text:
    Edward A. Pool, App’lt, v. State of New York, Resp’t.

      (Court of Appeals,

      Filed March 8, 1887.)

    State Hall—Employees in—Compensation op—Laws 1875, chap. 634— Laws 1876, chap. 193.
    By chapter 634, Laws 1875, the compensation of women employed in cleaning the chambers and rooms adjoining the senate and assembly chambers was fixed at two dollars per day; and by chapter 193, Laws 1876, it was enacted that persons employed as cleaning women, etc., at the slate hall should recover such per diem compensation as was paid to persons employed in like capacity at the capitol. Held, that the act of 1876 fixed the pay of the cleaning women at two dollars per day, the same as those in the capitol, and the mere change of location of the senate and assembly from the old to the new capitol" did not operate to change the salaries of the persons employed to keep them clean.
    Appeal from State Board of Claims.
    . Myer Nussbaum, for app’lt; D. O’Brim, attorney-general, for resp’t.
   Rapallo, J.

—The only question which it is necessary that we should consider for the purpose of determining this appeal is whether in 1880 and 1881 the compensation of the cleaning women employed in the state hall was or was not fixed by law. If it was, the comptroller had no power to reduce it. If it was not, his audit was conclusive.

By chapter 634 of the Laws of 1815, the compensation of women in cleaning the chambers and rooms adjoining the senate and assembly chambers was fixed at two dollars per day to each of them, and that of firemen in the capitol at three dollars per day to each of them, said salary to be paid on the certificate of the keeper of the capitol.

' By chapter 193 of the Laws of 1816, it was enacted that persons employed as firemen, etc., and cleaning women at the state hall should receive such per diem compensation as was paid to persons employed m like capacity at the capitol.

The senate and assembly chambers having been at the time of the passage of these acts in the old capitol, and the amount to be paid to women employed in cleaning the rooms adjoining those chambers being fixed by law, the fair construction of the term, “as is paid to persons employed in like capacity at the capitol,” is that the pay of the cleam ing women employed in the state hall should be the same as that fixed by law for the women employed in cleaning the rooms adjoining the senate and assembly chambers, there being no allegation that the actual payments to those thus employed at the capitol were different from the salaries fixed by law.

The act of 1816 should, therefore, be construed as enacting that the cleaning women employed at the state hall should receive the same per diem compensation as that fixed by law for persons employed in like capacity at the capítol, which was two dollars per day.

The board of claims, however, held that it was the intention of the act of 1876 to fix the compensation of the cleaning women employed at the state hall at the same rate as that fixed for cleaning women employed at the capítol, only for so long as the old capítol was used as such, and the ■senate and assembly chambers were held therein, and that, when these chambers were removed to the new capítol, the act of 1876 ceased to operate so as to fix the per diem pay of the cleaning women employed at the state hall. On this ground they disallowed the claims of the cleaning women, while allowing that of the firemen, under the same act.

We are unable to concur in this conclusion of the board of claims. .

The pay of the cleaning women employed in the state hall was fixed by the act of 1876, at the same rate as was at the time of the passage of that act payable to the cleaning women employed at the capítol, viz., two dollars per diem. Even if this rate should be regarded as ambulatory, and subject to modification, so as to conform to any subsequent change in the pay allowed the women employed in the capítol, no such change was shown. The mere change of location of the senate and assembly chambers from the old to the new capítol did not operate to change the salaries ■of the persons employed to keep them clean, nor of those ° employed in the state hall, the amount of whose pay depended upon that of the persons employed in the capítol.

So much of the award of the board of claims as disallowed the claim of the claimant, assignee of Catharine Pool and others, the cleaning women, should be reversed, and that claim should be referred back to the board for rehearing, with costs to abide the event.

All concur.


source: Caselaw Access Project

author: Danforth, J.

license: Public Domain

text:
    In the Matter of the Final Accounting of James P. Kernochan et al., Ex’rs, etc.

      (Court of Appeals,

      Filed March 8, 1887.)

    1. Will—Income to life tenant—Dividends declared before death OF TESTATOR, BUT PAYABLE AFTER ARE NOT INCOME.
    John R. Marshall died April 20, 1881, and by his will empowered his executors “to receive the rents, interest and income” of so much of the estate as was given to them in trust, to apply the net amounts of such rents or income to the use of the widow of the testator during her life, etc. Held, that dividends on stock declared April 14, payable May 2, formed part of testator’s estate, and were not payable to the widow as income.

      3. Same—Bonus received for selling stock.
    Prior to death of testator, the Pan. R. Co., of which he held 5,000-shares, had accumulated a large sinking fund, amounting to $1,102,000. The said company agreed, June 10, to sell their stock to the U. I. Canal Association for $250 a share, and turn over the sinking fund, and the latter company were to pay the stockholders of the Pan. R. Co. a ratable proportion of such fund, equivalent to $15.74 per share. The executors merged this into die price at which the stock was sold, and credited the whole amount to principal. Held, no error, that the money was not paid as a dividend, nor distributed among stockholders, but only to such as sold their shares to the new company, and was paid as a price to the seller.
    8. Same—Dividends.
    It was provided by the agreement of June tenth that all earnings of the railroad company to and including June, 1881, and all moneys and other effects not by the agreement to be left with the railroad company, should be transferred to a trustee "for the benefit of all the existing stockholders,” and belong to and be divided among the shareholders “ who are such at the time of the declaration of such dividend ” or transfer of the railroad company. This was not carried out, but the said assets were sold June-thirtieth to a syndicate for a sum which amounted to $24.26 on each share, and the company declared a regular dividend of that amount. Held, that said amount was properly credited by the executors as income. Andrews,. J., dissenting.
    4. Same—Options to exchange stock.
    The executors classed as income certain options or privileges given by various companies in 1881 to subscribe for and take at par one or more-bonds or shares of stock for a certain number of shares of stock held by the estate. Held, that if the option was accepted, the purchase operated to increase the capital and the increase should not bo classed as income.
    5. Same—Compound interest—When allowed.
    Testator held trust moneys for the purpose of investment and reinvestment, which he mingled with his own funds. Held, that it was not improper under the circumstances to charge him with interest upon interest. Earl, J., dissenting.
    6. Same—Commissions of executors.
    The testator, by his will, directed that “ each executor and trustee, other than my wife, do also receive and take the full rate of commissions provided by law for each executor,” etc. Held, that it was the intention of the testator to exclude his wife, who was appointed executrix, from, compensation.
    Appeal from decision of supreme court, general term,. First department, affirming a decree of the surrogate of the-comity of New York.

      Martin & Smith and M. W. Divine, for appl’ts; J. Frederic Kernochan, Wm. Jay and Edtuara S. Dakin, for resp’ts.

       Modifying and affirming 39 Hun, 658, mem.

   Danforth, J.

This is an appeal from a judgment of' the supreme court, affirming a decree of the surrogate of' the comity of New York, on a judicial settlement of the-account of the executors of John R. Marshall, deceased. The account was objected to by several of the parties interested, and, with the objections, sent to a referee to hear and determine. Upon the coming in of his report, it was-in substance confirmed by the surrogate, and .upon appeal to the general term his decision was affirmed. All parties. claim under the will of Mr. Marshall, and me principal questions now raised concern the rights of the donee for hfe and the remainder-men, and depend for an answer upon the true construction of so much of the will as empowers the executors “to receive the rents, interest and income ” of so much of the estate as was given to them in trust, to apply the net amounts of such rents or income to the use of the widow of the testator during her life, and after her death to divide the remaining estate among his surviving daughters, and the issue, if any, of such as may have died.

Among the items of personal property left by the testator was one of 5,000 shares of the capital stock of the Panama Railroad Company. This was inventoried by the executors at $100 per share, as its par value, and $275 as its market value, and $1,375,000 as its assessed value. On the 14th of April, 1881, a dividend of $25,000 (No 90), was declared upon this stock, payable May 2, 1881. The testator died during the night of April 20th, at ten minutes past eleven o’clock. The executors treated this dividend as principal, and charged themselves with it in these words: “ Panama dividend declared April 14, 1881. Books closed for transfer April 20, 1881, 2 p. M., and payable May 2, 1881.” Mrs. Marshall, the widow and executrix of the testator, objected to this in both characters, alleging £ 1 that no such amount as the said sum of $25,000 formed any part of the estate of John R. Marshall at the time of his death, and that said statement and item, and said amount of $25,-000, should be stricken from said inventory, and from said' account,” and added to the items of income, and as such received by the executors. The decision of the surrogate was against her contention, and we think properly. As soon as the profits in shares, of stock are ascertained and declared, they cease to be the property of the company, and the owner of the shares becomes entitled to the dividend. It at once forms part of his estate. The fact that they are made payable at a future time is immaterial. The dividend to which a life-tenant may be entitled as income can only be that which the company may declare after that relation is acquired. In this case the dividend represented profits or income, but had become a debt before the will took effect. Mrs. Marshall was entitled to income merely. In Cogswell v. Cogswell (2 Edw., Ch., 231), cited by the appellant, the testator directed that his wife be permitted “to take the interest or dividends” on certain stock, and the question submitted was “as to the time from which she would be entitled to dividends,” and the vice-chancellor said from the death of the testator; that is to say, he adds, “the dividends which may accrue or be declared or become payable at any time after ” that event. The terms of the will and the question were unlike those before us. The will in one case gives income or profits; in the other, dividends, that is, the share of income or profits already ascertained and declared. The first gives that to which the testator had no legal title. The other might include that oi which he became the legal owner on the day when the dividend was declared, although it remained unpaid. Hyatt v. Allen, 56 N. Y., 553; Hill v. Newichwanick Co., 8 Hun, 459; affirmed in 71 N. Y., 593.

