale in foreclosure is entitled to the rents from the day of the delivery of the deed, and where a receiver of the rents and profits had been appointed pendente lite and rent, payable in advance, was in his hands, Held, that suchrent must be apportioned, and that such receiver was entitled only to so much thereof as had actually accrued when the deed was delivered.
    3. Same.
    Upon an application by the purchaser for such an apportionment it seems that the owner of the equity of redemption may be entitled to be heard'
    Appeal from order of Justice Patterson, denying the motion of the purchasers at a sale under foreclosure in this action' to apportion the October rents for 1889 to the purchasers, from the 4th of October, the day of the delivery of the referee’s deeds.

      Lewis Sanders, for app’lts; Charles H. Lovett, for resp’ts.
   Brady, J.

It appears that in this action a receiver of the rents and profits was appointed on the 29th of March, last, and collected the rents, which were payable in advance. The plaintiffs, as purchasers, received their deed on the 4th of October, 1889, and made application that the receiver pay the plaintiffs’ attorney expenses of the agent, his commissions for collecting the October rents, and for disbursements in the care of the premises prior to October 4, and the expenses incurred after the 4th of October, during that month, amounting to twenty-nine dollars, and also to apportion the rent for October to the plaintiffs. The plaintiffs were the assignees of the agent Zittel, for value, of his claims just mentioned.

The application for the payment of the agent’s expenses and commissions, amounting to seventy-seven dollars and one cent, with interest, was granted, and the amount directed to be paid, but the application to apportion the October rents was denied.

A supposed difficulty which presents itself in the consideration of this appeal arises from the fact that it is alleged by the receiver that the owner of the equity of redemption had not been served with notice of the motion, and this point is taken. It is quite clear that, so far as this appeal is concerned, the defendant Finlc has no interest whatever in the fund that is left, for reasons which will appear. The rent was payable, as already suggested, in advance. but the only rent the receiver could take was for the first, second and third days of October, the delivery of the deed making him functus officio thereafter and entitling the plaintiffs to the rent accruing subsequent^. Where the purchaser is ready and willing to perform, and the delay is on the part of the vendors, the purchaser is entitled to the rents and profits from the time when, according to the terms of the contract, possession should have been delivered, or if the vendor has remained in possession, he is chargeable with the value of the use and occupation from the same period. Bostwick v. Beach, 103 N. Y., 433; 3 N. Y. State Rep., 659. The receiver’s appointment was subject to the sale of the premises, the purchase of them under it, and the delivery of the deed and possession of the premises. Beyond the time when the purchase was completed his official relations to ■ the parties did not exist, and he could not collect on the 1st of October the rent for the use of the premises from the 4th of October, although payable in advance, when the purchaser became entitled to the possession of the premises.

The learned counsel for the respondent suggests that in the absence of a statute or an express agreement to that effect rent can never be apportioned in respect to time; citing the following authorities: Zule v. Zule, 24 Wend., 76; The Mayor v. Ketchum, 67 How. Pr., 161; Cheney v. Woodruff, 45 N. Y., 98.

These cases, with the exception of Cheney v. Woodruff, relate to actions brought against tenants, and that case is decisive of the inability of a purchaser at a foreclosure sale to recover the rent accruing between the time of the purchase and the delivery of his deed. FTone of these cases, therefore, has any application to the question in hand. All that the owner of the equity of redemption is entitled to in lands mortgaged after the sale under the mortgage are the rents which become due down to the period when the purchaser under the decree of sale becomes entitled to the possession of the land. Clason v. Corley, 5 Sandf., 447. If the rule contended for, perhaps not seriously, by the respondent’s counsel were to prevail, namely, that any rental of premises sold under foreclosure which accrued by being payable in advance the day before the delivery of the deed would belong to the owner of the equity of redemption, then the purchaser would be deprived of the beneficial enjoyment of the premises for such period as the rent covered, whether it was three months, six months or a year. This proposition, of course, is wholly untenable.

The order appealed from must be reversed and the' motion ordered re-heard at the special term, when, if necessary, the owner of the equity of redemption can be brought in.

