author: O’Gorman, J.

text:
    Theodore C. Weeks, Resp't, v. The Silver Islet Consolidated Mining and Lands Company et al., App'lts

      (New York Superior Court, General Term,

      Filed June 13, 1887.)

    1. Stockholdebs —Effect of non-payment of assessment on stock.
    The plaintiff purchased 6,503 shares of the capital stock in the defendant corporation. On each and every certificate given by the company was indorsed the following: “ The capital stock of this company having been issued full paid for property, pursuant to law, this certificate is issued and received with the understanding and the holder hereby stipulates, that the directors of this company may from time to time but at intervals of not less than six months, make calls on certificate holders for contribution or assessments, of not more than one dollar each per share, * * * The payment of such calls to be optional with the holder, but the failure to pay-such call when due and payable—time being of the essence of this stipulation—shall be and be taken, to be a relinquishment by the holder of the shares, on which payment shall so fail to be made, and this certificate, or any interest thereunder in regard to such share shall be null and void.” The plaintiff failed to pay the amount of two certain assessments duly made, when they became due. Held, that he ceased by his own delinquency and laches to be a stockholder and had no rights or interest in the corporation and no right to object to what the corporation did with the stock he forfeited.

      2. Same—Interest of in forfeited shakes.

      Held, that the contract was a contract between yach stockholder and the corporation, and one another, and on the forfeiture by any stockholder of his interest and right to a distributive share of the corporate property assets and profits, the rights of the (¡operation and of the other stockholders to share in the corporate property which he had forfeited by his delinquency ipso facto came into existence and vested in them.
    3. Same—Could not be deprived of interest without their consent OR DUE PROCESS OF LAW.
    The shares of the other stockholders, who' thenceforth composed the corporation, became enhanced and increased in value, by the addition of the shares which the delinquent stockholder had lost. Their right to have and enjoy that increase was valuable and became vested in them and each of them and of that right, they could not be divested without their own consent or due process of law.
    4. Same—When court of equity will not releeve from effect of forfeiture.
    Courts of equity in cases of non-compliance by stockholders with the the terms of payment of their installments, at the time prescribe 1, by which a forfeiture of their shares is incurred under the by-laws refuse to interfere by granting relief against such forfeiture.
    Appeal from a judgment in favor of the plaintiff.

      S. A. Noyes, for resp’t; Nelson & Spencer, for app’lts.
   O’Gorman, J.

The action was tried at special term, and its main purpose was to obtain a decree canceling the forfeiture of plaintiff’s 6,523 shares of the capital stock in the defendant corporation, because of his failure to pay assessments on said stock and permitting him to redeem the stock so forfeited on his payment of the amounts due on such assessment with interest.

It is not alleged in the case on appeal that all the evidence received at the trial is set forth in the case, and, therefore, the findings of fact made by the learned trial judge must be assumed to have been supported by competent and sufficient evidence.

From these findings of fact it appears that plaintiff, before November, 1881, had purchased in the open market, and was, since then, the owner of 6,523 shares of the capital stock in the defendant company, which is a corporation duly created and organized by and under the laws of this state, with a capital of $1,000,000 divided into 40,000 shares.

The plaintiff paid, in common with the other stockholders, eight assessments on his shares.

He did not pay an assessment of one dollar per share duly called for by the corporation and.due on May 1st, 1884, being the ninth regular assessment, and he did not pay another assessment of one dollar per share, duly called for by the company and payable on November 1, 1884, being the tenth assessment.

As to the former of these calls:

On March 8, 1884, the defendant company caused to be served on plaintiff a notice, in the following words:

“New York, March 15, 1884.
Notice is hereby given that the directors of this company, by authority specially conferred by the shareholders, hereby call for a contribution or assessment of one dollar per share, payable on the first day of May next. Stockholders are requested to read and conform to the stipulation on their share certificates, as failure to pay is without remedy. Interest at the rate of seven per cent per annum will be allowed on payment made prior to first May.
B. E. STRONG-,
Vice-president.

About April 15, 1884, a further notice was sent by defendant corporation to plaintiff, which was in these words :

“New York, April 15, 1884.
“Stockholders are reminded that after Slay 1 next, all certificates for shares, on which the contribution or assessment then due is unpaid, will be ‘null and void,’ pursuant to stipulation endorsed on all certificates, and that the directors and company will be powerless to restore any interest to delinquent shareholders. B. E. STRONG-,
Vice-President.

N. B.—As a matter of form, the above reminder is sent to every stockholder of record;, therefore to holders who have paid the contribution or assessment due as above on their stock, this will not be considered a notice of delinquency.”

As to the latter of these calls, being for payment of an assessment on November 1, 1884, the defendant company also caused notices to be served on the plaintiff, in one of which, dated September 15, 1884, was included the following statement:

“ This notice does not apply to the following certificates, which are already void for. non-payment of an assessment due May 1st, last;” and the notice also contained a list of certificates of stock so forfeited, including the delinquent shares of the plaintiff. And thenceforth, in all communications from the company to the plaintiff, his said delinquent shares were treated as having been forfeited.

Neither of these assessments was ever paid by ths plaintiff.

On November 1, 1884, plaintiff was notified that all of the stock forfeited for non-payment of these assessments would be offered for sale on September 18, 1884, at a price not less than the sum due thereon, and interest; and that parties desiring to re-acquire their interests could have no preference upon offers for stock in excess of the minimum rate therein fixed, of $2.05 a share.

The company derived its authority to make these calls and serve these notices on stockholders from the following agreement between it and them.

When the plaintiff purchased his stock in the company, he received a certificate therefor, in the same words and to the same tenor and effect as all the certificates given by the company to all others of their stockholders.

On each of these certificates the following words were endorsed,

“The capital stock of this company, having been issued full paid for property, pursuant to law, this certificate is issued and received with the understanding, and the holder hereby stipulates that the directors of this company may from time to time, but at intervals of not less than six months, make calls on certificate holders for contributions or assessments, of not more than one dollar each per share, and to an amount not exceeding ten dollars per share in the aggregate. The payment of such calls to be optional with the holder, but the failure to pay any such call, when due, and payable—time being of the essence of this stipulation—shall be and be taken to be a relinquishment by the holder of the shares, on which payment shall so fail to be made, and this certificate, or any interest thereunder, in regard to such shares shall be null and void.”

On or about September 15, 1884, and November 7, 1884, and subsequently the defendant company assumed to forfeit plaintiff’s stock for non-payment of these assessments, and on the latter day advertised a sale of all its delinquent stock, including all the stock of the plaintiff, at a minimum price of $2.05 per share, but none of plaintiff’s shares'was then or since then ever sold by the company.

Adjournments of this threatened sale took place from time to time.

On January 19 and 20, 1885, plaintiff requested from the company, through its then president, an adjournment of the sale of his delinquent stock, which sale had been pre - viously adjourned to January 20, 1885, and plaintiff then received from the company acting through its then president, who was also its chief executive officer, the promise and assurance that the sale of the plaintiff’s delinququent stock should be kept alive and adjourned from time to time, until plaintiff’s arrangements were completed to protect his stock; and that plaintiff should have full and ample notice of any sale or of any adjournment affecting his stock or of anything affecting his stock. Plaintiff believed and relied on these promises and assurances.

He did not subsequently receive from the company any notice of any sale or adjournment of sale of his delinquent stock. But he did receive, in answer to his telegram to the president, a letter written by the secretary of the company to the effect that at the request of plaintiff the sale of the delinquent stock which had been rendered null and void for his non-payment of assessments, was further adjourned to the 20th of January, 1885. In June, 1886, he made formal protest in writing against any forfeiture of his stock as illegal, and against any transfer of the same.

Plaintiff never made any tender to the company of the amounts due and unpaid on account of these two" assessments, or either of them, and this action was begun by him on July 16, 1886.

The learned trial judge held, as conclusions of law: That the stipulation having been assented to by all the stockholders, was valid and binding on the plaintiff; that the failure of the plaintiff to pay the assessments, did not vest the title to his stock in the company, so that it could reissue it; that the effect of the forfeiture was simply to terminate the right, title and interest of the plaintiff as holder of said stock to any interest in the corporate property; that plaintiff’s delinquent stock did not become the property of the company, nor was there any power given to or in the company to sell the shares of stock held by him or to dispose of them in any way, and that plaintiff was entitled to be relieved of his forfeiture, on payment of the amounts due by him on the assessments, with interest.

The contention on this appeal is, whether it being conceded that the failure of the plaintiff to pay the assessments did work a forfeiture of his stock, and that such forfeiture terminated his right and title as holder of the-stock to any interest in the corporate property, the inference is not legitimate and inevitable that the right and title' to the stock thus forfeited, did vest in the company, at the instant on which the forfeiture took place, so that the company could re-issue it, or sell it, or dispose of it in any other lawful way, free and discharged from any adverse claim of the plaintiff.

In considering this question, it is proper to give consideration and due effect to the language of stipulation itself, which provides expressly, “that the failure to pay calls when due—time being of the essence of the stipulation— shall be, and be taken to be, a relinquishment by the holder of the shares on which payment has not been made and this certificate and all interest thereunder in regard to such shares shall be null and void.”