2. It is stated in the account that the 5,000 shares of Panama Railroad stock were sold to the Panama Canal Company for $265.74 2-7 per share, making $1,328,714.32. The life-tenant objected to the account in this respect, alleging that in fact the stock was sold at $250 per share only, and not $265.74 2-7, as in the account stated. The facts, so far as they are deemed material in presenting this question, and as found by the referee, show that, prior to the death of the testator, the Panama Railroad Company had not only earned and paid dividends, but had accumulated securities, money, and other assets from earnings over and above expenses and dividends, and on the 10th of June, 1881, had on hand $1,102,000 as a sinking fund for the redemption of outstanding obligations. On the day last named an agreement was entered into between certain stockholders of the railroad company and the Universal Inter-oceanic Canal Association for the sale of their stock to the canal association for $250 for each share, and also providing that the canal company should have the sinking fund, but that the stockholders should be paid by the canal company a sum equal to a ratable proportion of the $1,102,-000 sinking fund above named, which was equivalent to $15.74 per share of the capital stock. This makes the sum of $78,714.34, and in the account of the executors is merged in the price at which the stock was sold the canal company and credited to principal. This was sustained by the referee and surrogate; the life-tenant excepting thereto, and claiming it should have been carried to income. We think the exception cannot stand. The money was not paid as a dividend, nor was it distributed among stockholders, but only to such as sold their shares to the new company, the canal association. Indeed, as stockholders, no one received any part of it. It was paid as a price to the seller. The Panama Railroad Company was not dissolved, and its stockholders who did not sell have continued to receive dividends, and the canal company, which purchased the shares owned by the testator, have received in like manner dividends on the shares so purchased. Had the shares been retained by the executors, the money in question would not have been received by them. It is true that the sale in effect carried with it the interest which each shareholder, as a member of the company, had in the sinking fund; so that, as to that, the new shareholder was substituted for the old. The fund was the accumulation of profits, and may properly be regarded as part of the capital of the company. But it still remained pledged for the bonds, for the payment of which it was created, and its possible value only enhanced the value of the shares. The price paid for the shares, although increased by this prospective advantage, belonged altogether to the remainder-men, and was properly carried to principal, and not income.

3. It was also provided, in the same agreement of June 10th, that all earnings of the railroad company to, and including June, 1881, and all moneys and other effects not by that agreement to be left with the railroad company, should be transferred by the railroad company to a trustee “ for the benefit of all the existing stockholders,” and belong to and be divided among the shareholders “who are such at the time of the declaration of such dividend ” or transfer of the railroad company. This was not carried out; but before June 30th the assets so referred to were sold and transferred by the railroad company to a syndicate for the sum of $1,698,200, and this was paid to the railroad company, June 30, 1881. It amounted to $24.26 on each share of the capital stock of the railroad company, and on the same day the railroad company, on the report of its treasurer that the amount of funds on hand “ subject to distribution was sufficient to authorize a dividend of $24.26 upon each share of the capital stock of the company,” adopted the following resolution: “Resolved, That a dividend of twenty-four dollars and twenty-six cents ($24.26) on each share of the capital stock of this company be, and the same is hereby, declared payable on and after Monday, the first day of August next, to the stockholders of record, or their legal representatives; that the books of transfer be closed on the afternoon of the 30th inst., and be reopened on the morning of the 2d of August, 1881.” This dividend was numbered 91 in regular order, and was payable and paid at the time the usual quarterly dividends were paid. It appeared, also, that the assets which formed the consideration of the payment by the sydicate were accumulated net earnings, represented by cash, or securities calling for cash.

The executors credited to income the above amount of $24.26 per share, making $121,300. It was objected, in behalf df the remainder-men, that the above credit to income was wrong, and that the sum of $121,300 should have gone into the principal of the estate. The referee finds and reports that of this sum only $22,442.85 should be regarded as income belonging to the life-tenant, and the residue, $98,857.15, should be regarded as a portion of the corpus of the estate. To so much of the finding as apportions any part to principal, exception was taken in behalf of the life-tenant. The referee made the apportionment in question by ascertaining how much was earned before and how much after the death of the testator, and, so doing, applied a rule which may be founded on general equity, viz., that when a fund is given for life to one beneficiary, and remainder over, the first shall have its earnings after his life-tenancy begins, and the remainder-man the balance. I find nothing in the will which indicates that the testator intended any such investigation or division, or that any other than the ordinary rule, which gives cash dividends declared from accumulated earnings or profits to the life-tenant, should be applied. His direction to his executors is to receive the rents, interest, and income of his estate, and apply the net amount of such rents or other income (with certain exceptions not now material) to the use of his wife. From the shares in question no income could accrue, no profits arise, to the holder, until ascertained and declared by the company and allotted to the shareholder; and that act should be deemed to have been in the mind of the testator, and not the earnings or profits as ascertained by a third person or a court upon an investigation of the business and affairs of the company, either upon an inspection of their books or otherwise,

This was held in Clapp v. Astor (2 Edw. ch. 379) in construing a contract relating to “net profits or dividends,” and by this court in Hyatt v. Allen (56 N. Y., 553). The principle stated was said to be founded in good sense, and applied in construing an agreement made August 11, 1871, which provided that ‘ ‘ all profits and dividends of and upon ” certain “ stock,” up to the first of January, 1872, should be paid to defendant. No dividends were declared or distribution of profits made prior to that time, but in April, 1872, a dividend of $15 per share was declared, and was received by defendant. Plaintiff sued to recover it, and a referee found that $250 of this dividend, was earned between August 13, 1871, and July 1,1872, and gave judgment for that amount. This court reversed the judgment, saying there were profits earned by the corporation up to January 1, 1872, but they were not the profits of the stockholders in any legitimate sense. “ There were no profits accruing to the stockholders until they were set apart by the corporation for their use.” The same principle is be be applied in determining the relative rights of a tenant for life and a remainder-man. Payments in respect of profits accruing, and properly divisible as such, are income, and belong to the tenant for life, if the sum payable is ascertained and declared after the testator’s death.

In Be Hopkins’ Trusts (L. R, 18 Eq., 696), a holder of shares bequeathed his personal estate to trustees in trust, to permit his wife to receive the dividends, interest, and income thereof for her life, remainder over. He died in December, 1870. In January, 1873, an extraordinary dividend was declared on part of the shares for five years previous, and in July, 1873, a special dividend was declared on others for the half year previous. It was held that the life-tenant was entitled to both; that, although the company might have capitalized the earnings, they by resolution treated the money as dividend, and not capital, and their decision was conclusive. The same effect was given to the determination of the company in characterizing its earnings in Barton’s Trust (L. R, 5 Eq., 238, 245); and the rule is a reasonable and proper one which limits the right of a stockholder to profits by the action of the managers of a corporation or company. It is their sole and exclusive duty to divide profits and declare dividends whenever, in their judgment, the condition of the affairs of the corporation renders it expedient, and it would lead to great embarrassment and confusion if a court should undertake to interfere with their discretion so long as they do not go beyond the scope of their powers and authority.

In this case no portion of the earnings which entered into the dividend had been capitalized by the company, and therefore the inquiry, when the profits were earned out of which it was to be paid, was immaterial. It is not claimed that the declaration of the dividend as dividend from profits was ultra vires-, and, whenever earned, they were not profits until the directors so declared. In Hyatt v. Allen, supra, it was thought by the learned judge who spoke for the court, that “ a gift of the profits and dividends of stock for life would not be held to carry dividends declared after the death of the beneficiary, although made from profits accrued during his fife,” making the act of the company conclusive, and giving the earnings to the time of the declaration of the dividend. Sproule v. Bouch, 29 Ch. Div., 635, 653, sustains this view. “ The general principle applicable to these inquiries may, in'our opinion.” say the court in that case, “be thus stated: When a testator or settlor directs or permits the subject of his disposition to remain as shares or stock in a company which has the power either of distributing its profits as dividend, or of converting them into capital, and the company validly exercises this power, such exercise of its power is binding on all persons interested under him (the testator or settlor) in the shares, and consequently what is paid by the company as dividend goes to the tenant for life, and what is paid by the company to the shareholders as capital, or appropriated as an increase in the capital stock in the concern, inures to the benefit of all who are interested in the capital. In a word, what the company says is income shall be income, and what it says is capital shall be capital. ”

I think, therefore, the executors properly carried the whole of this dividend (91) to income; that the referee and surrogate erred in making an apportionment, and therefore that the exception of the life-tenant should prevail.