Van Brunt, P. J., and Daniels, J., concur in result.


text:
    Henry P. Sisson, Resp’t, v. Geo. W. N. Yost, Impl’d, App’lt.

      (Supreme Court, General Term, First Department,

      Filed December 29, 1890.)

    Sebvices—Evidence.
    In an action for services the issue was whether they had been rendered to a firm, as plaintiff claimed, or to a corporation, as defendant claimed. A wi'ness who had been successively secretary, treasurer and attorney for the corporation was called and his attention called to an entry of a resolution in the record of the corporation, viz.: “motion carried suspending the employment if any exists of * * * H. P Sisson (the plaintiff) with full power granted to vice-president and secretary to employ them temporarily as the interests of the company may seem to require. ” He testified that Sisson had made a claim and this was intended to suspend any further claim. The plaintiff asked " Do you recall putting in the words ‘ if any exists.’ ” The witness said he did not recall the circumstances which led him to put in those words. The plaintiff asked “ Is it not a fact that you were under the impression that the company was not liable at all?” Under defendant’s objection the witness said “I was of that impression.” Seld, error; that this evidence of the impression of the witness was clearly prejudicial to defendant.
    Appeal from a judgment entered upon the verdict of a'jury.

      C. G. Patterson, for app’lt; Rudd & Hunt, for resp’t.
   Brady, J.

This action was brought against the appellant and one Blanchard, composing the firm of Yost & Blanchard, to recover the balance due for services rendered to them by the plaintiff as a draughtsman, between October 6, 1883, and December 1, 1885, at an agreed salary of $57.70 per week. The summons was served upon Yost only. He admitted in his answer the existence of the copartnership during the period when these services were alleged to have been rendered, but set up as a defense that they were rendered by the plaintiff to a corporation named the Blanchard Electric Light & Power Company.

Upon the trial it was practically conceded that the services had been rendered and at the salary agreed upon; the issue, however, was whether they were rendered for the copartnership or for the company named.

During the trial the defendant called as a witness Philip Carpenter, a member of the bar and a lawyer by profession. He had been a trustee and secretary and treasurer of the company named for about two years. He preceded the plaintiff as secretary and the defendant Yost as treasurer, and became the attorney for the company. -He assumed to act as such at the same time that he became secretary and treasurer. That was before December, 1886, but was continued until April, 1888. The attention of the witness was called to a page of a book called the Record of the Blanchard Electric Light & Power Company. The resolution contained on this page, which had been passed by the company, was in his handwriting, and was offered in evidence. It is as follows:

“Motion carried suspending the employment, if'any exists, of R. D. Warner, Greo. W. Wanson and H. P. Sisson, with full power granted to vice-president and secretary to employ them temporarily, as the interests of the company may seem to require.”

He testified that Mr. Sisson was present at the time the resolution was adopted. He was asked whether anything was said by Mr. Sisson or to him or in his presence why that resolution was passed, and he answered, “Yes, sir.” He thereupon, in answer to a question propounded, proceeded to state that Mr. Sisson had made a claim at different times that the company owed him for services, and that his salary was a certain amount which he did not at that time recollect, and that the resolution, as far as he was concerned in voting for it, was intended to suspend any further claim of that kind on his part. He further stated that he was quite sure he sent a copy of the resolution to Mr. Sisson. Upon cross-examination he was asked, “ Do you recall putting in the words if any exists,’ ” and answered “ I do. not at this moment recall the circumstances which led me to put those words in that resolution.”

And this was followed by this question: “ Is it not a fact that you were under the impression that the company was not liable at all?” That question was objected to as incompetent, irrelevant and immaterial; the objection was overruled and the defendant excepted. The witness answered, “I was of that impression.” It will be remembered that the issue which was in process of investigation was whether the company or the defendants in this action were liable for the services which were rendered, and for which the plaintiff sought to recover, and that Carpenter had been secretary and treasurer and the lawyer of the company ; indeed he was, beside, the attorney of the company in an action brought against it by the plaintiff.

