author: INGRAHAM, J.

text:
    Richard H. Goodell, App'lt, v. William H. Hurlbut et al., Resp'ts.

      (Supreme Court, Appellate Division, First Department,

      Filed May 1, 1896.)

    1. Contracts—Public policy. .
    An independent contract, made between an agent and a third party, with whom the agent is negotiating on behalf of his principal, whereby, upon the execution of such contract, the agent is individually to receive a sum of money from such third party, is a contract which the courts will< not enforce in an action between the agent individually and such thirdi party.

      2. Samb.
    It is entirely immaterial, in considering the validity of such a contract, whether or not the agent made the best contract he could for his principal.
    Appeal from an interlocutory judgment, overruling a demurrer to a separate defense.
    Everett P. Wheeler, for app’lt; William W. Goodrich, for resp’ts.
   INGRAHAM, J.

This action is brought by the plaintiff to recover a commission which the defendants agreed to pay plaintiff for his services in negotiating a charter of the steamer George Dumois, of two and a-half per cent, on the amount of the charter hire agreed to be paid. The answer demurred to alleges that at the time of the agreement in question the plaintiff was an employee of a corporation, under a staled and regular compensation; that, as such employee, he was sent to the United States to negotiate and execute charters of three steamers named in the complaint, and that he had from said corporation a power of attorney authorizing him to negotiate and execute such charters, and that such charters were negotiated and executed by him as attorney for the company; that the said defendants agreed to pay him two and a-half per cent, commission on the amount of such charters, but that said company had not assented to the payment to the plaintiff of the amount of such commissions, and has given notice to the defendants not to pay the same; and that the contract between the plaintiff and the defendants was, as to the plaintiff, void and against public policy. By his demurrer the plaintiff admits that he, as the agent of the corporation owning these steamships—sent here to negotiate and execute a charter of the steamships—made a contract with the defendants whereby the defendants were to pay him a commission for making a contract between his employers and principals and the defendants. The demurrer was overruled by the court below on the grounds that such contract was void, and one that the court could not enforce.

The question here presented is, not as to the validity of the charter made by the plaintiff as agent for his principal, but whether an independent contract made between the plaintiff and a third party, with whom the plaintiff is negotiating on behalf of his principal, whereby, upon the execution of such contract, plaintiff is individually to receive a sum of money from such third party, is a contract which the courts will enforce in an action between the agent individually and such third party “It is a well-settled and salutary rule that 1 a person who undertakes to act for another in any matter shall not, in the same inatte'r, act for himself.’ It is only by a rigid adherence to this simple rule that all temptation can be removed from one, acting in a fiduciary capacity to abuse his trust, or seek his own advantage in the position which it affords him. * * * The rule which places it beyond the power of the agent to profit by such transactions is founded upon considerations of policy, and is intended, not merely to afford a remedy for discovered frauds, but to reach those which may be conceded, and also to prevent them, by removing from agents and trustees all inducement to attempt dealing for their own benefit in matters which they have undertaken for others, or to which their agency or trust relates.” Dutton v. Willner, 52 N. Y. 318. It is entirely immaterial, in considering the validity of such a contract, as to whether or not the agent made the best contract that he could for his principal. The principal was entitled to thé services of his agent, uninfluenced by any hope of reward or advantage from the person with whom he was dealing as agent for his principal. Common honesty requires that such an agent, in dealing with others, should not be exposed to the temptation of being influenced by a private agreement made with third parties, which is to inure to the benefit of the agent, and not to the principal. And to allow an agent to recover upon such a contract, irrespective of the question of the right of the principal to the benefit of the contract made in favor of the agent, would sweep away the most efficacious means for the enforcement of this most salutary rule. The observation of Lord Mansfield in Holman v. Johnson, 1 Cowp. 343, has often been cited as starting the basis upon which courts refuse to enforce contracts of this character. He said :

“ The objection that a contract is immoral or illegal as between plaintiff and defendant sounds at all times very ill, in the mouth of the defendant. It is not for his sake, however, that the objection is ever allowed; but it is founded in general principles of policy, which the defendant has the advantage of, contrary to the real justice, as between him and the plaintiff, by accident, if I may so say." • |

See Woodworth v. Bennett, 43 N. Y. 274, where this remark of Lord Mansfield’s is quoted with approval, and where the rule that a contract which is void as against public policy will not be enforced was strictly applied. That such a contract as the one in question comes within this class is clear. The case of Bollman v. Loomis, 41 Conn. 581, presents this question. There the plaintiff, acting for a Mrs. Robinson, went to the defendant with Mrs. Robinson to purchase a piano. The defendant, knowing his relation, requested plaintiff to endeavor to effect a sale, and to urge the piano upon the Robinsons. This the plaintiff promised to do,, and did, and a sale was effected. Neither of the Robinsons at any time knew that the plaintiff was acting for defendant, and after the sale the plaintiff recovered a judgment for his services, against defendant. The court held that a conti act by the defendant to pay plaintiff for his services in inducing the Robinsons to purchase was void, and that the plaintiff could not recover. In the case of Bell v. McConnell, 37 Ohio St. 399, it is said :

“ It is equally clear, both upon principle and authority, that in case of such double employment he can recover from neither,, where his employment by either is concealed from, or not assented’ to by, the other. * * * It is no answer to say that the sec-employer, having knowledge of theL' first employment, should be held liable on his promise, because he could ,not be defrauded in the transaction. The contract itself is void as against public policy and good morals, and, both parties being in pari delicto» the law will leave them as it finds them.”

See, also, Capener v. Hogan, 40 Ohio St. 203.

The judgment was'clearly right, and should be affirmed, with costs, with leave to the plaintiff to withdraw the demurrer upon payment of costs in this court and the court below.

All concur.


source: Caselaw Access Project

author: PATTERSON, J.

license: Public Domain

text:
    Ruth Livingston et al., Resp'ts, v. Manhattan Railway Company et al., App'lts.

      (Supreme Court, Appellate Division, First Department,

      Filed May 1, 1896.)

    1. Appeal—Judgment—Amendment.
    Casual error in description of premises in a judgment does not call for reversal, but only for an amendment conforming it to findings of fact and conclusions of law.
    2. Damages—Elevated batlboads.
    In action for the construction and operation of elevated railway, damages for depreciation of fee value may be allowed by reason of diversion of business from street, stopping all improvements therein and making it a haunt of low people.
    Appeal from a judgment, entered after trial at special term in favor of plaintiffs.
    A. O. Townsend, for app’lts; J. B. Ludlow, for resp’ts.
   PATTERSON, J.

The judgment appealed from in this case directs that the defendants be perpetually enjoined from maintaining and operating an elevated railroad on South Fifth avenue, in the city of New York, in front of and opposite to premises known as Nos. 47 and 49 Grand Street” and “ 220 South Fifth Avenue,” unless, within a specified time, the defendants shall pay the sum of $7,500 for damages to the fee value of the property, caused by the taking of certain easements appurtenant to such property, and contains the other ordinary provisions in cases of this character. It also provides for a money recovery for past damages, in amounts aggregating something over $1,000. The main ground upon which this decree is attacked by the appellants is that the court below has attached easements to much of the land of the plaintiffs, to which land, as matter of fact, no easements taken by the railway company were appurtenant.

The premises in suit, although descriptively known as “ Nos. 47 and 49 Grand Street” and “ 220 South Fifth Avenue,” constitute a plot of ground at the southwest corner of Grand street and •South Fifth avenue, with a frontage of thirty-four feet and six inches on Grand street, and about eighty-four feet on South Fifth avenue. Of this eighty-four feet on South Fifth avenue, the southerly thirty-four feet constitute the frontage of No. 220 South Fifth avenve that lot being thirty-five feet deep. The premises on Grand street are divided into two lots, of' equal size; No. 47 being to the west, and No. 49 the corner lot. Each of the three lots has a separate building upon it, of rather an inferior character. "No. 47 Grand street is distinct from No. 49 Grand street, and, as a separate property, the building on it undoubtedly has no benefit of easement of light, air, or access from any part of the South Fifth avenue frontage of the plaintiffs’ land, as the two structures on Grand street now exist. Although the decree is drawn in the manner above stated, yet it is quite clear, from the findings and conclusions of the court below, that it was not intended to adjudge, as matter of fact that the premises No. 47~ Grand street were so affected by the presence and operation of the elevated road as to entitle the plaintiffs either to an injunction or past damages as to that number (47), either separately, or as forming part of one consolidated plot of property. The sixty-fourth finding of fact distinctly states that “ the past damages found do not include any damages with respect to the building No. 47 Grand street,” and the twentieth conclusion of law is that the plaintiff is not entitled to any recovery with respect to the premises known as “No. 47 Grand Street.” In the face of that finding of fact and that conclusion of law, it cannot be inferred that in the fixing of the amount of depreciation in fee value, and the ascertainment of damage to rental value, the learned court intended to make any award, distinctly,, for No. 47 Grand street. The twenty-seventh and the twenty-ninth conclusions of law specifically exclude No. 47 Grand street, and as those are the clauses of the findings which directed what the judgment should be, it is obvious that the whole scope of the decision was confined to the easterly frontage of 220 South Fifth avenue and 49 Grand street, and that in the judgment itself the reference to 47 Grand street is merely a misdescription of what-was contemplated by the findings of fact and the conclusions of law, or rather the insertion in the decree of the description of the-whole premises of the plaintiffs, in block, and not separated. This mere casual error in the description of the premises in the decree is-one which does not call for a reversal of the judgment, but only for an amendment of the decree by making it conform to the fiudings of fact and the conclusions of law, by striking out the words “47 Grand street,” where they occur therein.