It seems hard to imagine any language that could more-clearly indicate the intention of the parties to this stipulation, that all possession, control of title to and interest in the delinquent stock, theretofore vested in the holder, should thereafter cease to exist, and that upon the occurrence of tlu act of delinquency, he should cease to have any share or part in the property or assets of the corporation or claim against the corporation or its stockholders.

The result would also follow, that the corporation would, from that time, have no claim against him for further assessments.

The stipulation was a contract between each stockholder, and the corporation, and one another, and on the forfeiture by any stockholder of his interest and right to a distributive share of the corporate property, assets and profits, the rights of the corporation and of the other stockholders to share in the corporate property, which he had forfeited by his delinquency, ipso facto came into existence and vested in them.

The shares of the other stockholders, who thenceforth composed the corporation, became enhanced and increased in value, by the addition of the shares which the delinquent stockholder had lost. The idea that he had forfeited his stock carries with it the conclusion that the interest in the corporate property, which his stock had represented, reverted to and became absorbed in the corporation and its stockholders.

Their right to have and enjoy that increase was valuable and became vested in them and each of them, and of that right they could not be divested without their own consent or due process of law. Morawetz on Private Corporations, § 316.

They might have consented to waive their claim to share in the interest of the delinquent stockholder, which he had forfeited, on payment by him of the assessment due, and interest.

They did, for a considerable time, give plaintiff ample opportunity to recover his forfeited stock on such term or terms almost as easy. But he took no steps whatever to avail himself of such opportunity, and the non-delinquent stockholders continued, on all occasions, to assert the right of the company to treat the plaintiff’s stock as forfeited, and null and void, as provided for in the stipulation.

Thus, whether the stockholders who paid the assessments did or did not sell the forfeited stock, or re-issue it, was not a matter in which the plaintiff had any interest.

He had ceased, by his own delinquency and laches, to be a stockholder, and had no rights, or interest, or concern, in the corporation to assert or defend.

That the stockholders in good standing had the right to sell or re-issue stock in place of the delinquent forfeited stock, would seem to follow from the extinguishment of plaintiff’s rights in that stock, even without any special authority to do so expressed in the stipulation, but that question need not be decided here.

It is enough to say that plaintiff’s rights as to that stock had ceased to exist, and he had no voice in the matter and no right to object to what the corporation did with it.

But it is contended, on the part of the plaintiff, that the corporation entered into a special agreement with him not to sell his _ delinquent stock without notice, and that notice was not given.

On that subject the trial judge found that on January 19 and 20, 1885, the plaintiff received from the company, acting through its president, the promise and assurance that the sale of plaintiff’s delinquent stock should be kept alive and adjourned from time to time until plaintiff’s arrangements to protect it were complete, and that he should have ample notice of any sale, and that no notice of any sale was given to the plaintiff by the president.

To this claim, it may be answered that no sale of the plaintiff’s delinquent stock ever did take place, and again, that, although no notice was given him by the president in person, such notice was given by the secretary of the company, in answer to the request of the plaintiff, telegraphed to the president; and that the president’s promise to the plaintiff was thus substantially kept good.

But the plaintiff’s delinquent stock, having been forfeited and become null and void, and all his interest therein having become invested in the non-delinquent stockholders, who thenceforth constituted the company, they had acquired valuable rights and interests in the share of the corporate property, represented by that stock, of which they could not be divested by the president by virtue of any power in him inherent in his office, and the trial judge found that there was no evidence that the board of trustees ever gave him any direction of any kind relative to the delinquent stock.

The remaining question is whether, under all the circumstances of this case, the plaintiff has shown that he is entitled to relief, against this forfeiture, from a court of equity. It has been said that a court of equity abhors forfeitures. It is true that it is indisposed to aid in the infliction of a forfeiture, but is by no means true that it always lends its active assistance in preventing forfeitures from taking effect.

Where the forfeiture is clearly intended to be a mere security for payment of money (as, for instance, a right of entry on non-payment of rent), there, it is treated as a mere security, and in the nature of a penalty and relievable.'

But where the forfeiture arises from the breach of another covenant of a collateral naturej as, for instance, a covenant for repair, although the compensation might be ascertainable, yet it has been held that courts of equity ought not to relieve, but should leave the parties to their remedy at law. Story’s Eq. Jurisprudence, §§ 1321, 1322.

On consideration of public policy also, and of the necessity of prompt performance in order to accomplish public or corporate objects, courts of equity, in cases of non-compliance by stock holders with the terms of payment of their instahnents, at the times prescribed, by which a forfeiture of their shares is incurred under the by-laws, have refused to interfere by granting relief against such forfeiture. Story’s Eq. Jur., § 1325; Sparks v. Liverpool, etc., 13 Ves., 433, 434; Opinion of court in extenso, in note to section 1325, Story’s Eq. Sur.; Prendegast v. Turton, 1 Young & Coll., Rep., 98, 110, 112.

It seems manifest that, in cases like the case at bar, prompt and punctual payment of assessments must be essential to the success of the corporate undertakings, and that delays in making prompt and punctual payment, and the uncertainty of receiving the required funds at the time called for, would tend to perplex and paralyze the execution of its purposes and plans, and produce disastrous failure of its efforts.

The consciousness that such relief against a forfeiture was attainable in such a case, even in spite of the strongest expression in the stipulation or agreement that the act, by reason of which the forfeiture was incurred, was specially obnoxious, would give the delinquent stockholder, as in the case at bar, full leave to pay his contribution to the corporate expenses, or leave them unpaid, according to his own will and pleasure, thus throwing the weight of supplying funds to the corporation on the stockholders, with the rights still retained by the delinquent stockholder to stand by, as long as he pleased, and until the better prospects of corporate success made it to his interest to renew his proprietary relations with the company.

This would seem to me to be a trifling with the obligation, and an offense against the sanctity of a contract, which it would be against public policy to encourage, and which a court of equity should refuse to protect or promote.

In the case at bar none of the ordinary grounds for equitable interference exist.

There was nothing harsh, or sudden, or secret, or oppressive in the action of the company after the forfeiture of the plaintiff’s delinquent shares had taken place. There was no deception on his part—no mistake on his.

His own delay in taking steps to reinstate his delinquent stock was laches for which no justification or excuse appears; and his appeal to the protection of the court, unless it is due to him as a strict right, has little or no support in any reason for indulgences that is presented in the case.

In my opinion, the contract set forth in the stipulation is clear, reasonable, and in all respects binding; and should be, in all respects, enforced without interference of a court of equity to sanction or sustain its violation.

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

Sedgwick, Ch, J., and Freedman, J., concur.


source: Caselaw Access Project

author: Truax, J.

license: Public Domain

text:
    George W. Manson, Resp't, v. The Manhattan Railway Co., App'lt.

      (New York Superior Court, General Term,

      Filed June 13, 1887.)

    1, Negligence—Railroads—Care and diligence required oe.
    In an action brought to recover damages for injuries alleged to have been sustained by the plaintiff by being struck in the eye by a small particle of iron, which fell on him from defendant’s road while riding on the front platform of a surface horse-car in a certain street, through which street the defendant’s elevated railroad was operated. The alleged negligence consisted in defendant’s allowing its railroad track to become worn and scaly, and in allowing particles of iron to accumulate on the structure of said railroad so that particles or scales of iron could be detached and thrown therefrom by defendant’s train of cars, and in not providing means to prevent the discharge or falling of such pieces, etc., into the street beneath the track. Held, that the defendant was not bound as against the plaintiff to add to the construction and equipment of its road and its cars the best and most select safeguards which human skill and ingenuity from time to time had invented and brought into use to prevent accident; but that it was bound to use due diligence and care in operating its road so as not to cause injury to others. If it had failed to use this due diligence and care, then it was liable to one injured for its failure.
    2. Same.
    It having been shown that the falling of the pieces and particles of iron, dust, etc., into the street beneath could have been prevented by sweeping them from the track into pans and removing them before they had time to accumulate and be dangerous: Held, it was negligent for the defendant not to have done so, and that plaintiff was entitled to recover.
    This is an appeal from a judgment in favor of the plaintiff, and from an order denying a motion for a new trial.
    The action was brought by the plaintiff to recover damages for injuries alleged to have been sustained by him by being struck in the eye by a small particle of iron which fell on him from the defendant’s road while riding on the front platform of a surface horse car in West Broadway, through which street the defendant’s road is operated.
    The alleged negligence consisted in defendants allowing its railroad track to become worn and scaly, and in allowing particles of iron to accumulate on the structure of the said railroad, so that particles or scales of iron could be detached and thrown therefrom by defendant’s train of cars, and in not providing means to prevent the discharge or falling of such pieces, scales or other materials into the street beneath the track.

      King & Lightfoot, for resp’t; Davis, Cole & Rapallo, for app’lt.
   Truax, J.

The principal questions discussed upon the argument of this appeal related to alleged errors in the refusal of the court to charge certain propositions requested by the defendant, and in charging certain propositions to which the defendant excepted.

One of these requests was : “That the proof shows that the defendant has complied with the requirement, conditions and plans established by the commissioners of rapid transit appointed by the act of 1875, and that the legislature has authorized the defendant to operate the railroad in question upon a structure, built according to the plans, and according to the specifications and requirements established by said commissioners, and therefore the defendants can not be held responsible for damages occasioned by such operation, provided such operation be carefully and properly conducted.”