All these circumstances taken into consideration appear to lead to but one conclusion, and that is that the question should not have been allowed. It contained a suggestion that the company were not liable, thus directly affecting the issue to which attention has been called, and which was confirmed by the answer, namely: “I was of that impression.” The jury had 'been empanneled for the purpose of deciding which was liable, the company or the defendants, and the conclusion was to be dependent upon competent testimony; not upon impressions with regard to the liability of the company or the defendants, but upon facts. It is impossible to say that the admission of that evidence worked no prejudice, in consequence of the triple character of Mr. Carpenter, namely, lawyer, secretary and treasurer; and for this reason, even if no other existed, the judgment should be reversed and a new trial ordered But there is still a serious objection to be considered.

The defendant Yost had testified in the cause, and the learned judge in submitting the case to the jury said that Messrs. Blanchard and Yost, the defendants, had both testified on their own behalf, each one of 'them denying that he ever had such conversation with the plaintiff, as stated by the latter, in reference to an agreement to employ him and pay him the amount of money stated as salary or any other sum from their own pockets; and he said to the jury: “You see that there is a direct, irreconcilable conflict of testimony; that either the plaintiff or Yost and Blanchard are very much mistaken in regard to this alleged interview. The plaintiff was certain that there was an interview, and that they had this conversation. The two defendants positively deny there was any such interview or. any such conversation.”

During the trial the defendant Yost on cross-examination was asked to look at a paper presented to him and to say if he was the person mentioned in it. It was objected to, but withdrawn. The paper purported to be an exemplified 'copy of the record of the indictment and conviction of Yost of perjury in the United States court of Pennsylvania; and the court having examined it, overruled the objections to its informality and insufficiency and the paper was put in evidence under the defendant’s exception. Mr. Yost was then recalled and examined in reference to the conviction to which the exemplified copy spoken of referred. He was asked: “Who was president of the United States at that time?” It was objected to as irrelevant, incompetent and immaterial ; the objection was sustained and the defendant excepted. He was then asked: “When did the president of the United States at that time grant you a pardon of the alleged offence?” To which there were the same objection, ruling, and exception. He was then asked: “ What were the reasons given to the president of the United States for the granting of your pardon?” The same objection,ruling and exception. Then followed the questions: “ Did you go to jail under that conviction? How long were you in jail under that conviction?” Both of which were excluded and exceptions taken.

The so-called exemplified copy contained this statement at the end of it: “September 26, 1872—Copy of pardon filed.” It did not appear when the pardon was filed nor did it state. It did not show when the original pardon was granted, or when it was delivered to and accepted by the defendant, as will have been seen. It only mentions when the copy was filed in the clerk’s office.

Tire object of these questions was to show, indeed" it must be so assumed, the promptitude with which the pardon itself was granted, the reasons why it was granted, and the time when the defendant was discharged. All these facts would necessarily have bad a very important bearing on the question of the credibility to be given to the witness. It may be assumed for the purposes of this exception that these questions would have demonstrated his innocence, or a due sense of the impropriety of the conviction to which the record refers.

It was held in Sims v. Sims, 75 N. Y., 466, that if such a record as that mentioned was competent, it was not conclusive as to the fact ..of the commission of the crime charged, but might be rebutted. In that case, the witness having testified as a witness in his own behalf, a record of his conviction in the state of Ohio for a felony was offered by the plaintiff, and received in evidence. The defendant was thereupon asked by his counsel whether he was guilty of the offense of which he had been convicted. This was objected to and excluded, and erroneously, as decided by that adjudication.

The principle of that case applies here. The defendant had a right to show the circumstances under which the pardon was granted, which the questions objected to and excluded were designed to accomplish; and for that reason, if no other existed in the case calling for such a determination, a new trial should be granted.

Ordered accordingly, with costs to abide the event.

Daniels, J.—I agree to the result on the objection first examined.

Van Brunt, P. J., concurs.


text:
    Rosalind C. Richmond, Ex’rx, Resp’t, v. The Railway Register Manufacturing Co., App’lt.

      (Supreme Court, General Term, First Department,

      Filed December 29, 1890.)