Fourth. The executors classed as income certain options or privileges given by various companies in 1881 to subscribe for stocks and bonds, in all of the value of $44,478. This was objected to by the remainder-men, and the objection sustained by the referee and surrogate. The privilege or option was to subscribe for and take at par one or more bonds or shares of stock for a certain number of shares of stock already held by the estate. The right to subscribe belonged to the trust-estate, and accrued upon condition the estate chose to pay for or purchase the bonds or stock. If [the option was accepted, the purchase operated to increase the capital or change its manner of investment; and, if not accepted, the life-tenant could neither complain of the choice of the trustees, nor in any way control their discretion. We think the value did not belong to her, and that the decisions of the referee and surrogate in regard thereto were correct.

Fifth. The guardian of Marie Marshall, a person of unsound mind, and the guardians for Kernochan, an infant, also appeared against (1) allowance of compound interest on moneys found due Mrs. Marshall from the testator; (2) commissions to Mrs. Marshall. 1st. Both referee and surrogate were against the objectors as to the first; as to the second, the referee sustained the objection, but the surrogate overruled it, and allowed $15,000 to Mrs. Marshall as commissions.

As to the first, the testator had the principal moneys in hand for the purpose of investment and reinvestment, but mingled them with his own funds. It was not improper, therefore, under the circumstances of this case, to charge him with interest upon interest, as if received in the usual manner, for he forebore investment, and used the moneys for his own convenience.

As to commissions, the referee found that Mrs. Marshall “duly qualified as executrix of the last will and testament of John R. Marshall, deceased, on the 8th day of October, 1881, and has been at all times since that date ready and willing to take part, and has taken part, in the management of the estate.” The objection raised in behalf of the remainder-men hangs upon the request of the testator contained in the will, in these words: “It is also

my request that all persons herein named as executors, will consent to act as such executors and trustees, and that each executor and trustee, other than my wife, do also receivé and take the full rate of commissions provided by law for each executor, intending thus to provide suitable compensation for their services in and attention to the duties herein devolved upon them.” We think the intention of the testator was to exclude his wife from compensation. Substantially the whole income of the estate, the result of the management of the executors, of whom she is one, is given to her and it cannot be supposed that he intended she should also be paid for caring for it. The decree of the surrogate and judgment of the supreme court should be modified according to the above opinion, and as so modified, affirmed, without costs in this court to either party.

Ettger, Oh. J.; Sapallo and Finch, JJ., concur. Earl, J., concurs, except as to allowance of compound interest, and as to that item he dissents. Andrews, J., dissents as to the $24.26, a share, on the ground that it was in substance a closing out of the sale of the stock and a distribution of capital. _


author: Per Curiam.

text:
    Henry Tozer, by Guardian, etc., Resp’t, v. N. Y. C. and H. R. R. R. Co., App’lt.

      (Court of Appeals,

      Filed March 8, 1887.)

    Evidence—As to ulterior consequences of injury—When not RECEIVABLE.
    The following case was decided on the principle enunciated in Strohm v. 2f. T., L. B. and W. B. B. Go. (96 N. Y., 305), which was that in an action to recover damages for personal injuries alleged to have been caused by defendant’s negligence, “future consequences, which are reasonably to be expected to follow an injury, may be given in evidence for the purpose of enhancing the damages to be awarded, but to entitle such apprehended consequences to be considered by the jury they must be such as in the ordinary course of nature are reasonably certain to ensue. Consequences which are contingent, speculative, or merely possible, are not proper to be considered in ascertaining the damages. * * * To entitle a plaintiff to recover present damages for apprehended future consequences, there must be such a degree of probability of their occurring as amounts to a reasonable certainty that they will result from the original injury.”
    Appeal from a judgment of a general term, supreme court, fifth department, affirming judgment entered upon a verdict of a jury at the Genesee circuit, and from an order of said general term affirming an order of the special term denying appellant’s motion for a new trial made, on a case and exceptions.
    The facts are stated in the opinion of Bradley, J. (38 Hun, 100), as follows :
    “In the evening of the 17th of June, 1881, the plaintiff, then of the age of nine years, and his brother aged seventeen years, in a wagon drawn by a horse, driven by the latter, were proceeding southerly in Cemetery street, in the village of Batavia, across the track of the defendant’s railroad, and were struck by the tender of what was known as a pusher locomotive engine, which was somewhat rapidly moving backwards on one of the tracks. The plaintiff was seriously injured and his brother killed. There were at that place five parallel tracks of the defendant’s road, and the accident occurred on the fourth track from the north.
    The evidence justified the conclusion that the injury was occasioned by the negligence of the defendant, and without fault on the part of the plaintiff. The plaintiff recovered a verdict of $8,000.
    “ The main questions on appeal arise on exceptions taken to the admission of testimony of witnesses. . It appeared that the plaintiff was injured in the head, right leg, right arm and elsewhere; that the injury to his brain was such that he was utterly unconscious for three weeks after it occurred and semi-unconscious for three weeks after that, and for weeks thereafter his talk was confined to monosyllables ; that the injury to the brain was of a permanent character, and such as to impair his memory and hearing; that before the injury he was fond of his books, attended school, learned rapidly and was a good scholar, and had a good menory; that since the injury he has suffered with roaring noises in his head, impairment of vision, cannot learn or remember his lessons, and study causes an uncomfortable feeling in his head; that since the injury he was fretful, nervous and easily excited, and was not so before.
    ‘ ‘ The evidence apparently had relation to his condition up to the time of the trial, which was in June, 1882, a year after the injury. A doctor was asked to state whether there was a probability that some disease of the brain, even after the lapse of a year from such an injury and apparent recovery, would carry off the person so injured, and he answered that such things do occur. He is then asked: 5 State
    whether it is probable they may occur in this case, or whether you would expect that to occur or whether there would be any more than a remote liability,’ and he unanswered: c There is a liability of their occurring.’
    “ The defendant’s objection to the answer being received and overruled, exception was taken.
    “He is then asked: ‘ State whether there is a probability from, such an injury of disease of the brain manifesting itself at a remote period, years after the injury, and if so,, tell us what you know on that subject.’ He answered: ‘ I do not think there is a probability of its occurring. It would be more likely to occur than as though he hadn’t received the injury.’ Q. State whether ordinarily this irritability and nervousness after a lapse of a year might assume a progressive form and grow worse instead of better ? A. That would be rather difficult for me to say. Taking into consideration the boy’s age and his natural inherited qualities, he probably will improve somewhat, and perhaps entirely recover. To the last two questions objections were respectively made, overruled, and exceptions taken. He was re-examined by plaintiff, as follows: Q. You may state the probability, and if there is any, of insanity following injuries to the head of the character you have described ? A. I wouldn’t want to answer the question that way, and say it was probable, because a person had injury to the brain, that he would become insane. I say they may become insane from injury to the brain. Q. State for what period of time such a thing may be apprehended. A. There is no period of time. Q. Does such a thing ever follow an apparently complete recovery ? A. I think such cases are recorded. I never have had any occur in my practice. It is generally conceded, I think, by physicians, that such things may occur. Objections and exceptions were taken to the reception of answers to those several questions. Another doctor testified that if anything should result from the injury to the brain of the plaintiff it would indicate itself by loss of memory and periods of undue excitement and impairment of vision to some extent, and possibly the hearing. Q. State what you think would be the probable result ? A. I don’t know but that covered the ground. I don’t know that anything more might be expected, and probably happened. Q. You may state whether there may be an apparent complete recovery when there is not an absolute recovery. A. I can say there can be an apparent freedom of symptoms at one particular time, and then they may be re-developed at an interval. Q. They may be re-developed after years ? A. Possibly. The defendant’s objections to those several questions were overruled and exception taken. The court at general term said: “ It is contended by the defendant’s counsel that much of this evidence offered and received was incompetent because it did not have the requisite character of certainty or even of probability in respect to future results of the injuries received by the plaintiff, and that it may have had the effect to enhance the damages found by the jury. The plaintiff had the right to prove damages, both past and future, as the result of the injuries suffered by the plaintiff, but-the evidence on that subject must be such as may advise of' the necessary probable and expected consequences of the condition in which the injury placed the plaintiff as distinguished from those that may be deemed merely possible or speculative. Strohm v. N. Y. L. E. & W. B. B. Co., 96 N. Y. 305.
    “ There may be results which naturally follow physical injuries, and may reasonably be apprehended from the condition occasioned by them. The judgment of men skilled in medical science is necessarily resorted to, and competent-as evidence in that respect, and the purpose of that referred to was to show the extent of the injuries and their effect upon his future health and condition. So far as the-questions put to those witnesses were competent, there was-no error in permitting them to answer. The competency of the evidence given in response to them was a question to be presented by motion to strike out, or upon request to-charge. The inquiry of the witnesses for the probable conquences of the injuries, we think, was competent, and that was the character of most of them to which objection was-taken. That is one method of expressing what may reasonably be expected to follow as the natural effect of the causes upon which the judgment called for is predicated,» and furnishes evidence as definite in quality as ordinarily is given by opinions of the future consequences-of brain and other physical injuries. And while the entire-correctness of opinions may not be demonstrable, and they may not have the merit of absolute certainty, they constitute the best and only means of furnishing proof on the subject for the consideration of the jury who are to give-such damages for the future effects of the injuries as are reasonably certain. Bud v. N. Y. Central B. B. Co., 31 N. Y., 314; Filer v. N. Y. Central B. B. Co., 49 id., 42-45.
    The following questions considered alone and independent-of any other examination of the witnesses would seem to-be incompetent: “Does such a thing ever follow an apparently complete recovery?” “You may state whether there may be an apparent complete recovery when there is not-an absolute recovery?” “May they (symptoms) be redeveloped after years?” These questions called for a possible condition which might follow injuries and appear in future-as a consequence of them. They were not in terms applied to the plaintiff or his injuries, but were in effect, inquiries whether sometimes there was or not a deceptive condition of recovery followed by a reappearance of results of previous injury. The evidence given in response to those questions did not furnish any legitimate information; and treating it as incompetent, the question arises whether the objections were such as to produce error. The objections taken were general. As a rule the grounds must be specific, to which there are exceptions, and it is contended that these come within the latter. It was competent to take opinions of the witnesses on the subject of the extent and future consequences of the injuries in question. The witnesses, as will be assumed, were competent to express them, and the plaintiff might have proved, if he could, that the nature of the injuries received by him were permanent in character, and that his apparent recovery could not be real or substantial. While the opinion asked for was irrelevant, it was not incompetent to call for the judgment of the witnesses relating to the effect which would follow his injuries. It cannot, therefore, be said that the objection could not have been obviated if the specific ground of objection had been stated. Levin v. Russell, 42 N. Y., 251, 255-6; Daly v. Byrne, 77 id., 182-187; In re Crosby v. Day, 81 id. , 242-245; Ward v. Kilpatrick, 85 id., 414—417. Nor can it be said that the evidence was in its essential nature so incompetent that no question was admissible on the subject involved in it as relating to the plaintiff’s condition. The difficulty was in the form of the question, and in calling for a speculative opinion rather than one based upon his case applicable to him and to the consequences which, in the judgment of the witnesses, would follow. These objections do not come within the exception to the general rule, which requires a specific ground of objection to support error. Bergmann v. Jones, 94 N. Y., 51; Quinby v. Strauss, 90 id., 664; Stevens v. Brennan, 79 id., 255; Tooley v. Bacon, 70 id., 34. The same suggestions are applicable to the other objections taken to the admissibility of evidence.