This was charged in substance by the court when it charged that the defendants had a right to run trains on their elevated railroad along and through West Broadway by steam, and that for consequences incidental to a careful and skillful operation of that road they were not responsible; that there was no evidence of negligence in the original construction of the road; and that the road was well built, and built according to the special requirements of the law.

The court also charged that in order to recover the plaintiff must establish by competent proof that his injury was caused by some negligence or want of care on the part of the defendants in the operation of their road.

The defendant also excepted to the refusal of the court to charge, “ that the preponderance of evidence is not sufficient in this case to authorize the jury to find that the injury to plaintiff was occasioned by the negligent operation of the railroad in question by defendant.”

This exception is not well taken. There was evidence that the defendant had allowed particles or scales of iron to accumulate upon portions of the structure, which particles were likely to be and were blown down by the wind, or knocked off by the motion of the cars along the track; that it was one of these particles which caused the injury to the plaintiff, and that by the exercise of ordinary care and attention the accumulation of these particles could be prevented.

While the defendant is not bound as against the plaintiff to add to the construction and equipment of its road and its cars the best and most select safeguards which human skill and ingenuity from time to time have invented and brought into use to prevent accident, it is bound to use due diligence and care in operating its road so as not to cause injury to others. If it has failed to use this due diligence and care, then it is liable to one injured for its failure.

There was evidence offered which tended to show that there was such a failure, and therefore it was not error for the court to refuse to charge as requested by the defendant.

These remarks apply to the request of the defendant to charge that the defendant is onty obliged to use such contrivances as are in known practical use under similar or parallel circumstances, and to the other request that- the placing of iron strips or pans, as testified, relates to the construction and not to the management or operation of the road.

The defendant also excepted to the refusal of the court to charge, “that there is no evidence that the particles, which injured plaintiff had accumulated upon .the structure, other than the inferences which may be drawn to that ‘effect from the circumstances testified to.’”

This request admitted that the jury would be authorized in inferring from the evidence that the particle which injured the plaintiff had accumulated upon the structure.

If such an inference could be drawn from the testimony then it was not error for the court to refuse to charge as requested. But the court did charge, “that the plaintiff, in order to recover, must establish, by competent evidence, that if the defendants had done their duty within the rule laid down by the court, the escape of that particular particle of iron would not have taken place; ” that the jury must be able to form a judgment as to where that particular piece of iron came from, and that, unless plaintiff’s case came up to all these requirements, the verdict of the jury must be for the defendants.

The defendant excepted to the refusal of the court to charge “that it was not obliged to use appliances which would produce other kinds of injury, even if such appliances would prevent the accident in question.

And defendant also excepted to the charge of the court “that it was the duty of the defendants to take all reasonable measures to guard against such injurious consequences, even if that' involved the making of additional fixtures, not contemplated from the beginning, so long as their adoption did not involve a radical change in the general construction of the road. ”

There was no error in either one of these rulings of the court. The charge was, in substance, as before stated, “that the defendants were not bound to use the best and most select safe-guards which human skill and ingenuity have invented and brought into use to prevent accident, but that they were bound to use due care and skill in operating their road.”

What that due care and skill was, the court instructed the jury.

One of the plaintiff’s witnesses was asked if he knew of any device that would prevent a paring from falling into-the street below ?

This the defendant objected to upon the ground that it is immaterial whether the witness does know of airy device that would, in his opinion, prevent it. And, upon, the ground that the legislature has designated exactly the way in which the road must be constructed in the act of 1815, chapter 606.

This objection was overruled and the defendant duly excepted.

The question was not directly answered. The witness did not mention any device, but said that it would be quite competent for the defendant to have its trackmen regularly as they go along the structure, make it a part of their duty to scrape this material as it accumulates, and before it gets to be dangerous, into little pans, which they could remove and thus prevent it from dropping into the street without any addition to the structure whatever—simply the exercise of care and judgment in the working of the road.

The liability of the defendant is defined in the case of Steinweg v. The Erie Railway Co. (43 N. Y., 123), as follows:

“ The defendant was negligent if it failed to adopt the most approved modes of construction and machinery in known use in the business, and the best precautions in known practical use for securing safety; in other words, if there was known and in use any apparatus or contrivance which, applied to the engine or to the track, would prevent the falling of dust or cinders into the streets, it was negligence in the defendant if it did not avail itself of such apparatus; but it was not bound to use every possible prevention which the highest scientific skill might have suggested, nor to adopt an untried machine or mode of construction.”

The defendant had used the road for some years prior to the happening of the accident, and experience must have taught them that dust and flakes of iron were likely to accumulate on the track and be blown by every breeze into the street. They knew that the street was used, and that it was not improbable that the falling dust would cause injury to those beneath the track. For this reason a high degree of care is required of the defendant.

Sweeping the dust from the tracks in the manner suggested by one of the witnesses, is a means of preventing an accident of the kind complained of in this case so patent and so easy that it should have been employed by the defendant.

It did not need that the witness should testify that such an appliance was in practical use, because the mere mentioning of it shows its worth. To sweep the dust from the track would have perhaps required the employment of a few more servants by the defendant, and thereby increased the expense of operating the road, but that is no reason that the defendant should injure others. It had control over the cause of the accident, and for its failure in not exercising that control it was negligent.

These questions were properly asked in rebuttal. The defendant sought to show that the dust and filings could be kept from falling into the street only at a great expense, and the answers to their questions tended to show that the filings and dust could be kept from falling into the street with little expense and without much trouble.

We are of the opinion that the judgment and order should be affirmed, with costs to the respondent.

Sedgwick, Ch. J., and Dugro, J., concurs.


author: Per Curiam.

text:
    Michael Noonan, Resp't, v. John H. Strahan, App'lt

      (New York Superior Court, General Term,

      Filed June 24, 1887.)

    Evidence—Admissibility of.
    The plaintiff had testified that the defendant at one time had told him that there was three or four thousand dollars more due to plaintiff which he could not pay. . That he did not have the money at that time, but that he would give his note, etc This was contradicted by the defendant, who also sought to show that as a matter of fact, he had at the time the statement was alleged to have been made, more than three or four thousand in bank. Held, that the evidence was properly excluded.
    Appeal from a judgment rendered after a trial by jury. And from an order denying a motion made on the minutes to set aside the verdict and for a new trial.
    The facts in the case are fully stated in an opinion delivered in a former appeal. 1 N- Y. State Rep., 783.

      Thomas Allison, att’y, and David J. Dean, of counsel, for app’lt; L. Laflin Kellogg, for resp’t.
   Per Curiam.

Most of the questions raised on this appeal were decided adversely to the appellant on the former appeal.

The only new questions arise on the exceptions taken by the defendant to the refusal of the court to admit certain evidence offered by the defendant.

The respondent had testified that the appellant at one time had told him that there were three or four thousand dollars more due the respondent which he (the appellant) could not pay.

That he did not have the money at that time, but that he would give his note at three or four months for said amount.

This testimony was contradicted by the appellant.

The appellant then sought to show that as a matter of fact, he had at the time this statement was alleged to have been made, more than the sum of three or four thousand dollars in bank, and questions tending to show that such, was the fact were asked, and under the objection of the respondent, excluded.

There was no error in excluding this evidence.

It did not prove, nor did it tend to prove, that the appellant had not made the statement which it was alleged that he had made.

The record failed to show an exception that constituted a ground for reversal, and the verdict cannot be held to be against evidence or the weight of evidence.

The judgment and order appealed from are affirmed, with costs.


author: Freedman, J.

text:
    Ellen A. Kelly as Adm'rx, etc., of James W. Drury, Deceased, Resp't, v. The Manhatten Railway Company, App'lt.

      (New York Superior Court, General Term,

      Filed June 23, 1887.)

    Negligence—Railroads—Care oe steps leading to train.
    In an action for damages for injuries received by intestate by slipping on the stairway leading from a station of the defendant company. Held, that the defendant, as a carrier of passengers for hire, was responsible for something more than mere ordinary care in keeping the staircase in a safe condition for the entrance and egress of passengers to and from the station. It was, as against its passengers, bound to use all such reasonable precaution against injury as human sagacity and foresight can suggest.
    Appeal from judgment entered in favor of the plaintiff upon the verdict of a jury, and from order denying defendant’s motion upon the minutes for a new trial.

      Davies, Cole & Rapallo, attorneys, and Edward S. Rapallo, Howard Townsend, of counsel, for app’lt; Ashbel P. Fitch, attorney, and Henry H. Spelman, of counsel, for resp’t.
   Freedman, J.

The theory upon which the plaintiff had a verdict is that plaintiff’s intestate, after having been carried as a passenger by the defendant, and while engaged in descending the stairs leading from defendant’s station to the street, slipped on about the third step from the bottom of the staircase and fell to the large flagstone at the bottom of the stairs, whereby, and without any fault on his part contributing thereto, he sustained serious injury, from, which he thereafter died. _

_ There was a conflict "of evidence upon the question whether, at the time of the occurrence, the steps of the staircase were or were not slippery and dangerous, and the case, therefore, was one for the jury.