    Contract—Royalties—" Heirs.”
    A royalty upon a device used by defendant was reserved to R, under a contract which, among other things, provided that in ease of the death of R it should not work a forfeiture as far as his rights were concerned, but his “ heirs and assigns ” should enjoy its benefits provided they furnished a competent person to take charge of R’s interests. The defendant demurred to a complaint in an action for an accounting brought by R’s executrix, upon the ground that any right of action was in his heirs. Held, that it was evident from the contract that after R’s death it was intended that the business should be carried on by his legal representatives and that the court would not give the word “heirs” a strict.construction.
    Appeal from interlocutory judgment overruling demurrer to complaint.

      E. C. Sprague, for app’lt; Tredwell Cleveland, for resp’t.
   Brady, J.

It appears from the complaint, and is admitted by the demurrer, that on the 18th of May, 1881, a contract was made between the defendant and Alfred W. Richmond, by which the latter was to receive, under the circumstances detailed in the contract, a specified royalty on each device of the defendant used in the territory covered by the contract. In it is contained the following clause:

“ In case of the death of the party of the second part (to wit, the said Alfred W. Richmond), it shall not work as a forfeiture as far as the rights of the party of the second part are concerned, but his heirs and assigns shall enjoy the benefits in full of whatever of business may be in force at that time in his territory, provided they shall furnish a suitable and competent party, satisfactory to the party of the first part (to wit, the ¡Railway ¡Register Manufacturing Company), to take charge of the business of the party of the second part, but any further business that may be obtained by the party of the first part after the death of the party of the second part shall revert to the party of the first part in full, and the heirs and assigns of the party of the second part shall make no claims to any part of such business so obtained without the consent of the party of the first part; ” on the provisions of which the plaintiff bases her claim for an accounting in respect to a share of the profits in its business.

It is alleged that ¡Richmond entered upon the performance of the duties imposed upon him by the contract and continued to discharge them down to the time of his death, on the 21st of November, 1881, fully and faithfully; that at the time of his death the business provided for and covered by the agreement was in force in the territory allotted to him, the benefit of which it was provided, as we have seen, should be enjoyed by his heirs and assigns, and which were claimed by this plaintiff, as the executrix of his last will and testament; that after the death of ¡Richmond one Beadle, who had acted as bookkeeper and whom Bichmond was required to furnish to attend to the business, continued in the employment of the defendant and was accepted by it as a suitable and competent party satisfactory to it, as is provided by the contract, to take charge of the business and affairs at the time of his death, who thereupon undertook the charge of such business and thereafter so continued and has ever since continued and still continues in the employment of the defendant in charge of said business.

It is also alleged that the defendant has caused to be paid to the plaintiff and the plaintiff has received from time to time various sums of money on account of her share as executrix of the profits of the business mentioned, but the just and full amount of such shares has never been paid and a large balance still remains due and owing on account thereof. Also that defendant has often been requested, but has neglected and refused, and still neglects and refuses, to render any account of the business mentioned or the profits, or the amount of profits due and owing to the plaintiff as her share from the same under the agreement aforesaid. The plaintiff then demands that the defendant fully account to her in respect to the business mentioned, from the time of the death of Mr. Bichmond to the date of the account.

The defendant demurred upon the ground that it appears upon the face of the complaint that it does not state facts sufficient to constitute a cause of action. The proposition of the learned counsel for the appellant is that the plaintiff cannot maintain this action unless the benefits of the contract accruing after Mr. Bichmond’s death are personal assets, forming a part of his estate, and for which the executrix may sue.

The learned justice in the court below has disposed - of this question in a brief opinion, presenting the satisfactory result that the demurrer should be overruled. His conclusions are that the word heirs, used in the contract, did not vest the testator’s interest in it in them. It was evidently used to include his next of kin or the persons entitled to his personal estate, and to enable such persons to enjoy the benefit of the business; that the right to the benefits of the business acquired at the time of Richmond’s death vested in his personal representative, and therefore the action was properly brought by the present plaintiff.