      George C. Greene, for app’lt; Win. C. Watson, for resp’t.

       Reversing 38 Hun, 100.

   Per Curiam.

This case falls within our decision in Strohm v. N. Y., L. E. & W. R. R. Co., 96 N. Y., 305. The testimony which was received under exception, as to the ulterior consequences which might ensue or be apprehended from the injuries received by the plaintiff, was quite as objectionable as that for the reception of which the judgment in the case cited was reversed.

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

All concur.


author: Earl., J.

text:
    Emma A. Saunders et al., Resp’ts, v. Bernard Reilly, Appl’t.

      (Court of Appeals,

      Filed March 8, 1887.)

      1. Partnership and individual property—Application on execution.
    A mere general creditor of a firm, having no execution or attachment, has no lien whatever upon the personal assets of the firm. But when a firm becomes insolvent and thus it becomes necessary to administer its affairs in insolvency, or in a court of equity, then the rule is well settled that firm property must be devoted to firm debts, and individual property to the payment of the individual debts of the members of the firm.
    3. Same.
    After sale of the firm property, upon a joint judgment against both members of the firm, no equity was left in either member of the firm to have the property thereafter applied in discharge of the firm debts. Having been applied in discharge of the joint debt against both members of the firm, all the equities of both members in the property as against each other were wiped out, and it is only through the equity which one member of a firm has in the firm property as against his copartners, that firm creditors, on the principle of subrogation, can enforce their claim against the firm property.
    Appeal from a judgment of the general term, first department,' entered on an order affirming a judgment entered on verdict for plaintiffs, by direction of the court.

      Henry Thomson, for app’lt; George H. Forster, for resp’ts.

       Reversing 35 Hun, 669, mem.

   Earl., J.

This action was brought by the plaintiffs against the defendant, late sheriff of the city and county of New York, to recover damages against him for making a false return to an execution issued upon a judgment recovered by the plaintiffs against William T. Tooker and Thomas J. Irwin, who were partners under the firm name of Tooker & Irwin. The action was put at issue by the answer of the defendant and brought to trial at a circuit court, and the trial judge, after the close of the evidence, directed a verdict for the plaintiffs. The defendant appealed from the judgment entered upon the verdict to the general term and from affirmance there to this court.

The material facts are as follows: In January and February, 1879, William T. Tooker and Thomas J. Irwin, were partners under the firm name of Tooker & Irwin, carrying on business in the city of New York. At the same time Tooker & Irwin together with Julius A. Candee and Daniel Webster Arnold were partners under the firm name of Tooker, Arnold & Co., also carrying on business in the city of New York. In the latter firm Arnold’s share was three-twelfths, Cahdee’s share four-twelfths and Tooker & Irwin’s share jointly five-twelfths. On the 16th day of January, 1879, these plaintiffs recovered a judgment against Tooker & Irwin for upwards of $800, and early on the next day they issued and placed in the hands of the sheriff an execution on that judgment. Later on the same day Jane Irwin issued an execution to the sheriff on a judgment recovered by her for upwards of $7,000 against the firm of Looker, Arnold & Co. Lhe sheriff under these executions levied on the personal property of Looker & Irwin and advertised the same for sale. Lhe plaintiffs then having a further claim for goods sold to the firm of Looker & Irwin, which was not then in judgment, gave notice to the sheriff on January 23d, that as creditors of the firm of Looker & Irwin they claimed the application of the firm property to the payment of the firm debts, and they forbade any sale of the assets of the firm under the execution issued by Jane Irwin on her judgment against Looker, Arnold & Oo. On February 7th, the sheriff, after selling enough of the firm property to satisfy the executions then in his hands against the firm of Looker & Irwin, proceeded to sell the balance of the property on the execution in his hands in favor of Jane Irwin. In making that part of the sale he announced that he sold the right, title and interest of Looker & Irwin, or either of them, in the property. _ On the 17th day of February, 1879, the plaintiffs recovered judgment against the firm of Looker & Irwin on their second claim against that firm, which was duly docketed and execution thereon issued on the same day to the sheriff. At the same time their attorney wrote to the sheriff that they required him under that execution to levy on any of the assets of the firm of Looker - & Irwin, of which he had only sold the interest of William L. Looker individually, and Lhomas J. Irwin individually, under the execution issued by Jane Irwin, and that if he had sold under the execution issued to him by Jane Irwin any of the assets of the firm, notwithstanding the notice which the plaintiffs had given him, then they required him to apply the proceeds of such sale to their exécution. Lhat execution he returned unsatisfied, and that is the return which the plaintiffs complain of as false.

Lhe property sold on the execution issued by Jane Irwin, or some of it, was still accessible to the defendant, and ample to satisfy the plaintiffs’ last execution, if the de-, fendant had the right, and was bound to seize it, notwith-' standing the prior sale.

Lhe claim of the plaintiffs, which has been sustained by the court below, is that the sale upon the execution issued upon the judgment of Jane Irwin simply operated as a sale of the separate interests of Looker & Irwin in the firm property, and not as a sale of the corpus of the firm property; and thus no greater effect was given to the sale than if it had been made by virtue of two executions upon judgments separately recovered against Tooker and against Irwin.

The decision below was based upon the authority of Menagh v. Whitwell (52 N. Y., 147). But we are of opinion that that case cannot be properly invoked as an authority for the decision made below, and that the principle there decided was misapplied by the learned court.

A mere general creditor of a firm, having no execution or attachment, has no lien whatever upon the personal assets of the firm. But when a firm becomes insolvent, and thus it becomes necessary to administer its affairs in insolvency, or in a court of equity, then the rule is well settled that firm property must be devoted to firm debts, and individual property to the payment of the individual debts of the members of the firm. If one member of a firm conveys to a person, not a member of the firm, all his interest in the firm property, the purchaser takes no part in the corpus of the firm property, but only such interest as remains after the equities between the partners have been adjusted, and the firm debts have been paid and satisfied. So, too, it was decided by the case above cited that if all the members of a firm should severally convey to different persons each his interest in the firm property, the persons so purchasing would not take any of the corpus of the firm property, but only the interest of each partner, after the firm debts were paid, and the equities between the partners adjusted. It is also settled that it would be a fraud upon firm creditors for a member of a firm to take firm property and apply it upon the individual debts of any member of the firm. Ransom v. Van Deventer, 41 Barb., 307; Wilson v. Robertson, 21 N. Y., 587. But one of two partners may transfer all of his interest in the partnership property to his co-partner, and the purchasing partner wifi be vested with the absolute title to the corpus of all the partnership property as if it had always belonged to him. Stanton v. Westover, 101 N. Y., 265.

And all the members of a firm may sell the partnership property, even if wholly insolvent, to a purchaser in good faith, and thus convey free from the claim of firm creditors a good title to the firm property. Instead of selling for cash, they may transfer firm property to pay a firm debt. And they may transfer the firm property to pay a joint debt for which they are jointly liable outside of the business of the firm, and the joint creditor will obtain a good title to the firm property. Therefore, while firm property will not pass under successive sales upon executions issued against the individual partners, we can see no reason to doubt that such property will pass under a sale upon a joint execution against all the partners, issued upon a judgment recovered for any joint debt whatever.