The defendant, as a carrier of passengers for hire, was responsible for something more than mere ordinary care in keeping the staircase in a safe condition for the entrance and egress of passengers to and from the station. It was,, as against its passengers, bound to use all such reasonable precautions against injury as human sagacity and foresight can suggest. Weston v. N. Y. Elevated R. R. Co., 42 Superior Ct. R., 156, affirmed 73 N. Y., 595.

Some parts of the charge that have been complained of, seem, when considered by themselves, to state the rule more strongly against the defendant; but the charge, as a. whole, with the corrections and additions made in view of the requests of the defendant, does not in effect go beyond the line laid down in the Case of Weston.

None of the exceptions taken to the charge, the refusal to charge, and the exclusion of certain evidence, presents, under all the circumstances, any ground for reversal.

Sedgwick, Ch. J., concurs; Truax, J., dissenting.


author: Per Curiam O’Gorman, J.

text:
    William C. Herring, as Trustee, v. Mary C. Berrian et al.

      (New York Superior Court, General Term,

      Filed June 24, 1887.)

    1. Title—Judicial sale—Kind of title purchaser is entitled to.
    The rule of law as to judicial sales is that the purchaser of real estate should have a marketable title free from all reasonable doubt.
    3. Same—Tax lease is a cloud on.
    The existence of an outstanding tax lease is a cloud on the title, so that it is not a marketable title.
    3. Same—Release—When does not remove cloud.
    ' An indenture was executed by the tax lessee to the purchaser of certain property at a judicial sale whereby he agreed for himself, his heirs and assigns, that neither he, nor they would take any action or proceeding to recover the possession of the premises in question, but reserved the right to sue the mayor, etc., of New York, for return to him of the-•amount paid for taxes. Held, that it did not remove the cloud on the title which existed by reason of the tax lease and that the title was not-marketable.
    Appeal from an order entered at special term directing, that the deposit on signing the contract for the purchase of real estate be returned. The release referred to in the opinion was: ‘ ‘That the said party of the first part for and in consid■eration of the premises, and of the sum of one dollar to him in hand paid by said party of the second part, does hereby for himself, his heirs, executors, administrators and assigns •covenant and agree to and with the said Abraham Gut-man, his heirs and assigns that if he will complete his said purchase, and shall take and accept a deed of the said premises, that neither the said party of the first part nor his heirs, executors, administrators and assigns shall or will at any time thereafter take any action or proceeding to recover the possession of the premises hereinafter, and in .said lease described under or by virtue of the said lease or to recover any damage for withholding possession of said premises or any part thereof, or any sum for the use and occupation thereof. * * * It is expressly agreed that nothing herein contained shall in any way affect the rights of the said" Louis Levenson in the action now pending between him and the mayor, aldermen and commonalty by virtue of said lease.

      C. H. Brewster, for pl’ff; Kurzman & Yearnan, for purchaser; Ten Eyck & Remington, for defendant Berrian.
   Per Curiam

Order affirmed, with ten dollars on the opinions below. The following are the opinions below:

(Special Term, Filed May 5, 1887.)

Motion by purchaser, at a sale of land in the partition, to be relieved of his purchase, etc., on the ground of defects in the title.

O’Gorman, J.

The main objection to the title is that the land was sold for non-payment of taxes and a lease delivered to the purchaser, which lease is still outstanding.

In answer to this objection the plaintiff contends that the sale of land for unpaid taxes was irregular and void, and that it was so held by a referee in an action brought by the holder of the tax lease against the defendant in this action.

That action, however, was never continued to judgment, and seems to have been discontinued, and the report of the referee therein is in no wise an adjudication or an estoppel that can be effectual in the action now at bar, and is not evidence in this action..

The rule of law, as to judicial sales, is that the purchaser should have a marketable title, free from all reasonable, doubt.

The purchaser buys on the assumption that there are no undisclosed defects in the title, and he pays and the seller receives a consideration in view of that implied condition. A title, open to reasonable doubt, is not a marketable title.

A court cannot make it so, by passing on objections dependent on a disputed question of fact or a doubtful question of law in the absence of the parties in whom the outstanding right is vested. Fleming v. Burnham, 100 N. Y., 8, et seq.

A purchaser should not be left, on receiving a deed to the hazard of a contest with other parties, which may seriously affect the value of the property if he desires to sell. Jordan v. Poillon, 77 N. Y., 621.

The existence, in the case at bar, of an outstanding tax lease, is a cloud on the title. The title is open to reasonable doubt and is not a marketable title.

Another objection is, that since the commencement of this action, and before a sale therein by the referee, the title of plaintiff as trustee ceased by the death of the cestui que trust, and all the interest remaining in the plaintiff in the land in question was a naked power to sell. --

I do not so interpret the deed under which plaintiff held in trust.

I am not of opinion that the trust vested in the plaintiff wholly ceased on the death of Cornelius J. Herring.

It still continued, I think, for the purpose of sale of the land and distribution of the proceeds among children. Morse v. Morse, 85 N. Y., 57.

' Besides, even if after the death of Cornelius, the trust in plaintiff had ceased, he yet, as one of the persons entitled to share in the final distribution of the proceeds of the sale of the land had, I think a personal interest in the property and right to possession entitling him to sue as plaintiff in this action.

This defect, however, if it be a defect, may no doubt be cured by amicable arrangement among the parties in interest in this action, if, as I am informed, they desire to render the sale to the present purchaser effective. Cromwell v. Hull, et al., 97 N. Y., 209.

The other objection depends on alleged irregularities which need not now be considered.

The first objection, I think is fatal.

The motion of Abraham Altayer, the purchaser, is granted, with ten dollars costs.

(Special Term, Filed May 16, 1887.)

O'Gorman, J.—Since writing my opinion, filed on May 5, 1887, my attention has been requested to a paper executed by Mr. Levenson, the holder of the tax lease, and filed, and I am requested to consider its effect on the rights of Mr. Gutman, the purchaser, to be relieved from his purchase. I see no reason to alter the conclusion at which I had heretofore arrived.

This paper called an indenture, executed hy the tax lessee, while it may secure the purchaser from molestation of his title by the tax lessee, expressly reserves to the latter the right to sue the Mayor, etc., of New York for return to him of the amount paid for taxes.

Whether he will succeed in this action, and on what ground his success may depend, are equally uncertain.

His recovery, if he does recover, may depend wholly on the irregularity of illegality of the sale, in which case a question might arise whether a further sale of the premises for the unpaid tax would not be proper. What the result would he if the assessment itself were held to have been irregular or illegal, is a question as to which I give no opinion now.

But the paper executed by the holder of the tax lease leaves that lease still an existing cloud on the title against which the purchaser may be called on to protect himself through the ordeal of litigation to which he should not be exposed. A title so endangered is not a marketable title.

1 have not alluded to other objections made on behalf of the purchaser to the' completeness of this paper, executed by Mr. Levenson, as relieving the title of its imperfections.

I adhere to the opinion heretofore expressed by me that Gutman, the purchaser, at a judicial sale, had the right to a marketable title, and that the title offered to him was not such.__


author: Per Curiam

text:
    John B. Ireland, Resp't, v. The Metropolitan Elevated Railway Co., App'lt.

      (New York Superior Court, General Term,

      Filed June 24, 1887.)

    Amendment—On new trial.
    Where an action had been once tried and the judgment entered in favor of plaintiff, which was reversed on appeal to the general term, “with costs to abide the event” and a new trial ordered, at which new trial the defendant objected to the sufficiency of the complaint, and plaintiff was allowed to amend on payment of twenty dollars costs. Held, that the plaintiff should have been ordered to pay the costs awarded to the appellant on the appeal, and ten dollars costs of the motion as the terms on which the amendment would be allowed.
    Appeal by the defendant from an order of the special term allowing the plaintiff leave to serve an amended complaint on payment of twenty dollars costs.
    This action was originally brought to recover the total damage to plaintiff’s easements of light, air and access, appurtenant to his property in Amity street and South Fifth avenue, in consequence of the construction, maintenance and operation of defendant’s railroad. Ireland v. Met. El. B. B. Co., 52 Super. Ct., 450. The plaintiff had a verdict in November, 1884, for $13,550. The defendant appealed to the general term. In December, 1885, the judgment appealed from was reversed, and a new trial was ordered, " with costs to the appellant to abide the event. ” The court then held that the total damage to the fee might be recovered, upon an offer at the trial to convey the property .alleged to have been taken, but that damages to the rental value could not be recovered in this case. Id. In January, 1886, the court of appeals decided that no action would lie to recover the total damage to the fee in such a case, but the plaintiff’s only remedies were either successive suits to recover his temporary damages to the rental value, or an action in equity to restrain the operation of the railroad and .abate the nuisance; or, -where the highway has been exclusively appropriated, an action of ejectment.
    Accordingly, when the new trial came on before Judge Freedman and a jury, in March, 1886, the defendant ■objected that the complaint was insufficient, because it .stated only a cause of action for injury to the fee, and no •such action would lie. The court sustained the objection, but gave the plaintiff leave to withdraw a juror and apply ■to the special term for relief.

      Whitehead, Parker & Dexter, for resp’t; Davies, Cole & Rapallo, attorneys, and Edward C. James, of counsel for app’lt.
   Per Curiam

This action has been tried once and a judgment entered in favor of the plaintiff.