The subject is one which is susceptible of great elaboration, but -that process is entirely unnecessary. It will have been observed that although the heirs and assigns should enjoy the benefits in full of whatever business might be in force at the time of the testator’s death, they were to furnish a suitable and satisfactory party to the defendant to take charge of its business; and this ■confirms the view already expressed by the learned justice in the court below that the design was not to vest his interest in the heirs at law wholly and absolutely, but to secure it to them through the instrumentality of his personal representative in case of his death, to whom in the ordinary course of legal transit such personal claims would pass and by whom it should be enforced. The testator evidently designed, and the contract should be so construed, that whatever business had been created by him under the contract which was unfinished at the time of his death should be carried out as an asset growing out of the contract which he made; and whilst it might be regarded as the property of his heirs in case of his death, it should be enforced if any legal proceeding were necessary by his personal representative and thus collected and secured.

For these reasons it is thought the judgment appealed from should be affirmed, with costs.

Van Brunt, P. J., and Daniels, J., concur.


author: Brady, J. Daniels, J.

text:
    The Virginia Tide Water Coal Co., Resp’t, v. The Mercantile Trust Co. et al., Impl’d, Def’ts.

      (Supreme Court, General Term, First Department,

      Filed December 29, 1890.)

    ■Corporations—Trustees.
    Directors of a corporation have no authority to vote interest bearing bonds to themselves as a gratuity, and such an act is void. Stockholders may hypothecate the property to pay debts or raise money for corporate purposes, but can do nothing further, unless there are no debts and the company is in a financial condition to wind up its affairs; and in that case the stockholders and bondholders must be each allotted their proper shares.
    Appeal from order continuing injunction pendente lite.

    This action is brought to restrain the proposed sale by the Mercantile Trust Company, as alleged trustees for bondholders, of 809 acres of coal lands in the state of Virginia, the property of plaintiff. An order enjoining such sale pendente lite was made and continued herein, and the defendant Dinniny, an alleged holder of certain bonds, alone appeals from such order.
    The plaintiff, about December 31, 1887, executed 500 interest bearing coupon bonds of the denomination of $1,000 each, and to . secure the same executed on that date a mortgage or deed of trust to the said trust company.
    The execution of these bonds was duly authorized by resolution of the stockholders, at a meeting called for that purpose, and at the same meeting the stockholders authorized, as part of the plan upon which said bonds were issued, the making of a contract for the disposal of said bonds by a syndicate.
    The time limited in said contract for the disposal of said bonds by the syndicate having expired, and the bonds being intact and unsold, said syhdicate retired from the control of the plaintiff,, and the contract under which the bonds had been made ceased and determined, and said trust company returned the bonds to the plaintiff by delivering them to Walter Hamilton, the president of the plaintiff.
    The bonds remained in the hands of the company intact until October 16, 1888, when the defendant Hamilton, president of plaintiff, procured the passage by the board of directors of plaintiff of a resolution to the effect that one-half of said bonds should be distributed pro rata among the stockholders. This resolution was passed by the vote of said Hamilton and his wife, who then held $330,000 worth of the $500,000 of the outstanding stock of the company.
    One-half of the stock of the company was at that time in the treasury of the company.
    Hamilton, under the alleged authority of such resolution, has taken and converted to his own use $165,000 worth of said bonds so allotted to the $330,000 worth of stock, and has attempted to transfer the whole thereof (stock and bonds) to the defendant Dinniny for $12,000. Dinniny has paid $7,000 and received the bonds, but by reason of the refusal of the treasurer of the company to transfer the stock, he has not paid the remaining $5,000.
    Dinniny received said bonds in the month of January, 1890, and on January 15, 1890, the Mercantile Trust Company, under a power of sale in said mortgage, began to advertise the plaintiff’s property for sale for alleged failure to pay interest on said bonds and this action was brought to restrain such sale, and to declare said bonds and mortgage void.
    Ho stockholders’ meeting was held to authorize the reissue of said bonds or to ratify the resolution for the distribution among stockholders. The plaintiff has not received .any value for said bonds, and all the bonds, except those taken by Hamilton, are now in the possession of the plaintiff, and no stockholder, other than said Hamilton, makes any claim thereto.
    The company never did any business or made any profits, and there are several stockholders not assenting to the resolution to' distribute those bonds.
    The lands of the company were purchased from Hamilton and wife, who received the whole capital stock ($1,000,000) therefor. They subsequently, and before December 31, 1887, donated $500,000 of the stock to the plaintiff for working capital, and that stock has been ever since in the treasury of the company.