Upon the facts of this case, it is entirely clear that Tooker & Irwin could have taken their firm property and applied it upon this joint judgment against them, and inasmuch as they had the power and right to do that, they could have turned it out to the sheriff when he came with the joint execution against them; and, as they could have turned it out upon the debt before judgment, or upon the execution, after judgment, there can be no reason to doubt that the sheriff could take and sell it upon the execution free from the claim of their firm creditors. After this sale of the firm property upon a joint judgment against both members of the firm, no equity was "left in either member of the firm to have the property thereafter applied in discharge of the firm debts. Having been applied in discharge of the joint debt against both members of the firm, all the equities of both members in the property as against each other was wiped out, and it is only through the equity which one member of a firm has in the firm property as against his co-partners, that firm creditors, on the principle of subrogation, can enforce their •claim against the firm property. And so, in effect, it was held in the cases of Menagh v. Whitwell, and Stanton v. Westover (supra).

In 3 Kent Com. 65, it is said that “creditors have no lien upon the partnership effects for their debts. Their equity is the equity of the partners operating to the payment of the partnership debts.” In Kirby v. Schoonmaker (3 Barb. Ch., 46), it was said by the chancellor: “The co-partners, however, have certain equitable rights between themselves arising out of the co-partnership by which either can compel the other to have all the effects of the firm applied in the first place to the payment of the debts du'e from them as co-partners. And this, as is said in the books, gives the joint creditors a quasi equitable lien upon the property of the firm, to be worked out through the medium of the equity of the co-partners as between themselves, and with their assent, or at least with the assent of one of them.” In Case v. Beauregard (99 U. S., 119), Mr. Justice Strong said: “No doubt the effects of a partnership belong to it so long as it continues in existence and not to the individuals who compose it. The right of each partner extends only to a share of what may remain after payment of the debts of the firm and the settlement of its accounts. Growing out of this right, or rather included in it, is the right to have the partnership property applied to the payment of the partnership debts in preference to those of any individual partner. • This is an equity the partners have as between themselves, and in certain circumstances it inures to the benefit of the creditors of the firm. The latter are said to have a privilege or preference sometimes loosely denominated a hen, to have the debts due to them paid out of the assets of the firm in course of liquidation to the exclusion of the creditors of its several members. Their equity, however, is a derivative one. It is not held or enforceable in their own right. It is practically a subrogation to the equity of the individual partner, to be made effective only through him. Hence, if he is not in a condition to enforce it, the creditors of the firm cannot be. But so long as the equity of the partner remains in him, so long as he retains an interest in the firm assets, as a partner, a court of equity will allow the creditors of the firm to avail themselves of his equity, and enforce through it the application of those assets primarily to payment of the debts due them, whenever the property comes under its administration. ”

In Fitzpatrick v. Flannagan (106 U. S., 618), Mr. Justice Matthews said: “The legal right of a partnership creditor to subject the partnership property to the payment of his debt consists simply in the right to reduce his claim to judgment, and to sell the goods of his debtors on execution. His right to appropriate the partnership property specifically to the payment of his debt in equity, in prefer-. ence to the creditors of an individual partner, is derived, through the other partner, whose original right it is to have the partnership assets applied to the payment of partnership obligations. And this equity of the creditor subsists, as long as that of the partner through which it is derivecl remains ; that is, so long as the partner himself retains an interest in the firm assets as a partner, a court of equity will allow the creditors of the firm to avail themselves of his equity and enforce through it the application of those assets primarily to payment of the debts due them whenever the property comes under its administration.”

Therefore, after the sale of the joint property upon a - joint judgment, although the judgment was not recovered upon a debt against the separate firm of Tooker & Irwin, there were no rights, legal or equitable, left to either member of the firm in the property, and, therefore, no equity in the firm property to be worked out under them by any of the firm creditors.

The statute (Code, § 1369) requires the sheriff to satisfy an execution against property “out of the personal property of the judgment debtor,” and if sufficient personal property cannot be found, then out of the real property belonging to him. There is no statute or rule of law which requires the sheriff to satisfy a joint execution out of the joint property of the execution debtors, or out of the separate property of each debtor. He may satisfy such an execution out of the joint property, or out of the separate nroperty of any one or more of the debtors. In 1 Lindiey Partnership, 515, it is said that “although the writ of execution on a joint judgment must be joint in form, it may be levied upon all or any one or more of the persons named in it,” and that “the consequence of this is that the sheriff may execute a writ issued against several partners jointly, either on their joint property, or on the separate property of any one or more of them, or both on their joint or their respective separate property, and so long as there is within the sheriff’s bailiwick any property of the partners, or any of them, a return of nulla bona is improper.” And these rules have now been embodied in section 1935 of the Code.

As between themselves, Tooker & Irwin were jointly liable for the debts of Tooker, Arnold & Co., and neither can complain that their joint property has been taken to satisfy such joint liability.

The fact that the sheriff, when he made the sale of this property on the execution in favor of Jane Irwin, announced that he had sold the right, title and interest of Tooker & Irwin, or either of them, in the property, can make no difference. He sold all he had the right to sell by virtue of the execution, and if he sold all the right, title and interest of Tooker & Irwin in that property, he sold the whole of it, and gave a good title to the purchaser. He, therefore, had no right to seize any of that property again, and sell it by virtue of the plaintiffs’ execution, and his return was not false.

The general denial contained in the defendant’s answer put in issue the material allegations of the complaint, and was sufficient to authorize the defense asserted by the defendant.

The judgment should, therefore, be reversed, and a new trial granted, costs to abide event.

All concur (Andrews, J., in result), except Huger, Ctu J., not voting. _


author: Rapallo, J.—

text:
    De Lancey Nicoll, Receiver, App’lt, v. John J. Spowers, Jr., Resp’t.

      (Court of Appeals,

      Filed March 8, 1887.)

    1. Assignment fob benefit of creditors—Laws 1877, chap. 466— When assignment, takes effect—Supplementary proceedings— Receiver in.
    The firm of S. & K., doing business in the city of New York, executed, acknowledged and delivered a general assignment to defendent, September 27.1883, which was on the same day recorded in the clerk’s office of King’s county, where assignors resided. It was not recorded In New York county until November 14, 1883, and in the meantime plaintiff was appointed receiver in supplementary proceedings oí the property of said firm. Held, that under the assignment act of 1877, chapter 466, the assignment took effect from the time of its acknowledgment and delivery, and plaintiff took no title as receiver to the property assigned.

      2. Same—Code Civ. Pro., § 2468—Relation.

      Held, further, that as the orders appointing plaintiff receiver were entered in the city of New York, and a certified copy was not filed in Kings county, where defendants resided, until February 1, 1884, the title to the debtors property had passed to the assignee, under Code of Civil Procedure, section 2468, before any title thereto had vested in the plaintiff.
    Appeal from the superior court of the city of New York.

      Eugene H. Lewis, for app’lt; P. Q. Eckerson, for resp’t.
   Rapallo, J.—

The general assignment, for the benefit of creditors, made by Stephens & Kellam to the defendant, was executed, acknowledged and delivered on the twenty-seventh of September, 1883, and was, on the same day, recorded in the office of the clerk of the county of Kings, where the assignors resided. Their place of business, however, being at the time of the assignment in the city of New York, section 2 of chapter 466 of the laws of 1877 required that it should be recorded in that county. This was not done until November 14, 1883, .and in the meantime the plaintiff was, under supplementary proceedings against Stephens & Kellam, appointed receiver of their property. It is conceded by the appellant- that, if the assignment took effect at the time of its delivery, (September 27, 1883,) this action cannot be maintained. But he contends that it did not take effect until the 14th of November, 1883, when it was recorded in the city of. New York, and that his title, as receiver, to the property of Stephens & Kellam, the assignors, had then attached. The question in the case, therefore, is whether under the assignment act of 1877,. .a general assignment takes effect from the time of its acknowledgment and delivery, or only from the time of its record in the proper county.