There remains, however, another question, respecting the condition of the South Fifth avenue frontage of the premises 49 Grand street. The position is taken by the defendants that for a depth of 50 feet on South Fifth avenue, southerly from the corner of Grand street, there is interposed between the easterly line of the plaintiffs’ premises and the street line a strip of three inches in width, that the title to this strip of 50 feet by 3 inches is not in the plaintiffs, and that the easements of light, air, and access on South Fifth avenue’ are not appurtenant to the plaintiffs’ land, but to-this strip of 3 inches in width. The plaintiffs deny the existence of any such strip at all, and claim title to and possession of all of the land up to the easterly street line of South Fifth avenue, and have introduced evidence to show title as claimed. In the first and third findings of fact the court has found the title and easements to be in the plaintiffs, and that Maturin Livingston, the plaintiffs’ testator and devisor, acquired the title to the Grand street lots in March, 1876, and 220 South Fifth avenue on the 15th day of April, 1885. The alleged facts connected with the-defendants’ claim seem to be as follows: Prior to 1870, South Fifth avenue was known as “Laurens Street.” That street was-widened on the westerly side, under proceedings taken for that purpose in the year 1868. At the southwest corner of Laurens and Grand streets was situated a lot known as “No. 51 Grand, street,” having a depth of about 58 feet on Lauren street. No. 51 Grand street was described in the proceedings as having a frontage of 25 feet, “more or less.” The commissioners for widening Laurens street took just 25 feet of the lot No. 51 Grand street and it was ascertained, according to the contention of the defendants, that the lot was 25 feet and 3 inches wide, and that that left the strip of 3 inches on the westerly side of the improvement,, being the strip of, 3 inches referred to in this action. The question is raised as to whom these 3 inches belong. On the other hand, the plaintiff has shown a clear title to, and possession of, all of the Grand street frontage, including 47 and 49, to westerly street line of Laurens street. That title is deduced originally from a warranty deed made by George Lovett in the year 1838. The premises conveyed by that deed were 27 and 49, Grand street, and they are referred to as being 25 feet westerly from southwesterly corner of Grand and Laurens street, and the easterly line is drawn, parallel with Laurens street, so that under this deed from Lovett the easterly line of 49 Grand street was, according to the description of the deed referred to, exactly 25 feet from the westerly line of Laurens street, and passed the 3 inches of Lovett’s grantee, because only 25 feet were taken in the improvement from lot No. 51 Grand street. When Maturin Livingston became the owner of the premises, 1876, lots 47 and 49 Grand street were conveyed by one deed, and as an entire piece of property. They are described as beginning at the corner formed by the intersection of the southerly line of Grand street and the westerly line of South Fifth avenue. As Laurens street has been widened, the westerly line of the demise runs, by the description, “ northerly, along the-westerly side of South Fifth avenue, fifty feet, to the point or place of beginning.” These conveyances, therefore, show -that Maturin Livingston, in 1876,— two years before the elevated railroad was built on South Fifth avenue,—not only had the legal title ¡to the premises in question, and to the whole of the land included ¡within strip, but that he was in possession thereof; and the proof ¡also shows that the easterly wall of 49 Grand street abutted on the avenue, and the building was served by the easements which the court found had been taken or interfered with by the construction and operation of the elevated road. There is much more evidence-of a documentary character to show the title of the plaintiffs to this so-called strip of 3 inches, and the court below was not in error in its finding establishing the plaintiffs’ right and title to this part of the premises in question. We think there is, therefore, no fair ground for controversy respecting the plaintiffs’ lot Ho. 49 Grand street abutting upon the avenue in which the defendants’ structure exists, and that the cases referred to by the learned counsel for the appellants, of Keene v. Railway Co., 79 Hun, 451, 61 St. Rep. 276, Mooney v. Railway Co., 30 St. Rep. 561, — and similar cases, do not apply.

We have already referred to the finding of the court respecting the premises Ho. 47 Grand street. The point is taken that the rulings of the court are inconsistent with the judgment, and cannot be made to harmonize with it. • But, as already stated, we think it is so apparent that the draftsman of the decree has merely made a misdescription that it is unnecessary to make any further reference to that point.

Concerning the amount fixed by the court as fee damage, we think that the allowance was not only reasonable, but that it was adopted on proper, principles. We find that the award was made for damages to the easements appurtenant to the whole 84 feet on South Fifth avenue. It is unnecessary to go over what was testified to respecting the history .of South Fifth avenue after it became known by that name, on the widening of Laurens street, and the facts •concerning the construction and operation of the elevated railway in that street, the effect of which was undoubtedly to take from what was then the widest street west of Broadway all of the business which it was contemplated would settle there, as a part •of that general locality of the city known as the “Dz;y Goods District.” Important business of that character was diverted into parallel streets, on which there was no elevated structure, such as Green and Wooster streets, and the improvements that were beginning to be made on South Fifth avenue ceased, as soon as it was known ‘that an elevated road would occupy it The business moved away from it, and it became the haunt of low people, and ¡a street with very disreputable places of resort. The general deterioration of the stz'eet was thoroughly proven, and, upon the testimony of the experts, the court was fully justified in making the allowance for the depreciation of'fee value.

We do not find that thez’e was any erz-or in the conclusions at which the court arrived respecting the rental values. As to 220 •South Fifth avenue, they were awarded at the rate of $100 a year only from the 1st day of February, 1888, to the time of the trial,’ which was propez1, there having been an outstanding lease which ran to 1877. The depreciation in rental values was proven. As: to 49 Grand street, an allowance was made of only $50 a year for: six years prior to the commencement of the suit, and we see no-reason for intez-fering with that amount And, as stated before, ss to Ho. 47 Grand street no award for past damages was made at all.

On the whole case, we think the conclnsions of the court were right, and that the judgment should be modified by striking out -any reference to No. 47 Grand street; and, with that modification, •the judgment should be affirmed, with costs.

All concur.


text:
    Alfred E. Stone, Resp't, v. Abraham Cohen et al., App'lts.

      (Supreme Court, Appellate Division, First Department,

      Filed April 24, 1896.)

    Contract—Condition—Waiver.
    The evidence, in this case, was held sufficient to show a complete waiver of the stipulation respecting liens theretofore or thereafter filed.
    Appeal from a judgment entered on a verdict for plaintiff, and from an order denying a motion for a new trial.
    George H. Yeaman, for app’lts; M. E. Duffy, for resp't.
   PATTERSON, J.

This action was brought upon an order for the payment of money, drawn by the defendant Francis McCormick on the defendant Julius Lipmann, and dated the 14th day of February, 1890, by which order the defendant Lipmann was 'requested to pay to John Burke the sum of $850 “ when the white coat of mortar is on the houses Nos. 164 and 166 East 112th street.” This order was presented to the defendant Lipmann, who accepted it in the following words: “Accepted, payable when white-coat payment becomes due and payable according to the terms of the building loan agreement on house south side 112th street.” The claim thus arising was assigned by John Burke to this plaintiff.

The complaint alleges the performance of the condition upon which the amount named in the order became due and payable according to the terms of the acceptance. The separate answer of the defendant Lipmann admits the making and acceptance of the order, but sets up, in connection with such admission, that there was a certain builder’s loan contract or agreement relating to the house mentioned in the acceptance, which agreement was executed between one Alice McCormick, the wife of Peter McCormick, and the defendant Lipmann, providing for the sale by Lipmann to Alice McCormick of a lot of ground, being that referred to in the complaint, upon certain terms, and subject to certain mortgages, and further providing that Alice McCormick should build upon the premises a five-story tenement house, Lipmann contracting to advance her the sum of $10,000, in payments of $1,000 each, at various stages of the progress of the work of building. By a clause of the agreement it was provided that the sum of $1,000, the seventh payment, should be paid when the white coat of plaster was on and the stairs up, but the defendant might make, at his option, any of the payments under the contract, before they became due according to the strict terms of the agreement, without waiving bis right to enforce such terms; and it was also provided that, if the work were suspended for ten days, or if any mechanics liens should be filed against the premises and remain unsatisfied or on file for ten days, then Lipmann might refuse, at his option, to make any further advances to the McCormicks, and that both the principal and interest on the mortgage should become due.

It would appear that Alice McCormick disposed of her interest in this contract and property to Francis McCormick, and Francis McCormick subsequently assigned to one Young, who seems to have become jointly interested with him in the building enterprise. John Burke became connected with the subject by reason of his being the contractor for the plastering work upon the buildings, under a contract made December 9, 1889, to plaster the house for the sum of $1,850, which he was to receive in three payments, namely, $800' when the brown mortar was on, $900 when the white mortar was on, and $150 when the plastering was fully done. It sufficiently appears in evidence that the contractor, Burke, fully performed his contract concerning the plastering. When the brown mortar was on Burke was unwilling to proceed further without being in some way secured for future work under his contract, and the order sued upon was given for that reason. Evidently it was intended to secure the greater part of the installment that would become due for the white plastering. It is so stated in the evidence, and in the order, and in the acceptance, all of which indicate that it was Lipmann’s agreement to pay it out of the particular $1,000 installment to become due when the white plastering was on and the stairs were up. At the time the order was accepted, Burke told Lipmann that there were some liens on the building, and Lipmann said: “Go ahead; never mind; I will see that you are paid.’’ And he also said that there was a payment due McCormick when the white mortar was on. The liens then on the premises were the first two mentioned in the answer of the defendant Lipmann. the 13th of March, 1890, another lien for $1,600 was placed upon the building, and the defendant Lipmann claims that he was, therefore, not liable upon the order.