From that judgment the defendant appealed and on the appeal a new trial was ordered with costs to the appellant, to abide the event.

After the decision of the general term the case was brought on for trial before a judge and a jury when the defendant objected that the complaint w-as insufficient because it stated only a cause of action for injury to the fee .and no such action would lie.

The judge before whom the case then was, sustained the •objection, but gave the plaintiff leave to withdraw a juror ánd apply to the special term for relief. The plaintiff availed himself of the leave given to him by the trial judge .and applied at special term for the relief suggested.

The judge below allowed him to amend his complaint upon payment of twenty dollars costs.

We cannot say that the discretion of the judge was unwisely exercised in allowing an amendment, but we are of the opinion that the terms on which the amendment was allowed are not all that should have been given by the judge at special term.

It may be that this amendment will result in a verdict in favor of the respondent in which event the appellant will lose the costs of an appeal in which he was successful.

We, therefore, amend the order of the court below by striking out the words, “twenty dollars costs,” and substituting in the place thereof the words, “ the costs awarded to the appellant on the appeal and ten dollars, costs of the motion,” and as so modified, the order appealed from is affirmed, without costs.


author: Ingraham, J.

text:
    Oceana A. Bancroft, App'lt, v. The Home Benefit Association of New York, Resp't.

      (New York Superior Court, General Term,

      Filed February 14, 1887.)

    1. Insurance (life)—Warranty as to answers in application.
    The policy sued on was issued on the application of the assured, and it was agreed by said assured that “any untrue or fraudulent statement made by me, or to any medical examiner for said association, or any concealment of facts by me, shall forfeit and cancel all rights to any benefit under the above named contract,” which agreement was signed by the assured. The certificate of membership, issued upon the application, provided that, “in consideration of the representations and agreements made in the application heretofore, and which is a part of this contract, and of each of the statements made therein * * * and that the assured admits to be mate, ial, and warrants to be in full and true, and to be the only statement upon which this contract is made.” Held, that the assured warranted the truth of the several answers and that any substantial deviation from truth in the answers given was material to the risk and constituted a breach of the terms of the contract, rendering the policy based upon such answers void.
    2. Same—What is a "wound, hurt or serious bodily injury.”
    In the application for the insurance the assured was asked, “Have you received any wound, hurt or serious bodily injury? ” to which he answered, “Ho.” It appeared that a little over a year prior to the making of the application the assured, while engaged in fencing, received a blow from a foil on the throat, in the neighborhood of or upon the Adam’s apple; that in a few seconds thereafter he raised a little blood, the force of said blow produced an abrasion, wound or hurt on the inside of the windpipe and that shortly thereafter he was confined to his bed during the whole or the greater part of three days, and during that time was attended by a physician. Held, there was sufficient evidence to sustain the finding that prior to the making of the application the assured had received a wound, hurt and serious bodily injury.
    3. Same—What contract may be made—How construed.
    Parties in an insurance contract have the right to insert such lawful stipulation and condition therein as they may mutually agree upon, or which they may consider necessary and proper to protect their interest, and which, when made, must be construed and enforced like all other contracts, according to the express understanding and intent of the parties making them. (Following Dwight v. Germania Life Ins. Co., 3 N. Y. State Rep., 115.)
    Appeal from judgment entered on the trial before the court without a jury.

      E. L. Fancher, for app’lt; H. W. Johnson and Hal. Bell for resp’t.
   Ingraham, J.

The policy sued on, was issued on the application of the assured, and it was agreed by said assured that “any untrue or fraudulent statement made by me, or to any medical examiner for said association, or any concealment of facts by me, shall forfeit and cancel all rights to any benefits under the above named contract;” which agreement was signed by the assured, and the said certificate of membership issued upon the application provides that “in consideration of the representations and agreements made in the application heretofore, and which is a part of this contract, and of each of the statements made therein, which, whether written by his own hand or not, every person accepting or acquiring any interest in this contract hereby adopts as his own and admits to be material, and warrants to be in full and true and to be the only statements upon which this contract is made.”

It is clear that by the application and policy the assured warranted the truth of the several answers, and that compliance with such, warranty was a condition of the validity of the contract of insurance, and that any substantial deviation from the truth in the answers given was material to the risk and constituted a breach of the terms of the contract, rendering the policy based upon such answers void.

This principle is well settled in this state, and has been lately reaffirmed by the court of appeals in the case of Dwight v. Germania Life Ins. Co., reported in 3 N. Y. St. Rep., 115.

In the application for the insurance, the assured was asked: “Have you received any wound, hurt or serious bodily injury?” to which he answered, “ No.”

The court found as a fact: “Fifth. Prior to the making and delivery of the said application, the said John S. Bancroft had received a wound. Sixth. That prior to the making and delivery of the said application the said John S. Bancroft had received a hurt; and, Seventh. That prior to the making and delivery of the said application, the said John S. Bancroft had received a serious bodily injury.” And the only question presented is whether there was evidence to sustain these findings.

It appeared, and the court found that a little over a year and prior to the making of the application, the said Bancroft, while engaged in fencing, received a blow from a foil on the throat in the neighborhood of or upon the Adams apple; that in a few seconds thereafter he raised a little blood; that the force of said blow produced an abrasion, wound or hurt on the inside of the windpipe, and that shortly thereafter the said John S. Bancroft was confined to his bed during the whole, or the greater part of three days, and during that time was attended by a physician.

A consideration of the evidence satisfies us that there was sufficient to sustain these findings. The injury received was followed by the spitting of blood, and by it the assured was confined to his bed for two or three days. Upon no reasonable interpretation of the language used could it be held that this was not a wound or a hurt.

It is not necessary for us to hold that if the court, on the evidence, had found for the plaintiff that there would not be evidence to sustain such a finding.

There is sufficient evidence to sustain the finding made.

As was said by the court of appeals in Dwight v. Germania Life Ins. Co. (supra), " Parties to an insurance contract have the right to insert such lawful stipulations and conditions therein as they may mutually agree upon, or which they may consider necessary and proper to protect their interest, and which, when made, must be construed and enforced like all other contracts according to the express understanding and intent of the parties making them. If the insurance policy, in plain and unambiguous language, makes the observance of an apparently material requirement, a condition of a valid contract, neither courts nor juries have the right to disregard it or construct, by implication or otherwise, a new contract in the place of that deliberately made by the parties.

Applying this principle to the facts as found by the court, defendant is entitled to judgment. Judgment must, therefore, be affirmed, with costs.

Freedman, J., concurs.


text:
    Aaron D. Farmer et al., Resp'ts, v. William P. Shannon, App'lt.

      New York Superior Court, General Term,

      Filed February 14, 1887.)

    1. Action—Conspiring to defraud creditors not a cause of action.
    A general creditor cannot bring a civil action against Ms debtor or against those combining and colluding with him to make disposition of his property, although the object of these dispositions be to hinder, delay and defraud the creditors. Following, Adler v. Fenton, 24 How. U. S., 408.
    2 Same—Subsequent judgment does not make actionable.
    Where the things complained of were all done while plaintiffs were but simple creditors: Held, that if the acts were not then actionable they did not become so by a subsequent recovery of judgment in favor of plaintiffs.
    3. Same—For fraud—What not sufficient.
    In an action for damages because in another action brought by these plaintiffs against a corporation, this defendant, as president of said corporation, with intent to delay and defraud plaintiffs, made an affidavit which he knew to be false, and obtained thereby a stay of proceedings and after-wards interposed a false answer, and while the plaintiff’s proceedings were thus obstructed, he, the defendant, by collusive arrangements with others, procured and suffered the recovery of judgments against the corporation, and the issuing of execution thereon, under which all the property of the corporation was sold and disposed of bef re the plaintiffs could obtain their judgment, so that when the piaiutiffs did recover judgment, it was uncollcctable and worthless, although it could have been collected if the plaintiff had not been obstructed as stated. Ileld, that the action could not be upheld; that it could not be sustained as cne for fraud.
    Appeal by defendant from judgment entered against him upon the report of a referee.

      E. F Bullard, for app’lt; Thornton, Earle & Kiendl, for res’pts.
   Per Curiam

The defendant was held liable in damages because, in an action brought by the plaintiffs against the Queen Publishing Company, a corporation formed under the laws of New York, in the marine court of the city of New York, for goods sold on note and open account, he as the president of said corporation, with intent to hinder and to delay the plaintiffs in the collection of their claim in suit, and with intent to defraud them, made and swore to an affidavit which he knew to be essentially untrue and on it procured an order to show cause why a bill of particulars should not be furnished, with a stay of all proceedings in the meantime and an extension of time to answer, for twelve days, and thereafter, with the like intent, interposed an answer, also sworn to by him, which he knew to be false, and because, while the plaintiffs’ proceedings were thus obstructed, he, the defendant, by collusive^ arrangements with others, and in a great part upon fictitious claims, procured and suffered the recovery of judgments against the corporation and the issuing of executions thereon, under which all the property of the corporation was sold and disposed of before the plaintiffs could obtain their judgment, so that, when the plaintiffs did recover judgment, it was uncollectable and worthless, although it could have been collected if the plaintiffs had not been obstructed as stated. The foregoing facts were found by the referee, and there is evidence to sustain the findings.