This precise question was decided in the case of Warner v. Jaffray, 96 N. Y., 248, which related to an. assignment executed in 1881. It is claimed, on the part of the appellant, that the point was not decided in that case; that what was said upon the question in the opinion of the court was obiter dictum, and that the case turned upon another point; that, considering the question as an open one, it should be held that the recording of the assignment was essential to its validity; and that his title as receiver, having accrued before the recording of the assignment in the county of New York, it should prevail over that of the assignee; and he has presented an able argument in support of his contention. But we think that point was decided in Warner v. Jaffray. There was, it is true, another point involved and decided in that case, the contest being between the assignee and certain creditors of the assignor, residents of this state, who had attached his personal property situated in the state of Pennsylvania, after the delivery of the assignment, but, before it had been recorded in Pennsylvania, and the attaching creditors having had no actual notice of the assignment. The assignee first demanded the attached property of the sheriff in Pennsylvania, who had levied the attachments, commenced an action in the supreme court of this state against the attaching creditors to restrain them from further proceeding under their attachments in Pennsylvania. It was contended, on the part of the defendants in that action, that the hen of their attachments was superior to the title of the plaintiff under the assignment. The question, therefore, was whether the title to the personal property of the debtors situate in Pennsylvania had passed to the assignee before the levy of the attachments there. It is evident that the first question presented was whether the plaintiff had any standing in court to restrain interference with the assigned property of the debtors anywhere. If he had not, it was unnecessary to go any further with the case, or to inquire into the validity of the lien of the defendants. The question of the plaintiff’s title lay at the threshold, and until that was passed the subsequent questions could not arise. It was held that the plaintiff, as assignee, acquired title to the personal property of the assignor generally. This would, on general principles, have been sufficient to entitle the assignee to claim the personal property of the assignor wherever situated, being a title acquired by the voluntary act of the owner. But there was a statute in the state of Pennsylvania which provided that where a person residing out of that state made an assignment, for jbhe benefit of creditors, of property situated within the state, such assignment might be recorded in any county where the estate, real or personal, might be, and should take effect from its date, provided no bona fide purchaser, mortgagee, or creditor having a lien thereon before the recording in the same county, and not having previous actual notice of the assignment, should be affected or prejudiced. It was, therefore, further held in Warner v. Jaffray that the title of the plaintiff as assignee must yield to the law of the state where the property was actually situated, and that the defendants, having obtained their hen by their attachments, before the assignment was recorded in the counties where the property was situated, and before they had any notice thereof, those liens were, under the Pennsylvania statute referred to, saved from the operation of the assignment. It is evident that this point could not have been reached and decided without first passing upon the general effect of the assignment upon the property of the assignor. It would have been quite immaterial to determine whether the Pennsylvania statute saved the property there from the operation of the assignment, if the assignment had no effect or operation anywhere. We must, therefore, regard the point now before us as having been adjudicated in the case of Warner v. Jaffray, and not open for discussion at this time.

There is still another view of the case which leads to a conclusion adverse to the plaintiff. His title rests upon his appointment as receiver made in proceedings supplementary to execution instituted subsequently to September 27,1883, at which date the assignment to the plaintiff was delivered and recorded in King’s county, so that the defendant’s title was in fact, in point of time, prior in its origin to that of the plaintiff, and, except for the failure to record in New York also, would, even on the plaintiff’s theory, be prior in all respects. But the statute in relation to receiverships required, Code Civil Pro., § 2468, that “where the judgment debtor, at the time that the order is filed (referring to the order appointing a receiver), resides in another county of this state, his personal property is vested in the receiver only from the time when a copy of the order certified by the clerk in whose office it is recorded, is filed with the clerk of the county where he resides. Now, the orders appointing the plaintiff receiver were entered in the city of New York, the judgment debtors residing in the county of Kings, and a certified copy was not filed in the last-named county until February 1, 1884, which was long after the assignment to the defendant was made perfect, even according to the plaintiff’s theory, by being recorded in the county of New York, viz., November 14, 1883. Therefore the title to the debtor’s property had passed to the assignee before (under section 2468) any title thereto had vested in the plaintiff. To obviate this otherwise conclusive answer to the plaintiff’s claim, he is obliged to resort to the doctrine of relation, which is recognized in section 2469, and by that means to make the title which he acquired by the filing of February 1, 1884, relate back to the institution of the proceedings under which he was appointed receiver, which proceedings were instituted after the delivery of the assignment, but before it was recorded in New York, and thus to divest the title of the general assignee, and secure a preference for the creditors whom he represents. But why should not the assignee be allowed to invoke the same doctrine of relation ? It is one which was originated by courts of equity, and is resorted to by them whenever necessary to effect justice. Suppose that it was necessary to the taking effect of the assignment that it should be recorded in the propel1 county. That record was made on the 14th of November, 1883. Did not the title, thus perfected in the assignee, relate back to' the time_ of the delivery of the assignment, and thus preserve his priority over the receivership ? I think that every equitable consideration requires that it should be so held. No rights of any bona fide purchaser would in this case be affected by so holding, but, on the contrary, the effect would be to secure the fund for distribution according to the terms of the assignment, which was earlier in its origin than any proceedings, even, under which the plaintiff’s title originated; and practically, when the assignment comes to be carried into effect, it will have to be treated as having been made at the time it was delivered, and not as of the time when it was recorded in New York, even if the law were as contended for by the plaintiff. It is, in my judgdment, a proper case for the application of the familiar doctrine of relation, on general principles of equity, independently of any statutory enactments.

The judgment should be affirmed, with costs.

All concur.


author: Rapallo, J.

text:
    Richard Pancoast et al, App’lts, v. John J. Spowers, Jr. et al, Resp’ts.

      (Court of Appeals,

      Filed March 8, 1887.)

      Rodger A. Prior, for app’lts; P. Q. Eckerson, for resp’ts.
   Rapallo, J.

Order of general term affirmed on opinion in Nicoll v. Spowers (supra), and judgment absolute for defendant.

ALL concur.


text:
    Catharine Taylor, App’lt, v. City of Cohoes, Resp’t.

      (Court of Appeals,

      Filed March 8, 1887.)

    Costs—Action against municipal corporation prior to Code Civil Procedure—Laws 1859, chap. 262, § 2.
    The question of costs in actions against municipal corporations for injuries caused by negligence, brought before the Cpde of Civil Procedure went into effect, was governed by Laws 1859, chap. 262, § 2, and it was not necessary to first present the claim to the chief fiscal officer of such corporation before bringing the action in order to obtain costs.
    This action was brought against the city of Cohoes for injuries sustained by plaintiff through a fall upon a defective sidewalk in said city, and resulted in a verdict for plaintiff for $2,000. On an appeal to the general term on exceptions a judgment was directed to be entered in favor of plaintiff upon the verdict, with costs.
    The taxation of costs, both of the circuit and of affirmance on appeal, was opposed by defendant on the ground that the complaint demanded judgment for the payment of a sum of money only, and no claim for damages had been presented to or filed with the chief fiscal officer of the defendant. A claim had been presented to the common council prior-to the bringing of the action and referred to the law committee, but such claim had not been audited or allowed. The action was begun August 21, 1880, and the Code of Civil Procedure took effect September 1, 1880. The clerk taxed plaintiff’s bills of costs at the amounts claimed and defendant excepted. This appeal is brought from an order of the general term, third department, reversing an order denying a motion for retaxation of costs, granted by Parker, J., at special term.

      James Lansing, for appl’t; P. D. Niver, for resp’t.

       Reversing 5 N. Y. State Rep., 92; 42 Hun, 654, mem.

   Per Curiam.

This action was brought before the new Code went into effect, and hence the section in regard to costs (§ 3245) has no application here. The case must be decided under the act of 1859 (chap. 262, § 2, Laws 1859). Under that section of the law, this court substantially held that cases for the recovery of damages for injuries sustained by reason of the negligence of the servants of a municipal corporation were not within its purview. McClure v. Supervisors of Niagara, 3 Abb. Dec., 83; Howell v. City of Buffalo, 15 N. Y., 512; McGaffin v. City of Cohoes, 74 id., 387. All of these cases did not arise under the act of 1859, but the principle decided in them is as stated.

The general term in this case, and in Dressel v. City of Kingston (32 Hun, 526), decided differently upon the authority of Baine v. City of Rochester (85 N. Y., 523). That case, we think, does not go to the extent assumed by the general term.

In the first place, it arose under the section of the Code above cited, and also the cause of action was ex contractu. It was. held that in such an action it was not an answer to the requirement of that section of the Code to show that-the city treasurer, the chief fiscal officer of the city, was-not authorized to adjust or pay the claim upon presentation. It is true that, in the opinion in the Baine Case, it is not specially stated that the action arose on contract, yet this was its character, and the decision was made with such fact existing. Nothing was said in the opinion as to these other cases above cited, and it cannot be supposed that, with reference to actions which were commenced while the act of 1859 was in force, the court meant to overrule them without making any reference to them whatever.

The Baine Case is authority for just what was therein decided, and it has not yet been decided that, under the section of the Code (§ 3245), in an action of this nature, a presentation of the claim must be made in accordance with its provisions before the commencement of the action, on pain of being deprived of costs, even if the plaintiff be successful.

The order of the general term should be reversed, and that of the special term affirmed, with costs in both courts.

All concur.


author: Peckham, J.

text:
    Silsby Manufacturing Company, App’lt, v. State of New York, Resp’t,

      (Court of Appeals,

      Filed March 1, 1887.)