The evidence shows that Burke fully completed his contract for the plastering, and the questions arising in the case are purely as to matters of fact. At the trial there were three of such matters litigated, each of which was submitted to the jury under proper instructions, and in a very clear way, by the learned justice presiding. The distinct question arose as to the liability of Lipmann upon the order, notwithstanding breaches of the building loan contract respecting the competion of the white piaster coat and the stairs, and also respecting the filing of liens and their remaining on record for more than ten days. Upon the subject of the completion of the work in accordance with the requirements of the contract, and of acceptance of the order, the defendant requested the court to charge that, unless the jury believed that the order sued on became due and payable under the terms of the building loan agreement referred to in the defendant’s acceptance of the order, relating to the white-plaster coat and the stairs, they must find for the defendant. That instruction was given to the jury in the words of the request. They were charged concerning the state of the evidence upon that point, and there was undoubtedly sufficient in the case to show, not only that the work was done, but that Mr. Lipmann himself admitted, in his conversation with Burke, that it was finished in timej and in such a way as to entitle Burke to the payment of the money. It is unnecessary to refer specifically to the particular evidence upon that subject, but there was testimony that Lipmann acknowledged his liability to pay, and urged Burke to go on with the work of patching and pointing up, and thus to complete the last work under his contract, in a manner to entitle him to a third and final payment.

On the subject of the existence of the liens upon the property, the defendant requested the court to charge the jury that, if they believed, from the evidence, that the mechanic’s lien of $1,600 placed on the property on the 12th of March, 1890, was allowed to remain on record ten days, they must find for the defendant, even though they believed that the work had been completed according to the contract. This the court charged, but with the very material addition that, if the jury believed, from the evidence, that the condition as to mechanics’ liens was waived, the instruction would not be applicable. The whole contention on the part of the plaintiff with respect to the mechanics’ liens was that they were waived from the beginning; that is to say, from the time of the inception of the $850 order.- That order was dated on the 14th day of February, 1890, and with reference to which, and its acceptance, the testimony of Burke is that, when the order was presented to Lipmann, Burke said, “ There are a couple of liens -on there.” Lipmann said, “ Never mind that; I will see that you are paid.” He stated, “I have enough money; go ahead.” He said there was a payment due McCormick when the white coat of mortar was on. He said there was a white-coat payment becoming due, and he would secure that. This was relied on as a waiver of any condition respecting mechanics’ liens, and evidence was given of what transpired between Burke and Lipmann on the 10th day of March, 1890, indicating that Lipmann’s own construction of the conversation of February 14, 1890, was that all conditions of the contract, the building loan, as to mechanics’ liens, were, waived in favor of Burke, in order that he might be induced to go on and complete his plastering contract. On the 10th of March Burke had aii interview with Lipmann, and then stated to Lipmann that the white-coat mortar was on, and that his payment was due. He testifies that Lipmann said, “All right, Mr. Burke; I am property poor at the present time, and, if you will wait a few days, I will give it to you.” He said there was still money due to McCormick, and that he had the money still in his possession. He told Burke not to be afraid, to go ahead and finish the work, and point up, which would come under another payment, and he would make the two together. He said that he would see Burke paid, who remarked, “ There are liens going on there.” He said, “Hever mind the liens; go ahead, and finish up, and I will pay jou. My word is as good as that paper.” All this was evidence .going to show a complete waiver on the part of Lipmann of any .right he might have had to insist upon the provisions of the con* tract respecting liens. The testimony as to what took place ora March 10th was not offered as establishing a new promise on the .part of Liprnann, but as evidence of what his understanding was-concerning the liens at the time he accepted the order for the $850r as well as the date of the last conversation. Now, the lien for $1,600 was not filed until March 13, 1890, three days after the conversation of March 10th. There was, therefore, abundant evidence to go to the jury that, on March 10th, Liprnann had promised to pay the order, and recognized that he had waived all stipulations respecting liens theretofore placed, or thereafter to ba placed, upon the property, and reiterated what he had substantially bound himself to respecting liens at the time the order was given. The conflicting evidence on the subject of this waiver was properly submitted to the jury, and upon that subject their verdict should not be interfered with.

Another question of fact arose with reference to some arrangement having been made between Burke and'Young by which the former agreed to look to the latter for the payment to be made for his plastering under the contract with McCormick, so as to relieve Liprnann from his obligation to pay the order sued upon. The court was requested to charge the jury with reference to this matter, and the request was complied with in the language in which it was presented to the court. .There was a dispute as to whether or not certain notes given by Young were given on account of the work done by Burke; but Burke expressly swears that he received only two notes, of $300, which were accommodation notes of Young, given to him to raise money upon, but that they were utterly worthless, and no money was raised upon them, and they were in no sense intended for or accepted as payments on account of the plastering work, nor recognized as obligations of Young-given on account of that work. Whether they were or not was-submitted to the jury, who found against the defendant Liprnann on that issue of fact.

We find no error in the whole trial of such a character as would call for a reversal of the judgment as to the defendant Liprnann. The plaintiff’s claim in the order is a just one, for work fully and honestly performed, and the judgment should be' affirmed.

Judgment and order denying motion to set aside the verdict, and to grant a new trial, affirmed, with costs.

All concur.


author: RUMSEY, J.

text:
    Jessie L. McNeven, App'lt, v. William H. Arnott et al., Resp'ts.

      (Supreme Court, Appellate Division, First Department,

      Filed April 24, 1896.)

    1. Negligence—Trespass.
    Where a person comes upon the premises of another without invitation, but simply as a bare licensee, and the owner of the property passively acquiesces in his coming, the owner is not, in case an injury is sustained by reason of a mere defect upon the premises, liable for negligence.

      % Same.
    Contractors owe no duty to one not in their employ who goes, merely to satisfy his own curiosity, upon premises where they are engaged in erecting a building.
    Appeal from a judgment in favor of defendants entered on verdict directed by the court.
    B. F. Einstein, for appl’t; Charles C. Nadal, for resp’ts.
   RUMSEY, J.

On the 23d day of November, 1892, the defendants were engaged as masons and builders in erecting a building at No. 497 Broadway. In the course of the work a deep excavation had been made in the front of the building, under the sidewalk, extending from the curb to the front of the building, which was some little distance inside the house line. The outside of this excavation in front of the building had been covered by a granite sidewalk extending from the curb twelve feet in towards the building. From the inside edge of this granite sidewalk towards the building the work on the sidewalk had not been completed, the defendants at that time being engaged in placing ironwork for the glass lights to be let into the sidewalk. From the center of the building to the granite sidewalk extended a plank runway, as it is called, about two and a-half feet wide, which was put there so that the defendants’ workmen might pass in and out of the building. The husband of the plaintiff fell into this excavation and was killed. All these facts are conceded. Whether or not there was any barrier upon the inside of the sidewalk, and between that and the hole from the south end of the plank runway to the south end of the building, was in dispute: the plaintiff’s evidence tending to1 show that there was no such barrier, while the evidence of the defendants tended to show that a barrier had been put there and still remained. If it were material to pass upon this question, we would be required to presume that the jury would have taken a view the most favorable to the plaintiff upon that point, and have found that there was no barrier at that place. At the close of all the evidence the case was summed up to the jury, and submitted to them by the judge, and when they failed to agree, after a considerable period of time, the court recalled the jury, and ordered a verdict for the defendant. Upon this verdict the judgment was entered, and the plaintiff tabes this appeal.