This being so, and no error having been pointed out in the admission of evidence, the question is whether, upon the facts as stated and found, a civil action can be maintained.

In so far as the referre relied upon the decision in Moffat v. Herman, by the general term of the city court of New York, he cannot be sustained, because that decision was reversed by the general term of the court of common pleas. See 1 N. Y. State Rep., 97.

It was shown in Verplanck v. Van Buren et al. (76 N. Y., 247, 259),and cases there cited, that an action on the case will not lie against a witness for perjury committed by him on a trial; nor against a party for subordination of perjury, or for a contrivance by which untrue testimony is produced. In so far, therefore, as the action, rests upon the perjury of the defendant, it cannot be sustained.

But it was also shown in the case last referred to that there was in former time the writ of conspiracy at common law, which lay in two cases only, viz.: Conspiracies for treason, or a capital felony, the party being acquitted, and that there also was, and is now, an action on the case for conspiracy, or for acts in the nature of a conspiracy.

Such an action on the case lies where there is a combination for the purpose of fraudulently making use of legal proceedings and damage is effected by such use.

The plaintiffs are not in a position to claim a benefit from Verplanck v. Van Buren, because, if for no other reason, the complaint here does not charge a conspiracy.

It then remains only to be seen whether the action can be sustained as one for fraud causing damage. If there was an actionable fraud, it must have been one which was committed by the defendant individually. Upon this branch of the case the following considerations arise, viz.: All of the acts done by the defendant, of which the plaintiff complains, were done while the plaintiff was a general creditor of the corporation, of which the defendant was an officer. The defendant was not the plaintiffs’ debtor. His acts cannot be more actionable than would the same acts by the creditor.

Adler v. Fenton (24 How. U. S., 408), was an action begun by creditors of two of the defendants, upon the complaint that the latter had combined and conspired with their co-defendants to dispose of their property fraudulently, so as to hinder and defeat their creditors in the collection of their lawful demands, and that, by means of such fraudulent ants, the plaintiffs suffered vexation and expense, and finally incurred the loss of their debt. There was testimony to convict all the defendants of the fraudulent acts alleged against them.

The opinion of the court notices that at the time of the fraudulent act's, the creditors had no lien upon their debtor’s property, and that the debtor had a legal right to use and dispose of it, as he pleased. In citing Moron v. Dawes (Hopkins Ch. R., 365), it was said that it was clear that chancery would not interfere to prevent an insolvent from alienating his property to avoid an existing or prospective debt, even when there is a suit pending to estabish it. From Moron v. Dawes (supra), was cited that “a creditor acquires a lien upon the lands of his debtor by a judgment, and upon the personal goods of the debtor by the delivery of an execution to the sheriff. Before these liens are acquired the debtor has full dominion over his property; he may convert one species of property into another and he may alienate to a purchaser.” The court ended by saying that, “in the.absence of special legislation we may safely affirm that a general creditor cannot bring an action on the case against his debtor or against those combining and colluding with him to make dispositions of his property, although the object of these dispositions be to hinder, delay and defraud the creditors.”

In the case just cited the plaintiffs do not seem to have recovered judgment on their original demand. In the present case the plaintiffs have become judgment creditors. The things of which they complain were, however, all done while they were but simple creditors. If the acts were not then actionable, they did not become so by a subsequent recovery of judgment.

It has been determined in this state that there is no equitable right to an injunction to restrain a debtor intending to defraud his creditor, by transferring property, from accomplishing his intent. Reubens v. Joel, 13 N. Y., 488.

These considerations fully establish that the action cannot be sustained as one for fraud.

There being no aspect in which the action in this present form can be upheld, the judgment should be reversed, the order of reference vacated, and a new trial ordered, with costs to the appellant to abide the event.


author: Truax, J. O’Gorman, J.

text:
    Cyrus Clark, App'lt, v. Elizabeth A. L. Hyatt, Resp't Elizabeth A. L. Hyatt, Resp’t, v. Cyrus Clark, App’lt.

      (New York Superior Court, General Term,

      Filed June 22, 1887.)

    1. Power of attorney—When it authorizes the leasing of land—A LEASE IS A CONVEYANCE. '
    Elizabeth A. L. Hyatt, having certain real estate, appointed one Lake, her true and lawful attorney, to manage and conduct her property and affairs in the United States, and “ to sell or dispose of all or any part of her real or personal estate” in the United States, and “to convey or assign the same ” to the purchaser thereof. Reid, that the words quoted authorized the attorney to make a lease of the property. That a lease is a conveyance. O’Gorman, J., dissenting.
    2. Same—Ratification—What is—Ultra vires.
    After the execution and delivery of the lease in question Mr. Lake received a cable message from Mr. Hyatt, the husband, which read as follows: “Your powers of attorney canceled, sign no lease.” Mrs. Hyatt, after she knew that Lake had made the lease and the terms thereof, visited the premises, saw the improvements and alterations which the tenant was then making, accepted rent from him at that time and afterwards. Reid, that she ratified the act of her agent. That the lease bound her even if the agent’s act was ultra vires.

    3. Delivery of deed in escrow—How made.
    The delivery of a deed or agreement as an escrow can only be to some one other than a party to the instrument. If made to the party the delivery is absolute, and the instrument takes effect presently, as the deed or agreement of the party making it.

      4. Evidence—Letter—When not evidence.
    A witness having identified a letter written by him to Mr. Lake, was allowed to state, under the objection and exception of defendant, that the statements contained in the letter were true, and then, under like objection and exception, the letter was offered in evidence. Held, error, that it might be used by the witness to refresh his recollection, but the paper itself was not evidence of any fact.
    This is an appeal from judgments entered on the trial of these two actions before the court at special term.

      Sanger & Davis, att’ys, and Joseph H. Choate, of counsel, for app’lt; A. P. & W. Man, for resp’t.
   Truax, J.

In January, 1880, the respondent was the owner of property known as No. 25 Waverly place, in this city of New York, and other real estate, in this state.

She was then living in London. On the second day of January, 1880, she made a power of attorney to her brother, Arthur Lake, which power of attorney recited that the respondent was entitled to certain and personal estate and effects in the United States, and that- the said Arthur W. Lake was about to proceed to the United States of America for the purpose of taking charge of all the respondent’s affairs in the United States, and of managing, conducting or carrying on the same; and that she was desirous of appointing the said Lake her attorney, with such powers as are or may be necessary for, or convenient, for enabling him to manage and conduct her affairs and property, real and personal, in the United States, as effectually as if she were personally present there.

She then proceeded to appoint the said Lake her true and lawful attorney for her, and in her name, or in his own name and on her behalf, generally to manage and conduct her property and affairs in the United States of America as fully and effectually as if she were personally present, and to sell or dispose of all or any part of her real or personal estate in the United States, and to convey or assign the same to the purchaser or purchasers thereof.

Acting, as he supposed, under this power of attorney, Lake entered into negotiations with Clark fora lease of the premises No. 25 Waverly place.

There was some doubt whether or not Lake was authorized to make any lease by his letters of attorney, but finally, and on or about the day of January, 1880, said Lake did execute and deliver to said Clark a lease of the premises above mentioned, for the term of five years, at a rental of $2,000 a year, with an agreement to renew said lease upon certain conditions for two other terms of five years each.

After the execution and delivery of this lease, Mr. Lake received a cable message from Mr. Hyatt, the husband of the respondent, which read as follows: “Your powers of attorney cancelled; sign no lease.”

Mr. Clark entered into possession of the premises February 12,1S80.

The appellant agreed in his lease to expend not less than $2,000 in putting the place in thorough repair, and in making certain necessary alterations. It was in evidence that he did pay upwards of $4,000 in' making these alterations.

The respondent came to this country in September, 1880, and saw the appellant and accepted the rent of the premises from him up to February, 1885.

Mr. Clark brings this action to compel the respondent to specifically perform the terms and conditions of the clause and covenant in the said original lease providing for a renewal thereof, while the respondent brings her action to obtain a judgment adjudging and decreeing that said lease is null and void, and that it be delivered up to her to be canceled.

The respondent claims in both of the actions in substance that the power of attorney did not authorize the attorney therein named to make a lease, and that for certain reasons, which will hereafter be mentioned, she has not ratified the lease already made.

I am of the opinion that the power of attorney did authorize the attorney therein named to make the lease.

In view of the facts of the case, and the recitals in the lease, it seems to me that the words “sell or dispose of all or any part of her real estate,” and the words “ to convey or assign the same,” authorized the attorney to make a lease of the property. A lease is a conveyance. 2 Black. Com., 506. The person conveying is called the leasor. (Wharton’s Law Diet. “Lease—certainly a lease is a disposition of the property.”) She, by that lease, as effectually disposed of the property for the time mentioned in the lease as she could have disposed of it by a deed. Hedges v. Riker, 5 Johns. Ch., 163.

There was a devise to executors in trust, with power to executors to sell and dispose of certain real estate. The executors made a lease for years, and the court held that this wás a valid disposition of the estate within the will.

It was claimed on the trial, and was found, that the appellant did not accept the delivery of the lease absolutely at the time that it was made, but postponed his decision as to accepting or not accepting it until Lake should have telegraphed to England to the respondent to ascertain whether or not she would consent to the lease.