    1. Canals—Rights acquired under Laws 1813, chap. 144.
    The Seneca Lock Navigation Company was incorporated by Laws of 1813, chapter 144, and after a grant to the company of certain powers, it was provided by the act that “whenever the navigation shall be completed, any owner or occupant of any land adjoining the said outlet may use the water for mills or other hydraulic works.” “Provided, that nothing in this act shall authorize the said corporation to use any of the waters of said outlet for any other purposes than for the navigation aforesaid.” Held, that the meaning of the statute was that the company should not use any of the waters for any other purpose than for navigation, and only as much as should bo necessary for that purpose.
    2. Same—Laws 1825, chap. 271—Rights of state under.
    Laws of 1825, chapter 271, authorized the construction of the Cayuga and Seneca canal, and contained a proviso that the canal cornmismissioners should not proceed with their duties under the act until the state should be invested with the right and title to the stock, property and privileges of the Seneca Lock Navigation Company, and also provided for the acquisition of such property. Held, that under this act the state succeeded only to the rights of .the company named. That the state had a right to all those waters for no other purp'ose than that of navigation, and only so much as should at all times be necessary for such purpose.
    3. Same—Action for damages by riparian owner—Water necessary FOR PURPOSES OF NAVIGATION—STATE NOT SOLE JUDGE OF QUANTITY.
    In an action by a riparian owner for damages for a decrease of his water supply by waste and leakage in the locks, etc.: Held, that the acts of the agents of the state in the use of the water would be entitled to a quite liberal construction, but that there was no principle to support the doctrine that the state was the sole judge of the amount of water necessary for the purposes of navigation and of what should be taken.
    4. Same—Laws 1870, chap. 321—Laws 1883, chap. 205, § 13—Liability of STATE UNDER.
    Provision is made by Laws 1871, chapter 321 for a recovery by any individual of damages sustained by him from the canals of the state, or their use and management, provided the facts and circumstances are such as would create a legal liability on the part of an individual or corporation, if in the position occupied by the state. Jurisdiction to hear such claim was conferred upon the canal appraisers, and by Laws 1883, chapter 205, section 13, transferred to the board of claims. Held, that the object in view was not the exemption of the state from liability, but the protection of the citizen, and that the state intended to assume the same measure of liability with reference to the management of the canals as that incurred by, individuals and corporations engaged in similar enterprises.
    5. Same—Actions for damages—Should include what—No bar to FUTURE ACTION FOR DAMAGES.
    Held, that if facts upon which to base an action were found, it would appear that there had been an unlawful diversión of water by the stale, and that the continuance of such use each day furnished a new cause of action; that while, when an action was commenced, all then existing claims should be included, yet a recovery of damages up to the time of the commencement of the action, would be no bar to those subsequently arising.
    Appeal by the claimant from an award made by the state board of claims, disallowing a claim against the state for injury to a water power by the wasting by the state of the waters of the Cayuga and Seneca canal. The facts are sufficiently stated in the opinion.

      Theodore Baron and James Harmon, for app’lt; D. O'Brien, att’y gen., for resp’t.
   Peckham, J.

The claimant, a manufacturing corporation located at Seneca Falls, filed its claim against the defendant in substance alleging itself to be a riparian owner of land adjoining the Seneca River, on an island therein, known as Dey’s Island, and upon which it had erected valuable buildings; and that it was the owner of valuable water power and hydraulic rights, by means of a water way called Dey’s Race, and that it employed this water power as a motor to propel its machinery in its buildings.

It was further alleged that the state maintained and operated a canal known as the Cayuga and Seneca Canal, which ran through the village of Seneca Falls, and the canal was divided into various levels by means of locks, for the purpose of facilitating the passage of boats, etc.; that the state had built a wall, of the proper height to protect navigation, and.that when the locks, gates, levels and walls were in proper condition, by being tight and secure, the surplus water coming into the upper level spilled over this wall and over a dam, and a portion thereof passed- over a lower dam into Dey’s race, and became available to claimant as a motor to prqpel its machinery; that in the years 1882, 1883 and 1884, the walls, locks, gates, levels, etc., ■were not kept by the state in a proper and tight condition to prevent leakage and wastage, and that large quantities of water wasted through these locks, gates and levels, and were diverted from Dey’s Race, and the claimant was thereby compelled to use steam instead of the water which otherwise would have flowed through Dey’s Race, and would have been used by it. Damages to the extent of §3,500 per year for these years were claimed.

On the trial evidence was given tending to prove the facts above set forth; and the state in answer made the claimt hat it was entitled to the use of all the waters, and that the claimant was only entitled to the use of such surplus as the state chose to give. ■ What the rights of the parties are is the question in contention in this case.

The claimant proved itself to be a riparian owner, and entitled to the use of the waters in Seneca river, as such riparian owner, in their natural flow, without any inter-0 ference from the state except in so far as its rights had been legally altered by the action of the state. Chenango Bridge Co. v. Paige, 83 N. Y., 178; Smith v. Rochester, 92 id., 463.

The right of the state to use the waters of Seneca river for canal purposes arises from two acts of the legislature, and action taken under them.

The first act (chap. 144, Laws 1813), incorporated the Seneca Lock Navigation Company for the purpose of improving the navigation- between the Seneca and Cayuga lakes. Power was given the corporation to take lands, goods, chattels and effects, not exceeding $10,000 in value, and any land for the purposes of navigation.

The ninth section provided that: “Whenever the navigation shall be completed, any owner or occupant of any land adjoining the said outlet may use the waters for mills or other hydraulic works; but such use shall at no time impede the passage of boats or other water craft or articles, or injure or affect the navigation or canals, locks or dams or appurtenances belonging to the said corporation: Provided that nothing in this act shall authorize the said corporation to use any of the waters of said outlet for any other purposes than for the navigation aforesaid.”

Power is also given by the next section to the owners of mills to make cuts to conduct the water to their mills, so, however, as not to impede the navigation or “prevent the company from the use of as much water as at all times shall be necessary for the purposes of said navigation.”

We think the meaning of this statute, taking the two provisions together, is that the company shall not use any of the waters for any other purposes than for navigation, and only so much as shall be necessary for those purposes.

Stock was issued and the company went on and built its locks and constructed its works under this act.

In 1825 (chap. 271), an act was passed authorizing the construction of the Cayuga and Seneca canal, the first section of which contained the proviso that the canal commissioners should not proceed in their duties under the act until the state should be invested with the right and title to the stock, property and privileges of the Seneca Lock Navigation Company. Provision was made for the acquiring such property, to wit: "“The lands, waters, canals* claimed by the said company for the purpose of navigation locks, feeders and appurtenances thereto appertaining and ■under its act of incorporation,” etc.

Upon payment as provided for in the act the state was to-“be invested with all the stock, property and privileges belonging or appertaining to the said Seneca Lock Navigation. Company.” This title and this only the state did subsequently secure.

The board of claims found that the superintendent of public works has the entire control and management of all the canals, including the one in question, and that the amount of water to be used by the state is entirely a matter of discretion with him; that he might use all the water if he deemed it necessary.

It was also found by the board that if the locks, gates, walls, etc., should be changed by the State more water might be saved, and the quantity of surplus water, over and above that necessary in the discretion of the superintendent for the use of the canals, increased, and in that event the claimant herein would be entitled to its proportion of increase.

As conclusions of law the board found that the state owed no duty to the claimant herein in the increase of surplus water, and that the board had no power to review the discretion of the superintendent of public works in the amount of water he shall use in the management of the canal. The claim was therefore dismissed. Proper exceptions were filed to the findings of fact and conclusions of law. The board was requested to find as a fact what seems to have been established by uncontradicted evidence, viz.: that if the locks, gates, etc., had been in such condition as not to leak, there would have been a saving of 5,250 cubic feet per minute, which but for such diversion would have passed into the race, and which was above the amount necessary for navigation. That the amount thus escaping, and some portion of which would have reached the flume of claimant, would produce fifty-five horse power, which cost claimant $3,000 per annum. The board refused to find these facts, and upon the finding of the board as made by it all these facts were immaterial and a refusal to find them entirely proper.

By chapter 321 of the Laws of 1810, the state provided for a recovery of damages sustained by any individual from the canals of the state and from their use and management, provided the facts proved made out a case which would create a legal liability .against the state were the same established in evidence in a court of justice against an individual or corporation, and jurisdiction to hear sucli claim was conferred upon the canal appraisers, and that jurisdiction was transferred to the board of claims by the act, chapter 205 of the Laws of 1883, section 13.

In relation to this act, assuming liability on the part of the state, this court has said, per Ruger, Oh. J., in Sipple v. State (99 Ñ. Y., 284, at 288): “The object in view was the protection of the citizen, and not the exemption from liability of the state; and it is quite evident that the state thereby intended to assume, with reference to the management of the canal, the same measure of liability incurred by individuals and corporations engaged in similar enterprises, and to afford to parties injured the same redress which they would have against individuals and corporations for similar injuries.”

Judged upon this measure of liability and by this stand- • ard, we cannot doubt that the board of claims erred in their construction of the relative rights of the parties to this controversy.

The state had a right to all these waters for no other purpose than that of navigation, and only so much as should at all times be necessary for such purpose. We do not see upon what principle it can be said that the state was to be the sole judge of that necessity and of the amount to be taken. It succeeded only to the rights of the lock company, and it has not since acquired any other or different rights. If it desired more it could easily acquire more by the exercise of its right of eminent domain, but so far its rights must be decided as they exist in its character as successor to the rights of the lock company.

We do not believe that it would ever have been contended that the company was the sole judge of the amount neces- • • sary for the purposes of navigation.