The serious question is whether, at the time of his fall, McNeven was upon the edge of the sidewalk, and fell into the eveavation while standing there, or whether he had gone upon the plank runway, and was standing there, looking about him, when he lost his balance and fell. The plaintiff produced no witness who actually saw McNeven fall into the hole. The plaintiff’s witness-who last saw him living was one Luxenberg, who testified that he was standing at the building next door, when McNeven came along, and stopped to look at the building, and spoke to Luxenberg about it. Luxenberg said that McNeven, when he spoke to him, was standing in front of the lower end of the building 497 Broadway, which would be considerably south of the plank runway; that he was standing on the sidewalk in front ■of the building; that he was faced towards the building, looking at it, and he looked straight into the building. He swore that McNeven was standing at that time a foot or a foot and a half from- the hole where the accident occurred, with his face towards it. The witness did not see McNeven again until he had fallen into the botton of the hole, when he saw him lying in the place where he fell, or near it. He said upon his direct examination that he saw him in the subcellar, having fallen three or four seconds after the time when he spoke to him, but upon his -cross-examination the witness said that five minutes elapsed from the time he spoke to McNeven ,and when he saw him lying down m the cellar. This was the oniy witness sworn by the plaintiff, who testified to having seen McNeven shortly before he fell. On the other hand, the defendant called four witnesses, all of whom testified that they actually saw McNeven fall, and each one said that at the time he fell he stood upon the plank runway. Some of them spoke to him as he stood there, and their attention was attracted to him, and each one of them testified that he actually saw him fall off from the planks, either as he was standing there looking about him, or as he was walking towards the entrance of the building. These witnesses do not precisely agree as to the place where he stood when he fell, nor do they agree as to the place where the body lay after the fall had taken place; but the witnesses were in different positions with relation to McNeven as he stood upon the runway. Their attention was attracted to him under different circumstances, and they had no occasion to notice precisely the place where he stood. The discrepancies in their ■evidence in that regard are not sufficient to discredit them as to their statement that he was actually upon the plank at the time he fell. Neither were the witnesses able to say exactly where the body lay after the fall had taken place, and their evidence differs ■considerably upon that point, as it also differs from the testimony, cf the witnesses sworn by the plaintiff. It is because of these discrepancies in the position of the body as the witnesses saw it at' the bottom of the hole that plaintiff insists that their evidence as to the place whence they saw him fall should not be credited, and that the whole question should be submitted to the jury. But a careful consideration of the evidence shows that an inference cannot be drawn adversely to the testimony of these witnesses from the fact tha-t they did not agree where the body lay, or that the jury might have found that it lay at a considerable distance to the south of the runway whence the witnesses say he fell. It appears from the testimony of the plaintiff's witness, and is not contradicted, that there was considerable pile of rubbish at the bottom of the subcellar upon which the body of McNeven struck after he fell. The witness Luxenberg testifies that after McNeven fell he looked down, and could see him rolling down this hill of rubbish that was there; and he rolled down under the sidewalk towards, the street. If that testimony be true, the jury must have found: from the evidence that the body of McNeven did not lie directly under the place where it fell, but that, after the fall, he rolled towards the inner edge of the granite sidewalk Luxenberg and Schroeder, who was one o£ the defendant’s witnesses, say that the body lay almost under that edge of the granite sidewalk which was nearest the building; and they are the only witness who precisely agree as to the place where the body was found. But this testimony loses any force as tending to establish that the fall was mot from the place where the defendant’s witnesses say it was, because of the testimony of Luxenberg that the body rolled after it had struck the pile of rubbish at the bottom of the hole. In view of the testimony of all these witnesses, of the failure of any witness of the plaintiff to locate the place where McNeven stood just before he fell, and of the fact that it appears by the testimony of Luxenberg that a long enough time elapsed after he spoke to McNeven for him to have gone upon the runway, we think the jury would have been compelled to find that McNeven fell from the plank runway, and that he was not standing upon the granite sidewalk which was there for the accomodation of passengers at the time the accident happened to him. That being the case, the defendant’s clearly cannot be charged with negligence for failure to protect that runway so that McNeven, going over, should not fall off of it. That was a place where he had no business to go. It was erected by the defendants solely for their own convenience, and for the use of employes in their work. McNeven went upon it to satisfy his curiosity with regard to the work which was being done there. Being where he had no business to be, he was clearly not even a licensee, but a trespasser, while he was there. The defendants owned him no duty to take any steps to protect him there. They were, not obliged to take any .means to protect him, or to see that no harm happened to him. It is said by the court of appeals in Cusik v. Adams, 115 N. Y. 55; 23 St. Rep. 548, that the principle is now well settled by repeated adjudications that where a person comes upon premises of another without invitation, but simply as a bare licensee, and the owner of the property passively acquiesces in his coming, if an injury is sustained by reason of a mere defect in the premises, the owner is not liable for negligence, for such person has taken all the risk upon himself. See, also, Sterger v. Van Sicklen, 132 N.Y. 499; 24 St. Rep. 863. The case of Galvin v. Mayor, etc., 112 N.Y. 223; 20 St. Rep. 569, in not in point. In that case it appeared that Galvin was employed to unload coal at a place which was furnished by the city for that purpose, which was ordinarily covered by a grating, winch was raised when coal was to be shot down the hole. The grating, as it. appeared, was so constructed that it was liable to fall, and no proper means of securing it were furnished by the city. The case was disposed of in the courts below upon the ground that the city owed no duty to Galvin to protect the hole, because there was no occasion for him to get under the grating; but the court of appeals reversed the judgment of the courts below, .and ordered a new trial; upon the ground of th§ erroneous exclusion of evidence which was offered to show that Galvin had a dntv to perform which would have taken him under the grating. The court says that, if that had been made to appear, he would not have been guilty of contributory negligeuce in getting under the grating, and he would'have had a right to rely upon it that the city had performed its duty so to erect the grating that it would not fall upon one who had occasion to go under it. The difference between that case and this is quite apparent. There the city owed a duty to any one who had occasion to go under that grating. Here the defendants owed no duty to one not in their employ who-went upon the plank merely to satisfy his own curiosity. Upon the point as to where McNeven stood at the time that he fell there was no room for different inferences to be drawn by different persons, but the jury would have been bound to believe the testimony of the four credible witnesses who swore that they saw him upon the runway, and that he actually fell from it. For that reason the rule laid down in Hart v. Bridge Co., 80 N. Y. 622, and other-cases of that nature, cited by the plaintiff, do not apply here.

Upon all the testimony the court was required to take the action that it did, and the judgment must be affirmed,- with costs..

All concur.


author: PER CURIAM.

text:
    C. Albert Jacob, Resp't, v. Clarence S. Watkins, App'lt.

      (Supreme Court, Appellate Division, Second Department,

      Filed April 28, 1896.)

    1. Conditional sale—Title.
    Where a person consigns an article to another for sale on his account, the article to remain his property until sold, and the property is seized on an execution against the consignee and sold to a third party, the latter acquires no title thereto by the execution sale.
    3. Evidence—Value.
    The price which property realizes at a public sale is evidence of its. value
    Appeal from a judgment on a vérdict directed for plaintiff.
    George B. Stoddart, for app’lt; Morris Putnam Stevens, for resp’t.
   PER CURIAM.


text:
    William Reynolds, App'lt, v. Nathan Kaplan, Individually and as Administrator, etc., Resp't.

      (Supreme Court, Appellate Division, Second Department,

      Filed April 28, 1896.)

    1. Parties—Foreclosure action.
    To an action for the foreclosure of a mortgage on real estate, where the mortgagor has died intestate, leaving her husband and children, to whom the property descended, the judgment creditors of the husband are necessary parties.
    3. Attorney and client—Compensation.
    An attorney, in an action to foreclose a mortgage, is not entitled to compensation, as a condition to plaintiff’s right to substitute another attorney, where his failure to bring in certain parties justifies the purchaser in refusing to accept the property.
    Appeal from an order imposing, as a condition for the substitution of attorneys by plaintiff, the payment of a certain amount.
    William E. Osborne, for app’lt; Horace G. Lansing, for resp’ts.
   PER CURIAM.

The action is for the foreclosure of a mortgage of real estate. The mortgagor died intestate, leaving her husband and children, to whom the property descended. It appears that the foreclosure was instituted at the request of the husband of the deceased owner; the plaintiff’s attorney, in a letter to the plaintiff, agreeing that no expense should be incurred by the latter. There were outstanding judgments against the husband. The judgment creditors were not made parties to the action. The action proceeded to judgment and sale. The title was rejected by the purchaser, for the failure to make the judgment creditors tof the husband parties. We think it too plain to justify discussion that the judgment creditors of the husband, the life tenant, were necessary parties to the action.- ©rdinary care required that the attorney should have made such creditors parties. No good title can be given under the decree rendered in this action. The plaintiff will be driven to either a strict foreclosure, or, as probably the wiser course, to apply to vacate the decree and bring the judgment creditors into the suit The services rendered by the attorney 'have therefore been, of no value to the plaintiff. For this reason, the attorney is not entitled to compensation for them.

So much of the order as is appealed from should be reversed, and motion granted unconditionally, with $10 costs and disbursements.


text:
    Francis Higgins, as Receiver, etc., App'lts, and Resp't, v. William E. Tefft, Impleaded, etc., App'lt and Resp't.

      (Supreme Court, Appellate Division, First Department,

      Filed April 17, 1896.)

    1. Corporation—Receiver.
    Whatever right of action has vested in the stockholders, as stockholders, or in the creditors as creditors, of a bank, is not divested from them by the appointment of a receiver. They still retain any cause of action that they had as against the officers or directors of the bank prior to its dissolution, and it is for them to enforce such cause or causes of action and not the receiver.
    2. Same.
    In such case, the receiver has no right to enforce an action which is vested in the creditors or stockholders as such, but only a cause of action that has vested in the corporation.
    3. Same.
    The fact that the court authorized toe receiver to bring such action does not determine the nature of the action, when brought, or the liability of the defendants to respond to the demands of the receiver.
    4. Same.
    The actual and real relation between the directors and the corporation is that of agents acting for their principal, and the directors may be sued at law for any damage whatever caused by their culpable misfeasance and nonfeasance.
    5. Action—Relief.
    In determining whether a complaint alleges a cause of action at law or in equity, the formal demand of relief with which the complaint concludes is not decisive of the legal or equitable character of the action. But where the facts are just as appropriate to a legal as an equitable cause of .action and are ambiguous as .to the subject of inquiry, the court will be guided by the relief asked in reaching a conclusion.
    6. Accounting—Misappropriation.
    When the relation of trustee and cestui que trust, or principal and agent exists, the principal or the cestui que trust may call his agent or trustee to account, for the property in the hands of the agent or trustee which has been misappropriated or lost by his negligence. But, to sustain such an action, there must be some allegation showing-the necessity of an accounting, or showing that a resort to a court of equity is necessary to give the plaintiff the relief to which he is entitled. ' ----
    7. Same.
    In a pure action for damages for the negligent and wrongful acts of certain officers of a corporation, the defendants in such action are entitled to a trial by jury, and no accounting or other equitable relief can be necessary or proper.
    8. Pleading—Demurrer—Misjoinder of actions.
    A cause of action against a defendant for negligent and wrongful acts committed by him as director cannot be joined with a cause of action for damages against other defendants for damages sustained by reason of the acts of such other directors while the demurring defendant was not a director of the corporation.
    Appeal from an interlocutory judgment overruling in part, and sustaining in part a demurrer to the complaint
    Thomas C. I. Crain, for pl’ff; Joseph H. Choate, for def't.
   INGRAHAM, J.