      At the time of making the first contract for the sale of the bonds the stockholders made Hamilton their trustee to transfer ■stock and receive a certain percentage of bonds for them.
    When this contract failed of its purpose the trust ceased. Nevertheless, 2,500 shares of stock so transferred by Mrs. Hamilton to Mr. Hamilton, as trustee, still stands in the name of such "trustee, aud such stock he has attempted to sell to Dinniny.
    Mrs. Hamilton died about March 1, 1889. The resolution of October 16, 1888, to reissue the bonds was the inception of a new attempt to sell these bonds through a new syndicate, and Hamilton was to be again trustee for the stockholders, but the action of Hamilton in taking $165,000 worth of the bonds and applying them to his own use has prevented that purpose.

      Horace Secor, Jr., for app’lt; George Bell, for resp’t.
   Brady, J.

The facts and circumstances detailed show an attempt at malappropriation of the bonds by Hamilton, and he was properly arrested in the full accomplishment of his purpose. The stock and bondholders of a company may doubtless justly divide its property among each other if there be no creditors and no dissenters, but there must be a meeting for that purpose. Here it is' expressly alleged and substantially admitted that there was no such meeting; not only that, but that the resolution of the company thereto was procured by Hamilton, under the alleged authority of which he took, as allotted to the amount of stock held by himself and wife, $165,000 of the bonds and attempted to sell them to the defendant Dinniny, who seems to have admitted that he had notice of the equities existing between the plaintiff company and Hamilton. If, however, it be not admitted by him, and his statement that he bought them in good faith is to be considered, it must be said as clearly established that he bought the bonds knowing that Hamilton was president of the company plaintiff, and one of its directors. And further, that they were not sold to obtain a .working capital or to pay a debt, but as the private property of Hamilton. He also knew that the stock which he bought stood in Hamilton’s name as trustee, to which must be added that he bought the bonds for a sum far below their face value, giving only $12,000 for bonds to the amount of $150,000, in addition to 3,300 shares of stock.

Directors of a company have no authority to vote interest-bearing bonds to themselves as a gratuity. The act is ultra vires and void. They are regarded as trustees, and restricted as such to acts consistent with, and protective of, the rights of bond and stockholders and creditors. Stockholders may doubtless hypothecate the property of the company to pay debts or to raise money for corporate purposes, but that is all unless, as suggested, there are no debts and the company is in such condition financially that it may wind up its affairs and go out of existence, and provided the stockholders and bondholders are respectively allotied their full shares. Bartlett v. Drew, 57 N. Y., 587; Hastings v. Drew, 76 id., 9.

There is no element of neglect existent herein which may invoke the doctrine of acquiescence in the unlawful act complained of, proclaimed in Kent v. Quicksilver Min. Co., 78 N. Y., 159, and other cases. There are no existent facts of which it could be predicate. Nor can the appellants derive any benefit from the fact that the board of directors owned five-sixths of the stock and their consent was binding upon them as stockholders, as suggested in Paulding v.The Chrome Steel Co., 94 N. Y., 341. That case related, however, to a mortgage given by the company which was assailed as fraudulent, but which was held to have been lawfully executed. It is wholly unlike the case in hand, in which the defendants seek to uphold a division of the bonds of the company made gratuitously and without consideration. It thus sufficiently appears that the injunction was provident and should be sustained. Order affirmed, with ten dollars costs and disbursements.

Daniels, J.

The affidavits establish the fact that the bonds were obtained and issued without authority. And while the defendant P. 0. Dinniny, Jr., swears to their purchase in good faith, he does not specifically deny notice, or information of the manner in which Hamilton obtained them. Such a denial was essential to the support of his title. Its absence, added to his intimacy with Hamilton, and the removal of the company’s books to his office, afforded sufficient support to the injunction, to require its continuance. The injunction issued out of the court of chancery in New Jersey did not prevent the prosecution of this' action in this state. The remedy, if even that will be sustained, will be by further proceedings in that court.

The order should be affirmed.

Van Brunt, P. J., concurs.