The trial court also found that this fact was not disclosed to the respondent until about the month of October, 1884, and that she accepted the rent which had been paid to her in ignorance of any right on her part to question the transaction or disaffirm or cancel the lease.

The witness, Lake, testified on the trial to the facts which would perhaps warrant these findings; but, on the other hand, the respondent, Clark, controverted in his evidence-this testimony given by Lake.

There is no dispute, however, of this fact; that the lease was drawn up, executed and delivered to Clark, and under the circumstances Clark could not hold the lease in escrow for himself.

Delivery of a deed or agreement as an escrow, can only be made to a stranger. If made to the party, the delivery is absolute, and the instrument takes effect presently, as. the deed or agreement of the party making it. Worrall v. Munn, 5 N. Y., 229.

On the trial, Mr. Yeaman was called as witness by me respondent. It was sought to prove by him that the lease-was delivered to Mr. Clark, but was to be held by him to-await the receipt of a message from the respondent. Mr. Yeaman’s recollection of the transaction was very vague, but he identified a letter written by him at the time to Mr. Lake. He was allowed to state under the objection and exception of the respondent, that the statements contained in the letter were true; and then under like objection and exception, the letter was offered in evidence. This, we think was error. It undoubtedly was offered for the purpose of corroborating Mr. Lake’s testimony.

Undoubtedly it might be used by the witness to refresh his recollection, but the paper itself was not evidence of any fact, and the admission of it under the circumstances, makes this case in many respects, like the case of Hubble v. Bowe (49 Supr. Ct. Rep., 131), in which this court held: “That a line of examination cannot be allowed, which in effect puts in evidence the affidavit of a witness made a. long time previous to the trial, instead of his direct oral statement of his present recollection of the facts therein deposed to.”

I am, also, of opinion that even if Lake had not the power to make the lease, it was ratified by the respondent with full knowledge of all the facts that it was necessary for her to have in order to make a ratification of the lease. The act that she ratified was the act of her agent in making the lease, and this she did, with the full knowledge of the only fact that it was necessary that she should know, namely, the fact that the agent had made the lease. She knew the terms of the lease. She visited the premises, saw the improvements and alterations which the tenant was then making, accepted rent from him at that time and afterwards, and now it would be unjust to allow her to set the lease aside on the ground that an immaterial fact which happened at the time of the making of the lease had not been disclosed to her.

Both of the judgments appealed from are reversed, with the costs and disbursements of appeal in one judgment only.

O’Gorman, J.

The pressure of business on me at special term obliges me to confine myself to a brief statement of the conclusions at which I have arrived.

The power of attorney from Mrs. Hyatt to Lake did not give him authority to execute a lease of Mrs. Hyatt’s house. Craighead v. Peterson, 72 N. Y., 283, et seq.

Both she and Lake, and Clark, were each of them chargeable with knowledge óf the legal effect of that power of attorney. Id.

The negotiation between Lake and Clark about the power of Lake to execute this lease, the doubt expressed by Clark —his refusal to accept delivery of the lease, and his postponement of his decision as to accepting it or not accepting it until he heard further from Mrs. Hyatt—his being informed of the cablegram from Mrs. Hyatt, “Your attorney power canceled; sign no lease,” and his acceptance of the lease thereupon, saying he “would take the risk,” are all immaterial. • The lease then received by Clark was ultra vires and of no legal effect, until Mrs. Hyatt waived the incompetency of her agent to make the lease and ratified the lease, notwithstanding that it was ultra vires.

Mrs.. Hyatt, by accepting rent, did waive the objection to the lease as ultra vires, and ratified it, and it thereby became valid and. binding.

When she so ratified it, she knew that it was ultra vires.

The law charged her with knowledge of the purpose, scope and legal effect of her own deed, and it made no difference what occurred between her agent Lake, and Clark, on the subject of the delivery.

There is authority, too, to support the proposition that she was chargeable with all the knowledge her agent Lake possessed, of what occurred between them. Myers v. Mutual Ins. Co., 99 N. Y., 11; Adams v. Mills, 60 id., 539.

• Her rights were in no way affected by what they said or did on that subject.

Nothing that they could have said or done would have added to, or detracted from her right to repudiate the lease, or to ratify it, if she elected so to do, and her ignorance of what was said or done between Clark and Lake was of no ■consequence, because her rights in no way depended on what was said or done between them.

If Lake had power to execute and deliver the lease, he had delivered it, as far as he was concerned, before the receipt of the cablegram from Mrs. Hyatt. That cablegram did not expressly, or by implication, assert that Lake had had no authority to make the lease, when it was so delivered, but only that the power of attorney was canceled.

If the lease were ultra vires, nothing that nad occurred between Lake and Clark about its delivery could have given it force.

If the lease were made by authority from Mrs. Hyatt, then the delivery of the lease by Lake to Clark before the receipt of the cablegram, was a valid delivery to Clark.

It could not be regarded as a delivery in escrow, for that can arise only when the instrument is delivered to some one, other than a party to the instrument. Worrall v. Munn, 5 N. Y., 229; Cocks v. Barker, 49 id., 107, 110.

The ratification by Mrs. Hyatt, therefore, I regard as a ratification of the execution and delivery of the lease by Lake, and a waiver of her right to object to the action of Lake therein.

In my opinion the lease, with all its incidents, should stand as valid, and binding in all respects, on Mrs. Hyatt, and Clark is entitled to a renewal, according to the terms of the lease.


text:
    Matilda Sloane as Executrix, Resp’t, v. William R. H. Martin, Frank R. Chambers and The American News Co., App’lts.

      (New York Superior Court, General Term,

      Filed December 17, 1886.)

    Lease—Injunction—Will lie to restrain the breach op a covenant NOT TO RE-LET.
    Aii injunction will lie to restrain a breach of a covenant contained in a lease. “ not to assign the lease or underlet the premises, or any part thereof, without the landlord’s consent in writing.”
    Appeal from an order granted by Mr. Justice Truax, on the 25th day of September, 1886, continuing, during the pendency of this action, the preliminary injunction theretofore granted by him, restraining the defendants, Martin and Chambers, from letting, leasing or sub-letting any portion of the premises mentioned in the complaint to the defendant, The American Hews Company, and restraining the defendant, The American Hews Company, from entering into possession of any portion of the said premises.
    On the 7th day of May, 1886, George Sloane, the plaintiff’s testator, by an instrument in writing, leased to the defendants, Martin and Chambers, composing the firm of Rogers, Peet & Co., for a period of seven years, from the first day of September, 1886, the store and basement situate on the northeasterly corner of Broadway and Thirty-second street, at a yearly rental of $15,000. The lease was executed by all the parties, and, among others, contained a covenant in the following words, “That the tenant shall not assign this agreement, or underlet the premises, or any part thereof, or make any alterations, in the building or premises, without the landlord’s consent in writing; or occupy, or permit to be occupied for any business deemed extra hazardous on account of fire.” On or about the 30th day of May, 1886, the said George Sloane died; his will has been admitted to probate and the plaintiff is the sole executrix thereof.
    On the 1st of September, 1886, the defendants Martin ancL Chambers entered into possession of the premises in question.
    Since the 1st of September, 1886, the defendants Martin and Chambers have been in negotiation with the defendant The American News Company for the purpose of assigning or sub-letting a portion of the premises to the defendant The American News Company; and The American News Company have agreed to take and sub-let from the defendants Martin and Chambers, and at the time of the commencement of this action were about to enter and use the same for their business as newspaper distributors without the consent, and against the will of the plaintiffs.

      George J. Peet, for app’lts; Marclay and Forest, for resp’ts.
   Per Curiam

The premises described in the complaint were leased to the defendants, who covenanted not to assign the lease or underlet the premises or any part thereof without the landlord’s consent in writing. By that covenant the plaintiffs reserved to themselves the right to refuse to allow a person to occupy the premises without-their consent, to this the defendants agreed. It will not do to say that tire defendants consider the proposed tenants unobjectionable. The covenant is that the plaintiffs shall consent. The plaintiffs are the ones to determine that question. The court cannot substitute its judgment for that of the lessor.

The papers show that it would be impossible to accurately ascertain the damages that would arise from the breach of this covenant, and no facts are shown which would make it inequitable to enforce the covenant.

On the case as presented by the affidavits, we think the plaintiffs were entitled to the injunction granted and the order appealed from should be affirmed, with ten dollars, costs and disbursements.


text:
    Franklin J. Minck, Appl’t, v. Edward Martin, Resp’t.

      (New York Superior Court, General Term,

      Filed December 30, 1886.)

    Husband and wife—Husband’s liability for necessaries furnished the wife—Effect of the pendency of divorce proceedings.
    Where the defendant had forced his wife to leave his house and had thereafter refused to provide for her, although requested so to do, and the plaintiff had supplied her with necessaries in good faith in ignorance of the pendency of an action for separation, the husband is liable for necessaries furnished to the wife even to one who was forbidden by him to trust her on his account and such liability continues during the pendency of divorce proceedings, at least up to the time of the actual payment of the alimony.
    This is a case where the plaintiff’s exceptions were ordered to be heard at general term in the first instance. The record also contains a notice óf appeal from the order •directing the verdict and from an order denying plaintiff’s motion for a new trial.

      Charles Putzel, for app’lt; Charles Blandy, for resp’t.
   Freedman, J.