The plaintiff brings this action as receiver of the North River Bank, a banking corporation organized unden the laws of the state of New York, to recover from the defendants, who were the directors of the bank, the damages which the said bank, its depositors, stockholders, and other creditors, have sustained by reason of the wrongful and negligent acts of the defendants as its directors. The defendants demur to the complaint upon two grounds: (1) That causes of action have been improperly united in said complaint; and (2) that the said complaint does not state facts sufficient to constitute a cause of action. The issues raised by this demurrer were disposed of by the special term by overruling the demurrer on the ground that the complaint does not state facts sufficient to constitute a cause of action, and also overruling that ground of demurrer whereby it was claimed that causes of action have been improperly united by joining a cause of action against this defendant demurring with causes of action against other directors arising at a time when this demurring defendant was not a director, so far as such causes of action arose because of negligence or improper conduct of their duties as such directors; but sustaining the demurrer on the ground of improper joinder of causes of action, as to the causes of action for the making and publishing of false statements or reports of the financial condition or affairs of the bank. The plaintiff appeals from so much of the judgment as sustains the demurrer, and the defendant appeals from so much of the judgment as overrules the demurerr.

The main question argued before us, and the one which must determine the question as to the sufficiency of the complaint, depends upon whether or not this action can be considered as an action in equity, which would entitle this plaintiff, conceding the facts alleged in the complaint to be true, to any equitable relief. The plaintiff sues as the receiver of the bank, appointed in an action brought by the people of the state of New York for a dissolution of the bank in which a final judgment has been entered, whereby the said bank was dissolved, and the plaintiff duly appointed permanent receiver of the property and effects thereof. The cause of action which plaintiff thus seeks to enforce was one that vested in him by his appointment as receiver of the bank. As such receiver he became vested with the property and rights of action that had theretofore vested in the bank, and he sues to recover what the bank could have recovered if it had not been dissolved, and no receiver had been appointed. It is quite important clearly to recognize that the plaintiff’s right of action depends upon his succeeding to the right of action that had vested in the hank at the time of his appointment. Whatever right of action had vested in the stockholders, as stockholders, or in the creditors, as creditors, of the bank has not been divested from them by the appointment of the plaintiff as receiver. They still retain any cause of action that they had as against these defendants as officers or directors of the bank prior to its dissolution, and it is for them to enforce such cause or causes of action, and not the receiver. Bearing this in mind, we may consider this action as one brought by the bank against its officers for negligent and improper conduct in the execution of the trust reposed in them, and then determine whether, upon the facts alleged, the action is to be deemed equiiable, or an action at law to recover damages sustained in consequence of the negligence in or improper performance of the duties of the defendants as directors of the bank.

The court of appeals, in the late case of O'Brien v. Fitzgerald, 143 N. Y. 377; 62 St. Rep. 344, has settled certain questions as to the relations that existed between a corporation and its directors; and, in the construction of a complaint in an action by a receiver of a corporation to recover from its directors damages for negligence or misconduct on their part resulting in damages to the corporation, it was there held that the actual and real relation between the directors and the corporation is that the agents acting for their principal, and the directors may be sued at law for any damage whatever caused by their culpable misfeasance or nonfeasance; that, in determining whether a complaint alleges a cause of action at law or in equity, the formal demand of relief with which the complaint concludes is not decisive of the legal or equitable character of the action; that, where the action is for the recovery of money only, it is classed as legal, and is triable by jury; and while the courts are not concluded by the formal demand of relief, but may look into the facts to see, nevertheless, if it be not equitable relief which they imperatively require, yet where the facts do not aid us, where they are just as appropriate to a legal as an equitable cause of action, where they are ambiguous as to the subject of inquiry, we must be guided by the relief asked in reaching a conclusion. The court in that case stated generally the nature of the action as one in which “the corporation, represented by its duly-appointed receivers, sues individuals who were its directors for such neglect or wrong in the performance of their duties as resulted in large losses, and demands a money judgment for the damages sustained. .There is no suggestion that any equitable relief is essential to a full and complete redress, and no facts are stated which indicate a need of such intervention. It is not averred that a discovery is requisite to the completeness of the remedy. On the contrary, the acts of negligence are asserted as fully known, and capable of proof. It is not alleged that an accounting is necessary to ascertain the damages, but these are' claimed as a definite and fixed sum, resulting directly from the negligent acts of the defendants. It is not asserted that such defendants are severally liable for separate and personal misconduct, and in separate and different amounts, although that is the reasonable inference from the facts stated in the complaint, but demands judgment against all, and against each, for the full amount claimed.”

It will first be necessary to examine the complaint in this action, to see how far it resembles the complaint thus described in the action above referred to. The complaint in question first alleges the incorporation of the bank, and the business it carried on under such incorporation ; that the government and management of the association was committed to a board of directors, who had provided by-laws as to how and in what manner the business Should be carried on ; the fact that the defendants had been directors during the periods designated, and had accepted the said office and the trust reposed in them, and thereby had, and took upon themselves, the duties and responsibilities of the office of directors of the said corporation. And the complaint then alleges various acts of the defendants which it is alleged were either negligent or improper, and which were alleged to be a violation of the duty that such directors owed to the bank, with a general allegation that the said directors had utterly failed and neglected to perform their official duties as such directors, and did not give proper care and oversight to the affairs of the hank, and" did not give proper care and oversight to the affairs of the bank, and did not administer such affairs in an honest, careful, and prudent manner, but, on the contrary, negligently suffered and permitted the money, property, and effects of the bank to be stolen, wasted, and squandered; that they did not keep correct books of account of the business and transactions of the said bank, but permitted the accounts to be falsified by false and deceptive entries; that they suffered and permitted various persons and corporations who were insolvent and and irresponsible to overdraw their accounts to a large amount, without security, whereby large sums off money were lost by the bank; that they did not elect or employ honest and competent persons as officers of the bank, but, on the contrary, elected, employed, and kept'in office persons who were dishonest and unfaithful in the discharge of their duties, and who were incompetént to discharge such duties; that such directors did negligently pay to themselves and other stockholders dividends at times when there was no profits arising from the business of the hank; that they negligently and unlawfully made loans to themselves, who were directors of the said bank, to an amount exceeding in the aggregate one-third of the capital stock of the bank, and carried upon the books of the bank, as available assets, promissory notes and other securities which they well knew were of no value ; that by reason of the negligence and misconduct of the directors, as before stated, the depositors and •stockholders of the bank have sustained damage in a large amount, and that the assets of the bank will not be sufficient to pay the amount of the claims of the depositors and creditors in full, nor to pay anything to the stockholders of the bank; and that such deficiency arises from the negligence and improper conduct of the defendants, and others thereinbefore named, as directors and trustees of .the said bank. Then follows the prayer for judgment, which is as follows :

“ Wherefore the plaintiff demands judgment that the damages which the North River Bank in the city of New York, its depostors, stockholders, and other creditors, have sustained by reason of the matters and things heretofore stated and set forth, may be ascertained and determined, and that the defendants and the representatives of those who were directors of said bank may be adjudged to pay such damages, and that the plaintiff may recover, collect, and receive the amount so ascertained for the benefit of the creditors and stockholders of the bank, and that the plaintiff may recover the costs of this action.”

On the face of the complaint, this is an action to recover damages for the misfeasance or nonfeasance of the defendants as directors of the bank. Calling it an action on behalf of the stockholders and creditors of the bank does not in any way change the nature of the cause of action. While all recovery by the corporation or by its receiver inures to the benefit of the creditors on stockholders of the corporation, it is still the cause of action that existed in favor of the corporation as an entirety, that the receiver has authority to enforce, and it is the misfeasance or malfeasance of the defendants in their relation to the corporation that is the basis of the right of the receiver to sue; for, as before stated,, this receiver has no right to enforce an action which is vested iff the creditors or stockholders as such, but only the cause of action that had vested in the corporation. The learned counsel for the-plaintiff calls attention to three points of difference revealed by a comparison of the complaint in this action with the complaint in the O’Brien Case. The first is that in the O’Brien Case all of the defendants had been directors, while in the case at bar some of the defendants are the personal representatives of deceased directors; second, in the O’Brien Case there are no allegations equivalent to those contained in the thirty-four and thirty-fifth paragraphs of the complaint; and, third, that in the O’Brien Case the plaintiff demanded judgment against, each of the defendants for a stated sum of money, while in the case at bar the plaintiff alleges that the depositors and stockholders of the bank have sustained damage to a large amount, and asks judgment that the damage which the bank, its depositors, stockholders, and creditors have sustained, may be ascertained andi determined, and that the defendants may be adjudged to pay such damages, and that the plaintiff may recover, collect, and. receive-the amount so ascertained, for the benefit of the creditors and stockholders. Ho stress is laid upon the first point of difference, and it is clear that it is not material, as the fact that a defendant is executor or administrator of a deceased wrongdoer cannot give a court of equity jurisdiction, where the nature of the claims against the deceased was of purely legal character. As to the allegations contained in the thirty-third, thirty-fourth, and thirty-fifth paragraphs of the complaint, it is difficult to see upon'wlmt principle they give a different character to the cause of action. The thirty-third paragraph of the complaint alleges that the plaintiff has, since his appointment as receiver, disposed of and realized upon the assets of the bank, has paid sixty per cent, of the claims of the creditors of the bank, and has realized all that can be realized from the assets thereof, and that the deficiency of assets to pay such creditors arises from the negligence and improper conduct of the defendants and others named, directors and trustees of the bank. The thirty-fourth paragraph states that the plaintiff has been authorized by the court to bring this action, as receiver, against the above-named defendants. And the thirty-fifth alleges that some of the creditors of the bank have requested the plaintiff .to commence an action against the directors and trustees of the bank to hold them liable for their negligence and improper conduct as directors. Hone of these allegations shows any reason why the interposition of a court of equity is necessary to give to the- plaintiff, as receiver of the bank, any relief that he could not obtain in an action at law against defaulting directors. The fact that the receiver has been unable to realize more than sixty per cent, of the claims of the creditors of the bank would not give the receiver of the bank that he represents any cause of action against the directors. If the malfeasance or misfeasance of the directors had injured the bank, it is entitled to recover, whether the recovery would go to the creditors or to the stockholders. The corporation was as much injured by the wrongful acts of its directors if it was solvent as if it were insolvent, and it is for this injury to the property of the corporation that the receiver can maintain an action, and not for an injury to its creditors or stockholders, as distinct from the corporation. Ho fact is alleged which would give to the receiver a right to recover from the directors the debts due to the bank for distribution among its creditors, as distinct from the cause of action that existed in favor of the bank because of the malfeasance or misfeasance of its directors. The fact that the court authorized the receiver to bring this action certainly does not determine the nature of the action, when brought, or the liability of the defendant to respond to the demands of the receiver. And the request of some of the creditors to bring this action would not vest the receiver with any additional cause of action to that which he already had as representing the bank.