Undoubtedly the acts of the agents of the state in the use of the water would be entitled to a quite liberal construction. The question would not probably be, has the state used no more water than was absolutely necessary for the purposes of navigation, and have its gates and locks been kept up to the highest state of efficiency and in the best possible repair, and have the most effective appliances been used to guard against the leakage of water, but the inquiry would be whether, taking the whole facts into consideration, all the circumstances surrounding the case, the state had done what was fairly and reasonably incumbent upon it to do in the use of the water for navigation purposes, and in the prevention of leakage or other wastage to a more than fair and reasonable extent.

The exception of the claimant to the finding of fact, that the superintendent of public works had power to use all the water, etc., as above stated, possibly might not raise the question, for even on that assumption the state may not have used any more water than was reasonably sufficient under the circumstances. Hence the materiality of the facts which the claimant requested the board to find in regard to the amount of water which was diverted by leakage, and what could have been done with it by the claimant if it could have had the use of it.

Upon a new hearing the whole case will be open to investigation, and it will be for the board to decide, in view of all the facts, whether the state is using more water than is fairly and reasonably necessary for purposes of navigation, or is talcing fair and reasonable precautions to prevent unreasonable waste of water not for navigable purposes.

The sections of the Revised Statutes called to our attention by the attorney-general are not, in our view, relevant. They refer generally to cases where the state has obtained the right to use ah the water, unconditionally and absolutely, and lets the surplus under conditions provided for in the statute. They do not touch such a case as this, where the state has no right to the use of water for any but navigation purposes, and only for such as may be necessary for that purpose, and where the balance has never been taken from the original riparian owner.

But even the statute referred to by the attorney-general expressly reserves the right of the owner of hydraulic privileges prior to any grant from the state, unless his damages for the loss of such rights are duly assessed and paid. 1 R. S. (7th ed.), 669, § 84.

' It is not necessary that there should have been a finding of negligence on the part of any officer of the state, or a request to so find. The exception to the finding as to the absolute discretion of the superintendent of public works, taken in connection with the refusal to find facts material to the issue as to the unlawful use of the waters by the state, and the exception to such refusal, are sufficient to bring the question before the court.

And this first exception is noticed in the notice of appeal, which is broad enough to permit the question to be raised and decided here.

The defense of the Statute of Limitations is made to the whole of the claim herein set forth. It is good undoubtedly as to the claim for 1882. We think it is equally clear that it is not good for the other years, 1883,1884.

If the proper facts upon which to base an action were found, it would then appear that the state had unlawfully used a certain amount of water, to the use of which the claimant had an undoubted right, and every day such use continued a new cause of action arose therefor, in favor of the claimant. Of course when action was commenced, all causes then existing would have to be included; but a recovery. for the damages sustained up to the time of the commencement of the action would be no bar to those subsequently arising for subsequent unlawful diversions.

The diversion being unlawful it is not to be presumed that it will be continued; hence, no foundation is laid for a recovery of damages that might be sustained in the future. Uline v. N. Y. Cent. R. R. Co., 101 N. Y., 98.

Besides, the amount of the diversion is liable to vary from day to day or hour to hour; and so wholly unstable would be the data that it would be entirely impossible to figure or reason upon the probable or possible amount of damage to accrue in the future.

As damages could not be predicated of the future, so a failure to sue for past alleged damages would have no effect upon the rights of the claimant within the period not barred, which, in this case, is by the statute stated to be two years. For the damages, if any, which claimant has sustained for. the two years prior to the commencement of this action, it is entitled to recover; the question to be determined by the rules we have laid down, and upon the facts which may then appear in proof.

To give the claimant the opportunity of proving the necessary facts, and the defendant any answer there may be to the claim upon the principles here laid down, the award must be reversed and the case sent back to the board of claims to be re-heard. Costs abide event.

All concur.


author: Finch, J.

text:
    Thomas H. Robbins, App’lt, v. William W. Butcher, Assignee, Resp’t.

      (Court of Appeals,

      Filed March 1, 1887.)

    1. Assignment for the benefit of creditors—When hade void by AUTHORITY GIVEN TO ASSIGNEE.
    Where by the terms of a general assignment for the benefit of creditors the mode and manner of carrying out the one duty of the trust, to convert and distribute the assigned assets, is placed in the discretion of the assignee and taken away from the supervision of the courts, the assignment is void.
    3. Same—When authority given, will not invalidate.
    An authority given to an assignee over the disposition of the assigned assets, which is not absolute, but conditional, the condition preserving to the courts their full control and supervision will not invalidate an assignment.
    Appeal from a judgment of the supreme court, general term, second department, affirming a judgment of the special term. This action was brought by a judgment creditor to set aside, as void, a general assignment for the benefit of creditors.

      Phillips■ & Avery, for app’lt; William C. Cooke, for resp’t.
   Finch, J.

It is to be expected that- the unpreferred creditors of an assignor, regarding his transfer as an obstacle to the recovery of their debts, will often assail it, either as fraudulent in law or in fact, sometimes justly and sometimes upon quite narrow and technical grounds. In either event our duty is to both parties, not hesitating where fraud is proved, or ought conclusively to be inferred, but preferring a construction, where the choice is open, which indicates innocence rather than fraud.

The question raised on this appeal is to some extent a question of such construction, and arises solely upon the language of the instrument. It contains a provision thus expressed: “And it is further provided that, should it be necessary and to the better performance of the trust, that the party of the second part shall have full power and authority to finish such work as is unfinished, to complete such buildings as are incompleted, and to pay all necessary charges and expenses for such completion prior to the payment of all debts and liabilities hereinbefore mentioned and provided. ”

The repetition of the word “that ” permits it to be said that this provision is an unfinished sentence and confers no authority at all, but no such criticism is made, and the meaning of the language is more accurately expressed by disregarding the word “that” where it occurs the second time. Both parties have argued the case upon such construction.

The appellant claims that the provision confers upon the assignee an authority derived from the assignor to unduly delay the execution of the trust and divert the trust funds, in the exercise of his discretion, and free from the supervision and control of thé courts, and so is fraudulent and void upon its face.

The respondent contends that the authority given is upon a condition which rests in the discretion and judgment of the courts, and if exercised by the assignee without their prior permission and approval must be so exercised at his peril, and subject to their prohibition or direction at any moment, and upon the application of any person interested or aggrieved, and so does not involve an intent to hinder, delay or defraud the creditors of the assignor.

We think the latter view of the instrument discloses its true and intended meaning. Two cases in this court have drawn the line of distinction between the constructions which have been argued. In one of them, Dunham v. Waterman (17 N. Y., 9), the assignment gave authority to the assignees to pay such sums “as they may find expedient” in completing unfinished articles, as “in their judgment shall seem most advisable.” The assignment was held to be void. The whole point of the decision was that the instrument conferred a discretion upon the-assignees which superseded the authority of the courts; a right to judge when and how long a delay, what and how much to expend, with which equity could not interfere; and the question was asked: “If the courts uphold this condition, must they not execute it ? Can they substitute their discretion for that which the owner of the property has vested in his assignees ?”

The question was answered in the negative, and the assignment fell with the answer. To the argument that sometimes the completion of articles of different stages of progress would be so manifestly wise that the courts would permit it, the reply was made that in such case an error “in the exercise of that legal discretion, which is incident to the trust,” could be corrected by the courts, but not so “in respect to a discretionary power expressly vested” in the assignee-by the assignment. The precise point of the adjudication is that where the mode and manner of carrying out the one duty of the trust, to convert and distribute the assigned assets, is placed in the discretion of the assignee, and taken, away from the supervision of the courts, the assignment is void. The instrument before us does not thus offend, as we read its terms. The authority given is not absolute, but conditional, and the condition preserves the full control and supervision of the courts, and no inconsistent or superseding discretion is conferred. The words are, “should it be necessary and to the better performance of the trust.” Who is to judge of that necessity or prudence ? The condition is not the judgment of the assignee as to whether the fact exists or not, but the existence of the fact itself. It must be necessary. It is not enough that the assignee thinks so. Any one interested may challenge the existence of the necessity or the prudence of the delay, and, when they do, the court has a right to determine whether or not the condition has arisen, and so decide whether the assignee may or may not spend a dollar, or wait a day, and he is vested with no discretion of his own which can prevent that intervention. And so the case differs at a vital point from the one cited. It comes rather within the doctrine of a later authority. Jessup v. Hulse, 21 N. Y., 170. The note of that case confines the invalidity discussed to instances “where the trustee would derive an independent discretion by force of the deed, if valid, and not by operation of law.”

In that case the language was to sell, etc., “ at such time or times and in such manner as shall be most conducive to the interests of the creditors, and convert the same into '.money as soon as may be consistent with the interest of such creditors.” The court asked who was to judge as to-when or how the sale would be most beneficial, and answered, not the assignee, for no power to determine was-vested in him. It remained in the courts, and their supervision and control was not superseded or destroyed. That, is true as we read it of the instrument before us. It confers no discretion to complete unfinished articles. It gives, simply the power to do so when necessity or a better performance of the trust as adjudged by the discretion of the-court shall require. We are of the opinion that this assigneecould not with safety spend money or employ time in completing unfinished articles except under the order of the court, and acting without that order acts at his peril, and. may be restrained at any moment since his sole authority is conditioned upon a necessity of which not he, but the court, is the sole and ultimate judge. This was the view which must have been taken by the general term and we give it our assent.

The judgment should be affirmed, with costs.

All concur.