This action was brought to recover for necessaries furnished by the plaintiff, to defendant’s wife. The evidence given at the trial would have authorized the jury to find that the articles furnished consisted of groceries and were necessaries; that they were furnished by the plaintiff on the wife’s application, but on the credit of the defendant, between July 15 and August 15, 1885, during which time the defendant and his wife lived separate and apart from each other, and the defendant refused to provide for her, and that the defendant refused to pay, etc. But it also appeared that on May 21, 1885, defendant’s wife commenced an action against the defendant for separation and support on the ground of abandonment.; that issue was joined in said action; that in it the wife made a motion for alimony during the pendency of the action; that said motion was denied on July 24, 1885; and that in January, 1886, the action was discontinued. Upon these facts and the ■decision of the court of appeals in Catlin v. Martin (69 N. Y., 393), the trial judge directed a verdict in' favor of the defendant, and ordered plaintiff’s exceptions to be heard at general term in the first instance. The view taken was that during the pendency of the action for separation, no authority was vested in the wife to charge her husband’s estate for necessaries, and on the part of the husband no obligation would be implied to pay for such necessaries, and that her remedy was by motion for alimony. The view and the disposition made of the case were erroneous. Catlin v. Martin was an exceptional case. The plaintiff was the mother-in-law of the defendant. She brought suit for alleged necessaries furnished by her to her daughter, the wife of the defendant. But it appeared that the defendant furnished and supphed necessary and suitable maintenance and support for his wife so long as she lived with him; that he never neglected or refused such maintenance or support during the continuance of the marriage contract; that defendant’s wife voluntarily left him and lived with her mother, who encouraged her in so doing, and induced her to remain away from the defendant by offering to support and maintain her so long as she would continue to live with her. It was with reference to this state of facts that the defendant was held not liable, and that Allen, J., in delivering the opinion of the court of appeals, said, among other things, the following, viz.:

“After the commencement of the action for a divorce there is no evidence that the defendant was called upon, or refused, to supply his wife with necessaries, and had the wife desired support pendente lite, her remedy was by application for alimony, and there is no implied promise of the defendant to pay for necessaries furnished during the period. The board of the wife by the plaintiff during this time was but the continuance of the voluntary support furnished by her, as found by the referee,” and this was said in reference to the claim advanced by the plaintiff that, although she might not be entitled to recover her full bill, she ought to be allowed to recover at least for the board of the wife during the pendency of the action for a divorce instituted by her, and for expenses incurred for medical attendance.

In the case at bar the facts are entirely different, at least there was evidence to the effect, and upon which the jury might have found, that the defendant had forced his wife to leave his house and had thereafter refused to provide for her, although requested so to do; and that the plaintiff had supphed her with necessaries in good faith and in ignorance of the pendency of the action for a separation.

On such a case a husband is liable for necessaries furnished to the wife, even to one who was forbidden by him to trust her on his account, and such liability continues during the pendency of divorce proceedings, at least up to the time of the actual payment of alimony. Lord v. Thompson, 41 Supr. Ct. R., 315; Sykes v. Halstead, 1 Sandf., 483.

Plaintiff’s exceptions should be sustained, the verdict set aside and a new trial ordered, with costs to the plaintiff to-abide the event.

I have so far treated the case as one coming before the general term upon a record, which shows upon its face that plaintiff’s exceptions were ordered to be heard at general term in the first instance. But, as the record also contains a notice of appeal from the order directing the verdict, and a notice of appeal from an order denying plaintiff’s motion for a new trial, and the said notices and order contain several wrong recitals and references, from which possibly the inference may be drawn, although the fact does not appear, that the order originally made was afterwards vacated in so far as it directed the hearing of plaintiff’s exceptions at general term in the first instance, if the fact should be that the said order was vacated to that extent, then the decision to be entered should be that the order denying plaintiff’s motion for a new trial should be reversed, the verdict set aside and a new trial ordered, with costs to appellant to abide the event.

Sedgwick, Ch. J., concurs.


author: Sedgwick, J.

text:
    Angeline M. Brown, Resp’t, v. Alfred S. Purdy et al., App’lts.

      (New York, Superior Court, General Term,

      Filed December 30, 1886.)

    1. Physicians—New York (city of)—Board of health—Duty of physician TO REPORT CONTAGIOUS DISEASES.
    Un'ler the statutes, any physician in New York city that possesses in fact an opinion that a patient has a contagious disease is bound to report the case to the board of health, whether he had or had not used ordinary professional skill and knowledge.
    2. Same—In case of small-pox—Duty—When responsibility on public OFFICER.
    If he really thinks the case to be one of small-pox, it is his duty to communicate his opinion to the public authorities who furnish skilled physicians peculiarly competent to pass upon the case. They are the experts that the law points out for the physician. The attendance of these experts upon a patient can cause no injury. And, thereafter, the responsibility rests solely upon the public officer
    3. Same—Inspector’s decision final.
    If there is any case for the inspector’s judgment, or any fact of appearance or symptom as to which a question of small-pox or not could arise, his determination is final as to the legality or propriety of removal.
    Appeal by defendants from judgment entered upon verdict for plaintiff, and from order denying motion for new trial made upon the minutes.
    The action was for damages for the alleged responsibility of the defendants, who were the physicians of plaintiff to plaintiff as their patient for her removal by the public authorities to the small-pox hospital.
    The jury found for plaintiff.

      Grosvenor P. Lowery and Francis Lynde Stetson, for app’lts; W. J. Martin for resp’t.
   Sedgwick, J.

In November, 1819, the plaintiff was taken involuntarily from her dwelling to the small-pox hospital. This was effected by the action of a sanitary in - spector, in conformity with the health laws. The validity and regularity of his proceedings are not questioned in this case, excepting in one respect, namely, that when the inspector examined the plaintiff, to ascertain if she had smallpox, her appearance and symptoms did not justify him in thinking or dreading that she had.

If there was any case for his judgment, or any fact of appearance or symptom as to which a question of smallpox or not could arise, his determination was final as to the legality or propriety of removal. The rule and its limitations are given in Underwood v. Green (42 N. Y., 140).

There was a case for his judgment in the eruption upon the skin of the plaintiff and the history of the case as given by the plaintiff herself. It is clear to me that the condition of the plaintiff, and particularly the eruption as shown by herself, and, after the exact appearance of the eruption had been ascertained, made the question, and would necessarily make it, to any physician of whether it was a case of small-pox. The law imposed upon the inspector the duty of adjudging as to this question of fact, and his decision of it was final, and no action even irrespective of the statute giving inspectors immunity from actions could be maintained against him.

This action is in reality placed by respondent’s counsel npon the proposition that the defendants are liable for the inconvenience and pecuniary loss the plaintiff suffered from the conduct of the inspector which we have considered, not to be actionable.

As matter of proof in the case, the defendants were not present when the removal was made. They had no part or lot in the execution of the report made by the inspector. Immediately before it was made, and while the inspector was examining the case, one of the defendants was with him, at the bedside, and said to him, “Did you notice her breath; that was what convinced me more than anything else.” And one of the defendants had reported the case to the board of health as one of smallpox, and this was the occasion of the inspector examining the case. I cannot see that this was a wrong to plaintiff. It was an address to the judgment of a public officer bound to exercise that judgment. It was in the direction of enlightening that judgment. It was not an attempt to prevent the judgment. It was not an appeal to the officer not to act upon his own observations and inferences. It is admitted that the defendants acted in good faith, without malice. It is not at all a case of conspiring with a public officer to use his power, irrespective of whether there is the legal occasion of such abuse.

It is to be observed, that it cannot be maintained, that the action of the officer was caused by anything said or •done by. the defendants. The cause of that action arose in the will and judgment of the officer. Between the statements of the defendants and the forming of the officer’s judgment, there was not the relation of cause and effect.

hi or, as I view the case, can it be maintained that the defendants’ omission, if there were such an omission, to use ordinary skill as physicians, in coming to their opinions, was actionable under the facts in this case. There was no improper or hurtful treatment or medication in pursuance of the opinions. These opinions led them to make an honest report to the health board. The statutes had made it their duty to report cases of contagious diseases. The performance of this duty was not part of the functions of a physician in his relation to a patient, but rather to the public. My opinion is/ that in order to give the public the protection due to it, according to the intention of the statute, any physician that possesses in fact an opinion that a patient has a contagious disease, is bound to report the case, whether he has or had not used ordinary professional skill and knowledge. A physician of skill in everything but cases of smallpox, which, happily, are not numerous, may, unexpectedly to himself, be called to a case, which presents to him the appearance of smallpox. It may be said that he can call in counsel. It cannot, however, be said, that private counsel should be called in rather than such as the law has appointed. Certainly, if he really thinks the case to be one of smallpox, it is his duty to communicate his opinion to the public authorities, who furnish skilled physicians peculiarly competent to pass upon the case. They are the experts that the law points out for the physician. The attendance of these experts upon a patient can cause no injury. And, thereafter, the responsibility rests solely upon the public officer.

For these reasons, I am of opinion, that the plaintiff had no cause of action, and the complaint should have been dismissed.

Judgment and order appealed from reversed, with costs to abide event, and new trial ordered.

Freedman, J., concurs.