We come, therefore, to the question as to whether or not the-difference in the demand for judgment stamps this action as one different from that of O’Brien v. Fitzgerald, supra. It will be noticed that in this case the judgment that the plaintiff demands is-a judgment for a sum of money. There is in this complaint, as in the O’Brien complaint, no allegation that a discovery is requisite to the completeness of the remedy, nor is there any allegation that an accounting is necessary to ascertain the damages. The pleader has not seen fit to allege the amount of the damage that was occasioned by the wrongful or negligent acts, but it is nowhere alleged that such damage is incapable of being ascertained by the ordinary methods of a trial by jury. In every action to recover for unliquidated damages, it is the province of the jury to ascertain the amount of the damages sustained in consequence of the acts complained of, and upon such damage being ascertained the verdict follows; and whatever recovery the plaintiff could obtain in this action from the directors would have to be applied by him, as receiver of the bank, according to law, and would not depend upon the form of the judgment. We fail to see how this prayer for judgment can be said to be for equitable relief. Ho accounting is demanded, no discovery Is demanded. The relief asked for is the same relief that is asked for in every action to recover unliquidated damages, i. e. that the damages be ascertained, and that, when ascertained, the plaintiff have judgment against the defendant for them. It seems to us, in 'determining this question, that we must come down to the nature of the acts of the defendants for which relief is sought. When a trustee or an agent, having possession of his principal’s money, has committed any act in relation to it by which a court of equity can compel him to account for the specific money, the principal or cestui que trust has a right of action for sucli an accounting. Such a right of action depends upon the receipt by the trustee of the money of his cestui que trust, or his interference with it, or some act of his which justifies a court of equity in calling him to account for the money that has been misappropriated or lost by the act of the trustee. It is based upon the control that the trustee had over the money or property of the cestui que trust, and that, in consequence of some misfeasance or malfeasance of the trustee, that money has been lost, or is not in the possession of the trustee so that he can account for it. And if a trustee of a bank should receive the money of the bank, use it as his own, or in any way interfere with it, so that, in consequence of his wrongful act, it was lost to the bank, the bank would have an action in equity to compel him to account. On the other hand, when the bank appoints its trustees or directors to manage its affairs, and appoints its officers and agents, and the trustees neglect their duty, and knowingly appoint incompetent men as officers, and negligently permit such ■officers to make injudicious or improper loans of the bank’s money, without the supervision required by them because of their position, the foundation of the liability of a director is different. In a suit to recover for such negligence or wrongful performance of duty, he is not chargeable with the sum received or paid out or lost, for which he is compelled to account, but he is chargeable for the direct injury to the bank which results from his negligence in not properly performing the duty that he undertook to perform. The rules of law that are applied to the enforcement of these distinct liabilities are different, the measure of damages is different, and the relief granted is distinct. In one case the director or trustee would be charged with the amount that he has received, and ■compelled to account for it; That would be an accounting in equity. In the other the neglect or wrongful act of the director is proved, with the consequences that have flowed from such wrongful act, and the jury are then directed to ascertain the damage resulting to the corporation from the wrongful or negligent act; and such an action is one at law, in which the defendant is entitled to a trial by jury. In this complaint the demurring defendant is not alleged ever to have received from the bank any of its money or property, or in any way to have interferred, personally, with the property of the bank. There is no sum of money with which lie is chargeable, and for which he must account. He is asked to respond in damages for certain negligent or wrongful acts, which have resulted in other people’s obtaining the money or property of the bank, not because such money or property was received by him as trustee, but because other people have been allowed to get possession of the property of the bank in consequence of his neglect properly to perform his duties, and thus prevent it. It is not • disputed that when the relation of trustee and cestui que trust, or principal and agent, exists, the principal or the cestui que trust may call his agent or trustee to an account for the property in the hands oí the agent or trustee which had been misappropriated or lost by his negligence. But, to sustain such an action, there must be some allegation showing the necessity of an accounting, or showing that a resort to a court of equity is necessary to give the plaintiff the relief to which he is entitled. Nothing of the kind is shown in this complaint. No accounting is necessary. Conceding all the facts as alleged, there would be no sum of money to which these defendants, or either of them, would be held liable to account. It is a pure action for damages for the negligent and wrongful acts of certain officers of the corporation, and in such an action the defendants are entitled to a trial by jury, and no accounting or other equitable relief can be necessary or proper. It follows, therefore, that the first ground of the defendant’s demurrer was well taken, and should be sustained. This conclusion renders it unnecessary to consider the other grounds of the defendant’s demurrer. We say, however, that we do not consider that the complaint alleges any violation of a statutory obligation on the part of the directors, or any cause of action for a penalty, but is based wholly upon a liability for the wrongful and negligent acts of the defendants as directors of the bank.

We think, therefore, that the judgment below should be reversed, and judgment entered sustaining the demurrer of the defendant on the ground that there is a misjoinder of causes of action,—there being joined a cause of action against this demurring defendant for negligent and wrongful acts committed by him as director, together with an action for damages against the other defendants for damages sustaided by reason of the acts of such other directors while this demurring defendant was not a director of the bank,—with costs to the defendant, with leave to the plaintiff to amend the complaint within twenty days after the service of the interlocutory judgment, upon payment of such costs.

All concur,


author: MERWIN, J.

text:
    The People ex rel., Staten Island Rapid-Transit Railroad Company, App'lt, v. James A. Roberts, as Comptroller, etc., Resp't.

      (Supreme Court, Appellate Division, Third Department,

      Filed April 14, 1896.)

    1. Taxation—Corporations,,
    Section 20, chapter 463 of 1889 contemplates that the whole case upon which the comptroller acted shall appear by the return, so that the court may determine whether in any respect the action of the comptroller was erroneous or illegal, and if so, may itself make the proper determination,
    2. Same.
    The determination of the comptroller on the question of valuation must stand unless clearly shown to have been erroneous,
    8. Same.
    Where it is apparent, uponthe evidence, that there were no sales of stock or market value upon which a valuation could be properly made, the intrinsic value is to be considered.

      4. Same.
    Under the statute, the present value of the stock, not the prospective, is-to be determined.
    5. Same.
    The amount of the tax is dependent upon the business prosperity, as evidenced by the capacity to declare dividends, instead of the value of the-corporate property.
    Certiorari to review the assessment of taxes against relator.
    Tracy, Boardman & Platt, for relator; T. E. Hancock, Att’y Gen., and G. B. D. Hasbrouck, for def’t.
   MERWIN, J.

The relator is a domestic corporation, operating and managing a railroad and cerbain ferries connected therewith. It was organized in 1880, and commenced business in 1884. It was within the classes oE corporations taxable under the provisions of chapter 542 of the Laws of 1880, and the acts amendatory thereof.. In November, 1894, in pursuance of the provisions of section 1 oE the act, it made a report to the comptroller, stating among other things, that the amount of its capital stock was $500,000, in shares of $100 each, all of which had been paid in; that no dividends had been declared; that the highest and lowest price of sales of stock during the .year was $10 per share. To this report, there was attached, in pursuance also of the requirements of the act, a verified estimate and appraisal, made by the-treasurer and secretary of the company, of the actual value in cash of the stock, at the sum of $50,000. The comptroller was not satisfied with this valuation, and thereupon made a valuation at the sum of $100 a share, and fixed the amount of the tax on that basis, under the provisions of section 3 of the act. In the return of the comptroller it is not stated upon what facts the comptroller based his valuation of the stock at par value. Thereafter the relator made application for revision and readjustment, under the provisions of section 19 of the act, as amended by chapter 463 of the Laws of 1889. A hearing was had, and evidence was taken, but the comptroller declined to change the valuation. Thereupon the relator, under the authority of section 20 of the act amended, obtained the writ of certiorari, which, with the return thereto, is now before us. .

By section 20, above referred to, it is provided that the action, of tiie comptroller upon any application for a revision and resettlement may be reviewed, both upon the law and the facts, and.that:

“ For that purpose the comptroller shall return to such certio-’ rari the accounts and all the evidence submitted to him on such! application, and, if the original or resettled accounts shall be found erroneous or illegal by that court either in point of law or of fact the said accounts shall be there corrected and restated by the said supreme court.”

This seems to contemplate that the whole case upon which the comptroller acted shall appear by the return, so that the court may determine whether in any respect the action of the comptroller was erroneous or illegal, and, if so, may itself make the proper determination. The question, then, here, is whether, upon the case presented by the return, the action of the comptroller, in fixing the 'valuation of the stock of the relator at its par value, is in any respect erroneous or illegal.

It seems to be settled that, the determination of the comptroller on the question of valuation must stand unless clearly shown to have .been erroneous. People v. Campbell, 145 N. Y. 591; 65 St. Rep. 526. It is apparent, from the evidence, that there were no sales of stock or market value upon which a valuation could be properly made. The intrinsic value was, therefore, to be considered. There were two mortgages upon the property of the company, and, subject to those, there had been issued income bonds :to the amount of $4,500,000, which were a lien prior to the stock. 'Substantially all of the stock of the company, as well as its bonds, had been used in constructing its road, which included a tunnel and a drawbridge. No dividend had ever been declared on the stock, and no interest had ever been paid or dividend declared on the income bonds, for the reason, as the secretary of the company testified, that the earnings of the company had never been such as to warrant it. It was shown that, for the last fiscal year of the company, prior to November, 1894, the net earnings, after the payment of the interest on the first and second mortgages, rentals, and taxes, was about the 'sum of $57,000, This was applied in redaction of an accumulation of interest on a floating debt that had existed for some years.

On the part of the defendant it is argued that, prospectively, the franchise of the company is valuable, and that during the year ending November 1, 1894, it had reduced its indebtedness over $50,000 or 10 per cent, of its capitalization, and that these facts furnished a good basis for the valuation of the comptroller. Under the statute the present value of the stock, not the prospective, is to be determined. The reduction of the indebtedness of the company was only by the application of the surplus of $57,000 in the manner above stated. In arriving at this surplus, no account was made of, or provision made for, any dividend or interest on the income bonds, which had priority to the stock. The fact of this priority was a very material element in ascertaining the value of the stock, and, having this in view, it is very difficult to see how the stock could be valued at par, or at any higher rate than the value placed on it by the company in its report. From the evidence in the case, we have not, I think, any right to assume that the income bonds are not a genuine liability of the company. If that be so, it is quite apparent that the capacity of the company to declare dividends on the stock is very limited.

In People v. Home Ins. Co., 92 N. Y. 328, 344, it was said concerning the tax levied on corporations under the act referred to:

" The amount of the tax is dependent upon their business prosperity, as evidenced by their capacity to declare dividends, instead of upon the value of the corporate property.”

The same view seems to have been accepted in People ex rel. American Contracting & Dredging Co. v. Wemple, 129 N. Y. 564; 42 St. Rep. 400. The tax, when imposed on a domestic corporation, is a tax upon its corporate franchises. People ex rel. Pennsylvania R. Co. v. Wemple, 138 N. Y. 1; 51 St. Rep. 702. As the present case stands, it seems to me to be very clear that the valuation of the stock at its par value is erroneous. If that be so, wears then, under the statute, called upon to fix the proper amount. The evidence does not, I think, warrant a larger amount than that stated by the company in its report.

Determination of the comptroller modified, by reducing the-valuation to the sum of $>50,000, and reducing the tax accordingly, with $50 costs and disbursements to the relator.

All concur.


author: WILLIAMS, J.

text:
    Marietta Ludington, Resp't, v. Daniel C. Thompson, as Receiver, etc., App'lt.

      (Supreme Court Appellate Division, First Department,

      Filed April 24, 1896.)

    1. Receiver—Contract.
    A receiver, who is simply a temporary custodian, appointed without authority of law, has no power to hind the estate in any way by the borrowing of money or the issuing of certificates.
    2. Same.
    The certificates of a receiver, whose appointment is afterwards declared-void, are void.
    3. Corporation—Dissolution.
    No action can be brought against a corporation after its dissolution.
    4. Receiver—Action.
    But an action may hereafter at any time be commenced against the receiver, but it is necessary to obtain leave of the court to bring such action.
    6. Limitation—Receiver.
    Where, by any form of proceedings, the property of a debtor is taken possession of by the court, to be administered for the benefit of all his creditors, and to be distributed among them in payment of their debts, the-statute of limitations does not run against any debts which were not barred by the statute at the time the possession of property is taken by the-court. The true rule is that the running of a statute, in such case, is sus- ' pended from the time of the appointment of the receiver,
    6. Notes—Protest—Waiver.
    The secretary of a corporation-, acting as receiver under a void appoint- ■ ment, may waive protest of notes on which the corporation is liable and bind the corporation.
    Motion by a defendant for a new trial, upon exceptions taken at the trial, "and ordered to be heard in the first instance by the-appellate division of the supreme court.
    Lyman W. Redington, for pl’ff; George Putnam Smith, for def't.
   WILLIAMS, J.

We do not see how there could be any recovery, upon the evidence given on the trial, for the $1,500 loaned and advanced by the plaintiff to Baylies, who was acting as re” ceiver. The order appointing him receiver was null and void, and had been so declared by the court. He was not, therefore, a lawful receiver when the loan and advance was made. He was simply a temporary custodian, appointed without authority of law. He had no authority to bind the estate in any way by the borrowing of money or the issue of certificates. Moreover, it was proven, at the trial, that there was any order of the court authorizing or directing the borrowing of money, or the issue of certificates therefor. Upon this state of facts the defendant could not be held liable for the $1,500 sought to be recovered as for money loaned and advanced.

The notes were concededly made or indorsed by the corporation before its dissolution. Some of the indorsed notes were duly protested, and as to the others there' was a waiver, signed by Bay-lies, both as secretary of the corporation and as its receiver. While he had no authority to bind the corporation as receiver, yet the corporation had not been dissolved. Baylies was its secretary, and we think he had power and authority to make the waiver, and that such waiver was sufficient to bind the corporation, and charge it as indorser upon the notes, and that no protest of the notes thereafter maturing was necessary. The waiver was not a release or abandonment of a substantial right or interest of the company. It was the waiver of a technical right, which was practically formal, and really saved the company the small amount of protest fees. And, further, when the waiver was made, the company being in the hands of a receiver it was well known that the notes-were not going to be paid, and therefore the notice of protest would not be of no value, in view of the situation.

The only defense of these notes, if any, is the statute of limitations.. This action was not commenced until more than six years bad elapsed after the maturity of the notes, and it is therefore insisted, in behalf of the defendant, that the statute of limitations is a complete defense to the action so far as the notes are concerned. The present receiver was appointed February 28, 1888, and we assume that the corporation was dissolved at the same time. Some of the notes had then matured. Some had not. The statute of limitations had then been running bus a few months, at most, as to any of the notes. As to some of them it had not commenced to run at all. There has never been any injunction issued by the court restraining the commencement of an action against the -corporation or its receiver to recover any debts owing by the corjioration. Ho action could have been brought against the corporation itself after its dissolution. An action could at any time have been commenced against the receiver, as plaintiff has finally done now. It would have been necessary to obtain leave of the court to bring an action against the receiver, as plaintiff did before commencing this action.

It is said, however, in behalf of the plaintiff, that, upon the dissolution o£ the corporation, and the appointment of a receiver, the statute of limitations ceased to run upon these notes until the rejection of the plaintiff’s claim thereon, presented to the receiver, and the refusal by him to allow the same, or to pay a dividend to-plaintiff, which was certainly as late as 1891, and within six' years prior to the commencement of the action. This contention is based upon the claim that the receiver was a trustee for the benefit of the creditors of the estate, and that the statute of limitations did not run in his favor against the creditors, his cestui que trustent, until the rejection of, and the refusal to pay, these claims. In Kirkpatrick v. McElroy, 41 N. J. Eq. 555, it is said by DEPUE, J.:

“As a general rule, the mere appointment of a receiver to take charge of property in dispute will not suspend the operation of the statute [of limitations], nor will it interrupt the possession of' a stranger, so as to prevent the statute conferring title on him or suspend the running of the statute against a stranger. But, where the receiver is appointed to take charge of an estate for the purpose of administering it, as, for instance, the settlement of the affairs of a partnership, and the payment of firm debts, the suit being substantially for the benefit of all the creditors, in analogy to an ordinary creditor’s bill, the appointment of a receiver with such powers will suspend the running of the statute, and the lapse of time before proceeding against the receiver in the court by which he was appointed will be regarded only on the question whether the creditor has been guilty of laches in delaying the prosecution of his demand.”

In Von Sachs v. Kretz, 72 N. Y. 556, ANDREWS, J., said:

“ The assignee of a bankrupt stands in a position of trustee for his creditors, and the statute [of limitations] did not run against their claim against the estate of the bankrupt not barred at the time of the adjudication,”—citing Parker v. Sanborn, 7 Gray, 191; Ex parte Ross, 2 Glyn & J. 46, 330; and Minot v. Thacher, 7 Metc. (Mass.) 348.

In Parker v. Sanborn, a Massachusetts case, METCALF, J., said:

“After the property of an insolvent debtor has been assigned under the insolvent laws, and thus sequestered and placed in the custody of the law in trust for his creditors, the statute of limitations does not run against their claims upon his estate in the hands of the assignee. The assignee, in bringing a suit upon a demand which was due to the insolvent before the commencement of the proceedings in insolvency, represents the estate, and in suclj a suit all claims of the defendant may be set off which existed at the time of the first publication of notice. A claim against the estate of a debtor in the hands of his assignee stands upon a different ground, in this respect, from the right of action against the debtor personally. That right is not taken away or suspended by the proceedings in insolvency, and is therefore barred by the lapse of the usual period of limitation.” /

In Minot v. Thacher, also a Massachusetts case, DEWEY, J., said:

“By force and effect of the appointment of a messenger [in proceedings in insolvency], and the publication thereof conformably to the statute, the property of the insolvent is sequestered for the benefit of the then existing creditors. After such publication, a suit by a creditor would be of no avail, as the property is all transferred to an assignee, and the body of the debtor is to be discharged from arrest on execution. The debts presented for allowance against the insolvent are to be considered with reference to their validity at the date of the publication by the messenger. If they are found to be barred by the statute of limitations at that period, it would, of course, be competent for the assignee to object to their allowance.”

In Ex parte Ross, the vice chancellor said;

“After a commission [in bankruptcy] issued, the statute of limitations does not run against a creditor, the commission is a trust for the benefit of all creditors, and it is a known principle that the statute does not run against a trust.”

And on appeal the chancellor asserted the same doctrine.

These cases appear to lay down the rule that where, by any form of proceedings, "the property of a debtor is taken possession of by the court, to be administered for the benefit of all his creditors, and to be distributed among them in payment for their debts, the statute does not ran against any debts which were not barred by the statute at the time possession of the property is taken by the court; and this rule would seem to be applicable to the appointment of the receiver in this case. The receiver here was appointed in proceedings for the dissolution of the corporation, lie took possession of all the property, and held it in trust, to be distributed among all the creditors existing at the time of the appointment of the receiver; and the true rule is, under such circumstances, that the running of the statute is suspended from the time of the appointment of the receiver.

Our conclusion is that the statute of limitations does not constitute a‘defense to the plaintiff’s right of action upon the notes. The plaintiff was therefore entitled to recover upon the notes, but The plaintiff was therefore entitled to recover upon the notes, but was not entitled to recover for the $1,500 loaned and advanced to Bay lies while he was acting as receiver of the corporation.

It was erroneous to permit the jury to render a verdict for the amount of money loaned and advanced, and such verdict should be set aside, and a new trial ordered, with costs to abide event, unless the plaintiff stipulates that the verdict he reduced so as to cover the amount due upon the notes alone. The plaintiff should have an opportunity, if he desires, to retry his case, and to give further proof than he gave upon this trial with reference to his right to recover the moneys loaned and advanced. All concur.


author: BISCHOFF, J.

text:
    John McCauley, Resp't, v. Fidelity and Casualty Company et al., App'lts.

      (Supreme Court, Appellate Division, First Department,

      Filed April 27, 1896.)

    1. Master and servant—Liability.
    A master is, ordinarily, liable to a third person injured through the negligence of his servant while acting within the scope of his employment. ,

      3. Samb.
    But where the servant is acting neither within the scope nor the-course oí his employment, the master cannot be held liable for such acts.
    3. Samb.
    The immediate employer of a servant is alone responsible for the latter’s negligent acts.
    Appeal from a judgment in favor of plaintiff.
    David Leventritt and Albertus Perry, for app’lts; Yellott D. Deckert, for resp’t.
   BISCHOFF, J.

The defendant the Fidelity & Casuality Company insured the plate glass on the plaintiff’s premises. By the third clause of the policy the company agreed, at its option, to replace the glass, or to pay actual value of the glass broken. The policy further provided:

“Whenever necessary, the assured shall, at his own expense, remove any woodwork, gas fixtures, or other obstruction to the replacing of the glass ”

The plaintiff notified the defendant company that the glass in his store window was broken, and thereupon the company notified the defendant Hutkoff, with whom he had a contract for that purpose, to replace the broken pane. Hutkoff sent his workmen to replace the glass. They found that the gas pipes outside the window interfered with the work, and notified the clerks in the stoi’e that they would have to be removed. Plaintiff leased the store to one Pape, and the two men in charge of it were his. employes.

The justice has found, on conflicting testimony, that the defendant Hutkoff’s men worked at the pipes, and negligently detached two lengths, in the cellar and basement, so that, when the gas was-lighted that evening, an explosion occurred, which caused the damage complained of in this action. A master is, ordinarily, liable to a third person injured through the negligence of his servant while acting within the scope of his employment. 14 Am. & Eng. Enc. Law, 804; Mott v. Ice Co., 73 N. Y. 543, 547. “The test of the master’s responsibility for the act of his servant is, not whether such act was done according to the instructions of the master to the servant, but whether it was done in the prosecution of the business that the servant was employed by the master to do.’’ Cosgrove v. Ogden, 49 N. Y. 255, 257. Here the daty of the servant was fixed by the contract of insurance, which placed the obligation of removing gas pipes and other obstructions upon the owner. This was known to all the parties interested. If, therefore, Hutkoff’s employes endeavored to remove the gas pipes, they acted, in so doing, neither within the scope nor within the-course of their employment, and the defendants cannot be held liable for such acts.

The j udgment, as rendered, against both defendants, is erroneous. The immediate employer of a servant is alone responsible-for the latter’s negligent acts. There cannot be two superiors severally responsible in such a ease. Blake v. Ferris, 5 N.Y. 48.

The judgment must be reversed as to each defendant, with costs to abide the event of a new trial, which is hereby directed,

All concur»


text:
    Equitable General Providing Company, App'lt, v. Meyer J. Stein, Resp't.

      (Supreme Court, Appellate Division, First Department,

      Filed April 27, 1896.)

    1. Sale—Installments.
    Where the vendee of goods, under a conditional sale, sends the article for repairs to the vendor who retains it hut offers its return, upon payment of an installment due and one not due, the default is not waived.
    2. Same—Agreement to repair.
    In such case, where, under an agreement by the vendor to keep it in repair, the vendee takes it, to the vendor’s knowledge, for repairs to the manufacturer which are made without charge except in one instance, when the sum of §4 50 is demanded by the manufacturer and paid by the vendee, the latter cannot deduct such sum from an installment due, in the absence of evidence that the vendor acquiesced in such payment or assumed to reimburse the vendee therefor.
    Appeal from a judgment in favor of defendant.
    Louis L. G. Benedict, for app’lt; Wales F. Severance, for resp’t.
   BISCHOFF, J.

The defendant, in July, 1895, obtained from the plaintiff a bicycle, under an agreement which was in form a lease of the chattel, providing for payment of $10 upon the 20th day of each month thereafter, the plaintiff agreeing to give a bill of sale to the defendant when 10 such payments should have been made, title to remain in thé plaintiff meanwhile, and the whole sum to be due at once upon any one default on the defendant’s part. Without objection, and by ample evidence, a contemporaneous oral agreement upon the part of the plaintiff to keep the machine in repair for one year was shown at the trial, and while there was a conflict of testimony upon the point, we take the fact to have been determined favorably to the defendant. The payments due in July and August were made, but the-installment for the 20th of September was at no time met. The bicycle was manufactured by the Overman Company, and was by the latter delivered upon the plaintiff’s order to the defendant, who, prior to some unspecified date in August, 1895, had taken it for repairs to the manufacturer, with the knowledge of the plaintiff, and these repairs were made without charge, except in one instance, when the sum •of $4.50 was demanded by such manufacturer, the Overman Com.pany, and paid by the defendant. There 'is no evidence, however 'that the plaintiff acquiesced in this payment, or assumed in any way, even inferentially, to reimburse the defendant for sums expended in repairs. Whatever course of dealing was shown was ,one whereby the Overman Company was to repair without charge .to the defendant, and that this was the understanding of the latter appears from his taking the machine for repairs thereafter directly to the plaintiff, the party who had agreed to make them. After default of the September payment, the defendant sent the rear wheel of the bicycle to the plaintiff for some further repairs, but the latter retained it, and one of its agents, on the 18th day of October, called upon the defendant, and offered a return of the wheel should the payments for September and October be then made. To this the defendant answered that he would pay $5.50/ claiming the right to deduct the payment made to the Overman Company for repairs, and insisting that the October payment was not then due, which, indeed, it was not. Thereafter, on the Slst day of October, demand was made for the return of the bicycle, and upon the defendant’s refusal, this action for its conversion was brought. From the above facts it appears that the defendant was in default of the September payment, and that the plaintiff was entitled to recover at least the value of its property which the defendant retained without right, by the terms of the agreement, after demand. Assuming that the plaintiff’s agent had authority to waive this default, there is no evidence that it was waived, since the offer to return the portion of the machine retained by the plaintiff upon condition that the October payment be made before it was due was in fact the tender of a new agreement, based upon a consideration which was refused, and the fact of the default was left unaffected. Moreover, apart from the defendant’s contractual duty to have made the September payment at the plaintiff’s office, upon the date specified, in which duty he failed, his readiness thereafter to pay $5.50 instead of $10 did not absolve him from his default, since the latter sum was, upon the evidence, fully due to the plaintiff. Sufficient evidence,which could not be arbitrarily discredited, appeared in support of some value in the chattel which the defendant retained, and the judgment against the plaintiff was upon the facts unauthorized.

Judgment reversed, and new trial ordered, with costs to the appellant to abide the event.